Thinking about Onsite Storage? Start Here.

Oil & Energy speaks to the experts to get your questions answered about adding onsite storage.

Is the grass really greener on the other side of the storage tank? For heating oil and propane retailers who do not have onsite storage, winter’s peak delivery schedules include scheduling trips to the wholesaler and, for those without contracts in place, price and supply concerns. At some point, as the owner tallies up travel time and rack costs, the thought might slip in, “If only I had my own storage … but how would that work?”

Oil & Energy spoke to the experts to answer that question and others about onsite storage for heating oil or propane. What’s involved, how long does it take, how is new storage different from expanding current capabilities, and more.

Meet our experts

First, our thanks to Mark Savage, President of Savage Associates and Matt Hiltz, CEO of Hiltz Propane Systems for their time and assistance.

Hiltz Propane Systems is located in Marietta, PA. Hiltz specializes in turn-key bulk propane storage solutions, from design and permitting, to engineering, installation, and ongoing service and maintenance support. For more information on their services, contact sales@hiltzpropanesystems.com or service@hiltzpropanesystems.com or call (717) 799-4322.

Savage Associates is headquartered in Bedminster, NJ. For over 70 years, Savage Associates Inc. has been a leader in providing liquid and gas transfer equipment and systems to the petroleum, chemical and industrial markets. Started in 1948 by John A. Savage as a regional office covering the New York Metropolitan area, they have grown into a worldwide company today. Contact Mark at (908) 234-1216 or marks@savageassociatesinc.com.

When a retailer comes to you considering installing bulk fuel tanks, what information do you need them to provide during the initial consultation?

Savage: Very first thing we need to know is what kind of site is it on. Where will your site be, do you currently have tankage there? Especially in New York and New Jersey, it’s much harder to get permits if there aren’t already tanks that are grandfathered in. Then we need to know what will you be storing: home heating oil/diesel or gasoline, as they each have their own nuances.

Do you have land and have you gone through the permitting process? Usually the answer is no, and that’s where we get started. Permitting requirements will need to be addressed ASAP and can be a hurdle, especially in the Northeast.

Hiltz: The most important information is the region/state location of installation. Does the customer have an existing piece of property? Is it developed? Is it zoned or approved for fuel storage? Also, initially how will the propane system be used? Is it for propane retail store distribution, industrial application, or agricultural use? Other things such as: What are the annual estimated gallons to process through the system? What is the connected BTU load? What is the expected timeframe for system completion? These are important first questions.

What does a company need know before deciding to go forward with an installation?

Hiltz: The likelihood of getting approval in the area or on the property identified, the expected timeframe for planning permitting installation and bringing the system online. Estimated project costs would be good to know as early on as possible.

Savage: The characteristics of the land where the tank is going to be placed. They will need engineered studies – ground testing, soil testing, etc., to make sure the tank(s) can be supported by the ground it’s going onto. You also need to look at containment and runoff, which will be critical items to nail down for your SPCC plan. These will be critical items when talking to the building department and getting the permit process to move along.

How long does the design and development process take, including any permits that might be needed?

Savage: If you are an established facility with existing tanks and you are adding a tank or new infrastructure, it may be easier to get the necessary permits. But if you’re looking to erect on a brand new site, it can take a lot longer, especial when you are in the tri-state area. We have customers who have taken years trying to put in new tankage, due to the red tape that you can encounter. Usually, though, it doesn’t take too long, as long as you have a good working relationship with your building department. It can take as little as a few months. We’ve even seen some fast-tracked in as little as a week or two.

Hiltz: The length of time for the phase can certainly be impacted by the region, state, or locality of the installation. Often the engineering and design phase can be completed within 1-2 months. In some instances, review and approval of permit submittals can happen within 30 days, but often closer to 3-4 months depending on the scope and location of the project.

How do you determine what size tank (or tanks) to install? What is “average” for bulk fuel retailers, if there is such a thing?

Hiltz: Determining the size of the tank will often depend on the type of application, the estimated annual gallons the tank needs to service, the frequency of ratability of those gallons, as well as current forecasted needs. Also, the user’s 3-5 years-and-beyond plan could have an impact on the size or quantity of tank suggested. Typically, the average size for a propane retailer is 30,000 gallons; often systems can be built with multiple 30,000 gallons or upwards of 60,000-90,000 gallons, but the average is 30,000 gallons.

Savage: That’s the start of the conversation – we ask what are they trying to do. Now we have customers growing into biofuels and renewable diesel, trying to expand their product line. So, what is their anticipated output; what are they expecting to do; what have they done in the past? We have an internal calculation we do to provide them with the estimated number of tanks and size of tanks for their individual project.

What determines whether to use an aboveground or underground storage system?

Savage: Many items go into that determination. The type of site (service station vs bulk plant), size of the site, what is being stored, the volume to be stored and most importantly, any and all local/state/federal regulations.

Hiltz: For above ground, the decision can often be customer preference. Sometimes for the aesthetics and/or the need for above grade space can impact whether to bury the tank UG and save space. Additionally, the size of the property and setbacks to property lines buildings or neighboring exposures can impact the decision to put a tank AG or UG. Finally, firefighting response times or water availability can impact the decision to install a tank AG
or UG.

What are the best-practices for maintenance of these systems?

Hiltz: Take service and maintenance seriously. We would suggest customers have checklist programs to verify functionality and condition on a weekly and monthly basis. We encourage them to hire a service provider to conduct an annual inspection, preventive maintenance program to ensure all equipment is function properly, being properly maintained, and the system is able to meet all system and safety requirements. Hiltz has a dedicated service team that can do all these services, and we offer recommendations on how best to maintain these systems.

Savage: That depends on the type of tanks – all tanks need to be watched, must be properly vented for capacity and output, have correct gauging for accurate gallonage and probes for high level control. You want to make sure you have a way to mitigate water when it comes in. For example, horizontal tanks must be sloped to the lowest point where a drain valve is accessible to remove the water. With a double wall tank, the customer needs to check the interstitial space and condition of the outside tank (including the bottom) every few months for corrosion. You need to use your eyes and test your product. If it sounds like the maintenance for a home tank, it is. A steel tank is a steel tank is a steel tank. They all need to be regularly monitored.

Are there any federal (or regional) regulations requiring regular testing or certification of the tanks?

Savage: The industry follows the API 650 and 653 guidelines for installation and tank testing. A qualified tank service company will be needed to inspect, generate either a passing report or one recommending repair, as well as perform any necessary work.

Hiltz: All bulk storage tanks must be ASME certified pressure vessels, they must have a legible ASME data plate or stamping and be equipped with over pressure relief valves and meet the requirements of the NFPA 58 gas code. NFPA 58 will also reference DOT compliance and manufacturer recommendation for hose testing and replacement as well as over pressure relief valve testing and replacement, respectively.

How do biofuels or renewable diesel change the installation and maintenance?

Savage: With renewable diesel, you don’t have to do much to the tanks. The product can go directly into a previously used diesel tank if you would like to repurpose it for renewable diesel. Biofuels are more involved. It requires changes to the tanks. If you are going to store B99, you need to make sure the tank is insulated and heat traced. There are several ways to do that. You also need to be able to recirculate your tank. There’s more maintenance that goes into a bio tank, mostly because you want to make sure you’re eliminating water. The combination of water, bio and heat can create severe chemical reactions, one of them being the formation of acetic acid within your tank, which can lead to pitting and eventual tank bottom failure.

These issues will be part of the recommendations we make when the tank is going in. Our people can take a look, inspect, help them out.

What industry changes have you seen in the last 5 years?

Hiltz: We continue to see certain regions (NE, NY) attempt more regulations or restrictions on fossil fuels and as a result the ability to install infrastructure in regions or the timeframe it takes to seek and receive approval can be negatively impacted.

On a technology front, we continue to see advancements being made by equipment manufacturers with such things as remote monitoring, product flow improvements, safety and relief valve technologies that result in new options that did not exist 5 years ago. One significant change we at Hiltz have experienced is the consideration of more prefabricated storage systems. For example, mounting a 30k tank on a prefabricated skid structure and including all propane system components, pumps and compressors, truck transfer stations, as one package unit that can be delivered and ready for service much quicker than the traditional onsite installation. This is a service that Hiltz provides and an area where we are still growing.

Retailers continue to add storage to existing locations, expand into new regions, and invest in bulk storage. We continue to see home heating fuel providers add propane as a fuel service and they are installing new storage facilities to support their new fuel line. Some of the possible contributing factors could be continued growth and market opportunities, buying power that comes with having your own storage and the ability to manage your own gallons better, protection against supply disruptions, and adding value to their businesses both for themselves and the customers they serve.

Savage: I’ve been happy to see the number of customers jumping at the opportunity that advanced fuels such as biodiesel and renewable diesel can provide. Over the last 5 years, largely thanks to the HBIIP grant, we’ve been able to upgrade many plants in the region to allow them to bring bio into their plants to meet the ever-changing fuel requirements within the Northeastern states. The growth of biodiesel and renewable diesel has been a key strategic development in keeping liquid fuels strong in the face of the “electrify everything” movement.

Retailers are becoming more strategic – with renewable diesel coming in, they’re looking to see what to put in next. When the HBIIP grant was available, everyone was looking to increase their storage. Now we’re waiting on a decision on when the next set of grants will go through.

Have tariffs and/or supply chain issues affected your business? Have prices increased because of the tariffs?

Savage: Anytime tariffs are involved we always see price fluctuations. The price of steel was not as volatile as a lot of people thought. I originally thought the prices of tanks were going to greatly fluctuate, but it didn’t change that much. However, meters, pumps, valves, etc., did have some dramatic shifts. It just creates some uncertainty, but when you been in the industry long enough, you have been through this before.

Hiltz: Leading out of the global pandemic we saw supply chain issues and prices elevating rapidly for 2–3-year period, leveling off in late 2023 and early 2024. Through that and even considering the last 18 months-2 years, fortunately we have been able to stay ahead of most price increases and equipment availability. The recent tariffs from the last 6-8 months have had slight impacts. It appears the manufacturers of tanks and equipment have stayed ahead of them both in the way they buy raw products, their strategy and the process and communication to companies like ours. Honestly, speaking for Hiltz, we have not seen a drastic impact from the tariffs to date.

Any last thoughts?

Hiltz: Businesses need to have an understanding that the process from start to finish, engineering/design to start up does take time. The earlier we can be involved in the process the better our ability to complete projects in a timely manner and meet goals. Know there are companies out there that can provide support and service from start to finish as well as continued support with service and maintenance needs.

Savage: We’re been doing this for years. Any questions you might have about storage, come to us for whatever it may be. If you’re looking to expand your operations and add tankage, it’s critical to understand your site and possible limitations to add tankage, and have someone who can help you find options.

Again, our thanks to Mark Savage, Savage Associates, and Matt Hiltz, Hiltz Propane Systems, for their time and expertise. For more answers to your storage questions, contact Mark at marks@savageassociatesinc.com or Matt at sales@hiltzpropanesystems.com.

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