EPA Gets the Vapors and Commercial Real Estate Feels the Chill

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EPA is worried that you may be a canary. Your realtor may share the worry. It’s not that you recently sprouted feathers or a beak. But just as miners carried caged canaries to warn if air was unsafe, EPA is concerned that vapors from old petroleum and chemicals spills into the soil may be working their way into buildings and making people sick, usually without anyone noticing the source of illness.

In addition to EPA, the outfit that tells how to screen commercial real estate for environmental problems, ASTM International, shares that concern and is changing its standards to address it. The current standard is ASTM 1527-05; the proposed new one is denominated ASTM 1527-13 and mandates a much closer look at this issue before clearing a property of environmental concerns. EPA is now evaluating the ASTM proposal to see if it meets statutory standards for “all appropriate inquiry” about the property’s environmental conditions, a critical legal test for protection against superfund claims against buyers of property.

Every commercial real estate deal in the country, and many residential sales, may be affected by the changed guidance from EPA and ASTM. That’s a lot of canaries.

The broad term for this concern is “vapor intrusion,” meaning the migration of potentially harmful chemical vapors into building spaces where people breathe them. In general, these are petroleum compounds and volatile organic compounds (VOCs) such as might be found in gasoline or degreasing solvents. But this concern also includes vapor from elemental mercury.

The concern is similar to that about radon, a naturally occurring radioactive gas resulting from the decay of radioactive elements in common rocks. In many parts of the country radon can accumulate in people’s homes at concentrations which pose a cancer concern; venting the radon from the subsurface usually resolves the problem. Radon testing of houses is now common.

Movement of soil vapor is much harder to predict than movement of surface and ground water. Buildings may have high vapor concentrations but no petroleum or chemical contamination on the land where they are located. Because vapor generally migrates through soil faster and thus farther than groundwater, surprise contamination can occur far from the solid or liquid contaminants.

EPA recently published two guidance documents about how to assess the risks people face from petroleum and other chemical vapors in soil. The objective is to determine whether action should be taken in nearby buildings to keep soil vapor from moving into homes and other buildings and making people sick. EPA is also reviewing the ASTM update to determine if it should be referenced in EPA’s regulations governing the due diligence needed for properties to qualify for certain kinds of liability defenses from superfund claims.

The net result of these changing standards may be to delay or prevent thousands of commercial real estate transactions, including many where the underlying environmental conditions, if properly evaluated, would pose no health concern. Similarly, much costly litigation about hazardous waste cleanups may be reopened as these concerns force a reexamination of prior remedial work as well as expensive new monitoring and remediation. Ways to navigate these new rules are the topic of the next posting.