This is the second installment of a three-part series on EPA’s new chemical program and its impacts on commercialization. Tomorrow, Bloomberg Environment will run the third and final segment.
Chemical Innovation in the 21st Century
For those of us who have been laboring in the TSCA vineyard for decades, the extent of the disruption caused by the EPA’s early implementation of new TSCA was quite surprising. As noted, EPA review of new chemicals under old TSCA worked well and, while Congress made measured changes to the law, the seismic changes in EPA implementation since June 2016 were unexpected and have not advanced TSCA’s goals of increased chemical safety. Some respected members of the TSCA stakeholder community will disagree with this statement, but the truth is that it did. That TSCA needed revision in other key areas was indisputable and this firm supported TSCA reform long before it was embraced by the industrial chemical community. Nonetheless, the great difficulty that EPA has had in implementing the law in a way that recognizes and values innovation in the 21st century is puzzling. These aspects are discussed below.
The TSCA revisions and EPA implementation of them inexplicably fail to appreciate and value innovation and the fact that industrial chemical innovation is not the same as it was when TSCA was enacted in 1976.
An argument can also be made that the language that appears in new TSCA Section 5(e)(1)(A) that tells the EPA to regulate new chemicals for which it has made a Section 5(a)(3)(B) determination “to the extent necessary to protect against an unreasonable risk of injury to health or the environment, without consideration of costs or other nonrisk factors…” (emphasis added) was completely unexpected and may have contributed to the early implementation problems and to confusion about what Congress intended. The language is incongruous relative to the rest of new TSCA’s text and was unexpected for several reasons. Little or nothing in the legislative history of hearings, testimony, and congressional statements prior to the passage of Lautenberg sets the stage for an approach wherein cost-benefit aspects should not be considered by EPA in taking action to control new chemical risks. On the contrary, there are instances where statements noted the importance of recognizing the health and environmental and performance benefits of new chemicals (see, for example, written testimony of Craig Morrison, Momentive Performance Materials Holding, LLC:
“Innovation is critical to the survival and growth of our industry and the downstream industries that we supply. To remain a market leader, our process of research, development, product testing and introduction is nearly constant. That is why an efficient, effective process to evaluate and approve new chemical innovations is vitally important to the chemical industry and why I will be focusing my comments on Section 5 of the Toxic Substances Control Act, known as the New Chemicals Program. … TSCA Section 5 established a rigorous process to evaluate and approve new chemistries in a way that protects health and the environment, enables continuous innovation, and allows new transformative products to come to market. Ensuring that this remains the case as part of any new effort or reform to modernize TSCA should be a top priority.” Regulation of New Chemicals, Protection of Confidential Business Information, and Innovation: Hearing Before the Subcomm. on Environment and the Economy of the H. Comm. on Energy and Commerce, 113th Cong. (2013), Serial No. 113-68.
Section 5(e) as amended stands alone as the only control provision in new or old TSCA that does not consider cost or cost-benefit aspects in taking regulatory actions. Such considerations are part of Section 5(f) and Sections 6(a) and (c), and requirements to consider cost aspects in taking regulatory action to require testing under Section 4 (subsection 4(b)(1)(C) states that the considerations in requiring testing “shall include the relative costs of the various test protocols”) and reporting under Section 8(a) (subsection 8(a)(5)(B) requires that EPA “minimize the cost of compliance with this section”). Regarding this issue, during questioning by Sen. David Vitter, Linda Fisher, then vice president and chief sustainability officer, DuPont, stated the following: “I think that is a big step forward from the current law, and I think you have made it clear that the cost benefit analysis really goes to the risk management decision piece, not the safety standard and the safety determination piece.” Strengthening Public Health Protections by Addressing Toxic Chemical Threats: Hearing Before the S. Comm. on Environment and Public Works, 113th Cong. (2013), available at https://www.gpo.gov/fdsys/pkg/CHRG-113shrg96018/pdf/CHRG-113shrg96018.pdf.
This provision in Section 5(e) is also in considerable tension with the overarching policy guidance found in TSCA Section 2(b)(3) that EPA should exercise its regulatory authority “in such a manner as not to impede or create unnecessary economic barriers to technological innovation.” It is also inconsistent with the policy guidance embodied in the Pollution Prevention Act.
Perhaps the best that can be said about this problematic language in Section 5(e) is that it illustrates well the unintended consequences of hurried decision-making that lacked transparency and, apparently, first-hand knowledge of the chemical industry and how and why new chemicals are created. Nonetheless, it has had real world consequences in that EPA, unlike under old TSCA, no longer gives value to improvements in new chemicals that, relative to the existing chemical competitors, indicate they have pollution prevention benefits or are more energy or process efficient or possess other non-risk attributes that can greatly benefit society and the environment.
The profound impact of chemical exposures to human and environmental health is well-understood today by all stakeholders as well as by the general public, and more is learned daily. The twin concepts of environmental protection and pollution prevention are deeply ingrained in our collective consciousness and the vast majority of chemical innovators and manufacturers are committed to these goals.
Most new chemicals are largely products intended to achieve a particular, and often discrete, market need. Many are not intended for continuous production. They are often high value, low-volume products that are often batch produced. Most “new chemical” products are not entirely new but are chiefly intended to improve on the functionality and performance of existing chemicals by commercializing new chemicals that are more efficient, with better processing options, better performance, and less toxic. Based on our experience, most of the time the improvements seen with new chemicals are incremental. New chemicals also frequently have only a limited time-period of commercial success as, over time, “new and improved” substances replace their new chemical predecessors. In this regard, it would be useful to have a clearer understanding of the typical commercial life of new chemicals to understand better how long and at what volumes they remain in the market. The reporting under the Chemical Data Reporting (CDR) rule should provide an excellent data set for such an analysis which, insofar as it has access to both confidential and non-confidential reporting, could be undertaken by EPA.
The net result of these factors is a strong continuous improvement and “creative destruction” effect. Increased product efficiency also translates into less material being used, and less material being released into the environment, which is the very essence of pollution prevention. The availability of better processing options, including equal or improved performance at lower temperatures, leads to reduced energy usage and potentially safer work environments. These are goals TSCA was intended to achieve.
Other commercial and legal drivers reinforce these fundamental goals. Ever-mindful of tort and product liability, evolving and increasingly stringent stewardship standards, and private codes of conduct that significantly exceed legally enforceable limits, chemical manufacturers are driven to diminish risk at many levels. The glare of an unforgiving stakeholder community that holds companies immediately accountable for missteps (real or perceived) in the court of public opinion through social media, and the relentless pressure on corporate entities to diminish their environmental footprint, chemical innovation today is fundamentally different from what it was four decades ago. Not only is the global commercial context of chemical production completely different today (legislative examples include the European Union’s Registration, Evaluation and Authorization of Chemicals (EU REACH) and the Canadian Environmental Protection Act (CEPA), among others), so also is the role new chemicals play in the 21st century. Chemical innovation is essential to achieving sustainable prosperity. New chemicals enable technologies designed to diminish greenhouse gas emissions, achieve significant energy reductions, facilitate the development of new, lighter, and more sustainable materials, contribute to the optimization of renewables, and in countless other ways help to actualize the potential to achieve sustainable prosperity.
These facts of chemical life have taken a distant back seat to a misperception that new chemicals are designed and produced in a factual and experiential vacuum, devoid of the business realities of life in the 21st century. Today, new chemicals are developed and engineered with careful consideration given to the consequences of human and environmental exposure to them, focused on satisfying the increasing demands of a supply chain whose appetite for risk is extremely low, mindful of the high cost of product and tort liability, and cognizant of the tremendous upsides of “green” chemistry. Our concern is there has been too little focus on the consequences of an EPA new chemicals program that seems to approach all new chemicals as needing regulation as a predicate to safe use. While this may be appropriate in the case of a registration program for substances that are known to be biologically active and are intended to be administered (drugs) or applied (pesticides), Congress chose not to go in this direction in constructing new TSCA. In its REACH legislation, the EU employs a third paradigm—testing is required to enter the market. Only a small fraction of registered substances are subject to regulatory restrictions. Nevertheless, we are confronted with a new chemicals program that causes innovators of new chemical technologies that offer considerable societal, health, and environmental promise to experience unpredictable delays of a year or longer in commercialization, delays that may cause them to abandon commercialization efforts altogether. The statistic in Table 2 (see first installment of this series) indicating that withdrawals of PMNs represents 26 percent of the new TSCA completed cases actions is dismaying; this compares to withdrawals of about 5 percent of PMNs under old TSCA. While some increase in withdrawals might be expected during the initial period as the chemical community adjusted to new TSCA, this figure strikes us as excessive.
Congress and most stakeholders could not have wanted this outcome. Yet EPA’s overly conservative, if not overtly precautionary, approach to new chemicals reviews, in conjunction with the unexpected effect of the changes made to Section 5 in the new law has yielded exactly this result. If Congress had intended EPA to take such a dramatic and more precautionary approach under TSCA, it would have included language such as “reasonably certainty of no harm” instead of “not likely to present unreasonable risk” or have specified that Section 5(a)(3) determination be hazard-based rather than risk-based. Congress did neither, and we find it difficult to reconcile EPA’s practice since Lautenberg’s enactment with the statutory language.
Perhaps the most compelling example of EPA’s precautionary approach is the ironic fact that if the substances listed on EPA’s Safer Chemical Ingredient List were subject to Section 5 review post-Lautenberg, many would have been heavily regulated with a consent order. Although we have asked several times, EPA has yet to provide a rationale for how a chemical can both be exemplars of “safe” chemicals and yet require full-face respirators and prohibited consumer uses if they had been the subject of post-Lautenberg PMNs.
EPA’s departure from its previous practices is due principally to its interpretation of what is “not likely to present unreasonable risk” under the reasonably foreseeable conditions of use. There are several points in this standard that require EPA to make a judgment: How unlikely does a circumstance need to be to be deemed as “not likely,” what is an “unreasonable risk,” and what is a “reasonably foreseeable” condition of use.
What is “likely” can be addressed by EPA employing its standard conservative models (the Sustainable Futures tools). If the EPA standard conservative estimates do not lead to EPA predicting releases or exposures that lead to a concern, EPA could conclude that such exceedances are “not likely.” Based on past experience, regardless of the model outcomes, EPA would seek to impose release or exposure restrictions (or both) based upon EPA’s hazard determination.
For example, EPA might identity a surface water concentration of concern (CoC) of 100 parts per billion (ppb). In its review of the PMN, the EPA conservatively predicts a maximum concentration of 28 ppb. Under new TSCA, the EPA has been concluding that there is not an unreasonable risk based on the intended conditions of use, but that “someone might” release an even higher amount to surface water and then proposed a consent order (and/or a SNUR) to limit surface water concentration to 100 ppb, the CoC. In our view, the EPA has not been meeting its obligations under Section 26(h) and optimizing EPA’s extensive experience with evaluating whether such an exceedance was likely or not, but merely concluding that it might happen. A more measured approach could be that the EPA compares the conservative, predicted concentration, 28 ppb, and the CoC, 100 ppb, and concludes that there is a sufficient difference between the two that the concentration was not likely to exceed the CoC and decline to regulate that substance for aquatic toxicity risk. EPA might be less sanguine about a predicted concentration of 98 ppb compared to a CoC of 100 ppb. In that case, the EPA might look at other factors in its assessment to determine whether its hazard and exposure predictions were sufficiently conservative to justify a “not likely” determination or if a “may present” finding was indicated.
“Unreasonable risk” is not a new term in new TSCA, but neither has it been defined or its boundaries tested under old or new TSCA. An example of a hazard EPA identified that it believed presented an unreasonable risk includes mild-to-moderate eye irritation. There are cases in which the EPA identified concerns for eye irritation and then proposed requiring workers to use protective eyewear such as goggles. We question how eye irritation is determined to be an unreasonable risk. Nearly everything is irritating to eyes, even water. This standard would require that the EPA require eye protection for everything that has not been tested and shown to not irritate eyes. In addition, eye irritation is an endpoint against which one would fully expect users to opt to protect themselves. If an activity causes an eye exposure that leads to irritation, it is likely that the user would choose to use eye protection, regardless of whether such protection is required by TSCA, or to use the substance in a manner to minimize the chance for eye exposure. When a person goes swimming, if the water irritates the swimmer’s eyes, a decision is made either to wear goggles or to close one’s eyes. In our view, mild-to-moderate eye irritation is not an unreasonable risk, nor is it a risk that requires a TSCA consent order to mitigate.
“Reasonably foreseeable condition of use” is a new term under Lautenberg, but a similar term has been in use under old TSCA for some time, “reasonably anticipated.” In the polymer exemption criteria, “reasonably anticipated” is defined, in relevant part, as what “a knowledgeable person would expect a given physical or chemical composition or characteristic to occur.” 40 C.F.R. § 723.250(b). EPA also defined “reasonably foreseeable” as being based on information, knowledge, or experience in its risk evaluation rule. 82 Fed. Reg. 33726 (July 20, 2017). Neither of these definitions aligns with the concept of “any possible” conditions of use. We, on behalf of the New Chemicals Coalition, suggested to EPA that could safely assume that routine PPE (e.g., long sleeves, long pants, closed-toe shoes, gloves, and goggles) are used in workplace settings. EPA challenged us to provide data to support this contention.
After significant effort, we found data in OSHA’s database of violations. In data that spans four decades and more than 12 million violations, a tiny fraction of OSHA violations relate to workers not using appropriate gloves (0.5 percent), goggles (0.4 percent), or general dermal protection (one in 12 million). We submit that the extremely low incidence of OSHA violations demonstrates that it is reasonably foreseeable that gloves, goggles, and general dermal protection will be used in a workplace setting when such use is otherwise required by OSHA regulations. A worker may decide otherwise as—workers do occasionally fail to observe workplace rules. On the other hand, it is questionable whether a TSCA consent order requiring glove use was intended to or in fact will prevent such noncompliance when gloves are already required under OSHA workplace standards and the reality that gloves are routinely worn in workplace settings.
Lynn L. Bergeson is the Managing Partner of Bergeson & Campbell, P.C. (B&C®), a Washington, D.C. law firm focusing on conventional, nano, and biobased chemical, pesticide, and other specialty chemical product approval and regulation, environmental, health, and safety law, chemical product litigation, and associated business issues. Charles M. Auer is a Senior Regulatory and Policy Advisor with B&C, and former Director of EPA’s Office of Pollution Prevention and Toxics. Richard E. Engler, Ph.D., is the Directory of Chemistry with B&C and a 17-year veteran of EPA. Kathleen M. Roberts is Vice President of B&C Consortia Management, L.L.C. (BCCM), and Manager of the TSCA New Chemicals Coalition.
The opinions expressed here do not represent those of Bloomberg Environment, which welcomes other points of view.