Minnesota may tap 3M settlement to help meet EPA limits on forever chemicals in drinking water

Photo by Hannah Black/Minnesota Reformer.

Minnesota’s 2018 settlement with Maplewood-based 3M over chemical contamination of east metro drinking water was the third largest natural resource settlement in U.S. history — behind the Deepwater Horizon and Exxon Valdez oil spills. 

In the ensuing years, however, scientists and public officials have learned more about the prevalence and persistence of the 3M-manufactured chemicals both nearby and around the globe as far away as the Arctic Circle — as well as their links to health problems such as birth defects, immune system suppression, thyroid and liver function and cancers. 

The EPA has responded with new drinking water rules, which means claims on the $850 million agreement with 3M could multiply, leaving municipal water systems fighting for diminishing dollars. 

In response, the state Attorney General’s Office is considering a range of options — either through the existing agreement or new claims against 3M — to keep up with the increasing cost of providing water free of contamination. 

The EPA’s new drinking water regulations ban even trace amounts of the chemicals that are used in everything from non-stick pans to medical devices, which has cities confronting the possibility of exorbitant costs to comply. 

Minnesota does not have a hazardous waste facility that can destroy the compounds, which have earned the nickname “forever chemicals” because they don’t break down in the environment or human body. The Minnesota Pollution Control Agency has estimated it could cost $12 billion to $25 billion to remove the chemicals from wastewater and destroy them over 20 years. 

3M has made the chemicals in Minnesota since the 1950s. 3M’s Cottage Grove plant still produces the chemicals, which resist heat, water and stains, making them highly useful for products as diverse as Post-it notes, Scotch tape, catalytic converters, reflective road signs and license plates, golf club finishes and TV, laptop and cell phone screens. The company plans to phase out their production by the end of 2025.

Consider Hastings, which is just downstream from 3M’s Cottage Grove factory. All six of its water towers exceed the new EPA limits, and residents’ water rates would have to go up 250% during the next decade to filter the water, city officials say. 

Hastings was not specifically included in the 2018 settlement, which was actually more like $720 million after a fee to a private law firm. The priority was clean drinking water in east metro communities, where 3M dumped its toxic waste into unlined landfills for decades; it leached into groundwater and created a 200-square-mile contaminated plume. Most of the money has already been dedicated to cleaning their water.  

Some — like former Rep. Jean Wagenius of Minneapolis — have long thought the settlement wasn’t enough.

Special Assistant Attorney General Pete Surdo told lawmakers earlier this year that “even at the time it was known it might not be enough.” 

Lori Swanson was the Minnesota attorney general who sued 3M in 2010, alleging the company failed for decades to tell regulators and scientists that its chemicals could be toxic to humans, animals and the environment in order to protect its lucrative revenue stream. The state settled the case on the eve of the trial. Swanson said her office was going to try to get $1 billion, and effectively got that by settling for $850 million, plus $40 million to pay for a temporary drinking water treatment system, plus interest.

“The reality is we got what we thought we could prove in court,” Swanson said. “And when you look at the sure thing of the settlement compared to the uncertain rolling the dice and going to court, we got in the settlement what we thought we could’ve proved in court.”

‘The state has options’

The EPA’s regulations limit six types of the chemicals in a family that contains tens of thousands of compounds called per- and polyfluoroalkyl substances, or PFAS. The EPA limited two of the most prevalent and most studied chemicals — PFOA and PFOS — to 4 parts per trillion, the lowest level at which they can reliably be detected. One part per trillion is equivalent to one drop of water in 20 Olympic-sized pools. In other words, there is basically no safe level for human consumption.

The Minnesota Department of Health said Monday the drinking water exceeds those limits in 18 cities, manufactured home parks and a veterans’ home. Upgrading water systems to filter the chemicals is expensive.

Assistant Attorney General Oliver Larson said the 3M settlement doesn’t preclude the state from seeking more money to help communities comply with the EPA rules.

“If there’s a need for more money associated with those projects, the state has options,” Larson said.

New claims possible

The settlement includes a release by the state of all claims through the date it was signed, so Minnesota could bring new claims against 3M that have arisen since 2018. 

The settlement also says once the $850 million is depleted, a 2007 Settlement Agreement and Consent Order between 3M and the MPCA again becomes operative, freeing up more money. 

“If more money is needed under the (2007 consent order), 3M must pay for it,” Swanson said. “The state’s lawsuit was not about remediation; it was about damages to natural resources.”

And the state has not sued any other chemical companies, so that’s another option. Cities can also sue.

Larson said as new sources of PFAS pollution are identified — usually groundwater plumes leaking into surface water — the state works with 3M to investigate the source.

“So far, 3M has been committing to pay the remediation costs associated with new sites,” Larson said. “And if they don’t, we’ll be ready to deal with that.”

Some money could also flow to Minnesota from a South Carolina case.

A federal judge there recently approved a settlement in which 3M agreed to pay $10.5 billion to $12.5 billion to settle contamination claims in public drinking water systems nationwide. And that’s just one of many lawsuits against chemical companies. 

The presiding judge, U.S. District Judge Richard Gergel, has called the lawsuits an existential threat to companies like 3M, and expressed concern that the companies could end up bankrupt, leaving nothing for consumers. He urged both sides to lobby Congress for help, saying the businesses don’t have the “capacity to remediate this completely.” 

Surdo, from the attorney general’s office, said, “They’re all rightly concerned about bankruptcy.” 

3M said in a statement, “Our strong balance sheet allows us to meet our capital allocation priorities and to fund the obligations arising from our legal settlement.”

After the South Carolina settlement, 3M CEO Mike Roman released a statement calling the agreement “another important step forward for 3M as we continue to deliver on our priorities. The final approval of this settlement and continued progress toward exiting all PFAS manufacturing by the end of 2025 will further our efforts to reduce risk and uncertainty.” 

Costs piling up for cities: Who will pay?

Sandeep Burman, manager of the drinking water program for the Minnesota Department of Health, said 921 of the 950 public water systems in Minnesota were tested, and 47% had traces of the chemicals. 

Among the worst: Woodbury is seeking $7.5 million from the state for a $19 million treatment plant because nine of its 20 wells are under health advisories and more are likely to exceed the EPA rule.

Hastings could get an estimated $3 million to $5 million from the South Carolina settlement, but needs $69 million to filter its water. Hastings officials are seeking nearly $21 million from the state to begin the work.

“It’s a massive lift,” Rep. Shane Hudella, R-Hastings, told the House Capital Investment Committee on Monday.

Hastings Mayor Mary Fasbender said the city’s entire water supply has been “compromised,” and the city’s 23,000 residents “are feeling unsafe drinking water.”

If the city can’t find outside help, Hastings residents would be forced to swallow some of the most expensive water rates in the metro area. That, in turn, would threaten the city’s AA bond rating and increase borrowing costs, said Public Works Director and City Engineer Ryan Stempski.

“This is really a budget-buster for our water rates,” he said.

MPCA engineer Scott Kyser said the chemicals cost about $50 to $1,000 per pound to buy, and between $2.7 million and $18 million per pound to remove from municipal wastewater and destroy. 

That’s why the agency instead focuses on preventing the chemical pollution — it’s more economical. 

Some lawmakers want polluters to pay to clean up the mess they made.

Capital Investment Committee chair Rep. Fue Lee, DFL-Minneapolis, authored HF5309, which requires the MPCA to recommend strategies for making chemical manufacturers pay for the cost of infrastructure that removes the chemicals from wastewater facilities statewide and treats and disposes of the chemicals.

“The scale to which polluters have harmed our water should not be shouldered solely by the taxpayers,” Lee said. “The manufacturers that either create or utilize PFAS can’t just sit on the sidelines and profit from pollution — they have a financial responsibility to help with the cleanup as well.”

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