Phase I Environmental Site Assessments, “Phase Is” are conducted prior to property transactions. Elements of a Phase I are defined in the American Society for Testing and Materials (ASTM) E 1527. Sellers, buyers, or financing institutions may initiate the process. The purpose of a Phase I is to allow the User (usually the entity who is paying to have a Phase I ESA conducted) to satisfy one of the requirements to qualify for an innocent landowner defense. All appropriate inquiry (AAI) into previous ownership and uses of the subject property must be conducted. The idea is to identify recognized environmental conditions (RECs) that indicate the presence or likely presence of hazardous substances or petroleum products that have been released to the environment, exist under conditions indicative of a release, or under conditions that pose a threat of a future release.

Most likely, the User will hire an Environmental Professional to conduct the Phase I. Is there a definition of an Environmental Professional (EP)? Yes. One can be a licensed professional (PE, PG) with 3 years of relevant experience. Or, one could have a bachelor of science (BS) in engineering or science with 5 years of relevant experience. Absent of certification or a BS degree, someone who has at least 10 years of relevant experience could qualify. The cost for Phase I’s can range from $2,000 to much, much higher. Costs are influenced by location (whether travel to the site is required), size of the subject property, and history of the subject property.

Past reports must be reviewed. This can be an onerous task – a complicated site could have years of prior reports that need to be reviewed. An EP can learn a great deal about the subject property before conducting the required reconnaissance. Numerous county and city websites provide property records, current ownership, and building permits. State and federal environmental websites can be searched for environmental permits, compliance issues, and environmental data. However, there is a simpler way to prepare in advance for a site visit. The advent of formal Phase I ESA’s in accordance with ASTM E 1527 created a new industry in environmental data collection. Companies that specialize in compiling environmental data and historical information can provide historical topographic maps, aerial photographs, and a collection of information obtained from federal and state databases. This information provides a one-stop resource of relevant material.

The EP should ask about sensitivity before conducting the site reconnaissance. The EP will be a strange face to employees, and rumors about selling the subject property could disrupt operations. While onsite, every building needs to be assessed. Among other things, the EP will look for stained vegetation, evidence of tanks, drums, containers, and activities on adjacent properties that may contribute to RECs on the subject property. The EP should take more pictures than he/she thinks is necessary, because once the EP leaves the subject property, there is little chance of returning. The EP is usually escorted by a site official, who should be interviewed about current and past practices – chemicals used, stored, generated, etc. At this point, the EP has gathered environmental data, historical information, has created a photo log of relevant issues, has created figures, and has conducted the site reconnaissance.

Now what? The Phase I report is next. ASTM 1527 has an outline of what should be in the report, and most likely, a lawyer or senior professional has created a report template. Language needs to be precise. There should be no language that is subjective. For example, stating “the subject property topography has a gentle slope” should be replaced with “based on the 1989 topographic map provided in Appendix D, the subject property slopes to the northeast with the highest elevation being x and the lowest elevation being y”. Of course, this detail is only relevant for larger properties where there is a discernable change in elevation.

The EP must comment on findings and whether those findings constitute a REC, CREC, HREC, or de minimis condition. RECs were defined earlier in this article. CRECs, or Controlled Recognized Environmental Conditions, are described as “a recognized environmental condition that involves a past release of hazardous substances or petroleum products that has been addressed to the satisfaction of the applicable regulatory authority, with hazardous substances or petroleum products allowed to remain in place subject to required controls.” To put it another way, the subject property might have had a historical release, but the release was remedied well enough such that the regulating body is satisfied with the results. Some product or substance may still remain, but with controls such as activity and use limitations (AULs) the exposure to residual contamination is limited. AULs are legally binding and can include land use classifications (residential, nonresidential, industrial) or the prohibition on drilling wells.

Often, AULs are listed in the environmental data obtained from the company used to obtain environmental data and historical information. HRECs, or Historical Recognized Environmental Conditions, are defined as “a past, regularly reported, 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 or meeting unrestricted residential use criteria established by a regulatory authority, without subjecting the property to any required controls.” If the definition sounds similar to the CREC, it is, but the major difference is that controls are not in place with an HREC.

Finally, a de minimis condition is defined as “a condition that generally does not present a threat to human health or the environment and that generally would not be the subject of an enforcement action if brought to the attention of appropriate governmental agencies”. An example of de minimis is a discrete, localized staining of soil that had a petroleum odor associated with it. This article is for informational purposes only and is not a comprehensive summary of the ASTM E 1527 standard.

– Barb Johnson P.E., Senior Environmental Reviewer, has experience working in industry and consulting and worked as a supervisory engineer including remediation of soil, groundwater treatment, and environmental assessments. She is a licensed professional engineer in Minnesota.