Changes to the Phase I Environmental Site Assessment–EPA Adopts ASTM E1527-13


On December 30, 2013, the United States Environmental Protection Agency (EPA) amended its All Appropriate Inquiries (AAI) rule to reference the recently published ASTM International E1527–13 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. Under EPA’s amended rule, compliance with E1527-13 now constitutes AAI for purposes of qualifying for certain protections under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). There are a number of differences between the 2005 E1527-05 and 2013 E1527-13 standards that will likely affect how Phase I Environmental Site Assessments (ESA) are conducted, including:

Important Changes in E1527-13

  • Simplified definition of Recognized Environmental Condition (REC). A REC is the “presence or likely presence of any hazardous substances or petroleum products in, on or at a property” due to a release or threatened release to the environment.
  • Revised definition of Historical Recognized Environmental Condition (HREC). An HREC is a past release of any hazardous substances or petroleum products that has been addressed to the satisfaction of the regulatory authority or meets unrestricted residential use criteria without institutional controls. If an HREC is a REC at the time a Phase I ESA is conducted (due to a change in the regulatory criteria), it must be included as a REC in the conclusions section of the report.
  • New definition of Controlled Recognized Environmental Condition (CREC). A CREC is a REC resulting from a past release that has been addressed to the satisfaction of the regulatory authority, subject to the implementation of institutional controls. A CREC must be included as a REC in the conclusions section of a Phase I ESA.
  • Requirement to consider vapor migration/intrusion risk. The new standard includes a reference to E2600-10, ASTM’s Standard Guide for Vapor Encroachment Screening on Property Involved in Real Estate Transactions. In addition, EPA has said that it hopes to issue its own vapor intrusion guidance later this year.
  • Stronger imperative for conducting regulatory agency file reviews. An environmental professional must provide justification in the report for not performing an agency file review.

Which to Use, Old or New?

EPA’s amendment to the AAI rule did not remove the reference to the older E1527-05 standard, which means the older standard will continue to meet AAI for now. However, in the preamble to the amendment, EPA “strongly encourage[d]” the use of E1527-13 and announced its intent to amend the AAI rule to eliminate any reference to E1527-05 (which is no longer recognized as current by ASTM International). Going forward, environmental consultants and prospective purchasers should comply with the new standard, especially if a party anticipates the need to assert one of the landowner liability defenses under CERCLA (e.g., bona fide prospective purchaser, contiguous landowner, innocent landowner).

Impact on Phase I ESAs

EPA has said that “E1527-13 improves upon the previous standard and reflects the evolving best practices and level of rigor that will afford prospective property owners necessary and essential information when making property transaction decisions and meeting continuing obligations under the CERCLA liability protections.” Practically speaking, the revised definitions and the requirement to consider vapor intrusion under E1527-13 may lead to the identification of additional RECs and recommendations from environmental consultants for more invasive Phase II site investigations. Ultimately, this may result in additional scrutiny from potential buyers and lenders which could increase the time and expense associated with transactional due diligence.

If you have any questions about this news alert, please contact the author listed above or the Riddell attorney with whom you normally consult.

The Riddell Williams Environmental Group has played a key part in addressing some of the region’s most challenging environmental issues. Our group’s clients include utilities, forest products companies, manufacturers, plastics and petroleum companies, regional energy companies, airlines, steel manufacturers, waste management companies, technology businesses, real estate development groups, private landowners and some of the state’s leading environmental groups.

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