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

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

32. What is the suggested way to conduct
vapor migration screening in an
E1527-13 Phase 1?
Vapor Migration Screening

33. • 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

34. • 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

35. 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

36. 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

37. 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

38. • 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

39. How is it possible to determine that
vapors may be migrating on the property
without performing soil gas sampling?
Vapor Migration Screening

40. • 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

41. If, in the past, we had not considered the
vapor migration pathway, does this
represent a potential liability to the firm?
Vapor Migration Screening

42. • 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

43. • 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

44. Other vapor migration questions?

45. 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

46. • 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

47. What are my alternatives for satisfying
the regulatory file review section in
E1527-13?
Regulatory File Reviews

48. • 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

49. What justifications are there for not
searching the files at the regulatory
office?
Regulatory File Reviews

50. • 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

51. Other regulatory file review
questions?

52. Are the changes included in E1527-13
expected to increase the price of
Phase Is?
Pricing Impact of E1527-13

53. • 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

54. 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

55. • 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

56. 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

57. 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

58. Other Phase I Pricing Impact
Questions?

59. • 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