What to expect from ASTM E1527-21, Updates to the Phase I ESA Standard

The long-awaited updates to the ASTM E1527-21 Standard Practice for Phase I Environmental Site Assessments have been released.

About ASTM E1527

Since 2005, the United State Environmental Protection Agency (USEPA) has recognized ASTM E1527 as the standards and practices for All Appropriate Inquires (AAI) to qualify for landowner liability protections under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Through this due diligence process, existing and potential environmental risks are evaluated that may result in liability to an owner, lending institution and/or borrower, devaluation of the collateral, third-party liabilities, cost recovery obstacles, and/or impact a borrower’s ability to repay a loan.

About the Phase I ESA Standard

The Phase I ESA standard is required to be updated every eight years to ensure that good business practices are maintained as the industry advances. As such, in late fall of 2021, the updated version of ASTM E1527 (ASTM E1527-21 “Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process”) was published by ASTM International.

With recently approved amendments to ASTM E1527-21, the USEPA has ruled that the new standard will become effective on February 13, 2023. The previous version of the standard (ASTM E1527-13) will be allowed to satisfy the requirements for All Appropriate Inquiries until February 13, 2024, at which time it will be phased out.

Updates to the Phase I Standard

While the updated ASTM E1527-21 is consistent with the previous version, notable changes include an explanation of key definitions, expansion on research requirements, and conditions related to emerging contaminants (also referred to as potential future scope concerns). Central revisions to the ASTM E1527-21 standard are reflected as follows.

Revised Terminology for Identified Conditions

Recognized Environmental Condition (REC)

Includes an explanation of the “likely” presence of hazardous substances or petroleum products due to a release or “likely” release.

Controlled Recognized Environmental Condition (CREC)

Contamination is allowed to remain on the subject property and is managed by institutional and/or engineering controls. The documentation providing the control(s) must be identified.

Historical Recognized Environmental Condition (HREC)

A review of applicable records to determine if the previously completed cleanup meets current standards.

Significant Data Gaps (SDGs)

An explanation of data gaps that affect the ability to identify a REC.

Research Requirements

Environmental Liens and Activity Use Limitations (Aul) Searches

The revised ASTM E1527-21 standard clarifies that AUL searches are a requirement of the user, and not required to be performed by the Environmental Professional (EP), unless otherwise specified during the engagement. The search of institutional and engineering controls does not meet the requirement for the environmental liens and AUL search.

Historical Research

Four standard historical sources must be reviewed at minimum. These include aerial photographs, fire insurance maps, local street directories, and historical topographic maps. If these standard historical sources are not reviewed, the report must include an explanation of the omission. Additionally, interviews will be included as a standard historical source rather than as a separate component.

Type of Use

Specific information pertaining to the historical use of the subject property should be reviewed if the general type of use is retail, industrial, or manufacturing. For example, a retail shopping plaza may have historically included dry cleaning.

Adjoining Properties

The report must include an evaluation of the past and current uses of adjoining properties, including the historical records.

Assessment Requirements

Site Reconnaissance

The report must discuss specific features, activities, uses, and conditions that were and were not present in, on, or at the subject property.

Site Plan and Photographs

A site plan and photographs documenting major features and locations that are considered RECs or de minimis conditions are now required.

Findings, Opinions, Conclusions

The report must clearly list all RECs, CRECs, HRECs, and significant data gaps and include the EP’s rationale for findings. In addition, the report should include an opinion as to if additional investigation is warranted. The specifics of the additional actions are not required.

Emerging Contaminants

The updated standard clarifies that substances not currently defined as hazardous substances under CECRLA are not covered under the scope of a Phase I ESA. An example of this would be per- and polyfluoroalkyl substances (PFAS), which are not currently defined under CERCLA as hazardous substances. Nevertheless, once these substances are defined by CECLRA as hazardous they will be required to be evaluated within the Phase I ESA. Prior to that time, these substances may be discussed as out-of-scope environmental risks.

Adoption of ASTM E1527-21

How will the recent revisions to the Phase I ESA standard be reflected in ESAs prepared by LCS? Firstly, report users can expect consistency to ASTM E1527-21 for reports engaged on and after February 13, 2023. Minor formatting changes may be apparent in LCS’ Phase I ESAs to coincide with the requirements outlined by ASTM International; however, the updated standard generally included clarifications rather than significant changes. Most importantly, while the revisions may result in additional findings being identified as RECs, rather than HRECs, this will not necessarily result in additional recommendations for further investigation. The need for additional investigation will continue to be evaluated in a consistent manner based on identified conditions, regulatory compliance, and risk analysis.

What does this mean to users of Phase I ESAs? The changes summarized herein will largely impact the preparers of Phase I ESAs and will have less of an impact on users. As always, LCS is committed to providing our clients with the highest quality reports while always exceeding good commercial and customary business practices within the industry.

A comparison of the ASTM E1527 standards can be found in the USEPA-developed “Comparison of All Appropriate Inquiries Regulation, the ASTM E1527-13 Phase I Environmental Site Assessment Process, and ASTM E1527-21 Phase I Environmental Site Assessment Process

To learn more, reach out to Liz Mahoney, Director of Sales & Business Development today.