Environmental Site Assessments – The Consultant’s Dilemma

Site remediation
At the core of every Phase 2 ESA is the laboratory certificate of analysis showing whether a site needs an expensive cleanup.

By George Duncan

Buying and selling commercial/industrial properties in Canada generally requires an Environmental Site Assessment (ESA) to see if it has any issues stemming from its previouse uses or current condition. The ESA also includes a review of the surrounding properties for any possible impact to the site, with a particular emphasis on “red-flag” operations, such as gas stations and dry cleaners or industrial manufacturers.

Demand for ESAs began in the late 1980s, when new environmental standards were introduced, placing limits on the levels of contaminants in soil and groundwater. This prompted buyers and sellers, bankers and lawyers to seek the help of environmental consultants to examine their properties and report back on any environmental issues found, and make recommendations on what to do about them.

At the beginning, the new rules were mostly ignored because those involved really didn’t understand what the fuss was all about and didn’t see the need for another layer of bureaucracy in an already expensive real estate process. Also, the new rules were in the form of voluntary guidelines rather than regulations, so there was no pressing reason to take on the increased costs and time delays of applying them to property purchases.

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This changed as news spread of property values collapsing as a result of applying the new rules after finding the site was contaminated. Sites and businesses which had seen their cash value continue to soar over the previous decades were suddenly blind-sided by an environmental report showing their real estate was contaminated and its value worthless, or catastrophically reduced. Particularly troublesome for some was the news that the contaminants had been there long before they purchased the property.

So, it is true to say that on the day the new rules were introduced, billions of dollars in property values disappeared and most of us didn’t know it, especially the countless mom-and-pop businesses built on old industrial land or over or near old leaky gas stations, fuel depots, dry cleaners and so on.

For them, the business was their retirement nest-egg and their anger at the government and the environmentalists for penalising them for something they didn’t know about was palpable. The outcome throughout the 1990s was a landscape dotted with derelict gas stations, shuttered buildings and abandoned industrial lands which were given a new name—brownfields!

The banks were quick to realise that a property’s cash value was very much tied to its environmental condition so they quickly made ESAs a prerequisite for loan approval. In the new millenium, guidelines were replaced with regulations and these greatly expanded the list of contaminants, while at the same time lowering the allowable limits for most of them.

This meant more properties were converted from assets to serious liabilities, including some that had already been shown to be clean under the previous limits.

By lowering allowable limits these “clean” properties were now “contaminated” again, despite the fact that the owners had done nothing to cause this.

This situation continues every time the regulations are revised and an allowable limit is lowered.

The consultant’s role

ESAs are now common practice in the buying and selling of commercial/industrial real estate and the role of the environmental consultant is now firmly established in the process. Although the same rules also apply in large part to the residential real estate market, there has been much less interest from home buyers in establishing the environmental condition of their properties.

The consultant is tasked with the job of recording a site’s previous history from an environmental viewpoint to see if there is any chance that it may now exceed a regulatory limit in its soil and groundwater. This involves a walk-through site inspection, including the interior of any buildings, to look for actual or potential environmental issues, but does not include any soil or groundwater sampling.

The surrounding properties are also scanned for any possible impact to the subject property and the whole exercise is presented to the client in the form of a Phase 1 Environmental Site Assessment report. If any contamination is known or suspected, a Phase 2 Environmental Site Assessment is then recommended.

This involves borehole drilling or excavating test-pits to examine the soil and groundwater on site to see if it complies with the regulatory limits (“Site Condition Standards” in Ontario).

If contaminants exceeding the limits are found, further investigation is required to define the horizontal and vertical extent of this, followed by a cleanup of the impacted zone. After the cleanup, additional samples are gathered to verify the contaminants have been removed. Costs for Phase 2 ESAs range from low five to six-figures and cleanup costs can take this into seven figures, well beyond the means of most small businesses.

The consultant’s first dilemma

Phase 2 ESAs present a series of challenges to the consultant which are not easily met and some of which are just not met at all. Phase 1 reports are often sketchy at best with much missing information, such as what chemicals, if any, were used on site? Where were they used and how were they disposed of? Did they have any spills? What were the neighbours doing at that time? Did they have any spills? and so on. These questions are hard to answer, especially when it relates to activities that happened 50 or more years ago.

Before starting a Phase 2 ESA, the consultant must prepare a “sampling plan” which defines the number of boreholes and monitoring wells to be installed and the number of samples to be gathered. How many boreholes? How many samples? All the regulation says is “a sufficient number” and what that number is is up to the consultant to decide.

Here’s the dilemma. Science and common sense say a “sufficient number of samples” is to drill closely-spaced boreholes all across the site and analyse samples from multiple depths to cover all possible contaminants.

Opposing this scientific approach is the client whose pockets are not deep enough to cover the drilling and lab costs and the consultant’s marketplace where the lowest bid wins and suggesting a project with expensive drilling and lab costs is not a recipe for success.

So where do you strike the balance? Current practice is to define “Areas of Potential Environmental Concern” (APEC) on the site based on the findings of the Phase 1 investigation and then concentrate on these areas in the Phase 2 investigation. This can be a hit-and-miss process, given the amount of missing information, and even here there is no guidance on how many boreholes and how many samples are required.

Site histories revealed

commerical office buidling site
The Phase 1 report on this commerical office buidling site shows that back in the late 1800’s there was a leather tannery on site, which later closed in the 1920’s.

The Phase 1 report  for a one hectare downtown site, currently used as a commercial office building with parking lot, shows that back in the late 1800s there was a leather tannery there, which closed in the 1920s. This was followed by a manufacturer who made things that are no longer used.So, no one is quite sure what chemicals or processes were involved or where and how these were stored. Did they spray-paint them with lead-based primer and, if so, where was the exhaust outlet from the paint booth?

This operation closed up in the 1940s and was replaced with a welding shop, which used a sand-blasting process to clean the rust prior to painting. From the 1940s to the 1970s the site was used as a gas station and auto garage with underground fuel tanks. Then, the garage building with its underground hydraulic lifts was demolished to make way for the new office building now on site. There’s no record of any cleanup being performed.

Accurately defining APECs on this type of site before any drilling is done is very difficult and the list of possible contaminants is long, given the different types of historical operations. So, the Phase 2 ESA has to be completed in two parts: preliminary and final.

In the preliminary Phase 2 examination of the site a few boreholes are drilled in each identified APEC to check the soil and groundwater for the “contaminants of potential concern”. The hope is that these are “sufficient” to indicate if the site is contaminated or not. If nothing amiss is found, the site is declared to “show no evidence of any exceedances of a regulatory limit for the contaminants examined” and nothing more is done.

However, if exceedances are found, further drilling and sampling is necessary to define the horizontal and vertical extent, followed by a site cleanup or risk assessment. The latter is used to see if the contaminants can be left in place.

Remember, all of this is based on the sketchy information in the Phase 1 report and the best guess at where any contaminants might be.

The consultant’s second dilemma

The regulations specify that “representative samples” must be submitted for analysis, but once again they do not define what size of sample and how many should be collected. This decision is left to the consultant, who is already under intense pressure from two conflicting sources. Firstly, there is the client who demands costs be kept to a minimum. Secondly, that same client who later finds out that you failed to detect contaminants that someone else has discovered is now threatening to sue you.

Worse still, it really doesn’t matter what size of sample you send to the lab (typically around 100 – 200 grams), the laboratory only uses about one gram (< 1%) of the sample to complete the analysis. The other 99% stays in the bottle.

This is less of an issue when sampling groundwater which is much more homogeneous because the contaminants are in a dissolved state but it is often an insurmountable issue when sampling soil, especially when you have no prior knowledge how the contaminant is dispersed within the soil.

A site which shows an exceedance of any contaminants must be cleaned up or risk assessed. In these and many other cases, one gram samples simply cannot be representative because the lab takes only a couple of thousand particles from the sample bottle for analysis.

Statistically, the chances of the one-gram lab sample containing any contaminant particles is close to zero but if it does happen to include one, the lab certificate will show a result far above the true value (1 particle in 2000 particles = 500 ppm).

What are the Consequences?

At the core of every Phase 2 ESA is the laboratory certificate of analysis showing whether or not a site needs an expensive cleanup. Consultants place great reliance on these certificates because they come with several pages of quality control showing how precise and accurate the results are. But, the result is only as reliable as the sample is representative and no one has yet defined what representative means.

It is troubling to think that many a site has been declared “clean” on the basis of lab certificates showing no exceedances when, in fact, the lab sample was simply not large enough to contain anywhere near a representative number of contaminant particles and the site is in fact “contaminated”.

Equally troubling is that many a site has undergone an expensive cleanup based on a reported exceedance in a one gram sample that was never representative in the first place.

A very common occurrence is to find a slight exceedance in one or more metals or PAHs on a site, which prompts further investigation, only to find these metals or PAHs have “disappeared” but are now replaced with other members in the analytical package that weren’t there first time around. The problem here is not with exceedances but with statistics.

What is the Solution?

The Ontario Ministry of the Environment, Conservation and Parks has just announced proposed changes to the Brownfields Regulation and has introduced a new Excess Soil Management regulation which once again fails to address the serious sampling issues. Indeed, it carries instructions that at least three samples from a 150 cubic metres pile of soil be analysed before it can be disposed of. That’s approximately 8 big truckloads and the 1.5 grams of soil analysed for metals (0.5 g/sample) is supposed to tell us something about the soil quality.

Finding a solution to these issues is not going to be easy because the answer is either to increase the sample size at least a 100-fold, or greatly increase the number of smaller samples.

Labs currently cannot handle the former and the client will refuse to pay for the latter, so we are left with lab results and cleanups based on very unrepresentative data.

Dr. George Duncan, M.Sc., Ph.D., P.Geo. (Limited), C. Chem., Q.P.ESA, is with A & A Environmental Consultants Inc. This article appears in ES&E Magazine’s June 2019 issue.

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