Anthropocene.

Some scientists are calling for a new geological age called the "Anthropocene" and you can read about it here. Fascinating debate.

Recent drilling work.....

Phase I Environmental Site Assessments (Part 2)

As many in the environmental, property, and lending industries are aware, the industry standard that environmental professionals use to do Phase I Environmental Site Assessments has changed to the ASTM E1527-05 Phase I standard. I want to take a moment to explain what this “standard” means for those that might not be familiar with the process.

The Phase I process has been a rather loose arrangement for a long time now. The government required that property owners or buyers had to due “Due Diligence” (a fancy lawyer term for “homework”) on properties to protect themselves from environmental issues, and then the government failed to strictly define what a Phase I should consist of. A group called ASTM came up with the Phase I standard since the government hadn’t, and that Phase I standard became the ASTM 1527 standard of 1997.

Fast forward to 2005.

From 1997 to 2005 the ASTM standard was the bible of Phase Is but in 2001 the government finally decided to come with their own plan, their own standard, and then turned it into a law. This law is known as AAI. Now before this gets too confusing, you can probably skip over the new law if you want to. Why? The new law allows a new ASTM standard, ASTM 1527-05, to be used to comply with the AAI law. You can read the AAI law for yourself, but it does not make for light bedside reading……

So what about this new standard? Glad you asked! Here's a few suggestions about purchasing Phase Is under the new standard:

1. Always get a GOOD Phase I from a reputable environmental consulting firm before buying a property. Make sure it says it is written to the new ASTM 1527-05 standard or AAI.
2. In every bidding situation, whether for bananas, military contracts or neurosurgery, one has to consider the possible compromises the low bidder made to reach his bid amount. The Phase I standard is flexible, it has weasel room in it. Environmental firms often cut research to accommodate those weasels just to make their low bids. I recommend getting three quotes for a Phase I and examining the highest-priced proposal to see the steps they included. Unless the lowest bidder is a small firm that is providing the same services as the middle bidder, skip the low bid and go with the mid-priced bidder, as long as they offer you the services you need.
3. A good Phase I should include ALL of the things I mentioned in the Introduction Part 1 of this series, at minimum. The environmental professional still has some discretion about whether some sources of information are required; however, the environmental professional needs to state why something hasn’t been included in the Phase I report.

The new Phase I standard also requires the following:

• If the property is vacant, the environmental professional has to interview the neighboring sites' owners for information on the site.
• Check for Environmental Liens on the property.
• If the purchase price of the property seems to be too inexpensive compared to market price, the environmental professional needs to identify if this is due to contamination. This does not require an appraisal, however.
• Some sites have engineered solutions (controls) or written institutional controls to deal with existing known contamination at the site. These engineering and institutional controls have to be identified and maintained.
• State and Indian tribe’s records must also be checked, as relevant.
• If anyone involved in transaction of the property has “Specialized Knowledge” such as the purchaser being in the same line of work as the site and therefore should know of the chemicals there, or the purchaser is already a neighbor of the property, they have MORE responsibilities in the Phase I.
• The environmental professional has to document what/was or was not provided that was required to complete the Phase I. This is called “data gaps”.
• The history of the site has to be determined all the way back to prior to first use. The old standard was limited to 1940, and that is no longer the case.
• A report that is older than 180 days from purchase of the property, is for all intents, dead.
• The report has to be signed by an “Environmental Professional” or EP. There is certain language that has to be included in the report, specifically a declaration that they meet the definition of an EP, and conclusion verbiage.

The Environmental Professional has some discretion to skip over various records and such, due to time constraints, availability of information, and so on, however, they should state that rationale in the document and should still have a solid history of the site for the buyers, owners, and lenders to rely upon. Cutting corners really isn’t an option.

If you have any doubt as to the completeness of a Phase I, you should consult another environmental consultant, or an environmental attorney even, to ensure you have the most complete Phase I that is possible. It’s a form of insurance you want to take on a new property.

Introduction to Phase I Environmental Site Assessments

I am writing this article to explain what a Phase I Environmental Site Assessment is for people that may have never even heard of a Phase I and have been asked by a lender, broker, owner, buyer, attorney, etc. to get one. A Phase I is research, observations, and a report on the history of the property by an environmental professional looking for chemical contamination.

Here are some of the more common records which environmental professionals research during a Phase I:

Sanborn Fire Insurance Maps
Historical city directories
Historical aerial photographs
A radius search of government lists
Building permits
Fire department/Hazmat records
Interviews with site owners
Any other sources that might be available such as websites, newspapers, etc.

The environmental professional will also walk the site looking for current or past usage of chemicals. The kinds of things that the environmental professional would look for include staining that might indicate a chemical leak, piping that would indicate an underground tank (like they have at gasoline service stations), dry cleaning use, washing equipment, oil/water seperators, floor drains, hydraulic hoists, etc.

The reason for Phase Is is to attempt to address one thing, lawsuits. Lawsuits can come in many forms, lawsuits from the city, state, or federal government over past chemical spills at a site, lawsuits from new owners for the previous owners contaminating their property, and lawsuits from people which may have gotten injured or made ill by chemical contamination at a site, etc.

The government can also inflict consequences that might be worse than a lawsuit. The government can make an owner clean up a contaminated property and incur costs the owner can’t afford. It can also forceably clean up a property and send the owner an expensive bill. It can even file criminal charges against people for failure to comply with a cleanup order (although that is rather unusual).

The point of the Phase I is to minimize risk from environmental contamination at a property. It is an important part of the real estate process and should be viewed as an essential document such as an appraisal or the property title.

I'll be discussing the new Phase I standard in my next installment....

Hydraulic Lift Tank Exemption

Many California environmental consulting firms are still investigating hydraulic lifts such as one would find in a mechanic’s shop or a building elevator. The Regional Water Quality Control Board placed a permanent exemption on these tanks in 1995.

The exemption can be found HERE

One of the interesting consulting problems with the exemption is that it appears to also render hydraulic fluids as non-hazardous. The exemption states

“With regard to toxicity, a literature search revealed no reported human toxicity associated with the ingestion of petroleum or vegetable based hydraulic oils.”

There is a slight problem with that blanket exemption though; polychlorinated biphenyls (PCBs) are a regular occurrence in hydraulic oil. As such, it creates considerable debate in the minds of environmental consultants as to whether to merely go with the exemption, or investigate the PCBs.

In addition, if the hydraulic lift is investigated for PCBs, and none are discovered, yet a hydraulic leak IS discovered, does that mean the leak has to be dealt with? The exemption and it’s dismissal of health risks certainly makes this debatable.

The bottom line appears to be site-specific, as is often the case in environmental consulting. If proof can be obtained that the hydraulic lifts never contained PCBs, it could be argued that the exemption applies. Given the RWQCBs use of “natural bioattenuation” in recent years to dismiss various gasoline spills, hydraulic oil certainly appears to be of little threat to human health or the environment…

Introduction

I started this blog to discuss some of the issues in the environmental consulting industry that I have learned over my 16 years in the business, as well as new issues that arise as we go. I have seen a lot of confusion both from clients, as well as by my contemporaries with regards to many issues includings Phase Is, soil and groundwater sampling, rules from regulatory agencies and so on over the years and I hope to bring some light to the subject, or at least an opinion or three.

If you find anything helpful, if you find something you disagree with, suggestions, or if you find anything wrong (I hope not), please be sure to post a reply!