5 Developments Driving Vapor Risk to the Forefront
With the new ASTM E 1527-13 standard now officially the current standard of practice, some environmental professionals are grappling with how to incorporate the revised language into their Phase I ESA process. Yet the new standard is only one of many recent developments shedding light on the risk associated with the migration of contaminated vapors and the adverse impacts on a property associated with vapor intrusion.
As public concern about the risks posed by vapor intrusion grows, along with the number of lawsuits, environmental professionals, lenders, attorneys and other professionals involved in commercial property transactions are becoming increasingly focused on the issue and how VI risk can and should be managed. Outside of the new E 1527-13 standard, here are a few other key reasons to pay attention to vapor risk:
1. CERCLA already includes the vapor pathway.
Contamination can be present in many forms, and CERCLA does not distinguish among soil, liquid/groundwater or vapor. This fact lies behind the new language in E 1527-13, bringing the standard in line with the law, which already recognizes vapor as a pathway. This issue was a topic addressed by attorney speakers at EDR Insight’s February 2013 webinar, titled Vapor Intrusion and Environmental Liability—Learning from Past Mistakes. Attorney Bill Wagner drew attention to the AAI rule, which states that:
“In performing all appropriate inquiries…the environmental professional…must seek to identify…properties adjoining or located nearby the subject property that have environmental conditions that could have resulted in conditions indicative of releases or threatened releases of hazardous substances to the subject property” (40 CFR § 312.20(e)(1)(vii)).” In Wagner’s opinion,
“There is simply no safe harbor exclusion that would explicitly allow an environmental professional to ignore the vapor migration pathway. CERCLA and the AAI rule do not allow environmental professionals to overlook the vapor migration pathway and simply consider contamination in the soil and groundwater in making a determination about the presence of RECs in, on or at a property.”
Later in the webinar, New Jersey attorney Stuart Lieberman of Lieberman & Blecher LLP took a firm stance in telling the environmental professionals in attendance that they ignore vapor at their own peril:
“It is almost malpractice at this point for an attorney involved in a real estate transaction, where we might have vapor presenting itself, who does not put in writing a suggestion that testing be done so that when a third party files suit saying they got some disease [due to vapor], I know I have myself covered. Consultants better be doing the same thing. They better be putting something in writing, and they should not sign a report, in my humble opinion, that a complete Phase I ESA was done if at least the suggestion was not made that vapor be looked at. The case law is just starting to evolve.”
For more on the topic, read the full Q & A here.
2. Draft federal guidance could result in more sites with VI issues.
In EDR Insight’s August webinar titled Sorting Out the Implications of Federal VI Guidance, attorney speaker David Gillay at Barnes & Thornburg noted that:“No longer can vapor risk be ignored, delayed or downplayed. Plenty of attorneys are out there arguing that vapor should have always been part of a CERCLA-driven Phase I ESA.”
The guidance will provide environmental professionals, lenders and investors/owners with more definitive guidance on how the presence of a VI issue at sites might affect an owner’s liability and most importantly, how this risk can be measured and managed over the course of property ownership. This guidance is something all environmental professionals should be watching closely as it moves closer to final. As Wagner noted during the webinar,
“The agency’s choice of conservative factors to evaluate VI will result in more properties being identified as having vapor problems, with the attendant stigma associated with such findings. It will also take longer to prove to the responsible agency that VI risks are insignificant. This will happen simply because agencies have limited resources and a limited number of risk assessors. EPA’s approach will likely result in delayed regulatory closings while the limited number of risk assessors examine sites posing relatively low risk situations (sites with multiple contaminants all below screening levels) and from the delay of possibly having to reopen closed sites.”
Find out more about the U.S. EPA’s Federal VI Guidance and what EPs should be telling their clients about it.
3. Most states have their own VI guidance.
Nearly every state currently has VI guidance (draft or final) on the books. Those that do not are expected to adopt the EPA VI Guidance when it is final. For environmental consultants, it is therefore important to understand the current state VI guidance in effect in order to help clients make educated decisions about how best to manage any potential vapor risk.
4. Vapor is gaining attention in the public eye.
The human health effects associated with vapor intrusion have gained a lot of attention in the media, especially as more cases are filed against current and past property owners believed to have caused contamination that led to vapor intrusion impacts. The uptick in vapor-related litigation, particularly high-profile cases impacting residential properties, has had a significant effect on raising public awareness about the dangers of vapor intrusion. Consider a few:
- Maryland Square (Las Vegas) is a major lawsuit involving a release from a dry cleaner at a shopping center. The plume, more than a mile long, traveled into a high-end residential neighborhood and created vapor intrusion issues for occupants.
- In Oak Park, IL, a bank foreclosed on a home right next to a dry cleaner with a known plume. Vapors were discovered in the home after foreclosure, impeding the bank’s ability to sell and leading to a lawsuit.
- A very highly publicized, and ongoing, case in Pompton Lakes, NJ, involves 435 homes with the potential for vapor intrusion from contaminated groundwater as the result of nearby manufacturing activity from 1902-1994.
The adverse impact that vapor intrusion can have on a property’s value, the health of residents/occupants and to lenders extending credit for property purchases make it an important factor to consider during property due diligence. There are numerous cases of known plumes migrating under properties and creating adverse health effects for occupants, and stigmatizing entire tracts of properties. This is why many financial institutions, particularly larger ones, have already made vapor encroachment analysis part of their standard environmental due diligence.
5. Formerly closed sites are being reopened.
With these recent developments and new guidance coming out all the time, vapor risk becomes that much more difficult to ignore (or exclude from standard environmental due diligence). The field of research into vapor intrusion risk is evolving and it is critical for anyone involved in property assessments to stay abreast of new developments. Property purchasers and lenders are being advised to work with environmental professionals who are knowledgeable about vapor risk, comfortable identifying a vapor issue, capable of advising on next steps if a vapor risk is identified, and (particularly important) are up-to-date on the latest guidance in a particular state.
FOR MORE INFORMATION
The body of regulations, policy and guidance documents on vapor is growing every day so there is no shortage of documents for environmental professionals to consult to get up to speed on vapor. The U.S. EPA, state agencies, ASTM and the ITRC are all reliable sources of information on what sites are at risk for vapor intrusion issues, how to determine the extent of investigation required, how to evaluate sampling results, how to mitigate vapor risk, and what long-term obligations a property owner may face.