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Revised Texas PST Regulations

Texas Petroleum Storage Tank (PST) Regulations, the new old regulations. On March 19, 2009 Texas PST regulations completely reverted back to Texas Administrative Code (TAC) Chapter 334 Regulations after being subject to TAC Chapter 350 reporting requirements for the past 5 ½ years. PST releases that occurred after September 1, 2003 had been subject to TAC 350 (Risk Reduction Program Rule) reporting requirements. Prior to that time PST releases had been subject to TAC 334 (Underground and Aboveground Storage Tanks) regulations. The rule changes reinstate the use of TAC §§334.78 – 334.81 reporting requirements and eliminated reporting requirements for assessment, response actions, and post-response action care for releases of regulated substances from underground storage tanks (USTs) or aboveground storage tanks (ASTs) as specified in TAC 350. The inclusion of PST facilities under TAC 350 was an attempt by the Texas Commission on Environmental Quality (TCEQ), formerly Texas Natural Resource Conservation Commission (TNRCC), to create one set of rules that could be universally applied to all environmental releases covered by different TCEQ remediation programs. However, pressure from the regulated community created the necessity to revert back to TAC 334 regulations.

Under TAC 334 regulations, when risk pathways are not present or less risk is posed at a site, corrective action may generally be conducted more expeditiously. Additionally reporting requirements for leaking petroleum storage tank (LPST) sites are more simplified and low priority sites tend to obtain case closure and a “No Further Action” designation in a quicker time frame, resulting in lower costs to the responsible party.

Advantages to TAC 334 Regulations include:

  1. Simplified reports – The Assessment Report Form required under TAC 334 guidelines is less time consuming and does not require the level of effort of the Affected Property Assessment Report required under TAC 350.
  2. Focuses more on groundwater monitoring and plume stability – In the absence of receptors, groundwater monitoring is performed to demonstrate plume stability and document concentration trends. Once plume stability is demonstrated and concentration trends indicate steady or decreasing contaminant concentration trends, case closure can be requested. The process of documenting plume stability may require as little as 3 to 5 years of groundwater monitoring.
  3. In the absence of receptors, construction worker exposure concentrations can be applied as target cleanup concentrations for groundwater. Target cleanup concentrations for construction worker exposure are much more lenient especially for benzene where the construction worker exposure concentration is 20.1 mg/l compared to 0.005 mg/l – 0.5 mg/l assessment levels under TAC 350. Benzene is typically the primary chemical that tends to exceed target concentrations.
  4. The use of construction worker exposure concentrations combined with demonstration of plume stability can be helpful in obtaining case closure within a 3 to 5 year time frame.
  5. Whether you need an environmental consultant to preform a complex Phase II Environmental Characterization Project or just preform a Phase I Environmental Site Assessment on a gas station, clients are well served to hire firms with expertise in Texas.

    For questions feel free to contact me at 214-666-6800.

Posted in Environmental Due Diligence, Environmental Law, Environmental Soil Testing, Phase I Environmental Site Assessments, Real Estate, Real Estate Due Diligence, Soil Remediation.

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Foreclosure Phase One ESA

In January, my firm, Partner Engineering and Science, was engaged to do more Phase I Environmental Site Assessments (Phase I ESAs) on foreclosures than on new deals for commercial properties. Bad sign. Also as sign that purveyors of Phase I ESAs must learn to hone our product to meet a new customer need.

Regardless of whether a Phase I ESA supports a new loan of a foreclosure our primary responsibility is to identify recognized environmental conditions. That is constant. However, when doing Phase I ESAs for foreclosure we are asked to dig a little deeper and look further down the road to identify sources of liability.

When writing new loans the lender is mostly concerned with the quality of the collateral and can afford to pay less attention to environmental compliance issues if they do not have the potential to affect collateral value. As the bank has no direct ties to the tenants/occupants of the property, remote risks to tenant health are not worth exploring. When taking title to an asset, lenders often feel that all such risks must be understood and fully mitigated.

In a Phase I ESA is support of foreclosure, the lender will generally take title of the property, and once this happens, they also assume management of the property. With management comes more direct exposure to environmental liabilities associated with the property. The once distant concerns are now the direct responsibility of the bank. As such, it would be in the lender’s best interest to be more cautious with any environmental concerns, such as mold, asbestos, vapor intrusion, and hazardous waste storage.

In the world of SBA Lenders, foreclosures are governed by a different SBA Standard Operating Procedure—SOP 50-51. The SBA’s SOP for new loans and foreclosures is different. Note that the SBA expects to revise its SOP 50-51 in 2009 and the standard will likely move closer to the requirements of the SBA’s new loan SOP 50-10.

The Phase I ESA purveyor must ensure that the appropriate measures are taken to protect the interest of the lender as the liabilities for the lender are much greater during foreclosures.

Posted in Environmental Due Diligence, Environmental Soil Testing, Phase I Environmental Site Assessments, Real Estate, Real Estate Due Diligence, Uncategorized.

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