Commercial lenders and buyers rely on consultants to inform them on potential risks to their investments. The “new” and unregulated nature of emerging contaminants, however, can make ASTM-driven Phase I Environmental Site Assessments and Phase II investigations challenging even for experienced professionals. The latest (and trendiest) emerging contaminant to make news is PFAS.
Today we will provide a little background on what PFAS is/are and how they may impact your real estate transaction so you are ready for the next wave of regulation.
WHAT IS PFAS?
PFAS stands for per- and polyfluoroalkyl substances. These persistent compounds have been in use since the 1940s in the United States, and are often found in non-stick, stain-resistant, and waterproof products. There are potentially thousands of PFAS compounds, but you may commonly see references to perfluorooctanoic acid (PFOA), perfluorooctanesulfonate (PFOS), and GenX.
WHERE DO WE FIND PFAS?
Tens of thousands of products contain PFAS, including food wrappers, aqueous film-forming [firefighting] foam (AFFF), Teflon(TM) , cleaners, and more. More importantly for commercial real estate, however, is where geographically PFAS is found. Let’s start with a great graphic from the Michigan Department of Environment, Great Lakes, and Energy:
You can see from the graphic above there are several opportunities for PFAS to leach into groundwater. PFAS is persistent in the environment so sites near potential releases are a concern. The State of California has indicated locations within two miles of an airport or military base are suspect due to AFFF use. The amount of PFAS dumped in landfills can create a potential release as well, and California has indicated a one-mile radius of concern for municipal solid waste sites.
Locations with a history of chrome plating, electronics manufacturing or oil recovery may also be PFAS sites. In Iowa, PFAS has been found at both the Iowa Air National Guard base in Des Moines and at the Iowa National Guard base in Sioux City.
WHAT ARE THE EFFECTS OF PFAS ON PEOPLE?
As an emerging contaminant, PFAS exposure effects remain under investigation. That said, several states have already enacted legislation regarding PFAS, and there is general scientific agreement on several risks.
High cholesterol may be the most consistent PFAS exposure effect observed, but that is not generally thought of as a driver for environmental lawsuits. The more insidious effects do create significant risk though and include:
- Low infant birth weights
- Thyroid hormone disruption (PFOS)
- Cancer (PFOA)
- Immune system effects
Studies in lab animals have also indicated reproductive, developmental, liver, kidney, and immunological disorders.
HOW TO LIMIT RISK IN PROPERTY TRANSACTIONS
Phase I Environmental Site Assessments cover a broad range of historic, current, and potential environmental risks – but not all. Emerging contaminants like PFAS are typically out of scope for a standard Phase I because they are not yet EPA recognized as hazardous substances . The ASTM E1527 guidance document update anticipated in 2020 is expected to specifically dictate how emerging contaminants are handled. Until then you can address PFAS through an addendum agreed upon by the user(s) like asbestos, radon or other out of scope concerns .
If your Phase I ESA or screening activity supports sampling for PFAS (i.e. Phase II) it’s time for some detailed discussions with your environmental team. The recommended action level for PFAS is 70 parts per trillion, which is comparable to a few drops in an Olympic-size swimming pool. The task of preventing cross-contamination during sampling is daunting. Sampling teams simply wearing a particular insect repellent, rain gear, or using treated field notebooks could contaminate the samples. The drill rig used for sampling itself may have components that leach PFAS.
Bottom line: if you actually sample for PFAS be prepared for delays in the acquisition process. Ask your consultant how (specifically) they plan to account for potential cross-contamination. You are doing the right thing addressing PFAS now, but it may require some careful planning to keep your project on track.