Phase I ESA Standard Revision - ASTM 1527

The ASTM Standard used to define Phase I Environmental Site Assessments (ASTM E 1517-05) is currently undergoing review and will potentially be revised. An ASTM Task Group has been established to conduct this review. As ASTM E1527 approaches its 2013 sunset date, a task group is currently considering whether the Phase I ESA standard should undergo revisions or be re-approved as-is. In recent weeks, the task group has been considering several legal issues and possible changes to the standard's legal appendix. A few of the issues currently being debated include:

Reliance: Given that SBA requires third party reliance on Phase I ESAs performed on properties guaranteed by there 504 and 7(a) loan programs, should the E1527 standard be revised to include better guidance about who can rely on a Phase I report? This has been a particularly controversial issue, as environmental professionals and their attorneys are concerned about being exposed to additional liability when they perform environmental site assessments.

Oil Pollution Act: The Oil Pollution Act (OPA) was amended in 2004 to include a secured creditor exemption and innocent owner protection provided that an OPA regulation very similar to the CERCLA All Appropriate Inquiry (AAI) rule is met. The task group is considering whether that E1527 standard might be expanded to include OPA, especially since the Coast Guard has already said that E1527 would satisfy these requirements.

Indoor Air Exclusion: Since the revision of the E2600 Standard on Vapor Encroachment, there have been many questions about when indoor air problems should be considered RECs during the Phase I ESA process. While the standard currently lists indoor air as a non-scope considerations, there may be instances when contamination encroaching on a property is both a release on the property and an indoor air problem. The task group is considering whether this should be further clarified within the standard.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Phase I Environmental Site Assessment Buyers Guide

What is a Phase 1 ESA?

A Phase I ESA is an investigation of the current and historic uses of a property, and an inspection of current conditions of the properly to determine the likelihood that contamination is present. The Phase I environmental assessment is intended to be a standardized review process looking for specific indications of contamination issues; it is not intended to be an exhaustive search looking for contamination that is not there.

How Long Does a Phase I ESA Take?

This will vary greatly between providers; you should allow at least two weeks to complete the Phase I. Some providers will ask for significantly more time, some requiring 4-6 weeks.

Can I Use a Previous Phase I ESA Report?

Possibly; however the ASTM is specific on how old the ESA report can be. Reports completed within the previous six months are valid; however after six months some or all of the report will need to be updated. Environmental assessments older than one year need to be redone.

Are There Different Kinds If Phase 1 ESA?

Different companies can use a variety of terms to refer to their own initial or cursory review of environmental issues associated with a property. It is sometimes difficult to determine what the review includes.

Therefore, to assure a comprehensive assessment, the only types of Phase 1 ESA accepted by the US government, States and most lenders uses the current ASTM standard method, referred to as “ASTM E 1527-05” or "E 2247 – 08", with the later applying to large tracts of rural or forest lands only. These ASTM standards are updated every five years, so older, obsolete versions are referred to as E 1527-00, etc. In the future, environmental professionals will be using E 1527-10, expected to the released in 2010.

To compare services between companies, be sure that each is providing a Phase I ESA that explicitly meets the ASTM E 1527-05 standard.

Other types of investigations exist, including:

• Transaction Screen
• Records Search With Risk Assessment

These types of investigations are appropriate for some limited situations, or can be conducted to satisfy the environmental due diligence requirements of specific organizations. For example, the Small Business Administration has developed their own “Records Search With Risk Assessment” procedure to provide an appropriate level of environmental review for low risk properties. These types of investigations are not equivalent to a Phase 1 Environmental Site Assessment.

What is the Phase 1 Looking For?

Simply stated, a Phase I ESA is looking for indications that current or historic uses of the property may have resulted in contamination. The Phase I also considers neighboring properties where contaminates may have migrated onto the property through groundwater, etc.

Because the scope of the Phase 1 environmental site assessment is focused on contamination issues, some organizations will decide to augment the assessment to address other related issues, such as:

• Asbestos
• Lead-based paint
• Indoor air quality and industrial hygiene
• Compliance with environmental permits and environmental laws
• Compliance with OSHA rules and other health and safety issues
• Past company disposal practices in landfills, etc.
  

These other types of issues are not addressed in a Phase I ESA under the ASTM standard; if you wish to have these issues addressed, you need to discuss adding them with the environmental professional.

Can anyone conduct a Phase I Environmental Assessment?

Yes and no; legally, anyone can conduct a Phase I ESA. However, if you want your assessment to meet the ASTM standard, then the “environmental professional” you use will need to provide documentation that they meet the specific qualification requirements contained in ASTM E 1527-05.

Different organizations and lenders may have additional requirements on who can conduct Environmental Site Assessments they will accept. For example, the Small Business Administration (SBA) requires that the environmental professional has a minimum of $1,000,0000 professional liability insurance, in addition to meeting technical qualifications.

How is my Lender Involved?

Lenders have a vested interest in the condition of a property they will accept as collateral. If contamination is discovered later, the value of the property can be significantly reduced and can make the property difficult to resell.

Make sure to discuss the Phase I ESA with your lender. They may have additional requirements that need to be included. The lender may also need to be identified in the ESA report as an “additional user”, or may require additional liability protections, such as a “reliance letter”. Some lender prefer that they order the Phase I ESA rather than having the borrower order one.

Understanding your lender’s requirements at the onset will save time and money, and will avoid having to make last minute changes prior to closing.

What Happens If the Phase I Identifies an Issue?

Sometimes the Phase I will identify issues (referred to as “Recognized Environmental Conditions” or REC) that indicate that contamination may be present on the property. In this case, the environmental professional will recommend a Phase II Environmental Site Assessment be conducted. The Phase II ESA will likely include collecting soil, groundwater or other samples to determine if contamination is actually present.

If contamination is discovered during the Phase 2 ESA, the property owner may be obligated to report it to State and/or Federal agencies, and may be required to conduct cleanup.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Phase I Environmental Assessment - Environmental Review in MN, IA, IL, WI, ND, SD, NE

A Phase I ESA conducted using ASTM E 1527-05 is intended to identify “Recognized Environmental Conditions” (or RECs) associated with a property. Recognized Environmental Conditions are defined as “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 [future] release”. In short, a Phase I ESA addresses releases hazardous substances and petroleum products.

Caltha LLP provides “qualified professionals” to conduct Environmental Due Diligence on industrial and commercial properties. Caltha’s assessment staff are also qualified to conduct environmental compliance assessments, and environmental liability assessments. These additional assessments can be conducted concurrently with a Phase I ESA, thus reducing both cost and time.

What does a Phase I Environmental Site Assessment cost?
Click here to go to Caltha’s on-line Environmental Due Diligence quote request page. You will be prompted to answer a few basic questions regarding the property(ies) you wish to have assessed. Once a request is completed and submitted, you should receive a quote within 24-hours.

Caltha offers Phase 1 ESA services at a very competitive cost for any site in any State. We also offer Rapid Response Phase I Environmental Assessments over selected geographic areas, including Minnesota, Wisconsin, Iowa, South Dakota, North Dakota, Nebraska & Illinois.

Click on a State below to request a quote:

Phase I Environmental Assessment – Environmental Review in Illinois
Phase I Environmental Assessment – Environmental Review in Iowa
Phase I Environmental Assessment – Environmental Review in Minnesota
Phase I Environmental Assessment – Environmental Review in Nebraska
Phase I Environmental Assessment – Environmental Review in North Dakota
Phase I Environmental Assessment – Environmental Review in South Dakota
Phase I Environmental Assessment – Environmental Review in Wisconsin

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

ASTM Standard On Sustainable Site Assessment and Remediation

ASTM is currently developing a proposed standard guide in response to requests to minimize greenhouse gases and resource use during site cleanup. Proposed standard WK23495, Guide for Green and Sustainable Site Assessment and Cleanup, is an effort to help the regulated community to develop more sustainable ways to balance the social, environmental and economic aspects of a cleanup operation.

The Green and Sustainable Site Assessment and Cleanup Standard is expected to include sections covering planning and scoping requirements for green and sustainable corrective actions, as well as elements that characterize greener, more sustainable approaches to remediation; the proposed standard includes a scalable, three-tiered decision process similar to ASTM’s risk-based corrective action guides. The three-tiered process consists of a matrix where users can choose from screening, qualitative and quantitative evaluations, or tiers, and environmental, societal and economic categories. The proposed standard will also describe processes for monitoring, tracking and documentation. Finally, the proposed standard will include appendices with examples of the decision-making process, information about off-the-shelf technologies for green cleanup and references, and information from state programs about green and sustainable processes.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Revised Vapor Encroachment Screening Standard

ASTM has recently released an update to procedures used to evaluate soil vapor encroachment, or VES, (formerly referred to as ‘soil vapor intrusion’) under “E2600-10 Standard Guide for Vapor Encroachment Screening on Property Involved in Real Estate Transactions”. The newly revised standard reflects several significant amendments, including:

• A more targeted focus on screening for contaminant of concern (COC) vapors with the potential for encroaching upon or migrating to the target property
• Exchanging the term vapor intrusion condition (VIC) with the new term, vapor encroachment condition (VEC)
• Clarifying the relationship between a VEC and a recognized environmental condition under the E1527-05 Phase I ESA standard

The guide is intended for use on a voluntary basis by parties who wish to conduct a VES on a parcel of real estate to determine if a VEC is identified for the property. The process defined in the guide is a screening process that requires information similar to information generally collected as part of a Practice E1527 Phase I ESA as well as additional information. If a VEC is identified by this screening process, the user may conduct further investigation. The guide can be applied to property with existing structures, property with structures that will be substantially rehabilitated, property without existing structures but having planned structures, or property without existing structures and with no planned structures.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at info@calthacompany.com or Caltha LLP Website

Audit Policy Compared To Audit Privilege or Audit Immunity

Many companies and other regulated entities struggle to balance the benefits and risks associated with conducting environmental compliance audits, and more importantly, what to do if non-compliance issues are uncovered, especially in the context of environmental due diligence.

EPA and numerous States have enacted various “audit policies” to reduce the regulatory risks associated with compliance auditing. An “audit policy” generally applies to the settlement of claims for civil penalties for any violations under environmental statutes. It provides incentives (relief from penalties) when regulated entities discover, disclose, and correct certain types of violations. An audit policy may not cover all types of environmental violations and conditions may exist that limit its applicability.

Some States with Self-Disclosure Audit Policies include:

California
Connecticut
Delaware
Florida
Indiana
Maine
Maryland
Massachusetts
Minnesota
New Mexico
New York
North Carolina
Oregon
Pennsylvania
Tennessee
Vermont
Washington

An “audit policy” is different than “audit privilege” or “audit immunity”. A number of States have passed self-audit "privilege" and/or "immunity" laws. Most privilege laws protect the disclosure of audit reports. For example, in some states, under specified conditions, an audit report is not admissible as evidence in any civil or criminal proceedings. In most cases immunity state laws, under certain specified conditions, gives a person immunity from fines and in some cases criminal penalties related to non-compliance provided that when the information arises from a self-audit that person makes a voluntary disclosure to the appropriate agency. In exchange, companies may be required to implement pollution prevention and/or an environmental management system.


States with Privilege and/or Immunity Laws include:

Alaska
Arizona
Arkansas
Colorado
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Michigan
Minnesota
Mississippi
Montana
Nebraska
Nevada
New Hampshire
Ohio
Oregon
Rhode Island
South Carolina
South Dakota
Texas
Utah
Virginia
Wyoming

EPA has clearly stated its opposition to statutory and regulatory audit privilege and immunity laws that exist in some states.

More information on Environmental Compliance Audits and Regulatory Compliance Assessment

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at

info@calthacompany.com

or

Caltha LLP Website

CERCLA Financial Responsibly For Mining Industry

Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980 establishes certain authorities concerning financial responsibility requirements. U.S. EPA is currently developing a proposed rule to establish financial responsibly requirements for the hard rock mining sector. EPA has already identified classes of hard rock mining facilities for which financial responsibility requirements will be first developed. In 2009, EPA identified classes of facilities within the Hardrock Mining industry as its priority for the development of financial responsibility requirements under CERCLA Section 108(b). In that notice, “hardrock mining” was defined as the extraction, beneficiation, or processing of metals (e.g., copper, gold, iron, lead, magnesium, molybdenum, silver, uranium, and zinc) and non-metallic, non-fuel minerals (e.g., asbestos, phosphate rock, and sulfur).

The proposed rule will establish requirements for financial responsibility, as well as notification and implementation requirements. EPA currently estimates that the proposed rule will be published in April 2011.

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at

info@calthacompany.com

or

Caltha LLP Website

Energy Audit Basics - Types of Energy Audits

Energy efficiency experts generally recognize three levels of energy audits depending on the time and effort spent during the audit and analysis:

Level I, basic. This approach involves a cursory analysis of energy bills and a brief survey of the building to produce a rough estimate of how efficiently energy is used in the building. This level of effort will detect at least some of the "low-hanging fruit" and may suggest other options worthy of more study, but should never be viewed as comprehensive.

Level II, intermediate. This method provides a breakdown of how energy is used in the building as well as a broader range of savings options, including simple capital investments. It accounts for the "people factor" and its effect on uncertainty of savings, and also explores maintenance procedures and assesses any impacts savings measures may have on them.

Level III, advanced. This analysis digs into the details of any large capital projects you may be considering as a result of previous, simpler audits. Even more detailed data is gathered from field equipment, extensive test measurements are taken which may include spot-measurements and short-term energy monitoring, possible risks are assessed, and intensive engineering and economic analysis produces reliable estimates of project energy and financial performance with the high confidence needed for major capital projects.

Caltha LLP assists building owners and property managers in conducting commercial energy audits. To request a quote on-line, go to Caltha Quote Web Page.

For further information contact Caltha LLP at

info@calthacompany.com

or

Caltha LLP Website

Should a Property Seller Conduct a Phase 1 Assessment?

In most property transactions, the Buyer and the Lender(s) have a keen interest in the condition of the property. This information, in part, is , of course, used to determine the fair price offered for the property and/or business. During this period, the Seller is most vulnerable –information gathered by the Buyer can be used to negotiate a lower purchase price. But, more importantly, a Seller can be responsible for any clean up or other actions required, whether or not the Buyer actually closes on the property. This information also becomes part of the record which may need to be disclosed to future prospective Buyers, in the event that the current Buyer drops out.

Therefore, Sellers need to be actively involved in all assessments of their properties. This article highlights some of the key considerations all Sellers should bear in mind.

First –expect that prospective Buyers will conduct an environmental assessment of the property. Because Landowner Liability Protections (LLPs) are available to prospective purchasers only if they performed an Environmental Site Assessment prior to closing, many Buyers will routinely conduct an assessment, regardless of any perceived risks. Beyond this, most Lenders will require some level of environmental review prior to issuing any loans. Assuming that prospective Buyers will want some level of environmental assessment, the first question Sellers should ask themselves is whether or not to conduct an assessment themselves, and provide a copy of the report to perspective Buyers. This obviously adds a small “up front” cost to selling the property; however, there are some clear benefits with this approach…

• Allows the Seller to preview the same information the Buyer will have access to;
• Identifies any issues early, allowing time to address them, rather than learning of issues from the Buyer late in the transaction process;
• Avoids further environmental reviews, if the reports are accepted by the Buyer and/or Lender

Caltha LLP assists Sellers, prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at
info@calthacompany.com
or
Caltha LLP Website

Environmental Assessment of Rural Agricultural Or Forestland Properties

Conducting a Phase 1 Environmental Site Assessment for a large, predominately undeveloped property presents special challenges when using the ASTM Standard Method E 1527 (Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process). A different ASTM Standard, E 2247 – 08 (Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property) was developed to address these issues. The purpose of E 2247 – 08 standard is to define good procedures for conducting a Phase I environmental site assessment of forestland or rural properties. To qualify for use of the ASTM standard, the property needs to meet certain criteria relating to size and land uses.

Like other ASTM standard practices, a valid ESA must be conduct by professionals meeting specific qualification requirements.

As with other ASTM standards for Phase I Environmental Site Assessments, the standard only addresses 1) contaminants within the scope of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and 2) petroleum products. Persons using the ESA report might want to consider additional issues which are outside the scope of the Phase I ESA, including:

• Asbestos-Containing Building Materials,
• Best Management Practices,
• Radon,
• Lead-Based Paint,
• Lead in Drinking Water,
• Wetlands,
• Regulatory compliance,
• Cultural and historic resources,
• Industrial hygiene,
• Health and safety,
• Ecological resources,
• Endangered species,
• Indoor air quality,
• Biological agents, and
• Mold.
  

Caltha LLP assists prospective Buyers and their Lenders in meeting Due Diligence, Environmental Site Assessment and Environmental Review requirements. To request a quote on-line, go to Caltha Environmental Assessment Quote Web Page.

For further information contact Caltha LLP at
info@calthacompany.com
or
Caltha LLP Website