Background
The American Society for Testing and Materials (ASTM) revised its Standard for Environmental Site Assessment (ESA) to new Standard E1527-21 in November 2021. One of the significant revisions in ASTM E1527-21 is the inclusion of per- and polyfluoroalkyl substances [PFAS] and other emerging contaminants in the Standard for the first time. As described in the following paragraphs, US Environmental Protection Agency (USEPA) has withdrawn its intention to adopt the proposed revised Standard as written.
The USEPA requires the performance of a Phase I ESA as part of the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA) process, as such, E1527-21 was approved for incorporation into its All Appropriate Inquiries (AAI) rule under the CERCLA. AAI is the process of evaluating a property’s environmental conditions which may be relevant to assessing potential contaminant liability for the seller and purchaser. The process can be critical to demonstrating a party is not contributing to a contaminant source, and as such, can be crucial in assigning liability in multi-party property transactions.
Ongoing uncertainty and changes in federal and state PFAS regulations are critical in property transactions and related business decisions. Two revisions to the Standard particularly relevant to sites where PFAS may be present include:
Recognized Environmental Conditions (REC). The definition of REC was revised to provide more clarity on the way the word ‘likely’ was used in the previous Standard (E1527-13).
Non-Scope Considerations. Section 13 of the Standard addresses Non-Scope Considerations, such as PFAS, which include environmental issues that may be present at the site that are outside the scope of the written Standard and/or do not fall under CERCLA jurisdiction. Assessment or discussion of the potential for PFAS to be present can also be included in the ESA under Non-Scope Considerations at the request of the owner or user of the report.
In addition, as written, USEPA’s rule provided the “action does not require any party to use the ASTM E1527-21 Standard” and “EPA’s only action … is recognition of the ASTM E1527-21 Standard as compliant with all the appropriate inquiries requirements.”
Impact of Public Comment on the New Standard
Based on USEPA’s proposed and direct final rules published March 14, 2022, the new Phase I ESA Standard was to be incorporated into the AAI Rule May 13, 2022; USEPA asked for public comment through April 13, 2022. Many commenters were particularly concerned on how the option of using the old or new Standard at the discretion of the parties would create confusion in assessment and transactions.
EPA has since withdrawn its May 2 direct final rule and intends to address the comments in a future final action. Until the final action is published, property transactions may be clouded by uncertainty and potential financial risk to the parties. Buyers and sellers will have to decide whether to move forward with the 2013 ESA Standard, assume the new 2021 Standard will be adopted mostly as is, or wait for the USEPA’s final rule.
Next Steps
As USEPA’s path forward on the new Phase I ESA Standard is clarified, EHS Support continues to help our clients with defensible, science-based assessments and alternatives to inform your property transactions. EHS Support has a reputation for performing thorough and accurate due diligence programs, and sound cost allocation regarding PFAS and other contaminants. Let our team of forensic toxicologists and environmental scientists facilitate your decision-making during this time of regulatory change.
EHS Support delivers multi-disciplined services that provide our clients with realistic and innovative solutions at a time of developing PFAS regulation.
To discuss services associated with PFAS-related site issues contact: Ceil.Mancini@ehs-support.com, Dana.McCue@ehs-support.com, or Bruce.Martin@ehs-support.com.
