This blog is for all the environmental consultants who have told me how uncomfortable they feel bringing up vapor migration risk with their clients.
I’ve written quite a bit on the topic over the past year and hosted several webinars with leading experts on a range of vapor-related angles: why vapor is getting so much attention today, the risks associated with it, how environmental professionals can talk to their clients about it, what other environmental due diligence firms are doing on the vapor front, the liability EPs face if they don’t address it, the imminent update to the federal guidance, implications of the E 1527-13 revisions, what lenders should know about vapor risk, how vapor risk can be managed, what attorneys are advising, how different states are addressing vapor risk, and so on. I’ve heard from EPs who don’t want to be the only consultant in town suggesting to their clients that vapor migration should be part of an assessment. Or they worry that clients will think they’re trying to squeeze more money out of them. Or they just don’t understand it well enough themselves or the process to use for assessing it properly.
At yesterday’s Due Diligence at Dawn workshop on Long Island, I heard an interesting new take on vapor-related risk from a risk manager at a large institution based in New York. Before I get to his comment, it is important to note that his institution’s environmental policy has had vapor in it for several years now so E 1527-13 is not the impetus for addressing it—they already require vapor assessments.
What he said at DDD is that vapor really signifies a transition in property due diligence–a transition away from the traditional way of thinking about environmental due diligence at a property only in terms of contaminated soil and groundwater. Interestingly, he said that their borrowers “get” vapor. They can grasp the concept of contaminated vapors entering a building from the subsurface and that the mitigation of these vapors is simply about moving the vapors from point A to point B. His observations were that: “Borrowers intuitively understand that contamination entering a building via vapors poses potential health risks to building occupants, legal risks and may possibly even impact a property’s value. That makes sense to them. It’s not as abstract as soil or groundwater contamination issues which may or may not impact the actual usage of a property. They don’t have to understand plumes or groundwater flow concepts. And, that’s been a win for us.” With vapor in the mix, the investigation becomes about the viability of a building and whether conditions are such that there could be issues for tenants down the road. Their borrowers, he said, get that.
And as the industry transitions over to E 1527-13, others likely will as well.