There are many myths about Phase 2 projects that buyers, brokers, lenders and owners should consider when they request or review this data.  

Some are as follows:

  1. Phase 2 projects tell you a property is clean – Sampling locations are often subjective and are based on professional opinions on what samples are representative. Well designed and appropriate investigations still only provide subjective data that lessen the risk that significant contamination is present, they do not tell you a property is “clean”.
  2. There is no problem if the concentrations are below the “actionable” or “cleanup” levels – Unless SPECIFIC defensible locations are sampled (such as below a known UST location), ANY detectable concentration of contamination constitutes a release and is required to be reported to the environmental regulatory agency.
  3. Due diligence Phase 2 investigations can be less stringent and comprehensive than active leak sites – While due diligence investigations are often the initial investigation at a site, ALL phase 2 investigations should be performed to regulatory agency standards of care and practice. It should be assumed that the investigation will be reviewed by a regulatory agency, especially if any contamination is detected.  ALL investigations should be justified by having stated specific targets and written objectives as required by the agencies.

KEY CONCLUSION: Phase 2 soil and groundwater investigations must be overseen and certified by a Professional Geologist (PG).

Under the state of California Business and Professions Code, any subsurface investigation where conclusions and recommendations are made must be overseen by a PG. Historically, lenders and real estate brokers have asked for a quick Phase 2 investigation for due diligence just to see if there is an obvious problem. This approach has become a problem for a number of reasons as follows:

  • Most drilling contractors will not drill without an approved regulatory agency drilling permit. This means that is many cases, the agency will expect a report to be submitted, certified by a PG..
  • Should concentrations of chemicals be detected above regulatory levels, the owner of the property has a legal requirement to officially report it to the appropriate agency within 30 days. The use of a non-legal professional could be a further issue.

The need to conduct an “informal” Phase 2 investigation may result in incomplete or substandard geological work being performed by unqualified individuals.

ERAS employs Registered Environmental Assessors (REA) both Class 1 and 2, a Professional Geologist and a Certified Asbestos Consultant (CAC).

KEY CONCLUSION: Basic minimum costs apply for all Phase 2 subsurface investigations. Read more in this article.

Our clients are sometimes surprised at the cost of even the “simplest” Phase 2 investigation involving only 1 or 2 soil borings. This is due to what is commonly known as “economies of scale”. In this way, the cost of drilling 6 soil borings may only be 10-20% higher than the cost of drilling two, depending on the depth of the borings and laboratory analyses required.

As an example, for the drilling of one 15 foot boring in or near the Bay Area using a licensed driller, current costs are approximately as follows:

  • Drilling subcontractor $1,150
  • Locating subcontractor 350
  • Project setup/coordination 400
  • Drilling permits 300
  • Field equipment 300
  • Field Labor 600
  • Laboratory subcontractor 100
  • Report preparation 800

The total minimum cost of this simple investigation is approximately $4,000. Many of these costs would be the same or only slightly more for 1 boring or 4 for example (depending on the depth). Additional costs may apply if:

  1. the site is out of town
  2. if permit fees are higher
  3. if concrete cutting is required
  4. a work plan is necessary prior to conducting the work
  5. additional laboratory analyses or a larger number of samples is required.

A Phase 2 must also be overseen and certified by a Professional Geologist (PG), adding to the cost. 

KEY CONCLUSION: The main goal and purpose of a Phase 1 assessment is to determine the necessity of and the scope for a possible future Phase 2 subsurface investigation.

Phase 2 investigation refers to any subsurface or other sampling work that exceeds the scope of a Phase 1 ESA project. The ESA is simply an evaluation of environmental conditions based on available agency and other printed documents. A Phase 2 project may be needed to assess subsurface environmental conditions at a particular Property. This may be because of a known “pre-existing” condition such as the presence of an underground storage tank (UST), a sump (oil/water separators and clarifiers are types of sumps) used for chemicals, hydraulic lift or because the Property or an adjacent or up-gradient site is already a known leak case.

ERAS is sometimes asked to skip the Phase 1 process and perform a Phase 2 investigation. The basic purpose of a Phase 1 is to determine the need for a Phase 2 and ERAS believes the Phase 1 Environmental Site Assessment (ESA), or at least the historical research that would be performed for an ESA, is absolutely essential prior to conducting Phase 2 work for the following reasons:

The research may determine other environmental issues that could be present that could be addressed at the same time, resulting in lower overall project cost.

Details, such as construction specifications pertaining to the issue of concern, such as for USTs or sumps, may be found.

Historical research may indicate the uses of the Property, which includes the specific or likely chemicals that may have been used. These chemicals would therefore be the target for investigation and reduce the cost of laboratory testing for “everything under the sun”.

Phase 1 information provides defensible information regarding the need for and the scope of the Phase 2 investigation.

The effects of a Phase 1 or historical research are more likely to decrease than to increase the cost of a Phase 2 investigation. At the least, it provides data that can be used as legally defensible information to justify the scope and analyses that were performed for the Phase 2.

ERAS has over 25 years of experience in performing Phase 2 soil and groundwater investigation projects. ERAS follows the ABCs for these projects. Assertion supported by Basis is necessary for Credibility. Without Assertion and proper Basis for the investigation the results will be Crap.

Almost all Phase 2 investigations are designed using a biased sampling approach. That is, there should be an assertion and basis (what and why) to investigate specific sampling locations. Without knowing specific locations, the only option is to perform a random sampling approach which, unfortunately, is the approach that is recommended by many Phase 1 project consultants. Random Phase 2 investigations are quite risky and usually very expensive if they are performed correctly.

ERAS has recently recommended in a number of cases, and will continue to recommend, that Property owners do not allow non-credible, random Phase 2 investigations to be performed, regardless of what a Phase 1 consultant or a bank recommends. The economic liability of the owner for potentially spurious Phase 2 investigations is far too high.

Recommendation - ERAS recommends that any recommendations for Phase 2 investigations be scrutinized for proper assertion and basis.