the new astm e 1527-13 standard

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Panel discussion from the 2013 Client Summit Pat Coyne, Moderator Panelists: John Sallman, Terracon Julie Kilgore, Wasatch Kathryn Peacock, Partner Engineering & Science

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Page 1: The New ASTM E 1527-13 Standard
Page 2: The New ASTM E 1527-13 Standard

Upcoming revisions to the ASTM 1527 Standard

Page 3: The New ASTM E 1527-13 Standard

ASTM 1527-13 Standard

For the first time in eight years, there is a revision to the ASTM protocol for conducting Phase I ESAs. While the key areas of change are known, the ways that EPs

and lenders are responding to them is not. In this track, we will dig into three specific areas of change

to illuminate how firms may adjust practices. A panel of insiders will candidly share their views on the new requirements, managing client communication in the areas of REC’s, vapor and agency file reviews, and E

1527-13’s impact on delivery time and pricing.

Page 4: The New ASTM E 1527-13 Standard

Kathryn Peacock

• Serves as the Western Regional Manager for Partner Engineering and Science, a national environmental and engineering due diligence consulting firm. Kathryn has been practicing in the environmental and engineering due diligence field for over 12 years.

• Kathryn has worked on thousands of transactions, subsurface investigations, and site remediation projects. Her clientele includes many of the nation’s largest lenders, real estate investors, and corporations.

Page 5: The New ASTM E 1527-13 Standard

John Sallman

• Assistant Director of Environmental Services at Terracon Consultants, Inc. Prior to this role, John was Office Manager of Terracon’s Fort Worth office and Environmental Department Manager of Terracon’s Dallas office. John’s expertise is in Phase I ESA’s, risk based corrective action and brownfields projects. As an original member of the ASTM 2600 committee, John helped craft the current standard for vapor encroachment screening.

Page 6: The New ASTM E 1527-13 Standard

Julie H. Kilgore

• President of Wasatch Environmental, an environmental science and engineering firm based out of Salt Lake City, Utah. – 20 years experience– Chair of Committee E50 on Environmental

Assessment, Risk Management, and Corrective Action– Chair of E1527 the task group– Served on the ASTM International Board of Directors– Appointed by EPA as one of 25 negotiators to assist

EPA in developing All Appropriate Inquiry regulation

Page 7: The New ASTM E 1527-13 Standard

Background

• Sunset provision – if not revised, standard would sunset.

• Could either re-ballot as is, or make some changes.

• Key consideration: Don’t mess up alignment w/ EPA AAI Rule.

• Task group’s mission: strengthen & clarify more than change.

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Agenda

• Focus on three areas• Impacts on cost and pricing• When is it coming out?

Page 9: The New ASTM E 1527-13 Standard

Key Revisions

• Major– RECs– Vapor Migration– Regulatory File Reviews

• Minor– User Responsibilities– Industrial/Manufacturing Properties– Appendicies

Page 10: The New ASTM E 1527-13 Standard

REC, HREC, CREC

Page 11: The New ASTM E 1527-13 Standard

REC, HREC, CREC• Received over 100 questions in the two webinars we hosted in

March and April on the topic of HREC.• EP’s are trying to apply the concept on real world scenario’s

they are familiar with.

Page 12: The New ASTM E 1527-13 Standard

RECs

• REC definition “simplified”• Revised HREC definition• New definition: “controlled” REC (CREC)

Page 13: The New ASTM E 1527-13 Standard

Simplified REC Definition

• Old Definition:– “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 release of any hazardous substances or petroleum products into structures on the property, or into the ground, ground water, or surface water of the property. The term includes hazardous substances or petroleum products even under conditions in compliance with laws.”

• New Definition:– “the presence or likely presence of any hazardous substances or

petroleum products in, on, or at a property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment.”

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Revised HREC Definition

• Here's the -05 HREC definition• 3.2.39 historical recognized environmental condition—an environmental condition which

in the past would have been considered a recognized environmental condition, but which may or may not be considered a recognized environmental condition currently. The final decision rests with the environmental professional and will be influenced by the current impact of the historical recognized environmental condition on the property. If a past release of any hazardous substances or petroleum products has occurred in connection with the property and has been remediated, with such remediation accepted by the responsible regulatory agency (for example, as evidenced by the issuance of a no further action letter or equivalent), this condition shall be considered an historical recognized environmental condition and included in the findings section of the Phase I Environmental Site Assessment report. The environmental professional shall provide an opinion of the current impact on the property of this historical recognized environmental condition in the opinion section of the report. If this historical recognized environmental condition is determined to be a recognized environmental condition at the time the Phase I Environmental Site Assessment is conducted, the condition shall be identified as such and listed in the conclusions section of the report.

Page 15: The New ASTM E 1527-13 Standard

Revised HREC Definition

• New Definition– “a past release of any hazardous substances or petroleum

products that has occurred in connection with the property and has been addressed to the satisfaction of the applicable regulatory authority, without subjecting the property to any required controls (e.g., property use restrictions, AULs, IC’s, or EC’s). Before calling the past release an HREC, the EP must determine whether the past release is a REC at the time the Phase I ESA is conducted (e.g., if there has been a change in the regulatory criteria). If the EP considers this past release to be a REC at the time the Phase I ESA is conducted, the condition shall be included in the conclusions section of the report as a REC.”

Page 16: The New ASTM E 1527-13 Standard

New CREC Definition

• “a REC resulting from a past release of hazardous substances or petroleum products that has been addressed to the satisfaction of the applicable regulatory authority (e.g., as evidenced by the issuance of a NFA letter or equivalent, or meeting risk-based criteria established by regulatory authority), with hazardous substances or petroleum products allowed to remain in place subject to the implementation of required controls (e.g., property use restrictions, AULs, institutional controls, or engineering controls)…a CREC shall be listed in the Findings Section of the Phase I ESA report, and as a REC in the Conclusions Section of the…report.”

Page 17: The New ASTM E 1527-13 Standard

REC-HREC-CREC Relationship

Contamination

in, at or on the target property.

Is it de minimis?

Has it been

addressed?

Would regulatory officials

view cleanup

as inadequate today?

Are there restrictio

ns?

YES

NO

NO

YES

REC(“Bad REC”)

De minimis(“Not a REC”)

NO

CREC(“Good REC”)

HREC(“Not a REC”)

YES

YES

NO

Page 18: The New ASTM E 1527-13 Standard

CREC Example

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In your Phase I Report

• List in FINDINGS– RECs– CRECs– HRECs– De minimis conditions

• List in CONCLUSIONS– RECs– CRECs

Page 20: The New ASTM E 1527-13 Standard

For the panel…

• Best practice for communication and education?

• The REC, HREC, and CREC system can be a little confusing at first. What is the best way to teach it to staff and clients?– “Good REC vs. Bad REC”?– Flow charts?

Page 21: The New ASTM E 1527-13 Standard

Vapor

Page 22: The New ASTM E 1527-13 Standard

Vapor Migration

• No differentiation between state of matter:– Solid, liquid, or gas– Refer to CERCLA definition of “release” and “environment”

• Definition of “migrate”• E2600-10 is a referenced document in 1527

– You can use it or any other vapor screening standard, just document a replicable practice.

– Addressed in revised AUL definition• Contaminated vapor migration now clarified to be associated w/

a release.• Driven by legal community. They wanted vapor included.• If vapor migration or encroachment is eliminated as an issue, then logically,

vapor intrusion is a moot point.

Page 23: The New ASTM E 1527-13 Standard

Migrate/Migration Definition Added

• “refers to the movement of hazardous substances or petroleum products in any form, including, for example, solid and liquid at the surface or subsurface, and vapor in the subsurface.”

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Vapor and 1527

• “The EPA will come out with vapor guidance this year, and the ASTM 1527 standard will clarify vapor as a consideration. What do you think the impact will be on our market?”

• “Do you expect the EPA guidance for VI will be consistent with 1527-13?”

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• “Does my Phase I ESA need to address vapor intrusion into buildings on my target property if I’m dealing with a situation where vapors are potentially migrating onto the property?”– Emphasis added• “vapor pathway”

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Vapor and 1527

• “Have you seen vapor impacting any clients deals?”

Page 27: The New ASTM E 1527-13 Standard

Vapor and 1527

• “In a recent article on REIT.com, David Farer, chairman of the environmental department with Greenbaum Rowe Smith & Davis LLP noted that more investors are paying attention to the issue of vapor intrusion. Do you agree?”

Page 28: The New ASTM E 1527-13 Standard

Regulatory File Reviews

Page 29: The New ASTM E 1527-13 Standard

Regulatory File Reviews

• New section added, 8.2.2• If TP or adjoining is identified in gov’t records, “pertinent

regulatory files and/or records associated with the listing should be reviewed” at the EP’s discretion.

• If EP deems it not warranted, or not reasonably ascertainable, the EP must provide justification in the Phase I report.

• EP may use files from alternative sources such as on-site records, user provided records, records from local agencies, interviews w/ agency officials, online resources, etc.

• Summary of information obtained from the file review shall be included in the Phase I report and EP must include opinion on the sufficiency of the information obtained.

Page 30: The New ASTM E 1527-13 Standard

Regulatory File Reviews

• Challenges inherent– High variability of availability across states– Research project canvassed all 50 states

• Variability of TAT from instant to months• Variability in access includes internet, phone (verbal),

email, and regular mail.• Variability of cost from free to prohibitive• Variability in number of pages/documents from very few to

prohibitive• Variability in distance traveled

– Result: High variability in current practices

Page 31: The New ASTM E 1527-13 Standard

Process is different in every state

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Current Practice

• Survey of 400 EP’s last year.

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Questions

• What are your suggestions for how my firm can adequately account for the effort/cost of visiting regulatory agency offices to review files of adjoining properties in my Phase I price? I have no idea at the proposal stage whether or not there are any problem properties adjoining my target property or how extensive any files are that may be available.

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Questions

• How will the revision impact pricing?• Which areas will impact pricing?• Which will not?• How will firms communicate changes to their

clients?

Page 44: The New ASTM E 1527-13 Standard

Kathryn Peacock, Partner Engineering & ScienceCopyright 2013 by RMA | March 2013 The RMA Journal 73

Page 45: The New ASTM E 1527-13 Standard

When will it come out?

Page 46: The New ASTM E 1527-13 Standard

Q&A

• How did the task group engage w/ the SBA to make sure the standard was embraced by them?

Page 47: The New ASTM E 1527-13 Standard

• Ballot closed October 17, 2012• Negatives ruled non-persuasive in follow-on ballot that closed January 9,

2013• Final standard submitted to EPA for formal approval (to issue a ruling that

the standard is AAI-compliant)• EPA plans to publish both the proposed rule (with a 30 day public comment

period) and the final rule simultaneously in early summer• Assuming there are no objections to the proposed rule, the already

published final rule becomes effective 30 days after the public comment period ends (likely becoming effective around Labor Day)

• ASTM would then immediately publish the standard (as E1527-13) and the standard would be effective immediately

Status of ASTM E 1527 Revision Process