Introduction

Redevelopment of contaminated land and land adjacent to contaminated sites can be a relatively straightforward process when you work with a good environmental consultant that understands the special risks and concerns a developer faces. However, there is one issue that can get any consultant tied up in knots because of the increasing attention given to it by regulators: vapor intrusion.

What’s the Concern?

Vapor intrusion occurs when certain types of contaminants in the soil or groundwater evaporate (volatilize) and migrate through spaces in the soil into occupied spaces within a building on the property. The type of contaminants that tend to evaporate are called volatile organic compounds (VOCs) and include substances such as benzene, toluene, xylene, acetone, and perchloroethylene (dry cleaning solvent). The scientific studies that regulators rely on suggest that the presence of such VOCs in indoor air can adversely affect the health of building occupants. Because of potential health risks, regulators, especially the EPA, are increasingly focusing their attention on vapor intrusion issues. Therefore, purchasers and redevelopers can be exposed to liability (both regulatory and for personal injuries) if they acquire property with vapor intrusion issues that are not abated. A good consultant should identify such potential risks during the pre-acquisition due diligence process and, depending on site location, the consultant might use one or a combination of the following screening methodologies.

ASTM Assessment

The American Society for Testing and Materials (ASTM) has developed a recommended vapor intrusion standard (E 2600: “Assessment of Vapor Intrusion into Structures on Property Involved in Real Estate Transactions”) which is beginning to be followed by many consultants. ASTM E2600 prescribes a tiered approach to the vapor intrusion risk assessment. The first tier (Tier 1) of the analysis relies solely on documentary evidence. If information shows that there is a contaminated plume or potential plume within 100 feet of a proposed or existing building or property boundary (or within 30 feet for dissolved petroleum hydrocarbons), then a potential vapor intrusion concern (pVIC) is presumed to exist. (The consultant can modify these distances based on site specific conditions such as groundwater flow, depth to groundwater, vapor conduits, etc.). When a pVIC is identified, the consultant moves on to Tier 2 of the analysis, which can include sampling. If sampling is performed as part of Tier 2, the consultant compares the results to determine if any of the contaminants (within the 100 or 30 foot radius) exceed risk-based concentrations (RBCs) established by federal or state policy or site-specific RBCs established by the consultant. If there are any RBC exceedances, then further testing is undertaken during the Tier 3 analysis to confirm the presence of a VIC. If the presence of a VIC is confirmed in Tier 3, the consultant can propose a mitigation strategy using the Standard’s Tier 4 process.

EPA Assessment (Proposed)

On March 17, 2011 the EPA issued draft guidance for evaluating vapor intrusion entitled “Evaluating the Vapor Intrusion to Indoor Air Pathway from Groundwater and Soils” (which can be accessed here). EPA’s goal is to finalize the guidance by November 30, 2012. The guidance will be used at RCRA Corrective Action, CERCLA and Brownfield sites but it will not supersede state guidance. Like the ASTM assessment, the EPA guidance is to be used to determine if there is a potential for an unacceptable risk. While this risk assessment approach is not appropriate at sites where employees are working with hazardous substances similar to those that are contaminating the site, the guidance is intended for use in other situations.

Like the ASTM standard, EPA’s VI guidance relies on a tiered analysis and the first step (Tier 1) is very similar to the first tier of the ASTM standard. In this step, the consultant determines if existing data indicates that VOCs are near (within 100 feet) of occupied buildings. If they are, then the consultant proceeds to the next step (Tier 2) which can include comparison of available indoor air concentrations to generic criteria established by the EPA or the collection of soil gas samples and comparison of that data to the generic criteria. Site specific factors such as depth of the contamination and soil type are also considered. Based on the results of Tier 2, the consultant will then move to Tier 3 to further refine the assessment by collecting site specific data such as collecting indoor air and/or sub-slab air samples. The consultant can also use modeling techniques to factor in variables such as soil type, depth to groundwater, and various building characteristics that can impact indoor air such as type of ventilation, air exchange rates, etc.

Michigan DEQ Assessment

Michigan, under Part 201 of its Natural Resources and Environmental Protection Act (NREPA), has promulgated specific numerical screening criteria for many hazardous substances. The generic criteria that are used to assess vapor intrusion to indoor air for residential and non-residential properties are the groundwater volatilization to indoor air inhalation criteria (GVIIC) and soil volatilization to indoor air inhalation criteria (SVIIC). (These generic criteria would be the RBCs relied on if the consultant uses ASTM E 2600). If soil and groundwater testing identifies an exceedance of the GVIIC or SVIIC criteria on property where buildings are or will be located, then there is a potential risk to indoor air quality. If site-specific factors such as lack of cement or block foundation, shallow groundwater plume, or preferential pathways, the rules preclude reliance on the generic criteria and the consultant must perform a site specific analysis to determine if a vapor intrusion (indoor inhalation) risk is present that must be abated.

To clarify the process set forth in its rules, the Michigan Department of Environmental Quality has prepared draft vapor intrusion guidance (“Guidance Document for the Vapor Intrusion Pathway“) that sets forth the steps that can be taken to evaluate the potential for a vapor intrusion risk. In its current form, the guidance is structured in a 4-step process like ASTM E 2600, however, it uses a 100 foot receptor radius for the preliminary screening area. Step 2 involves the collection of soil-gas data and Step 3 involves the refinement of that data through sampling of indoor air and sub-slab soil gas as well as an evaluation of conditions such as the presence of cracks, utility lines and operational uses of hazardous substances. If a vapor intrusion risk is confirmed, a remediation strategy is developed in Step 4.

As you can see, when consultants encounter a site that may have a vapor intrusion risk there are several ways of approaching the assessment that are similar but at the same time have subtle differences. Although each of the approaches allows consultants to consider site specific factors and the consultant’s professional judgment, a consultant’s ultimate conclusion could be different depending upon the assessment methodology used.

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The new standard provides clarification for environmental professionals and Phase I ESA users. Included within the changes are the following concepts:

1. Simplification of the definition of “recognized environmental condition”.
2. New defined term “controlled recognized environmental condition” (CREC) to address continuing obligations and limitations on use.
3. Vapor migration evaluations are mandatory under the new standard.
4. Environmental professionals must explain in greater detail their rationale for reviewing or not reviewing a regulatory file.

In summary, it is likely that the EPA’s “all appropriate inquiry standard” will change to reflect the new ASTM-E1527-13 Standard published in November. The new standard should be become law sometime in late December or early January. It is important that all environmental documents be updated to reflect this new standard and care should be taken to ensure implementation of it in your business endeavors.

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It is EPA’s belief that ASTM E1527-13 is an improvement over prior standards as it increases the level of inquiry done by future property owners making property transaction decisions. It also assists new property owners in defining any continuing obligations they may have when operating on a historically contaminated site and how to maintain any liability protection afforded by CERCLA.

ASTM E1527-13 include multiple changes to the definitions of key terms in Phase I audits, including:

(1) Recognized Environmental Condition (REC) – A REC under ASTM E1527-13 includes any release, or likely threat of a future release of a hazardous substance or petroleum products to the environment or property. De minimis conditions are generally not considered REC’s.

(2) Historical Recognized Environmental Conditions (HREC) – This new standard for a HREC contemplates that prospective purchasers will pursue additional information regarding the nature of the historical release of the property so as to make an informed decision regarding their potential future use of the property. A HREC designation is limited to past releases that have been addressed to an unrestricted residential standard and meet applicable regulatory standards. This may require a comparison between cleanup standards used at time of the remediation and cleanup standards in place at the time of Phase I audit is prepared.

(3) Controlled Recognized Environmental Conditions (CREC) – This new category is for a release that may have been cleaned to something less than unrestricted use, such as to commercial/industrial standard. Hazardous substances are allowed to remain on site and there are risk based restrictions such as institutional controls.

(4) De minimis Conditions – While an environmental consultant may consider minor conditions as de minimis, this does not include a CREC.

(5) Migrate and Migration – This includes the movement of vapors.

(6) Release – Has been revised to parallel CERCLA and excludes releases solely associated with the workplace.

The ASTM Standard also provides greater guidelines as to the significant role environmental consultants have to thoroughly review reasonably available regulatory agency files and records. The consultants should verify agency information and confirm information taken from databases. With respect to undertaking regulatory agency file and record reviews, ASTM E1527-13 provides a more standardized framework for verifying what is known about environmental conditions on the property.

A more complex and significant change in the scope of the Phase I audit includes, an

assessment of the potential for vapor releases. By redefining the definition of migration to include the movement of vapors from hazardous substances, Phase I assessment will include an assessment of the indoor air pathway. At a minimum the ASTM E1527-13 standard suggests that a Phase I assessment of a historically contaminated site, should consider the vapor intrusion pathway, just like any other exposure pathway. Because this is the Phase I assessment it may be sufficient to conclude that given the release of hazardous substances from contaminated soil or groundwater, vapor intrusion is a potential REC. This is especially true in the case of off-site releases on to the property. Some environmental consultants may address this issue in the Phase I audit, without collecting air or subsurface samples. A more detailed discussion regarding vapor intrusion and the ASTM Standard will be discussed in the blog entry to follow.

The EPA in making its announcements of the final rule acknowledges that ASTM’s new standard constitutes a consensus of an esteemed technical committee. EPA has stated that ASTM E1527-13 having already been published it is considered a public printed standard. The EPA has suggested that this standard is well known and readily available to prospective purchasers and sellers. The EPA does not discuss the potential confusion and lack of clarity that may exist for parties that do not have ready access to ASTM standards.

The EPA intends to specifically incorporate ASTM E1527-13 and by rulemaking it will revise the All Appropriate Inquiry Rule to reflect this standard change. The EPA states that this final rule became effective immediately, per its issuance on December 30, 2013, without the usual 30-day waiting period prescribed by the Administrative Procedures Act (APA) because this rule change does not

“create any new regulatory requirements or take other action for which effective parties would need time to prepare before the rule takes effect. Rather, this action merely offers parties the option of using an additional ASTM International Standard to conduct all appropriate inquiries. Today’s rule does not require that any party use this standard. Therefore, this revision became effective on the date of publication.” (70 Fed. Reg. 79321)

Therefore, technically, one could argue that ASTM E1527-05 is still an acceptable standard for a Phase I audit for CERCLA purposes, until EPA completes its rulemaking process.

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This concern over vapor intrusion as an exposure pathway was first raised by toxicologists evaluating the correlation between indoor air quality and human health. Toxicologists reviewed the effects of human exposure to low level volatile organic compounds and carcinogens such as benzene and concluded that there is a cancer risk posed to building occupants from vapor migration into the building.

The concern over vapor intrusion include an initial assessment during the Phase I audit, to evaluate the risk for vapor intrusion. The generally accepted protocol for testing is set forth in ASTM E2600-10 entitled, “Standard Guide for Vapor Encroachment Screening on Property Involved in Real Estate Transactions.” For most consultants the focus for assessing the risk posed by vapor intrusion will be on sites where volatile chemicals are present. These typically include sites where gasoline and dry cleaning have contaminated the subsurface soils and groundwater, below or near a building. Then this contamination may accumulate so that vapors can find pathways through cracks or crevices into the indoor air. This indoor air pathway can be of particular concern in many modern airtight buildings. The focus of the analysis is defining the Vapor Encroachment Condition, which is “the presence or likely presence of vapors in the subsurface of the targeted property caused by the release of vapors from contaminated soil or groundwater either on or near the targeted property”.

Lenders in real estate transactions have also raised their concern over how to quantify the risk posed by vapor intrusion and how to meet the standard recently adopted ASTM E1527-13. Because ASTM added movement of vapors in the subsurface to the definition of “migrate”, a Phase I audit will include an assessment of the migration of vapors from soil and groundwater as a part of the evaluation of whether hazardous substances have likely migrated within the property.

Consultants have been wrestling with the issue of what changes should be made in the scope of the Phase I audit to include an assessment of vapor intrusion. But, the more complex questions are developing standards for assessing vapor intrusion in the course of a Phase I audit.

By its very nature vapor migration can move in any direction and can migrate through a myriad of routes, including utility lines making sampling difficult. Further complicating the ability to characterize vapor intrusion is the fact that such vapors are affected by soil chemistry, the presence of groundwater, site specific factors, seasonal changes, barometric pressure, the operation of any heating, ventilation and cooling systems, the use of chemicals on the property, proximity to other businesses and motor vehicles. Some within the scientific field have argued that there is a great deal of uncertainty inherent in vapor intrusion studies that fail to take into consideration the complex factors that effect this exposure pathways. Results are often inconsistent and time sensitive for the consultant making any determination that chemicals present in vapor are attributable to subsurface soil or groundwater conditions is almost impossible, given the inability to eliminate all other sources

Consultants are also evaluating the unique challenges posed by this risk pathway, and there is some lack of consensus on, how to;

1. Properly communicating what the risk is to property owners;

2. Identify which properties merit a vapor intrusion investigation;

3. Determine background level for vapors;

4. Determine how much testing is sufficient to characterize conditions;

5. Prepare a model that considers alternative factors;

6. Manage the identified risk;

7. Respond to changing thresholds, screening values and guidelines;

8. Identify all sources; and

9. Eliminate factors such as HVAC systems or operational chemicals.

Just as consultants have improved their vapor sampling methodology, better methods are being developed to manage this risk. While at first glance cleaning up of contaminated soils or groundwater may be a permanent fix for vapor intrusion, there are less expensive alternatives that may be available. Some of these potential remedial measures include;

1. Increasing the HVAC’s capacity to increase air exchanges;

2. Use of passive systems to vent conditions below the building slab;

3. Active systems and fans to blow vapors away;

4. Use of impermeable layers beneath the concrete slab so as to create a barrier that prevents the vapors from entering the building.

Consultants are debating the consequences of having not tested for vapor intrusion in conjunction with past property transactions and what that might mean in demonstrating sufficient due diligence and conducting a sufficient appropriate inquiry. Environmental attorneys and property owners may also need to explore what the risk of vapor intrusion means in the context of past purchase and their redevelopment plans.

As concern over vapor intrusion continues to pick up steam, others have raised the question of what this means in the field of toxic tort litigation. Even without adequate data to demonstrate cause and effect, plaintiffs’ attorneys have eyed this pathway as an additional count in litigation. Previously cases in which plaintiffs have not demonstrated direct exposure from hazardous waste on an abutting property, may now find they can bring a viable claim for injury from exposure to vapors migrating in crevices in the ground. All of these liability scenarios can be potential nightmares for property owners unless they follow the evolving science and are prudent in addressing historical contamination and assessing indoor air. We will continue to follow these developments.

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In support of the Governor’s goals, the MDEQ has partnered with stakeholders to formulate a plan for improvements in Michigan’s environmental programs. This effort is referred to as the Collaborative Stakeholders Initiative (“CSI”). CSI grows out of a series of recommendations prepared by the Office of Regulatory Reinvention and that was submitted to the Governor’s office.

Participants in CSI are taking a closer look at seven key issues facing Michigan’s cleanup and redevelopment programs. They include:

(1) Groundwater and Surfacewater Interface (GSI) pathway;

(2) Cleanup criteria;

(3) Vapor intrusion;

(4) Free product, source removal and Csat;

(5) Brownfield redevelopment;

(6) Part 201 Rules/Operational Memorandum Guidance; and

(7) Due care obligations.

As a backdrop to reviewing these issues and developing recommendations, participants also hope to derive the benefits of an opportunity for exchange and cooperation between the MDEQ, the regulated community and other public stakeholders. Each issue subgroup is in the process of refining their recommendations and developing action plans after having completed several intensive sessions both in Lansing and during a three-day working program at the Kellogg Biological Station on Gull Lake. There will be a public session to present these recommendations on March 15, 2012.

The action plans will include recommendations with respect to Part 201 and Part 213, Part 201 Rules, applicable Operational Memorandums, Guidance Documents, and other policies affecting the implementation of these programs. There will be an opportunity learn more about these recommendations and action plans during a webcast scheduled for March 15, 2012. More details on connecting to the webcast to follow.

As someone involved in the CSI process, it is my belief that the process and this initiative has the potential for being extremely beneficial, and may lead to many changes within Michigan’s cleanup and redevelopment program that will facilitate expedited cleanups and redevelopment while protecting the environment.

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