New Phase I Standard Published

By: Nate Wanner, CP, CPG

ASTM recently published a revised standard for Phase I Environmental Site Assessments (E1527-21, Standard). While there are no momentous changes to the previous 2013 update, the new Standard seeks to normalize expectations during environmental due diligence. The new Standard should result in only minor changes in quality Phase I reports, such as those produced by Cox-Colvin.

One change to the standard is that “likely” is now defined as “that which is neither certain nor proved, but can be expected or believed by a reasonable observer…” Adding this definition may seem trivial but has been the subject of many debates between consultants, attorneys, property owners, banks, and buyers. The line between “possible” and “likely” will always be a bit gray, but perhaps the new definition will help to align expectations. Cox-Colvin has long viewed our role in due diligence as identifying all possible concerns, and then providing both context and guidance regarding the likelihood and severity of the concerns so that our clients can make educated decisions during property transactions.

The new Standard retains the terms “historical recognized environmental conditions (RECs)” and “controlled RECs.” Historical RECs are RECs that used to be a concern but were fully addressed (remediated) to unrestricted use standards and are, therefore, no longer RECs. Controlled RECs are RECs that are fully addressed subject to the implementation of controls – for example, by limiting the extraction of groundwater or only allowing commercial/industrial use of the property. Relative to controlled RECs, the new Standard adds a “property use limitation” term that broadly includes any allowance of contamination remaining above unrestricted use standards, even when it is not explicitly presented in an “activity and use limitation.” As an example, we occasionally review environmental assessments that have been performed at industrial property without any discussion or consideration to future non-industrial use. Based upon zoning or other considerations, the authors of the assessments consider the probability of future residential property use (or similar daycare, recreation, or educational uses) to be so low as to not be worth considering in their reports. As a result, “no further action” designations may be based on a presumption of future industrial land use, even without an explicit assumption of such in an activity and use limitation.  If the risk in an unrestricted use scenario was never considered, then this represents a Controlled REC and not a Historical REC.

Many wondered if PFAS would be included in the new Standard.  Because the Standard is written around requirements for “all appropriate inquiries” under CERCLA, it does not include compounds that are not defined as hazardous substances. Despite this, the new Standard does add discussion of “emerging contaminants” such as PFAS that may be considered a “hazardous substance” under applicable state laws or are on an apparent path towards hazardous substance designation. Such contaminants will generally be discussed as a “Non-Scope Consideration.” If and when such emerging contaminants are defined to be a hazardous substance under CERCLA, they will then be included within the scope of the Phase I practice.

Preparers of Phase I reports must think about what they are doing, and not merely “check the box.” For example, the new Standard states that, when reasonably ascertainable, historical use should be more specific than “retail, industrial, or manufacturing.” This has obvious importance – retail use as a gas station is very different from retail use as a tax office and warrants discussion in the Phase I report.  Similarly, preparers should not ignore adjoining and surrounding land use when reviewing historical aerial photographs or fire insurance maps.

EPA currently recognizes the E1527-13 Standard as meeting “all appropriate inquiries” (AAI) under CERCLA but has not yet officially recognized E1527-21. Going forward, Cox-Colvin will prepare reports so that they incorporate procedures and terms set forth in both E1527-13 and E1527-21. It is expected to take around a year for EPA to incorporate a reference into the AAI Final Rule which explicitly states that E1527-21 meet AAI. Once that occurs, Cox-Colvin’s standard Phase I reports will reference only the E1527-21 Standard and not the historical E1527-13.

Published in the  Focus on the Environment, December 2021

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Nate Wanner is a Cox-Colvin Senior Scientist with over 15 years of experience leading and completing environmental projects, in addition to six years as an educator and IT director. He holds a BS in Geology: Water Resources from Ohio University and a Masters in Geographic Information Systems from Penn State University. His areas of expertise include brownfields, underground storage tanks, due diligence and database services. Nate is an Ohio EPA VAP Certified Professional (CP), a Certified Professional Geologist (CPG) with the American Institute of Professional Geologists (AIPG) and is a registered Professional Geologist (PG) in Kentucky, and a Licensed Professional Geologist (LPG) in Indiana.