March 11, 2022 – There’s been a lot of coverage of PFAS, the “chemicals forever,” over the past year. These emerging contaminants have raised concerns due to their ubiquity in the environment and our relatively limited understanding of their impacts on human health. And while it seems there are more questions than answers regarding PFAS today, growing awareness of their harmful impact could lead to increased environmental regulations and future liabilities for the real estate industry. , because these chemicals forever seem to live in building materials and soil. substances.
Therefore, it is important that those acquiring or constructing real estate understand PFAS, the changing regulatory landscape around them, and the proactive steps that can be taken to minimize potential future regulatory burdens or litigation risks.
Per- and polyfluoroalkyl substances (PFAS or PFOAS) are a family of more than 7,000 synthetic chemical compounds that have been in use since the 1930s and have expanded significantly in application over the past century. PFAS are very effective surfactants, lowering the surface tension between two liquids or between a liquid and a solid. They are also extremely heat resistant.
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PFAS are useful in a variety of applications, particularly in non-stick and waterproof coatings – for example, in your favorite pan for making scrambled eggs – as well as in fire-fighting foam, food packaging, structural resins in building materials, umbrellas, varnishes, waxes, cleaners and a myriad of other household and industrial uses.
PFAS and PFOAS with longer molecular chains tend to be the most persistent in the environment, meaning they take a long time to break down, hence the nickname “eternal chemicals”. This slow degradation process poses a risk to human health, among other environmental concerns, because it provides a continual source of exposure, which increases opportunities for bioaccumulation – or environmental “stickiness”.
PFAS are also resistant to common remediation technologies such as chemical oxidation and bioremediation used to treat other ubiquitous contaminants, making them expensive and difficult to remove from the environment.
The long-term risks of exposure to PFAS are not fully understood, and the routes of exposure have not been fully evaluated. Studies suggest that exposure to PFAS is associated with ulcerative colitis, thyroid disease, testicular cancer, kidney cancer, pregnancy-induced hypertension, increased cholesterol, and reduced infant birth weight. However, scientists and health experts are still evaluating the concentrations at which PFAS pose increased risks to humans and the environment.
Research to date has focused on the risks of PFAS in drinking water, but humans can also be affected by PFAS in air, soil, groundwater, and when PFAS particles attach to surfaces, although the degree of risk associated with each of these routes of exposure is not fully understood.
PFAS and PFOAS regulations are changing rapidly, and there will likely be significant regulatory developments at the state and federal levels over the next two to three years. Currently most of the guidelines apply to drinking water, but this is likely to change.
At the federal level, the Environmental Protection Agency (EPA) has taken steps to advance the monitoring and regulation of PFAS in drinking water and groundwater. The EPA has issued regulations requiring the sampling and monitoring of PFAS levels in drinking water supplies nationwide.
The EPA has also launched a rulemaking process that could allow the agency to label certain PFAS as “hazardous waste” under the Resource Conservation and Recovery Act (RCRA) and strengthen compliance. EPA’s ability to require remediation of PFAS through the RCRA corrective action process. President Joe Biden’s Environmental Justice Plan also pledged to set “enforceable limits for PFAS” in the Safe Drinking Water Act.
Additionally, if EPA lists PFAS as a hazardous substance under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), as well as addition to the list of regulated substances under RCRA, parties Potential culprits can expect enforcement action from the EPA at Superfund sites. . This could increase the costs of remedial action and complicate contribution and cost recovery actions.
These initiatives have the potential to trigger significant and potentially costly remediation efforts in the future. Although the EPA has issued non-binding guidelines on suggested allowable concentrations of PFAS in drinking water, there is uncertainty as to what level of PFAS concentration would be sufficient to trigger cleanup efforts, and whether such cleanups will occur. extend to media other than water. .
States are also taking a more active role in regulating PFAS. A number of states have established guidelines for allowable concentrations of PFAS in drinking water. State environmental agencies are also reviewing and issuing guidelines on PFAS as hazardous substances, which means that high concentrations in other environmental media such as soil, groundwater, and sediment could be sufficient to trigger state-mandated remedies.
Drinking water PFAS regulations are unlikely to have significant impacts on most standard private sector real estate transactions. However, the development of guidance on PFAS as hazardous substances in other environmental media could lead to unexpected future liabilities, particularly with respect to liabilities resulting from RCRA and CERCLA regulations and their state corollaries.
There are a few steps asset acquisition teams can take now to better assess and mitigate potential risks from these emerging contaminants:
•Ask your environmental consultant to add a PFAS review to the Phase I survey prior to purchase. The new Phase I survey standards allow the potential impacts of emerging contaminants, such as PFAS, to be considered as “non-scope considerations”. Obtaining this information during due diligence will be helpful in assessing potential liabilities that may arise years after closing.
• Consider purchasing insurance to mitigate potential risks associated with future liability of PFAS. Although standard environmental policies may be of questionable value, PFAS coverage is still nascent and some options offer potentially attractive coverage.
• Manage potential liability with particular attention to representations and warranties, indemnities and release clauses in the purchase and sale agreement and other acquisition documents. For sites with clear impacts or potential liability, consider a holdback or refund agreement.
•Consult an environmental advisor about the potential property impacts of developing PFAS regulations. Federal and state laws are changing rapidly, and the attorney can provide insight into existing and planned regulations that will impact the property, particularly regarding rules that impact soils, sediments, and waters. underground.
• Understand if the development of PFAS regulations could be a “re-opening” for a cleaned site. Sites that have been remediated and subject to regulatory closure may be subject to new PFAS regulations and require additional remediation.
Alexandra Kleeman is a regular environmental law columnist for Reuters Legal News and Westlaw Today.
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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias by principles of trust. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.