The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
Issue link: https://read.dmtmag.com/i/393307
38 OCtOBER 2014 | FUEL OIL NEWS | www.fueloilnews.com BUSINESS OPERATIONS By Stephen Bennett W hat do you do when reme- diation costs for a fuel oil spill estimated at $179,900, instead turns into a bill for $1.2 million? That's what happened in the case of a spill that occurred at a farm in Ontario in 2006. The farm operators filed a civil claim against the fuel oil company that installed an above ground storage tank and delivered the fuel that spilled. The case was not decided until this year. The court found that the fuel oil company was not liable; the farm operators have filed a notice of appeal. Besides garnering wide attention, the case embodies a cause-and-effect chain that threatens Canada's fuel oil indus- try—and that the Canadian Oil Heat Association is mobilizing to address, said Stephen Koch, president of the association. A spill or leak is the first link in the chain; the other links are insurance com- panies, remediation companies, envi- ronmental authorities and the courts. "The biggest threat to our industry right now is insurance issues," Koch said, citing continually rising premiums relat- ed to out-of-control remediation costs. "Homeowners are being directed by their insurance brokers to remove their oil- burning units and move to a different source of heating, so that they can reduce the premium that they pay on their house insurance. That's become a huge threat to us right across Canada." In response, the COHA board this year approved and developed a Multi- Stakeholder Advisory Council that includes representatives from all the links in the aforementioned chain: gov- ernment, remediation companies, insur- ance brokers, regulators and consumers as well as representatives of COHA. The council's purpose is to find ways to reduce risks of spills and leaks, in part by identifying their causes, wheth- er tank failures, line failures or mis- takes being made in installation or ser- vice. Collected data will be evaluated at the council's next meeting, Oct. 16 in Toronto, at which risk-reduction pri- orities also are to be recommended. In addition, the association's techni- cal committee, through its GreenTech certification program, is preparing to add education in new technologies and new methods of equipment installation and setup; the goal being to limit risk of contact or impact that might cause a system leak or spill. The association has also asked gov- ernment to be engaged so that the stan- dards bodies are educated and informed as to what they should look for during inspections. The idea is to avoid disputes where an on-site inspector finds fault and the fuel oil company insists that its work was done "to code," Koch said. The new advisory council is also charged with looking into the reasons remediation costs have sky-rocketed. In the case stemming from the leak at the Ontario farm, the judge expressed concern that there seemed to be no standard process for the reme- diation, according to Koch. Instead, the remediation company seemed to have been given "carte blanche," without a process that would end in "a true understanding of the problem prior to the start of the remediation," Koch said; the judge indicated that insurance companies that hire remediation com- panies should take more responsibility for oversight of the process. "That particular judgment indicated within the industry and the stakeholder groups that we work with that something may be amiss here," Koch said. "Is there concern of fraud or mismanagement within the remediation process?" Exploring how government and industry could play an oversight role in remediation is another aim of the coun- cil. "We can reduce risk in spills and leaks," Koch said. "The data we're seeing is telling us that spills and leaks overall have decreased in the last couple of years. We haven't seen a decline in reme- diation." Allowing that state of affairs to continue would result in "continued pressure on the industry," he said. Gaining access to in-depth data on spills and leaks proved to be not-so- easy at first. While government regu- lators collect spill data, "They're very limited on what they collect," he said. "They don't put in what caused the problem. It's generally just where the spill happened, how many liters were spilled, and who were the key people." Further muddling the picture is that insurance companies rely on remedia- COhA targets Clean-Up Costs Remediation costs in Canada are running rampant Stephen Koch, COHA president.