Presented by EDR’s Dianne Crocker and Pat Coyne at the 1/7/14 meeting of the Environmental Professionals Organization of Connecticut. Content provides an overview of the key areas of change in ASTM’s E 1527-13 Phase I environmental site assessment standard, the reactions from environmental professionals, attorneys, lenders and the U.S. EPA as well as an in-depth look at the challenges of conducting agency file review.

1. Environmental Professionals’ Organization of Connecticut:
Clearing Up the Confusion About the ASTM
E 1527-13 Phase I ESA Standard
Tonight‟s presenters:
•
•
•
•
Dianne Crocker, Principal Analyst, EDR Insight
Pat Coyne, Vice President of Marketing, EDR
Sam Haydock, LEP, Principal-in-Charge, BL Companies
Pam Elkow, Partner, Robinson & Cole LLP
January 7, 2014
© 2014 Environmental Data Resources, Inc.

2. What Just Happened to Our Standard?
An Update on the Market Reaction
by
Dianne Crocker,
Principal Analyst
EDR Insight
© 2014 Environmental Data Resources, Inc.

3. The Road to Final E 1527-13 Standard
• End of 2012:
• ASTM Phase I Task Group approved revisions to E152705, submitted to EPA for AAI approval
• August 15, 2013:
• EPA proposed amendment to AAI rule recognizing E1527-13
• September 16, 2013:
• Comment period ended, majority supported EPA‟s decision
• November 6, 2013
• ASTM published E 1527-13 standard, -05 became a
“historical standard”
• December 30, 2013:
• EPA published final rule recognizing -13 as AAIcompliant, announced intent to propose removing E1527-05
reference

4. Why Did ASTM Revise E 1527?
• ASTM standards have a maximum 8-year shelf life
• Prior E1527 publications: 1993, 1994, 1997, 2000, 2005
• Careful review of the 2005 standard began in 2010
• ASTM‟s Phase I Task Group agreed on two primary objectives:
1. Clarify existing language
2. Strengthen the deliverable

5. 3 Key Changes for Tonight’s Discussion
1. Vapor migration
• Adds VAPOR to the more traditional soil
and groundwater pathways for evaluating
contamination risk
• A lot of confusion/inconsistency in how to
handle vapor risk in Phase I ESAs
2. RECs/HRECs
(revised)
CRECs (new)
• Revised definitions of REC and HREC
• New definition for “controlled REC” or
CREC
• More clarity on how EPs define
environmental conditions
3. Agency file
reviews
• Always in standard but more clarity on
when they need to be done…and what to
do if a review is not done
• More attention on standard
environmental sources

6. 1. Vapor Migration Language
• E 1527-13 adds new definition of “migrate/migration” (used in
many places in E1527) as the movement of hazardous
substances or petroleum products in any form, including solid
and liquid at the surface or subsurface, and vapor in the
subsurface.
• References E 2600-10 as a process for vapor encroachment
screenings (not required).
• Specifically excludes contaminated vapor migration/intrusion
from IAQ (which is a non-scope consideration).
• Reflects that CERCLA/AAI do not differentiate by form
(e.g., solid, liquid, vapor) of the release to the environment.

7. Prior to E 1527-13: Inconsistency in How
Vapor is Treated in Today’s Phase Is
• Some EPs automatically included consideration of vapor
migration.
• Others did so only at a client‟s request.
• Likewise, some financial institutions require vapor screens
on all Phase I ESAs.
• Others do so only on a case-by-case basis.
• This is changing as awareness of vapor risk grows.

8. EPs’ Concerns About Vapor
• Don‟t want to be the only consultant in town suggesting to their
clients that vapor migration needs to be part of an
assessment.
• Concerns that clients will think they‟re trying to squeeze more
money out of them.
• Just don‟t understand it well enough themselves or the
process to use for assessing it properly to explain to clients.
• Ignored VI because it was always non-scope under IAQ
exclusion.

9. Distinction Between Vapor Intrusion and
Vapor Migration
• Vapor migration:
• Is there a presence or likely presence of hazardous substances
or petroleum products on the property due to a release, based on
consideration of pathways and how contamination is likely to
migrate onto a property?
• Within the scope of a Phase I ESA.
• Vapor intrusion:
• Is vapor present inside a building as the result of a release?
• Never part of a Phase I, and is not now under -13.

10. Reaction to Vapor Language:
U.S. EPA
• EPA‟s final rule (Dec. 30, 2013):
• “EPA wishes to be clear that, in its view, vapor migration has
always been a relevant potential source of release or
threatened release that, depending on site-specific
conditions, may warrant identification when conducting AAI. EPA
applauds the revisions made by ASTM International to the
updated E1527-13 standard regarding vapor migration.”
• “…The new standard makes important revisions to the standard
practice to clarify that AAI and Phase I ESAs must
include, within the scope of the investigation, an assessment
of the real or potential occurrence of vapor migration and
vapor releases on, at, in or to the subject property.”

11. Reaction to Vapor Language:
LENDERS
• Large institutions required vapor assessments for several
years already, particularly for foreclosures or purchases.
• Less common at smaller banks, still coming up to speed.
• “Vapor really signifies a transition in property due diligence—a
transition away from the traditional way of thinking about
environmental due diligence only in terms of contaminated soil
and groundwater.”
~Mike Tartanella, Capital One at EDR‟s DDD Long Island
“We like the E 2600 process for vapor because it ensures a
consistent process for vapor across states we lend in.”
~regional New England lender

12. Reaction to Vapor Language:
ATTORNEYS
•
•
•
CERCLA and the AAI rule do not allow EPs to overlook the vapor
migration pathway and simply consider contamination in the soil and
groundwater in making a determination about the presence of RECs in, on or
at a property.“ Attorney Bill Wagner, Taft, Stettinius and Hollister LLP
“Consultants should not sign a report, in my humble opinion, that a
complete Phase I ESA was done if at least the suggestion was not
made that vapor be looked at.” Stuart Lieberman, Lieberman & Blecher
LLP
“Nothing in the underlying law (i.e., CERCLA or the AAI rule) allows for
carving hazardous substances or petroleum products in vapor form
out of the REC term in the Phase I standard. If an EP disclaims all
consideration of vapors in the Phase I ESA report, then it is not an AAIcompliant report.” Christopher Roe, attorney at Fox Rothschild LLP

13. 2. Family of REC Definitions
•
•
•
REC definition simplified
HREC definition revised
New definition for “controlled” RECs (CRECs)
• Applies where past release has been addressed, but residual
contamination remains subject to control
• Allows for the EP to classify a condition on the site using a less
threatening term
• Avoids stigma associated with RECs

14. Impact of New CREC Term
• Signals to potential purchasers of properties that not all RECs
are necessarily bad or warrant abandoning the deal.
• New emphasis on continuing obligations under CERCLA.
• Failure to satisfy these continuing obligations could result in
forfeiture of otherwise available future CERCLA liability
defenses.

15. Industry Response to New REC Terms
• Some confusion on how to make REC vs. HREC vs. CREC
determinations.
• Generally positive response from users, especially lenders,
who are responding favorably to the added clarity.

16. 3. Regulatory Agency File Review
• E 1527-13 contains new section that indicates the EP should
do an agency file review if a subject property or adjoining
property is identified in any of the standard environmental
records sources.
• If the EP decides not to undertake such a file review, the
justification must be included in the Phase I ESA report.

17. Reactions from EPs
• Impact varies based on what each firm is currently doing.
• Huge variability in level of effort.
• Major challenge in factoring cost/time of research into original
proposal.
“File reviews with the long turnaround times will be an
issue.”
“File reviews are a BIG unknown for each project until you
get into the work. Makes competitive bidding a losing
game.”’

18. Overall Expectations on
Pricing/Turnaround Time

19. EPs Score Key Revisions (Time/Cost
Impact)

20. Overall EP Reactions
• “Most of this will be client education. Many of the changes are
relatively minor.”
• “The lenders don’t understand what they want at this point. It
makes it difficult for us to format for them.”
• “Our company has a formal training program.”
• “We will be expected to learn about the new changes
independently, outside of the office.”
• “[We] already consider all of these issues; for us, it’s just a change
in definitions.”
• “We have been doing file reviews for 20 years and anticipate no
cost impact. Vapor will require some tweaking. REC-HREC-CREC
should actually help simplify some reports.”

21. One Lender’s Reaction
• “All of the revisions in -13 are already standard in our scope
and expectations. The section I like the most is the one on
AFRs. There is no complete Phase I ESA without a file
review, in my opinion. And vapor was never not a risk. For
us, these changes are not monumental.”
~regional lender

22. Summary of Impact of E 1527-13 on Pricing
Area of Change
Expected Impact
REC-HREC-CREC evaluation
No impact on price
Vapor migration screening
Additional time (up to 6 hours),
added cost (up to $400-500)
Regulatory file review
Additional time/; highly variable

23. Who Has Adopted E 1527-13 At This
Point?
• Many larger institutions switched when E 1527-13 became
new industry standard in November.
• Others assume the new standard will necessitate an update to
their policies, were waiting on EPA or are relying on their
environmental consultants to tell them what they need to do.
• Federal agencies:
• Freddie Mac is requiring E1527-13 since their Guide requires use
of the most current standard.
• U.S. SBA is allowing a grace period where reports meeting either
E 1527-05 or E 1527-13 will be accepted.
• Fannie Mae will require the use of E 1527-13 on any reports
ordered on or after February 1, 2014.

24. Education and Awareness Are Key

25. What You Should Be Doing
• Attend events dedicated to the E 1527 revisions.
• Ensure that internal staff are aware of the key areas of
change, and ready to implement them consistently across
office.
• Plan for any necessary changes to the internal Phase I ESA
process, scope of work and report format, addressing any
expected changes in pricing.
• Take online courses to get trained.
• Educate clients on areas of revision, working with them to
update policies to reference current industry standard…

26. Page 26

27. For More Information
• EDR‟s ASTM Toolkit
• EDR Insight
• Contains all past research on
E 1527-13 and vapor risk
• Questions?
• Email: dcrocker@edrnet.com
• Phone: 203.783.8156

28. EPOC
Demystifying Agency File Reviews
Presented by:
Patrick Coyne
EDR
© 2014 Environmental Data Resources, Inc.

29. Agency File Review

30. What‟s in them?
• Source files
• Other examples
Page 30

31. Beyond the database report
• This is what was in the DB Report

32. Details
•
•
•
•
•
•
•
Two waste oil tanks
500 & 250 gallons
Removed in „91
Filled w/ sand & gravel
Oversight by FD
ESA performed
No contamination observed

33. Driver of Agency File Reviews
• Best practice for fully understanding a site
• 60% of Phase I’s always or very often include the EP
seeking agency files.
• How many EP‟s have conducted one?
• It is a core ASTM 1527 data element.
• New clarification in the ASTM 1527-13 standard

34. ASTM 1527-13

35. ASTM 1527-13
• Property or adjoining “hit” in any 8.2.1 database
• Agency files should be reviewed
• Subject to 8.1.1-7 (reasonably ascertainable, reasonable time
and cost)
• If not warranted, EP must explain
• Alternative sources
• Shall include summary of the information reviewed
• EP must comment on sufficiency

36. Challenges
• Operational
•
•
•
•
•
•
Disparate
No standardization
Multiple programs
Different accessibility
Not to mention local
Report templates
• Business
• Educating clients
• Fees

37. Market Research
• Survey of EP‟s.
• Calling campaign to all 50 state agencies to document
processes.
• ASTM task group participation.
• EP interviews
• Discussions with lenders

38. Survey
• 335 total complete surveys
• 60% of respondents “very often” or “always” perform
agency file reviews in conjunction with their Phase I‟s.
• Only 7.2% “rarely or never”
• 26% of respondents state that their agency files are
available online.
• 18% of respondents said they have to travel zero
distance, because they can access files online.

39. When do you do it?
• When do they conduct them?
• 62% with the Phase I
• 31% afterwards

40. How far?

41. Available Online?

42. Once you‟re there…
•
•
•
•
I had to make an appointment 76%
Hours are limited 37%
56% make copies
60% review and abstract

43. Subject or Adjacents?
• What are they looking for?
• Not adjoining properties only
• Either subject property, or both TP and adjoining

44. Is it a pain?
Respondents don‟t think travelling to the agency office is a pain point.
65% respond that travel to the location is “extremely easy” or
“moderately easy”.

45. A lot of variability
• In reading the qualitative responses, a majority of the
respondents mention a very high variability in information
available, quality of information, access to information.

46. How long does it take?

47. How do you charge for it?

48. Questions Lenders are asking EP
Firms
• “Remind me…are you completing AFR‟s as a standard part of
the Phase I scope of work you conduct for me?”
• “Will completing a file review affect the TAT and price of my
Phase I?”
• “Should we be revising our scope of work to make it more
clear whether we expect AFR?”
• Regardless of the answers, they want to feel confident that
their EP partner has a rock solid understanding of the details
of the changes.

49. NFA:

50. Questions?
• Pat Coyne, EDR
• Phone 203.783.8192
• Email pcoyne@edrnet.com