I’ve often thought how convenient it would be to purchase fuel in bulk and save money. But would I actually save money?
Above-ground bulk storage tanks are available in all sizes with or without an attached containment system and come with a barrage of laws including municipal, township, provincial and federal — all having significant fines should one not comply with their directions.
Considerations for bulk storage should be:
--Do I use enough fuel to warrant bulk storage?
--What is the cost of the tank (taking into consideration laws governing it for my jurisdiction)?
--What is the cost for fuel stabilization additive?
--What is the cost of pumping apparatus needed to get it from the storage tank to the equipment including proper length of hose?
-What is the cost for bulk delivery? Is a contract required?
--Do I have an appropriate location with a concrete floor or footings which includes hydro for the pumping apparatus?
--Do the costs incurred warrant the inconveniences of non-bulk storage?
--Do I have adequate security against theft and vandalism (out of sight, out of mind)?
--And finally, what does my insurance agent say about bulk fuel storage on my property?
I contacted Lenard Sharman, with the media relations department for Co-operators Insurance (CO-OP) who stated that: “We pretty well follow the requirements set out by the Technical Standards & Safety Authority (TSSA) who set the rules governing the storage of petroleum products through the Liquid Fuels Handling Code (LFHC)”.
There are recommendations that CO-OP make in regards to installation distances such as 40’ from buildings, 10’ from property lines, 25’ from ignition sources, 50’from a drilled well and 100’ from a dug well as well as impact protection.
The CO-OP also requires training for anyone using the equipment and that logs be kept on training, inspection and maintenance to prove that the tank has been properly cared for and operated. Lenard also advised that, “it is imperative to follow all legislative codes and to err on the side of caution when dealing with fuel storage in that any material change in the risk factor to a client’s property that’s not reported to the CO-OP could void a claim made”. He gave an example that if a client purchased a 5000 L fuel tank valued at $5000.00 the client’s premium would increase approx. $10-12.00/year.
Determining how much fuel storage one needs can be calculated by the amount used in a year which should be close from year to year for equipment on a farm (excluding a generator backup system which isn’t so easy to figure out).
The optimum situation would be to store exactly the amount you need for a year or as close to that as possible, filling up the tank in the fall prepared to go for the winter. Fuel stored at below 20 degrees Celsius without an additive will last for about 12 months. Above that temperature the storage time will drop as much as six months. During storage and exposure to oxygen, gum will form in the non stabilized fuel which can cause operational problems with carburetor/injector and filtration systems. These issues can, however, be managed with a good fuel stabilization product which is a quick fix but yet another addition to the already expensive product being stored.
Having the fuel delivered can become interesting as dealers often require a minimum amount of usage which include delivery fees and/or a contract as well, which again adds to the cost of the fuel.
Under Environment Canada’s rules, tanks less than 2500 liters which are attached to a heating system or emergency generator and tanks enclosed in a building with a secondary containment (non cracked concrete pad with perimeter) do not require a double wall secondary containment.
As an option to stationary tanks, mobile bulk tanks such as those that are mounted in the back of a pickup truck could be worth considering. Mounted on your pickup truck a tank would be covered under your vehicle insurance including theft and have no bearing on the property insurance at all.
I contacted Brian Nelson owner of Tidy Tanks Ltd. in Langley, BC who advised that his company manufactures quite a collection of storage tanks in single wall, double wall, stationary, mobile and mobile with a built in tool box, all Transport Canada approved. He advised that stationary tanks have to be ULC approved meeting the fire marshals approval while on your property and although some folks use the mobile units for stationary storage it is not legal and they could find themselves in trouble with their local fire marshal as well as other agencies should something go wrong. When Transport Canada (TC) set the rules for the mobile units and the Ministry of Transportation Ontario (MTO) added more rules just to make sure, you can see why it’s imperative that you start with your local municipality to establish what each bureaucratic level have added on top of TC’s rules in order to establish the requirements for a stationary unit in your particular area.
Maintenance on bulk units are more visual than anything else other than changing the filter which is based on usage and watching for any rust that may appear which should be addressed to prevent a further deterioration. If the pumping apparatus is electric, consideration should be given to ensure that the electrical contacts especially the ground cable is all in good order. Fuel stabilizer should be a “de-emulsifier” and not an “emulsifier”. Emulsifiers encapsulate the water molecule and allow it to pass through the system into the combustion chamber. In aspirated (carbureted) engines this is not a problem but with injected engines this will promote premature stretching of injectors which supports poor engine performance all around. De-emulsifiers force the petroleum and water molecules apart which allows proper capture and drainage of the contaminant.
My fuel storage consists of a small lockable building with concrete floor and hydro that I designated as the “fuel shack” and contains a variety of fuel storage including five gallon cans of gasoline and diesel as well as propane and naphtha. I have found this a more user friendly way to manage fuel storage without walking the path of bulk storage in one container. If one of my containers was to spring a leak the containment that I have in place would control the spill and the replacement cost of fuel and container would be minimal.
In my case I do not use enough fuel to warrant bulk fuel storage and being able to take my empty container(s) with me in my pick up to the cheapest retailer works for me. My insurance company is not involved because of the quantity is low and the fuel is always fresh without the use of stabilizers.
If you are considering bulk storage I would highly recommend a call to your insurance broker first; it’s hardly worth the risk not to.
- Dan Kerr