The Environmental Protection Agency (EPA) has proposed new rules that would add PFAS chemicals to the list of hazardous substances covered under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). If these new rules take effect, they will have dramatic impacts, both on consumers and public utilities. Although the EPA has made addressing the issue of PFAS chemicals a priority, the agency may be underestimating the downstream impacts of its proposed regulations. Both companies and consumers may feel the pinch of sharply increased costs as a result of these new rules.
PFAS Chemicals Are Designed to Be Durable
PFAS refers to a family of chemicals that are used to make durable and long-lasting substances. They are specifically designed to be both heat- and stain-resistant. Given the durability of PFAS, some plaintiff attorneys refer to them by the name “forever chemicals.” Plaintiff attorneys allege that PFAS chemicals have been found in the ground and water supply near areas where they are used. Although PFAS chemicals are often discussed by these lawyers in the context of the imminent danger they create, the International Agency for Research on Cancer classifies PFAS chemicals as “possible” carcinogens.
The Biden Administration Is Under Pressure to Take Action on PFAS
Environmental interests have lobbied the federal government to take strong action on PFAS chemicals. They appear to have found an ally in the Biden Administration. As a result, the EPA has proposed drastic new rules that would extend CERCLA coverage to PFAS chemicals. The new rules may have a number of significant effects, whether intended or not.
CERCLA attempts to pass the costs of cleanup to the companies that work with chemicals and substances categorized as pollutants. The government can designate certain sites as “Superfund” sites and essentially hand the bill for cleanup to the company that they deem responsible for the pollution. Superfund designation depends on the presence of “hazardous substances.”
The EPA Proposes to Classify PFAS as a Hazardous Substance
In September 2022, the EPA designated PFAS chemicals as hazardous substances. This classification may result in hundreds of billions of dollars in cleanup costs. There are nearly 3,000 sites throughout the United States that are known to contain PFAS chemicals. The alleged durable and long-lasting nature of PFAS chemicals means that remediation will be challenging and expensive.
The new rules could impose costs not only on the companies that make PFAS chemicals themselves but also on companies that use them in their products. The way that CERCLA is drafted could also mean that waste management and wastewater facilities that treat PFAS chemicals could also be liable for cleanup costs. Again, the alleged durable character of PFAS chemicals could mean an expensive and long-lasting cleanup effort.
Billions of Dollars of Liability Could Bankrupt Utilities and Mean Increased Costs for Customers
If companies are made to pay for the costs of remediation, it could impose a crippling financial burden on them. One cannot expect companies to take on these costs on their own because they may not survive. Most businesses will look to pass at least part of the costs along to consumers, meaning that there could be dramatic price hikes on consumer goods during a time of already heightened inflation.
Another area that may lead to skyrocketing costs for consumers is their utility bills. Environmentalists argue that PFAS has sometimes contaminated the water supply in areas where it is used. Even though water utilities were not the ones who used the chemicals in the first place, they are often the ones who have the responsibility of absorbing the cleanup costs. Water utilities cannot be expected to foot the bill for these costs, and in many cases, they simply cannot afford them. As a result, consumers will see sharp hikes in their water bills when PFAS cleanup is required. Although the recent infrastructure bill allocated $10 billion for PFAS cleanup in water, it is not nearly enough to pay the total costs of doing so, assuming that remediation is required.
Another area where costs may be passed along to consumers is air travel. Airports have often used products that contain PFAS, such as firefighting foams. Assuming that airports must foot the cleanup bill, they will pass the costs along to the airlines, which will in turn hike airfares yet again.
Congress Should Act, but it Is Unlikely
One potential solution is for Congress to pass a law that clarifies the extent of the exceptions from CERCLA. For example, there is currently an exemption from CERCLA that covers PFAS in fertilizers. Although this exemption is meant to cover farmers, there is some uncertainty about how it would protect farmers from the new PFAS designation. However, given the sharp divisions in the current Congress and the controversy over PFAS, it is not likely that Congress would pass any legislation. PFAS chemicals have been a controversial issue across the political spectrum, and there are numerous differing opinions.
Expect Litigation Over the Finalized Rules
For now, much depends on the scope of the regulations that the EPA finalizes. Like every agency rule, the EPA has released its proposed PFAS/CERCLA rule for public comment. Once the public has commented, the agency must consider the comments and respond in its final rule. Hopefully, the EPA will take the above factors into consideration, but its flexibility may be limited by CERCLA once it finalizes these rules. The EPA could use its discretion in enforcing the rules, but the current agency leadership seems inclined to make a broader sweep when it comes to PFAS cleanups.
In the meantime, one can expect these rules to be challenged on multiple legal fronts if and when they are finalized. Courts have recently shown a willingness to curtail agency action that reaches too far without Congressional authorization. However, they choose to act, rest assured that the end result of the actions taken by the EPA, Congress, and federal courts regarding the EPA’s new CERCLA plan could have drastic impacts on companies and consumers.