Insights and perspectives on navigating the ASTM E1527-21 transition: A LightBox webinar
In November 2021, the American Society for Testing and Materials (ASTM) Committee on Environmental Assessment, Risk Management and Corrective Action approved a new standard, E1527-21, for conducting Phase I Environmental Site Assessments (ESAs), modifying the earlier version, E1527-13. The revisions provide clarification and guidance on various aspects of conducting Phase I ESAs, including historical research, documentation, REC determinations, shelf life and the consideration of emerging contaminants.
Previous LightBox webinars focused on key revisions; this one was a significant pivot in that lenders and an environmental professional shared the first indications of what the transition to the new Standard Practice looks like, what elements of Phase I ESAs would likely improve as a result, and what professionals should be doing now to prepare.
The February 9th webinar, “Navigating the E1527-21 ASTM Transition: Expert Insights and Perspectives” was hosted by Dianne Crocker, principal analyst at LightBox and moderated by general manager Alan Agadoni. The panelists were Enrique Garcia, Jr., and Mary Claire Maxwell, environmental risk directors in commercial banking at Chase, and Sean Leary, an associate principal and the vice president of transaction risk management at Vieau Associates/GZA as well as an ASTM-approved instructor.
The panelists covered a broad range of topics, including the U.S. EPA’s estimated timing for approving E 1527-21 as compliant with the All Appropriate Inquiry Rule under CERCLA, documentation and report format, training tips for environmental professionals, and lenders’ perspectives on specific areas of revision. Key takeaways from the event are below.
When is the U.S. EPA expected to reference the ASTM E 1527-21 standard as compliant with All Appropriate Inquiries under CERCLA?
Alan Agadoni: “We reached out to the US EPA in advance of our webinar, and they updated us that the process for referencing the -21 standard as AAI-compliant could happen as early as springtime so it’s definitely time for the industry to treat this grace period as a time to get things in order for a seamless transition to -21.”
Sean Leary: “We’ve already taught several ASTM training classes with instructors highlighting the changes. A lot of environmental professionals are looking now at their templates and expecting to issue new -21 reports soon. One big factor for EPs to consider is that the shelf life of a Phase I ESA report is 180 days. The EPA is expected to adopt the new standard this spring or summer as the official means for an owner to quality for landowner liability protection so for the reports we’re authoring now, the EPA news could happen before a transaction closes several months out. So clearly it’s time to have conversations with your clients now and figure out what standard to follow.”
What should EPs and lenders be aware of in terms of report formats and documentation in general?
Leary: “The first thing is to remember is that there’s nothing saying you can’t go above and beyond what the standard requires. Many lenders will want you to do so.
“Definition changes—such as usage of the word “likely”—will affect templates and offer a response to clients who say: “You can’t see it” or “You can’t prove it” or “You’re speculating.” Clearly the standard is asking us to speculate. Highlighting these areas in a template will be useful when we must provide a defensible opinion. There are changes everywhere, most of which are small tweaks instead of major overhauls.”
Do you expect that the industry’s transition to E 1527-21 will impact average ESA pricing or turnaround time?
Leary: “During the Covid-19 pandemic, prices were going up at the same time employees were fighting for more pay across the board, so if you didn’t raise pay, you were probably part of the Great Resignation. Because of that, there’s been an effect on pricing. We had stagnant prices for years, but quality and price are linked.”
A final note…
The industry is in an important “grace period” from now until the U.S. EPA recognizes E 1527-21 as AAI-compliant. The panelists recommended staff training, as well as reviewing processes, procedures, contract language and reports to get any necessary changes in place in advance of the EPA notice.
FOR MORE INFORMATION
Listen to the full replay for answers to these questions:
- What aspects of the new standard are welcome changes from the lender perspective?
- What changes to Phase I ESA reports do lenders expect to see?
- Are changes to pricing and turnaround time expected?
- What should EPs be doing now to train their staff?
- Should today’s reports reference -21 in advance of EPA’s notice?