On December 15, 2022, the United States Environmental Protection Agency (EPA) announced that they had amended Standards and Practices for All Appropriate Inquires (AAI) to reference the ASTM E1527-21 Standards for Phase I Environmental Site Assessments (ESAs).
ASTM updated the previous standard (ASTM E1527-13) in the fall of 2021. The EPA had initially (in March 2022) indicated they were going to adopt the new standard but then withdrew their intention (in May 2022). Below is a brief background.
EPA Proposed Adoption of AAI Rule then Withdraws Intent
In March of 2022, the EPA issued the rule to adopt the E1527-21 standard. The agency stated that if they received adverse comments on the proposal to reference the ASTM E1527-21 standard, the Agency would withdraw the direct final rule.
The EPA did receive negative comments. One of the areas of concern by commenters was that EPA stated that consultants could also continue to use the 2013 standard to satisfy AAI. Several comments stated that allowing the use of both standards would create confusion and potential future liability risk relating to AAI defense under the Comprehensive Environmental Response Compensation and Liability Act or CERCLA (bona fide prospective purchaser defense, the innocent landowner defense, and contiguous property owner defense).
PFAS Non-Scope Consideration
Another point of contention in the comments was the addition of per- and polyfluoroalkyl substances (PFAS) in the E1527-21 standard, albeit as a non-scope consideration.
According to the law firm Thompson Hine, “Some of the comments requested that PFAS be excluded completely from the rule until USEPA lists PFAS as a CERCLA hazardous substance. The Chamber of Commerce noted that the business community supports cleanups but urged USEPA to wait to include PFAS in the ASTM standard (even as a non-scope consideration) until formally adopted as a CERCLA hazardous substance in order to avoid leading to additional potentially premature CERCLA liability for landowners and potential buyers.”
On May 2, 2022, the EPA officially withdrew the adoption of the E1527-21 standard.
AAI Compliant Phase I ESAs will soon be required to follow the ASTM E1527-21 Standard (Image purchased from Shutterstock).
Adopting ASTM E1527-21
That brings us to the December 15, 2022, announcement that the EPA is now adopting E1527-21. In adopting the final rule (which goes into effect on February 13, 2023), the EPA states that in order to provide parties with an adequate opportunity to complete AAI investigations that may be on-going and to allow all parties sufficient notice to become familiar with the updated industry standard (ASTM E1527-21), the Agency is providing for a sunset period for the removal of its recognition of the previous standard (ASTM E1527-13) as compliant with all appropriate inquiries. The sunset period ends on February 13, 2024.
Changes to Phase I ESA in E1527-21
The law firm Latham Watkins states that E1527-21 “…incorporates several changes that distinguish it from E1527-13, including expanding requirements for using historical sources, updating guidance on emerging contaminants, and expanding reporting requirements.”
To their point, there were changes to definitions of Recognized Environmental Condition (REC), Controlled Recognized Environmental Condition (CREC), and Historical Recognized Environmental Condition (HREC). These changes will, at a minimum, require review of additional regulatory information and data to document that these issues have been addressed “to the satisfaction of the applicable regulatory authority.”
In the near term, if you are engaging an environmental consultant to conduct a Phase I ESA, you should clarify which standard you want your consultant to use. Lenders may have other specific requirements relating to a Phase I ESA.
Environmental regulatory changes have been coming at a rapid pace over the past couple of years. Before beginning a Phase I ESA or other environmental assessments, it may be wise to meet with your technical and legal advisors to discuss strategies.
For more information about the changes to Phase I ESAs, including assistance with a Phase I ESA, contact Mark Resch, LPG or Jeffrey Bolin, M.S. at 248-932-0228.
This blog was drafted by Alan Hahn. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for 45 years. He has written hundreds of blogs and articles. His published work includes Michigan Lawyers Weekly, Detroiter, Michigan Forward, GreenStone Partners, Manure Manager Magazine, Progressive Dairy, and HazMat Magazine.
The blog was reviewed by Jeffrey Bolin, M.S. Jeff is a partner and senior scientist at Dragun Corporation. He is a published author, frequent speaker, and expert witness. His expertise in environmental due diligence, PFAS, vapor intrusion, and site assessments has led to projects in the US, Canada, and overseas. See Jeff’s Bio.
Follow Dragun Corporation on LinkedIn, Twitter, or Facebook.
Sign up for our monthly environmental newsletter.
Principled Foundation | Thoughtful Advice | Smart Solutions