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Untangling the Web of Confusion Around the ASTM E1527-13 Phase I Standard

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Presentation by Anthony J. Buonicore …

Presentation by Anthony J. Buonicore
Fall 2013 DDD Tour

For environmental due diligence firms, 2013 is the year of a new version of the ASTM E 1527 Phase I environmental site assessment standard. And updates to the protocol for Phase I ESAs trigger a period of education and eventually, adjustment. With release of the standard expected in early November, the challenge for environmental due diligence professionals is to be trained and ready to make the switch as soon as the standard is published. How ready is your team to make the transition? What areas are still confusing? Tune into the industry’s leading expert to clear up any confusion on:

-Status of the E1527-13 Standard
-How the E1527-13 Standard differs from the E1527-05 Standard
-Key questions related to:
The new REC/HREC/CREC definitions
Vapor migration screening
Regulatory file review
Phase I pricing
-Implementation suggestions

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  • 1. by Anthony J. Buonicore, P.E., BCEE, QEP CEO, The Buonicore Group Past Chairman, ASTM Phase 1 Task Group Untangling the Web of Confusion Around the ASTM E1527-13 Phase I Standard
  • 2. A Billion Dollar Market Opportunity Energy Efficiency and Building Energy Performance Assessment Services Anthony J. Buonicore, P.E. CEO, The Buonicore Group S&ME Due Diligence Technical Conference February 11. 2011
  • 3. • Chronology of the E1527-13 Phase I Standard • E1527-13 v. E1527-05 • Discussion on Most Frequently Raised Questions Regarding: • REC/HREC/CRECs? • Vapor migration screening? • Regulatory file reviews? • Pricing impact of E1527-13? • Company Implementation Suggestions Overview
  • 4. • ASTM Phase I Task Group approved revisions to E1527-05 at the end of 2012 • Revisions (E1527-13) submitted to EPA for AAI approval • On August 15, 2013 EPA amends AAI rule to state ASTM E1527- 13 as revised satisfies AAI and seeks public comment • Comment period ended September 16, 2013 • ASTM E1527-13 was published on November 6, 2013 and became effective immediately • ASTM E1527-13 replaces ASTM E1527-05 • On December 30, 2013, EPA published an Amendment to the AAI Rule that states E1527-13 is AAI-compliant and… • s Page 4 Chronology of the E1527-13 Phase I Standard
  • 5. • EPA intends in the near future to publish a proposed rulemaking to remove the previous reference to E1527-05 in the AAI Rule • EPA recommends that E1527-13 be used by environmental professionals and prospective purchasers • EPA states that E1527-13 “enhances the previous standard with regard to the delineation of historical RECs…and clarifies that all appropriate inquiries and Phase I ESAs must include…an assessment of vapor migration and vapor releases on, at, in or to the subject property” • EPA noted that both the AAI Rule and E1527-05 already call for the identification of potential vapor releases Page 5 Chronology of the E1527-13 Phase I Standard
  • 6. Major Changes to E1527-05 • Recognized Environmental Condition (REC) Definitions • Vapor Migration Screening • Regulatory File Review E1527-13 v. E1527-05
  • 7. • REC definition improved • HREC definition revised • New definition for a “controlled” REC (CREC) RECs
  • 8. Old Definition: “the presence or likely presence of any hazardous substances or petroleum products on a property under conditions that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into structures on the property, or into the ground, ground water, or surface water of the property. The term includes hazardous substances or petroleum products even under conditions in compliance with laws.” New Definition: “the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment.” Improved REC Definition
  • 9. 42 U.S.C. § 9601(22) defines a release as “any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discharging of barrels, containers, and other closed receptacles containing any hazardous substances or pollutant or contaminant” (refer to Terminology Section of the E1527-13 Standard) CERCLA Definition of a “Release”
  • 10. 42 U.S.C. § 9601(8) defines environment to include (A) the navigable waters, the waters of the contiguous zone, and the ocean waters…and (B) any other surface water, groundwater, drinking water supply, land surface or subsurface strata…” (refer to Terminology Section of the E1527-13 Standard) CERCLA Definition of “Environment”
  • 11. Old Definition: “an environmental condition which in the past would have been considered a REC, but which may or may not be considered a REC currently.” New Definition: “a past release of any hazardous substances or petroleum products that has occurred in connection with the property and has been addressed to the satisfaction of the applicable regulatory authority or meeting unrestricted use criteria established by a regulatory authority, without subjecting the property to any required controls (e.g., property use restrictions, AULs, institutional controls, or engineering controls). Before calling the past release an HREC, the EP must determine whether the past release is a REC at the time the Phase I ESA is conducted (e.g., if there has been a change in the regulatory criteria). If the EP considers this past release to be a REC at the time the Phase I ESA is conducted, the condition shall be included in the conclusions section of the report as a REC.” Revised HREC Definition
  • 12. “a REC resulting from a past release of hazardous substances or petroleum products that has been addressed to the satisfaction of the applicable regulatory authority (e.g., as evidenced by the issuance of a NFA letter or equivalent, or meeting risk-based criteria established by regulatory authority), with hazardous substances or petroleum products allowed to remain in place subject to the implementation of required controls (e.g., property use restrictions, AULs, institutional controls, or engineering controls)… a CREC shall be listed in the Findings Section of the Phase I ESA report, and as a REC* in the Conclusions Section of the…report.” * Section 12.8 of E1527-13 requires that the conclusions section of the report summarize all RECs (including CRECs) connected with the property. New CREC Definition
  • 13. REC-HREC-CREC Relationship Contamination in, at or on the target property. Is it de minimis? Has it been addressed? Would regulatory officials view cleanup as inadequate today? Are there restrictions? YES NO NO YES REC (“Bad REC”) De minimis (“Not a REC”) NO CREC (“Good REC”) HREC (“Not a REC”) YES YES NO
  • 14. • CERCLA/AAI do not differentiate the form (e.g., solid, liquid, vapor) of the release to the environment (refer to CERCLA definition of “release” and “environment”) • Vapor migration is to be treated no differently than contaminated groundwater migration • Migrate/migration now defined in E1527-13 and includes “vapor in the subsurface” • E2600-10 is a referenced document in E1527 • While vapor migration assessment is part of an ASTM E1527-13 Phase I, vapor intrusion assessment is outside the scope Vapor Migration Clarified as Included in Phase I Investigation
  • 15. • New section 8.2.2 added on Regulatory Agency File and Records Review • If the TP or any adjoining property is identified in government records search, “pertinent regulatory files and or records associated with the listing should be reviewed” - at the discretion of the environmental professional • If in the EP’s opinion such a file review is not warranted, the EP must provide justification in the Phase I report • As an alternative, EPs may review files/records from alternative sources such as on-site records, user-provided records, records from local government agencies, interviews with regulatory officials, etc. • Summary of information obtained from the file review shall be included in the Phase I report and EP must include opinion on the sufficiency of the information obtained Regulatory File Review
  • 16. • REC/HREC/CREC definitions • Vapor migration screening • Regulatory file reviews • Pricing impact of E1527-13 Discussion on Most Frequently Raised Questions Related to…
  • 17. The target property site (shopping center) has been remediated (source of contamination has been eliminated and contaminated soil removed). State agency is allowing the contamination in the groundwater to attenuate naturally. However, the state agency requires quarterly groundwater sampling, which is currently being performed. How would this be treated under the new REC/HREC/CREC definitions in E1527-13? REC/HREC/CREC
  • 18. • Groundwater contamination above state standards exists on the site – ordinarily would represent a REC, but… • When a state allows remediation via natural attenuation, this is typically supported with a risk assessment to protect public health and the environment • In this case, the state agency added a “restriction,” i.e., quarterly groundwater sampling needs to be conducted until contaminant levels comply with remediation standards • Thus a CREC! Response
  • 19. A target property site (shopping center) had been remediated ten years ago using risk- based cleanup. The state agency approved closure and issued an NFA letter at that time. A Phase I is currently being performed for a transaction and it was determined that the vapor pathway was not considered when the initial risk-based clean-up took place. How would this be treated under the new REC/ HREC/ CREC definitions in E1527-13? REC/HREC/CREC
  • 20. • Contamination still exists on the property • Risk-based cleanup was conducted before vapor intrusion was recognized as a serious problem and when there was little understanding of the vapor pathway • State NFA letters typically say that no further action is required at this time, but if new information becomes available, the case may be re-opened • Vapor intrusion concern represents “new information” • Thus a REC! Response
  • 21. A target property site (office complex) has been remediated to industrial/commercial soil and groundwater cleanup standards (less restrictive than residential standards). The state agency issued an NFA letter. The property is now being acquired and a Phase I performed. How would this be treated under the new REC/HREC/CREC definitions in E1527-13? REC/HREC/CREC
  • 22. • Contamination still exists on the property above residential remediation standards, but below industrial/commercial remediation standards • State NFA letter says that no further action is required, but the inferred restriction is that the property remain industrial/commercial. • Thus a CREC!* * However, when the EP provides professional opinion on the CREC, client will be advised of the situation and it is unlikely the CREC will create a problem in the property transaction (unless the prospective purchaser plans to develop a residential use on the property). Response
  • 23. An industrial property is cleaned up to industrial standards and the property is zoned industrial. The cleanup has been to the satisfaction of the state regulatory agency and no restrictions are noted in the NFA letter. How would this be treated under the new REC/HREC/CREC definitions in E1527-13? REC/HREC/CREC
  • 24. • Contamination still exists on the property – below industrial/commercial cleanup standards, but above residential remediation standards • Zoning prohibits residential use • Cleanup has been to the “satisfaction of the regulatory agency” and NFA issued does not specify any restrictions • BUT “unrestricted use” criteria is still not met • Thus a CREC*! * However, when the EP provides professional opinion on the CREC, client will be advised of the situation and it is unlikely the CREC will create a problem in the property transaction (unless the prospective purchaser plans to develop a residential use on the property). Response
  • 25. A LUST on a multifamily property has been remediated (UST excavated and disposed, contaminated soil removed and contaminated groundwater remediated to residential cleanup standards). State issued an NFA letter. Property is being acquired and a Phase I conducted. How would this be treated under the new REC/HREC/CREC definitions in E1527-13? REC/HREC/CREC
  • 26. • Contamination still exists on the property but below residential remediation standards • NFA letter has no restrictions on property use • Thus an HREC! Response
  • 27. A former dry cleaner was identified on a shopping center site currently being acquired and a Phase I performed. How would this be treated under the new REC/HREC/CREC definitions in E1527-13? REC/HREC/CREC
  • 28. “the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment.” New REC Definition
  • 29. • Assume PERC used in the dry cleaning process • Experience with dry cleaners using PERC has demonstrated that the probability of releases to the environment is very high, i.e., there is the “likely presence of PERC and its degradation products…on the property…under conditions indicative of a release to the environment” • A REC exists! Response
  • 30. Other Questions on REC-HREC-CREC Relationship? Contamination in, at or on the target property. Is it de minimis? Has it been addressed? Would regulatory officials view cleanup as inadequate today? Are there restrictions? YES NO NO YES REC (“Bad REC”) De minimis (“Not a REC”) NO CREC (“Good REC”) HREC (“Not a REC”) YES YES NO
  • 31. What is the suggested way to conduct vapor migration screening in an E1527-13 Phase 1? Vapor Migration Screening
  • 32. • E1527-13 requires that vapor migration in the Phase I be treated no differently than contaminated groundwater migration • Alternatives to conduct vapor assessment • Tier 1 of E2600-10, or • Company’s own methodology, but… Response
  • 33. • If company develops its own methodology, the methodology must be sufficiently documented in the Phase I to permit reconstruction by a third party • Advantage of using Tier 1 in E2600-10 • Methodology standardized through ASTM consensus process • Developed by VI experts in the industry • Ability to use (w/o further documentation) the critical distances in E2600-10 • Reduced liability Response
  • 34. Should the prospective purchaser of a property be concerned about vapor from a nearby off-site dry cleaner since it is the dry cleaner that has responsibility for any releases? Vapor Migration Screening
  • 35. There are good business reasons for a prospective purchaser to be concerned: • If dry cleaner has no financial resources to undertake a cleanup, the problem will continue to exist and may worsen the situation on the TP • Tenants may leave or use it as an excuse to break leases; worse still, tenants may sue the property owner (TP owner can then sue dry cleaner, but recovery may be difficult or impossible if the dry cleaner has little or no financial resources) • May be difficult to attract new tenants to a site with known “vapor issues” • Negative publicity may adversely impact the value of the property • If site to be developed in any way, vapors could present a problem during construction (resulting in delay/additional costs) • If TP owner has the “deepest” pocket, involvement in expensive litigation may be unavoidable Response
  • 36. Does the Phase I investigation need to address vapor intrusion into buildings on the property if vapors are found to be encroaching upon the property? Vapor Migration Screening
  • 37. • Vapor migration screening is part of an E1527-13 Phase I • Vapor intrusion assessment is outside the scope of an E1527-13 Phase I investigation (a “non-scope consideration”) • If the Tier 1 investigation does not identify a VEC, the presumption is that vapor intrusion is not an issue • If the Tier 1 investigation finds there is a VEC and the EP determines this represents a REC • The ASTM E1527-13 Phase I investigation need go no further (without specific direction from the client) • If the client requests a recommendation, then Tier 2 in E2600- 10 offers a logical pathway to proceed • The presence of a VEC does NOT automatically indicate a vapor intrusion problem exists Response
  • 38. How is it possible to determine that vapors may be migrating on the property without performing soil gas sampling? Vapor Migration Screening
  • 39. • An E1527-13 Phase I investigation is a non-intrusive investigation (no sampling is required) • Vapor migration is dealt with the same way contaminated groundwater migration is dealt with in a Phase I • “If there is a potential for contaminated groundwater to reach the target property, this would likely be identified as a REC and the recommendation made to proceed to a Phase II (groundwater sampling)” • “If there is a potential for volatile COC vapors to reach the target property, this would likely be identified as a REC and the recommendation made to proceed to a Phase II (Tier 2)” Response
  • 40. If, in the past, we had not considered the vapor migration pathway, does this represent a potential liability to the firm? Vapor Migration Screening
  • 41. • Legal counsel should make this determination • Technical issues to be considered in any defense: • E1527-13 directly addresses vapor migration for the first time (2013) • Not customary practice (almost 90% of EPs prior to 2010 when E2600-10 published did NOT include vapor migration screening in Phase I investigations)(2012 Industry Survey by ECR) • E2600-10 clarifies that CERCLA and AAI do not differentiate the “form” (solid, liquid or vapor) of a “release” to the “environment” (2010) Response
  • 42. • Technical issues to be considered in any defense: cont’d • E2600 consensus methodology to evaluate vapor migration first published in ASTM E2600-08 BUT identified vapor screening as a non-scope consideration in a Phase I (under the IAQ exclusion)(2008) • While EPA has still not yet incorporated the vapor pathway into the HRS or finalized its draft 2002 Vapor Intrusion Guidance, EPA noted in its December 30, 2013 Amendment to the AAI Rule that both the AAI Rule and E1527-05 already call for the identification of potential vapor releases Response
  • 43. Other vapor migration questions?
  • 44. What is the difference between what has been required for regulatory file review under E1527-05 and what is now being required under E1527-13? Regulatory File Reviews
  • 45. • E1527-05 did not have a section on regulatory agency file reviews • Section 8.1.9 of E1527-05 states that “if a standard environmental record source (or other sources in the course of conducting the Phase I ESA) identifies the property or another site within the approximate minimum search distance, the report shall include the EP’s judgment about the significance of the listing to the analysis of RECs” • E1527-13 expands the E1527-05 requirement by bringing in the preference (not requirement) for actual review of state regulatory files on TP & adjoining Response
  • 46. What are my alternatives for satisfying the regulatory file review section in E1527-13? Regulatory File Reviews
  • 47. • Review the files at the regulatory agency • Deem it unnecessary and provide rationale • Review information from alternative sources, e.g., on-site records, records from local government agencies, interviews with regulatory officials or other knowledgeable individuals • Do not visit the state agency to review regulatory files, rather conclude the site or adjoining site with known or suspect contamination creates a REC on the target property; however, recommend that regulatory files be reviewed in depth in a follow-on investigation, i.e., a Phase II quoted separately Response
  • 48. What justifications are there for not searching the files at the regulatory office? Regulatory File Reviews
  • 49. • Not reasonably ascertainable (not publicly available, or practically reviewable or not available for reasonable cost within a reasonable time frame) • Regulatory agency may be located a considerable distance from the EP’s office • Regulatory agency does not make records available without a FOIA request and involving an unacceptable response time • Unacceptable fees to search and reproduce files • Files in multiple locations requiring multiple trips Response
  • 50. Other regulatory file review questions?
  • 51. Are the changes included in E1527-13 expected to increase the price of Phase Is? Pricing Impact of E1527-13
  • 52. • The REC/HREC/CREC evaluation may impact Phase I pricing, e.g., it may take more time for an EP to evaluate whether a past release that has been satisfactorily addressed at that time might today under current cleanup criteria be considered a REC • Conducting the vapor migration screen will likely require additional time and therefore can impact Phase I pricing • Performing the regulatory file review will likely require additional time and therefore can impact Phase I pricing Response
  • 53. My competitors are not considering vapor migration in their Phase Is. This will put me at a competitive disadvantage. What can I do? Pricing Impact of E1527-13
  • 54. • Vapor migration consideration is specifically included in the E1527-13 standard • If not included, the Phase I performed is not consistent with the ASTM E1527-13 scope of work, nor is it AAI- compliant • Whether or not an EP chooses to include a cost adder to conduct this investigation as part of the Phase I is the EP’s choice • Experience to-date has shown that up to six additional hours may be required to perform a Tier 1 vapor encroachment investigation, depending on the complexity of the property and its surroundings Response
  • 55. How can I price a visit to the state regulatory offices into my Phase I proposal when it is not possible to determine a priori if there is an issue that requires a search of regulatory files or how extensive the regulatory files might be on a property? Pricing Impact of E1527-13
  • 56. What you might do is… • Standardize in Phase I pricing proposal inclusion of a fixed number of man-hours for the regulatory file review, e.g., up to hour fours, and • Advise client that if it requires additional time or expense, this will be charged on a time & materials basis Response
  • 57. Other Phase I Pricing Impact Questions?
  • 58. • Be sure all Phase I professionals are familiar with E1527-13 and how it differs from E1527-05 • Develop internal policy on how the company will deal with the major revisions associated with E1527-13 • Establish E1527-13 Phase I pricing policy • Educate clients on E1527-13 Company Implementation Suggestions

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