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Forever Litigation: the PFAS Project

PFAS Cleanup Backers Face Unexpected Foe: Water Utilities

June 9, 2020, 10:00 AM

After decades of inaction, the federal government has gotten serious about cleaning up PFAS, a class of compounds known as “forever chemicals” that have been linked to health problems and inhabit the bloodstream of nearly every American.

Congress has introduced dozens of bills mentioning “PFAS” so far in the 2019-2020 Congress, many more than in previous years. The boom in legislation has sparked a major increase in lobbying. In 2017, only four entities mentioned the issue in government lobbying reports. In 2018, the number grew to 35, and by 2019, it rocketed to 164.

More water utilities—which have pushed back against certain provisions to clean up PFAS—have lobbied on regulation of the chemicals than any other group. They rank above the air travel industry, cities, and chemical companies, a Bloomberg Law analysis shows.

“I continue to be shocked that people charged with keeping our water clean have been among the most vocal opponents of getting PFAS out of our water, and are in many respects just as bad as many of the polluters whose mess they are charged with cleaning up,” said Scott Faber, senior vice president for government affairs with the Environmental Working Group, a nonprofit advocacy organization.

PFAS chemicals have invaded the nation’s water supply, thanks mostly to discharges from manufacturers and the use of firefighting foam by the military. Utilities are concerned about being stuck with major expenses if the compounds are declared “hazardous” under the federal Superfund law. They have also resisted efforts in Congress to push what they see as overly broad enforcement limits on PFAS in drinking water.

“We consider our top priority to be public health and that has been our mission for as long as we’ve been in existence,” said Tracy Mehan, who heads federal government affairs for the American Water Works Association, in response to Faber’s comment. The utility trade group’s membership includes over 4,300 utilities that supply roughly 80% of the nation’s drinking water and treat almost half the nation’s wastewater.

While the Superfund designation didn’t make it into law last year, some other, narrower reforms did, relating to the military. Meanwhile, nearly half the states are writing their own guidance, regulations, or legislation on PFAS chemicals, with some running into opposition from utilities.

One basic question underlies the debate over what to do about what is arguably one of the most pervasive public health threats facing Americans in years: Who is going to pay to clean up this mess?

PFAS Explained

PFAS is short for per- or polyfluoroalkyl substances, which have been manufactured and used in various products since the 1940s, most famously in DuPont’s nonstick Teflon pans, which debuted in 1946. The man-made chemicals include thousands of variations, including PFOA (perfluorooctanoic acid) and PFOS (perfluorooctane sulfonate), among the most studied in the group.

They are used in hundreds of products, including microwave popcorn bags, stain-resistant and water-repellent fabrics, and firefighting foams. One report by the Centers for Disease Control and Prevention from 2015 estimated that PFAS could be found in the blood of 97% of Americans.

PFAS compounds don’t break down and they tend to accumulate in the body, prompting the label “forever chemicals.” Scientists don’t know the environmental half-life for PFAS, which is the amount of time it takes 50% of a chemical to disappear, according to the National Institutes of Health.

The health effects of the most common PFAS chemicals, according to the Agency for Toxic Substances and Disease Registry, may include interference with the body’s natural hormones, increased cholesterol levels, immune system effects, and increased risk of some cancers.

Despite the concerns about the chemical compounds, the EPA has been slow to regulate them, critics say. In February 2019, the agency released its PFAS Action Plan and a year later, announced it was considering regulating PFOS and PFOA in drinking water and sought comment. A request for an interview with EPA Administrator Andrew Wheeler was denied.

Agency spokeswoman Corry Schiermeyer said that the EPA “continues to work on the proposed rule to designate PFOA and PFOS as hazardous substances under CERCLA,” the Comprehensive Environmental Response, Compensation and Liability Act, better known as Superfund. “In the absence of the rule, EPA has used its existing authorities to compel cleanups,” which are detailed in the plan.

“The EPA is making some progress, although at a typically slow pace,” said Seth Siegel, author of the book “Troubled Water: What’s Wrong with What We Drink.”

“Because there is such a large financial incentive for both industry and the Pentagon to stall, I don’t expect this to get addressed any time soon unless there is a public outcry,” he added.

But pressure from Congress on the EPA is mounting to do something quickly. Tests of drinking water in several states have revealed contamination, sparking public protests, switches to bottled water in some systems, and legislation in numerous state legislatures.

Who Pays?

Under proposed EPA regulation and congressional action, utilities are faced with removing the stubborn compounds from their systems and disposing of them in landfills which could be designated as Superfund sites. Water utilities are already dealing with an aging infrastructure, worries about lead, and costs associated with the coronavirus pandemic and its economic impact.

Among the tools in the EPA’s toolbox for cleaning up toxic chemicals like PFAS is the Superfund law, enacted in 1980, which gave the agency the authority to force polluters to pay for cleanup of toxic sites.

In July 2019, the Democrat-controlled House approved the National Defense Authorization Act (H.R. 2500), which contained an amendment by Michigan Democratic Rep. Debbie Dingell that would force the EPA to designate PFOA and PFOS as “hazardous” within a year, thus triggering the Superfund designation that would allow the EPA to compel cleanup.

An alliance of water associations wrote to the House and Senate armed services committees in August, saying the Superfund designation could “create liability for communities that encounter PFAS in their water treatment activities.”

The letter was signed by the American Water Works Association, the American Association of Metropolitan Water Agencies, the National Association of Water Companies, and the National Rural Water Association.

A coalition of industry groups also argued against the Superfund designation, saying such decisions are “not political questions that Congress is best positioned to address,” in a letter to the House. “EPA should retain its traditional authority to study potentially hazardous substances and to ascertain whether they should be designated under CERCLA.”

The letter was signed by more than a dozen industry associations, including the American Chemistry Council, whose members include 3M, which still manufactures PFAS compounds, and DuPont spinoff, Chemours Co., which now holds most of DuPont’s PFAS liabilities.

Faber, of the Environmental Working Group, said utilities aren’t usually big contributors of PFAS to sites that could be designated under Superfund and subjected to liability. And they don’t have deep pockets. The government usually goes after companies with resources, not “cash-strapped entities,” he continued.

Mehan, from the utilities group, said that EPA doesn’t sue municipalities under Superfund, but other entities—like polluters that have been declared responsible for cleaning up contaminated sites—"have and will. Hundreds of them.”

Mark W. LeChevallier is the former chief environmental officer for publicly traded American Water and is now a consultant. “Any utility has to be worried,” he said. “The ultimate disposal is an issue here. And that might be a concern that some utilities have. Will they have ultimate responsibility?”

PFAS Makers Pay Up

Cleanup of PFAS under proposed laws falls almost entirely on the water utilities, and largely leaves alone the companies that make the chemicals, and the military, which uses PFAS-containing firefighting foams, noted LeChevallier.

“They’re on the hook for providing the treatment and passing those costs onto the customers,” he said of utilities. “Whereas the original polluter, there’s no legislation—you’re paying for someone else’s pollution.”

Chemical companies have their own problems.

DuPont de Nemours, Inc., 3M, Chemours, and other PFAS manufacturers, as well as companies that use the chemicals in their products, face a growing barrage of lawsuits.

3M in 2018 reached a single $850 million settlement with the state of Minnesota to cover damage the chemicals caused to the state’s drinking water. Under the settlement agreement, the company admits to no “fault, responsibility, wrongdoing, or liability.”

Despite the payout, 3M on its PFAS information website says that “the weight of scientific evidence from decades of research does not show that PFOS or PFOA causes harm in people at current or past levels.”

While chemical companies only rank fourth in total entities registered to lobby PFAS issues, that’s not a true measure of their influence.

Big companies like 3M, DuPont, and Chemours employ dozens of lobbyists and spend millions of dollars each quarter on a multitude of issues. For example, 3M spent more than $1 million on lobbying in the first quarter of 2020 on at least two dozen issues and pieces of legislation, including the PFAS Action Act of 2019 (H.R. 535).

Broader Action Rejected

The spike in bill introductions coincides with the House takeover by Democrats in 2019, though some Republicans have also introduced PFAS-related bills.

In January 2019, Dingell introduced the PFAS Action Act, a sort of omnibus PFAS bill that included several proposals, among them the Superfund requirement and an enforceable limit on PFAS in drinking water. The bill passed the Democratic-controlled House in January and was dead on arrival when it hit the upper chamber.

The White House “strongly” opposed the bill, saying in a veto advisory that the legislation would “bypass well-established processes, procedures, and legal requirements of the nation’s most fundamental environmental laws.”

More recently, the Senate Committee on Environment and Public Works agreed to direct the EPA to develop a national drinking water standard for PFOA and PFOS within two years—though that language is still likely to be problematic for utilities.

The water utility associations oppose any standard that regulates the chemicals “as a group or class,” noting in a letter to Senate Armed Services Committee Chairman James Inhofe (R-Okla.) that “more research is needed to understand the health impacts of other PFAS compounds.”

However, Mehan said the association “would be open to various groupings—three, five, or some other grouping—if there is a legitimate scientific justification common to the group.”

Current legislation singles out the two most-studied compounds, PFOA and PFOS, and tasks the EPA with considering regulation of other PFAS in coming years.

Those chemicals are “the tip of the iceberg” as far as utilities are concerned, according to LeChevallier, the consultant. The utilities can deal with those two compounds. It’s the thousands of others that are part of the PFAS family that they’re worried about.

The utility associations argue that more research is needed to understand the health impacts of other PFAS, and that the EPA already has authority under the Safe Drinking Water Act to regulate them.

Colorado Pushback

Several states are years ahead of the federal government when it comes to addressing the PFAS issue. But some are battling the same lobbyists for industry and water utilities.

In Colorado, where groundwater contamination is a problem thanks in part to the military’s use of firefighting foam at its facilities, state lawmakers proposed testing requirements for drinking water and setting limits for PFAS. But the proposal didn’t survive the bill’s first hearing.

“We had pushback from the utility companies,” said state Rep. Tony Exum Sr., a Democrat who represents a part of the state that has been contaminated with the chemicals. “To mitigate and prevent is very, very expensive, as well as enforcement.”

Similar to the federal level, the groups had liability concerns, which lawmakers sought to address, “but we just didn’t have enough time to move forward,” Exum said.

“We’re going to keep working on it so we can come to an agreement,” he continued. “We can’t take clean water for granted.”

Tripp Baltz, Ellen M. Gilmer, Amena H. Saiyid, and Sylvia Carignan contributed to this report.

To contact the reporters on this story: John Dunbar in Washington at jdunbar@bloomberglaw.com; Christina Brady in Washington at cbrady@bloomberglaw.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Anna Yukhananov at ayukhananov@bloombergindustry.com

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