EBA Journal: Winter 2024 Edition by Envirobank

EBA JOURNAL Winter 2024 | Volume 9, Issue 1

ERM Certificate Program Launch

EBA Journal – Winter 2024 Edition

EBA and Authors Copyright Disclaimer These documents and resources are provided solely to members of the Environmental Bankers Association, Inc. (EBA) for informational purposes only. EBA members are authorized to use these materials for internal reference or training purposes, but are not authorized to disseminate or publish any portion of the document to non-EBA members or the general public without prior written consent from EBA. Non-EBA members are not authorized to use these materials for any purpose without the prior written approval of the EBA. Neither the EBA, nor any of its directors, officers, employees or agents, nor any of the Authors makes any representations or warranties, express or implied, or assumes any legal liability for the completeness, reliability, timeliness, currency, accuracy or usefulness of the information provided herein, or for the applicability of the information provided herein to the facts and circumstances particular to any specific use, including but not limited to information found through any links or references to resources, case studies, projects and/or services referred to within these resources.

EBA Journal

Winter Edition Volume 9, Issue 1, February 2024

EDITOR/ COMMITTEE CHAIR

Victor DeTroy COMMITTEE

Meghan Conan

The viewpoints and information provided by the Authors is their personal viewpoints and information, and not the viewpoints or information of the organizations of which they are employed or affiliated.

Tina Huff Elizabeth Krol Rachel McShane Mike Nesteroff

Any action taken based upon the information provided in or through these documents and resources is done so strictly at your own risk. Neither the EBA nor any of the Authors shall be liable for any damages of any nature incurred as a result of or in connection with the use of this information. These materials and the information herein do not constitute legal or other professional advice or opinion. It is recommended that you seek appropriate legal or other professional advice to determine whether any advice, actions or practices referenced within these resources is appropriate or legally correct in your jurisdiction.

Ruxandra Niculescu Thomas Rengert Mike Seney Stephanie Trueb Charlene Webber Rita Wiggin

Some of the material provided herein has been published with permission of the copyright holder and is not the copyrighted content of the EBA. Where applicable, attribution to the copyright holder has been given herein. No permission is granted to republish any such content without seeking express permission of the copyright holder.

EBA Journal – Winter 2024 Edition

2024 BOARD OF GOVERNORS

Vice President

President David Lambert, Wells Fargo

John Rybak, Truist Bank

Secretary

Treasurer Mary Clare Maxwell, Chase Bank

Rita Wiggin, First Bank

Governor/

Membership Committee Chair Onamia Chun, Zions Bancorporation

Conference Committee Chair Jennifer Bellamy, US Bank

Governor Brian Aubry, Comerica Bank

Governor Carla Nelson, Bank of Hope

Governor Mike Seney, SouthState Bank

Affiliate Governor

Meghan Conan, ASTM

Scott Davis, ERIS

Thank you for your service to the Environmental Bankers Association! 2

EBA Journal – Winter 2024 Edition

In this issue: 4-6 7-10 11 13-14 15 16-18 19-22 23-29 31-43 45-55 56-60 62-64 65-76

Welcome to EBA – A Message from our President What’s Ahead in 2024? Five CRE Market Predictions Spotlighting New Members Introducing EBA’s New Environmental, Social & Governance (ESG) Committee EBA Committee Updates Launching the Environmental Risk Manager Certificate PFAS Corner: EPA Data on PFAS and Lithium in drinking water The Long Goodbye – a nationwide ban of PCE and TCE is underway Containing Risk: Climate Data and Phase I ESAs - A Case Study of ASTs in High Flood Risk Regions Positive Look Into Future Brownfields Redevelopment Opportunities Using Low-impact Low-cost Soil And Groundwater Biostimulation Strategies Environmental Due Diligence, Don’t Buy That Car Before You’ve Looked Under the Hood Are You Ready? ASTM International Develops New Environmental Professional Certification Contamination Discovery Rates 3

EBA Journal – Winter 2024 Edition

Welcome to EBA A Message from the President

EBA President David Lambert, Wells Fargo Bank

A MESSAGE FROM THE PRESIDENT Welcome and thank you for contributing to the success of EBA’s 2024 Annual Conference! The Conference Committee, chaired by Jennifer Bellamy of US Bank, has once again planned a fantastic agenda and conference experience. We are officially transitioned to a cadence of holding the Annual (in-person) Conference and the Virtual Conference in the first and third quarter of each year, respectively. The 2025 Annual Conference will be held in Nashville, TN, a town that seems a perfect fit for EBAers! EXECUTING ON EBA’S FUTURE Over the past year, the Board of Governors has been focused on executing strategic priorities to enhance EBA’s future, most importantly what we affectionately coined “the big idea” or development of the industry leading Environmental Risk Manager Certificate Program. I am delighted to report that we have maintained our schedule and made significant progress on course development and will be welcoming the first cohort in April 2024! Look for more details coming soon from EBA HQ. 4

EBA Journal – Winter 2024 Edition

Environmental Risk Manager Certificate Program Date: April 1, 2024 CEUs: 3 Duration: 6 weeks Schedule: Mondays and Wednesday (2–3-hour blocks) Course Titles: 1. Banking Essentials for the Environmental Risk Manager 2. Risk Mitigant Analysis, Introduction and Tools 3. Advanced Risk Mitigant Analysis 4. Legal Framework of Insurance for Environmental Liabilities 5. Environmental, Social, and Governance Risk in Commercial Banking 6. Risk Communication and Program Management 7. Certificate Exam This program is aimed at enhancing membership value, elevating the environmental risk profession, and connecting the dots between banking and affiliate members. The program also provides for the future of the EBA by allowing us to broaden ongoing educational offerings and to become the career home base for other subject areas such as Environmental, Social, and Governance (ESG). I can’t say enough about the power of EBA volunteers! From the Board of Governors, Executive Committee, Committee Chairs, to Committee members, the level of commitment to providing expertise and executing on this program has been exceptional with over 65 members having contributed to date! A huge thank you to all! LEADERSHIP CHANGES Thank you to Bill Sloan of Regions Bank for chairing the Nominations Committee and conducting a successful election late last year. A warm welcome to the new Governors joining the Board in January 2024: • • • •

Brian Aubry, Comerica Bank Meghan Conan, ASTM International Carla Nelson, Bank of Hope Mike Seney, SouthState Bank

EBA Journal – Winter 2024 Edition

Governors re-elected include: • • •

Myself (President) John Rybak, Truist Bank (Vice President) Onamia Chun, Zions Bancorp

Remaining Governors: • • • •

Mary Clare Maxwell, JPMorgan Chase Bank (Treasurer) Rita Wiggin, First Bank (Secretary) Jennifer Bellamy, US Bank Scott Davis, ERIS

Finally, thank you to the outgoing Governors for their dedicated service and leadership: • •

Caitlin Lozano, Rockland Trust Sean Leary, GZA

We expect the entire Board of Governors to attend the San Diego conference. We are here to serve the membership, so please seek us out and say hello, provide feedback, ask questions, or volunteer to serve. With all we have accomplished over the last year, I am very excited about EBA’s future. I very much look forward to seeing everyone at our ‘career home base’ in February! David Lambert EBA President

EBA Journal – Winter 2024 Edition

What’s Ahead in 2024? Five CRE Market Predictions Dianne P. Crocker, Lightbox

One year ago, the commercial real estate market was digesting the aggressive 75 bps interest rate hikes of 2022 and bracing for more. The Mortgage Bankers Association optimistically forecast an 11% growth in lending for 2023 over 2022 that never materialized. Instead, the Fed held fast to its policy of raising rates which kept lending and investment at bay for much of the year. Now, one month into 2024, the market is once again cautiously optimistic that this will be the year that markets become unstuck. The most optimistic forecasts are based on the expectation that the Fed will begin to lower rates around midyear and signal to lenders and investors that it’s safe to move money back into play. Yet there are other considerations that cloud the forecast. For one, it’s an election year which typically gives the market an excuse to take a ‘wait and see’ position. Concerns about the fate and impact of a wave of maturing loans weighs heavily on the minds of many. There’s guarded optimism for a busier second half as assets begin to change hands in a meaningful way, particularly if the Fed starts to lower rates.

EBA Journal – Winter 2024 Edition

Based on outreach to key industry experts drawn from the lending, environmental due diligence, appraisal, market analysis, and broker segments, the top five predictions for what we can expect this year are:

#1 Interest rates will start to drop by the second quarter. The latest Fed statement in December was notable because it marked a distinct change in tenor with the suggestion that rates could finally be turning the corner and begin to drop by midyear. The timing of the first rate cut will be very telling in terms of triggering any measurable uptick in commercial property deals, and market perception will be an important element in convincing the industry that it’s safe to go back in the water. “From a commercial real estate point of view, we don’t necessarily need the Fed to start cutting rates. We just need them to stop raising rates,” said Ryan Severino, Chief Economist and Head of Research at BentallGreenOak. “And, of course, the market has to sincerely believe it.”

#2 The bid-ask spread, which impeded deal flow in 2023, will narrow as prices recalibrate. As this occurs, price discovery will improve and buyers will be less skittish. From an appraisal perspective, “The market hasn’t seen values drop off because there haven’t been any sales that would reflect it,” noted Craig Benton, CRE, MAI, AIGRS, Senior Director of Valuation Services at Synovus Bank. It’s still unclear to what extent prices will reset, and valuation declines in the teens to as high as 40-50 percent are not out of the question.

EBA Journal – Winter 2024 Edition

#3 CRE lending and dealmaking will rebound by midyear. As the fog surrounding property values lifts and market confidence improves, investors will be more comfortable penciling out commercial property deals again, a change of pace for those who struggled to close transactions in 2023. Mike Flood, Senior Vice President, Commercial/Multifamily Policy and Member Engagement, Mortgage Bankers Association, predicts that “Once we have a few solid valuations and hopefully steady rates, we will see lending rebound in earnest. Assuming no exogenous events, I’m hopeful for more lending volume by the second half of 2024.”

#4 Treasury rates, tied to borrowing costs and cap rates, will stabilize at 3.5 to 4 percent by midyear. This sends a positive signal to investors and lenders that capital can safely move back into play. For some experts, where the U.S. Treasury will land is more important than interest rates, because there is an important relationship between yields on the benchmark Treasury bond, borrowing costs and property values—and therefore, market confidence. If the 10-year U.S. Treasury rate stabilizes between 3.5% to 4% by the end of the year, well-known analyst Victor Calanog predicts that “should spur some recovery in activity, including some repricing on the debt side, but also a repricing on the asset side, which will herald some revitalization.”

#5 Secondary market loan sales will increase as distress ramps up. As more CRE loans reach maturity and are challenged to refinance, lenders will take advantage of ways to divest distress that didn’t exist in previous cycles. The time horizons on problem credit concern many property owners because of challenges selling assets in a high interest-rate environment. Still, the current cycle offers more ways to handle distressed assets than the market offered in previous downturns. For environmental due diligence consultants who support lender clients, there are definite challenges ahead. “What worries me for 2024 is the amount of commercial property loans with challenges,” observed Dana Wagner, CHMM, National Manager of Environmental Due Diligence Services at Terracon. “There are still many people looking for financing for commercial loan maturities that are coming due and they’re going to have to figure out creative ways to do it, whether it’s a workout or bankruptcy or finding an investment partner.” 9

EBA Journal – Winter 2024 Edition

During the next 12-24 months, the fourth phase of the post-pandemic era, the industry will slowly recover, recalibrate, and reset, but the path forward will be choppy and challenged by significant uncertainty. All eyes will be on the Fed in the coming months as it balances a strategy of loosening monetary policy and continuing to curb inflation.

For the Full Report CRE Expert Predictions for 2024, a LightBox report that looks at how market sentiment will affect the lending, brokerage, investment, appraisal, and environmental due diligence sectors. The report includes insights from industry insiders: Mike Flood, MBA; Ryan Severino, BentallGreenOak; Victor Calanog, Manulife Investment Management; Craig Benton, Synovus Bank; Dana Wagner, Terracon; Jon Winick, Clark Street Capital; Bob Knakal, JLL; and Christ Powers, Fort Capital.

Dianne Crocker is the Principal Analyst at Lightbox, a leading technology provider of due diligence, risk management, location intelligence and workflow solutions to consultants, lenders, appraisers, brokers, and other stakeholders in CRE transactions. She is a highly respected expert on commercial real estate market trends and forecasting; property due diligence and risk management; and technology trends. With more than 20 years’ experience in the commercial real estate industry, she has analyzed the market through three cyclical downturns. Globe St. Real Estate Forum recently recognized Dianne among their 2022 Women of Influence based on career achievements, community outreach and mentorship within the industry. She was also selected by Connect Media as one of ten national winners of the 2020 Women in Real Estate Awards, which honors the achievements and inspirational stories of women who have reached respected positions of leadership and play key mentorship roles for others. She is also a co-founder of LightBox’s Developing Leaders mentoring program, now in its fourth year of connecting young environmental professionals in the consulting and lending sectors with veteran mentors. Dianne is a passionate member of CREW Boston, currently serving as her chapter’s Delegate to the global organization, CREW Network, and co-chairs CREW Network’s Member Education Committee.

EBA Journal – Winter 2024 Edition

Spotlighting New Members EBA would like to extend a warm welcome to all new members who have recently joined. We are excited to grow with you! Affiliate Members Company Name

Registration Month

City

State

Blew & Associates, P.A.

November

Fayetteville

Arkansas

ClimateCheck

July

New York

Environmental Professional Partners, LLC

June

Marietta

Georgia

Intertek

January

York

Pennsylvania

Lockton Insurance Brokers

November

Plano

Texas

Omesa Group

July

Arvada

Colorado

ONE Environmental Group

December

Charlotte

North Carolina

Terrain Solutions, Inc.

December

Houston

Texas

Company Name

Registration Month

City

State

Apex Commercial Capital

November

Horsham

Pennsylvania

Santander Bank, NA

November

Boston

Massachusetts

T Bank, NA

October

Dallas

Texas

The Standard / StanCorp Mortgage Investors, LLC

September

Hillsboro

Oregon

Veritex Community Bank

September

Richardson

Texas

Bank Members

EBA Journal – Winter 2024 Edition

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EBA Journal – Winter 2024 Edition

Introducing EBA’s New Environmental, Social & Governance (ESG) Committee Have you been overwhelmed by the amount of news stories, regulatory guidance, and financial regulation that either mentions or explicitly addresses ESG topics? Do you find it hard to understand which regulations may apply to your role in environmental risk management or how to implement ESG risk management principles at your institution? The fast pace of ESG developments since the early aughts has created a sense of whiplash in the industry in trying to keep up with the ever-changing landscape of climate change risk and regulatory requirements.

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EBA Journal – Winter 2024 Edition

With that in mind, EBA has created a new ESG Committee to harness our collective expertise and assist our members in tackling these issues. First and foremost, the purpose of this committee is to educate our members about climate change risks, ESG-related regulatory developments / requirements, and how these issues can impact your environmental risk assessments. As our members are mainly focused on assessing credit risks in transactions, that is where our efforts will initially be focused. Our primary goal is to provide EBA members with educational opportunities and examples of real-world application of ESG risk management in financial transactions. EBA members represent a wide variety of institutions. Depending on the institution, ESG topics are often addressed by cross-functional teams of various professionals, not addressed at all, or somewhere in between. Another goal of this committee is to give EBA members a practical, working knowledge of ESG risk management, so that we may, in turn, serve as resources within our individual institutions and be at the forefront of this new focus within the environmental risk management industry. Our industry and has faced new and emerging risks before, and we pivoted quickly to learn how to manage these risks. ESG risk management is one of the biggest developments in our industry in some time. Not only do we have an opportunity to expand our expertise, but we also have the opportunity to be part of the new future, where climate change risk management is a part of every financial decision-making process. Be on the lookout for announcements from our new committee regarding future webinars, EBA Journal articles and other opportunities to expand your expertise. We welcome suggestions for future topics to tackle! EBA Members are invited to submit topics for webinars on the EBA website, found on the “Committees” page, which is located under “Member Resources” from the main navigation menu. Serving on an EBA committee requires about 5 hours per month and is a way to shape EBA’s education program and our advocacy for Environmental Risk Managers. Please contact a committee member if you’re interested in joining the ESG committee.

EBA Journal – Winter 2024 Edition

EBA Committee Updates DEI Committee By Lori McKinnon (she/her), DEI Committee Chair The EBA Diversity, Equity, and Inclusion (DEI) Committee is rolling into its fourth year of service. This Committee continues to be committed to building dialogue, having collegial debates, supporting members, and fostering community through DEI initiatives across the organization. In the past year, the Committee crafted and supported EBA’s adoption of a DEI Policy and this Committee was first to formalize its Committee Charter. The DEI Committee is focusing on a series of Environmental Justice Sessions for the current and upcoming conferences. The first session will be previewed at the San Diego Conference entitled, “A Seat At the Table-Environmental Justice and You.” Additionally, there is always an opportunity to join the ever-popular quarterly Book Club, which is found on the EBA website’s calendar. The DEI Committee continues to meet virtually, on the second Tuesday of each month. Please consider joining any of the Committee calls or initiatives as a member or an ally.

Gives Back Committee By Jonathan Green, Gives Back Committee Chair Happy 2024 everyone! The EBA Gives Back committee remains focused on serving underprivileged communities, both locally in cities where the EBA hosts its annual conferences and nationally where organizations who focus on helping underprivileged communities and groups can benefit from our support. We also focus on leaving an area, if even in a small way, better after the EBA has left than before we arrived. We are partnering with San Diego CoastKeepers at this year’s annual conference to complete a beach cleanup. There is so much to do, but we hope that our small contribution will make a positive difference to the beautiful San Diego coastline. We are also reaching out to local universities and colleges to provide students with conference attendance opportunities and introduce our organization to the next generation of environmental professionals and engineers. As has always been the case with the EBA Gives Back committee, we continue to look for opportunities to partner with missions, homeless shelters, and organizations who share our vision of making a difference wherever we go.

EBA Journal – Winter 2024 Edition

Launching the Environmental Risk Manager Certificate By Marty Walters, Recovery Risk LLC, EBA Training Director

Raise your hand if you’ve ever tried to explain what you do to your child or a neighbor and been met with a puzzled expression. Eyes glaze over even before you deploy the term “due diligence.” That 90-second elevator speech ends prematurely when your victim ducks off the elevator on the next floor. Working at the intersection of the environment and finance can sometimes feel like a contradiction, even to those of us who have been doing it for decades. Are we protecting the environment from bad bankers? Helping whales get loans? What exactly does it mean to be an Environmental Banker? The answer to all of the above is that Environmental Risk Managers help banks and other financial institutions make good decisions. We do that by understanding the conditions of the assets that banks are financing, pointing out any environmental risks to people, banks, and their customers, and finding ways to solve or reduce those risks. We help to keep our banking system safe, which in turn helps to keep our society healthy. Keeping our complicated financial system safe is a monumental task for regulators, the court system, bank managers, and the journalists covering these topics. Environmental risk managers play a small but very important role in this endeavor. The financial impacts of programs to clean up our air, water, and soil have changed the trajectory of many companies and economic development around the world. Cumulative impacts to our climate from burning fossil fuels are having a profound effect on human society. And there is no better time to consider these impacts than when a company is seeking financing for its operations, an acquisition, for a construction project, or for a real estate investment. Our Environmental Risk Manager Certificate is designed for any professional, whether inside a bank or providing service to the bank and its customers, who must understand environmental impacts in the context of a financial transaction. Our mission is to help you operate comfortably at the intersection of two of the most complex and regulated activities on earth.

EBA Journal – Winter 2024 Edition

The ERM Certificate consists of six 3-hour seminars accompanied by discussion sessions and a final exam. The entire program revolves around the concept of identifying and mitigating risks that are foundational for good decision-making. We give you the tools, practice, and depth of understanding to build your knowledge and apply your existing skillset to risk-mitigant analysis and management. With small class sizes and students moving together through the program, you’ll make lifelong connections and build a network of professional resources as you learn and study together. This program could not exist without our EBA members who have volunteered to shape and guide the curriculum, ensuring that we are not representing just one point of view but are capturing the experiences of a wide cross section of people who work in this field. Over 50 EBA members, half from banks and half from consulting firms, have participated in a total of three rounds of peer review to shape this program. Our DEI committee also deserves special thanks, helping us to design the program for inclusiveness, with many of its members serving as curriculum reviewers. The Environmental Risk Manager Certificate offers a structured approach to recognize, communicate, and solve environmental issues that are embedded in various documents that are prepared for every loan made by banks. Whether it’s a borrower questionnaire, a Phase I environmental site assessment, a property condition assessment, a sustainability checklist, or any other document used in the loan underwriting process, this certificate equips you with the tools to interpret findings and data points. Additionally, you’ll be well prepared to identify and implement solutions that contribute to the final credit decision made by the bank. The table on the next page provides insight to the program content and time commitment.

Marty Walters, principal consultant at Recovery Risk LLC, is contracted to EBA to lead the development of the Environmental Risk Manager Certificate. Marty spent several decades working for both traditional banks and non-bank financial institutions, developing risk management programs for hazardous materials, property condition, seismic risk, construction risk, and corporate social responsibility. Prior to that, she worked in the hazardous waste industry. Marty has a particular passion for good governance, and she volunteers to support nonprofit organizations in her community and industry, providing guidance to boards on good governance.

EBA Journal – Winter 2024 Edition

Course Number

Course Title and Description

Banking Essentials for the Environmental Risk Manager

Instructional Session Hours

Discussion Session Hours

Putting into context the basic framework of financial regulation and how the credit risk management process intersects with environmental risk management.

Risk-Mitigant Analysis, Introduction and Tools Two complex and highly regulated systems both depend on sophisticated tools for identifying and managing risks. How to work effectively within both systems at the same time.

Advanced Risk-Mitigant Analysis How to apply risk-mitigant analysis to more complex worlds like energy project finance, brownfield redevelopment, and mergers and acquisitions.

Legal Framework and Insurance for Environmental Liabilities Build your confidence in navigating all kinds of legal agreements used in finance and working with lawyers to capture risks and mitigants in these documents. Understand the benefits and hazards of using insurance as a mitigant.

Environmental, Social, and Governance Risks in Commercial Banking The future of our profession requires us to understand the larger context of climate, social and economic equity, and responsibility on the decisions banks are making every day about every single loan. Tools for navigating complex risks without falling into a trap.

Risk Communication and Program Management No risk manager works in isolation. Learn how to operate in both a financial and environmental workplace, develop an effective program and team, and use bank policies and procedures to bring your program to life.

Certificate Exam 75% or better to pass

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EBA Journal – Winter 2024 Edition

PFAS CORNER

EBA Journal – Winter 2024 Edition

EPA Data on PFAS and Lithium in drinking water By Rachel McShane, SCS Engineers

On August 17, 2023, the United States Environmental Protection Agency (EPA) released the first of twelve datasets on 29 polyfluoroalkyl substances (PFAS) and lithium (an alkali metal) in our nation’s drinking water. The second set of data was released on November 9th, 2023, representing in total approximately 15% of the total data that will be collected. This sampling will continue through 2026, and is the latest action delivering on the EPA PFAS Strategic Roadmap, which dictates that PFAS (an emerging contaminant not yet regulated under CERCLA) requires a multi-agency approach and specific actionable steps to better assess risks to human and environmental health, hold polluters accountable, and identify the extent of the problem. PFAS and lithium are currently being monitored under the fifth Unregulated Contaminant Monitoring Rule (UCMR 5). The Safe Drinking Water Act (SDWA) requires that EPA issue a list of unregulated but potentially harmful contaminants every five years, and accordingly, devise a protocol for monitoring those contaminants in public water systems (PWSs).

EBA Journal – Winter 2024 Edition

The current UCMR 5 is the regulatory framework that allows for the collection of PFAS and lithium data throughout the United States. It will ensure science-based decision-making regarding how to best address these chemicals. Results, which will be updated quarterly, can be reviewed by the public on the EPA’s National Contaminant Occurrence Database. While there is not currently a final drinking water standard in place for PFAS, EPA has already issued health advisories for four PFAS compounds, and two of them – perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) – have also been proposed for entry as hazardous substances under CERCLA, as of March 2023. While the initial timeline for the final rule on PFAS CERCLA designation was set for August 2023, it was pushed back to February 2024 this past June. The initial two data sets do appear to raise some red flags, though it is not uniformly indicative of widespread contamination. Some noteworthy takeaways include the following: • • • •

•

PFOA and PFOS were measured above the EPA health advisory (HA) levels for 9.5% and 10.7% of PWSs, respectively. One PWS (out of 3,073 tested) measured HFPO-DA (“GenX chemicals”) above its HA level. PFBS was not found above its HA level at any PWS. Of the remaining 25 PFAS, 14 were measured at or above their respective Minimum Reporting Levels (MRL) by at least one PWS. No PWSs have reported results at or above their respective MRLs for the final 11 PFAS. 25% of PWSs reported lithium results above EPA’s health reference level

This data will ultimately be immensely useful for both public sector officials trying to make policy decisions regarding PFAS and lithium management and fine-tune community engagement/education efforts, as well as for private sector industries and lending organizations seeking to get a handle on potential liabilities.

EBA Journal – Winter 2024 Edition

Additional information can be found using the links below: EPA Releases Nationwide Monitoring Data on 29 PFAS and Lithium | US EPA PFAS Strategic Roadmap: EPA's Commitments to Action 2021-2024 | US EPA National Contaminant Occurrence Database (NCOD) | US EPA Proposed Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances | US EPA

Rachel McShane is a Licensed Environmental Professional (LEP) with nearly 20 years’ experience in environmental consulting, with particular expertise in due diligence (Phase I and II environmental site assessments) and Brownfields/Voluntary Cleanup Program risk assessments and remedial work. She has a Bachelors of Arts degree in Anthropology & Biology from Whitman College, and graduated Cum Laude in 2002. She also has a Masters of Science degree in Environmental Studies from Antioch University New England. Between 2006 and 2017, Rachel worked as an Environmental Scientist with a St. Louis based women and minority-owned business enterprise (WMBE) firm, Professional Environmental Engineers, where she worked for a wide variety of mainly public sector clients including US EPA, Missouri Department of Natural Resources, Illinois EPA, and US Army Corps of Engineers. She began working at Trileaf Corporation in June 2017, transitioning to work in the private sector, primarily for lending institutions and developers engaged in commercial real estate transactions which required environmental due diligence. Rachel joined SCS Engineers in March 2023, where she has merged those two spheres, and now serves both the public and private sectors on a wide variety of site investigation and cleanup projects.

EBA Journal – Winter 2024 Edition

The Long Goodbye – a nationwide ban of PCE and TCE is underway By Natalie Sucharski & Rachel Yockey, AEI Consultants

Introduction In the environmental industry we all know too well of the pitfalls of Trichloroethene (TCE) and Tetrachloroethene (PCE). Although incredibly effective solvents, these chemicals have also proved to be a severe environmental and human health risk. The United States Environmental Protection Agency (EPA) recently has proposed a full ban on these chemicals. While the phase out would be prolonged, it marks a positive step forward.

Photo credit: One Hour 'Martinizing' Certifies the MOST in DRY CLEANING, by Steve Snodgrass 23

History and Background The earliest synthesis of both TCE and PCE date back to 1830s. However, TCE’s discovery is more widely attributed to German chemist Emil Fisher in 1864. Commercial production of TCE first occurred in Germany in 1920, and followed in the United States (U.S.) in 1925. TCE is best known as a cleaning and degreasing solvent for metal parts. However, there are numerous other historical uses of TCE including within the food industry, for uses such as a grain fumigant, as a pet food additive, for the extraction of vegetable oils and spices from plant materials, and for the extraction of caffeine for the production of decaffeinated coffee. In the medical field and pharmaceutical industry, TCE was used for anesthesia in hospitals (especially for women during childbirth in the 1950s and 1960s), as a surgical disinfectant, and to treat migraines and trigeminal neuralgia (a nerve disorder causing several pain in the face). TCE was banned for food and medical uses in the U.S. in 1977. TCE also has numerous industrial uses, such as in dyeing and finishing operations, within the rubber industry, and as an ingredient in printing inks, varnishes, and industrial paint formulas. TCE is applied before metal plating, anodizing and painting. Additionally, TCE has been used to clean kerosene-fueled rocket engines, in the manufacturing of fluorocarbon refrigerants, and in industrial refrigeration applications. TCE was used for a short time as a dry cleaning solvent, though by the mid-1930s had been mostly replaced by PCE. Nevertheless, TCE remains in use as a spot cleaning under the trade name Picrin. Since the 1930s, PCE has also been used as a dry cleaning solvent. PCE was the most common dry cleaning solvent used in the 1950s, with about 80 percent of dry cleaners using PCE. By the 1960s, almost all U.S. dry cleaners were using PCE. Use of PCE peaked in the U.S. in 1980 at which time dry cleaning was the largest user of PCE. In 1999, it was estimated by the U.S. EPA that 85 percent of U.S. dry cleaners used PCE as their main cleaning solvent. According to informal industry surveys in 2009 and 2012, PCE use by dry cleaners had dropped to between 50 and 70 percent as a result of many dry cleaners switching to other solvents or cleaning methods. For a full history of chlorinated solvent use in the dry cleaning industry, please refer to a wonderful article published in the 2017 EBA Winter Journal by Ruxandra Niculescu and Derek Ezovski.

EBA Journal – Winter 2024 Edition

PCE has also been used as a degreaser for metal parts in the automotive industry, including as a brake cleaner, along with other metal working industries. Other uses of PCE include in the textile industry to remove oils from fabrics after knitting and weaving operations, within the printing industry as a cleaner and as an ingredient in printing inks, for the production of other chemicals, for testing in the coal industry, in petroleum refineries, for film cleaning, and in carpet stain removal products. Environmental Contamination and Increasing Regulation TCE was first identified in groundwater (well contamination) in 1949. More recently, U.S. federal and state surveys indicate that between 9 and 34 percent of drinking water supply sources have at least some TCE contamination. Today, half of the most toxic Superfund sites contain TCE. With growing concerns over environmental, as well as health and safety implications of chlorinated solvents, there has been a general decline in TCE demand over the years. Nevertheless, the U.S. was the largest consumer of TCE in 2007, followed by Western Europe, China and Japan. States have begun to impose stricter regulations on the chemicals. Bans on PCE in dry cleaning have been implemented in Minnesota (Title 17, California Code of Regulations 39109 and 93110; Minnesota HF 91) and New York (6 NYCRR Part 232). In California, PCE was declared a Toxic Air Contaminant (TAC) in 1991 by the California Air Resources Board (CARB) under California's Toxic Air Contaminant Identification and Control Program (Health and Safety Code section 39650 et. seq.). The TCA is California’s designation for chemicals that have no exposure level that can be considered safe. As a result of this identification, CARB required that a report be prepared regarding the need to control PCE and adopt appropriate measures. Subsequent studies found that PCE had contaminated 1 in 10 wells in California, and the dry cleaning operations were a major source of PCE exposure to the public. As a result, CARB focused control efforts on the dry cleaning industry in California. In 1993, CARB adopted a control measure governing the use of PCE in dry cleaning operations (Dry Cleaning Air Toxic Control Measure, or ATCM) which set forth requirements for recordkeeping and reporting for equipment, operations and maintenance of dry cleaning operations utilizing PCE. In 2007, CARB approved amendments to ATCM that banned PCE in dry cleaning operations by January 1, 2023. The health risks have been well studied and documented. Even small amounts of these chemicals have been found to be toxic. Contamination is often found in facilities that utilize TCE and/or PCE. Since these solvents are dense non-aqueous phase liquids (DNAPL), they tend to sink to the bottom of a water table and cause widespread contamination. 25

EBA Journal – Winter 2024 Edition

Additionally, since TCE and PCE are volatile, soil and groundwater impacts are often accompanied with soil vapor contamination. The main concern from this is potential vapor intrusion into buildings and structures that can impact the health of occupants/tenants. In buildings with elevated TCE within indoor air, TCE exposure represents an immediate health risk to tenants. In particular, pregnant women are at risk given studies that have found a link to fetal cardiac defects (ATSDR Addendum to the Toxicological Profile for Trichloroethylene). Several lawsuits have recently been filed when apartment buildings were instantly evacuated after elevated concentrations of TCE were detected in indoor air samples. An increased recognition of this risk has found its way into regulatory requirements. For instance, the Oregon Department of Environmental Quality (ODEQ) recently updated its attenuation factor for vapor intrusion in soil gas and groundwater, which includes the addition of acute response for TCE. EPA’s Proposed Ban on PCE and TCE According to the Federal Register, the EPA has determined that TCE and PCE present an unreasonable risk of injury or death as evidenced in its November 2020 Risk Evaluation for TCE and January 2023 revised/final Risk Determination for TCE pursuant to the Toxic Substances and Control Act (TSCA)*. Significant health effects from exposure to TCE and PCE include cancer and non-cancer effects. These include liver toxicity, kidney toxicity, neurotoxicity, immunotoxicity, reproductive toxicity, and developmental toxicity and cancer of the liver, kidney, and non-Hodgkin lymphoma. These health effects are brought on by chronic inhalation or dermal exposure to these substances.

EBA Journal – Summer Winter 2024 2023 Edition

For instance, in order to address the risk of TCE, the EPA is proposing to: prohibit all manufacture (including import), processing, and distribution in commerce of TCE and industrial and commercial use of TCE for all uses, with longer compliance timeframes and workplace controls for certain processing and industrial and commercial uses (including proposed phaseouts and time-limited exemptions); prohibit the disposal of TCE to industrial pre-treatment, industrial treatment, or publicly owned treatment works, with a time-limited exemption for cleanup projects; and establish recordkeeping and downstream notification requirements.

Under TSCA section 6(a) (15 U.S.C. 2605(a)), if EPA determines through a TSCA section 6(b) risk evaluation that a chemical substance presents an unreasonable risk of injury to health or the environment, EPA must by rule apply one or more requirements listed in TSCA section 6(a) to the extent necessary so that the chemical substance or mixture no longer presents such risk. According to the EPA, the majority of TCE/PCE use is within commercial or manufacturing facilities and sold through industrial supply chains. As previously discussed, products containing TCE and PCE are used for removing grease from metal parts. These substances also remain an ingredient in adhesives, paint removers, and spot removers. As a result, industries impacted will include textiles, dry cleaning, chemical manufactures, and any industries that use these substances for metal degreasing. On the consumer/retail side, it should be noted that TCE is not widely marketed to consumers. On the other hand, some consumer products containing PCE (such as glues) still are available for retail sale.

EBA Journal – Winter 2024 Edition

The EPA proposed rules can be found here: https://www.federalregister.gov/documents/2023/10/31/202323010/trichloroethylene-tce-regulation-under-the-toxic-substances-control-act-tsca https://www.regulations.gov/document/EPA-HQ-OPPT-2020-0720-0024 Closing The proposed EPA ban would include phasing out the use of TCE and PCE. As a result, after the final rule is passed, PCE still used at dry cleaning facilities will need to be phased out within 10 years. Even with the prolonged phase out, the environmental and health impacts of TCE and PCE will last much longer.

Natalie Sucharski has worked in the environmental consulting industry since 2002. Currently, as Director of Professional Development for Due Diligence at AEI Consultants, she is responsible for training staff to ensure consistency and quality are maintained throughout AEI’s environmental due diligence consulting services. Previous project experience for Mrs. Sucharski includes Phase I Environmental Site Assessments, Environmental Transaction Screens, peer reviews, other limited environmental site assessments for sites ranging from large tracts of land, to small and large scale industrial, commercial and multitenant commercial and residential properties. Her experience also includes management of portfolio projects involving numerous properties throughout the United States, including Northern California, Nevada, Washington, Oregon, Utah, and Arizona. Mrs. Sucharski also provides QA/QC review expertise to ensure compliance with ASTM and AAI standards, as well as satisfying client requirements. Additional responsibilities have included department management, staff supervision, and client management. She also has previous technical experience reviewing and maintaining Safety Data Sheet (SDS) records for the Lawrence Livermore National Laboratory. Ms. Sucharski has a Bachelor’s of Science degree in Environmental Policy Analysis and Planning from the University of California at Davis.

Rachel Yockey has worked in the environmental consulting field for 13 years. She provides environmental project management, consulting, and due diligence duties including Phase I ESAs, Limited Environmental Assessments (LESA), Environmental Transaction Screens (ETS), Regulatory Database Reviews, and Peer Reviews, for large and small scale industrial, agricultural, commercial, multi-tenant residential and rural properties. Mrs. Yockey coordinates and manages environmental due diligence projects from inception to completion; interacting with clients and field staff, managing subcontractors and performing QA/QC reviews; and providing senior author services for national and regional clients, client management, and quality control of work products including oversight of regional staffing. Project experience for Mrs. Yockey includes field inspections, investigative research, city, county, state and federal research, and interpretation of numerous state-driven environmental programs; navigating state-driven environmental programs including the Texas Innocent Owner Program (IOP) and Voluntary Cleanup Program (VCP), Michigan’s Baseline Environmental Assessment (BEA) and Due Care Plan (DCP), and the Connecticut Transfer Act (CTA) process; understanding real estate transactions including equity-level and debt-level transactions and associated lease agreements. Mrs. Yockey has a Bachelor of Arts degree in Political Science with Environmental Science minor from Baylor University in Waco, Texas.

EBA Journal – Winter 2024 Edition

References Mertens JA (1993). Chlorocarbons and chlorohydrocarbons. In: Kirk-Othmer Encyclopedia of Chemical Technology, 4th Ed. Kroschwitz JI, Howe-Grant M, editors. New York: John Wiley & Sons, as cited in “Trichloroethylene.” Wikipedia, 8 Jan. 2024, en.wikipedia.org/wiki/Trichloroethylene TCE Overview | Animated Toxicology Tool | ATSDR. www.atsdr.cdc.gov/toxtool/trichloroethylene/01/tce_overview.html. Doherty, Richard E. A History of the Production and use of Carbon Tetrachloride, Tetrachloroethylene, Trichloroethylene and 1,1,1-Trichlroethane in the United States: part 1 – Historical Background; Carbon Tetrachloride and Tetrachloroethylene. Environmental Forensics, 2000. “Assessment of Alternatives to Perchloroethylene for the Dry Cleaning Industry. Methods and Policy Report No. 27.” Toxics Use Reduction Institute, University of Massachusetts Lowell. June 2012, https://www.turi.org/content/download/7399/134622/file/2012%20M&P%20Report%2027%20Assess ment%20of%20Safer%20Alternatives%20to%20Perchloroethylene.pdf Mertens JA. Chlorocarbons and chlorohydrocarbons. In: Kirk-Othmer Encyclopedia of Chemical Technology, 4th Ed. Kroschwitz JI, Howe-Grant M, editors. New York: John Wiley & Sons, 1993, as cited in “Trichloroethylene.” Wikipedia, 8 Jan. 2024, en.wikipedia.org/wiki/Trichloroethylene 6. Toxicological profile for trichloroethylene. Update. Atlanta, GA: Agency for Toxic Substances and Disease Registry. 1997a, as cited in Sources, Emission And Exposure To Trichloroethylene (TCE) And Related Chemicals, United States Environmental Protection Agency, March 2001. “Common Dry Cleaning Chemical Linked to Parkinson’s Disease.” URMC Newsroom, 13 June 2023, www.urmc.rochester.edu/news/story/common-dry-cleaning-chemical-linked-to-parkinsonsdisease#:~:text=While%20domestic%20use%20has%20since,EPA)%20Superfund%20sites%20contain% 20TCE Glauser J, Ishikawa Y (2008). Chemical Economics Handbook Marketing Research Report: C2 Chlorinated Solvents, as cited in IARC Monographs on the Evaluation of Carcinogenic Risks to Humans, No. 106.IARC Working Group on the Evaluation of Carcinogenic Risks to Humans. Lyon (FR), International Agency for Research on Cancer, 2014. Hung Out to Dry: How the Use of Perchloroethylene in Dry Cleaning Endangers You and Your Family’s Health, Coalition for Clean Air, October 2002, as cited in California Dry Cleaning Industry Technical Assessment Report, California Air Resources Board, February 2006. “Fact Sheet on Trichloroethylene (TCE) | US EPA.” US EPA, 5 Oct. 2023, www.epa.gov/assessing-andmanaging-chemicals-under-tsca/fact-sheet-trichloroethylene-tce#q5.

EBA Journal – Winter 2024 Edition

Containing Risk: Climate Data and Phase I ESAs - A Case Study of ASTs in High Flood Risk Regions By: Victor DeTroy, AEI Consultants Editor: Mary Ann Grena Manley, 15E Communications Data and Graphics Contributors: Cal Inman and Annie Preston (ClimateCheck); Melanie Veltman (ERIS) Special Thanks: Holly Neber and Tommy LaPoint (AEI Consultants)

Introduction You just invested in a warehouse property with fantastic cash flow. Suddenly, there is a flash flood event. It dislodges an aboveground storage tank (AST), which spills hundreds of gallons of diesel over a large area. Several drums of chemicals stored in the yard tip over and discharge onto soil and into an abutting creek. All the money the regulators are mandating that you spend cleaning it up is destroying your return on investment. When you conducted due diligence, your site was not in a FEMA flood zone. So, how could this have happened? Modern climate risk models that account for various ramifications of climate change have largely rendered FEMA maps antiquated. While flooding is a costly concern to the general structural elements of a building, it can also pose a liability for properties that store hazardous substances and petroleum products. The goal of this article is to determine if climate data (flood data specifically) can be combined with more general environmental data to help identify hidden risks on properties during the environmental due diligence process.

EBA Journal – Winter 2024 Edition

Current Phase I ESA Framework The environmental risk management community has been watching the evolution of climate risk models and assessments with a keen eye. There is an intuitive feeling that there is a crossroads up ahead where climate models will play a significant role in environmental due diligence assessments, but that intersection has appeared distant and foggy. Yet, if we look back at our good ole’ friend, the ASTM E1527 Phase I standard, that fog may clear. The E1527-21 definition of a REC includes “the presence of hazardous substances or petroleum products in, on, or at the subject property under conditions that pose a material threat of a future release to the environment” (emphasis added). A typical example of what has been considered a “material threat of a future release” (as provided in Appendix X4.3 of E152721) is the following: there is a damaged AST (containing diesel fuel) on a gravel surface that is “not protected by a roof, bollards, or a containment structure.” One accidental bump by a vehicle backing up would undoubtedly lead to a release of diesel fuel onto the gravel surface and into underlying soils. Hence, this AST in this precarious position would be considered a REC. Is the location of a property in an area of high flood risk a similarly precarious condition that could qualify as a Recognized Environmental Condition (REC)? In the past, there have been many counterpoints against this approach. But it is time to reassess. Growing climate-related risks, including flood risks, highlight the need for a new approach. It’s time to start rethinking the basic assessment framework before we get inundated by rising future risk.

EBA Journal – Winter 2024 Edition

Pairing Climate Risk Data with Environmental Records Can an integrated dataset that combines climate risk modeling with environmental records ultimately assist environmental professionals in identifying RECs (per the E1527-21 definition)? To determine how this would work, we assembled a unique dataset to see where an overlap may exist. Flood risk models (provided by ClimateCheck) were integrated with aboveground storage tank (AST) locations (provided by ERIS), which resulted in some interesting findings. Our analysis uncovered that areas with a seemingly low flood potential had a much higher than anticipated risk. If we consider how climate change has increased flood risk in the areas where ASTs are located, we may be opening the floodgates of countless new RECs. Overview of ASTs Aboveground Storage Tanks (ASTs) are enclosed containers that are, well, above the ground. They can hold innocuous items such as water, like the large water towers you see in small rural towns or liquid ingredients for food. Our discussion, however, is focused on ASTs that contain hazardous substances (HS) and/or petroleum products (PP). While you are unlikely to get many complaints about a tank full of strawberry jelly that tips over, you will likely face stiff fines and potential litigation if a tank containing a hazardous solvent spills and contaminates an underlying groundwater aquifer. Thus, ASTs containing HS/PP typically require the local fire department, for example, to conduct periodic inspections of the tank and ensure the facility has a permit to operate the tank. AST permits are public records. A set of digitized AST permit data was collected and analyzed for this study. The dataset used includes 26,303 sites with registered ASTs. In particular, three AST records were provided: National sources 1.

Facility Response Plan (FRP) Tanks (1,599 locations): This list essentially consists of facilities across the entire nation with massive quantities of oil storage (we are talking about bulk oil terminals with over one million gallons of oil) that could reasonably be expected to cause "substantial harm" to the environment if a release occurred.

EBA Journal – Winter 2024 Edition

California-specific sources: 2. 3.

Delisted California Environmental Reporting System (CERS) Tanks (9,051 locations): This list is a snapshot of all the registered ASTs in California in 2009 (the list is no longer updated). California Environmental Reporting System (CERS) Tanks: (15,653 locations): This consists of active registered ASTs in California.

Risk Analysis Methodology Flood risk for each AST site was assessed using the ClimateCheck flood risk analysis. This assessment includes risk from the following types of flood events: 1. 2. 3. 4.

Storm surge flooding High-tide coastal flooding Fluvial (riverine) flooding Pluvial (surface) flooding

The probability and likely depth of each of these four types of flood events are synthesized into a risk scale that uses 0 as the lowest possible flood risk and 100 as the highest possible flood risk (see Graphic 1 below). Graphic 1: ClimateCheck Flood Risk Rating

Graphic 1 displays the scoring breakdown for how each site is classified using the risk model. For example, a site with a score of 25 would be considered a “significant” flood risk, while a site with a score of 75 would be considered a “very high” flood risk.

EBA Journal – Winter 2024 Edition

Data Analysis and Findings The 26,303 AST sites were scored using the flood risk rating cited in Graphic 1. The distribution of each is present in the pie chart (Chart 1) below. Chart 1: Pie Chart of the breakdown of the flood risk rating of the 26,303 AST sites

FLOOD RISK RATING OF AST SITES Extreme 6% Very High 6% High 9%

Significant 13% Relatively Low 66%

Chart 1: Pie Chart of the breakdown of the flood risk rating of the 26,303 AST sites.

A majority of the listed AST sites were identified to be “relatively low” flood risks. However, approximately 21% of sites (5,617 of the total 26,303 sites) were located in areas of high to extreme flood risk. Approximately 13% of sites (3,300 of the total 26,303 sites) were in areas of very high to extreme flood risk. Approximately 6% of sites (1,640 of the total 26,303 sites) were in areas of extreme flood risk. This suggests that more than 1 in 5 sites with permitted ASTs are in elevated flood risk areas. This is a number that should raise the eyebrows of environmental professionals. As our climate continues to evolve, the danger of an AST being damaged by a flood may no longer be considered a remote possibility.

EBA Journal – Winter 2024 Edition

Part of the risk analysis was not just determining the chance of a flood but also the likely flood depth (see Table 1 and Chart 2): Table 1: Likely Flood Depth

Total ASTs

ASTs with no FEMA zone

ASTs with FEMA ASTs with FEMA zone = 0.2 percent zone = 1 percent**

none

15,458

15458

less than 1 foot

4,975

3312

1130

533

1-3 feet

2,473

1353

590

530

3-6 feet

911

329

121

461

over 6 feet

1,134

315

762

tidal/unknown

1,352

287

652

413

Table 1: Number of storage tank sites within each range of likely flooding depth, broken into FEMA designations. Risk categories are based on the expected depth of a flood most likely to occur in the next 30 years (based on a radius search of data around each site). *0.2 percent represents sites that have a 0.2% annual chance of a flood occurring (500-year floodplain) **1 percent represents sites that have a 1% annual chance of a flood occurring (100-year floodplain)

Chart 2: Table 1 and Chart 2 give us some insight into probable flood depths. From an environmental professional’s perspective, the risk of a flood less than one foot may not be much of a concern for a site where hazardous substances are properly stored in elevated secondary containment. However, at a site with poor housekeeping (including various stained areas and corroded containers stored on bare soil), a onefoot flood may present a much higher risk. For a site with an AST, depending on the configuration of the AST, an environmental professional may consider any flood below three feet to be a fairly limited hazard.

Chart 2: Distribution of the expected depth of a flood at the locations over 30 years (a graphical representation of Table 1).

EBA Journal – Winter 2024 Edition

One additional finding of note is that FEMA classified the largest percentage of sites with a high to extreme flood score as sites with “minimal” flood risk. While FEMA maps are helpful tools, they were developed for an intended purpose, and their application in this scenario is limited. FEMA maps do not contain an analysis of future changes in potential flood risk related to climate change. Relevance to Environmental Professionals and Risk Managers So why is this relevant to environmental professionals and environmental risk managers at lending institutions? If a quarter of sites with ASTs are in locations with high to extreme flood risk, and a large number of these sites are in an area FEMA maps mark as a “minimal” risk, there is potentially a very large blind spot that impedes a full risk assessment of an asset. Below is a visual (Map 1) of several AST sites overlaid with a flood risk score. While the location of an AST in a high flood-risk area may not typically be on the mind of an environmental professional, something like the below map may help serve as a quick screening tool to understand potential flooding risk at sites that store hazardous substances and petroleum products.

Case studies

Map 1:

Map 1: An example map showing AST sites (circular features) overlaid with a flood risk score (dark blue is the highest risk of flooding).

Random sites were selected from the data set to see how flood risk may be relevant to environmental professionals and environmental risk managers. The initial details of each site are based on facts. However, for the purposes of this analysis, hypothetical conditions were posited to see if they would alter the conclusions of a Phase I ESA report. 37

EBA Journal – Winter 2024 Edition

Site #1 - A Bear of a Gas Station Our first case study is based on a site located in northern California. The property is a rural gas station with a single fuel dispenser connected to a 5,000-gallon AST containing gasoline. Typically, gas stations utilize underground storage tanks (USTs); however, since this is a rural location with a low sales volume, a single AST is utilized. The property is located approximately one mile inland from the Pacific Ocean. A creek that leads to the Pacific Ocean abuts the property to the north. The AST is located approximately 200 feet from this creek. FEMA maps classify this area as a “minimal” flood risk, however, the flood risk rating (cited in Graphic 1 above) classifies this site with a flood score of 100 (extreme flood risk). Hypothetical: During the inspection for a Phase I ESA at this property, a field assessor observes the AST. The AST is on a concrete slab, and the support system underneath is in poor condition. In particular, the bolts that should fasten the AST to the concrete pad are broken, rusted, or missing. Although the assessor did not observe any current releases from the AST, in the event of a flood, the integrity of the AST anchors would likely fail. Failure of the anchoring system would cause the AST to be dislodged and damaged, resulting in the release of the tank contents into the environment. Because this site is located in a high flood-risk area, one could argue that this represents “conditions that pose a material threat of a future release to the environment” (i.e., a REC) under ASTM E1527. Site #2 – Flood Rock Quarry In our second case study, Flood Rock Quarry (not its real name) is in Sonoma County, California, and consists of a steep hill stripped of vegetation. Three 1,000gallon diesel ASTs and approximately 30 drums (containing waste oil and solvents) are situated at the base of the hill. ASTs and drums are on a concrete pad, but no berms or concrete walls enclose the area. 38

EBA Journal – Winter 2024 Edition

The property is not in a FEMA flood zone; nevertheless, given the location next to a creek and steep elevation disparity, it is given a flood score of 100 (extreme flood risk; see Graphic 1). The fact that the steep hill is stripped of vegetation compounds the potential risk of flash floods during extreme precipitation. A retention pond is present; however, the water appears to be at grade and at risk of overflowing into the yard area.

Hypothetical: During a Phase I ESA at this property, a field assessor observed leaking valves and piping from all three ASTs, and small amounts of product appeared to be pooling at the base of the tanks. However, the product is confined to the underlying concrete pad and does not extend onto surrounding soils. Drums appear to be rusted and are stored directly on concrete with no secondary containment; no leaks were noted at the base of the drums. Nearly half of the drums do not have lids, and the lids on the remaining drums do not appear to be tightly fastened. While some of these conditions may be considered a potential compliance concern, since staining is confined to the concrete pad, there is no evidence of a release to the environment. Based on the lack of a release, an environmental professional may not consider these conditions to be a REC.

EBA Journal – Winter 2024 Edition

A week after the Phase I ESA site reconnaissance was conducted, an extreme rainfall event occurs. The drums without lids fill, and a rainwater-chemical mixture overflows. A surge of water down the hill tips several drums over, causing the contents to be released into waters flowing into the retention pond and surrounding soils. The retention pond eventually overflows and raises the waters in the chemical storage area high enough to move and tip the ASTs onto areas of base soil. Given the poor condition of the ASTs and observed leaking components, substantial loss of product occurs. A follow-up inspection is conducted after the rainfall event, and RECs are identified. Several areas of contaminated soil are observed. A heavy sheen is noted on the retention pond and drainage swales. Contaminated soil and groundwater are suspected at several dry wells. Should the assessor have classified the observed conditions as a REC during the first site inspection? There was no evidence of a release. However, one could argue that the condition of the drums and ASTs represented a “material threat” of a future release if a flood event were to occur. Closing argument: Is it a REC or not? The most important question is: can the risk of a potential flood be factored into determining a REC? First, let us argue that the answer is “yes.” Then, let us delve into how this could have massive ramifications in commercial real estate. The argument: Let us pretend that our second case study (Flood Rock Quarry) ends up in court. Suing Condos LLC, an adjoining property owner and developer, had to spend $1.7 million cleaning up contamination that originated from the quarry during the extreme rainfall event and is looking to recover those costs using the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund). The quarry owner’s attorneys claim that the rainfall event was an “act of God.” Under the federal Superfund law, a party shall not be liable for a release if it is more probable than not that the release resulted from “an act of God.” (CERCLA Section 9607(b)). However, the attorneys for Suing Condos LLC point out that CERLCA defines the term “act of God” to mean “an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight” (emphasis added). 40

Furthermore, “due care or foresight” has been interpreted as steps a “reasonable and prudent person would have taken in light of all relevant facts and circumstances.” (H.R. Rep. No. 253, 99th Cong., 2d Sess. 187 (1986) (ASTM E1527-21 legal appendix)). The Suing Condos LLC legal team argues that the failure of the quarry operator to install basic precautions (like anchoring an AST) in an area of high flood risk is considered a failure to exercise due care or foresight. Additionally, the quarry operator stored hazardous substances in an exterior yard in uncovered drums and without any form of containment. Based on this lack of due care or foresight, the heavy precipitation event resulted in a release to the environment. It is further argued that given the increasing trend of annual precipitation data, the rainfall event cannot reasonably be considered a “grave natural disaster” that could not be avoided. Therefore, the legal team argues, the release was easily avoidable if basic due care had been applied. To further hammer home the point, the Suing Condos LLC legal team posits the following: When is a flood considered a “grave natural disaster?” Is a rainfall event with one inch of water “grave” enough?” What about 6 inches? What about 2 feet? Where is the threshold? Certainly, something as routine as rainfall cannot be an excuse for neglecting to implement AST best practices (exercising due care). The judge eventually rules that the “act of God” defense cannot be applied in this circumstance. Suing Condos LLC is ultimately able to recover its cleanup costs from the quarry operator. 41

EBA Journal – Winter 2024 Edition

Ramifications of a REC If there is industry consensus that potential flood risk can be considered a REC, there could be colossal implications in commercial real estate. Why would this be the first domino in a long line of consequential outcomes? First, this would result in an increase in RECs in an average Phase I ESA. For the real estate investor, more RECs mean more money. More money that will have to be spent installing updated anchoring and containment systems. More RECs also mean more time. More time spent addressing items and delaying funding and closing. This could be especially troublesome for time-sensitive deals. For lenders, this would mean significantly revising the scope of work for underwriting CRE loans. Climate resilience and climate risk reports are currently more of an optional item with a very slow adoption rate. However, virtually all CRE loans require some form of environmental due diligence. If a future flood risk is a REC, then environmental risk managers at banks would be forced to consider certain future climate risks as part of their due diligence requirements before approving a commercial loan. For the environmental consulting industry, it would mean a seismic shift in how risk is approached. The relevant ASTM standards would need to be updated and revised to clarify when future climate risks can be considered “a material threat of a release.” For the EPA, it may mean revising all appropriate inquiries (AAI) to encompass potential climate risks. If AAI requires an assessment of climate risk, the entire commercial real estate industry, including investors, lawyers, regulators, lenders, and consultants, would have to take notice. Conclusion Given the ever-evolving nature of climate change, we need to be prepared to utilize new approaches. What was once considered industry best practice may no longer be good enough. As climate models become more widespread, there could be a breaking point where certain climate risks may be considered “common sense,” and the failure to prepare for those risks will no longer be considered defensible.

EBA Journal – Winter 2024 Edition

Post-Script: Mitigating Flood-Related Risks The focus of this article was to use AST and flood data to find a potential link between the behemoth that is the environmental due diligence industry and the growing field of climate risk data analysis. I would be remiss if I did not, at the very least, address the fact that there are indeed solutions and mitigants to potential flood risk for sites with ASTs. Perhaps the most straightforward solution is for environmental professionals and risk management teams to take a closer look at anchoring and containment systems for aboveground outdoor storage of hazardous substances and petroleum products. For both example sites provided above, the risks would be abated by ensuring that the ASTs are properly anchored and protected against flood events. Additional rigor may be required to ensure the proper storage and containment of hazardous substances stored in outdoor areas. Not only is a concrete pad and secondary containment necessary to prevent spills, but containment walls may also be extremely prudent, especially in areas of high flood risk. The United States Office of Energy Efficiency and Renewable Energy (US EERE) provides guidance on how to properly anchor, plan, and protect ASTs from floods and other extreme weather events.

For more information on preventing damage to ASTs during a flood event, visit: https://basc.pnnl.gov/resource-guides/fuel-tanks-anchoreddisaster-resistance#edit-group-training

Victor DeTroy has worked in the environmental service industry since 2007 and provides project management to ensure compliance and satisfaction of client requirements for Phase I Environmental Site Assessments, Transaction Screens, limited due diligence assessments, as well as Phase II and Phase III subsurface investigations. Currently, Mr. DeTroy serves as AEI's Due Diligence National Practice Leader, providing technical guidance for AEI's due diligence team. As a Maine native, he spent his early summers aboard lobster and fishing boats trying not to fall overboard. He sprinted to southern California to get away from the harsh Maine winters and spent the majority of his career basking in the glory of the SoCal tar pits. With climate change making Maine the next tropical destination, Mr. DeTroy recently returned to his native land to raise his two young sons under the warm Maine sun. 43

EBA Journal – Winter 2024 Edition

Positive Look Into Future Brownfields Redevelopment Opportunities Using Lowimpact Low-cost Soil And Groundwater Biostimulation Strategies By Kent C. Armstrong, TerraStryke Products LLC

Lost Opportunity The avoidance of abandoned existing structures (Brownfield) in predominately urban areas due to environmental management concerns continues to result in millions of square footage in building/warehouse space remaining vacant and underutilized. Brownfield properties typically, due to past site use, have contaminant issues associated with building materials, surface and/or subsurface soils, soil vapor, and the groundwater beneath and proximate to the building proper. Each of these issues (such as asbestos, petroleum hydrocarbons, and chlorinated solvents) brings added costs and delays to the project as do the additional regulatory requirements associated with the proper management of each matter. As a result, scheduling becomes extended outside the business-related investment and/or purchase window, eliminating a valuable property from future occupancy, beneficial reuse, and positive revenue generation.

EBA Journal – Winter 2024 Edition

Unnecessary and Costly Historic and current remediation techniques often assume aggressive manufactured systems with extensive subsurface and aboveground infrastructure are necessary to ‘clean’ Site contaminants from the soil and/or groundwater. These techniques are not only energy consuming, vapor, and noise emitting, they are costly in terms of operation and maintenance and often fail to achieve remediation objectives. Failure to attain compliance objectives often isn’t the fault of the technology ‘working hard’, it more often than not is incorrect placement in terms of contaminant location and basic physics. Frequently, due to electrostatic forces between the soil and contaminant, physical processes fail to remove the last of the sorbed (attached) contaminant mass. In doing so, you are left spending money for asymptotic results that get close to, but do not fully achieve the intended goal, instead, you are left with a continuous long-term source of dissolved phase groundwater contamination. Alternatively, tradition directs the Owner to follow an inorganic chemical approach requiring multiple site deployments, each within close proximity to each other, creating exhaustive site operational, product, and maintenance costs. Also, if the inorganic amendment does not come in contact with the organic contaminant, you need to keep adding more until it does, resulting in greater costs, and more interferences to redevelopment. Ultimately, you are again left with a continued groundwater contaminant source further delaying your redevelopment schedule while exhausting your available capital.

EBA Journal – Winter 2024 Edition

Residual Contaminant Mass – A Real Problem This sorbed residual contaminant mass, acts as a long-term source of groundwater contamination. It slowly and naturally liberates from the soil to the groundwater in response to concentration gradients between the two. This liberation is often referred to as rebound and groundwater analyses will continue to indicate non-compliant dissolved phase concentrations of site contaminants of concern (COCs). Most frustratingly, rebound can be avoided, but often not using traditional remedial methods. Be it a physical process that can’t remove the residual mass completely or be it an inorganic process in which deployments miss the contaminant mass entirely and contact with the organic contaminant was not achieved, the bottom line is without the removal/capture of residual source mass, site compliance is likely to be difficult, prolonged, if not impossible to attain. Traditional methods often yield encouraging results at the onset, unintentionally or intentionally prevent the pursuit of innovative and new processes. They unfortunately may not ultimately correct the issues at hand. As a result, your Site lingers in the world of non-compliance even after years of writing check after check for additive, deployments, site time, permitting costs, and continued delay to your goal of completing the redevelopment, attaining certificates of occupancy, and returning the site into a positive revenue generating property. This causes headaches for Owners, Developers, Investor(s), and project Stakeholders. Fortunately, unnecessary delays, numerous permits and the exorbitant costs, delays, and infrastructure demands associated with traditional remediation processes can be avoided using biostimulation.

Trend to Sustainability Redevelopment is increasingly trending toward sustainability, in building design, in resource utilization and in the design of interior space to maximize fuel, lighting, and atmospheric efficiencies. The goal of this trend is to benefit the environment, the community, and the occupants within each building. The trend towards sustainability is a movement toward ‘Green’ design. This movement focuses on programs such as Leadership in Energy and Environmental Design (LEED), and impacts project and corporate goals to achieve Environmental, Social, and Governance (ESG) benchmarks in all aspects of their operations; including but not limited to, building construction, subsurface remediation, and aboveground landscaping.

EBA Journal – Winter 2024 Edition

The ultimate goal of communities, government agencies, developers and property owners is to save energy, save costs, minimize impacts and maximize the efficiencies of existing and developing infrastructure and operating facility systems, so the environment and occupants themselves collectively benefit from project completion. Interestingly, this collective of LEED/ESG inspired practitioners iact in a very similar fashion to what indigenous microbes do via biostimulation; work in unison with a laser focus on exploiting available energies as efficiently as possible. This ability of microbes to collectively work as a consortium is a process called Quorum Sensing and Signaling (QSS) and is performed in a self-constructed protective biofilm. Biofilm is essentially the microbes ‘LEED’ structure, organically found ubiquitously on Earth and dedicated as a group to an ethos strictly adhering to ‘ESG principles’. Biofilms have been referred to as a city for microbes. Remediation Moving Forward Environmental remediation professionals continue to search for ways to not only remediate classic site contaminants, i.e. petroleum hydrocarbons (PHCs) and chlorinated volatile organic compounds (cVOCs); but also, newly emerging ‘recalcitrant’ ever-contaminants such as polyfluorinated organohalides (PFOS/PFAS), dioxanes, plastics, and more. Unfortunately, our industry continues to adhere to traditional beliefs and apply traditional physical and/or inorganic ‘solutions’ for these newly emerging recalcitrant COCs. This continued attempt to solve environmental management concerns using traditional approaches may produce results that achieve compliance, but at staggering remedial costs that dwarf those associated with biostimulation and Nature-based remediation strategies. New-Age of Remediation There is an emerging group of remediation practitioners ready to respond and identify new Nature based strategies that provide safer, more economical, remediation strategies that meet ESG ideals and support LEED ‘Green’ construction requirements. In all aspects of these newly emerging Nature-based strategies is the goal of sustainability, an effort to minimize the carbon footprint of remediation while limiting adverse impacts from start to completion. 48

EBA Journal – Winter 2024 Edition

Biostimulation The new era of remediation isn’t mechanical, isn’t chemical, isn’t traditional bioremediation, isn't innovative, and thankfully doesn’t cost that much. This is Nature’s approach and has minimal impacts on site interior or exterior air conditions allowing for redevelopment concurrent with remediation and occupancy. The new era of remediation generates no noise, and no vapors/emissions because it uses no fuel; biostimulation in fact, can generate fuel and lowers a Site’s carbon footprint by naturally sequestrating subsurface carbon sources in-situ (meaning, in place). Biostimulation is a naturally occurring process that originated 4+ billion years ago. It continues operate as it did then, and will continue to use this process, to degrade organic compounds. Organic compounds include logs, bones, anthropomorphic contaminants, and yes, organic beings including us. If organic material is available to be exploited, as either a microbial respiratory source or microbial food, it will be degraded. The problem at a contaminated site is, unlike other examples mentioned, the onslaught of protons or electrons (hydrocarbons/solvents) into the saturated soils/groundwater deplete available nutrients and inorganics necessary for microbes to survive, so instead, they simply go dormant and form Ultramicrobacterium (UMBs), basically a ‘shell of themselves’ containing that precious strand of DNA. They then lay in wait for nutritive help and support, for millions of years if necessary. Dr. William Costerton, known as the Father of Biofilm’, wrote in his academic classic ‘The Biofilm Primer” (….) that ‘Bacteria are unique in their ability to adapt to starvation by forming UMB that preserve their genome and persist for very long periods of time in nutrient deprived environments.’ He further stated, ‘They are equally unique in their ability to rapidly mobilize appropriate genomes into custommade communities (sic. biofilm) that can respond to nutrient opportunities.’ ‘First, we discovered that starved bacterial cells are converted to very small dormant ‘ultramicrobacteria’ (UMB) that retain their full genomic complement and resuscitate to full size and metabolic activity when nutrients again become available’. He further states ‘…these dormant prokaryotes are present in virtually every ecosystem in which nutrient content varies from feast to famine. Therefore, in all ecosystems, a vast library of genomes is available….can be mobilized and mixed and matched….to capitalize on any nutrient opportunities that are presented.’

EBA Journal – Winter 2024 Edition

Biostimulation strategies are designed to restore the microbial ecosystem and bring UMBs out from dormancy. The process results in greater microbial growth and enhanced microbial communication. When growth and communication attain sufficient densities to initiate the collective development of biofilm, the process is known as Quorum Sensing and Signaling (QSS). QSS is how life exited the primordial soup, developed methods to exploit energy, and ultimately, created multicellular organisms. Biofilm: the Good and the Bad In biofilm microbes shed their roles as a swimming (planktonic) individual and assume a role within the protective biofilm that benefits the collective and allows them to exploit available energy with a laser focus. In our world of remediation, the available energy are the exact targets we want to eliminate in the form of protons (hydrocarbons), or electrons (solvents). Humans experience biofilm too, for example, it’s a form of infection that when found in the human lung, is called Cystic Fibrosis. Be it a nutrient-rich groundwater system or a human lung, QSS allows planktonic bacteria to attach, grow to quorum levels, change phenotypically in a sessile form, and establish biofilm. During this process the microbes collectively adjust to actual site conditions, and in the case of cystic fibrosis, at rates antibiotics cannot stop. As a result, you die of lung asphyxiation because biofilm grows throughout the pore spaces of your lung, exploiting the available energy in your body, until you and the available energy is exhausted, i.e. terminated. Biostimulation in the world of environmental remediation enhances QSS in the contaminated groundwater, redefining the contamination into a beneficial energy resource. There are huge amounts of energy in the groundwater related to the release of one or more chemicals) but because of it, the health of the microbial ecosystem is poor at best and the availability of nutrients and the necessary components to support growth, communication and biofilm development have been depleted. 50

EBA Journal – Winter 2024 Edition

As a result, your site has a microbial ecosystem that is stressed, and the indigenous microbes present are mostly in the form of UMBs. Worse, over the years contaminant levels have remained generally asymptotic. Biostimulation minimizes/eliminates these stresses to enhance QSS and maximize microbial performance by creating a beneficial infection, a subsurface ‘bioreef’. Be it you, me, a log, a fish, or subsurface contaminants, this process works the same. The trick is to figure out how to stimulate the microbes to feed on the contamination as a sustainable energy source, until the contamination ceases to exist. Case Study The following is a real-world example of how Biostimulation expedited contaminant destruction, shattered predicted remediation timelines, lowered overall remediation costs and allowed for expedited site redevelopment. In 2011, a biostimulation approach was introduced to the Owner of a strip-mall in the City of Burlington, Ontario Canada. The end unit of the mall was a dry cleaner that had operated for over 40-years. The dry cleaner ceased operations in the late 2000’s due to bankruptcy. The Owner ‘inherited’ the property, which at the time was valued at $680,000 (USD). The Owner also inherited a contaminant legacy. Traditional Expectations Several remediation proposals crossed the Owners desk each suggesting a pumpand-treat system (P&T). One group particularly noted P&T was the only alternative available due to Site conditions and specifically stated that bioremediation was not feasible. The average proposal cost for this traditional approach ranged from $750,000 to $1 million dollars (USD). Each estimate also came with a 10 to15-year timeframe for hopeful completion. During these 15 years of P&T the facility would remain unoccupied, creating no revenues, generating noise, emissions, and vapors, basically remaining a blight to the mall itself and the community as a whole. Proposed costs did include infrastructure and associated OM costs; but did not include the cost of energy to fuel the system, the cost to replace pumping system parts; nor did it consider Greenhouse Gas issues associated with emissions, vapors or noise; all of which require permits, disrupt redevelopment, and cost more. The Owner rejected the P&T strategies for these reasons and because the cost of remediation negated the value of the property itself. Luckily, biostimulation was introduced to the Owner and presented a new path forward. 51

EBA Journal – Summer Winter 2024 2023 Edition

The New Reality After listening to the biostimulation approach, the Owner, and the Ministry of the Environment (MOE) Ontario allowed TerraStryke® to perform an on-site ‘proof-ofconcept’ evaluation to determine the efficacy of the biostimulation additive ERDENHANCED™ at supporting contaminant destruction at the dry-cleaner. Baseline data did not include the quantification of microbial presence, density, or type. Furthermore, baseline conditions indicated there was no biological activity ongoing at the site as per Parent:Parent Daughter (P:PD) Ratio, which noted Tetrachloroethylene (PCE) was the only contaminant present.

Specifically, the evaluation would determine if biostimulation alone could facilitate enhanced reductive dechlorination (ERD) at a site where geochemical and microbial data are lacking. The essential question was whether restoring the subsurface ecosystem via biostimulation alone could enhance the dehalorespiration of chlorinated volatile organic compounds (cVOCs) by indigenous microbial populations likely in a stressed UMB state. The 9-month proof-of-concept evaluation confirmed that yes, biostimulation was feasible and yes indigenous microbes were present in the form of dormant UMBs lying in wait to exploit the overwhelming amount of electrons (energy). At the end of the evaluation data indicated a >81% reduction in total concentrations of cVOCs, Parent and Daughter Trichloroethylene (TCE), cis-Dichloroethylene (cis-DCE) and Vinyle Chloride (VC). Furthermore, Ethene was detected throughout the evaluation confirming complete dehalorespiration of the PCE molecule was occurring. It confirmed biostimulation works, the microbes were always there (and you don’t test for them!) and, regardless of baseline conditions all the components needed were there and could be revitalized simply through Biostimulation. This study defies traditional beliefs regarding remediation and demonstrates there is an organic low cost, low impact remediation strategy that is LEED/ESG compliant and works!

EBA Journal – Winter 2024 Edition

Full Scale Implementation In 2014 the Owner retained the services of the Burlington Ontario consulting firm G2S Environmental, Inc. (G2S). G2S was tasked with the implementation of a full-scale biostimulation program based on the results of the proof-of-concept evaluation completed two-years earlier. Prior to project implementation source zone soils from within the building proper were excavated from below the buildings footprint to approximately 3 meters below ground surface. Roughly 250 cubic meters of contaminated soil was removed and replaced with pea gravel backfill and the installation of a simple infiltration gallery manifolded to the exterior of the building. Upon completion, the additive solution was gravity fed into the newly installed infiltration gallery system to allow passive distribution of the additive solution throughout the gallery and downgradient from the same. The total size of the contaminant zone understood to require remediation approximated 25m x 15m x 5m. Site operations required 1 week for excavation and gallery construction followed by two additional days of site work associated with the gravity feeding of the additive solution to the gallery system. Once completed, other than quarterly sampling events, no personnel and/or labor costs, no additional site disruptions, and no noise/vapor generating energy consuming equipment was required. Rather, all that was required was patience for the microbes to do their work. If you are an operating site, a location with no immediate plans for transacting property ownership, or wish to establish a property line protective border, biostimulation is the answer.

EBA Journal – Winter 2024 Edition

Results of the Biostimulation Strategy In the summer of 2014, under MOE review and Owner allowance, a full-scale biostimulation strategy was implemented at the former Roseland Dry Cleaner which; due to past site use, both soils and groundwater were adversely impacted by chlorinated solvents; specifically, PCE. Baseline concentrations of PCE in groundwater exceeded 100,000 micrograms per Litre (µg/L). As noted previously, with respect to biological activity there was no evidence of reductive dechlorination except, as a result of the 2011 noted Proof-of-Concept evaluation. Similar to the 2011 Proof-of-Concept evaluation, two years after full scale additive deployment (2016) concentrations of PCE, TCE, cis-DCE and VC attained bellowed detection levels (BDL). This at a Site other practitioners with traditionalist approaches said biostimulation would not work. In summary, the biostimulation strategy realized compliance with two-years of deployment and allowed redevelopment into a Scottish bakery within four-years of full-scale implementation. Total remediation costs were $234,000 all-in an. Biostimulation saved the Owner 10-years in remediation effort, over $500,000 dollars in remediation costs, and allowed positive revenue generation to start 11-years earlier than traditional approaches could dream of, with no adverse interior-exterior impacts. Low cost, low impact remediation working in concert with redevelopment and occupancy is why biostimulation can work for your project. Biostimulation is a non-active remediation process that will expedite the redevelopment of more vacant, contaminated, underused properties at less costs, with less impacts. Biostimulation allows for expedited redevelopment by simply enhancing 4.5+ Billion years of Natures experience degrading, utilizing, and exploiting energy.

EBA Journal – Winter 2024 Edition

Conclusions The medical, dental, oil and waste-water treatment industries have known for decades, and science for centuries the full benefits of a healthy macrobiotic systems. Yet this knowledge is all but non-existent to the environmental remediation industry. We should strive to understand it’s impacts and change how we educate upcoming practitioners, and how and what we evaluate in the field to appropriately understand site characteristics; Biostimulation is natural and anthropomorphic, and we need technological advancements in monitoring, sensing, and data logging equipment so we can understand what matters, that which the microbials are doing. The strategy of leveraging existing resources to achieve our end goals is practical, reasonable, intelligent, and sustainable. These same strategies are used to leverage an urban building, with contamination, located in proximity to highways and railyards. As we look below the surface, we see a different set of resources waiting to be stimulated into production. Microbes can be used to target contamination that might otherwise delay a Brownfields project and convert these compounds into a sustainable energy source for their work to continue, until the contamination is eliminated. Concurrent and resulting from these changes, regulatory guidelines will also evolve. This will create change that benefits the environment and humanity by expediting remediation and facilitating ‘Green’ redevelopment that follows LEED/ESG ethics, all the while, minimizing the impacts associated with greenhouse gas emissions and the physical impacts to the surrounding environs associated with remediation. Ultimately, sustainable redevelopment will increase the cost-effective return of urban sites with value, unfortunately adversely impacted by contamination, to a beneficial site that realizes a rebirth of the existing culture and community of any City efforting redevelopment. Kent Armstrong is a Graduate of California State University Long Beach, ‘The Beach’; B.S. Terrestrial Ecology (Zoology), minor in Philosophy/Religious Studies, with Graduate Studies in Palynology (fossil pollen) and Paleoecology. After numerous jobs as a butcher, human anatomy instructor, ravioli maker, warehouse and parts dispatch operator…real work began with the Los Angeles County Sanitation District as Plant Laboratory Chemist and then as a Treatment Plant Operator. Over the next 35 years, Kent would work for and aid both government and corporate businesses with remediation strategies as a contractor, consultant, and general nice guy. The culmination of these experiences afforded Kent the opportunity to participate in a wide variety of environmental investigation, remediation, and management projects combining numerous methods of physical, chemical, and biological strategies. It also, 20+ years ago, led to the realization of a far-fetched concept in 2018, the inception of TerraStryke Products LLC. Since then we have efforted the development of sustainable biostimulation additives designed to leverage existing site conditions and enhance indigenous microbial populations to realize safe, low-impact and cost-effective destruction of organic soil and groundwater contaminants, mimicking that which Mother Nature has done in every other ecosystem on the planet. 55

EBA Journal – Winter 2024 Edition

Environmental Due Diligence, Don’t Buy That Car Before You’ve Looked Under the Hood By Kathy Lehnus, PG, LEP, Farallon Consulting If someone were to offer you a 2022 Tesla with low miles for $5,000, would you buy it? Sure! But before you handed over the cash, you would probably look the car over and test drive it. But are you doing everything you can to make sure you aren’t getting a lemon? Maybe you would also take it to your mechanic to run a diagnostic. And maybe you would ask for estimates on what would need to be replaced in the near future. You might even look for a mechanic with lots of Tesla experience who knows what is likely to break and what it will cost to repair. If not, you may have just purchased more problems than you’re prepared to deal with.

EBA Journal – Winter 2024 Edition

Environmental due diligence is to real estate what assessing a used car is to making sure you will enjoy that car for years to come. History is replete with examples of individuals and corporations buying properties and then having to pay millions (and even lots more) to take care of environmental issues that could have easily been identified, and planned for, at the front end. Once you own a property, even if you never caused any issues, you are likely going to be held responsible for conducting any clean up needed on or downgradient from the property. This millstone of responsibility can even fall to the banker, investor, or insurer who is fiscally responsible for one of these investments. One of the only ways around that crippling responsibility is to establish yourself as an “innocent landowner” where you show you performed “all appropriate inquiries” into the property before acquiring it. It’s that reason that bankers and other savvy lenders require all appropriate inquiry before investing money. To help with the all appropriate inquiry qualification, the American Society for Testing Materials (ASTM) devised guidelines for the preparation of Phase I Environmental Site Assessments (ESAs), which provides a Federally-recognized procedure for technical professionals to identify environmental concerns so they can determine risk during their transactions. These guidelines, with their updates, are the gold standard of what the industry uses today to understand environmental risk. But the Phase I ESA is the baseline assessment (e.g. your used car test drive); there are many more tools to add to your toolbox that can help you open the hood, turn the wrench, and understand what you are buying. Let’s dive into why environmental due diligence is important. When boiled down to its core, due diligence can be defined as “the care taken to avoid harm.” The environmental due diligence industry has been developed to provide stakeholders like lenders, insurers, regulators, purchasers, and sellers with a clear picture of the environmental liabilities for the property or business transaction. This helps them avoid harmful and costly issues that can be discovered later, like investigation and remediation, delays in development schedules, lawsuits, regulatory fines, and bad publicity. Environmental due diligence evaluations are intended to discover and, if desired, evaluate liabilities for a variety of properties and transactions, including purchase, sale, or leasing of real property or businesses. These evaluations can extend far beyond Phase I ESAs, and include Phase II and III subsurface investigations focusing on the potential for on- and off-site impacts, with assessment of the extent of impacts. And when contamination is found that needs to be addressed, you can ask for rough order of magnitude cost estimates to help you address the liabilities discovered during the Phase I ESA and fleshed out further with the subsurface investigation in the Phase II and III processes. 57

And yet there are still those transactions that are closed without evaluation, because stakeholders decide against evaluation due to factors like a benign property use considered unlikely to have caused issues, a future planned industrial use with perceived “lower risk” receptors, a lack of change in Site conditions since the last evaluation, or simply as a means to save money. Stakeholders may feel that there likely aren’t any environmental problems, or problems of any significance, that would be discovered during an evaluation. But the savvy investor knows that there could be unforeseen conditions and additional information discovered that might change opinions. Or the opinions of the environmental professional could change based on changing regulations, rendering previous conclusions obsolete. Certain environmental indemnifications, like the innocent landowner defense, have no possibility of being invoked without documentation of a proper environmental due diligence process. In other words, reliance on previous reporting may prove problematic, not only from a legal reliance capacity, but also because the decision maker must take into account the age of the of the work, changing regulations and availability of information, and even the purpose of the User for which the previous report was prepared. On the latter point, the environmental professional may have provided conclusions in the report that were based on the original User’s redevelopment scenario to industrial rather than the newly-planned, and higher risk, residential scenario. 58

EBA Journal – Winter 2024 Edition

And for those seasoned bankers, brokers, and developers who are savvy to the importance of environmental due diligence, it is worth accentuating that there are differing levels of assessment, contingencies, and risk tolerance that must be taken into account when using the resulting data to understand environmental liability in the decision making process. Understanding the tools used to conduct environmental due diligence evaluation, and the limitations of the tools, are paramount to understanding the extent of environmental risk. A Phase I ESA is the ground level of any good environmental site assessment process and can be used to develop a conceptual site model detailing the potential for release locations, types, volumes/durations, and migration pathways. But a Phase I ESA has over 1,000 pieces of information that can be gathered from dozens of sources. If there are time limitations due to market pressures, the User should build extra contingencies into the findings that account for the potential that key issues may have been missed and later records or new interviews may be uncovered that document those issues. In a similar manner, if moving forward with subsurface investigation as part of the due diligence process, the number of samples, analysis, and ability to digest the data with an appropriate understanding of the presence and/or extent of releases needs to be considered when time or budget constraints have been administered. That being said, the User can use appropriate expert input to understand the limitations of the assessment and determine what contingency should be set when relying on the data in order to formulate estimated costs and timeframes associated with environmental liability with rough order of magnitude remedial cost estimates. This is the car-buying equivalent of relying on your trusted and experienced Tesla mechanic. The preparation of rough order of magnitude remedial cost estimates would be the final step of a robust environmental due diligence process. These are estimates prepared to address known potential environmental liabilities based on the previous assessments, and must account for the limitations used to determine those liabilities, including things like age of the assessment, limitations of the assessment, and current (and applicable) regulatory criteria. In the right environment, rough order of magnitude remedial cost estimates can also address the potential for future environmental liabilities that have not yet been discovered. In order to be useful, the estimates must incorporate current regulatory standards with regard to clean up goals, including sensitivities around vapor intrusion risk, and also must seek to incorporate some level of future regulation expectations, including off-site assessment and long-term monitoring. This level of effort is largely in the opinion of the environmental professional who prepares the evaluation and are well outside of the ASTM guidelines to complete Phase I ESAs. The work should include an open discussion between the User and the environmental professional to understand future uses, goals, the potential for regulatory involvement, and risk associated with the planned use of the estimates. 59

EBA Journal – Winter 2024 Edition

In sum, just as it is wise have your expert mechanic inspect that used car you are about to buy, a robust environmental due diligence process can be your lifeline to inform you of and/or potentially release you from being on the hook for time consuming and expensive remedies. The end result of a truly robust and successful environmental due diligence process must incorporate an understanding of the elements and reliability of the assessment, the process for completion, and the limitations of the work. This process can go well beyond the simple guidelines of a Phase I ESA completed for high-risk properties that has become the baseline standard evaluation, and will involve collaborative conversations with experienced environmental professionals who understand liability related to many different environmental histories, risks, and transaction types. The savvy investor goes into decisions with eyes wide open, knowing what they are getting into (and what it will take to get out of it) rather than risking buying a lemon.

Kathy Lehnus, PG, LEP has worked over 27 years of managing projects in the environmental consulting industry, helping clients understand the risks associated with the purchase and redevelopment of contaminated or potentially contaminated properties. Kathy's areas of expertise include due diligence, investigation/remediation work plans, and regulatory navigation; and support to stakeholders to help them understand liabilities associated with investigated properties.

EBA Journal – Winter 2024 Edition

Are You Ready? ASTM International Develops New Environmental Professional Certification By Brittney Gibson, ASTM International

ASTM International (ASTM) is excited to announce the ongoing development and rapidly approaching launch of two fully online certification programs, the Certified Environmental Professional (CEP) and Certified Environmental Liabilities Professional (CELP). These programs are designed to meet the needs of YOU, the exceptional environmental professional. We have heard the conversations in the meeting rooms and coffee breaks at conferences, and thanks to our very passionate subject matter experts, work has been underway for the past year on these timely programs. The Certified Environmental Professional (CEP) program is designed for practicing environmental professionals, who perform environmental site assessments (ESAs) and will assess competency in how to properly perform a Phase I Environmental Site Assessment (ESA) as well as how to document and report the results as per the ASTM E1527-21 Standard. Requirements for this program include the completion of an ASTM Phase I training course, successfully passing an online, proctored written examination, and meeting the eligibility requirements, consistent with those defined in the ASTM E1527-21 Standard and outlined below. The topics covered include: CERCLA, ASTM E1527, terminology, user responsibilities, physical setting records, government records review, historical records review, interviews, site reconnaissance, report preparation, and non-scope items. 62

EBA Journal – Winter 2024 Edition

The Certified Environmental Liabilities Professional (CELP) program is designed to assess competency in how to properly identify, value, characterize and explain environmental liabilities. Requirements for this program include the completion of an ASTM Environmental Liabilities training course, successfully passing an online, proctored written examination, and meeting the eligibility requirements outlined below. The topics covered include: climate change and emerging contaminants, due diligence, environmental laws and regulations, environmental science and engineering, recognition and derecognition of environmental liabilities, valuation of environmental liabilities, disclosure, and knowledge management. Training courses for both programs are offered both in-person and on-demand virtually. Eligibility Requirements Certified Environmental Professional

Certified Environmental Liabilities Professional

Education and Experience

II.

III.

IV.

hold a current Professional Engineer’s or Professional Geologist’s license or registration from a state, tribe, or U.S. territory (or the Commonwealth of Puerto Rico) and have the equivalent of three (3) years of full-time relevant experience; or be licensed or certified by the federal government, a state, tribe, or U.S. territory (or the Commonwealth of Puerto Rico) to perform environmental inquiries as defined in § 312.21 and have the equivalent of three (3) years of full-time relevant experience; or have a Baccalaureate or higher degree from an accredited institution of higher education in a discipline of engineering or science and the equivalent of five (5) years of full-time relevant experience; or have the equivalent of ten (10) years of full-time relevant experience.

Relevant experience means: participation in the performance of all appropriate inquiries investigations, environmental site assessments, or other site investigations that may include environmental analyses, investigations, and remediation which involve the understanding of surface and subsurface environmental conditions and the processes used to evaluate these conditions and for which professional judgment was used to develop opinions regarding conditions indicative of releases or threatened releases (see § 312.1(c)) to the subject property.

ii. iii.

Have a Baccalaureate or higher degree from an accredited institution of higher education in an engineering or environmental (or related science) discipline and have two (2) years relevant experience; or a practicing environmental attorney with a law degree from an accredited law school.; or have the equivalent of five (5) years of full-time relevant experience.

EBA Journal – Winter 2024 Edition

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Te & Dst Bu e liv ild in e ry g

Over the past year, we have worked diligently to establish eligibility and prerequisite requirements, determine the applicable scope of knowledge, certification and recertification requirements, certification outcomes, and program administration. Some of you may have even been involved in the initial job task analysis (JTA) surveys that went out earlier this year. The graphic below outlines the process utilized when developing these new programs.

Within the next six months, you can expect to see news regarding the launch of the beta exams for each program and the outcomes of our standard setting process. ASTM is committed to ensuring that our exams are relevant to real-life workplace scenarios and that the items covered are technically accurate. This beta exam process is crucial in determining the appropriateness of the topics covered and the quality and defensibility of the exam and its questions. If you are interested in participating in the beta exams when they become available, please reach out to credentialing@astm.org for more information. The beta exam for the Certified Environmental Liabilities Professional program is currently live and accepting participants. Why Certification is Important? Why Participate in the Beta Exam? • • •

Passing the beta exam leads to real certification. Your comments on accuracy and grammar/typographical errors directly contribute to exam improvements. You may be eligible for discounted exam vouchers.

Earning a certification is a cost-effective way to advance your career and business success. It demonstrates your commitment to quality, adherence to industry standards, and dedication to continued learning. A certification can help boost your professional credibility within your own network, with your current clients, and when pursuing new business opportunities.

Brittney Gibson is responsible for creating and managing processes used in developing and maintaining ASTM’s personnel certification programs. Previously, Brittney worked in the Construction Materials Testing (CMT) and standards field, and has served as a Laboratory Assessor, Quality Analyst, and Trainer. Currently, Brittney oversees the development and management of personnel certification programs for construction materials testing, petroleum, and environmental industries. Brittney holds a Bachelor’s degree in Environmental Science from Trinity College.

EBA Journal – Winter 2024 Edition

Contamination Discovery Rates Kathryn Peacock, Partner Engineering and Science, Inc. Vanessa Chambers, Nova Consulting John Green, Green Environmental Management Tim McGahey, AKT Peerless Environmental Services

Introduction “Why Do I Need a Phase II Investigation?” How many times have we heard these words? Be it from our clients, loan officers, or borrowers, it is a common question because a Phase II investigation requires additional expenditures and time. From experience, environmental professionals inherently know what property types or features have a higher likelihood of contamination, and prior Environmental Bankers Association (EBA) studies (2012 and 2015) have provided pertinent information around the likelihood of contamination. Nevertheless, in 2023, a new study offering more in-depth research into the frequency of contamination was undertaken by fifteen EBA member firms. The resultant dataset is much larger than prior studies and provides conclusive evidence to substantiate the recommendation for additional investigation. This blind, unbiased data collected from Phase II investigations across multiple states promises to be extremely valuable to both environmental and commercial real estate professionals. Due to the magnitude of this project, we offer sincere thanks to the fifteen participating EBA member firms which made this project possible: Partner Engineering and Science, AEI Consultants, AKT Peerless, Atlas, CBRE, EFI Global, Green Environmental Management, GZA, Molen & Associates, Nova Group, PM Environmental, Terracon, Tetra Tech, TGE Resources, and Wasatch Environmental. 65

EBA Journal – Winter 2024 Edition

About the 2023 Contamination Frequency Study For this study, EBA members collected data from 1,755 properties across eleven specific property types/uses that had Phase II investigations completed within the past five years. Not only did this study examine more sites than the similar studies performed in 2015 and 2012 (which included 1,081 and 452 sites, respectively), more data points were collected from each site. The goal of this study was multi-faceted. In addition to identifying CDRs for the property types/uses researched, the 2023 EBA study also collected data regarding other commonly asked questions, including: •

How often is overall contamination detected during Phase II investigations?

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What is the average cost of a Phase II investigation?

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Does contamination increase with the age of a feature?

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Does the presence of a crawl space mitigate vapor intrusion?

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What are the potential costs of remediation?

The contamination frequency rates identified in this study are referred to as Contamination Discovery Rates (CDRs). The term CDR—which represents how often contamination is found during a Phase II in terms of percentage, both above and below a regulatory standard—was coined by the EBA in 2023 in a presentation titled, “Phase II Data Analysis and Deep Dive.”

Study Findings The cumulative data from the three EBA surveys has revealed that between 70% and 80% of Phase II investigations have some type of contamination detected, and between 40% and 54% of these sites have contamination detected above some regulatory standard (see Table 1). More specifically, the 2023 study found that some level of contamination was detected above the laboratory reporting limits in 80% of the sites and was identified above applicable regulatory levels in 54% of the sites. Since approximately one of every two sites in this study had contamination above regulatory standards, we now have statistical validation of the importance of conducting Phase II investigations. These findings also lend credence to the identification of various “red flags” as Recognized Environmental Conditions (RECs) in the Phase I ESA. They enable our industry to utilize real field data and statistics to quantify risk and allow us to make educated, risk-based credit determinations.

EBA Journal – Winter 2024 Edition

An interesting finding from the series of studies is the increasing frequency of contamination detected above regulatory levels in each subsequent study: a 6% increase from 2012 to 2015, and an additional 4% increase from 2015 to 2023. The data obtained suggests the cause of these increases is likely related to the higher frequency of soil gas sampling included within the scopes of work for the subsurface investigations included in this study.

An additional objective of this study was to determine the CDRs for various media when sampled as part of a subsurface investigation. Media considered for the 2023 study included soil, groundwater, soil gas, and indoor air. Soil and soil gas were found to be the most frequently sampled. The study revealed that soil gas had the highest rate of contamination both below and above regulatory standards. This is likely due to the implementation of increasingly more stringent soil gas screening levels by numerous state agencies. Furthermore, sub-slab soil gas sampling can often be conducted in areas where access is limited and soil and/or groundwater sampling is not viable. Regardless, the data affirms the need for inclusion of soil gas sampling within the protocol of many subsurface investigations. The data in Table 2 shows that soil gas and groundwater are two of the most commonly impacted media types. The industry's understanding of soil gas as a pathway for contaminant migration has become more pronounced over the last decade. This data demonstrates that, of the almost 1,200 Phase II reports where soil gas was sampled, approximately 1 in 2 sites had soil gas impacts above a regulatory standard. Similarly, groundwater was impacted above a regulatory standard in more than 1 in 3 sites that were studied. These findings reinforce the importance of working with your consultant to determine the right media to sample during your Phase II ESA. 67

EBA Journal – Winter 2024 Edition

CDRs for Property Types/Uses The 2023 study provides a deep dive into property types/uses that are common contamination culprits. Table 3 shows the total number of sites of each sensitive property type/use studied, the rate of contamination, and if they were above any regulatory standards. The most relevant category here are percentages that are above commercial/industrial regulatory standards, as we are largely working in the context of commercial real estate transactions. However, when multifamily residential properties are in question, the percentages above residential regulatory standards would apply. In either case, the commercial/industrial CDRs for off-site issues, dry cleaners, plating facilities, historical manufacturing sites, and metal fabrication sites are the highest.

EBA Journal – Winter 2024 Edition

CDR Breakdown by Media (Soil, Groundwater, Soil Gas, and Indoor Air) The overall CDR for sensitive property types/uses is extremely beneficial because it tells us what the overall rate of contamination is. However, due to the nature of chemicals used on-site or the methods of storage, usage, and disposal, select media are more likely to be affected by property type/use. For this study, CDRs were calculated for each sensitive type/use for soil, groundwater, soil gas, and indoor air. Of note, contamination in soil gas for all sensitive property types/uses, both above and below regulatory standards, was significantly higher than for other media. As previously discussed, this data affirms the need for inclusion of soil gas sampling within the protocol of many subsurface investigations. The property types/uses with the highest commercial/industrial CDRs for soil contamination include metal fabrication, plating facilities, historical manufacturing, and heating oil USTs (see Table 4).

The commercial/industrial CDR for groundwater contamination was highest for off-site issues, dry cleaners, historical manufacturing, USTs, and auto service (see Table 5).

EBA Journal – Winter 2024 Edition

Plating facilities, historical manufacturing, and off-site issues had the highest commercial/industrial CDR for soil gas (see Table 6).

The commercial/industrial CDR for indoor air contamination ranked highest for off-site issues, metal fabrication, dry cleaners, and historical manufacturing (see Table 7).

EBA Journal – Winter 2024 Edition

How Much Do Phase II Investigations Cost? Of the 1,755 sites studied, we obtained Phase II investigation costs for 1,602 sites. The average cost of a Phase II investigation was $12,785 (see Table 8). The Phase II investigations encompassed a wide variety of property types and geographical locations, each with distinct scopes and purposes, all of which influenced the investigation costs. In this regard, the minimum Phase II cost was $4,100 and the maximum cost was $60,000. This data was collected from fifteen consultants who perform Phase II investigations nationwide, offering a well-rounded representation of its average ballpark cost. It’s important to note that the Phase II costs collected represent the initial investigation performed at the property. Subsequent investigations may have occurred but were not factored into this study.

EBA Journal – Winter 2024 Edition

Does the Presence of Contamination Increase with Age? The data from the EBA study told an interesting story about the correlation of contamination and age for dry cleaners (Figure 1) and USTs (Figure 2). These graphs show a positive correlation between age and contamination for these property types. In other words, as time progresses, contamination above regulatory standards was reported in greater frequency for these property types. It should be noted that releases above regulatory standards not only increased as time went by but were also reported in the early years of these property types, most notably less than ten years, and even less than five. The results are indicative that age is not the only factor determining risk for these property types.

EBA Journal – Winter 2024 Edition

Do Basements and Crawl Spaces Help Mitigate Vapor Intrusion? Environmental Professionals often surmise that the presence of a crawl space beneath a building may mitigate the effects of volatile contaminants to the indoor air inhalation exposure pathway. That supposition generally comes from the professional’s experience or that of their firm/bank, which is limited for even the most seasoned veteran. However, the large data set generated during this study provides some viability to the theory. As seen in Figure 3, the number of properties in the data set where samples were collected for soil gas only (767), indoor air only (75), or both (420) was fairly robust, totaling 1,262 sites.

Although the number of sites constructed over crawl spaces where soil gas and/or indoor air samples were collected was smaller (45), the data still provides insight into the impacts a crawl space can have on vapor intrusion. Of the 45 crawl space sites where soil gas and/or indoor air samples were collected, contaminants were detected in soil gas at 25 sites and found in both soil gas and indoor air samples at only 4 sites (see Figure 4). The data is even more compelling when comparing contaminant concentrations to regulatory thresholds. Soil gas criteria were exceeded at 14 of those sites, and only two sites showed both soil gas and indoor air concentrations exceeding regulatory criteria.

This data seems to support the theory that the presence of a crawl space, and even subsurface parking garages, can have a mitigating effect on volatile contaminants impacting indoor air. 73

EBA Journal – Winter 2024 Edition

Indoor Air Contamination Ratio by Property Type Regardless of property type, the data gathered during this study demonstrates that threats to indoor air inhalation when volatile contaminants are present is worthy of concern. When volatile contaminants are detected in soil gas, those same contaminants are frequently found in indoor air (see Figure 5).

That frequency was more pronounced at properties where soil gas was also found to exceed regulatory criteria (see Figure 6).

EBA Journal – Winter 2024 Edition

Remedial Cost Estimates – What Does it Cost to Remediate Impacted Properties? While this might seem like a simple question to answer, remedial cost data is not widely available and is extremely variable and complex. We asked our members to provide remedial cost estimate data for the eleven sensitive property types/uses in our study and were only able to collect 110 total data points. The data that was collected shows that remedial cost estimates vary greatly. Factors such as regionality, regulatory environment, and concurring contaminant plumes impact these numbers significantly. Additionally, these estimates are not reflective of final remedial costs. For risk managers who are tasked daily with quantifying the financial impact of contaminated properties to their transactions, this type of data is extremely valuable but was beyond the scope of this study. Additional research by the study participants is underway and will be available in the future.

EBA Journal – Winter 2024 Edition

Compliments to Lender/Consultant Decision Tree The results of this study provide risk mangers one more layer of information when determining risk. There are multiple layers to the risk decision, and those layers have always included property type/use and CDRs. However, thanks to the dataset provided by the fifteen participant EBA firms (Figure 7), we can now assign a risk rating to property types. The CDRs naturally fall into the definition of a REC – the “likelihood of a release” – and this data, coupled with our personal experience, can help us better determine what is a REC in a Phase I ESA.

EBA Journal – Winter 2024 Edition

COMMITTEE ROUND-UP Conference Committee Plans the EBA conference agenda and conference experience. 2024 Chair: Jennifer Bellamy, U.S. Bank

Continuing Education Committee Oversees EBA educational content, including webinar planning and execution, and recommended topics for conference sessions. 2024 Chairs: Rita Wiggin, First Bank and John Rybak, Truist Bank

DEI Committee The EBA has several committees meeting regularly. In fact, it is due to our volunteer members who dedicate their time, talent, and expertise, that most of the EBA's content exists, including this Journal.

Identifies and organizes opportunities we can make EBA and our industry more diverse, equitable, and inclusive. 2024 Chair: Lori McKinnon, Zions Bancorporation

ESG Committee Assesses environmental, social, and governance risk management as it relates to financial institution regulation, risk management industry standards, and development of methods for assessing and mitigating risks. 2024 Chair: Kate Flaherty, Wells Fargo Bank

Gives Back Committee Identifies and organizes opportunities where our members can make an impact through contributions to charitable organizations. 2024 Chair: Jonathan Green, Green Environmental Management

Membership Committee All EBA members are invited to join these open committees and get involved! Contact eba@envirobank.org to learn more.

Builds connections with members to ensure they’re making the most of their EBA membership, as well as identifies and makes initial outreach to future members. 2024 Chair: Onamia Chun, Zions Bancorporation

Journal Committee Collects, writes, edits, and assembles articles our members contribute to our 2x annual publication. 2024 Chair: Victor DeTroy, AEI Consultants 77

EBA Journal – Winter 2024 Edition

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