Company Bio

EKI Environment & Water, Inc. (EKI, formerly known as Erler & Kalinowski, Inc.) has performed comprehensive environmental engineering services nationwidefor a broad range of companies and government agencies since it was established in 1989. Over 90 percent of their work is through referrals or new business with existing clients. Their staff includes engineers, geologists, and scientists in five offices located in Northern and Southern California and Colorado.  EKI provides environmental, water, wastewater, and water resources services.

Key Takeaways

  1. Vapor intrusion is one of the most common environmental issues facing companies in industrial buildings today.
  2. Depressurization systems are common solutions to sub surface vapor issues and it is not uncommon to have to add an additional air handling solution to boot.
  3. A great environmental consultant will have built relationships within all of the regulatory agencies to be able to clarify issues and speed up remedial action plans.
  4. There are specific strategies for handling remediation issues when a property sale is in the near future.
  5. Insurance products exist that can help lessen the risk to buyers of industrial properties that have had or currently have environmental challenges.

What is vapor intrusion?

Vapor intrusion is where volatile organic compounds, which we call VOCs, are just as happy to move around in the vapor form as they are in liquid. They come from underneath the slab or through floor drains, intruding the building; it’s occurring in a lot of industrial parks. In fact, a lot of times they’ve got such a low boiling point that it takes very little heat to get them into the vapor phase. A perfect example is when you’re gassing up your car. When you pull the nozzle out of the tank and a drop of gasoline hits the pavement or the concrete, that wet drop can evaporate in about – depending on how hot the day is – two to five seconds, so gasoline is a volatile organic compound.

It doesn’t have to be very warm for VOCs to go from the liquid phase to the gas phase. I’m working on a site now that makes coatings for wood and airplanes, so they have a variety of chemicals in underground storage tanks. Interestingly enough, it’s not always the tank that leaks but rather the lines that go to them, the pumps that go to them, or the elbow joints; those are the weaker links. The tanks are really regulated, but once the leak happens and gets into the subsurface, that’s when there’s potential for a vapor intrusion problem. The most common contaminants are gasoline (we call them hydrocarbons/petroleum) or Volatile Organic Compounds which is normally some form of cleaning solvent.

The main cause of a vapor intrusion is contaminated soil or groundwater. If the contaminants are at a high enough concentration, then they off gas from the groundwater which create vapor in the soil and can cause a vapor intrusion problem.

I’m working on a site right now that near the Burbank airport. There’s a bunch of TCE, PCE, and groundwater 200 feet below ground surface. I’m not too worried about it becoming a vapor intrusion issue because the depth makes it too far for it to go anywhere and there are too many obstructions. It varies though. At the Lockheed Martin site, which is about a quarter of a mile from the site I’m working at, they had a lot of contamination make it 200 feet down to groundwater. Therefore, they’re going to have a vapor intrusion issue unless do they a soil vapor extraction. That’s where you put a well in the unsaturated zone, pull a vacuum out of it, and basically extract soil vapors in which cleans up the site.

Can it still be safe to utilize the office and warehouse if there’s vapor intrusion?

Put in a sub slab depressurization system. I did a project years ago where a church was next to the manufacturing facility. They had high levels of VOCs inside the church, so what they did to mitigate that was they ran the air conditioning system all the time. That created a higher air exchange rate within the church keeping the VOC vapors from collecting inside the church. By keeping the air moving through the church, it was protecting the church visitors.  People have AC in their buildings so it doesn’t require an upgrade.  But using Air conditioning for improved air exchange to protect occupants/visitors is really a stopgap measure because someone needs to install soil vapor wells or sub-slab depressurization system and hook that up and get those vapors from going into that building. It’s not a long-term solution.

Is vapor intrusion still prevalent with new buildings that have modern manufacturing operations?

If you look at most manufacturing facilities, many have stopped using solvents. Though some facilities still use solvents, there are those that have migrated to non VOC solvents for cleaning purposes.  They have become more sophisticated in the sense that they’re not using chlorinated solvents unless they have to.

It comes down to how they store used solvents and how they store their cleaning rags, if they have spills, and if stuff gets into one of the floor drains which then gets underneath the building. There are a variety of ways that VOCs can get into the subsurface and it doesn’t have to be from an underground storage tank. For example, somebody could be power washing and knock something over.

What is a depressurization system? How much does it cost and how long do you need it?

I talked to one of our engineers over the weekend. When we go into a building, what we’ll do is drill through the floor, put a couple of basically little steel nipples in there, and pull soil gas from underneath the slab. Then we’ll send that in a canister to a laboratory where they may say, “Holy cow, Justin. You’ve got a whole bunch of TCE under the floor.”

If this happens, what we can do for the owners is put in a sub-slab depressurization system. For a good-sized warehouse, the typical costs would be between $200,000 to $500,000 to design and install and about $15,000 to $40,000 to operate and maintain.

The time that you need it will depend on how hot the soil is and how deep the ground water is. For example, if the groundwater came from an off-site source and it’s shallow – maybe 20 feet below ground surface – then vapor may be an issue, so in order to protect your workers you may run it for the next 30 to 40 years. It’s a cost you can control, a decision you can make, and a risk management decision.

When are regulatory agencies involved in the process? Can a landlord have an issue but not report it? When must they?

Regulatory agencies are involved in the process once they’re notified or if there’s some kind of catastrophic thing like a fire big accident, so normally they need to be notified. It’s only once you surpass the threshold of acceptable levels in soil or ground water that it’s reported.

If you’ve collected information that indicates that there’s been a spill in a facility, that needs to be reported to the Regional Water Quality Control Board or the Department of Toxic Substance control. If it’s simple stuff like an underground storage tank, then you can report it to your Certified Unified Public Agency. Here in Orange County that’d be Orange County Health Care Agency.

A landlord can have an issue but not report it, but if they’ve had a spill of a chemical that exceeds allowable limits, they’re in violation. Another instance could be if you were buying a facility. You’d want to have someone look at it and tell you what chemicals have been used. During the inspection, the person could say, “It’s in your best interested to do a phase two to make sure that there are no issues here.” If something is found at a level that exceeds the accepted levels then you, the buyer, are not required to report it. That is left to the person who owns the property, the seller.

What is it like dealing with regulatory agencies?

They’re a necessary evil. They can operate super slow. I spent a lot of time in my last 10 years trying to develop relationships with the people at the regulatory agencies, so that I can move things through faster to better help my clients.

Each regional board is different. As are the DKFC officers; they have their own personalities. Some are just totally impossible – they want everything back to clean background, to zero. Some are more reasonable.

One of the projects we’re working on is cleaning up a site so that they can sell it. They want to sell it to someone who’s going to build active senior living. We were thinking about doing an in-situ chemical oxidation which is a remediation method where liquid is injected into the surface, contacts the contaminants, and oxidized them and chemically changes them into harmless constituents. I was surprised when we were talking to the regional board. The decision makers – the ones who say yes or no – said, “Oh, by the way, Steve, if you do that, you have to have two years of monitoring where the monitoring shows us that it does not rebound.” Before, they had closed a site where they had four quarters – one year of monitoring – but once they granted closure, it rebounded later. I responded, “I’ve never heard of any board asking for it,” and they said, “Well, we’re the only ones asking for it because we recently got burned.”

You want to sell an industrial property that you own that has current ongoing environmental conditions. How should you think about preparing yourself, your property and your team for the realities of selling the property?

First thing you really need to do is you need to understand where the contamination is, how bad it is, and what you can do to manage that risk. You have to ask yourself if managing that risk means remediating the site to clean it up or starting that process.

You can transfer a property with environmental issues. It takes sophisticated attorneys to do it. There are plenty of people that do it, but a lot of times, if you’re a good company and you want to sell a property, then you’re going to look for a company with resources. For example, you don’t want to sell it to a guy that just barely qualifies for his loan because if anything comes up – any kind of hiccup or any kind of cash flow issue – he’ll turn off the remediation system to try to save his business. We talked about selling a company to a firm and that is backed with paper, but it’s only as good as the paper it’s written on and that’s not good paper. It has to be sold to a company that has a good balance sheet that can manage that.

There are different types of legislation to protect people. One of them is CLARA, which provides relief to the seller for the long-term liability and the buyer as long as certain conditions are met.

With Brownfield Developments they said, “We have to get creative to make it easier for owners who are basically sitting there with dead property, a non-performing asset. We have to make a way for them to get out from underneath it. But we also need to protect the guy that’s buying because he’s not only buying a property, but a huge liability.” As a result, they’ve created some legislation and CLARA  legislation is one of the ways to do that.

What are the risks of litigation years in the future from a prior occupant (when you owned it)?

Pretend an employee says, “Steve, I got cancer working with you. I’m taking you to court.” First off, you, the owner of new building, that’s not your problem because it would be tendered under my insurance – the insurance policy that I had at that time, CGL, comprehensive per liability. My CGL policy, once they sued me, would kick in under “duty to defend” provisions within= the insurance policy,  and I would hire a consultant and an attorney, and they would work on defending me. We would look at the case and figure out if it’s justified or not and if it’s going to settlement, trial, or mediation. I’ve worked on a bunch of mediated cases.

There’s a thing under the Regulatory Agency called reopeners. This has happened a lot. I’ll give you a good example. Many years ago, when I was starting out, oil companies would sell up to 300 gas stations and we would have to go assess 25 gas stations. We’d look for soil and groundwater contamination and then we would submit reports and the regional board would say, “Okay, no further action.” Well, a couple years later, they figured out that MTBE had been in the gasoline at the site, and they hadn’t been looking or analyzing for MTBE in the laboratory analyses of the soil and groundwater samples because it was not a regulated compound. When it became regulated, we had to go back to these sites that had been closed. We collected groundwater samples and there was in fact MTBE in there. The Regulatory Agency said, “We’re reopening the case.” When they reopen that case, they do go back to the person who owned it before and say, “Hey, we’ve reopened the case because you were the responsible party.”

The trickier part of that now is if you sold that gas station from Exxon to Shell, and they’ve continued to use the same gas, you have to figure out when the leak occurred and what the apportionment is, and that’s why people hire consultants and lawyers.

People want you to be able to go back into a time machine and tell you when Owner A spilled stuff and where and when Owner B spilled stuff and where. And they want you to be able to take a look at lab analysis from chemicals in the ground and that’s difficult. There are some things to try to roughly date things, but it’s tricky. It’s very tricky. That’s when they get all kinds of experts in there and they fight it.

How do banks look at these issues? Will they lend on property like this?

Some banks, depending upon the level of contamination, what it is, and where it is, are sophisticated. They’ve got their own internal environmental department where they’ll have someone look at the situation and say, “Well, you guys have evaluated this well. You’ve got a good handle on this. Looks like this is not that big of a problem and you’re working on cleaning it up. We can lend money.”

Other banks are like “NFW”. We are not going anywhere near that. We are not touching it. We don’t want any contaminated property in our portfolio because God forbid something goes wrong or you figure something is even worse and you walk away from the property then we own a contaminated property.”

What are deed restrictions? Do you deal with that pretty often?

A deed restriction is where you’ve gotten the site about as clean as you can get it, but it’s still higher than approved regulatory levels in soil, vapor, or groundwater. To get it even cleaner, it would cost an inordinate amount of money.

Say you’ve invested money and time. You’ve worked on cleaning it up, but maybe because the soil is very tight and the VOCs are stuck in there, they’re too deep. You really can’t dig a hole 70 feet down, so that’s when you would apply for a deed restriction.

The deed restriction states that you will not put a ground water drinking well on this site. You will not sell this site to someone to use for sensitive receptors: old folks’ homes, daycare centers, schools, etc. The deed also restricts the future use of the site and it stays with the site in perpetuity. What it does is it allows you to get a no further action on that site even though you have not been able to clean it up to regulatory standards, thus you can transfer the deed as you do what the deed restriction says. It’s as if I were to sell you a car that has the front nose chopped off, but everything works. My deed restriction would be that you can drive the car, but just not at night because there are no lights.

How would you define risk in a human health assessment?

First there needs to be a contaminant, second there needs to be a pathway, and third – for a lack of better term – there has to be a receptor. If I have TCE in soil vapor, the people that can be affected by it are the people that work there and the people that live there. We calculate the time weighted average of a person that lives there every day, that works there every day, or a construction worker who may go there every now and then. Then we compare that to the levels that are in the soil or soil vapor, and how great their exposure is. One of the many things we try to do to control this is, you can have a contaminant, but if you don’t have a pathway or a receptor, you don’t have risk. You have to have all three.

We’ve looked at sites where they’re redeveloping. Sometimes they’ve got an area that’s really contaminated and hot. We’ll remove as much of the source as possible and then we’ll tell them when they’re redesigning the site to put their parking lot over this area, for example.

If you think about it, it caps it and that keeps pathway from occurring. I can still use the area, but not spend all my money cleaning it up to a higher standard because people won’t be working and breathing in the vapors there. Pathways include ingestion which occurs if VOCs are in the groundwater and you drink the groundwater, inhalation which is when the vapor gets into your lungs, and dermal contact which is when you get it on your skin.

For more information regarding this interview, please contact:

Justin Smith, SIOR

Senior Vice President

949.790.3151

jsmith@lee-associates.com

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