• EPA Approves New ASTM Standard for Conducting Environmental Site Assessments
  • February 3, 2014 | Author: Boyd A. Bryan
  • Law Firm: Jones Walker LLP - Baton Rouge Office
  • One of the most significant sources of liability for cleanup of contaminated sites is the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Under CERCLA and its state counterparts, the current owner of property is potentially liable for cleanup of existing contamination even if the contamination was caused by another, and occurred before the current owner's purchase of the property.

    CERCLA provides limitations to environmental liability, however, to three types of landowners: "innocent landowners," who purchase the property without knowing, or having any reason to know, of the prior disposal of hazardous substances on the property; "contiguous property owners," who own property that is contiguous or otherwise similarly situated to contaminated property owned by another; and "bona fide prospective purchasers," who purchase property with knowledge of existing contamination. To qualify for any of these liability limitations, the current owner must, among other things, establish that prior to its purchase of the property, it carried out "all appropriate inquiries" into the previous ownership and uses of the property.

    In 2005, the Environmental Protection Agency (EPA) promulgated regulations providing that conducting a pre-closing environmental site assessment (ESA) that complies with either the EPA regulations set forth in 40 C.F.R. Part 312 or the ASTM E1527-05 standard titled, "Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process," satisfies the "all appropriate inquiries" test. Since that time, it has been common practice for prospective purchasers to obtain an ESA of property conducted in accordance with the ASTM E1527-05 standard prior to the purchase of property.

    In November 2013, ASTM published an updated standard for conducting ESAs-the ASTM E1527-13 standard. The most significant changes from the prior standard (ASTM E1527-05) include:

    • Vapor Intrusion. The potential release or migration of vapors from contamination on the property, or vapor intrusion into structures on the property, must be considered. As a result, consultants preparing ESAs will need to assess possible indoor air quality impacts from vapor intrusion pathways if there is subsurface soil or groundwater contamination at or near the property.
    • Historical Recognized Environmental Conditions (HRECs). The revised definition clarifies that this term is limited to past releases of contamination that has been addressed to a degree that allows unrestricted (e.g. residential) use of the property, under current regulatory standards. Thus, if past remediation does not satisfy current, more stringent regulatory criteria, the remaining contamination may need to be designated as a recognized environmental condition (REC) instead of a HREC.
    • Controlled Recognized Environmental Conditions (CRECs). This term has been added and is defined as past releases that have been addressed to the satisfaction of the regulatory agency (e.g. as evidenced by a no further action letter or equivalent from the agency), but allows contamination to be left in place subject to required controls (e.g. activity or use limitations or engineering controls).
    • Agency File and Records Review Requirements. The new standard provides a framework for verifying agency information obtained from key environmental databases, and clarifies that the consultant should make efforts to review and document the validity of information found from searches of environmental databases.

    On December 30, 2013, the EPA issued a final rule providing that an ESA conducted in accordance with the new ASTM E1527-13 standard will constitute "all appropriate inquiries" as required to establish the limitations to environmental liability under CERCLA. In the preamble to the rule, the EPA recommends and encourages prospective purchasers to use the new standard. The new rule does not remove the prior standard-ASTM E1527-05-as an approved standard for ESAs. However, the EPA announced its intent to publish a proposed rule in the near future to remove ASTM E1527-05 as an approved standard.

    Thus, although at present ASTM E1527-05 and ASTM E1527-13 are both approved standards for ESAs, ASTM E1527-05 likely will not be approved for much longer. Prospective purchasers would be well-advised to obtain ESAs that comply with the new ASTM E1527-13 standard.