pfas 2020 update - cclr webinar...2020/05/28 · state soil screening levels: pfoa (0.2 –35...
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PFAS 2020 Update: Slippery Slope or Manageable Risk for Property
Transactions and Redevelopment? May 28, 2020
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SpeakersCorey Carpenter, PhDEnvironmental Engineer EKI Environment & Water, Inc.
Corey Carpenter has over seven years of experience inenvironmental monitoring including micropollutant identification,measurement, and treatment in water resources. He joined EKI in2019 to provide support to engineering and remediation projectsincluding emerging contaminant investigations.
Trisha BlauEnvironmental Services Group Managing DirectorAON Risk Solutions
Trisha Blau is a member of Aon’s Environmental Practice based inthe San Francisco office. She draws on her experience in insuranceand environmental consulting to assist companies in evaluatingtheir environmental risks and structuring coverage for propertytransactions and redevelopment.
Nicole Fry, PhDResearch Scientist lllCalifornia Regional Water Quality Control Board
Nicole Fry joined the Regional Water Board in 2015 to providesupport reviewing risk assessments, providing risk communication,and managing cleanup cases. Currently, she is a member of theSan Francisco Water Board’s Environmental Screening Levels teamand the CalEPA Vapor Intrusion Workgroup.
PFAS: SLIPPERY SLOPE OR MANAGEABLE RISK FOR
PROPERTY TRANSACTIONS AND REDEVELOPMENT?
2020 UPDATE
28 MAY 2020
Corey Carpenter, PhDEnvironmental Engineer EKI Environment & Water, Inc.
NATIONWIDE ISSUE
9
(Environmental Working Group, 2020)
PFAS AND PROPERTY REDEVELOPMENT
Widespread
“Forever chemicals”
Omitted from prior due diligence
Insurance exclusions
Limitations of remedial technologies
Significant regulatory uncertainty
Rapidly increasing litigation
Proposed CERCLA listing
Resultant uncertainty in how to assess and manage risk
Replacement PFAS (e.g., GenX)
10(Fort Ord, Bothman)
(Brisbane Baylands, City of Brisbane)
OUTLINE
Introduction – Corey Carpenter
California Environmental Screening Levels (ESLs) &
state-wide PFAS survey – Nicole Fry
Insurance perspective – Trisha Blau
Tools to evaluate and address risks – Corey Carpenter
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Man-made chemicals
Thousands of unique chemicals
Chain length (short vs long)
Functional head group
Orientation
Carbon – Fluorine bonds
Chemical and thermal stability
Water, stain, and grease repellant
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PFOAPerfluorooctanoic acid
GenXHexafluoropropylene oxide dimer acid
PFOSPerfluorooctanesulfonic acid
6:2 FTS
6:2 Fluorotelomer sulfonate
(Agency for Toxic Substances and
Disease Registry)
PER- AND POLYFLUOROALKYL SUBSTANCES (PFAS)
HISTORICAL AND CURRENT USES
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Used since the 1940s
PFOA and PFOS were phased out
of US industry in 2000s
Replacement PFAS (e.g., GenX)
Primary & Secondary
Manufacturing
Industrial Processes
Consumer Products
Class B Firefighting Foams
Aqueous film forming foams (AFFF)
SOURCES AND PATHWAYS
14(PA DEP, 2020)
PFAS IMPACTED GROUNDWATER SUPPLY
State
Superfund Site
15(NY DEC, 2020)
Site
investigation
Remedial
investigation
Hoosick Fall, NY
PFOA > 70 parts per trillion
(EPA Health Advisory) in
drinking water
First detected in 2016
Ongoing litigation from the
Village and residents against
local industry and PFAS
manufacturers
NATIONAL REGULATORY PERSPECTIVE – US EPA Health Advisory for PFOA + PFOS at 70 parts per
trillion (ppt) in drinking water
PFAS Action Plan (2019; Update 2020)
In process of developing drinking water standards or MCLs (>5 years)
Interim groundwater cleanup guidance (PFOA & PFOS)
Screening level of 40 ppt
Remediation goal of 70 ppt
Proposed listing PFOA & PFOS as hazardous substances under CERCLA
Proposed listing PFAS chemicals to the Toxics Release Inventory (TRI)
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(US EPA, 2019)
NATIONAL REGULATORY PERSPECTIVE – STATES Adopted EPA Health Advisory Level
CO, CT, MN, MS, MI, RI:
PFOA + PFOS (70 ppt)
More stringent drinking water standards
CA: PFOA (14 ppt), PFOS (13 ppt)
NJ: PFOA (14 ppt), PFOS (13 ppt), PFNA (13 ppt)
VT: PFOA + PFOS + PFNA + PFHxS + PFHpA (20 ppt)
State soil screening levels:
PFOA (0.2 – 35 mg/kg); PFOS (0.04 – 6 mg/kg)
17(ITRC, April 2020)
Promulgated Proposed
Center for Creative Land Recycling
Webinar – May 28, 2020
San Francisco Regional
Board PFAS Sites Statewide Orders:
• 4 Airports
• PFOS > 10 ppt* & PFOA > 10 ppt*
• 29 Municipal Solid Waste Landfills
• PFOS > 1,000 ppt* & PFOA > 100 ppt*
• 25 Chrome Plating Facilities
DoD Facilities
• PFOS: 80 – 700,000 ppt**
• PFOA: 120 – 700,000 ppt**
Source: SWRCB 2019b; downloaded January 8, 2020. 19
* average concentrations
** maximum concentrations
Identifying Additional PFAS SitesInitial PFAS screening level analysis sampling will be required at sites
where there was likely PFAS use and/or discharge, such as:
• fire-fighting practice training areas;
• semiconductors;
• electronics manufacturers;
• metal plating and finishing facilities;
• mining industry (copper, gold,
aluminum, vanadium, and uranium);
• textile manufacturers and processors;
• furniture manufacturers and
upholsterers;
• carpet manufacturers;
• cardboard/paper packaging
manufacturers;
• surface coatings/paints/varnish
manufacturers and high-volume users;
• manufacturers of non-stick or known
PFAS-containing products
Initially focusing on:
• Existing cleanup cases; and
• Sites near impacted supply wells.
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ESL Specific Concerns Diagram
Indoor
Air
SoilSoil Gas
Ground
-water
Direct
Exposure
Direct
Exposure
Direct
Exposure
Odor
Odor
Taste/
Odor
Gross
Contam.
Aquatic
Habitat
LeachingVapor
Intrusion
Vapor
Intrusion
Odor
Terrestrial
Habitat
Gross
Contam.
PFOS &
PFOA are
relatively
nonvolatile
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PFOS and PFOA
ESLs
Soil
Ground
-water
Direct
Exposure
Direct
Exposure
Aquatic
Habitat
Leaching
Terrestrial
Habitat
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Human Health
Direct Exposure ESLs
• Equations: Regional Screening Level (RSL) User’s Guide
• Toxicity Values: Office of Environmental Health Hazard
Assessment (OEHHA) recommended values (2019 Notification
Level Recommendations)
• Exposure Parameters: Generic RSL & California Department of
Toxic Substances Control (DTSC) recommended values.
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Direct Exposure PFAS ESLs
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Groundwater ESLs (µg/L)
Soil ESLs (mg/kg)
Direct Exposure:
Cancer Risk
Direct Exposure: Noncancer
Hazard
MCL Priority
PFOS 1.7E-03 3.6E-02 6.5E-03
PFOA 5.4E-04 9.0E-03 5.1E-03
Note: Division of Drinking Water Notification Levels are used for MCL Priority ESLs since MCLs have not yet been developed for these chemicals.
* California Division of
Drinking Water
Notification Levels are
used since MCLs have
not yet be developed
(expected by 2023)
*
Aquatic Habitat Exposure
Pathways• Ecotoxicity
– Direct exposure – Toxicity to aquatic species form direct contact with
contaminated water.
– Secondary poisoning – Bioaccumulation-based risk to species higher in
the food chain (e.g., mammals, birds) through consumption of aquatic
species that have bioaccumulated high levels of PFAS.
• Human Health: Seafood Ingestion – Bioaccumulation-based risk to
humans through consumption of contaminated seafood.
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Fish Tissue Bioaccumulation Factor Values:
• PFOS - 13,229 L/kg (SERDP, 2020b)
• PFOA - 894 L/kg (SERDP, 2020b)
Aquatic Habitat
Ecotoxicity Levels (µg/L)
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Direct Exposure
Ecotoxicity: Freshwater
Direct Exposure
Ecotoxicity: Saltwater
Secondary Poisoning
Ecotoxicity: Freshwater &
Saltwater
Final Ecotoxicity
ESL: Freshwater &
Saltwater
PFOS 5.6E-01 2.6E+00 7.5E-02 7.5E-02
PFOA 5.4E+02 5.4E+02 4.4E+00 4.4E+00
a. SERDP, 2020a. Conder, J., et al. Guidance for Assessing the Ecological Risks of PFASs to Threatened
and Endangered Species at Aqueous Film Forming Foam-Impacted Sites. Project ER18-1614. January.
b. SERDP, 2020b. Divine, C., et al. Approach for Assessing PFAS Risk to Threatened and Endangered
Species. Project ER18-1653. March.
a ab
Aquatic Habitat – Seafood Ingestion
Human Health Levels (µg/L)
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• RSL equations
• Bioattenuation factor (BAF) values on slide 7 (SERDP, 2020b)
• OEHHA recommended toxicity values and exposure parameters.
Cancer Risk Noncancer
Hazard
Final Seafood Ingestion ESL: Freshwater &
Saltwater
PFOS 4.7E-06 3.8E-04 4.7E-06
PFOA 2.2E-05 1.4E-03 2.2E-05
Terrestrial Habitat ESLs for
Direct Exposure & Secondary PoisoningEcotoxicity-Based Levels (mg/kg)
Note: NOAEL = No Observed Adverse Effects Level
LOAEL = Lowest Observed Adverse Effects Level
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SERDP, 2020b. Divine, C., et al. Approach for
Assessing PFAS Risk to Threatened and
Endangered Species. Project ER18-1653. March.
Generic ESL Leaching Model
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ESL Leaching
Dilution Attenuation Factor (DAF)
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DAF = (6207 x H) + (0.166 x Koc)
Where:
H = Henry’s Law Constants
o PFOS: 4.7E-09 atm-m3/mol (OECD 2002)
o PFOA: 4.0E-06 atm-m3/mol (RSL Calculator, 2019)
Koc = Organic Carbon Partition Coefficient
o PFOS: 3.7E+02 L/kg (RSL Calculator, 2019)
o PFOA: 1.2E+02 L/kg (RSL Calculator, 2019)
a. OECD [Organization for Economic Co-operation and Development]. 2002. Joint Meeting of the
Chemicals Committee and the Working Party on Chemicals, Pesticides and Biotechnology.
b. USEPA. 2019. Regional Screening Levels –Calculator (online). November.
Leaching to Groundwater Soil ESLs
(mg/kg)
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Leaching: Drinking
Water
Leaching: Aquatic Habitat
PFOS 4.0E-04 2.9E-07
PFOA 9.7E-05 4.2E-07
The unique physical chemical properties of PFOS and PFOA could mean
that these ESLs overestimate the leaching potential in some situations
Ambient PFAS Concentrations
• Substitute the background concentration for the ESL when
background > ESL
• Cleanup to less than background or ambient concentrations is
generally not required.
• Include background in cumulative risk assessments so community
members can put risks from site in perspective.
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Conclusion:
Correct Use of PFAS ESLsYes
Use for initial risk assessment
Identify low-risk sites
Use to start dialogue between
regulator and discharger
No
Use as stand-alone decision
making tool
Determine what is hazardous
waste
Determine when to report a release
Confuse as policy or regulation
Use if site differs from assumptions
Definition of clean fill
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Possibly
Use as the basis for cleanup levels
Discussion Agenda
Overview of Environmental Insurance Products for Transactions
Transactional and Redevelopment Risk Options
PFAS Environmental Insurance Underwriting
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Environmental Insurance Products for Transactions
Primary Products
Pollution/Site Legal Liability (Site Owner / Seller/Buyer ) – Most common product used for transactional and redevelopment risk.
Contractor’s Pollution Liability (Contractor / Project Owner) – May also be used with a site liability policy to provide construction
pollution risk protection
28
Environmental “Transactional Risk” Contrasted
“Transactional Risk” – Environmental risks associated with “deals”.
– Arise out of pre-existing conditions in soil and groundwater unrelated to current or planned operations of the purchaser
– Typically involve allocations of risks for environmental conditions between the parties
– Cannot be addressed by risk control or management
– Environmental matters may not be addressed by Reps & Warranties Insurance
“Passive Risk” – Environmental risks that are present in all activities regardless of operations or activities of an organization
– Example: Smog in LA, Water Pollution in Mississippi River, Climate Change, etc.
“Operational Risk” – Environmental risks associated with operations and activities of an organization that could result in an
environmental release
– Factors to Consider:
• Third-party claims alleging bodily injury or property damage
• Requirement for cleanup of buildings, soil and groundwater to meet requirements of environmental laws
• Regulatory orders regarding operations
• Fines and penalties for violations of environmental laws
• Legacy product liability
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Deal Risk Challenges…Environmental Liability Insurance Solutions
The strategic use of Environmental Insurance can help buyers
and sellers reach their goals.
Buyer
Concerns
Seller
Concerns
Adequate deal
protection
Changing tax and
environmental
regulations
Post-closing
liabilities and
holdbacks
Claw-back
exposure
Extended time
to closing
Ability to
attract buyers
Representations
& Warranties
Insurance
Litigation
& Specialty
Insurance
Environmental
Insurance Deal-breaker
issues
Competing
bidders’ terms
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Timeline of Coverage*
Policy InceptionCovers New
Pollution Events
Covers Unknown
Pre-existing
Contamination • Discovery Trigger
• Third-Party Trigger
• Government Trigger
On-site and Off-site cleanup coverage
contaminants on, under or
migrating from/through the site
3rd Party Bodily Injury
3rd Party Property
Damage
Associated Legal
Defense Expense
Pollution Legal Liability - PLL
Additional Coverage
Non-Owned Disposal Sites
Transportation Pollution
Site Pollution Liability as a Transaction Deal Tool
Site Pollution Liability
– Purchased for a specific covered location or locations
– Operational exposure or redevelopment
– Multi-Year Terms
– Underwrite to exposure – no standard policy form PFAS exclusion from insurers
• Consult with counsel regarding specific PFAS due diligence for higher risk transactions
Identify current or former uses that likely involved PFAS such as major fires, known regional concerns, proximity to military
bases, onsite waste disposal impoundments or known PFAS manufacturing facilities
Limited product review, including review of MSDS
If PFAS was used in the manufacturing process, identify the disposal practices (landfill, impoundments, etc.)
May require soil/groundwater sampling via a Phase II
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Are you redeveloping one of these?
You should address PFAS in your due diligence if you are redeveloping any of the following:
– Industrial facilities that manufactured PFAS or used PFAS in their production chain
– Industrial facilities that have older wastewater impoundments or landfills
– Airports, Ports and other locations that use/used foam for fire fighting
– Former Department of Defense sites
– Municipal or industrial landfills
– Site that have recorded a large fire event
– Sites in areas with PFAS “regional issues”
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Underwriting Pollution Insurance – What is required?
Site Pollution Liability Coverage
Schedule of locations with occupancy information
Any available environmental reports, Phase I/Phase II or equivalent
Redevelopment/development plans
If no development, current operations and environmental management protocols
Claims/litigation history
Copy of PSA, including any indemnities
What happens if PFAS is suspected or known?
If the Phase I indicates manufacturing or suspected PFAS products, many insurers will issue a full PFAS exclusion unless more data
is provided.
For most insurers, any positive PFAS detection will result in a full PFAS exclusion.
Is there a responsible party already on the hook? Underwriters can craft coverage around agreements/indemnities in place.
Historical insurance archeology – Commercial general liability insurance without a pollution exclusion (pre-1985) may be a viable
solution for industrial targets/responsible parties
34
Environmental Insurance Market – PFAS Summary
No standard policy form PFAS exclusion for site pollution policies for redevelopment. Insurers will underwrite to the risk.
PFAS restrictions or exclusions at environmental insurance renewal for some operations– airports, landfills, public entities, certain
manufacturing operations
If PFAS was detected at your facility, most insurers will have a full exclusion – clean-up and third party claims
Restrictions on products pollution liability for combined general liability/pollution policies. Products pollution liability may be excluded for
certain classes of industry or moved to a claims-made versus occurrence trigger.
35
TOOLS TO EVALUATE AND ADDRESS RISKS
44
Consult with counsel and
environmental team
Deal structure
PFAS due diligence
• Phase I Environmental Site Assessment
• Phase II Sampling
Evaluate potential for liability protection
(federal/state)
Assess regulatory landscape and
direction
Availability of insurance
RemediationConsider risk
tolerance
PFAS DUE DILIGENCE Proposed listing PFOA & PFOS (and other PFAS) as hazardous substances under
CERCLA
PFAS Action Act (H.R. 535)
State listings as hazardous substances
Reopen previously closed sites for PFAS investigation
Due diligence (ASTM Phase I Environmental Site Assessment)
PFAS are likely to be added in ASTM 2020 revision
Check state regulations for PFAS hazardous listing
Potential source or impacted site
Prior Phase I ESA’s typically do not include PFAS
Seller indemnity
45
PROPERTIES WITH HIGH PFAS RISK
Primary & secondary PFAS
manufacturing facilities
Areas that Class B firefighting
foams are stored, used, or
released
Waste management facilities
(e.g., landfills)
Areas of biosolids production or
application
46(ITRC, 2020)
PROPERTIES WITH HIGH PFAS RISKPFAS Source Risk Score
DoD Facilties 100
Chemical manufacturing 100
Landfills 100
Fire training areas 75
Airports 75
Petroleum refineries 75
Textiles 50
Furniture 50
Paper 50
Rubber/plastics 50
Fire stations 25
Fabricated metal 25
47(Guelfo et al, 2018)
Years of
operationRisk of PFAS
releases
PHASE II SAMPLING – ADDRESS CHALLENGES WITH
PFAS SAMPLING AND ANALYTICS Avoid contamination?
Sample collection methods (materials, personnel)
Blanks (field, equipment, method)
Which PFAS to test for?
Depends on potential source and analytical requirements
Which analytical method do you use?
What laboratory accreditations are required?
US EPA Method 537.1 (drinking water), Method 533 (short chain PFAS), SW-843 Method 8327 (non-potable water)
Emerging and laboratory modified methods
48(US EPA, 2020)
PHASE II SAMPLING – DETECTED PFAS
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Carpet Cleaning and Treating Chrome-Plating Facility Downgradient
(Woodard & Curran, GRA Webcast, 2019)
Detected everywhere
Consult applicable federal/state regulations
Source fingerprinting
PHASE II SAMPLING – PFAS SOURCE FINGERPRINTING
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(Zhang et al., 2016)
Sample Sites
Co
nta
min
an
ts
(Carpenter et al., 2018)
REMEDIATION
Goals (federal & state)
Human health screening levels
Remediation goals
Regulatory uncertainty
Techniques
Dig and haul (excavation disposal to landfill/incinerator)
Pump and treat (sorption or membrane filtration)
Soil amendment (in-situ stabilization)
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MANAGING PFAS RISK IN TRANSACTION DEALS
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PFAS are “new”
and of emerging
concern
Previous
documents likely
not include PFAS
Consult with
counsel and
environmental
team
Establish risk
tolerance and
scope
Determine
applicable state
& federal laws
and regulations
Consider the
changing regulatory
landscape
Include PFAS in
due diligence?
ASTM Phase I
Address known
and unknown
liabilities
PFAS Risk Toolbox
QUESTIONS?Corey Carpenter, PhD
Environmental Engineer
EKI Environment & Water
Nicole Fry, PhD
Research Scientist III
California Regional Water Quality Control Board, San Francisco Bay Region
Trisha Blau
Environmental Services Group Managing Director
Aon Risk Solutions
53
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