Key Takeaways
- A Phase 1 Environmental Site Assessment (ESA) can identify potential contamination risks through research, site inspection, and interviews, while a Phase 2 ESA confirms risks through sampling and laboratory analysis.
- Phase 2 delves the deepest, delivering hard data to identify and quantify contamination, guiding future remediation efforts.
- Both ESA phases are strategically designed to ensure a property is compliant with environmental standards, ultimately protecting property buyers, lenders, and developers from costly cleanup and legal liabilities.
- It is essential to call an environmental professional before purchasing a property with an unknown history, past industrial use, or potential contamination risks like underground storage tanks.
Understanding Environmental Site Assessments (ESAs)
Environmental Site Assessments (ESAs) are detailed, professional-led evaluations of land and building usage that can identify potential contamination issues that could impact a property’s value, safety, or legal standing, making them customary before buying, selling, or developing property.
Common environmental risks that ESAs uncover include soil or groundwater contamination from underground storage tanks, the presence of asbestos or lead-based materials, and mold or moisture issues.
In many cases, these assessments are required by lenders, investors, and regulatory agencies to mitigate risk, as cleanup costs can range from tens of thousands to even millions of dollars if contamination is discovered after purchase.
ESAs are typically broken up into two separate phases, only progressing to the second phase if necessary. Phase 1 ESAs are great for identifying potential risks based on research and a walk-through inspection, while Phase 2 ESAs take the next step, testing soil, water, or building materials to confirm whether contamination is present.
The detailed guide below will help you distinguish Phase 1 vs Phase 2 environmental site assessments and understand the importance and standard operating procedure of each.
What Happens in a Phase 1 ESA
Anyone wondering what a Phase 1 ESA is should try to view it as detective work. This phase involves piecing together the history and current condition of a property to accurately assess whether contamination is present.
Read through the following considerations to grasp what goes on during a Phase 1 ESA.
Historical Research
One of the first steps on a Phase 1 ESA checklist is for the environmental professional to start digging into the property’s past. Some examples of documents and resources the professional may review are:
- Aerial photographs from past years
- Topographic maps
- Insurance maps used to calculate fire probabilities
- Ownership and land use records
- Government databases detailing hazardous sites
By performing the research mentioned above, the environmental professional may be able to reveal whether the specific property or its neighbors pose ecological risks. For instance, if a nearby building used chemicals, fuels, or hazardous materials, the land being assessed may still be affected to this day.
Site Inspection
Next, inspectors typically conduct a thorough walk-through of the site. Some examples of things they look for during this inspection are:
- Abandoned fuel tanks
- Chemical containers or left-behind residues
- Stained soil or pavement
- Dead vegetation
- Standing water or other drainage issues
Even seemingly small red flags, such as unusual soil colors or odors, can indicate deeper problems that should be explored further.
Interviews
Another critical step of Phase 1 ESAs is when inspectors speak with current or former property owners, tenants, and local officials. These conversations can uncover important details that did not show up in records. For example, they may learn about undocumented chemical spills or old, unregistered underground storage tanks (USTs).
Deliverables
After performing the sleuth-like steps mentioned above, the professional is expected to compile their findings into a Phase 1 ESA report. This document should explicitly outline potential risks that can be traced back to historical uses or visible concerns found during the inspection. If no risks are found, the process may end here. However, if red flags are raised, the report will likely reflect the professional’s recommendation for a Phase 2 ESA.
Why It’s Used
Some scenarios that may require a Phase 1 ESA are:
- Real estate transactions – Many lenders insist on a Phase 1 before approving financing, especially if the property lacks an easy-to-trace history.
- Regulatory compliance – To comply with American Society for Testing and Materials (ASTM) standards and the requirements set by the Environmental Protection Agency, many development projects necessitate a Phase 1 ESA.
- Risk management – Historically, buyers and developers have used Phase 1 reports to avoid inheriting hidden environmental liabilities.
What Happens in a Phase 2 ESA
Sometimes, further investigation is needed after the initial wave of research and inspection—that is what a Phase 2 ESA is for. Instead of simply identifying possible risks, this phase confirms whether contamination is actually present and to what extent.
Read through the considerations below to see how the steps in a Phase 2 ESA differ from the first phase.
Testing and Sampling
Using the guidance provided by the Phase 1 ESA, environmental engineers may collect soil, groundwater, surface water, or building material samples from the areas that were already flagged. For instance, the soil near a suspected UST might be drilled and tested to confirm whether a leak has contaminated it.
Laboratory Analysis
After the samples have been collected, they are taken off-site to be analyzed by an accredited laboratory. Some examples of pollutants that detailed laboratory analysis can uncover are:
- Heavy metals like lead, arsenic, and mercury
- Petroleum hydrocarbons
- Volatile organic compounds (VOCs)
- Solvents
- Pesticides
In addition to providing concrete data about what contaminants are present, lab analysis can also reveal the contaminants’ concentrations.
Risk Assessment
Once tests have been run, results should be compared against state and federal environmental standards to determine whether levels are safe, borderline, or hazardous. During this process, assessors evaluate potential impacts on human health, groundwater, soil quality, and nearby ecological systems.
Deliverables
Similar to the report at the end of the first phase, these laboratory-backed findings are typically compiled into a Phase 2 ESA report. In addition to the laboratory results, this report should include maps and figures that show contamination areas, along with recommendations for remediation, monitoring, and prevention of issues.
When It’s Needed
A Phase 2 ESA is usually only triggered when Phase 1 findings suggest a credible risk, such as if the property has a history of industrial use. It may also be needed if a buyer, lender, or regulator demands confirmation of specific environmental concerns before proceeding with a transaction.
Key Differences Between Phase 1 and Phase 2
While both Phase 1 and Phase 2 ESAs aim to protect buyers, sellers, and developers from hidden risks, each serves a different purpose. In general, Phase 1 asks the question, “Is my property at risk of environmental issues?” and Phase 2 provides the answer. Nevertheless, the table below goes more in-depth, highlighting the key differences between these two phases.
| Aspect | Phase 1 ESA | Phase 2 ESA |
| Purpose | Research and a walk-through inspection are used to identify potential environmental risks | Thorough testing and lab analysis are used to confirm and measure specific contamination levels |
| Methods | Conduct a visual inspection, look through property records, and review site history | Collect soil, groundwater, or building material samples and take them to a lab for analysis |
| Timing | Always completed before Phase 2’s thorough testing | Conducted only if Phase 1 pinpoints potential issues |
| Outcome | Determines whether risks may exist and whether they are worth testing | Provides detailed data for remediation and regulatory compliance |
Why Both Phases Are Important
Both phases work hand in hand to provide a complete picture of a property’s environmental condition. Some of the main reasons environmental site assessments are important are:
- Protecting your investment – Identifying environmental risks upfront can help you safeguard investments by avoiding large-scale remediation projects down the line.
- Ensuring compliance – ESAs can ensure you meet ASTM standards and regulatory requirements, helping you avoid legal issues or financial penalties.
- Informing decisions – Results, especially from Phase 2 ESAs, can give you the clarity needed to move forward with a sale, redevelopment, or safe property use.
When to Call an Environmental Professional
Although non-specific property inspections are common before transactions to find universal issues, some situations warrant involvement from a more specialized environmental professional. Some circumstances that demand the attention of an ecological specialist are:
- If the property is large or complex
- If the property has an unknown history or past industrial use
- If lenders or cautious buyers request Phase 1 or Phase 2 ESAs before closing
- If there are suspected spills, USTs, or chemical use
- To comply with environmental standards before moving forward with certain developments
Making the Right Choice for Your Property
When trying to distinguish Phase 1 vs Phase 2 environmental site assessments, you should remember that a Phase 1 ESA is more preliminary. It identifies potential environmental concerns, such as historical chemical use or hidden hazards like USTs. In contrast, Phase 2 confirms and quantifies any contamination through targeted testing of soil, groundwater, or building materials. Both assessments play vital roles in protecting property-related investments, ensuring regulatory compliance, and crafting effective remediation plans.
With over two decades of experience, Alpha Environmental Services stands out as one of Portland, Oregon’s most trusted resources for Phase 1 and Phase 2 ESAs. Our team of talented environmental professionals combines local expertise with precise testing methods to provide actionable insights for property owners, buyers, and developers alike.
So, if you are trying to uncover hidden risks and ensure safe property use, contact Alpha Environmental for comprehensive, accurate, and timely ESA services that are tailored to each property’s unique needs.
