Speaker 1: Welcome to the Roots and Birds podcast hosted by Bloomberg Intelligence,
Speaker 1: the investment research arm of Bloomberg out PEAT. In this
Speaker 1: podcast series, we talk about the intersection of business policy
Speaker 1: and law.
Speaker 2: My name is Holly Frome.
Speaker 1: I'm an analyst with Bloomberg Intelligence covering consumer and industrial litigation.
Speaker 1: Today's podcast we'll focus on regulatory and other issues related
Speaker 1: to pfast chemicals, what are also called forever chemicals. I'm
Speaker 1: delighted to be joined today by doctor Betsy Sutherland, who
Speaker 1: received a PhD in environmental science and engineering from Virginia
Speaker 1: Tech and worked as senior scientist and manager of the
Speaker 1: Water and super Fund program at the US EPI for
Speaker 1: thirty three years before retiring in twenty seventeen. She's authored
Speaker 1: several papers related to pfasts and has testified before Congress
Speaker 1: on multiple occasions. Doctor Sutherland, can you tell us a
Speaker 1: little bit about your background and what you did while
Speaker 1: you worked at the EPA.
Speaker 3: Yes. After working for state and local government environmental programs,
Speaker 3: I joined EPA in nineteen eighty four. I was a
Speaker 3: scientist and manager in EPA's national Water and Superfund programs
Speaker 3: for thirty three years, retiring in August twenty seventeen as
Speaker 3: Director of the Office of Science and Technology. For my
Speaker 3: career accomplishments at EPA, I received the Presidential Distinguished Rank
Speaker 3: Award and was inducted into Virginia Tech's Academy of Distinguished
Speaker 3: Alumni for the Civil and Environmental Engineering Department. After retiring,
Speaker 3: I joined the Environmental Protection Network, a nonprofit organization of
Speaker 3: former EPA career staff and political appointees who volunteered to
Speaker 3: build the capacity of environmental agencies and communities to address
Speaker 3: urgent health and environmental crises. At EPN, I led an
Speaker 3: effort by multiple environmental groups to develop a p FOS
Speaker 3: action Plan for the Biden EPA that influence the twenty
Speaker 3: twenty one p FIST Strategic Roadmap.
Speaker 2: Can you expound on what you did for the Superfund program?
Speaker 3: Yes. In the Superfund Program, I was there for over
Speaker 3: ten years. I was responsible for overseeing the cleanup at
Speaker 3: sites around the country, providing technical guidance on cleanup levels
Speaker 3: for contaminants, and adding new sites to the national list
Speaker 3: of Superfund Sites.
Speaker 1: Interesting, and so you mentioned you worked to develop the
Speaker 1: PPAs action Plan for the biden EPA that influenced the
Speaker 1: twenty twenty one strategic growmap. Can you explain a little
Speaker 1: more what work you did on a PPAs action plan.
Speaker 3: Sure, the EPA under Trump had developed a PFOS action
Speaker 3: plan that lack key actions to prevent, control, and remediate
Speaker 3: p FOS contamination. So I invited other environmental groups to
Speaker 3: join me in developing a new PFIs action plan that
Speaker 3: included those key actions. We sent our recommended PFAS action
Speaker 3: plan to the Biden EPA in April twenty twenty one,
Speaker 3: and we were gratified to see that the PFIST Strategic
Speaker 3: Roadmap EPA released in October of twenty twenty one, incorporated
Speaker 3: many of our recommendations.
Speaker 1: Listen background here. We've been hearing a lot about PFAS chemicals.
Speaker 1: We keep hearing it's all kinds of products and its problem.
Speaker 1: Can you tell us what they are, where they've shown up,
Speaker 1: and why they are a problem.
Speaker 3: Per and polyfloro alkyl substances are a group of thousands
Speaker 3: of manufactured chemicals that have been used since the nineteen
Speaker 3: forties and many different consumer, commercial, and industrial products. Because
Speaker 3: of their widespread use and persistence in the environment, PFIs
Speaker 3: are found in the blood of people and animals. All
Speaker 3: over the world and are present in water, air, fish,
Speaker 3: and soil at locations across the US, US and the globe.
Speaker 3: Only a fraction of the thousands of PFOS chemicals have
Speaker 3: been studied, but those that have been studied have shown
Speaker 3: the potential to cause development effects in children, decrease fertility,
Speaker 3: increased risk of certain cancers, immune systems suppression, and increase
Speaker 3: thyroid and liver diseases. Both EPA and the Agency for
Speaker 3: Toxic Substances and Disease Registry continually search the world's literature
Speaker 3: for PFOST studies in hopes of finding enough data to
Speaker 3: determine the safe level of the twenty nine PPOs we
Speaker 3: can measure in drinking water. EPA's Drinking Water Rule documents
Speaker 3: the key studies on the six p foss being regulated
Speaker 3: and explains that the most sensitive effects were selected for
Speaker 3: the MCL for PFOA, the most sensitive effect within kidney
Speaker 3: and testicular cancer, PFOS liver cancer, gen X liver toxicity,
Speaker 3: p f h XS developmental toxicity, pf BS thyroid toxicity,
Speaker 3: and pfn A developmental toxicity.
Speaker 1: Interesting and those appearing about them and some of the
Speaker 1: lawsuits that we're following we've heard about those chemicals as well.
Speaker 1: So Biden's EPA passed a rule in April setting maximum
Speaker 1: contaminant levels for ppass and drinking water. And that rule
Speaker 1: says pfo A and pfos canx four parts per trillion,
Speaker 1: sets a hazard index for four other types of PPAs.
Speaker 1: Can you explain what the NCL the maximum contaminant level
Speaker 1: does and what a hazardous indexed.
Speaker 2: A hazard index means.
Speaker 3: When a contaminant occurs frequently in public water systems at
Speaker 3: a level of healthcare concern. The Safe Drinking Water Act
Speaker 3: requires EPA to establish a non enforceable maximum contaminant level goal,
Speaker 3: or an MCLG, and an enforceable maximum contaminant level or mcl.
Speaker 3: The MCLG is the level that poses no known adverse
Speaker 3: health effects. The mcl must be set as close as
Speaker 3: feasible to the MCLG, taking into consideration the limits of detection,
Speaker 3: treatment technology, effectiveness, costs, and benefits. Because PFOA and pfos
Speaker 3: are classified as likely carcinogens, EPA set their mclgs at
Speaker 3: zero and the MCLs at four parts per trillion, which
Speaker 3: is the lowest reliable detection limit using EPA's Drinking Water
Speaker 3: Analytical mail For three other p FOS chemicals, EPA set
Speaker 3: the MCL at ten parts per trillion, the exact same
Speaker 3: level as the MCLG. Because these three p foss and
Speaker 3: an additional PFOS often occur together and are expected to
Speaker 3: have additive toxic effects, EPA also regulated them using a
Speaker 3: hazard index MCL of one. The hazard index of one
Speaker 3: ensures that even if each of the four co occurring
Speaker 3: p fos is below the level of concern, their combined
Speaker 3: toxicity will not exceed the level of concern.
Speaker 2: Got it?
Speaker 1: So you said that some of these are likely carcinogens?
Speaker 1: Who has made that determination?
Speaker 3: EPA made that determination based on a review of one
Speaker 3: thousand animal and human studies of PFOA and PFOS. EPA's
Speaker 3: guidelines for carcinogenic risk assessment use a weight of evidence
Speaker 3: criteria to classify a substance in one of five ways.
Speaker 3: The highest classification requiring the most data is to be
Speaker 3: a known carcentergen asbestos as an example of that. The
Speaker 3: next highest data requirement is for classification as a likely
Speaker 3: carcinogen PFOA and PFOS. Those data met that requirement.
Speaker 1: So you had said that with regard to the four
Speaker 1: p fasts that are on this hazard indets, they are
Speaker 1: likely to occur together.
Speaker 2: Do you know why those are likely to occur together?
Speaker 3: Well, all we do know is that monitoring data from
Speaker 3: EPA's Unregulated Contaminant Monitoring program and from all the state
Speaker 3: monitoring programs show that these can mcals often co occur
Speaker 3: in public drinking water systems in many locations. We expect
Speaker 3: this is because they're all used in so many consumer, commercial,
Speaker 3: and industrial products that they're often released into the environment
Speaker 3: and then show up together in our drinking water supplies.
Speaker 2: Got it? So?
Speaker 1: The Biden administration also passed a rule in April last
Speaker 1: year designating the foss hazardous under superfund laws. Can you
Speaker 1: tell us what that means and what power does that
Speaker 1: designation give thee get?
Speaker 3: The Superfund law gives EPA the authority to clean up
Speaker 3: pollutants or contaminants that are not designated as hazardous substances,
Speaker 3: but that authority is much more circumscribed than for hazardous substances.
Speaker 3: If a substance is not designated as hazardous, EPA cannot
Speaker 3: require polluters that release this substance to notify the public
Speaker 3: when a release occurs, EPA cannot clean up the substance
Speaker 3: unless the agency can demonstrate that it poses an eminent
Speaker 3: and substantial danger. EPA cannot compel the polluters to conduct
Speaker 3: or pay for the cleanup, and cannot recover costs from
Speaker 3: the polluters for actions EPA takes to investigate and clean
Speaker 3: up non hazardous substances. As a result, the designation of
Speaker 3: PFOA and PFOSS hazardous enables EPA to expedite cleanups, clean
Speaker 3: up many more sites, and ensure the polluters pay for
Speaker 3: the investigations and cleanup.
Speaker 1: So it's a really important, powerful tool. But there are
Speaker 1: legal challenges now winding their way through the courts. They're
Speaker 1: challenging both the maximum contaminant level and the super fund designation,
Speaker 1: and both challenges argue that EPA's rules aren't justified by the.
Speaker 2: Costs of the rule.
Speaker 1: And you said, you thought you had said previously in
Speaker 1: publication that you think Trump's APay may not defend those
Speaker 1: rules in court. Can you explain why you think that is.
Speaker 3: In the recent Senate hearing on the fiftieth anniversity of
Speaker 3: the Safe Drinking Water Act, Senator Shelley Moore Capito declared
Speaker 3: that as the incoming chair of the Senate Environment and
Speaker 3: Public Works Committee, she will work with the Trump administration
Speaker 3: to redo the Biden administration's PFAS Drinking Water Rule and
Speaker 3: the PFAS Hazards Substance Designation rule. Congress cannot get rid
Speaker 3: of these rules through the Congressional Review Act because they
Speaker 3: were finalized too early in twenty twenty four. I expect
Speaker 3: that she will ask the new EPA administrator to roll
Speaker 3: back these two rules, and that he will agree to
Speaker 3: do so. If the Trump EPA decides to redo them,
Speaker 3: they will stop defending these rules in court and take
Speaker 3: a voluntary Remand.
Speaker 1: Yeah, so we'll be watching for that. It'll be interesting
Speaker 1: to see what happens. Befo're following these lawsuits now. So
Speaker 1: there are some major stakeholders opposing the rules. Can you
Speaker 1: can you tell us who those stakeholders are? And one
Speaker 1: of the challenges that have been raised in the briefing
Speaker 1: in the petition where they oppose a rule is that
Speaker 1: the cost of regulating these p fastest part of the
Speaker 1: hazard indets is four point nine million dollars annually, whereas
Speaker 1: the benefit is only six seven hundred and sixty thousand.
Speaker 2: Do you agree with that contention.
Speaker 3: Well, let's first talk about the stakeholders. The two water
Speaker 3: utility trade groups, two industry trade groups, and the Comores
Speaker 3: Company have challenged the p Fast Drinking Water standards and
Speaker 3: my opinion, and it's my opinion, their benefit estimate for
Speaker 3: treating the four hazard index chemicals grossly underestimates the real benefits.
Speaker 3: These four PFIs chemicals were chosen for regulation because they
Speaker 3: have known safe levels and thus can serve as surrogates
Speaker 3: for the sixteen pfos chemicals that have been detected in
Speaker 3: public water supplies but lack all toxicity information. The treatment
Speaker 3: required to remove these four pifis will have the benefit
Speaker 3: of reducing all the PFIs present and the drinking water supply.
Speaker 3: EPA explained in the Drinking Water Rule that they could
Speaker 3: not monetize the benefits of treatment reducing all the co
Speaker 3: occurring PIFAs along with the regulated PIFAs. EPA also explained
Speaker 3: that they could only monetize a fraction of the benefits
Speaker 3: that result from treating the regulated pipis because they lacked
Speaker 3: a methodology to monetize Number one reductions in the ability
Speaker 3: of the immune system to fight disease, number two reductions
Speaker 3: and decrease fertility, and number three decreases in thyroid and
Speaker 3: liver disease, which are the very basis of the gen
Speaker 3: X and PFBS safe levels, which are two of the
Speaker 3: four chemicals that they're claiming they do have benefits for.
Speaker 3: So again, there are seven hundred and sixty thousand dollars
Speaker 3: couldn't possibly include the real basis of reducing thibroid and
Speaker 3: liver disease, which are the need for GenX and PFBS MCLs.
Speaker 3: The challengers did not account for the benefits of reducing
Speaker 3: thibroying liver diseases or the benefits of reducing co occurring pfots.
Speaker 3: Under the Unregulated Contaminant Monitoring Program EPA requires all large
Speaker 3: and mid sized public water systems in the entire country
Speaker 3: to monitor twenty nine p FOSS between twenty twenty three
Speaker 3: and twenty twenty five. Final results will not be available
Speaker 3: until twenty twenty six, but EPA has posted all the
Speaker 3: data collected so far. The current data, representing only about
Speaker 3: half of the total, results show that systems with detectable
Speaker 3: pfas have between two and thirteen different pfas. This indicates
Speaker 3: there will be major health benefits from reducing co occurring
Speaker 3: but unregulated p fas, and again the litigants did not
Speaker 3: take any of that into consideration.
Speaker 1: Interesting, so you had said that there are sixteen, So
Speaker 1: these four pfas are asserted for sixteen p fas temicals
Speaker 1: that are detected in water but lackxic toxicity information.
Speaker 2: Can you explain why they lack toxicity information?
Speaker 3: This is a problem really worldwide with the widespread contamination
Speaker 3: throughout the globe on p fos, all of us are
Speaker 3: trying desperately to study as many of the fifteen thousand
Speaker 3: pfus that are in circulation in the world right now.
Speaker 3: So it turns out that EPA in the Biden administration
Speaker 3: spent the entire four years just coming up with an
Speaker 3: excellent analytical method for drinking water that only includes twenty
Speaker 3: nine pi fus, and we do not even have toxicity
Speaker 3: studies on all twenty nine of those PIFAs. It's really
Speaker 3: been up to EPA, the Agency for Toxic Substances, Disease Registry,
Speaker 3: and university professors around the world to try to study
Speaker 3: these chemicals and find out what their safe levels are.
Speaker 3: Industry has played no help in the agency efforts nationwide
Speaker 3: and worldwide to try to find out how toxic these
Speaker 3: chemicals are that they have released into the environment.
Speaker 2: The EPA is not going to defend these rules. Do
Speaker 2: you think that the EPA is.
Speaker 1: Going to propose a replacement standard for the MCL and
Speaker 1: what time frame would we be looking at in terms
Speaker 1: of implementation if they decided to go ahead and revise
Speaker 1: those standards.
Speaker 3: So I expect the Trump EPA will do the p
Speaker 3: Fast Drinking Water Rule with much higher MCLs for the
Speaker 3: five p fos and possibly eliminate the hazard index MCL altogether.
Speaker 3: EPA will need at least three years to propose a
Speaker 3: new rule, take public comment, and finalize the rule in
Speaker 3: twenty twenty seven. The final rule could require utilities to
Speaker 3: come into compliance in three years, which is the traditional
Speaker 3: compliance period, or they could give them five years, which
Speaker 3: is what the current p FAS Drinking Water rule does.
Speaker 3: Either way, depending on how high the MCLs are set
Speaker 3: and how long the compliance period is given, very few
Speaker 3: water systems would have to treat for pfos and they
Speaker 3: wouldn't even have to do that until twenty thirty or
Speaker 3: twenty thirty two. That would mean millions of people will
Speaker 3: continue to drink these chemicals, increasing the risk of cancer,
Speaker 3: reduce fertility, impaired child development, and suppressed ability to fight disease.
Speaker 2: That's very stuff.
Speaker 1: Do you think that Trump EPA would revise the super
Speaker 1: Fund Designation rule?
Speaker 2: And if so, how so?
Speaker 3: Again? I expect the Trump EPA will redo the pfas
Speaker 3: has a substance designation rule to exempt from liability municipal
Speaker 3: wastewater treatment plants, drinking water treatment plants, landfills, airports, and farmers.
Speaker 3: Republicans on both the Senate Environment and Public Works Committee
Speaker 3: and the House Transportation and Infrastructure Committee have unsuccessfully tried
Speaker 3: to pass laws provide these exemptions. EPA can go ahead
Speaker 3: and do those exemptions for Congress, but they will need
Speaker 3: at least three years to propose the new rule, take
Speaker 3: public comment, and finalize the rule in twenty twenty seven.
Speaker 3: I expect EPA will retain the requirement for immediate compliance
Speaker 3: that was in the original rule. In twenty twenty four,
Speaker 3: the Biden EPA issued the first ever chemical specific Enforcement
Speaker 3: Discretion memo for pifos that stated the agency would not
Speaker 3: pursue these five entities for Superfund liability EPA argued to
Speaker 3: Congress that this enforcement discretion commitment would better protect those
Speaker 3: entities from liability, and exemptions would have the following disadvantages.
Speaker 3: Number One, it will set the dangerous precedent for other
Speaker 3: hazardous substances and for other entities to get exemptions from
Speaker 3: superf liability in the future. Number two, exemptions will not
Speaker 3: shield these groups from citizen suits or torque claims, which
Speaker 3: are far more likely than super fun actions to begin with.
Speaker 3: And number three, exemptions will decrease the incentive for these
Speaker 3: entities to reduce their p FoST contamination.
Speaker 2: The EPA was proposing as role.
Speaker 1: I remember when the waste companies were asking for inxemption
Speaker 1: and the water companies were asking for inception, and so
Speaker 1: it's like an interesting policy argument because they're saying, well,
Speaker 1: we didn't we didn't create the problem, so we should
Speaker 1: be exempted from these very expensive rules.
Speaker 3: The Trump EPA revises the rule to exempt the five
Speaker 3: entities that Congress has identified. Polluters not covered by the
Speaker 3: exemptions will still have to pay for remediation. The exempted
Speaker 3: entities will not have to pay for cleanup, but EPA's
Speaker 3: enforcement discretion memo already committed to shielding them from paying. Hopefully,
Speaker 3: the exempted entities will decide to voluntarily reduce their p
Speaker 3: FOS contamination in order to protect their communities from exposure
Speaker 3: to these toxic chemicals. States can decide to use their
Speaker 3: existing authority to establish technology based PFOS permit limits for
Speaker 3: treatment plants and landfills, and municipal wastewater treatment plants can
Speaker 3: require industries and landfills that discharge into their sewer systems
Speaker 3: to pre treat for PIFOS. Frankly, it's very disappointing that
Speaker 3: these readily available actions to reduce p FOS contamination have
Speaker 3: not already been taken by most states.
Speaker 1: So if the Trump administration does go ahead and do
Speaker 1: these things, do you think that disincentivizes defendants from settling
Speaker 1: other pre fast contamination claims.
Speaker 3: I really don't think so. I don't think weakening those
Speaker 3: rules will have an effect on PFOS litigation or settlements
Speaker 3: under the Trump administration. I unfortunately expect that all of
Speaker 3: EPA's efforts to prevent, control, and remediate p FOS will
Speaker 3: be slowed and weakened as EPA steps back. However, I
Speaker 3: expect the states will take the lead on regulating pifos.
Speaker 3: A number of states have already established their own drinking
Speaker 3: water standards for a variety of PFOS chemicals, and several
Speaker 3: have banned or restricted pfas in certain products. Maine has
Speaker 3: banned land application of sewage sludge because of PIFAs, and
Speaker 3: Michigan has required all p FOS dischargers to municipal wastewater
Speaker 3: treatment plants to pre treat their waste. The Safer State's
Speaker 3: website tracks the large number of PFOS regulations and laws
Speaker 3: currently in place in the states, throughout the country and
Speaker 3: under consideration loss.
Speaker 1: The country interesting, so we'll be definitely, will definitely be
Speaker 1: watching for those lawsuits to see what happens in court.
Speaker 1: With the lawsuits challenging the rules, the super fun designation,
Speaker 1: the n CLS, it'll be interesting to see what the
Speaker 1: Trump administration does. Thank you so much, doctor Sutherland for
Speaker 1: joining us today, and we'll look forward
Speaker 2: To speaking to you in the future.