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Digging Up The Past: What truly defines a Historical Recognized Environmental Condition?

From the desk of David S. Coyne, QEP, Principal, Environmental Due Diligence Expert

We hear all the time that it’s not wise or healthy to dwell on the past. How often have we been told, ‘Don’t brood over that old argument, it will eat you up inside’ or ‘Don’t pine over the one that got away, it was never meant to be’? Times change, of course. We’re told to accept them; adapt and move on, like fashion or technology.  What sixth grader in 1981 didn’t have a pair of parachute pants, for example?  Mine were shiny gray, had dozens of zippers, and were the coolest things ever…….until they weren’t, about two weeks later.

But is this always good advice? Should we fully ignore history after it passes, as if it didn’t exist?  I’ll offer up my opinion that it’s not really a good idea.  When we’re studying a property with an environmental past, those of us involved in transactional due diligence know that it is in fact very necessary to dwell a bit over history.  Looking backward is quite essential in this process, as we must ask ourselves – what happened here, and why?

Since so much of the past is masked by the present, a historical perspective forms the core of what good due diligence is all about.

In its 2013 revision to the Standard Practice for Phase I Environmental Site Assessments (E1527-13), ASTM clarified its definition of a recognized environmental condition (REC) and expanded upon that framework of conditions, adding definitions for special conditions that included a historical REC (HREC).   An HREC, as set forth in the above-referenced Standard, is as follows:

A past release of any hazardous substances or petroleum products that has occurred in connection with the subject property and has been addressed to the satisfaction of the applicable regulatory authority or meeting unrestricted use criteria established by a regulatory authority, without subjecting the subject property to any required controls (e.g., property use restrictions, activity and use limitations, institutional controls, or engineering controls).

As defined above, the Standard allows for an HREC to be assigned to a prior release at a site where we as the consultant can be assured that the impacts have been fully addressed and would therefore not warrant any additional evaluation in the form of a Phase II site investigation.  However, when we apply this concept to professional due diligence as a practice – where we as consultants are examining sites on behalf of our clients who will assume ownership or financial liability for a property – we mustn’t rely on limited evidence.  Typically, a complete record of the prior release and its remedial measures, and – if applicable – a similarly complete record of regulatory agency approval of said actions, is what is implied here.  After all, how can we as consultants know that the release was ‘addressed to the satisfaction of the applicable regulatory authority or meeting unrestricted use criteria established by a regulatory authority’ without obtaining a full record of that information?

So, where we can review full documentation about a prior release as described above, we can then evaluate whether an appropriate remedial action was completed. If, for instance, we are provided with a regulated underground storage tank (UST) closure report from the early 1990s, we can review the report documentation as well as the appropriate agency response to determine if regulatory approval was achieved.  For circumstances where no regulatory reporting was required at the time – an unregulated UST closure report, or a remedial action performed outside of a formal regulatory process – we can still review the report data, determine its completeness, and compare the field data and analytical data against current regulatory cleanup requirements.

This last example brings up yet another scenario, which is actually a common dilemma faced by consultants when reviewing earlier environmental reports of all kinds. What if the remedial action met the cleanup criteria at that time, but those have since changed? Or, what if the applicable agency has since listed a new target contaminant that was not required to be evaluated at that time?  In Pennsylvania for example, attainment criteria for storage tank cleanups became more stringent in the mid-1990s when new, risk-based Statewide Health Standards were published in connection with the establishment of Department of Environmental Protection’s Land Recycling (or Act 2) Program.  More recently, new risk thresholds and screening criteria for vapor intrusion were added to remedial programs in several states in the early 2000s.

In this case, we must truly be the expert consultant that the client needs. The ASTM Standard even identifies this need, in the second part of its HREC definition:

Before calling the past release an HREC, the environmental professional must determine whether the past release is an REC at the time the Phase I ESA is conducted (for example, if there has been a change in the regulatory criteria). If the EP considers the past release to be an REC at the time the Phase I ESA is conducted, the condition shall be included in the conditions section of the report.

Thankfully, however, there are many different ways that we as EPs (Environmental Professionals) can evaluate prior data to determine its applicability as an HREC, even if regulatory conditions have changed as noted above. For instance, the field notes and screening data become very important, as does the existing analytical data.  Does this data show that no observations of any impacts (e.g. staining, odors, etc.) were observed, and was the analytical data non-detect or at trace concentrations, at most?  A reasoned judgement can likely be made that additional, newly-listed target contaminants are also not present.  On the contrary, does the closure report show evidence of impacts, and do samples show significant impacts that are just below then-applicable levels?  Then, perhaps we can’t rule out the presence of newly-listed contaminants as well, especially those which are known to pose exposure risks such as vapor intrusion.  My colleagues and I have had to inform clients on numerous occasions that a prior regulatory approval – a ‘No Further Action’ letter, for example – is insufficient to meet the criteria of an HREC.

Where such insufficient evidence exists, we’ll typically identify the issue as an REC and recommend further study.

As it pertains to the above, we need to hold onto history a bit, understand it more fully, and take appropriate actions in order to move forward. An uncredited quote on the subject reads, “You can’t start the next chapter of your life if you keep re-reading the last one”.  And that’s sage advice, no doubt.  But from time to time, we benefit from keeping a page or two, don’t we?