[00:00:00] Speaker A: But again, I mean, you know, we're just the very beginning of dealing with this problem in a real way. It's going to be probably decades of cleanup and understanding the full scope of the problem. So be interesting to see how this kind of evolves forward.
[00:00:18] Speaker B: I am Reese Tisdall, and this is future water, which we talk about all the ways which companies, utilities and people are addressing the challenges and opportunities in water. This is episode 93, and I know it's gonna be a good one. Well, one, we're only seven away from 100, which our team is already planning or throwing out ideas of how we want to present number 100, the next big milestone. But until we get there, we got seven more to go. So for episode 93, I'm joined today by Bluefield senior research director Greg Goodwin. Wanted to talk to Greg because not only has it been a while, but he's also attuned to the recent policy developments in Washington on PFAS. So obviously, there was some news that came out this past week with new guidance from the Environmental Protection Agency. So I talked to Greg about what it is, what it means, what we're thinking of Bluefield, but also take a little bit further because we've been having some discussions with clients about what the election and honestly, what some pending Supreme Court proceedings or rulings might have on the water and wastewater sector, including PFAS. So, Greg, provide some thoughts on that with everyone. So it'd be good to have him on. So talk a little bit about the size of the market for pfas, how we revised our forecast just over the past year in the wake of these mcls, which we've been waiting for. We knew it was coming down the pipe, so to speak, but also some significant legal settlements, including the three m settlement in the state of South Carolina.
Before we do that, though, and get Greg on, I thought I'd share some other news that caught my attention this past week. This is a little bit old, but I thought it was interesting. And actually it's on PFAs as well. And that's what caught my eye. So Texas county has launched a first of its kind criminal investigation into the Senagro, which it's really over. PFAS contaminated sewage sludge that has been selling to Texas farmers as an alternative to fertilizer. This is common. It's their business model. They've been doing this for a while. We've been talking in Bluefield about how this is ultimately going to be a problem because of PFAS, the sludge that was spread near the Grandview Texas. Farms came from the city of Fort Worth's wastewater treatment facility, which is about 30 miles north of the sites. And the sludge was spread on crop fields on a couple of ranches that included PFAS. The lawsuit at least alleges snagros apparently acknowledged the potential of unwanted substances, but hasn't really gone any further than that. And that makes sense because it looks like they're in a lawsuit. But what I thought was interesting, or why do we care at Bluefield is the MCLs that were just released is really about drinking water. But on the back end of this is the management of biosolids and the responsibility of the wastewater treatment facilities. Number of different questions which talked to Greg about, but also the, you know, the cost of biosolid disposal if it can't be spread on fields, which that doesn't happen everywhere, it's only in certain places, certain markets. But Senagara is not the only one doing it. Is PFAs ultimately going to put companies in legal jeopardy and therefore they can't do it? Maine has already prohibited the use of biosolids for agriculture for the same reason. So now we're moved to Texas. I suspect we may see more and more losses happening in the coming months and years. So it'll be interesting to see how this plays out. So Bluefield's closely watching this in addition to the responsibility when it comes to PFAS and wastewater and water utilities, who's ultimately responsible. So this is a PFAS episode, so be on the lookout for that. So rather than hear me talk more about it, let's get to Greg and have him share his insights on what's happening in Washington.
All right, so I'm joined here by Greg Goodwin, senior analyst of Bluefield research. So, Greg, thanks for. Thanks for jumping on.
[00:04:21] Speaker A: Thanks for having me. Reese, how are you doing?
[00:04:22] Speaker B: Pretty good. Pretty good. It's been a big week at the Bluefield office. Had people from around the country, or around the world, for that matter, coming in, and it's been good to catch up in person. Always great. And I think we've got more people coming next week as well, so.
And you're, I'm catching you right before. It. Sounds like you're headed on a vacation of sorts to the nation's capital.
[00:04:50] Speaker A: Yeah, just doing a long weekend in DC. I haven't been in a couple of years, so visiting some friends I have in the area and hitting some of the museums I haven't been to yet. There's always something new, so should be good. Hopefully the weather holds.
[00:05:01] Speaker B: Yeah. And so speaking of Washington, I asked you to jump on for a couple of reasons, but there have been developments in Washington in regards to drinking water policy. And sort of. We'll start with the obvious. The EPA has set, or at least solidified, I don't know the right way to put it, mcls for PFAS. So they've got new maximum contaminant levels or limits. And so let's just start with the basics. So just for, you know, in the event that, let's say, my mother listens to this podcast, can you explain what PFAS is and why people are concerned about it? Then we can get into some details.
[00:05:39] Speaker A: Sure. So PFAS is a class of manmade chemicals. There's every time that you read about it, there's a larger number that comes under the umbrella term PFAS. So I think the current number is 4500 or so. And they're essentially a class of long chain synthetic sort of materials that have been used in industry and consumer products around the world since around the 1940s. And there's been questions about their impact on human health since at least the 1960s. So this has been a growing problem, a huge footprint of where these sort of chemicals reside. The big problem is that they don't break down naturally. Their half lifetimes are massive. So basically, when they get in the water table, they cycle through over and over again. So they are kind of ubiquitous and they're using all kinds of household items like nonstick cookware, anything that is waterproof, like Scotch guard for people who remember that kind of stuff. Anything that is kind of used for hydrophobic or hydrophilic materials for industry and sort of cosmetic type products. They're kind of in all that stuff. So essentially they're, they're pretty much everywhere. It's kind of like the new DDT in terms of like a ubiquitous human health hazard. That's kind of of our own doing.
[00:07:08] Speaker B: Yeah, I mean, you beat me to scotchgard. That's a great one, because I remember that as a kid. So we're definitely dating ourselves a bit. But it works. It was incredible. You could split it, spray it on anything, and it was super water repellent. So between that and all the lead paint that I probably ate as a kid, you know, we'll see where this ends, but let's just talk about the EPA. So we've been talking about this a while. We put out a report, I think it was in the Q four end of last year, basically looking at, hey, we've got these new mcls coming out. It's pending. It'll probably happen in Q one. So I think we're there. So what has the EPA done and why is it significant?
[00:07:47] Speaker A: Yeah, so the main kind of law at the federal level that's relevant here is the safe drinking Water act, and there's a. A periodic process for updating contaminants that will be viewed under that. And this is the first time that new standards been set under SDWA since. Since the 1996 amendments. So there have been discussions about this regulation for the last couple of years, and there's been a number of kind of gates that the agency has had to go through in terms of review and public comment and sort of all the bureaucratic elements, but they've now finalized what will be the national standard. So, essentially, there are maximum allowable concentrations of four parts per trillion for PFOA and PFOS, which are kind of the two most ubiquitous chains within sort of the PFAS umbrella term, and then ten parts per trillion for Genx, PFNA, and PFH xs. So those are the six that are currently under this sort of regulatory regime. So that's the first time this has happened in quite some time, and it's a pretty strict standard, we could say.
[00:09:02] Speaker B: Yeah, I mean, I think that the one point is that, like you said, this is a new contaminant. Others, there have been changes in the past where levels have been changed for certain things. We were actually talking about arsenic before this, just sort of, you know, even arsenic is not being dealt with in some cases. It's still a problem.
Once again, maybe for my mother, you know. Well, how much is four parts per trillion, or what? You know, whatever the number, a part per trillion. I think someone. I don't know where I saw it. It was a. It was a good, I guess, example of, like, you know, they said, we'll just imagine a map of Texas. One part per trillion is basically equivalent to 7 sqft out of the 7 trillion sqft that make up the state. So, I mean, we're. We're not talking about a lot.
[00:09:49] Speaker A: It's.
[00:09:49] Speaker B: It's, uh, those levels, if there's. If anything, they are considered to be pretty low. And that's gonna maybe lead to my next question. So maybe the question is, all right, well, if that's the case, what's the rub? What are people, you know, what are we expecting? I know there's, you know, everything from cost to just how to deal with it, et cetera. What's your take on that?
[00:10:13] Speaker A: Yeah, so obviously, huge challenge, as you're mentioning. The other one I've heard is one part per trillion is one drop in an Olympic swimming pool, something like that, which really calls into question the difficulty for even testing for this. So a lot of challenges going forward. But I mean, we've looked at this a number of times in the past. We've forecasted remediation outlook for pfas over the last couple of years and we keep revising it upward in terms of how the regulatory regime is shaping out. So right now we're looking at, in our estimates about 13.5 billion between 2023 and 2030. And so this would be really focused on kind of the standard ways of dealing with pfas now on the drinking water side. So that would be granular activated carbon ion exchange resin reverse osmosis, where it makes sense to do so.
[00:11:01] Speaker B: Now.
[00:11:01] Speaker A: You know, the last time we had looked at that, I think it was less than half of that, around 6 billion. So this kind of updated look at the market is taking into account some of sort of the EPA nationwide mcls. We had looked at it previously before kind of at a, a state level taking a look at some of the states that are more aggressive on how they're approaching this problem. So it would be states like Michigan, New Jersey, places that have kind of an industrial legacy and kind of a large footprint of decommissioned air force bases and so forth, where things like aqueous film formatting foam was used to deal with buyers and so forth. And that's a big source of this stuff. But again, I mean, we're just the very beginning of dealing with this problem in a real way. It's going to be probably decades of cleanup and understanding the full scope of the problem. So it'd be interesting to see how this kind of evolves forward.
[00:11:51] Speaker B: Yeah, I mean, our prior forecasts initially been looking at this a while, but our forecast was about six to $7 billion over, let's say, to 2030. And I think that was the beginning of last year. We're looking at it. And that was really looking at those eleven or twelve key states, which is they had already set in motion the policies to, in many case not even levels to this degree what the EPA has proposed. So, but now this has moved it nationwide. So I think between that and there are also some legal settlements that have happened. I think we've talked about at least one of them. I think it was Ethan Edwards and I. We talked about like the three m settlement in South Carolina. You know, I think it was like a twelve to $13 billion legal settlement with three m to deal with a number of different sites. So we've gone from 6 billion to 13 and a half. But quite honestly, I mean, internally, that number is going to continue to climb upwards. I think the scale of this is going to be massive. I think, if anything, our number is partly low because of the pace of remediation and like winter states or systems utilities really going to implement any new infrastructure addresses, like you said, whether it be activated carbon, whether it be on exchange, et cetera, combination. But there are other considerations. So what might other considerations be that at least we're thinking about a blue field when you look at this.
[00:13:20] Speaker A: Right? So from a technology perspective, I mean, there's been some developments around. I mean, because the end question is always, what do we do with this stuff at the, when we finally remove it from waste streams and can we destroy it or render it inert in whatever way? So there's not yet a kind of dominant design, I guess, in terms of how remediation will be approached. So whether that's kind of a centralized approach at the utility level or whether it's going to be kind of a decentralized kind of at the producer level. So there's some open questions around that. There's been studies about this is used in, if biosolids that have PFAS within them are used as fertilizer, does that get transferred through to plant material or animal material? And I think that the science on that is not quite 100% yet. I know there's been a couple instances where, like the state of Maine had a ban on biosolids for land application due to sort of PFAS concerns. And that obviously has large implications for utility revenue streams and sort of the structure on the wastewater side. So theres still some shuffling in terms of how this will play out in terms of kind of an investment perspective on the technology side and then for the military side. So as we were kind of saying before, a lot of the really highly concentrated areas are Department of Defense responsibility or on, you know, active or decommissioned sort of military bases. So they're advocating for on site treatment rather than transportation for PFAS related materials. There's also kind of the overseas component of the US military sort of footprint and what the responsibilities are there. And also in terms of the technology itself, the build America buy America component of IJA, it's also kind of causing some supply chain constraints and issues in terms of available components and so forth. So there will be some questions in terms of the project speed that kind of get wrapped up in sort of that provision. And then lastly, you know, it was sort of alluded to a little bit earlier, but the concentrations of this are low enough that testing is a real challenge. So there's a lot of questions around sort of the lab space. Who's going to be doing the tests for this? What's the standard for the tests themselves?
It's not a easy test to perform. It's not something that every utility will be able to do in house. So how does that play out over this period of time where utilities kind of have to get in gear in terms of meeting this regulation over the next couple of years?
[00:16:03] Speaker B: Yeah, I mean, the laboratory constraints are pretty significant.
I mean, that's basically where it all starts, whether a utility or system has a problem and understanding that. And there are a number of large laboratory companies, and I know they're definitely interested in sort of building out capacity to address this. So they're trying to figure out not only the size, but the pace and need for lab testing. So it's one of the, I don't want to say overlooked, but, you know, you can throw out policies, and this is partly Ija, Ira, there are all these things being thrown out there. There's money obviously, through IIJ that's being thrown out there to help and support utilities addresses. But on the back end of that policy or the back end of the dollars are all these other constraints that have been a problem and for a number of different things, like supply chain. So one of the things that everybody was, and, you know, we're talking drinking water, right? So like we said, $13.5 billion by 2030. That's just for drinking water. You mentioned Maine, who's been dealing with using fertilizer, the biosolids for fertilizer and seizing that within the state. But everybody's talking about drinking water, like I said. What about the wastewater side? There's some other bigger pending issues there as well now.
[00:17:20] Speaker A: Yeah. So there's, in terms of, you know, so in about two years ago, EPA proposed designating PFAS, PFOA, and pfos specifically as hazardous substances under the CERCLA designation. So that's typically known as superfund for basically kind of the cleanup from the federal government side. So under this proposed designation, it's essentially EPA is seeking to hold polluters accountable for PFAS contamination, but without sort of proper protections or exemptions in place. Passive receivers of water that's contaminated with PFAS could basically be caught holding the bag in terms of the costs. So there's something that should be announced, I think, before summer of whether that's going to be a designation that holds, but that will be an important determinant of who will eventually have to pay and be sort of held responsible for pfas that exists sort of within the environment.
So, yeah, there are a number of bills and provisions that are within sort of the government right now to kind of play this out. And I think it's something that we're supposed to hear about in the next couple of months in terms of how that plays out. So you mentioned earlier sort of the class action lawsuits that have been filed to kind of hold the producers accountable. So you mentioned three m. That's the biggest one to date. And I think that's spent about twelve or $13 billion across systems in the thousands, I believe, that have some sort of claim within that settlement. And there are additional unresolved claims that could result in anywhere from eight to 16 billion that are kind of follow on effects of that settlement that might be coming down the pipe. So there's definitely kind of the legal and class actions component of things that we'll probably be seeing more of as more of this is discovered and understood. Who ultimately was sort of the culprit in putting it there.
[00:19:23] Speaker B: Yeah, I think this is, and while drinking water, this is big. This is big news and definitely progress on the regulatory side of things, the wastewater, the biosolids, this is going to get far more complicated because also, in addition, even on the drinking water side, if you're using activated carbon, if it's, you know, falls under CERCLA and it becomes, if it's hazardous waste, how is that going to be dealt with? That's just adding on cost. I mean, tipping fees for biosolids, for wastewater utilities has been climbing, I think pretty steadily over time. And then things start become hazardous waste, how is that going to be dealt with? And it's going to get really expensive. And as we know, ratepayers can only take on so much, and then who's going to step in and deal with this? These legal settlements are, you know, like we said, twelve and a half billion for three m. There are a number of other companies, you know, places like North Carolina that have been closely watched and it could be pretty significant. And then to your point, are these utilities, they're just basically pass throughs for PFAS, right? They're not generating it, they're not creating it. It just happens to be in their product. And so which is water in this case, so, yeah, and, you know, this is likely going to play out over decades. I mean, are we looking at asbestos all over again? I mean, like I mentioned, you know, we're still dealing with arsenic, and arsenic's been on, on the list. The question is, can it be enforced or to what level will it be enforced? And can particularly small, very small utilities and system operators, can they pay for all of this? So as we talk about that, one last question I have for you, which we've been having some conversations with clients in recent weeks, and that is we have an upcoming election, obviously, whether it be congressional or presidential, in the US. Are there any things that we should be thinking about or that maybe listeners could be thinking about when it comes to elections and policy? Could that, could PFAs or the EPA be impacted by that in any way for at least from a high level without getting into too much sausage making or watching the sausage being made?
[00:21:42] Speaker A: Should I say? Yeah. One thing that will be interesting to see in June is there's a pending Supreme Court case called loper bright enterprises v. Raimondo, and it deals with, I mean, it's basically a very large case that deals with all of administrative law, but essentially, you know, after the oral arguments were heard last fall, there's kind of a wide belief that the previous sort of precedent that controlled the last 40 years, which is essentially that in cases where legislation had any sort of vague aspects to how regulations are carried out, the deference would go to sort of the executive branch. It's believed by court watchers that that precedent will no longer hold going forward. So it kind of depends on how the court decides to answer the question as a whole. But it's conceivable, I would think that depending on how these regulations have been stipulated under SDWA and depending on how the court decides that there might be some legal challenges in terms of EPA's authority to bring some of these regulations and that might play out over the next couple of years. So that's sort of an open question, and that's something that's sort of irrespective of how November plays out. And then I think in terms of the Biden administration has sort of put down a position through IIJ funding and sort of the way that law was passed that there are specific monies that are allocated towards PFAS remediation in specific for sort of how that bucket of spending comes together to the extent that, you know, there would be another round of something similar or, you know, water focused dollars that kind of follow that is sort of a, it's a tough question to, you know, to address in terms of, you know, who's going to be controlling each branch and how they decide to move forward on this. So I'm not exactly sure how that will play out. But certainly, you know, there's some stuff on the court side of things that are, I think, worth watching. Based on recent years of EPA sort of authority being trimmed back in certain areas around kind of how waters of the United States is defined and, you know, sort of overturning of some previous precedents. There's another one this year that could add to that.
[00:24:04] Speaker B: Yeah, no, I think, no, that's really interesting. And like you said, this pending Supreme Court ruling, which I think is expected this summer, and that's really a result, in some respects, of the last Trump administration. Right. And really the appointments of justices on Supreme Court. So that's really how this is playing out. So there's a bit of a lag here. I mean, it's like you said, Biden's already sort of played his hand. We kind of know where he stands. Obviously, the point of this conversation was the MCL. So we've already talked a little bit about that. So I know that clients are closely or starting to watch what's happening within the, within not only supreme Court, the EPA. Like you said, you mentioned waters of us. So we're talking like, Sackett versus EPA, and then where there's a West Virginia air quality ruling. But like I said, chipping away at the EPA. So all super helpful, Greg, thanks for jumping on. Really appreciate it. And enjoy your trip to Washington, which is where you're headed later today. So we'll talk soon.
[00:25:11] Speaker A: Thanks, Reese.
[00:25:14] Speaker B: All right. That was awesome, Greg. He's a policy watcher. That's what he likes to do. So I appreciate him getting on and sharing some of his insights.
I will do this because the other day I was listening to the New York Times, the daily podcast, and they had one episode specifically on PFAS, goes back into the history of PFAS, where it came from over time, and gives a good background as well, a little bit more historical detail than Greg provided. I think we've talked about PFAS on the future Water podcast before, but I would say today's the 18th. It's, let's say it's probably the April 16 or so. The daily podcast had an episode on PFAS, so I just wanted to share that. Maybe the daily will give us a shout out. But also, I wanted to thank Mike Galer for pulling all this together. I know periodically I throw his name out there in appreciation, but I don't do this alone. There's a lot of people that get involved in this, whether it be the Bluefield marketing team, production team, but also Mike Gaylor behind the scenes is also producing this and cleaning up the mess in many respects. So thanks, Mike, for that. So before we sign off, if you're in Boston, Barcelona got clients coming in next week. Look forward to that. And then headed down to Atlanta, see some others. So if you're anywhere near us in Boston Barcelona, let us know. We'd love to have you in the office, grab a coffee, or just have a meeting. Please subscribe to the Future Water podcast. Give us a review.
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