Phase I ESAs are typically performed as part of property transactions (acquisitions and divestitures) to assess environmental risk and identity the presence of hazardous substances or petroleum products (also known as Recognized Environmental Conditions (RECs)). Phase I ESAs typically follow a standard practice developed by the American Society for Testing and Materials (ASTM). The current ASTM standard for Phase I ESAs is known as ASTM E1527-13; however, an updated version has recently been developed by ASTM (ASTM E1527-21).
This updated standard is awaiting final acceptance by the United States Environmental Protection Agency (USEPA) as it was released for public comment in March 2022. Due to adverse comments received, the final rule (which would’ve made the updated standard effective on May 13, 2022) has been withdrawn to address these comments. The majority of the adverse comments were associated with the continued allowance of the use of ASTM E1527-13 after ASTM E1527-21 is adopted. Upon EPA’s acceptance of the ASTM standard, it will comply with the federal All Appropriate Inquiries (AAI) regulations concerning landowner liability defenses and qualification for Brownsfield grants. In addition, since the updated standard has heightened levels of environmental due diligence, it is anticipated to be beneficial in identifying environmental issues associated with a property.
Primary Modifications to ASTM E1527
- Clarification of the requirement for historical reviews of adjoining properties
- Addition of emerging contaminants (including PFAS) as non-scope considerations
- Revised definition of RECs and inclusion of a logic diagram to assist with defining RECs vs. CRECs vs. HRECs
- Updated the shelf life of a Phase I ESA report
- Clarification of the expected content in the Findings, Opinions, and Conclusions section of a Phase I ESA report
EPA approval of the updated ASTM E1527-21 standard is expected prior to the end of 2022. In the meantime, the following options are available with regards to conducting Phase I ESAs:
- Continue to use ASTME1527-13 until the EPA finalizes ASTME1527-21
- Use and cite the new standard ASTME1527-21
- Use and cite the current standard but indicate that requirements associated with the new standard have been incorporated
NGE has experts with significant experience in completing Phase I ESAs and has been completing them for 20 years. We use only senior staff to complete Phase I ESAs, and our approach is comprehensive and methodic. We understand the importance of identifying environmental risks as part of any property transaction. As such, many of the noted modifications to the standard are practices that NGE already includes as part of their Phase I ESA process. We also have experience in completing Phase II efforts if a Phase I identifies RECs and a Phase II is deemed necessary.
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