Source: ExxonMobil
Contamination of fuel by water and dirt entering the fuel as a result of careless fuel handling may cause poor diesel engine performance. Extreme care must be exercised. Fuel-tank caps, dispensing nozzles and hoses should be kept clean to eliminate potential sources of contamination. Regularly removing water from storage tanks, vehicle fuel tanks, and filter bowls is important. Dry storage systems will reduce fuel emulsion problems, injection system corrosion and microbial growth.
Water gets into diesel fuel storage and vehicle tanks in several ways – by condensation of humid air, during transportation from refineries to service stations, by leakage through faulty fill pipes or vents and by careless handling. Water can cause injector nozzle and pump corrosion, microorganism growth and fuel filter plugging with materials resulting from the corrosion or microbial growth. Both vehicle and storage tanks should be checked frequently for water and drained or pumped out as necessary. In extreme cases, biocides may be required to control microorganism growth. In cold northern winters, ice formation in fuels containing water creates severe fuel line and filter plugging problems. Regularly removing the water is the most effective means of preventing this problem; however, small quantities of alcohol may be used on an emergency basis to prevent fuel line and filter freeze-ups. Cleanliness refers to the absence of water and particulate contamination. This characteristic is important because dirt and water can plug fuel filters in your engine and cause severe damage to your fuel injection system because of the close tolerances within fuel pumps and injectors. All diesel engine manufacturers equip their engines with fuel filters to protect the fuel delivery system. You should replace these filters according to the manufacturer's recommendations. Some manufacturers also provide filters with drain valves and recommend periodic draining of any water that may accumulate from condensation and careless handling in storage or vehicle tanks.
http://www.exxon.com/USA-English/GFM/Products_Services/Fuels/Diesel_Fuels_FAQ.asp
Source: Advanced Fuel Solutions
Tank maintenance is an essential part of any successful premium diesel or heating oil program. As little as .01% (100ppm) water in a fuel storage tank can cause operational problems. Water cannot be completely eliminated from distillate fuels. It can get into the fuel at various stages as it progresses through the distribution network from the refinery to the end-user. Water can get into the fuel during its production, when the hot fuel is in contact with process water. Most of this water is removed in the stripping units at the refinery and more will separate as the fuel cools, but still, some water remains in solution with the diesel. This entrained water may cause a haze in distillate fuel.
Most of the water present in fuels will drop out as it is heavier than the fuel and will sink to the bottom if given time. The temperature of the fuel has an impact on its water-shedding tendencies as well. Warmer fuel can hold more water in suspension than can colder fuel. Water can also be introduced during transportation and storage of the fuel as well. Sea-going vessels can sometimes introduce water into distillate fuel, which can then drop out into storage tanks. Tanks themselves have inherent problems at roof seals and vent pipes which can allow rain water to seep into the system. During fuel withdrawals, tanks can breathe in large volumes of humid air. Moisture in the air will condense when the ambient temperature falls, collecting in tank bottoms. This is particularly prevalent in the spring and fall when the day-night temperature fluctuations can be extreme.
In cold weather, many water-related problems are incorrectly attributed to the fuel. Water in tanks can freeze 20oF - 30oF above the temperature at which fuel-related problems begin (cloud point). Ice crystals can build up on filters, restricting flow and compromising performance. They can also restrict fuel flow in tank pumping lines.
In warmer weather, the presence of water in tanks may encourage the growth of fungi or bacteria which live in the tank water bottoms and feed on the fuel. Under the power of a microscope, these bugs look like deep-sea creatures. To the naked eye, these bugs show up as slimy mats of substance that can be any color from green to black. Under ideal conditions, these bacteria can double in number in as little as four hours. When left unchecked, they can be drawn out through suction lines and plug filters. In addition, the by-products of their fuel consumption are very acidic and can cause pitting and decay in tank bottoms. Many tanks go unchecked for years, accumulating water from any number of sources. When fuel inventory is low, water bottoms can be stirred up during deliveries, and if not allowed to settle out, can be suctioned out into a transport truck or into a diesel vehicle's tank.
Water also causes corrosion in storage tanks and engine systems. The by-products of this corrosion, including scale and rust, can all lead to filter plugging or injector fouling and can help make a stable emulsion.
Fuel injection pumps are often times lubricated only by the fuel they are pumping and are, therefore, very susceptible to seizing if water gets into them. These high-pressure pumps are not at all tolerant of dirt, debris and organic deposits, all of which can be carried into them with water. The barrel and plunger clearance is often times only 1-2 microns. This tight tolerance is necessary to maintain fuel injection pressures and ensure minimal leakage past the plunger shaft.
Ideally, storage tanks should be checked with a stick treated with water-finding paste prior to every delivery. Many tanks are, however, difficult to gauge for water due to limited access.
Underground tanks can settle to one side and unless you are checking at the low end, you can get a misleading indication of how much water is present. Most tanks have more water than can be easily detected so err on the side of caution.
All water should be drained from storage tanks periodically. The frequency will depend on the ease of removal, volume of fuel throughput and tolerance of water-related problems. It is not always an easy task, but tanks should never go more than 6 months without having bottoms removed.
Be sure to remove water and bottoms until the product being removed is "clear and bright". Remember, emulsions being held stable at the bottom of the tank due to sediment or biological growth can cause problems just as bad as if you were pumping straight water.
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