What is a Phase I ESA?

A Phase I Environmental Site Assessment is the process ASTM E1527-21 sets out for assessing a parcel of commercial real estate for the hazardous substances CERCLA covers and for petroleum products (E1527-21, 1.1, 3.2.62). Its goal is to identify recognized environmental conditions, or RECs, at the subject property (E1527-21, 1.1.1, 7.1). It is built to let a user meet one requirement of the federal landowner liability protections: all appropriate inquiries into the property's past ownership and uses (E1527-21, 1.1). An environmental professional does the work or supervises it, no samples are taken, and the result is a written report (E1527-21, 7.4, 7.5.1, 12).

The question it answers

A REC takes one of three forms. Hazardous substances or petroleum products are at the subject property because they were released to the environment; they are likely there because of an actual or likely release; or they are present in circumstances posing a material threat of a future environmental release (E1527-21, 3.2.73). Likely means neither certain nor proved, but what a reasonable observer could expect from the environmental professional's logic, experience or the evidence, as the report explains (E1527-21, 3.2.73.1). A de minimis condition is not a REC (E1527-21, 1.1.1). Petroleum products are in scope because they matter for commercial real estate, not because CERCLA reaches them (E1527-21, 1.1.2).

What it is made of

The standard lists the elements a Phase I shall include (E1527-21, 7.2). Besides the user's own tasks (E1527-21, 6), they come down to four parts of work, used together: the environmental professional weighs all the lines of evidence with professional judgment (E1527-21, 7.3.1).

Records review. A USGS topographic map (E1527-21, 8.2.1); the standard government environmental record sources, each searched out to an approximate minimum distance that the environmental professional may adjust within the standard's limits (E1527-21, 8.1.2.1, 8.2.2); and the property's obvious uses, traced back to its first developed use or 1940, whichever is earlier, using the standard historical sources that are reasonably ascertainable and likely to help; if they run out before that point, the report records a data failure (E1527-21, 8.3.6, 8.3.8). Only records reasonably ascertainable from standard sources must be reviewed (E1527-21, 8.1.4).
Site reconnaissance. A visit to look at the subject property's periphery, its structures inside and out, and the adjoining properties (E1527-21, 9.2.2, 9.2.3, 9.2.5). No more than one visit is expected (E1527-21, 9.2.7).
Interviews. With the owner; with a key site manager, if the owner names one, after a reasonable attempt to arrange it, or with another knowledgeable person during the visit; by reasonable attempt, with a reasonable number of occupants, chosen as the standard sets out (residential occupants of multifamily property need not be interviewed); with identified past owners, operators and occupants likely to add material information not already obtained; and, by reasonable attempt, with staff of at least one state or local agency, such as the fire department (E1527-21, 10.5.1 to 10.5.4, 11.5.1).
Evaluation and report. Findings, opinions and conclusions, signed by the environmental professional (E1527-21, 12.5 to 12.7, 12.13).

Who does it

A Phase I must be performed by an environmental professional (E1527-21, 4.3): a person who meets the education, training and experience requirements of 40 CFR 312.10(b), whether an outside contractor or someone the user employs (E1527-21, 3.2.30). Other people may do parts of the work, supervised by the environmental professional or under that person's responsible charge. When someone else does the interviews or the site visit, the environmental professional must take part in planning them. Whoever gathers the information, the environmental professional must review and interpret what the findings, opinions and conclusions rest on (E1527-21, 7.5.1).

The report

The Findings name what may point to hazardous substances or petroleum products being at the subject property, and identify the significant data gaps (E1527-21, 12.5, 12.5.1). The Opinions give the reasons for calling each finding a REC or not (E1527-21, 12.6). The Conclusions list every REC, controlled RECs included, and every significant data gap (E1527-21, 12.7). The environmental professional should give an opinion on whether more investigation is appropriate; recommendations are not required (E1527-21, 12.8, 12.9). The report carries the signature, the two statements the AAI rule requires, and the qualifications of those who did the work (E1527-21, 12.13 to 12.15).

What it is not

It includes no testing or sampling of soil, water, air or building materials (E1527-21, 7.4). It is not exhaustive: it narrows uncertainty within reasonable limits of time and cost but cannot remove it (E1527-21, 4.5.1, 4.5.2). Conditions outside its scope, such as naturally occurring radon, mold, or asbestos-containing building materials unrelated to a release, need no assessment for all appropriate inquiries, though a user may add them as additional services (E1527-21, 1.4, 13.1.2, 13.1.5). It does not settle whether the user meets the CERCLA requirements beyond all appropriate inquiries, such as the continuing obligations (E1527-21, 1.1.3), and it does not address state or local law (E1527-21, 1.1.4).

The AAI rule and the landowner liability protections

The landowner liability protections are CERCLA defenses open to innocent landowners, contiguous property owners and bona fide prospective purchasers (E1527-21, 3.2.47). EPA's All Appropriate Inquiries rule, 40 CFR part 312, sets the inquiry each of them needs (40 CFR 312.1). It names E1527-21 among the industry standards that "may be used to comply with the requirements set forth in §§ 312.23 through 312.31" (40 CFR 312.11), beside E2247-23 for forestland and rural property. Under the rule, the whole inquiry "must be conducted within one year prior to the date of acquisition of the subject property" (40 CFR 312.20), with five of its parts held to 180 days.

The protections differ on what the inquiry may turn up. For a bona fide prospective purchaser, knowledge of contamination gained through all appropriate inquiries would not generally bar the protection, and the inquiry must be made on or before the date of purchase (E1527-21, 3.2.8). For an innocent landowner or a contiguous property owner, the inquiry must not lead to knowledge of the contamination; a person whose inquiry does would not be eligible for that protection (E1527-21, 3.2.16, 3.2.41).

Use of the practice is voluntary and not limited to the protections (E1527-21, 4.1, 4.2.1). A user may be a buyer, a tenant, an owner, a lender or a property manager (E1527-21, 3.2.94.1).

This page is general reference. It does not assess any property. ASTM E1527-21 is the standard and is not reproduced here.