Written by Steve Henshaw, P.G., President & CEO, EnviroForensics
As seen in the April 2009 issue of Western Cleaner & Launderer
For years dry cleaners have suspected that they might have an environmental problem, but have been afraid to find out whether they do or not. It’s always reminiscent of an ostrich with his or her head in the sand, but it’s completely understandable why dry cleaners would be afraid of collecting soil and groundwater samples at their site. Of course the biggest reason for not looking into the environmental conditions at your site or sites is opening up that proverbial “can or worms” or maybe it’s “Pandora’s Box”. Simply stated, the cost of an environmental cleanup would cause financial hardships at best. That being said, this issue causes many a dry cleaner to lose sleep.
So what triggers an environmental investigation?
Some times you can control the situation, but most of the time you can’t. More times than not, the triggering event is a requirement by a bank lending on the property. Specifically, the property owner wants to refinance his or her property or a perspective buyer of the property is trying to obtain financing.
What happens once the environmental investigation is triggered?
Next the bank will require a Phase I Environmental Site Assessment or Phase I ESA.
A Phase I ESA is a due diligence evaluation of the property to identify potential or existing environmental contamination liabilities. This work is conducted under guidelines established by ASTM International. ASTM International is an organization made up of engineers, scientists and policymakers that set technical standards for all types of materials, products, systems and services. The consultant conducting the Phase I ESA will inspect the site for signs of staining, evidence of spills, stressed vegetation, determination of underground and above ground tanks, secondary containment, violations and operating practices. They will evaluate records at the fire department, local health department, state environmental agencies, and federal EPA, to determine whether fires or chemical spills were reported on the subject property or on neighboring properties. This review would also evaluate what businesses are operating in the near vicinity that could cause environmental impacts that could impact the subject site. The most current guidance protocol is set forth in ATM E 1527-05, known as “All Appropriate Inquiries” and can be found on the internet. Never does a Phase I include actual subsurface samples such as soil, soil gas, or groundwater.
What happens after the Phase I ESA?
Should the Phase I ESA identify a reasonable potential that soil and groundwater may be impacted, the consultant will suggest that a Phase II ESA be conducted. This will include actual collection of subsurface samples to determine whether the property has been impacted with chemicals that pose a risk to human health or the environment. And this is where the costs start to mount, should chemicals be identified.
Other issues out of your control that trigger environmental investigations include:
- Contamination showing up in municipal or private drinking water wells;
- Contamination showing up beneath neighboring or downgradient properties; and
- Regional investigations conducted under the direction of state or federal regulatory agencies such as those conducted in Modesto and a new investigation starting in Visalia.
What would happen in those situations?
Typically it means perchloroethylene (PERC) has been identified in the groundwater and because PERC is a common dry cleaning solvent, focus is put on dry cleaners both past and present. We have seen situations where the State of California found levels of PERC in municipal drinking water wells and immediately set out to identify all dry cleaners that operated within a mile radius of the well over the past 50 years. By using old phone books and city directories it is fairly easy to identify the address, name and period of time that a dry cleaner has operated at a location. We have seen the State pursue a retired couple that operated a dry cleaner for just two years from 1958 through 1959. While we don’t believe that in the end the State required this couple to cleanup the contamination, they spent time and money defending themselves from the long arm of the law.
Why would you want to open “Pandora’s Environmental Box”?
While I hate to be the bearer of bad news, it’s important that all dry cleaners understand how investigations are triggered and what to expect once they are triggered. For this reason we always talk about finding the businesses or property owner’s old comprehensive general liability (CGL) insurance policies. Most people that know me understand that these old policies may be the most valuable paper you could ever have. Old CGL policies written before 1985 or 1986 do not have absolute pollution exclusion language in them and therefore may be used to defend the insured against claims. A claim is what an “injured” party can bring against a business or individual that owned or operated a business that is found to have any amount or responsibility for the contamination found in the subsurface, typically the groundwater.
What else you’d like to mention about environmental investigations?
For now, my goal is to educate you about the environmental arena. There are seven things I want people to…
- To understand how investigations are triggered.
- To understand that old insurance policies of yours or those that you bought your businesses from may be worth millions of dollars.
- For dry cleaners to be aware of their surroundings and what drilling activities are happening in your neighborhoods.
- For dry cleaners to know your rights by reviewing your lease agreements.
- For dry cleaners and manufacturers to find your old insurance policies and store them securely.
- Securely store information regarding the individuals that operated at your location before you did.
- To seek qualified environmental assistance.
And to remember the story of Pandora’s Box… Zeus had given Pandora a box and told her not to open it, but she did anyway. And even though all evils subsequently unknown to man escaped from the jar, at the very bottom of the jar there lay hope.
With 30 years of experience, Mr. Henshaw holds professional geology registrations in numerous states. As President and CEO of EnviroForensics, Mr. Henshaw serves as a client and technical manager on projects associated with site characterization, remedial design, remedial implementation and operation, litigation support and insurance coverage matters. He has acted as Project Manager or Client Manager on several hundred projects, involving dry cleaners, manufacturers, landfills, refineries, foundries, metal plating shops, food processors, wood treating facilities, chemical blenders, and transportation facilities.