Identification of Vapor Migration at Site Not a `Deal Killer,’ Attorney Tells Webinar

Reproduced with permission from Daily Environment Report, 122 DEN A-6 (June 25, 2014).
Copyright 2014 by The Bureau of National Affairs, Inc. (800-372-1033)
Bloomberg

Identification of Vapor Migration at Site Not a `Deal Killer,’ Attorney Tells Webinar

By Pat Ware

June 24 –The identification of vapor migration at a site under consideration for redevelopment isn’t a “deal killer” but warrants certain measures, an environmental lawyer said at a June 24 webinar.

One measure to take is to build a multidisciplinary team to develop an approach specific to a particular site or transaction, David Gillay, a partner with the law firm Barnes & Thornburg LLP, said.

Members of the team might include risk assessors, toxicologists, hydrogeologists, people qualified at vapor intrusion sampling and mitigation and legal counsel, he said.

The webinar was sponsored by EDR Insight to consider how parties should address vapor migration after publication of an Environmental Protection Agency rule adopting a voluntary industry standard on conducting environmental assessments. The preliminary assessments are known as Phase I environmental site assessments.

In December 2013, the EPA published the final rule referencing ASTM E1527-13 into the agency’s all appropriate inquiries (AAI) rule. The agency’s action allows parties to use the updated standard, along with a 2005 version, to satisfy AAI requirements to quality for certain liability defenses under the Comprehensive Environmental Response, Compensation and Liability Act.

Identified as “Recognized Environmental Condition”

The 2013 version of the standard identifies vapor migration as a “recognized environmental condition,” whereas the 2005 standard didn’t, Gillay said.

The definition of recognized environmental condition is updated in the 2013 standard to more closely align with definitions under CERCLA .

Vapor intrusion usually occurs when volatile chemical vapors from contaminated sources migrate into overlying buildings. The vapors are harmful to human health.

Although vapor migration wasn’t specifically mentioned in the 2005 standard, Gillay said the EPA’s preamble to the 2013 rule stated the agency has always recognized vapor migration as a potential source of release or threatened release that could warrant identification when conducting all appropriate inquiries.

Need Seen to Document Due Diligence

Parties also should understand and document the underlying purpose of due diligence in connection with the transaction, identifying the client, why the client is conducting due diligence, what the client plans to do with the target property and what the potential continuing obligations are.

On June 17, the EPA proposed to remove reference to the 2005 version of the ASTM Phase I environmental site assessment from its AAI rule. When finalized, the change would mean assessments conducted under the 2005 version wouldn’t be allowed [for the purposes of CERCLA liability protection].

The effective date of disallowing use of the 2005 standard would be one year from the date the final rule is published, Gillay said. He called this “unfortunate,” saying it would add confusion in the marketplace.

If the vapor migration pathway hadn’t been considered previously at a site, a party’s liability would be determined by a legal determination and ultimately a judge, he said. Evaluation of liability would largely include looking at how the state agency manages vapor intrusion, he said.

Preemptive Mitigation Emphasized

The EPA’s current draft vapor intrusion guidance emphasizes preemptive mitigation, and agency staff have been stressing its importance recently, Gillay said.

When determining if preemptive mitigation should be considered, parties should examine passive versus active systems, determine the construction and planning needed to install mitigation, conduct a cost-benefit analysis and consider the source of the vapor migration, he said.

“Mitigation may be ‘forever,’ so clear communication and expectations should be calibrated appropriately,” he said.

Some states, such as Indiana, have proposed guidance on mitigation, with performance standards, monitoring schedules and criteria for turning systems “off,” he said.

Gillay said parties that want to develop sites where vapor intrusion has been found should develop clear communication protocols to define the nature and scope of their due diligence efforts.

A vapor intrusion team should be established and alliances built with experienced environmental professionals, he said. Finally, parties should consider post-vapor-intrusion-related post-closing continuing obligations and document them in written communications, Gillay said.

By Pat Ware

To contact the reporter on this story: Pat Ware in Washington at pware@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

Copyright 2014, The Bureau of National Affairs, Inc.