The Homeowner's Guide to Oil Tank Removal

If an oil furnace heats your home, you may want to upgrade to natural gas and ditch your old heating system. Natural gas is a cheaper heating fuel, and gas furnaces run more efficiently than oil models. When you switch from oil to natural gas, you should decommission and remove your oil furnace’s fuel tank.

Unfortunately, this isn’t a job you can do yourself, even if you have experience servicing your HVAC system. Old oil tanks are serious environmental hazards, and removing them incorrectly can be disastrous. In fact, it’s illegal to extract an oil tank without the proper licenses and permits in most states. 

You should still understand the removal process and hazards that go along with it, though. Keep reading, and we’ll teach you all you need to know about oil tanks, their liabilities, and how to correctly remove one from your property.

Why you should get your old oil tank removed

A heating oil tank can be a serious environmental hazard and an immense financial liability if it starts to leak. And since switching from oil heating to natural gas can help you save a lot of money on your heating bills, there’s really not much reason to keep your oil furnace and storage tank if natural gas is an option in your region. 

According to the Energy Information Administration, it cost $2,904 to heat the average home using oil in the winter of 2023. For comparison, natural gas customers only spent $787 for heating in that same period. Additionally, the oil must be delivered to your home by a truck instead of fed into your furnace via a utility company’s mainlines, so natural gas is more convenient than oil and more affordable.

Affordability aside, the liability of an old fuel tank sitting in your basement or buried on your property is arguably the best reason to get it removed. Fuel oil tanks, especially older models, are typically made from steel, a material that rusts and corrodes when exposed to moisture. And unchecked corrosion eventually leads to oil leaks. 

An oil leak in an underground storage tank (UST) will contaminate soil and groundwater, which can seriously threaten public health. When this happens, expensive soil remediation is necessary to remove and treat the contaminated soil properly. Costs for soil remediation vary depending on the severity of the oil leak, but the EPA estimates that it costs anywhere from $10,000 to $1,000,000. And since your oil tank belongs to you, you’ll have to pay for the remediation, though your insurance company may help.

An aboveground oil tank isn’t quite as big a liability since you can usually spot corrosion before it causes a leak. Still, if your tank does end up leaking unnoticed, it will fill your basement or yard with oil, depending on where the tank is stored. Not only can this cause all the same problems as a leaking UST, but it will also expose everyone in your home to toxic oil. 

All things considered, it’s best to remove your old oil tank as soon as possible if natural gas is available where you live. If you’ve already made the switch but you still have the old oil tank on your property, you should get it removed ASAP. It isn’t doing you any good, and unless it’s been decommissioned via proper oil tank abandonment procedures, it’s still a liability.

How much does oil tank removal cost?

Oil tank removal is relatively affordable as long as your tank doesn’t leak and you don’t have to worry about remediation. On average, oil tank removal costs about $1,664, though depending on the tank’s size, age, and location, you could pay anywhere between $500 and $3,000. In some instances, costs can be even higher.

Also, if you’re switching to natural gas at the same time you’re removing an old oil storage tank, you should keep in mind that this isn’t all you’ll pay. You’ll also have to remove the oil heat furnace—which can cost as much as $200—and install a new natural gas furnace, a project that can cost anywhere between $4,000 and $10,000. 

All told, switching from oil to natural gas heating can cost as much as $12,000 if you’re charged on the high end for all the project costs, though you’ll likely pay less. 

How oil tanks are removed

Now that you know why you should remove your old oil tank and how much it can cost, let’s talk about the process a little so you know what to expect. 

How aboveground storage tanks are removed

When a tank removal crew extracts an aboveground storage tank, they’ll first siphon out all the oil that can still be used. This oil can be filtered and resold, so in some cases, the removal company might reimburse you for the price of the oil they extract from your tank. 

Next, the crew will cut a large hole in the tank with a saw. With this hole open, the crew can access the inside of the tank and remove all the sludge. Sludge is a thick slurry of sediment that accumulates at the bottom of an oil tank over time. Sludge typically consists of rust, waste oil, minerals, water, and even microorganisms that can grow in oil. 

As you might expect, this sludge is considered hazardous waste and has to be correctly disposed of, so the crew has to scrape it out and ship it to a treatment facility for recycling and reuse. Once they’ve removed all the sludge, the crew disconnects the tank from all its fill pipes and vents. This usually involves cutting them away with a saw. 

With this done, the tank can be cut down into multiple pieces for removal or carried away whole if it’s small enough. Once they’ve got the tank out of your house, the crew will take it to a suitable waste disposal location that can adequately treat the scrap metal and sell it. 

How underground storage tanks are removed

The first step of underground oil tank removal is excavation, which is usually done with a tractor that can quickly shovel away heavy mounds of dirt. Once the tank is unearthed, the process of removing an underground oil tank is similar to that of removing an aboveground one.

The crew siphons out any oil that’s still usable, cuts a hole in the top of the tank, removes the sludge, then severs the tank from its vents and fill lines. Then, when the tank has been emptied and cleaned, the crew uses their tractor to lift it out of the earth where it can be hauled to the disposal location.

After they’ve extracted the tank, the crew will take groundwater and soil samples to check for oil leakage. If they don’t find any soil contamination, they’ll close the hole back up and fill the empty space left by the tank with dirt. If the crew does find contamination during their soil testing, though, they’ll need to document that for the state and the EPA and begin the remediation process. 

Removing your oil tank

While oil tank removal costs are high, it can cost much more to leave an old tank on your property for so long that it leaks. On the plus side, switching from oil to natural gas heating will save you tons of money in the long run. If you have an oil tank rusting away on your property, don’t wait. Contact your local fire department for a list of certified tank removal contractors, or call oil providers near you to ask if they offer tank removal.