ASTM E1527-05 Standard – Phase I Environmental Site Assessments

May 22, 2013

The ASTM E1527-05 Standard is the industry standard used for Phase I Environmental Site Assessments. Fully named “ASTM E1527-05 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process,” the Standard outlines the purpose and use of the Phase I ESA as well as the scope of work to be conducted, including: records review (historical and governmental records); site reconnaissance (inspection of the property and adjacent sites); interviews (with owners and occupants and local government officials); evaluation and report preparation.

The ASTM E1527-05 Standard was formed by the American Society for Testing and Materials (now ASTM International), and is designed to meet the EPA’s condition for All Appropriate Inquiry for environmental due diligence. The E1527 Standard for Phase I ESAs has gone through many versions, the latest being finalized in 2005. The standard is reviewed and revised by the ASTM Committee E50 on Environmental Risk Assessment, Risk Management and Corrective Action.

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All Appropriate Inquiry – AAI

May 14, 2013

All Appropriate Inquiry or “AAI” is defined by ASTM and EPA (through CERCLA) as the process of conducting inquiry “into the previous ownership and uses of the property consistent with good commercial or customary practice…that will qualify a party to a commercial real estate transaction for one of the threshold criteria for satisfying the LLPs to CERCLA liability.” Essentially, conducting all appropriate inquiry consists of environmental due diligence conducted prior to a property transaction to determine whether a property may have been contaminated by past or current activities, in order for a user (for example, the prospective purchaser) to be exempt from liability for contamination that existed on a property prior to the property transaction.

The AAI requirement began with the CERCLA or “Superfund” law of 1980, and was refined by several later laws: the Superfund Amendment and Reauthorization Act (SARA) in 1986; the Asset Conservation, Lender Liability and Deposit Insurance Protection Act in 1996; and the Small Business Liability Relief and Brownfields Revitalization Act (“Brownfields Amendments”) in 2002. The most recent ruling regarding what composes AAI was decided in 2005 by the EPA’s Final Rule on All Appropriate Inquiries.


Phase I Environmental Site Assessment

December 28, 2012

 

Phase I Environmental Site Assessment is a generally accepted report for evaluating the environmental liability associated with a property, and is frequently required by lenders.

An environmental consultant conducting a Phase I ESA gathers information regarding a property to evaluate whether past or present activities may have caused contamination of the soil or groundwater.  If the Phase I ESA uncovers a recognized environmental condition (REC), the environmental consultant will usually recommend a Phase II ESA, which involves invasive soil or groundwater testing. Their information sources when conducting a Phase I ESA may include the following:

 

Site Visit

-Inspection of site and observation of surrounding properties

-Note presence of hazardous materials and potential sources of contamination

-Look for evidence of past uses of the property

 

Historical Research

-Aerial photos

-City directories

-Building permits

-Topographical maps

-Oil & gas maps

-Title information

 

Geology & Hydrogeology

-Soil type

-Ground water flow

 

Regulatory Research

-Fire department and other local agencies

-State & federal environmental agencies

 

Interviews & Document Review

-Tenants, owners and property managers

-State & local regulators

-Review provided reports

 

The widely accepted standard for conducting a Phase I ESA is the American Society of Testing Materials (ASTM) 1527-2005 Standard, although specific clients and agencies may have additional requirements and standards. The ASTM E1527-05 Standard for Phase I Environmental Site Assessments has been accepted by the EPA as meeting the requirements of All Appropriate Inquiry. The EPA’s All Appropriate Inquiries Rule governing the scope of Phase I Environmental Site Assessments went into effect on November 1, 2006 and provided specific scope requirements for a Phase I ESA to meet the requirements of CERCLA’s (Comprehensive Environmental Response, Compensation and Liability Act, commonly known as the Superfund law) innocent land owner defense.


Possible Changes to ASTM E1527 Standard

December 20, 2012

The ASTM E1527-05 Standard for Phase I Environmental Site Assessments has been accepted by the EPA as meeting the requirements of All Appropriate Inquiry. The latest revisions to the ASTM E1527 were done in 2005, and in 2012 the standard is currently under review for another round of potential changes. The Phase I Environmental Site Assessment scope of work is not anticipated to change dramatically and many of the potential changes serve simply to clarify language. However several potential changes could impact the way Phase I ESAs are conducted or written.

 

For example, a potential new category of Recognized Environmental Condition (REC) has been proposed: the Controlled Recognized Environmental Condition (CREC), which would apply to risk-based closures of contaminated sites. If adopted, this new term would impact the way findings and conclusions are discussed in the Phase I ESA Report, and could potentially impact the report user’s understanding of environmental risk. Certainly the term would require some education of the industry.

 

Another potential change to the Phase I Environmental Site Assessment process is an explicit requirement for regulatory file reviews on adjacent properties. Many environmental consultants already perform these file reviews during the Phase I ESA when deemed appropriate due to high risk information being identified at the adjacent properties (such as a leaking gas station). However, an explicit mandate for these file reviews could impact the cost and timing of the Phase I Report, as well as the environmental consultant’s liability.

A decision will have to be made in 2013 whether to adopt any changes to the E1527 standard, or renew the standard as is.


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