Environmental Due Diligence

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A Q&A with ASTM Phase I environmental site assessment Task Group Head Julie Kilgore

Julie Kilgore
Julie Kilgore
April 20, 2021 8 mins

 A topic that LightBox is watching closely this year is ASTM’s ongoing process of updating the E 1527-13 Standard Practice for Phase I environmental site assessments. For this Q&A, I had the pleasure of posing questions to long-time Task Group chair Julie Kilgore, CEO of Wasatch Environmental. 

Below are her answers to my questions on what environmental due diligence consultants, commercial real estate lenders, investors, and other users of ASTM E 1527-13 can expect to see in the next round of revisions. We covered how the Task Group is tackling the revisions process, and where they will likely end up in terms of building in language that clarifies the historical research section, determining the significance of data gaps, improving how environmental professionals make REC determinations, and the timeline for release of the final standard.

During your presentation at the Environmental Bankers Association in March, you noted that there are essentially two main objectives to the revisions: clarifying the language and strengthening the Phase I Environmental Site Assessment (ESA) report deliverable. Can you explain the process that the Task Group followed in meeting these objectives? 

Julie Kilgore: We have over 80 attorneys, lenders, facility owners, developers, insurers, and other “users” on the task group. We also have several representatives from the U.S. SBA, U.S. HUD, and Fannie Mae as well. One of the first things we did as a group was to identify the pain points, including a review of recent litigation, claims, and other misses in the Phase I ESA process. Task Group members also shared experiences from the field where they see wide variations in interpretation of the E 1527 standard that result in inconsistencies in the actual scope of work being performed. It’s important to note here that E 1527 is a Standard Practice, so identifying areas of inconsistent applications is helpful in determining where the Task Group should focus to provide the industry with more clarity and specificity. We also have a U.S. EPA Office of Brownfields liaison who attends all of our meetings to ensure we don’t suggest language that deviates from federal All Appropriate Inquiries (AAI) compliance under CERCLA.  

These early Task Group discussions revealed several areas that could be updated or clarified, including: 

  • Conducting historical research for the subject property and for the adjoining properties
  • Making the REC, HREC, and CREC determinations
  • Understanding and articulating significant data gaps
  • Addressing the growing attention on emerging contaminants
  • Improving the quality and consistency of the written reports

The historical research section is one that hasn’t changed in a very long time. What elements of that section needed attention to ensure it was consistent with good commercial and customary practice? What might users and practitioners see in the changes? 

Kilgore: As we were gathering industry information, the issue of historical research was identified as a critical challenge. The E1527 was intentionally crafted to allow the environmental professional tremendous flexibility to determine which historical resources were appropriate for a particular property. Unfortunately, that flexibility has resulted in a huge disparity of historical research. So first, we needed to gauge what EPs were actually doing for historical research.  At first, we focused on what resources were consistently obtained, and we found that no consultants obtained only one resource (at least none that admitted it!). We found that, for the most part, EPs obtained information from what we call the “Big 4” resources: aerials, topographic maps, fire insurance maps, and city directories for sites located in areas where those resources were typically available. This was consistent whether the EP obtained those resources from a data provider or researched the resources themselves. Then, EPs would look at other resources if they needed more information. This was fairly consistent and not very controversial for researching the history of the subject property. 

“Where it got more complicated and more contentious, was figuring out what EPs do to research historical uses of adjoining properties. One of the challenges that was identified early on when we were asking about those pain points was inadequate historical information about adjoining properties that (it was later found) had impacted the subject site.”

The current and prior versions of E1527 discuss historical research for the “surrounding area,” but there is no specific instruction or guidance about researching adjoining properties. Some of these brownfield sites or large redevelopment projects have a LOT of adjoining properties, but there are very real liabilities and continuing obligations attached to contamination on a subject property that originated on another property. We’re still working through the final language, but for the most part, consultants are typically looking at the historical information from those same “Big 4” resources that were obtained for the subject property (where available and when it makes sense). The bigger challenge has been establishing “good commercial and customary practice” for researching other historical sources for adjoining properties. The answer to that depends on so many things.  

As for the historical resources themselves, the standard historical resources are the same, but we did move “interviews” out of the “other” category and added that as one of the standard historical resources. An interview with someone knowledgeable about the subject property is an important element of research, especially in rural and other areas where records may be limited.

We kept much of the same language about considering time/cost factors. For instance, looking at aerials for adjoining properties is easy, but doing so with tax files could be too time-consuming.  

In revising this section, it’s important to remember that the Task Group can’t add requirements to the practice just because we think it’s a good idea. The legislative mandate is to conduct “all appropriate inquiries consistent with good commercial and customary practice.” Since the original publication in 1993, that’s what the ASTM E 1527 standard practice reflects. People will disagree, as they often see an issue through their own lens. But that’s what the consensus process is all about – what can most of us agree on? 

What did your outreach show regarding the deliverable, the Phase I ESA report? And in what ways might the revisions achieve this objective? 

Kilgore: It’s clear to the Task Group that users of the Phase I ESA standard want to see better deliverables. Not bigger reports, but better reports. They want to see a clear answer that has been adequately researched, is properly documented, and contains a result that is reproducible (meaning, they can figure out how the EP got to the answer). One of the things we did within the standard itself was to incorporate consistent use of the term “subject property” vs. subject site or target property.

Believe it or not, the standard never had a requirement to include photographs or a site map in the report, and sure enough, there are some consultants who still don’t provide them. Gone are the days of having to wait to have photos developed. It’s now so easy to embed photos in a report that it’s hard to imagine why one would not include them. So that will be reflected in the standard for the first time. 

What about data gaps and making determinations on how significant they are? What can we expect to see here?

Kilgore: There was confusion on the difference between a “data gap” and a “significant data gap.”   The AAI regulation requires that the EP identify “data gaps and comment on the significant such data gaps with regard to the ability to identify conditions indicative or releases or threatened releases . . .”   

The current E 1527 turns that around a bit and says in Section 12.7 that “the report shall identify and comment on significant data gaps that affect the ability of the EP to identify RECs, and also requires that the EP identify the sources of information that were consulted to address the data gaps,” yet the term “significant data gap” was not defined. So there is now a proposed definition of “significant data gap” that clarifies that the term to mean a data gap that is so big that it affects the EP’s ability to reach a conclusion, to reach a REC determination. Then, if an EP has a significant data gap, a data gap that affects the EP’s ability to reach a conclusion, the users don’t want that buried in the report. We’ll probably see that those significant data gaps need to be brought forward into the findings, opinions, and conclusions of the report.

When can EPs who are not Task Group members expect to see the new version published and available from ASTM? When will it take effect, and will the E 1527-13 be grandfathered in for some period of time as was the case with previous versions? And is the U.S. EPA expected to recognize the new one as AAI-compliant? 

Kilgore: From an ASTM perspective, once a new standard is published, that becomes the current standard, but E 1527 is a little different because ASTM then submits a request to the U.S. EPA requesting that the agency reference the updated E 1527-XX standard as being compliant with the federal AAI regulation. That process takes time, maybe six months or so. Then generally, the U.S. EPA has allowed a phase-in period that allows use of either standard, leading up to a time that only the new standard will be recognized. So what I have seen in the past two revisions is that: 1. an EP continues to reference just the AAI-approved standard until there is public notice by the U.S. EPA that the new one is approved, or 2. the EP references that the report conforms with both the AAI-approved standard and the current standard. That approach works because there is nothing in the new version that takes anything away from the old one, and that approach tells the user that the new and improved standard has also been incorporated.  

About Julie Kilgore

Julie Kilgore is president of Wasatch Environmental. She has 25 years’ experience in environmental assessment, investigation, remediation, and regulatory agency coordination. Since 2000, Ms. Kilgore has chaired the task group responsible for developing the revisions to ASTM 1527 Phase I Environmental Site Assessment Standard, and she was appointed by the U.S. EPA to serve on the regulatory negotiation Federal Advisory Committee to assist the agency in developing the federal All Appropriate Inquiry regulation. In addition to being involved with ASTM International, Julie has participated in the Environmental Affairs Committee of the Salt Lake Chamber of Commerce and the Envision Utah Brownfields Task Force, and has served on the Environmental Bankers Association Board of Governors. As a result of Ms. Kilgore’s involvement in development of industry standards, federal regulation, and local policies, she was requested to assist in developing numerous Phase I ESA, Transaction Screen, and Phase II Environmental Site Assessment training courses, and she regularly conducts industry training courses throughout the country.

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