June 08, 2022
The Environmental Protection Agency (EPA) is embarking on a costly and unnecessary rule-making with significant implications for businesses, consumers, and governments alike - the designation of certain Per-and polyfluoroalkyl substances (PFAS) as hazardous under the Comprehensive Environment Response,
Compensation and Liability Act (CERCLA). This report provides new analysis on the cost of cleanup for potentially responsible parties (PRP) for Perfluorooctanesulfonic acid (PFOS) and Perfluorooctanoic acid (PFOA), which total over $17.4 billion for existing non-federal national priority sites alone.
CERCLA authorizes the use of various enforcement tools to require PRPs such as private businesses, recycling and waste management companies, and governments to cleanup contaminated sites. EPA has some existing authority to address pollutants or contaminants like PFOA and PFOS found at existing CERCLA sites that present an imminent danger to the public health or welfare. Designating PFOS/PFOA as hazardous substances would create significant uncertainty regarding estimated cleanup costs for private entities. The uncertainty is driven in large part because designation would trigger new assessment and inspection, including sites with completed cleanups, and likely resulting in new NPL listings. The result is that PRPs at existing and new sites with PFOS/PFOA contamination would incur both direct cleanup costs and indirect transactional costs associated with the cleanup .
The U.S. Chamber of Commerce engaged third party experts in environmental and economic modeling to estimate total private party costs for addressing PFOS/PFOA contamination at Superfund sites. CERCLA cleanup is already a complex process, and is further complicated by site specific variables, the inherent complexity of PFOS/PFOA, and EPA metrics guidance presently under review at the Agency.
These factors include:
• Difficulty in determining the scope of affected sites because PFOA/PFAS contamination remains mostly uncharacterized;
• Human health and environmental thresholds for PFOS/PFOA are not yet finalized by EPA;
• Specific NPL sites require remediation, but particular remedial actions are unknown and unclear because investigation has not yet begun;
• Size, complexity, and on-site specific factors such as the progress made in addressing the initial hazardous substance(s), and the overlap of PFOS/PFOA contamination; and
• A lack of clear PFOS/PFOA contamination goals for different cleanup pathways and receptors.
Additional uncertainty is created by pending and potential state-level action to regulate PFAS2 and federal and state-level environmental agency action to update disposal polices that would increase cleanup costs. The decades-long process of CERCLA remediation makes it further challenging to estimate costs today, when many remediation phases will not be implemented for another five or more years. However, this complexity does not prevent a reasonable economic analysis now with the information available, as there are known economic impacts that will flow as a foreseeable consequence of a PFOS/PFOA listing.
In the past, EPA has asserted that the costs associated with designating PFOS/PFOA as hazardous would not have an annual effect, either costs or benefits, on the economy of $100 million, which is the threshold beyond which regulations are considered “economically significant” and subject to more thorough analysis and internal review. By not designating the rule as economically significant, the agency would be avoiding the responsibility of undertaking a formal regulatory impact analysis (RIA) of PFAS cleanup costs triggered by a CERCLA designation. This agency determination would be surprising given the potential for responsible private parties, not counting the federal government (particularly the Department of Defense (DoD)), to face major cleanup liabilities at a broad range of PFAS sites.
In order to ascertain a reasonable estimate of potential private cleanup costs triggered by a CERCLA designation, the Chamber's third-party experts conducted economic modeling and analysis of financial liabilities associated with cleanup of PFOS/PFOA sites. This research found:
• Private sector cleanup costs at Superfund sites alone resulting from the proposed hazardous substance designation of PFOA and PFOS are estimated to cost between $700 million and $800 million in annualized costs ($11.1 billion and $22 billion present value costs), far in excess of the $100 million annual effect threshold requiring an RIA.
• Private site cleanup costs are only one component of total costs that a CERCLA hazardous substances designation would impose on the U.S. economy. Significant additional costs are expected to be incurred by (1) federal agencies that own and operate sites containing PFOS/PFOA, (2) municipalities responsible for community water systems, landfills, and publicly-owned treatment works, as well as at potential state and local brownfield sites. Additionally, beyond these direct cleanup costs to affected site owners that will likely be responsible for certain maintenance and operations programming, among others.
• While the Chamber acknowledges that estimating Superfund site cleanup costs is inherently uncertain, uncertainty has not prevented EPA from pursuing site cleanup and imposing these costs in the past .