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Buyer Due Diligence Part 3: Thar’s Oil in Them Thar Ground

The house we are buying has fairly new oil furnace (2000 according to PortlandMaps’ online permits). PortlandMaps also shows an oil tank installation of a 675 gallon oil tank in 1950. Sampling the soil around the tank was a no brainer. Pray for good news, don’t expect it. We didn’t get it. I knew it wasn’t going to be good because you could smell the oil in the soil sample. The soil is contaminated and will require soil removal to clean up the site. How that happens in the transaction is an open negotiation. Alpha Environmental did the inspection.

I started to research some options yesterday. If the furnace is in poor repair, we will probably convert to natural gas. I am meeting with Portland Green Heat, who is mentioned in a previous post about BioDiesel on Tuesday to determine if what we have is a good candidate for B20 or B99 fuel. That post had some great information in the comments. You can run B20 with no modification and B99 with some modification to the system. If we can make that change a 250 gallon tank would be installed in the basement. As of yesterday, Star Oil charges $4.27 for B99, $4.09 for B20 and Pullian Petroleum $3.86 for diesel per gallon based on a 200 gallon delivery. B20 is 6% more expensive and B99 is 11% more than diesel. I don’t know how they compare efficiency wise.

Then the plan is put a smaller natural gas furnace with AC to heat and cool the top two floors. I don’t think the oil furnace is big enough or ducted to the right places for modern day comfort so it should be able to do the main floor and basement without any issues. Using both heat sources will allow for better heat control and since the top floors are really the only ones that need AC, a smaller unit will be able to do the job.

As a side note: the oil in the existing tank belongs to the seller and is personal property. There is a provision in the standard contract that at closing, the oil is sold to the buyer at the prevailing rate. In this case, the tank will be pumped dry ASAP so that no more oil can leak out of the tank so transfer will probably not be an issue.

5 Comments on “Buyer Due Diligence Part 3: Thar’s Oil in Them Thar Ground

  1. I’ve been using B20 for the last few years, in the future I’ll stop using it. Considering the current food crisis gripping the world, B20 is starting to make less sense. The furnace was serviced once when the ignition clogged, I learned that B20/B99 has a sort of detergent effect on the lines and tank. (pulling sludge through the lines)

    YMMV.

  2. I have no idea as I haven’t seen a bid yet. In the cases where there is no contamination, it costs around $600-$800 to decommission a tank.

  3. I met with Portland Green Heat today and was quite impressed. I got the feeling he knew what he was talking about and he wasn’t plugging one product or fuel source more than another (they install gas, electric and oil heat sources).

    I did learn that even with B20, they are finding the system does need some modifications to avoid potential issues.

    There are a few reasons Jenny doesn’t post. The main one is that it is simply to complicated for two people to post on one site effectively. She comments as she sees fit.

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