Strategic Environmental Baselining Protects Buyers and Sellers of Petroleum Impacted Sites

Real estate transactions of commercial and industrial properties involve risk, especially at sites that have been impacted by petroleum products. Whether a sale involves a single gasoline station or a group of oil refineries, buyers and sellers have a vested interest in minimizing any existing or future environmental liability. Battelle scientists have now developed Strategic Environmental Baselining (SEB), a cost-effective and pro-active form of environmental due diligence that helps manage long-term liability much more effectively than conventional assessments.

SEB incorporates advanced chemical fingerprinting, a key component of environmental forensics, using modified EPA methods that are tailored for hydrocarbon fingerprinting. If contamination is newly discovered at a site, the critical question for the buyer and seller is whether it occurred before or after the sale as this most often determines who bears the liability. Thus, a critical environmental factor in most property litigation is determining the true nature of existing conditions at the time of the transaction. Legal cases have necessarily relied upon attempts to ‘age-date’ the newly discovered contamination. Unfortunately, age-dating petroleum contamination is difficult to perform and to defend technically.

Although conventional Phase I and II Environmental Site Assessments (ESAs) often identify the presence of hazardous substances at commercial and industrial properties, they do not collect chemical data that adequately distinguishes one form of petroleum from another or from other types of hydrocarbon contamination. Data that is not definitive is clearly not helpful in litigation surrounding post-sale versus pre-sale contamination.

The alternative – SEB – is an extension of the Phase II ESA that can benefit both buyer and seller in the event of future litigation. In some cases, the benefits to both parties are significant enough that they agree to a cost-sharing agreement for the SEB study. Sufficient sampling and advanced chemical fingerprinting performed at the time of a transaction provides the evidence that eliminates the need to age-date contamination at some future time. (Samples may also be taken and properly archived to await analysis, if and when needed.)

Strategic Environmental Baselining documents site conditions at the time of the sale; minimizes the seller’s exposure to future liability claims that occur because of post-sale releases; reduces the buyer’s exposure to future liability claims due to unrecognized pre-sale contamination; provides chemical data to facilitate speedy resolutions and pollution abatement; establishes a benchmark against which either natural attenuation or remediation of pre-sale contamination can be measured over time; helps recognize off-site contaminant source(s), such as an impact from a neighboring property after the transaction; and recognizes new sources of contamination from on-site operations post-sale.

While SEB studies cannot completely eliminate future liabilities, they are a significant new strategy that helps buyers and sellers reduce their exposure more effectively than conventional environmental site assessments.

For more information contact Dr. Scott Stout at (781) 952-5234, stouts@battelle.org.