On November 1, 2021, the American Society for Testing and Materials (ASTM) approved a new standard for conducting Phase I Environmental Site Assessments (ESAs), known as “E1527-21 – Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.”
The new standard makes significant modifications to the previous ASTM Phase I Standard Practice (E1527-13) that has been in use by environmental professionals (EPs) for the past eight years. The goal of an ASTM E1527 Phase I ESA is to identify the confirmed presence, likely presence or a material threat of the presence of hazardous substances or petroleum products on, at or about real property, which are collectively defined as a “Recognized Environmental Condition” (REC).
The ASTM E1527 Standard defines what constitutes “good commercial and customary practice for conducting an environmental site assessment of a parcel of commercial real estate in the United States of America with respect to the range of contaminants within the scope of the Comprehensive Environmental Response, Compensation & Liability (CERCLA) Act (42 U.S.C. 9601) and petroleum products.” The previous ASTM E1527-13 Standard was incorporated by reference into rules promulgated by the federal Environmental Protection Agency (EPA) (known as the “All Appropriate Inquiry” [AAI] rule) as what specifically is required to obtain protection from liability for contamination under CERCLA. EPA is reviewing the updated standard and it is expected that EPA will update its rules accordingly. In the interim, the new standard will define best practices and will become the new standard for commercial practice even before EPA completes its review.
The most significant modifications include the following:
- New Definition of “Recognized Environmental Condition” (REC)
The E1527-21 Standard contains a new definition of REC. It is now defined as:
(1) the presence of hazardous substances or petroleum products in, on or at the subject property due to a release to the environment; (2) the likely presence of hazardous substances or petroleum products in, on or at the subject property due to a release or likely release to the environment; or (3) the presence of hazardous substances or petroleum products in, on or at the subject property under conditions that pose a material threat of a future release to the environment.
To assist environmental consultants in identifying RECs, the new E1527-21 Standard will contain an Appendix (Appendix X4) that is intended to clarify what each of the three phrases means. Further, the Appendix contains examples of what constitutes a REC.
- Shelf Life of an E1527-21 Phase I Report
E1527-21 states a Phase I Report will remain viable only if it was completed no more than 180 days prior to the date of acquisition, or up to one year, if five specific components of the Report have been updated (i.e., interviews, searches for recorded environmental cleanup liens, reviews of government records, site reconnaissance of the subject property, and the Environmental Professional [EP] Declaration). The Standard requires that the dates by which each of the components were completed be identified in the report and that the 180 day or 1-year time period begins with the date upon which the first of these components was completed.
- Emerging Contaminants and the State of New York
The “emerging contaminants” per- and polyfluoroalkyl substances (PFAS) are regulated in the state of New York. However, the EPA has not yet listed PFAS as a federally regulated hazardous substance under CERCLA. Unfortunately, because PFAS are not currently regulated under CERCLA, the new E1527-21 Standard states that PFAS are not required to be included in the scope of an ASTM E1527-21 Phase I ESA report. The new E1527-21 Standard indicates, however, that inclusion of such substances can be added to the Phase I ESA as a “Non-Scope Consideration” and be addressed if the user of the Phase I wishes the environmental consultant to do so. For New York site assessments, you should discuss with environmental legal counsel whether PFAS should be included in the scope of any Phase I investigation.
- Requirement to Use Standard Historical Sources
The new Standard prescribes that, at a minimum, the following four sources shall be reviewed in association with the subject property and adjoining properties as part of the Phase I ESA process.
- Historical Aerial Photographs,
- Historical City Directories,
- Historical Topographic Maps, and
- Historical Fire Insurance [Sanborn] Maps.
If one or more of these sources cannot be reviewed, there must be a statement why the source could not be reviewed. Additional Standard Historical Sources shall be reviewed as needed to complete the objective of identifying RECs.
- Use of Additional Standard Historical Sources
The E1527-21 Standard emphasizes that it is important to provide as much specific information in the Phase I ESA Report as is possible. Thus, for example, even if the general use of the subject property is classified as retail, the new E1527-21 Standard requires that additional ASTM Standard Historical Sources be reviewed if they are likely to identify a more specific use and are reasonably ascertainable (e.g., a former dry-cleaning facility).
- Historical RECs (HREC)
An HREC is defined in E1527-21 as “a previous release of hazardous substances or petroleum products affecting the subject property that has been addressed to the satisfaction of the applicable regulatory authority or authorities and meeting unrestricted use criteria established by the applicable regulatory authority or authorities, without subjecting the property to any controls (for example activity and use limitations, or other property use limitations).” An NYSDEC issued unconditional “No Further Action Letter” that does not require any type of limitation or control would, for example, allow a petroleum release to be classified as an HREC.
Of note, E1527-21 also requires that the report evaluate the past closure of a contaminated site and the environmental assessment data associated with the closure to confirm that the assessment meets current standards for unrestricted use.
- Guidance Regarding REC vs HREC vs “Controlled Recognized Environmental Condition” (CREC)
A CREC is defined in the E1527-21 as “a recognized environmental condition affecting the subject property that has been addressed to the satisfaction of the applicable regulatory authority or authorities with hazardous substances or petroleum products allowed to remain in place subject to implementation of controls (for example, activity and use limitations or other property use limitations).” E1527-21 includes an Appendix that contains a flow chart (Appendix X 4) which will assist in making determinations whether a subject property condition constitutes a REC, HREC or a CREC.
- Significant Data Gap
The Standard now includes a definition of what constitutes a “significant data gap” as “a data gap that affects the ability of the environmental professional to identify a recognized environmental condition.” An example of a significant data gap could include a building that is located on a subject property and is inaccessible during the site reconnaissance, and based upon the EP’s experience, such a building is one that involves activities that can lead to RECs. In addition, the new E1527-21 Standard requires a discussion of how significant data gaps affected the EP’s ability to make conclusions regarding RECs.
- Inclusion of Maps/Photographs
While it may appear to most that the inclusion of photographs of the subject property and of a map that illustrates the boundaries of the subject property should be included as a routine part of a Phase I ESA Report, the prior ASTM E1527-13 Standard did not explicitly require photographs or maps. E1527-21 makes it clear that photographs and a subject property map illustrating the boundaries of the subject property shall be included in all Phase I ESA Reports.
If you have questions about the new standard, the ability to use or the soundness of relying on an ASTM E1527-13 report and how to proceed going forward, the Wladis Law Firm is available to assist you.
Kevin C. Murphy is a member of the Wladis Law Firm, P.C., located in Syracuse, New York. Should you have questions regarding the new standard or the applicability of environmental law obligations or impacts on you, your business or your property, please feel free to contact Attorney Murphy or Attorney Timothy Lambrecht of the Wladis Law Firm.
Kevin C. Murphy
Kevin C. Murphy concentrates his practice in the areas of environmental compliance and litigation; environmental and white-collar criminal defense, and complex litigation matters. Mr. Murphy is a graduate of the University of Virginia School of Law and a former senior trial attorney with both the Kings County (NY) District Attorney’s office and the U.S. Department of Justice Environmental Crimes Section in Washington, D.C. He previously taught a seminar on environmental criminal enforcement at the Syracuse University School of Law and has been listed in The Best Lawyers in America.