Our customers often ask, “Why do I need a Phase I ESA? Is it really worth the additional expense and time?”. The quick answer is “Yes” given that the purpose of a Phase I ESA conducted to the ASTM E1527-13 and the US Environmental Protection Agency’s “All Appropriate Inquiry” standards are meant to protect the potential buyer/future property owner against CERCLA liability. That all sounds good, but what does that really mean? Well, here’s a “real life” example that helps answer those questions and give the customer some perspective.
A number of years ago, a customer asked Bowser- Morner to perform a Phase I ESA study on a parcel of land that the customer wanted to purchase to use as a borrow source for clay for a construction project. The parcel was undeveloped and situated in close proximity to the proposed construction site. This seemed like a good business decision, because the distance between the clay and the construction site was nominal and would have kept trucking costs to a minimum. At first glance, it looked like a win-win situation. However, further investigation proved otherwise.
Part of the Phase I ESA process is to review various historical resources to establish if the property’s past use could indicate an environmental concern. One of those historical resources is aerial photography. A review of the historical aerial photographs dating from the 1960’s showed significant disturbance to surface areas of the property, including possible earthmoving activities and the presence of roadways that allowed access to the property from the public roadway. Because the surficial disturbance in the aerial photographs raised a clear “red flag”, historical city directory listings for this same time period were reviewed to try to get a better understanding of what activities were going on at the property. Given that city directories are generally published annually and reference an individual’s or business’ name for a corresponding street address, the review of these historical publications revealed a gravel mining operation for the address coinciding to the site during the late 1950’s. As was typical for the times, the excavation left from mining activities was used as a private “dump” or landfill operating under various names through the late 1960’s. It was common practice for these “dumps” operating prior to regulatory oversight to accept anything from general household-type items to industrial chemicals and related toxic wastes.
Due to the increased risk and potential liability involved with purchasing a property with questionable environmental history, the customer decided to walk away from the deal and seek another borrow source. In the absence of a Phase I ESA, the purchaser of the property could have been liable for contamination from the property. The EPA could have ordered the owner to investigate environmental impacts, potentially resulting in substantial clean-up costs totaling in the hundreds of thousands or even millions of dollars.