|Phase l pricing increase likely for new environmental liability protection requirements
by J. Richard Rhudy, PE and Marvin Webster, REP
April 4, 2006 - Wireless carriers and tower companies commonly retain an environmental consultant to provide a Phase I Environmental Site Assessment as part of their due diligence process.
The Phase I Environmental Site Assessment process is designed to allow the user to qualify for certain landowner liability protections (LLPs) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA ).
In addition to protection against environmental liability, the wireless telecommunications industry uses the Phase I Assessment process to assess any contamination issues that may impact facility construction and ultimately, the intended use of the property.
New EPA regulations
On November 1, 2006, new Environmental Protection Agency (EPA) Regulations contained in Title 40 CFR Part 312 become effective. The regulations, Standards and Practices for All Appropriate Inquiries, codify all appropriate inquiries (AAI) as required under CERCLA. The regulations specify tasks required to determine the previous ownership and uses of a property for the purposes of meeting the requirements necessary to qualify for certain LLPs under CERCLA.
The new regulations specify that only ASTM Standard E1527-05 may be used to comply with the new provisions after November 1, 2006. Therefore, in November 2006, ASTM E1527-05 will become the customary Phase I Standard within the United States and will replace the E1527-00 standard that has been in use since 2000.
New qualification requirement for consultants
The AAI rule and the ASTM E1527-05 standard includes the definition of individuals who are qualified (environmental professional, or EP) to perform Phase I Assessments. In general, an EP must have a PE or PG registration or certification to perform assessments and 3 years property assessment experience; a science or engineering degree and five years experience; or ten years experience.
The user has responsibilities under the EPA AAI rule and must provide available information to the Environmental Professional. Such information includes documentation pertaining to 1) environmental cleanup liens, 2) activity and land use limitations, 3) specialized knowledge or experience or commonly known information about the property, and 4) relationship of the purchase price to the fair market value of the property. Failure to provide this information could result in a determination that "all appropriate inquiry" was not completed, if a suit were to be brought regarding the property and whether the purchaser was diligent in the conduct of all appropriate inquiry.
Use of prior assessments
Information in prior Phase I assessments that are between six months and one year old may be usable within limitations. Specifically, according to the EPA Regulations, interviews, database searches, site reconnaissance, and the EP declarations must be updated.
Assessment costs like to increase
The AAI rule and new ASTM E1527-05 standard will necessitate additional effort in research, a more intensive interview process, and better documentation which will place upward pressure to Phase I pricing.
Richard Rhudy is ECA Chief Engineer for Environmental and Geotechnical Services . Marvin Webster, also of ECA, is Co-Chairman of the Georgia Wireless Association (GWA) Education Committee and also serves on the GWA Regulatory Committee.
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For additional information, see: Environmental.