ASTM International Issues Revised Phase I Environmental Site Assessment Standard

Authored by: Julie Kilgore, President, Wasatch Environmental, Inc. and William R. Weissman, Retired Partner, Venable LLP November 2013

This article was originally published on The Horinko Group website.

ASTM International, Inc. (ASTM) has issued a revised version of its widely used Phase I Environmental Site Assessment (ESA) due diligence standard. Originally developed in 1993, the Phase I standard is used to conduct research into the previous ownership and uses of a property to identify the potential for releases of hazardous substances or petroleum products that could lead to potential future liability. The most significant revisions occurred in 2005 to meet the new requirements enacted by Congress in the 2002 Brownfields Amendments to the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as CERCLA or Superfund). Following ASTM's 2005 revisions, EPA referenced the 2005 Phase I standard as compliant with the “All Appropriate Inquiry” (AAI) regulation and hence an acceptable alternative procedure for satisfying AAI requirements.

Because all ASTM standards have a maximum shelf life of 8 years, ASTM's Phase I Task Group began a careful review of the 2005 standard in 2010 to simplify the language and clarify provisions that experience had shown were sometimes misunderstood in conducting Phase I assessments. The new E1527-13 standard is the result of that review, and it now supersedes the 2005 standard. Copies may be obtained at www.astm.org. EPA has proposed a similar reference of the 2013 revision as compliant with the AAI rule and expects to take final action on the proposed reference by year–end.

There are three primary sets of users for ASTM E1527:

• The task group found that many consulting firms performing Phase I ESAs throughout the country were already following the flexible procedure now prescribed in E1527–13. What was often missing in past Phase I reports, however, was the environmental professional's rationale for why a review of those records was not conducted. There are a number of valid reasons for dispensing with a search for agency records. For example, the environmental professional could determine that the database information was sufficient to allow a finding that there is a recognized environmental condition on the property. The professional might consider certain factors to justify concluding that a neighboring property was not a risk to the subject site. Or the professional might conclude that needed records were not available within reasonable time or cost constraints, or perhaps the needed information was available from another source. All of these reasons are permissible within the framework of E1527–13.
• Municipalities and quasi–governmental agencies applying for federal brownfields grants;
• Lenders who finance commercial property transactions for evaluating and managing environmental risks as part of their loan determination.

The ASTM E50 Task Group determined that several of the provisions in the 2005 standard were confusing and resulted in varying interpretations that produced inconsistencies in how information was presented to the end user. The aim of the E1527–13 standard was to clarify these ambiguities, simplify some of the definitions, and facilitate greater consistency in applying the standard. In a document EPA prepared comparing the 2005 and 2013 standards to determine consistency with the AAI rule, the Agency determined that “the newly revised standard, although essentially congruent to the ASTM E1527–05 Phase I Environmental Assessment Standard, provides some clarifications and additional guidance for the environmental assessment of commercial properties and determining whether or not there are recognized environmental conditions at a property or conditions indicative of releases or threatened releases of hazardous substances at a property.” See EPA, Summary of Updates and Revisions to ASTM E1527 Standard Practice for Environmental Site Assessment Process — How E1527–13 Differs from E1527–05, available at "http://www.regulations.gov/#!documentDetail;D=EPA–HQ–SFUND–2013–0513–0003.

A few commentators have circulated statements that E1527–13 introduces significant new costly requirements pertaining to a range of subject areas, including vapor intrusion, agency file reviews, and characterization of remediated properties. These dire predictions are wildly exaggerated and contrary to both EPA's and the ASTM task group's understanding of E1527–13. Only those who misread the 2005 standard as allowing environmental professionals to dispense with requirements that were never intended to be discretionary may face material changes in their Phase I implementation strategy. This minority of environmental professionals is now on notice that even if they continue to use the 2005 standard, they can no longer justify an inadequate environmental assessment by relying on the ambiguities in the outdated 2005 standard. The clarifications in the 2013 standard provide ample guidance on what constitutes “good commercial and customary practice” for a Phase I assessment consistent with EPA's AAI rule. It would therefore be useful to explain the clarifications in E1527–13 and to dispel some of the myths circulating in the media.

Vapor

The primary challenge with “vapor” is the tendency to use of the terms “vapor intrusion” and “vapor migration” interchangeably. An evaluation of the potential for vapor to be present inside a building as a result of a release has never been part of a Phase I in the past and is not part of a Phase I with the new revision. The objective of a Phase I ESA is to identify the presence or likely presence of hazardous substances or petroleum products on the property due to a release. Whether that release or suspected release is affecting soil, groundwater, or indoor air is a matter of further evaluation and is not part of the Phase I assessment.

What is new in the revised ASTM standard is a definition for “migrate” or “migration.” This definition states that “migrate” and “migration” refers to the movement of hazardous substances or petroleum products in any form, including solid and liquid at the surface or subsurface, and vapor in the subsurface. There is no requirement to identify in the Phase I ESA which form the environmental professional suspects the hazardous substance or petroleum product may be present on the target property, but rather to understand the various pathways and how the hazardous substance or petroleum product is likely to migrate on to the property.

Agency File Reviews

There was considerable discussion within the ASTM task group on the issue of agency file reviews with active participation by all interested stakeholders. The aim was to strike a reasonable balance to achieve the objectives of AAI without creating an undue and unnecessary marketplace burden.

It is important to note that there is no mandate to obtain regulatory agency file records in all Phase I ESAs. The flexibility that was built into the revision was in direct response to the diverse opinions on the subject and is consistent with the AAI rule. Nevertheless, there are several important points about reviewing agency records that need to be noted:

• Purchasers of commercial property seeking to qualify for one or more of the CERCLA liability defenses for innocent property owners;
• A major reason that the agency file review issue became contentious during the task group development of the 2013 standard is that some environmental professionals have used the ambiguities in the prior 2005 standard to avoid conducting the appropriate research altogether, even though the objectives of AAI had not been met. The task group sought to address this concern by stating clearly that performing the agency file review is not optional, but if the environmental professional concludes that it is unnecessary in a particular ESA (such as the reasons listed above), the justification for that omission must be included in the Phase I report. E1527–13 puts those who may have assumed that the agency file review was optional under the 2005 standard on notice for future Phase I ESAs that their past interpretation is not consistent either with the intent of E1527–05 or the explicit language of E1527–13.

Definitions of Recognized Environmental Conditions and De Minimis Condition

The definition of recognized environmental condition (REC) has been simplified to track more closely EPA's statement of the objective of the AAI rule to identify “conditions indicative of releases and threatened releases of hazardous substances on, at, in, or to the subject property.” The new definition makes no substantive change to what the Phase I assessment seeks to identify. The term “de minimis condition,” which is not a REC, has been given a separate definition, again without making a substantive change to the term.

Remediated Properties

Under the 2005 standard, properties that had undergone remediation were identified as “historic recognized environmental conditions” (HREC), but the standard was unclear how the environmental professional should treat properties that had been addressed to a standard that allowed contaminants to remain in place. E1527–13 clarifies the ambiguity by bifurcating remediated properties into two categories:

• HRECs are properties that have undergone a site remediation in the past that met unrestricted land use standards at the time of the cleanup, and the standard for unrestricted land use remains unchanged at the time of the Phase I assessment. These properties need not be identified as RECs in the Phase I report.
• “Controlled recognized environmental conditions” or CREC is a new term and applies to a property where a past release has been addressed and where some contamination remains subject to implementation of some type of formal or informal control, common in cases of a risk–based cleanup. Under the 2005 standard, there were inconsistent interpretations whether such a property would fall within the definition of a REC or HREC, but under the 2013 standard this condition is clearly treated as a subset of a REC. The evaluation process by the environmental professional does not change under either the 2005 or 2013 standard. The adoption of the CREC term signals to potential purchasers of properties that not all RECs are necessarily bad or warrant aborting the property transaction. Rather, the CREC signals that contamination is present on a property that is subject to some kind of control and alerts the prospective property owner that after acquiring the property, the new owner has continuing obligations to comply with any land use restrictions and not to impede the integrity or effectiveness of any institutional control. Failure to satisfy these continuing obligations could result in forfeiture of otherwise available future CERCLA liability defenses.

In sum, E1527–13 contains relatively modest changes to the prior Phase I standard aimed at clarifying ambiguous or confusing language in the 2005 standard to produce more consistent results in Phase I assessments. In responding to an inquiry on whether to begin using E1527–13 before EPA publishes its final action on referencing E1527–13, EPA staff advises that it is “encouraging folks to go ahead and use the new standard (E1527–13). If you comply with E1527–13, you essentially are compliant with E1527–05 (only with a bit more rigor).” We expect that the transition to E1527–13 will be swift and smooth.

Julie Kilgore is President of Wasatch Environmental, an environmental science and engineering firm based out of Salt Lake City, Utah. She has 20 years experience in environmental assessment, investigation, remediation, and regulatory agency coordination. Kilgore is the chair of Committee E50 on Environmental Assessment, Risk Management, and Corrective Action. Kilgore also chairs the task group responsible for developing E 1527, Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, and served on the ASTM International Board of Directors.

William Weissman focused his law practice for more than 45 years on administrative law matters with an emphasis during the past three decades on environmental regulation, legislation and litigation. He concentrated on regulatory, compliance and enforcement issues arising under the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). He has been an officer of the ASTM E50 Committee on Environmental Assessment, Risk Management and Corrective Action since 1998 and is a member of the E1527 Phase I Task Group and its Legal subgroup.