Environmental Studies ‘Critical’ to Property Purchases
Conducting thorough due diligence on a property’s former use and any environmental issues it may face is both sensible risk management and critical to defense against lawsuits, according to John Beauchamp, environmental product head at insurance company Beazley.
An All Appropriate Inquiry is the name given to such an environmental risk assessment. The use of such due diligence should go beyond just understanding the historical environmental conditions of the property and should also investigate any possible risks posed by recently enacted government regulations, Beauchamp writes in a column for Industry Week.
Beauchamp details a 266-acre site that is one of 89 former General Motors locations that the Revitalizing Auto Communities Environmental Response Trust is charged with selling as a result of the GM bailout. This particular site needed a soil investigation in order to receive a No Further Action letter from the state. The site may be subject to restrictions that limit its use to industrial or commercial, and that prohibit groundwater use, and $3 million has been earmarked for future investigation and potential cleanup needs.
According to a National Research Council report released in November, about 10 percent of the 126,000 contaminated groundwater sites in the United States are considered complex, with restoration unlikely in the next 50 to 100 years due to technological limitations.
The report estimated that the cost of complete cleanup at these sites ranges from $110 billion to $127 billion. The US Department of Defense has already spent about $30 billion in hazardous waste remediation to address past legacies of its industrial operations, the report says.
In March last year, Aecom released a new version of its cost-estimating program developed for environmental remediation and restoration projects. The updated Remedial Action Cost Engineering and Requirements, or (coincidentally) Racer software, contains 110 cost-estimating modules for feasibility studies, site work, waste removal, containment, treatment and disposal. The software captures waste media including air, soil, water, sediment, free product and building materials, Aecom said.
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