Excerpt

The environmental consulting field is an extremely diverse industry that can often appear to be Pandoras box for those unfamiliar with the many branches of environmental work. As with any multi-disciplinary field, the key to finding the right answer is in knowing the right question. Within the world of environmental consulting, specialists deal with everything from regulatory compliance (i.e., spill prevention, surface water runoff, air emissions, etc.) at industrial and manufacturing facilities to environmental impact studies (i.e., eutrophication studies, assessment of planned activity on flora/fauna, cultural resources, etc.) to the assessment of real property concerning its current use, future use, or historical use with regard to potential releases of hazardous substances and/or petroleum products to the environment.

This study is focused on the last of these areas: potential releases of hazardous substances/petroleum products and the assessment of real property with regard to environmental liability, reuse limitations, applicable cleanup standards, and the environmental due diligence process that continues to change in response to ever evolving regulations, judicial interpretation of existing laws, and a maze of industry and regulatory guidance. Environmental due diligence has become the common phrase used to describe the effort and research performed to evaluate a site, often prior to purchase, for potential environmental concerns that may affect the use or future liability of the purchaser for a historic environmental problem. Much of this work has been performed since 1986 as an effort to meet the Innocent Landowner defense afforded under the then amended Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), though no universally or federally-accepted standard existed. The effort to meet this defense was loosely termed in CERCLA as all appropriate inquiries.

With the recent clarification of All Appropriate Inquiry (AAI) by way of the 2002 CERCLA amendment (Small Business Liability Relief and Brownfields Revitalization Act of 2002) and November 1, 2005 All Appropriate Inquiry rules published by the U.S. Environmental Protection Agency (40CFR Part 312) in response to this CERCLA amendment, pieces of the assessment puzzle with regard to the Innocent Landowner defense and new legal statuses for buyers (Bona Fide Prospective Purchaser) and neighbors (Contiguous Property Owner) have been further clarified.

As a result, the Environmental Protection Agency (EPA) has acknowledged that the environmental consulting industry has become a valuable partner in identifying the presence/absence of environmental impairment by releases of hazardous substances/petroleum products. To this very point, the EPA has projected that private parties will conduct as many as 11.5 million Phase I Environmental Site Assessments and 2.3 million Phase II Site Investigations over the next 30 years (EPA 2004m). The EPA Administrator, Stephen L. Johnson, noted at the 2005 National Brownfields Conference that EPAs goal with AAI is a new rule which establishes clear standards for environmental due diligence (EPA 2005b).

Although RCRA and CERCLA regulations continue to play a significant role in highly impaired operational and formerly operational facilities, it is the evolving state programs that have adapted to the new challenges of addressing site contamination issues and moving sites forward to redevelopment. From tiered state programs, which allow the assessment of sites based on potential risk scenarios, to Voluntary Cleanup Programs, which can provide parties interested in redeveloping slight to moderately impaired property with a means of concurrence on the removal of certain owner/operator liability issues, the partnership of firms involved in environmental due diligence and state governments has resulted in the growing trend of reusing our developed property and slowing the development of our nation's green spaces.

Realizing this process was in place and growing, the U.S. government has provided millions of dollars to fuel innovation for the assessment and redevelopment of brownfields. This new emphasis will continue to drive a need for the assessment and characterization of real property with regard to potential contaminants and appropriate levels of remedial effort to suit the future use of the property.

A recent clarification by the Financial Accounting Standards Board (FASB) concerning FAS 143 has also led to further environmental due diligence efforts for other reasons. FAS 143, and recent FASB clarifications in 2005 (FIN 47), have led publicly-traded companies to account for normal operational impact on the environment as foreseeable Asset Retirement Obligations (AROs). This will undoubtedly require efforts similar to those outlined in this book to allow estimation of the financial impact of these AROs.

In order to better understand where the current environmental consulting industry standards are headed, it is important to take a look at some major events and regulations that have set the tone and approach in evaluating environmental issues. In the timeline presented in Figurer 1.1, some significant events shaping the assessment process are highlighted with Chapters two, three, and four dedicated to three major laws that directly affect the assessment process. The remainder of this book is focused on the environmental assessment (presented herein as a Phase I Environmental Site Assessment) and site investigation (presented as a Phase II Site Investigation), with the final chapters considering what comes after the completion of assessment and investigation activities. It is important to present the full extent of this material, since performance of the AAI process may often include a review or performance of Phase II efforts.

Numerous environmental laws have overlapping responsibilities carried out by nearly every branch of the federal government and many portions of both state and local government. From these laws and the potential consequences they carry for specific actions (i.e., spills of hazardous substances, intentional dumping of solid waste) or often inaction (i.e., ignoring reporting obligations, not conducting due diligence into potential hazards) dictate the need for the assessment of real property. Since volumes could be, and often have been, written about each of these laws individually, it is the purpose of this study to selectively note certain laws that have played significant roles in the shaping of why and how environmental assessment of real property is performed.