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/county, state/provincial and federal — all having significant fines should one not comply. We can’t emphasize it enough, look into your specific laws at all levels ahead of time, and consider insurance and other hoops you might have to jump through. But bulk fuel can be beneficial on the farm.
Considerations for bulk storage
• Do I use enough fuel to warrant bulk storage?
• Cost of the tank (taking into consideration laws governing it for my jurisdiction).
• Cost for fuel stabilization additive.
• Cost of pumping apparatus needed to get fuel from the storage tank to the equipment, including proper length of hose.
• Cost for bulk delivery (is a contract required?).
• Do I have a sufficient location with a concrete floor or footings, which includes hydro capability for the pumping apparatus?
• Do the costs incurred warrant the inconveniences of nonbulk 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 our property?
Determining how much fuel storage one needs can be calculated by the amount used in a year, which should be close year to year for equipment on a farm, excluding a backup generator system, which isn’t so easy to figure. 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 into winter.
Fuel stored at around zero to minus 5 degrees Fahrenheit without an additive will last for about 12 months, warmer temperatures than that and the storage time will drop as much as six months. During storage and exposure to oxygen, gum will form in the nonstabilized fuel, which can cause operational problems with carburetors, injectors, 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, delivery fees, and maybe a contract as well, which again adds to the cost.
Exemptions exist for Canada and the United States. Under Environment Canada’s rules, tanks less than 2,500 liters, which are attached to a heating system or emergency generator, and tanks enclosed in a building with a secondary containment (uncracked concrete pad with perimeter) do not require a double wall secondary containment. Similarly under the United States Environmental Protection Agency’s (EPA) Spill Prevention, Control, and Countermeasure Regulation (SPCC), farms with aggregate above-ground oil storage capacities greater than 2,500 gallons and less than 6,000 gallons are not subject to SPCC regulation based on aggregate above-ground oil storage capacity so long as they have a clean spill history.
As another option to stationary, mobile bulk tanks like those mounted in the backs of pickup trucks could be worth considering. Mounted on your pickup truck, it 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, British Columbia, 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 toolbox. He pointed out that there are stores in Canada that sell overseas tanks that look the same as theirs in a different color, and that’s where the similarities end. All of his mobile tanks are, among other differences, Transport Canada (TC) approved. He advised that stationary tanks have to be ULC (Underwriters Laboratories of Canada) approved, meeting the fire marshal’s 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.
In Canada, when Transport Canada 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 has added on top of TC’s rules in order to establish the requirements for a stationary unit in your particular area.
For a comparison I contacted Tammy Cline, Marketing Analyst for DeeZee USA who advised that their Auxiliary tanks meet U.S. Department of Transportation (DOT) and Federal Motor Carrier Safety Administration (FMCSA) requirements for tanks to perform as an auxiliary fuel system, and that standard transfer tanks cannot be connected to OEM (original equipment manufacture) systems. Tammy also advised that their tanks have been put to use many times as a stationary system for power generators and as a fuel supply on job sites, she also added that they have not identified any government regulations preventing this use. As far as an American having one of their tanks onboard and traveling to Canada, she believes that their U.S. regulations would be sufficient.
When comparing steel versus aluminum, Tammy added that both materials are robust and that the material difference doesn’t sacrifice stability. Aluminum has the benefits of being lighter in weight and rust proof, where with steel tanks, owners should keep the tank full, maintain lubricated walls, and prevent rust formation as a result of condensation or water in the fuel.
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 — if this occurs address it immediately. If the pumping apparatus is electric, consideration should be given to ensure that the electrical contacts, especially the ground cable, are 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, allowing proper capture and drainage of the contaminant.
My fuel storage consists of a small lockable building with a concrete floor and hydro. I call it “the fuel shack,” and it contains a variety of fuel storage: 5-gallon cans of regular gasoline, diesel, and propane and naphtha. I’ve found this a more user-friendly way to manage fuel storage without walking the path of bulk storage in larger containers. 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 is minimal.
In my case, I don’t use enough fuel to warrant bulk storage, and being able to take my empty container(s) with me in my pickup to the cheapest retailer works for me. My insurance company is not involved because of the quantity, and it keeps the fuel fresh without the use of stabilizers. I purchased and now use my USA-made “Mr. Funnel” every time I fill any of my equipment — my ATV, chainsaw, tractor, or airplane — as it’s equipped with a debris-water screen that will filter impurities but allow the fuel, even if mixed with oil, to flow through. It is a very cheap way to prevent problems with your equipment fuel system, it’s easy to clean, and they’re cheap.
If you are considering bulk storage, I would recommend a call to your insurance broker before you get too committed. They can guide you on what you need to do to comply with all levels of government for your region, and especially their requirements. I contacted Lenard Sharman, media relations for Co-Operators Insurance (CO-OP) Canada (my insurance company) 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 makes in regards to installation distances such as 40 feet from buildings, 10 feet from property lines, 25 feet from ignition sources, 50 feet from a drilled well, and 100 feet from a dug well, as well as impact protection.
The CO-OP also requires training to 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.” Lenard gave an example that if a client purchased a 5,000-liter fuel tank valued at $5,000, the client’s premium would increase approximately $10 to $12 per year.
Even if your insurance company doesn’t require you to keep logs of users, training, and additional details, this is a good idea, as is contacting your broker. It’s not worth the risk not to.
Dan Kerr is a retired forensic investigator and for the past five years, writes a maintenance column for Small Farm Canada magazine. His spare time is spent building a personal airplane.