Teflon is the quintessential American product. It was discovered by accident and like many such discoveries was at first simply a creation in search of a purpose. Versions of it are in our frying pans and popcorn bags, our medical devices and electronic gadgets, our pruning shears and our cars. It is ubiquitous and essential. It is part of our vocabulary, uttered with both envy and exasperation to describe politicians and Mafia dons. It even helped win World War II: Teflon was needed to properly seal the pipes in the gaseous diffusion plant where uranium was enriched to make the first atomic bombs.
Teflon is made by Chemours, a chemical manufacturer that was spun out of DuPont in 2015. At that time, many investors thought Chemours was destined—even designed—to fail. It was weighted down with both DuPont’s environmental liabilities and billions in debt. But the company proved critics wrong and has become a stock market darling by selling businesses, cutting costs, and reaping a windfall from widespread adoption of its Opteon line of environmentally friendly refrigerants. With $6.2 billion in sales, Chemours ranks No. 451 on this year’s Fortune 500, up 31 spots from last year. Its erstwhile parent DuPont, meanwhile, fell off the list this year after completing its merger with Dow Chemical. (The combined DowDuPont ranks No. 47 on this year’s 500.) Shares of Chemours have soared more than 400% over the past two years vs. a 33% gain for the S&P 500.
In February 2017, Chemours took a big step toward resolving its environmental problems when it and DuPont were able to settle—without admitting fault or liability—a sprawling class-action litigation with plaintiffs involving a chemical known as C8, a once-vital ingredient for making Teflon that has been linked to certain kinds of cancer and other diseases. The agreement appeared to signal stability and certainty for the young company.
But Chemours (and by extension, DuPont) now finds itself again in legal and regulatory trouble with Teflon. This time it’s over the chemical developed to replace C8—and how it came to be that the companies were for decades discharging this substance from a factory in rural North Carolina into the air and the Cape Fear River, the water supply for more than 250,000 people in and around Wilmington, N.C.
The chemical is called GenX. (Not to be confused with Generation X, the demographic cohort that came after the baby boomers.) GenX is everywhere in and around the Chemours North Carolina factory, known as the Fayetteville Works. It’s in the dirt, falling to the earth with the rain. It is in the wells of nearby residents, say state officials, sparking fear and anger.
“People ask me why I don’t just walk away,” said Mike Watters, who lives near the factory on five acres with a well and property contaminated by Chemours’s discharges and has joined a lawsuit against the company. He has a simple answer: “I didn’t cause this. They did.”
GenX has been linked to cancer in laboratory animals. A 2016 report from the Dutch government—Chemours has a Teflon factory in the Netherlands—said it was less toxic than C8 but still a “suspected human carcinogen.” Other research suggests GenX is safe at low doses. There have been no human epidemiology studies.
The uncertainty has made GenX a symbol of so-called emerging contaminants, or chemicals for which the health risks are not known. It is fueling a national debate over how to regulate an industry in which innovation is often driven by developing replacement chemicals that are said to be safer—if not always actually safe. This is all taking place as the U.S. Environmental Protection Agency is under scrutiny, with Administrator Scott Pruitt facing multiple investigations into his spending, travel, and ties to lobbyists while also pursuing policies that could make it harder to control what gets pumped into our air and water. The GenX controversy may show the limits of that strategy: The Trump administration’s appointee for the EPA section overseeing chemical pollution was forced to withdraw, in part, because he faced stiff resistance for defending GenX in the past.
North Carolina officials, meanwhile, are trying to rein in Chemours through tighter regulation and litigation. In a pending lawsuit, the state claims the company systematically misled its regulators on its emissions. “In fact, information provided by DuPont and Chemours led Division of Water Resources staff to reasonably believe that GenX was not being discharged into the Cape Fear,” the state’s filing says. Chemours has not yet responded to or made public comments about the allegations. Chemours also faces a slew of lawsuits from property owners with allegedly contaminated wells, from residents who rely on public drinking water, and from the local governments that draw their water from the Cape Fear.
“We want an assurance that the things that are going into the river that we can’t filter are safe for our drinking water, and that’s not something that our rate payers should pay for,” says Jim Flechtner, the executive director of the Cape Fear Public Utility Authority, which is a plaintiff and is considering whether to build a $46 million treatment plant to filter out GenX and related contaminants.
Chemours declined repeated requests from Fortune for interviews. In court papers, the company has said it followed proper procedures on its discharges and that GenX is not toxic at the amounts released. But the company is now capturing its GenX-contaminated wastewater and sending it off-site for disposal. Chemours has been ordered to provide bottled water to many residents who live near the factory, and it has told the state it will spend $100 million to eliminate virtually all of its tainted-air emissions.
The CEO of Chemours, Mark Vergnano, said on an earnings call in February that there is no cause for concern and that Chemours has purposefully kept a low profile out of respect for the process of finding a long-term solution. “I really want to be clear that we continue to believe that none of the discharges either before we became an independent company in mid-2015 or after have adversely impacted anyone’s health,” he said.
While Vergnano is well-respected in the industry for his discipline and execution skills, good timing has played a part in the company’s recovery. Prices for titanium dioxide—the company’s largest product line—stabilized just as Opteon took off, giving Chemours some needed momentum. “Opteon turned the company around,” says James Butkiewicz, a professor of economics at the University of Delaware who has watched Chemours closely since its spinoff.
But Teflon and GenX are casting a shadow over Chemours’s future prospects. Moody’s said recently that it would be unlikely to consider an upgrade for Chemours debt, now at Ba2, “until the litigation risk has better clarity, or until there are clearer settlement parameters with one or more of the complainants.” For both the company and the residents of Wilmington, resolution might not come anytime soon.
If there’s one thing that sticks to Teflon, it seems, it’s controversy.
Like Tylenol, Teflon is a brand name for something far harder to pronounce. The actual material is a concoction called polytetrafluoroethylene, or PTFE, which was discovered in 1938 by Roy J. Plunkett, a 27-year-old chemist, as he worked on new refrigerants at DuPont’s Jackson Laboratory in Deepwater, N.J. One experiment appeared to be a failure. But when Plunkett took the waxy substance left inside a lab cylinder and tested it, he found that the material was extremely resistant to heat and corrosion and possessed almost no surface friction. Teflon’s existence would not be revealed to the public until 1946.
GenX and C8 belong to a class of chemicals known as perfluoroalkyl substances, or PFAS. They are polymerization aids used to make Teflon and similar substances. At the core of these molecules is a carbon-fluorine bond that is extremely strong and resilient, qualities that end up in the finished substance. 3M used to make C8 for its Scotchgard products and also sold the chemical to DuPont for making Teflon. But 3M stopped production of C8 in 2000 as health concerns started to mount about exposure to the chemical. (In February 2018 the company agreed to pay $850 million to the state of Minnesota to settle claims that fluorochemical discharges from its factories contaminated drinking water near St. Paul; in announcing the settlement, 3M said it didn’t believe there was a PFC-related public health issue.) By the end of 2000, DuPont was making C8 at the Fayetteville Works and shipping the chemical to its factory in Parkersburg, W.Va., to make Teflon.
DuPont eventually decided to move on from C8 as well. Epidemiological studies have tied C8 to thyroid disease, certain kinds of cancer, ulcerative colitis, pregnancy-induced hypertension, and high cholesterol. Even as DuPont was fighting lawsuits tied to the Parkersburg complex (now owned by Chemours), it was working with other chemical companies and the government to phase out C8. That program started in 2006, and the companies agreed to eliminate C8 and similar chemicals by 2015. They accomplished that goal but were left with a separate problem: DuPont still needed a polymerization aid.
There was reason to believe the chemical would be less problematic than its predecessor. C8 has eight carbon atoms. GenX compounds are short-chain PFAS molecules, with only six carbon atoms, and some research indicated that a shorter chain might be less toxic and less likely to build up in organisms. In marketing materials, the GenX technology was touted as having a “favorable toxicological profile.”
In 2009, DuPont entered into a consent order with the U.S. Environmental Protection Agency that allowed the production of GenX, provided there were strict emissions controls and further testing of its health effects. Within the scientific community, there is still disagreement over whether the government declared victory too quickly. But DuPont began making GenX at its factory in North Carolina.
The Fayetteville Works is 50 miles northwest from where the City of Wilmington—as well as Brunswick and Pender counties—draws water from a narrow inlet just above the last lock and dam on the Cape Fear, after which the river runs past an enormous pulp mill and becomes brackish with the tides.
Near the factory, at the northern end of Bladen County, the Cape Fear is barely a ripple in the topography, just a muddy ribbon cutting between farms and timber and small towns. A few miles downriver from the Fayetteville Works is the world’s largest hog slaughterhouse, once part of the Smithfield Foods empire and since 2013 controlled by a Chinese conglomerate. The slaughterhouse, with its heavily immigrant workforce and foreign owners, used to dominate the headlines. That was before GenX.
Perfluorinated chemistry is complex in theory but can also be imprecise in practice. For example, a DuPont engineer wrote the following to state regulators in 2002: “As with all chemical processes, side reactions to the desired product reaction create dozens or hundreds of by-products in very low concentrations.” The engineer said the fluorochemistry involved was “exceptionally complicated” and explained that “most of the by-products are unknown compounds.” The company wasn’t sure whether it needed to test for and report these by-products, and asked the state for suggestions. There is no record that the state ever responded.
EPA scientists first detected GenX in the Cape Fear in 2012. Water samples taken then revealed a wide range of perfluorinated compounds. Advances in the use of high-resolution mass spectrometry along with a great deal of sleuthing on industrial and government databases allowed researchers to identify these chemicals, says Mark Strynar, a scientist in the EPA’s Office of Research and Development who led the research. A year later, Strynar and other researchers returned to the river in hopes of answering more pointed questions: How extensive was GenX? And was it showing up in drinking water? Their findings—that there were significant amounts of GenX in the water—were published in an academic journal in November 2016 and sent to a wide range of state and local officials. But little happened until June 2017, when the Wilmington newspaper, the StarNews, got hold of the research and began a series on the Cape Fear’s contamination.
The Chemours factory is really several facilities surrounded by nearly three square miles of woods. Along with GenX, the plant also makes Nafion, used in fuel-cell membranes. Another section is still run by DuPont to make polyvinyl fluoride resins. When Chemours applied for its discharge permit renewal in April 2016, it noted that the Nafion, laminates, and polyvinyl processes all sent their wastewater to the facility’s treatment plant before it was sent to the river. The GenX line, it said, wasn’t even connected to the treatment plant. Rather, all that waste was already being sent off-site. But if that was the case, then how was the chemical ending up in the Cape Fear?
2017 Company Profile: Chemours.
|$6.2 Billion||$746 Million|
|Employees||Total return to shareholders|
|*Total Return to Shareholders assumes the 2007–2017 Annual Rate.|
On June 15, 2017, a week after the newspaper began its series, a team from Chemours met with local officials in Wilmington. According to notes from the meeting taken by a StarNews editor who was allowed to attend, the Chemours team confirmed that the GenX wasn’t coming from the production line. That was the good news. The bad news was that GenX was apparently also a by-product of other chemical production at the factory, and it had been released into the river as far back as 1980. This wasn’t exactly by design, but it also wasn’t simply an accident. The company had known about it for years and said that new technology installed in 2013 had captured 80% of the GenX discharges.
Chemours told the officials there had been no need to share that knowledge. Kathy O’Keefe, the company’s director of product sustainability, said at the June 15 meeting that Chemours had no requirement to disclose the presence of GenX in the waste stream because the consent order covered only the substance’s purposeful manufacture. Said O’Keefe: “It was never used. It was produced unintentionally so under the requirements of TSCA (the Toxic Substances Control Act), it’s made in the by-product of the process. There’s no commercial intent there, so it doesn’t get regulated until there’s commercial intent.”
O’Keefe and the others tried to allay the fears in the room. “I think a lot of it is the unknown,” she said. “There’s this toxic chemical in our water. There’s the first rule of toxicology, which is, the dose makes the poison. Just because something is present doesn’t mean it’s going to cause harm. When you cook Brussels sprouts, did you know you release formaldehyde?”
Detlef Knappe, a professor of environmental engineering at N.C. State University and the lead author of the 2016 report on GenX in the water supply, says Chemours’s admission was stunning and revealing. “If you look at the history of 37 years of essentially uncontrolled discharges, it is something that is pretty egregious.”
There is no regulatory level for GenX concentrations in the air or water. North Carolina first set a health advisory of 71,000 parts per trillion (PPT) but then lowered it to 140 PPT. A Chemours consultant told the state there was “no scientific rationale” for the revision. Since Chemours began shipping its wastewater off-site, GenX levels have stayed below the state’s new level. While that’s a positive development, it comes after more than 30 years of discharges; the 2016 study found that GenX levels had typically been about 630 PPT previously. In addition, Knappe says the research and ongoing water sampling revealed the presence of a wide range of other related perfluorinated chemicals, all tied to Chemours. “The elephant in the room is that GenX is below 140, but there’s all these other products in the water. It’s really just a fraction of the total.”
The health advisory has no force of law. Chemours and DuPont have said in court papers that they can’t be liable for exceeding a standard that doesn’t exist. And if the local governments say the water is safe to drink, which they still do, then the companies have not caused any damage. “The mere presence of a chemical in water does not allow a party to seek recovery for nuisance or negligence unless the amount of that chemical exceeds an amount set by regulation for the protection of human health,” they wrote in a motion seeking to dismiss a federal lawsuit filed by the Cape Fear Public Utility Authority and Brunswick County. The state of North Carolina asserted in its lawsuit that Chemours has violated clean-water laws. Because GenX isn’t a natural substance, it said the regulatory standard defaults to a “practical quantitation limit,” no more than 10 PPT. Chemours says that limit has no basis in fact.
The full scope of the environmental exposure to GenX is still to be determined—as is the best approach to remediation. GenX has been found in water supplies in Ohio and West Virginia near Parkersburg, where the chemical was shipped from North Carolina. Meanwhile, Chemours is testing whether filtration systems can remove GenX from the well water used by people who live near the Fayetteville Works.
Jim MacRae moved to a house a half-mile north of the Chemours factory in 1991. His stepmother, a sister, and brother-in-law also live nearby. While the well at his house tests below the 140 PPT, another near some cabins he owns is at 400. He says state officials have told him the pond where he cools off in the summer is toxic. And he and dozens of his neighbors have sued Chemours and DuPont, represented by the same attorneys who are handling the litigation on behalf of the utilities.
DuPont and Chemours each paid $335 million last year to settle the C8 lawsuits in and around Parkersburg, but MacRae insisted he wasn’t motivated by money. “I want what I can’t have, and that is what it was before DuPont and Chemours did what they’ve done.” His wife cries at night. His neighbors are filled with panic about what’s in their water now, and with paranoia about what was there for all the years prior. “All of this,” says MacRae, “has been caused by people who didn’t want an egg to stick to a pan.”
In a letter written April 27, 2018, that detailed the company’s $100 million plan for emissions controls, an attorney for Chemours expressed concern that what North Carolina really wanted was zero discharges, which he said would be both unlawful and impossible to achieve. Then, he played the Teflon-patriotism card: The plant supplies a “substantial percentage of the fluoropolymer needs of the U.S. military, the automobile industry, the aerospace industry, and the semiconductor industry—all of whom would otherwise confront severe shortages … and be forced to turn to suppliers from China or other foreign nations.”
Industrial chemicals go through a much different approval process than pharmaceuticals. They’re generally considered safe until proven hazardous. When the EPA approved the manufacture of GenX in 2009, the agency had concerns about its toxicity and its “bio-persistence.” It ordered DuPont to conduct additional testing, including a two-year test of laboratory animals to approximate long-term exposure. That research showed that rats developed tumors in the liver, pancreas, and testicles. DuPont downplayed the results and said they were “not considered relevant for human risk assessment.”
The FluoroCouncil, a section of the American Chemistry Council, said in a written response to questions that these chemicals are well-studied and safe. “Based on this research, the short-chain fluorotelomer-based products manufactured by FluoroCouncil members do not meet criteria for chemicals of concern based on their environmental fate and potential for adverse health effects.”
But many scientists disagree that the science is so settled. In 2015 more than 200 researchers signed what has become known as the Madrid Statement, advocating closer scrutiny of GenX and other PFAS substances, which are in a wide range of products including food containers, firefighting foams, and fabric protectors.
Much of the existing research suggests GenX doesn’t remain in mammals for a long time. It isn’t particularly bio-accumulative. But if GenX is in the water, something a person might use every day, then the exposure to the contaminant could be different. Jane Hoppin, a toxicologist at N.C. State University, has begun a study of Wilmington residents and their potential exposure to GenX. First she sampled people’s tap water. She and her team also took blood and urine samples for analysis. She cautioned that hers is not a study designed to link GenX to illness and that the sampling took place after Chemours had stopped its discharges. “One of the huge questions is, How long does this chemical stay in the body? If we don’t find something, it doesn’t mean it wasn’t there. It means we got going five or six months after they turned off the source.”
The EPA has opened a formal investigation into whether Chemours is in compliance with the terms of the 2009 consent order. An agency spokesperson declined to comment on its status. The EPA was scheduled to hold a national conference in May, after this article went to press, on PFAS contaminants for state and local governments. This summer the EPA is supposed to release toxicity values for GenX. These can guide screening levels for exposure, but they aren’t regulatory standards. GenX is not on the federal government’s watch list of unregulated contaminants.
Richard Denison, the lead senior scientist with the Environmental Defense Fund, said that the EPA under Pruitt has pushed regulatory responsibilities on GenX to the states, which lack sufficient personnel or funding to do the job properly. “As we innovate increasingly sophisticated chemicals that are shrouded in secrecy, how do we keep up?” he says. “The chemical properties that impart GenX’s functionality are the same things that create problems when it gets down into the environment.”
While Republicans have generally supported Pruitt and the changes he’s made at the EPA, GenX has proved that regional environmental issues often outweigh party affiliation. Michael Dourson, President Trump’s appointee to head the EPA’s Office of Chemical Safety and Pollution Prevention, withdrew his nomination in December after North Carolina’s two Republican senators, Richard Burr and Thom Tillis, voiced concern about Dourson’s record as an industry consultant, including work for DuPont on C8. The position is still vacant. Pruitt’s own future is also uncertain.
One sunny day this spring, I rented a kayak in Wilmington and drove up past the pulp mill and the slaughterhouse to the William O. Huske Lock and Dam just below the Chemours factory. I put the kayak in the river and started paddling upstream. The Cape Fear was flat and quiet. The water was high, and the Chemours discharge pipe was submerged and invisible. I paddled farther and eventually came to the large tubes where the company draws water from the river. I could hear the factory, but it was all but lost beyond the trees.
I was thinking about Teflon and about a snippet of a response to the Madrid Statement written by Jessica Bowman, who is the president of the FluoroCouncil. “The importance of PFAS chemistry,” she wrote, “was long ago determined by the market.” Which was true. Everybody I talked with had a connection to Teflon and its progeny. It was in their father’s stent, keeping him alive. Or it was in the Gore-Tex on their rain jacket, keeping them dry. It was in the plumber’s tape that sealed the leaking valve on my dishwasher. I thought about what 140 parts per trillion actually means, which is this: 140 drops of water in an Olympic-size swimming pool.
A week later I attended a forum where Hoppin, Knappe, and another colleague discussed the results of the water samples drawn from homes in Wilmington. Most had some GenX, although all the concentrations were below the advisory levels.
It was possible to imagine that the whole thing might blow over, that GenX was not the son of C8 and was no longer a threat to residents or to Chemours’s bottom line. But then I remembered that the release of GenX went on for more than 30 years. What’s in the water today is not what was there a year ago, or five, or 20.
Before the meeting broke up, there was one question everybody wanted answered. Would these researchers drink the city’s unfiltered tap water today? There was little hesitation from the scientists before answering: No, no, and no.
This article originally appeared in the June 1, 2018 issue of Fortune.