Keith Phillips now has a heating oil tank with a leak alarm after his last one spilled some 1

Oil spills on the home front

Heating oil tanks: unregulated, uninsurable, and homeowners are on the hook for leaks

Last year, the average Canadian household spent $1,400 on expenses at Christmas. Keith and Susanne Phillips can only dream of a holiday season so cheap.

The Saanich couple was left with a $48,000 cleanup bill when their home heating tank failed mere days before Christmas 2011, pouring upwards of 1,000 litres of oil into the soil on their property.

“We had the tank topped up, around 800 litres, on (Dec. 21). By the next morning (the tank) was dry and the furnace wouldn’t turn on,” recalls Keith. “There was a hole in the tank smaller than my little finger. You couldn’t even see a hole, at first.”

Nobody knew the age of the steel oil tank aside the house on Phillips’ Ambassador Avenue property. Keith says it could’ve been anywhere between 20 and 50 years old. Either way, it had been sitting long enough that oil corroded the tank from the inside, ultimately rupturing on Dec. 21.

“We had a platinum protection plan where (our oil company) would do sonic testing of the tank to check the thickness of the walls. We were also using their oil that’s supposed to have additives in it that retards corrosion,” Keith says.

“We were sort of relying on that plan, to some extent, to give us a head’s up if something was up. At the end of the day that didn’t help us out. We’re kicking ourselves now – it was an old tank, why didn’t we just replace it? For $2,000 we could’ve avoided a ton of grief.”

Cleanup of the property began immediately after the spill. Crews and backhoes dug out oil-saturated earth, and trucks, tractors, hazmat vehicles and cement mixers used their property as a parking lot. And on Day 1 of remediation, the Phillips’ insurance company delivered the bad news.

“Our insurer said, ‘This is the escape of pollutants clause in your home insurance.’ They wouldn’t cover any of it,” Keith says.

Most insurance coverage for homes with oil heating includes a pollution exclusion clause, which states the insurer won’t cover losses or damages caused by contamination or the release of pollutants.

“Do you carefully read all the clauses before you sign your (home insurance) policy?” asks Elizabeth Adjin-Tettey, an associate dean in the faculty of law at the University of Victoria and an instructor of insurance law. “Most of us don’t even know that we have those clauses in our contract.”

Insurance companies have pollution exclusion clauses to avoid being exposed to costly oil spill scenarios, but some policies cover homeowners in the event oil leaks onto a neighbouring property.

Naomi Kovak, with UVic’s Environmental Law Clinic, says re-examining such clauses and changing insurance requirements would be a step toward proactive spill prevention.

“Even where they do not have such an exclusion clause, recent case law would suggest that property owners might still find themselves without coverage,” Kovak wrote in a recent report, co-authored with fellow student Trevor Johnson.

“Other jurisdictions have passed regulations requiring the insurance companies to at least offer pollution coverage, though they still leave it up to the individual homeowner whether or not to purchase it.”

Kovak and Johnson’s report, entitled Preventing Home Heating Oil Spills in British Columbia, focused on seven suggested provisions. Their recommendations would, overall, protect the environment through prevention, and take part of the onus off homeowners, should a spill occur.

Among the recommendations are: improved physical requirements for tanks and equipment; limiting the length of time a tank can be in use; regulating oil delivery; inspection and monitoring requirements; tank decommissioning requirements; and direct economic incentives for homeowners to change heating fuels.

“I think the ultimate solution here is provincial changes. This is not a Victoria problem, it’s not a Saanich problem, it’s a B.C. problem,” Kovak says.

“We’ve had a provincial government that’s been neglecting the environment and repealing environmental laws, so we really need to take some action provincially,” adds Calvin Sandborn, legal director of the environmental law clinic and supervisor on the report.

Kovak and Johnson’s research found that B.C.’s legal protection surrounding oil spills is reactive, as opposed to preventative. The Environmental Management Act, the B.C. Fire Code and the federal Fisheries Act all come into play only after oil hits the ground.

“You can charge people, you can sue people, you can get money out of people, but what the law’s not doing is preventing the accidents from happening,” Kovak says.

The simplest steps that can be taken, the report says, is creating inspection requirements so oil companies aren’t refilling old or corroding tanks.

“We’re suggesting by regulating oil delivery, which is a better preventative system, oil shouldn’t be delivered to tanks that are old or that aren’t in good shape. Oil companies, once given the tools to measure that, can be held responsible once they spill,” Kovak says. “As deliverers of oil, the oil companies are in a unique position to reduce the risk of spills from poor tanks.”

Adjin-Tettey suggests that until legislative changes are made, a homeowner’s best protections are vigilance and seeking to secure better protection through one’s insurance company.

“Say to your insurer that you want to have a modification of the terms to include certain things that are normally excluded. The insurer will likely say ‘no,’ but if they do say ‘yes,’ be sure it’s reflected in your premium – which may not be worth it,” she says.

“Your options are to live with it or try to negotiate to have it covered at a much higher premium. Monitor the oil tank and make sure it’s replaced when it needs to be.”

The Phillips’ new tank is much more “skookum” than their last, they say, and it’s now located in their garage, as opposed to on a rarely frequented side of their house. It also has failsafe technology – it’s essentially a tank within a tank with an emergency gauge to sound an alarm if there’s a leak in the main bladder.

The couple says at least four of their neighbours replaced their old heating tanks when they saw the destruction to the Phillips’ front lawn and learned of the cleanup costs. Keith says he hopes other Saanich residents will also learn from his family’s misfortunes, and take action to prevent themselves from landing in a similar situation.

“It was one of those things that was out of sight, out of mind, and in retrospect we should’ve been more proactive,” he says. “Nobody wants to go through what we went through. We were one of the lucky ones, really, when you think how bad it could’ve been.”

Cleanup costs associated with home heating oil spills can easily reach hundreds of thousands of dollars.

“It’s hard on us – my retirement’s been pushed back a few years, but it could be financially devastating to a lot of people,” Keith says. “And these old tanks are all destined to fail, just by the effluxion of time.”

The Phillips are optimistic Christmas 2012 will be a different story for them compared to last year, and hopefully one that’s a lot less stressful and less expensive.

“It’ll be better, this year,” Keith says. “I hope it’ll be much less memorable.”

To read the full report from the Environmental Law Clinic, visit



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