How does an abandoned oil tank leak?

Abandoned oil tanks will corrode and leak in one of two ways. 

First, if the tank was abandoned in place previously without soil sampling, the tank likely leaked before it was abandoned in place.  In short, if the tank was filled in place without testing you can't assume it didn't leak, since every metal tank rusts and will likely leak 

Second, if the tank was filled with sand and not 100% cleaned of oil before filling it, you have oil that will leak out in the future, we estimate 60% of previously filled in place tanks were not properly cleaned of oil.   You have oil left in the tank that can leak after the tank is filled with sand.   You see a person has to physically go inside a tank to clean it.

Many tanks were filled by an HVAC or plumbing company, in short not an environmental company.    So you often had work done by people who likely did not have the training a licensed environmental company would. 

Look at the above photo, pretty long tank, say an HVAC company digs a small area to expose the tank and then cuts a small hole in top of tank, then someone has to climb through the hole,  and then crawl to the far end of the tank to clean the oil out. Doesn’t sound like fun.  Often times people only removed the easy pumpable oil and leave the sludge and oil in the tank, thinking they job was good enough for government work and that the sand would absorb the oil (it doesn't).

That being said over 20 years rainwater gets into tank (through the hole the HVAC company cut to fill the tank with sand). So water creates a bathtub effect in the tank, allowing residual oil (oil and water does not 100% mix) and water to overflow out of the tank.

See the photo below:  Note at the top of the photo there is a small semi circular hole cut into the tank, that hole was from the company that previously filled the tank in place.  I think you can see that tiny hole is not big enough for human entry and thus why many oil tanks were not cleaned of residual oil, because the company doing the work never planned on going inside the tank to clean it which is 100% necessary. 

The tank will also corrode and holes will form in the tank.   You see  the sand in the tank is wet, so the bottom of the tank will corrode since wet sand is touching the inside of the tank. 

Yes abandoned in place tanks are a liability and can be a financial drain.  Know that most laws say the property owner owns the contamination and is thus responsible for the cleanup.