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Phase 1 & 2 Environmental Assessments

phase 1 research

Do I Need a Phase I ESA?

You may or may not need a phase 1 to complete the deal but you will be taking a huge gamble if you choose not to get one. A Phase I ESA is typically required by lenders who are making loans on property. If you don't understand why you need and Phase 1 or Phase 2 ESA then you have come to the right place.

What is a Phase 1 ESA?

It's an investigation of a property which must be conducted following ASTM standards which conform to the All Appropriate Inquiry standards, acceptable to the USEPA for provision of certain defenses against CERCLA liability.

In simple terms, it's an investigation of your property by a trained professional into the current and past history and uses of the property in question. What was previously on the site? What could past usage have done? Did any usage contaminate the soil or groundwater of the site? How about the current operation? Are any petroleum, hazardous materials or chemicals in use at the site, or have they been released to the air, soil or groundwater at or near the site?

This investigation can determine if there are any conditions that are indicative of releases of petroleum or hazardous materials or chemicals at the site, now or in the past. These conditions are collectively known as "REC" or recognized environmental conditions.

A REC can be the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment.

My Bank Says I Need a Phase I Environmental Site Assessment.

Some banks, lending institutions, and legal counsels will recommend a Phase 1 ESA. In this case, you are going to need a Phase I to proceed with the transaction. Whoever's requesting you get a Phase 1 ESA likely won't proceed without it.

Components of a Phase I Environmental Site Assessments

The Phase I Environmental Site Assessment includes four components:

  • Records Review
  • Site Reconnaissance
  • Interviews
  • Report Preparation

Other Reasons for a Phase 1 ESA

Managing environmental risk and not getting involved with contaminated properties is a very good reason for having a Phase I ESA done. But the CERCLA liability protection and or qualifying for one of those three LLPs is hands down the most valuable reasons for conducting a Phase 1 ESA. If you want protection from incredibly costly environmental cleanups bite the bullet and get one. Get protected in case something is ever found at the new property.

phase 2 esa

Phase 2 Environmental Site Assessment

A Phase 2 ESA allows the client to understand the types of environmental contaminants located on the site as well as each contaminants’ quantity. Not every Phase I Environmental Site Assessment should turn into further Phase II work. When there are conditions that show signs of present or past releases of hazardous substances or petroleum products to the environment, you should perform a Phase II. A good Phase 2 ESA can help to determine when and why the site was contaminated.

I’d be concerned if every Phase I turned into further Phase II work. While being ultra-conservative (and maybe that’s what you want), you’re also likely doing a lot of extra work, and paying a lot of unnecessary cost. If that's your case, you're taking a lot more time in the due diligence process than is probably necessary. There's no harm in doing a Phase II, but it's your call.

Typical Contaminants Found in a Phase 2 Environmental Site Assessment

The most common contaminants we find when conducting Phase 2 ESAs are:

  • Lead Based Paint
  • Asbestos Containing Material (ACM)
  • PCB Ballasts
  • Fluorescent Lamps
  • Groundwater contaminants
  • Mold

Phase II Environmental Assessments consist of collecting soil samples to screen for chemical or metal contamination. This sampling is conducted by drill rig, hydraulic push, hand auger or backhoe, depending on site conditions. Phase II Environmental reports can also include sampling of groundwater and surface water. The samples are collected and tested according to State and Federal regulations with the samples collected shipped to a state certified laboratory for independent analysis.

Some of the tests that may be performed include:

  • surficial soil and water samples
  • subsurface soil borings
  • groundwater monitoring well installation
  • drum sampling (if any were left on the property)
  • sampling of dry wells, floor drains and catch basins
  • sampling for hazardous chemicals
  • geophysical testing for buried tanks and drums
  • testing of underground storage tanks

A Phase II ESA report will describe the investigative activities performed including:

  • detailing soil borings performed,
  • soil and groundwater analytical results as compared to applicable state standards.