[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
CHEMICAL FACILITY
ANTI-TERRORISM ACT OF 2008
=======================================================================
HEARING
before the
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 26, 2008
__________
Serial No. 110-95
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Printed for the use of the Committee on Homeland Security
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
__________
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44-136 PDF WASHINGTON DC: 2008
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COMMITTEE ON HOMELAND SECURITY
Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California Peter T. King, New York
Edward J. Markey, Massachusetts Lamar Smith, Texas
Norman D. Dicks, Washington Christopher Shays, Connecticut
Jane Harman, California Mark E. Souder, Indiana
Peter A. DeFazio, Oregon Tom Davis, Virginia
Nita M. Lowey, New York Daniel E. Lungren, California
Eleanor Holmes Norton, District of Mike Rogers, Alabama
Columbia David G. Reichert, Washington
Zoe Lofgren, California Michael T. McCaul, Texas
Sheila Jackson Lee, Texas Charles W. Dent, Pennsylvania
Donna M. Christensen, U.S. Virgin Ginny Brown-Waite, Florida
Islands Gus M. Bilirakis, Florida
Bob Etheridge, North Carolina David Davis, Tennessee
James R. Langevin, Rhode Island Paul C. Broun, Georgia
Henry Cuellar, Texas
Christopher P. Carney, Pennsylvania
Yvette D. Clarke, New York
Al Green, Texas
Ed Perlmutter, Colorado
Bill Pascrell, Jr., New Jersey
Jessica Herrera-Flanigan, Staff Director & General Counsel
Todd Gee, Chief Counsel
Michael Twinchek, Chief Clerk
Robert O'Connor, Minority Staff Director
(II)
C O N T E N T S
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Page
Statements
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Chairman, Committee on
Homeland Security.............................................. 1
The Honorable Peter T. King, a Representative in Congress From
the State of New York, and Ranking Member, Committee on
Homeland Security.............................................. 2
The Honorable Ginny Brown-Waite, a Representative in Congress
From the State of Florida:
Prepared Statement............................................. 3
Witnesses
Col. Robert B. Stephan, Assistant Secretary, Infrastructure
Protection, Department of Homeland Security:
Oral Statement................................................. 4
Prepared Statement............................................. 6
Mr. Kevin L. Wattier, General Manager, Long Beach Water
Department:
Oral Statement................................................. 11
Prepared Statement............................................. 13
Mr. David C. Pulham, Ph.D., Director of Compliance, Siegfried
(USA), Inc.:
Oral Statement................................................. 15
Prepared Statement............................................. 17
For The Record
National Propane Gas Association:
Statement...................................................... 18
Chemical Bill Coalition:
Statement...................................................... 21
Mr. Rick Hind, Legislative Director, Greenpeace Toxics Campaign,
Greenpeace:
Statement...................................................... 22
Mr. Russell Melancon, President and CEO, Industrial Safety
Training Council:
Statement...................................................... 33
CHEMICAL FACILITY
ANTI-TERRORISM ACT OF 2008
----------
Tuesday, February 26, 2008
U.S. House of Representatives,
Committee on Homeland Security,
Washington, DC.
The committee met, pursuant to call, at 10:09 a.m., in Room
311, Cannon House Office Building, Hon. Bennie G. Thompson
[Chairman of the committee] presiding.
Present: Representatives Thompson, Sanchez, Markey, Jackson
Lee, Etheridge, Cuellar, Carney, Pascrell, King, McCaul, Dent,
Brown-Waite, Davis of Tennessee and Broun.
Chairman Thompson. We would like to call the hearing to
order.
The committee meeting today will receive testimony on the
Chemical Facility Anti-Terrorism Act of 2008.
I now recognize myself for purposes of the opening
statement.
When I assumed the Chairmanship of this committee last
January I highlighted the need to shield the Nation's critical
infrastructure from foreign and domestic terrorism as one of my
eight goals in charting the course toward freedom from fear.
That is why this committee has dedicated considerable resources
toward drafting legislation to extend DHS's authority over
chemical plants beyond October, 2009, when it is slated to
expire.
Today, we are meeting to discuss a draft bill that this
committee has been working on for the past several months, the
Chemical Facility Anti-Terrorism Act of 2008. It is important
to me that we have worked in an open and bipartisan manner to
develop this legislation.
I would especially like to acknowledge the fine work of the
chairwoman of the Subcommittee on Transportation Security and
Infrastructure Protection, Ms. Jackson Lee of Texas, for her
efforts to move this process forward.
I would also like to thank the Ranking Member of that
subcommittee, Mr. Lungren of California, for his cooperation
and leadership.
In this Congress, the Transportation Security and
Infrastructure Protection Subcommittee has held two hearings on
the topic of chemical facilitated security, in July and
December. At those hearings, the committee heard from Assistant
Secretary Stephan, whose Infrastructure Protection Division is
responsible for implementing the current Chemical Facility
Anti-Terrorism Standards, or CFATS.
Those hearings also allowed us to hear from a wide range of
witnesses representing all sides of this issue. We have talked
to large chemical manufacturers who are regulated under CFATS;
a representative from the State of New Jersey, which is also
regulating security at chemical facilities--and they now have
Mr. Pascrell on the committee, who handles the New Jersey end
of that aspect. We welcome him here again, also--
representatives from labor unions that represent chemical
facility workers, and also academic and other experts.
Today's hearing will continue in that spirit. We will
receive an update from Assistant Secretary Stephan and
testimony from Dr. David Pulham from Siegfried, a small
chemical manufacturer, as well as Mr. Kevin Wattier from the
Long Beach Water Department.
Dr. Pulham is here to help us understand the impact of the
chemical security legislation on smaller facilities, as well as
tell us how his facility is complying with the State of New
Jersey's chemical security requirements; and Mr. Wattier is
here to give us the feedback from a water facility about the
legislation, especially given that it would subject water
facilities to the same chemical security framework as is in
place for all other chemical facilities.
It is worth noting that DHS considers water facilities to
be at risk and therefore justifiably regulated along with other
facilities that hold large volumes of toxic chemicals.
In addition to other testimony, the committee has
maintained an open dialog with the Department, environmental
groups, labor representatives, large and small chemical
manufacturers, fertilizer manufacturers, petroleum and propane
manufacturers and distributors, as well as water facilities.
I decided to use the vehicle of a Committee Print rather
than an introduced bill because of the flexibility it offers
us. This way, every time we hear a good idea on how to make the
legislation better, we can incorporate it.
I want to thank Ranking Member King and his staff for
working in such a cooperative manner through the many
iterations of the bill, and I am confident that we will have a
legislative product we can all support.
Securing our chemical facilities against an attack advances
my commitment to making sure that our Government can provide
the American people security, accountability and, most
importantly, freedom from fear. I look forward to hearing from
our witnesses, and I thank you for contributing to this
process.
The Chair now recognizes the Ranking Member of the full
committee, the gentleman from New York, Mr. King, for an
opening statement.
Mr. King. Thank you very much, Chairman Thompson.
I want to, at the outset, join you in pointing out the
bipartisan nature of the process so far and the process which I
am sure will continue. Obviously, when we are talking about
chemical plants, it certainly has the opportunity to become a
very partisan or divisive issue. It is easy for either side to
use scare tactics or to try to accuse the other of bad motives.
That has not been the case here at all.
I want to thank Chairwoman Sheila Jackson Lee for her
efforts and also Ranking Member Dan Lungren, who is right now
recovering from knee surgery, for their efforts at the
subcommittee level.
I also want to commend the Department for the rapid
progress they have made, I believe, in implementing the
legislation that we adopted in the previous Congress. I think
it is important to acknowledge that.
Obviously, this is all a work in progress. It is a very new
world that we live in, but it is important to give credit where
credit is due, and I think the Democrat majority certainly
deserves credit as this process is going forward.
I believe the Congress and this committee overall observed
progress from what went on in the past, but especially the
Department also deserves credit for taking the legislation and
moving forward with it. No one has prior authorship here. We
should just continue to meet with various represents from the
industry, from labor, from the overall Homeland Security
community; and, of course, I look forward to the testimony of
the Department today as to what they have done and what they
expect to be doing as we go forward.
I would note just one situation. The Committee Print does
address background checks to a certain degree, but it does not
address them to the extent that Ms. Brown-Waite did as far as
screening individuals at high-risk facilities against the
terrorist watch list and the immigration status database, and I
hope that we give more close attention to that as this goes
forward.
But, again, the legislation we adopted was not the end. We
should build on it, and we should also be careful not to
disrupt what the Department is trying to do as it goes forward.
So, with that, Mr. Chairman, I yield back the balance of my
time and look forward to the testimony.
Chairman Thompson. Thank you very much, Mr. King.
Other Members of the committee are reminded that, under
committee rules, opening statements may be submitted for the
record.
[The statement of Honorable Brown-Waite follows:]
Prepared Statement of Hon. Ginny Brown-Waite
February 26, 2008
Thank you Chairman Thompson and Ranking Member King for holding
this hearing today.
To begin, let me echo a point Ranking Member King has raised
several times already before the full committee: this committee must
begin work on a Department of Homeland Security authorization bill.
Passing an authorization bill is a primary responsibility of this
committee and we cannot overlook this duty.
America's chemical facilities are a critical part of America's
infrastructure. As we are all well aware, if terrorists were able to
exploit weaknesses in this industry's security measures, there would be
far-ranging, disastrous consequences.
While I applaud taking responsible steps to ensure the security of
chemical plants and facilities, our guiding principle must be a focused
effort not to undermine any progress already made to keep these
facilities safe.
My major concern with the language before us involves the issue of
background checks. I was upset to see that while there are extensive
criteria for conducting background checks on those with access to high-
risk facilities outlined, there is no requirement to conduct these
checks in the first place.
It seems utterly backward to outline a detailed appeals and waivers
process before actually requiring the background checks themselves.
Accordingly, I offered an amendment in subcommittee markup to address
this problem and require background checks against immigration status
and the terrorist watchlist.
Today, I look forward to examining this issue further, as the
committee pursues meaningful ways to ensure the security of our
chemical facilities.
Thank you.
Chairman Thompson. I now welcome our panel of witnesses.
Our first witness, Mr. Robert Stephan, is Assistant
Secretary for Infrastructure Protection at the Department of
Homeland Security, which is responsible for carrying out the
Chemical Facility Anti-Terrorism Standards. Our second witness
is Mr. Kevin Wattier, General Manager of Long Beach Water
Department; and our third witness is Mr. David Pulham, Director
of Compliance with Siegfried, Incorporated.
I welcome you here today and look forward to hearing your
testimony.
Without objection, the witnesses' full statements will be
inserted in the record. I now ask each witness to summarize his
or her statement for 5 minutes, beginning with Mr. Stephan.
STATEMENT OF ROBERT B. STEPHAN, ASSISTANT SECRETARY,
INFRASTRUCTURE PROTECTION, DEPARTMENT OF HOMELAND SECURITY
Mr. Stephan. Thank you Mr. Chairman, Ranking Member King
and distinguished Members of this committee. It is a pleasure
to appear before you today to address the Department's efforts
in securing the chemical sector through the implementation of
our CFATS regulation.
I would also like to echo the sentiment that I recently
heard. Without the bipartisan cooperation on this issue that
this committee and its subcommittees have achieved with the
Department, we absolutely could not be achieving the progress
that we have made today with respect to implementing this
regulation, a very, very difficult task; and, sincerely, we do
appreciate the continued leadership and support as we move
through this effort.
As you all know, the fiscal year 2007 appropriations act
directed the Department to develop and implement a regulatory
framework addressing the high level of security risk posed by
certain chemical facilities across the country. Consequently,
DHS published an Interim Final Rule, known as CFATS, on April
9, 2007. Section 550 of the Act authorized the Department to
require high-risk chemical facilities to complete vulnerability
assessments, develop security plans and implement protective
measures necessary to meet risk-based performance measures
established by the Department.
The following core principles guided the development of
this regulatory structure and remain in place:
No. 1, securing high-risk chemical facilities is an immense
undertaking that involves a national effort, including all
levels of government and the private sector in a security
partisanship.
No. 2, risk-based tiering of chemical facilities that
represent a high level of risk will ensure that resources are
appropriately deployed and the appropriate measures put in
place to protect them.
No. 3, reasonable, clear and equitable performance
standards will lead to enhanced security across the
partnership.
Finally, recognition of the progress many companies have
already made in improving facility security helps leverage
achievements and past investments.
In terms of progress, DHS published Appendix A to the CFATS
Interim Final Rule in November of last year. Appendix A
contains a list of chemicals of interest and their screening
threshold quantities.
Possession of one or more of these chemicals of interest at
or above the screening threshold triggers a requirement for the
facility to complete and submit an on-line consequence
assessment known as a Top-Screen. The data gathered to the Top-
Screen tool then informs the Department's determination of a
facility's level of risk and the potential need for the
facility to comply with follow-on substantive requirements of
the regulation.
In formulating the appendix the Department included
chemicals based on three principal risk vectors: release,
hazards, theft and diversion hazards, and sabotage
contamination hazards. The Department established again a
screening threshold quantity for each chemical based on its
potential to create significant adverse consequences in terms
of public health and safety, human lives and injury.
To implement the requirements under the regulation, the
Department developed the Chemical Security Assessment Tool, or
the CSAT, to identify potentially high-risk facilities and
provide a methodology that the facilities can use to conduct
their vulnerability assessments and develop site security plans
that are more uniform across the country. Through the
previously discussed Top-Screen process the Department can
identify which facilities do or do not have to or represent a
significantly high risk and then move on in the process. Those
facilities that are deemed high risk must complete a site
vulnerability assessment for submission to the Department, and
then that will in turn again inform the Department's final
determination of the risk-based tier in which the facility will
be placed.
Following the site vulnerability assessment, a regulated
facility must develop a security plan that will be based upon
19 risk-based performance standards which are broad and
designed to promote a great deal of flexibility in how a
facility approaches meeting the standards applicable to it.
Although all high-risk facilities must comply with the
risk-based performance standards, the measures necessary to
meet these standards will vary across the four risk tiers under
the CFATS framework.
Outreach and partnership efforts have been a very important
part of an overall approach to this problem to date. Since the
release of CFATS in April, the Department has made a concerted
effort to inform our security partners of CFATS and its
requirements and to engage them very productively.
As of last week, approximately 28,000 facilities across the
country have submitted a Top-Screen consequence assessment that
is currently undergoing analysis. That analysis will be
complete, I believe, by the end of next month. Approximately
7,800 facilities have requested and received a Top-Screen
filing extension which will expire on approximately March 22 of
this year.
In addition, after the release of Appendix A, we granted
Top-Screen filing extensions to those owners and operators of
chemicals of concern in the agricultural world that possess
certain chemicals for agricultural use, mainly fertilizers and
pesticides. This extension will allow the Department to engage
agribusiness distributors and end-users in a productive dialog
to narrow the CFATS program focus onto truly high-risk
operations in the food and agricultural world. DHS will then
determine whether any modification of the Top-Screen
requirements might be warranted, particularly the approach
toward chemicals of interest, again in the chemical world.
The Department has also been committed to fostering a solid
working relationship with State and local officials or first
responders in jurisdictions with high-risk facilities, and we
have a initial cadre of 40 inspectors that we have deployed
across the country to begin this process.
In terms of our fiscal year 2008 requirements or
deliverables, we are looking at reviewing submitted site
vulnerability assessments for final tiering determinations,
yielding final populations of a regulated community; developing
the CSAT site security plans; reviewing the site security plans
and beginning Tier 1 and Tier 2 inspections; enhancing the CSAT
suite of applications in a CSAT version 2.0, and in developing
a comprehensive case management system; and, finally, very much
engaging the State and local partners in terms of pushing this
down to the grassroots level across the country.
In closing, on the subject of proposed new legislation, I
believe that it is critical that any new legislation on
chemical security should be carefully crafted to continue the
forward momentum and the success of the CFATS program, continue
the initiative and the partnership across the various
stakeholder groups, prior and existing efforts by the
Department, and, most importantly, the compliance activities
already implemented or under way by the regulated community
should be carried forward with any new legislative authority.
The Department and industry have invested a significant
amount of resources and time into information collection,
consequence assessment and risk mitigation activities and those
efforts should be validated by incorporation or continuation to
the maximum extent possible in any new legislation.
Again, ladies and gentlemen, we are interested in carrying
the momentum forward, carrying the progress forward and
bridging the current structure from one administration to the
next. My personal goal is to hand over a 100-percent-squared-
away operation to the next executive and congressional
leadership team that will take office in January 2009.
Sir, subject to your follow-on questions, I have now
completed the initial part of my testimony.
[The statement of Mr. Stephan follows:]
Prepared Statement of Robert B. Stephan
February 26, 2008
Thank you, Chairman Thompson, Ranking Member King, and
distinguished Members of the committee. It is a pleasure to appear
before you today to address progress on the implementation of the
Department's authority over security at high-risk chemical facilities
through the Chemical Facility Anti-Terrorism Standards (CFATS) program,
as well as provide insight regarding a transition of the existing
regulatory program to a permanent authorization. In terms of CFATS,
there is significant activity to report on a recent regulatory
deadline--the deadline for chemical facilities to submit to the
Department a completed Top-Screen questionnaire.
chemical security regulations
The fiscal year 2007 Department of Homeland Security Appropriations
Act directed the Department to develop and implement a regulatory
framework to address the high level of security risk posed by certain
chemical facilities. Consequently, the Department published an Interim
Final Rule, known as the Chemical Facility Anti-Terrorism Standards
(CFATS) on April 9, 2007. Specifically, Section 550(a) of the Act
authorizes the Department to require high-risk chemical facilities to
complete Security Vulnerability Assessments (SVAs), develop Site
Security Plans (SSPs), and implement protective measures necessary to
meet risk-based performance standards established by the Department of
Homeland Security.
The following core principles guided the development of this
regulatory structure:
(1) Securing high-risk chemical facilities is an immense
undertaking that involves a national effort, including all
levels of government and the private sector.--Integrated and
effective partnerships among all stakeholders--Federal, State,
local, and private sector--are essential to securing our
national critical infrastructures, including high-risk chemical
facilities. Implementing this program means tackling a
sophisticated and complex set of issues related to identifying
and mitigating vulnerabilities and setting security goals. This
requires a broad spectrum of input. By working closely with
experts, such as New York and New Jersey State officials,
members of industry, members of academia, and Federal
Government partners, we leveraged vital knowledge and insight
to improve the regulation.
(2) Risk-based tiering will ensure that resources are appropriately
deployed.--Not all facilities present the same level of risk,
and the greatest level of scrutiny should be focused on those
facilities that, if attacked, could endanger the greatest
number of lives, have the greatest economic impact, or present
other significant risks.
(3) Reasonable, clear, and equitable performance standards will
lead to enhanced security.--The interim final rule includes
enforceable risk-based performance standards. Facilities have
the flexibility to select among appropriate site-specific
security measures that will effectively address risk, which
leads to a Site Security Plan (SSP). The Department will
analyze each facility's SSP, and, if it satisfies the CFATS
performance standards, approve. If an SSP does not meet the
CFATS performance standards, DHS will disapprove the plan and
work with the facility to revise and resubmit an acceptable
plan.
(4) Recognition of the progress many companies have already made in
improving facility security leverages those advancements.--Many
responsible companies have made significant capital investments
in security since 9/11, and building on that progress in
implementing the CFATS program will raise the overall security
baseline of high-risk chemical facilities.
appendix a: chemicals of interest list
The Appendix A final rule to the CFATS, published in the Federal
Register on November 20, 2007, contains a list of chemicals and their
Screening Threshold Quantities. Possession of one or more of these
chemicals of interest at or above the applicable threshold quantity
triggers a requirement for the facility to complete and submit an
online consequence assessment known as a Top-Screen. The data gathered
through the Top-Screen tool informs the Department's determination of
the facility's level of risk and the potential need for the facility to
comply with the substantive requirements of the CFATS.
The Department published the Appendix A final rule after a notice
and comment period. The final Appendix A lists 322 chemicals of
interest, including common industrial chemicals such as chlorine,
propane, and anhydrous ammonia, as well as specialty chemicals, such as
arsine and phosphorus trichloride. The Department included chemicals
based on the consequence associated with one or more of the following
three security issues:
(1) Release.--Toxic, flammable, or explosive chemicals that have
the potential to create significant adverse consequences for
human life if intentionally released or detonated;
(2) Theft/Diversion.--Chemicals that have the potential, if stolen
or diverted, to be used or converted into weapons; and
(3) Sabotage/Contamination.--Chemicals that, if mixed with other
readily available materials, have the potential to create
significant adverse consequences for human life.
The Department established a Screening Threshold Quantity for each
chemical based on its potential to create significant adverse
consequences for human life, given the above three listed security
issues.
chemical security assessment tool
Implementation and execution of the CFATS regulation requires the
Department to identify which facilities it considers high-risk. The
Department developed the Chemical Security Assessment Tool (CSAT) to
identify potentially high-risk facilities and to provide methodologies
facilities can use to conduct security vulnerability assessments (SVAs)
and to develop site security plans (SSPs). CSAT is a suite of four
tools: facility registration, an SVA tool, an SSP template, and the
initial consequence-based screening tool called the Top-Screen. The
Top-Screen builds on the voluntary assessment tool referred to as the
Risk Analysis and Management for Critical Asset Protection (RAMCAP),
which the Department developed with technical input from industry.
Through the Top-Screen process, the Department can identify which
facilities do or do not have a significant potential to be the source
of negative consequences (that is, those that are or are not high-risk)
and can then ``screen out'' those facilities across the country that
are not high-risk.
The Department requires facilities that possess a chemical of
interest at or above the listed Screening Threshold Quantity to
complete the Top-Screen within 60 calendar days of the publication of
Appendix A (or within 60 calendar days of coming into possession of a
chemical of interest at or above the applicable Screening Threshold
Quantity after publication of Appendix A). As Appendix A was published
on November 20, 2007, the due date for initial Top-Screen submissions
was January 22, 2008. By that date, the Department had received 23,264
Top-Screen submissions from chemical facilities.
If a facility is not screened out during the Top-Screen process,
the Department will assign the facility to a preliminary risk-based
tier. Those facilities must then complete the Security Vulnerability
Assessments and submit them to the Department. Results from this SVA
will inform the Department's determination of a facility's final tier
assignment. This represents the very next phase of the CFATS process.
All high-risk facilities fall into one of four risk-based tiers.
These high-risk facilities will be required to develop Site Security
Plans that address their identified vulnerabilities and address the
performance standards and the security issues presented by the
facility. The higher the risk-based tier, the more robust the security
measures and the more frequent and rigorous the inspections will be.
For example, Tier 1 facilities will have more rigorous requirements
than Tier 4 facilities. Inspections will both validate the adequacy of
a facility's Site Security Plan and verify the implementation of the
plan's measures.
risk-based performance standards
CFATS promulgated 19 risk-based performance standards for
compliance. The standards themselves are broad and designed to promote
a great deal of flexibility in how a facility approaches meeting
standards applicable to it. Although all high-risk facilities must
comply with the risk-based performance standards, the measures
necessary to meet these standards will vary for the different tiers.
For example, a Tier 1 facility with a release hazard security issue
would be required to satisfy the performance standards for perimeter
control, personnel access, cyber security, intrusion detection, and all
other standards applicable to that security issue at a level
appropriate for Tier 1 facilities.
How the facility chooses to meet the required performance standard
in its Site Security Plan is at the facility's discretion. In the
example of the Tier 1 facility with a release hazard security issue,
the ``restrict area perimeter'' performance standard at the Tier 1
level may involve, for example, the facility establishing a clearly
defined perimeter that cannot be breached by a wheeled vehicle. To meet
the performance standard, the facility is able to consider a vast
number of security measures and might ultimately choose to install
cable anchored in concrete block along with movable bollards at all
active gates. As long as the specific measures are sufficient to
address the performance standard, the Department would approve the
plan. Or, the facility might choose to ``landscape'' its perimeter with
large boulders, steep berms, streams, or other obstacles that would
thwart a wheeled vehicle. Again, as long as the proposed measures are
sufficient, the Department would approve this plan.
phased approach to cfats implementation
The Department is using a phased approach for implementation of the
CFATS regulation. In advance of the release of Appendix A, the
Department began Phase 1 of CFATS implementation at certain facilities
that the Department believed, based on available information, are
likely to be high-risk. Following initial outreach at the corporate
level, the Department sent letters to approximately 90 facilities,
informing them of their selection for participation in Phase 1, and
advising those facilities of the requirement to submit a Top-Screen.
The facilities were to complete the Top-Screen in advance of the
release of Appendix A and receive technical assistance from Department
inspectors. The Department, after receiving the majority of Phase 1
Top-Screens, reviewed these submissions for risk determinations. Those
Phase 1 facilities determined to be high-risk will receive written
notification from the Department informing them of the Department's
determination and instructing these facilities on their requirements to
complete a Security Vulnerability Assessment (SVA) for departmental
review. The Department will provide technical assistance to those Phase
1 high-risk facilities as they conduct the SVA process.
In addition to the above, publication of the final Appendix A
initiated Phase 2, the full implementation of the CFATS program. Phase
2 covers all facilities that possess chemicals of interest at or above
the listed Screening Threshold Quantities listed in Appendix A. For
Phase 2, most facilities have completed the Top-Screen, although a
number of facilities received filing extensions. Those facilities
subsequently determined to be high-risk will receive preliminary
tiering decisions and will be instructed to complete SVAs. Upon receipt
of a facility's SVA, the Department will review it for purposes of
final tiering determinations, and covered facilities will be required
to develop SSPs. The Department will review those SSPs and conduct on-
site facility inspections to ensure compliance with the submitted plan.
outreach and partnership efforts
Since the release of CFATS in April, the Department has made a
concerted effort to publicize the rule and make sure that our security
partners are aware of CFATS and its requirements. As part of a
dedicated outreach program, the Department has presented at numerous
security and chemical industry conferences, participated in a variety
of other meetings of relevant security partners, issued several press
releases regarding the regulations, published and distributed full
copies of the regulations as well as various facts sheets summarizing
critical aspects of the regulations, and developed and continually
update a DHS.gov Chemical Security Web site. We believe these efforts
are definitely having an impact. As of February 10, 2008:
24,891 facilities have submitted a completed Top-Screen;
Approximately 7,800 facilities have requested and received a
Top-Screen filing extension; and
Agricultural operations possessing COI for agricultural use
have received a Top-Screen filing extension.
Partially stemming from the implementation issues surrounding the
ammonium nitrate security-related provisions within the fiscal year
2008 Omnibus Appropriations Act, the Department granted an extension to
a category of agricultural operations possessing COI for agricultural
use. This extension will allow the Department to engage agri-business
distributors and end users in dialog to narrow the CFATS program's
focus on the truly high-risk operations. DHS is currently gathering
more information about these issues to determine whether any
modification of the Top-Screen requirements might be warranted. As a
result of this research and dialog, DHS will review its approach toward
COIs used in agricultural operations.
Additionally, the Department intends to focus efforts on fostering
solid working relationships with State and local officials and first
responders in jurisdictions with high-risk facilities. To meet the
risk-based performance elements under CFATS, facilities are likely to
develop active, effective working relationships with local officials in
the areas of delaying and responding to potential attacks and a clear
understanding of roles and responsibilities during an elevated threat
situation.
In terms of staffing the chemical security program, the National
Protection and Programs Directorate has launched an aggressive hiring
effort in order to meet a wide variety of program requirements by the
end of fiscal year 2008. In addition, the chemical security regulatory
program has embarked on a course to fulfill in fiscal year 2008 the
following deliverables:
Review submitted SVAs for final tiering determinations,
yielding the population of facilities subject to the
substantive security requirements of the CFATS regulatory
program;
Develop the CSAT SSP template for use by regulated
facilities, as well as review of Phase 1 facility SSPs and
conduct inspections for those facilities;
Review SSPs, along with a select number of inspections for
Tier 1 facilities;
Enhance the CSAT suite of applications, by developing
requirements for CSAT version 2.0, which will: (1) Provide
chemical facilities with the ability to conduct ``what if''
analyses within the SVA based on risk assessments; (2) host a
portal for a personnel surety capability; (3) maintain Top-
Screen and SVA analytical capabilities; and (4) host a case
management system for tracking CSAT usage; and
Engage State and local officials and chemical facilities to
plan, train, and exercise activities related to delay and
response performance standards.
In addition, as the committee is aware, the Department has recently
submitted a fiscal year 2009 budget request that further details the
chemical security regulatory program's requirements for future years,
including additional inspector personnel to upgrade outreach, plan
approval, inspection, and audit capabilities; further outfit the
program's adjudications and appeals component; and further enhance CSAT
by developing an economic modeling tool for the chemical sector, as
well as accomplish other important program objectives.
ammonium nitrate regulations
In addition to the previously legislated chemical security
regulatory authority discussed above, in the fiscal year 2008 Omnibus
Appropriations Act, Congress amended the Homeland Security Act of 2002
(6 U.S.C. 361 et seq.) by adding a Subtitle J, Secure Handling of
Ammonium Nitrate (AN). Subtitle J authorizes the Department to regulate
the sale and transfer of AN and requires that DHS develop a regulatory
program that oversees or requires: (1) The registration of AN
Facilities and AN Purchasers with DHS; (2) Point-of-Sale verification
of AN purchasers; (3) record-keeping requirements for AN sales
transactions, with penalties for failing to maintain records
appropriately; (4) theft or loss reporting requirements; (5) compliance
inspections conducted by DHS; (6) guidance materials and informational
posters for the benefit of both AN facilities and AN purchasers; (7) an
appeals process. Subtitle J also provides DHS with the authority to
levy civil penalties of up to $50,000 per violation of the subsequent
regulation.
One of the key principles of any subsequent DHS regulatory program
resulting from Subtitle J will be to ensure that the AN-specific
regulations are complementary to the CFATS regulations, especially as
CFATS applies to AN facilities (that is, facilities that meet CFATS
criteria for submitting Top Screens and high-risk facilities that must
submit SVAs and SSPs). The goal is to ensure the secure handling of AN
without unduly burdening buyers and sellers of AN.
Prior to initiating the rulemaking process, Congress directed the
National Protection Programs Directorate (NPPD) to develop a report
that would discuss how the Department would implement and fund a
program incorporating the above requirements within the current budget.
DHS is currently in the process of developing that implementation
report, which will estimate the magnitude of the costs that AN facility
owners and operators, AN purchasers, and DHS may incur in the
implementation of and compliance with the Act. The report is presently
undergoing intra-Departmental review and will be presented to Congress
in the near future.
In addition to this new authority, the Department is currently
engaged in a variety of efforts, both regulatory (e.g., CFATS and the
U.S. Coast Guard's Maritime Transportation Security Act program) and
voluntary (e.g., National Infrastructure Protection Plan's Chemical
Sector efforts, Transportation Security Administration's security
action items), aimed at securing the chemical supply chain, including
ammonium nitrate.
As discussed above, the Department is currently analyzing the
various regulatory approaches that could be used to accomplish the
activities required by Subtitle J. Our intent is to harmonize the new
security authorities for ammonium nitrate with existing chemical
security supply chain authorities, including CFATS, MTSA, and the rail
transportation security regulations. To that end, DHS is working to
ensure that there are no duplicative or overlapping regulatory
requirements, and is seeking to avoid unnecessarily burdening both the
private sector and the Federal Government.
new legislation
Any new legislation on chemical security should be carefully
crafted to continue the forward momentum and success of the CFATS
program. Prior and existing efforts by the Department, and most
important, the compliance activities already implemented or underway by
the regulated population, should be carried forward with the enactment
of any new legislative authority. The Department and industry have
invested a significant amount of resources and time into information
collection and consequence assessment activities, and those efforts
should be validated by incorporation or continuation to maximum extent
in any new legislation.
conclusion
The Department is collaborating extensively with the public,
including members of the chemical sector and environmental groups, to
actively work toward achieving our collective goals under the CFATS
regulatory framework. In almost every case, industry has voluntarily
done a tremendous amount to ensure the security and resiliency of its
facilities and systems. As we implement the chemical facility security
regulations, we will continue to work as partners with industry, States
and localities to get the job done.
We must focus our efforts on implementing a risk- and performance-
based approach to regulation and, in parallel fashion, continue to
pursue the voluntary programs that have already borne considerable
fruit. In doing so, we look forward to collaborating with the committee
to ensure that the chemical security regulatory effort is sufficiently
defined in order to achieve success in reducing risk throughout the
chemical sector. In addition to our Federal Government partners,
success is dependent upon continued cooperation with our industry and
State and local government partners as we move toward a more secure
future.
Thank you for holding this important hearing. I would be happy to
respond to any questions you might have.
Chairman Thompson. Thank you very much for your testimony.
I now recognize Mr.--I hope I am pronouncing it right--
Wattier to summarize his statement for 5 minutes.
STATEMENT OF KEVIN L. WATTIER, GENERAL MANAGER, LONG BEACH
WATER DEPARTMENT
Mr. Wattier. Chairman Thompson, Ranking Member King,
distinguished Members of the committee, my name is Kevin
Wattier; and I am the General Manager of the Long Beach Water
Department, an urban retail water supply agency of the city of
Long Beach, California. I am a licensed professional engineer
and a certified Grade 5 Water Treatment Operator in the State
of California. I have been General Manager of the Long Beach
Water Department since July 2001; and over a decade of my
career was spent with the Metropolitan Water District of
Southern California, the largest supplier of drinking water in
the country, where for part of that time I had the
responsibility for managing the organization's water treatment
and distribution facilities throughout southern California.
I would like to thank the committee for its consideration
of chemical security oversight at our Nation's water treatment
facilities and for inviting me to be here this morning to share
my experience and opinion on this important policy matter.
My testimony before you this morning will focus
specifically on Department of Homeland Security regulation of
chemical security practices at water treatment plants and the
handling and storage of gaseous chlorine at the Long Beach
groundwater treatment plant. This testimony represents my
professional opinion as a licensed professional engineer and
water treatment operator, and it is based on the responsibility
I have as a water official of the city of Long Beach.
All water treatment plants throughout the country use some
form of chorine for at least part of their disinfection
process. The disinfection of drinking water with chlorine is
widely regarded as one of the greatest public health
achievements of the 20th century. While the use of gaseous
chlorine is often the most cost-effective and efficient method
of water disinfection, the risks associated with the handling,
transport and storage of large amounts of gaseous chlorine must
be considered within the broader context of current security
interests.
I have closely reviewed the draft Chemical Facility Anti-
Terrorism Act of 2008 before you today and strongly support the
proposed Department of Homeland Security risk and performance
based regulation of chemical security practices at U.S. water
treatment facilities. While it is imperative that this new
regulation in no way interferes with the existing Safe Drinking
Water Act compliance at our Nation's drinking water plants, the
additional expertise which the Department of Homeland Security
can provide to this critical element of our Nation's
infrastructure is greatly needed. Close coordination between
the Department of Homeland Security, the U.S. Environmental
Protection Agency and the associated State and local agencies
will ensure that our drinking water treatment plants will
continue to provide clean, reliable, affordable drinking water
while safeguarding the neighborhoods surrounded these plants.
I also believe that alternatives to the handling storage,
transport and storage of gaseous chlorine at these facilities
should be encouraged, considered and implemented where
feasible, without impairing critical operations. Federal
funding to encourage the consideration and implementation of
alternative disinfection treatment methods on a voluntary basis
will provide the necessary stimulus to enable certain agencies
to move forward toward implementation of inherently safer
technologies.
The city of Long Beach gets its water from two primary
sources. Half of our supply is treated imported water we
purchase from the Metropolitan Water District of Southern
California, and half is local groundwater treated at our
groundwater treatment facility, which is one of the largest
groundwater treatment plants in the country, if not the
largest. This facility employs conventional filtration
processes, which are typical of processes used in treatment of
surface water. Our treatment operations currently use gaseous
chlorine as the primary disinfectant.
Our groundwater treatment plant is located in a densely
populated urban area in California's fifth largest city. The
Los Angeles/Long Beach area is the most populated metropolitan
area in the country. Our facility is immediately adjacent to
the city of Long Beach Emergency Operations Command Center; the
Long Beach Airport, where it sits under the flight path of
incoming commercial aircraft and across the street from the
control tower; the north and southbound lanes one of the 405
freeway, one of the busiest freeways in the United States; the
Long Beach Unified School District food distribution center; a
professional business center; the Greater Long Beach Regional
Red Cross headquarters, two medical buildings; and many other
business and residential units.
Like all other large water utilities throughout the
country, we conducted a vulnerability assessment of our
critical facilities following the terrorist attacks of
September 11, 2001. While we have implemented significant
security improvements to control site access, detect, deter and
delay potential terrorist incidents and numerous other security
enhancements, the consequences of an intentional attack by a
highly motivated terrorist on our chlorine supplies merit
further consideration.
It is clear to us in Long Beach that the most effective way
to protect against such an intentional attack is to eliminate
the target. We are in the process of doing just that.
To eliminate this vulnerability, the Long Beach Water
Department has integrated and since March 2004 has been
conducting operations of a demonstration-scale 700-pound per
day on-site chlorine generation system. On-site gaseous
chlorine generation is a relatively new process, and I believe
Long Beach may be among the first in the United States to begin
integrating such a system into our water treatment operations.
We are pleased with the results of our demonstration-scale
project and have now begun to increase the capacity of the
system to 2,000 pounds per day, which is Phase 1 of an eventual
6,000-pound-per-day on-site generation system. The total
capital cost of completely eliminating the handling and storage
of gaseous chlorine and bringing on-site chlorine generation
on-line at the Long Beach groundwater treatment plant is
estimated to cost between $2 million and $3 million.
While Long Beach is pursuing this particular alternative
chlorination method, it is important for this committee to
understand that there are numerous commercially available
alternative disinfection technologies that exist that have been
successfully implemented at various water and wastewater
treatment operations across the United States. However,
numerous local considerations and other critical site-specific
factors must be considered on a strict case-by-case basis to
determine feasibility of integrating any of these alternative
technologies. In a few cases, it may be infeasible to integrate
any of these alternative technologies into treatment
operations. Any consideration of alternative technologies must
include assurances that maintain reliability of water systems
as well as the flexibility needed to enable water treatment
operators to adhere to strict Federal and State water quality
standards.
I would propose that the committee amend its current draft
to include an authorization of appropriations for voluntary
integration of technologies that reduce or eliminate the risk
posed by transport and storage of containerized gaseous
chlorine. Federal participation in voluntary demonstration-
scale projects of this type would have a profound impact on the
United States water treatment industry.
I want to thank the committee again for allowing me to give
you my thoughts on these matters. My organization and I make
ourselves available for any further discussion on these and any
other matters related to the Chemical Facility Anti-Terrorism
Act of 2008 upon your request.
I would be happy to answer any of your questions. Thank
you.
Chairman Thompson. Thank you very much. For the record, we
have already incorporated that suggestion in the print.
Mr. Wattier. Thank you sir.
[The statement of Mr. Wattier follows:]
Prepared Statement of Kevin L. Wattier
February 26, 2008
Chairman Thompson, Ranking Member King, distinguished Members of
the committee, my name is Kevin Wattier, and I am the General Manager
of the Long Beach Water Department, an urban, retail water supply
agency of the city of Long Beach, California. I am a licensed
Professional Engineer and certified Grade 5 Water Treatment Operator in
the State of California. I've been General Manager of the Long Beach
Water Department since July 2001. Over a decade of my career was spent
with the Metropolitan Water District of Southern California, the
largest supplier of drinking water in the country, where for part of
that time I had responsibility for managing the organization's water
treatment and distribution facilities throughout southern California.
I would like to thank the committee for its consideration of
chemical security oversight at our Nation's water treatment facilities,
and for inviting me to be here this morning to share my experience and
opinion on this important policy matter. My testimony before you this
morning will focus specifically on Department of Homeland Security
regulation of chemical security practices at water treatment facilities
and the handling and storage of gaseous chlorine at the Long Beach
Groundwater Treatment Plant. This testimony represents my professional
opinion as a licensed professional engineer and water treatment
operator; and it is based on the responsibility I have as a water
official for the city of Long Beach.
All water treatment plants throughout the country use some form of
chlorine for at least part of their disinfection process. The
disinfection of drinking water with chlorine is widely regarded as one
of the greatest public health achievements of the 20th century. While
the use of gaseous chlorine is often the most cost-effective and
efficient method of water disinfection, the risks associated with the
handling, transport and storage of large amounts of gaseous chlorine
must be considered within the broader context of current national
security interests.
I have closely reviewed the draft ``Chemical Facility Anti-
Terrorism Act of 2008'' before you today, and strongly support the
proposed Department of Homeland Security risk- and performance-based
regulation of chemical security practices at U.S. water treatment
facilities. While it is imperative that this new regulation in no way
interferes with the existing Safe Drinking Water Act compliance at our
Nation's drinking water treatment plants, the additional expertise
which the Department of Homeland Security can provide to this critical
element of our Nation's infrastructure is greatly needed. Close
coordination between the Department of Homeland Security, the USEPA,
and the associated State and local agencies will ensure that our
drinking water treatment plants will continue to provide clean,
reliable, affordable drinking water while safeguarding the
neighborhoods surrounding these plants.
I also believe that alternatives to the handling, transport and
storage of gaseous chlorine at these facilities should be encouraged,
considered, and implemented where feasible, without impairing critical
operations. Federal funding to encourage the consideration and
implementation of alternative disinfection treatment methods, on a
voluntary basis, would provide the necessary stimulus to enable certain
agencies to move toward implementation of inherently safer
alternatives.
The city of Long Beach gets its water from two primary sources.
Half of our supply is treated imported water we purchase from the
Metropolitan Water District of Southern California, and half is local
groundwater treated at our groundwater treatment facility, which is one
of the largest groundwater treatment facilities in the United States,
if not the largest. This facility employs conventional filtration
processes, which are typical of processes used in the treatment of
surface water. Our treatment operations currently utilize gaseous
chlorine as the primary disinfect.
Our Groundwater Treatment Plant is located in a densely populated,
urban area in California's fifth largest city. The Los Angeles/Long
Beach area is the most populated metropolitan area in the country. Our
facility is immediately adjacent to the city of Long Beach Emergency
Operations Command Center, the Long Beach Airport (where it sits under
the flight path of incoming commercial aircraft and across the street
from the control tower), the north and southbound lanes of the 405
Freeway, one of the busiest freeways in the United States, the Long
Beach Unified School District food distribution center, a professional
business center, the Greater Long Beach Regional Red Cross
Headquarters, two medical buildings and many other business and
residential units.
Like all other large water utilities throughout the country, we
conducted a vulnerability assessment of our critical facilities
following the terrorist attacks of September 11, 2001. While we have
implemented significant security improvements to control site access,
detect, deter and delay potential terrorist incidents, and numerous
other security enhancements, the consequences of an intentional attack
by a highly motivated terrorist on our chlorine supplies merit further
consideration.
It is clear to us in Long Beach that the most effective way to
protect against such an intentional attack is to eliminate the target.
We are in the process of doing just that.
To eliminate this vulnerability, the Long Beach Water Department
has integrated, and since March 2004, has been conducting operations of
a demonstration-scale 700 lb/day on-site chlorine generation system.
On-site gaseous chlorine generation is a relatively new process and I
believe Long Beach may be among the first in the United States to begin
integrating such a system into its water treatment operations. We are
pleased with the results of our demonstration-scale project and have
now begun work to increase the capacity of the system to 2,000 lbs/day,
which is Phase 1 of an eventual 6,000 lb/day on-site generation system.
The total capital cost of completely eliminating the handling and
storage of gaseous chlorine, and bringing on-site chlorine generation
on-line at the Long Beach Groundwater Treatment Plant is estimated to
cost between $2 million and $3 million.
While Long Beach is pursuing this particular alternative
chlorination method, it is important for this committee to understand
that there are numerous commercially available alternative disinfection
technologies that exist that have been successfully implemented at
various water and wastewater treatment operations across the United
States. However, numerous local considerations and other critical site
specific factors must be considered, on a strict case-by-case basis, to
determine feasibility of integrating any of these alternative
technologies. In a few cases it may be infeasible to integrate any of
these alternative technologies into treatment operations. Any
consideration of alternative technologies must include assurances that
maintain reliability of water systems, as well as the flexibility
needed to enable water treatment operators to adhere to strict Federal
and State water quality standards.
I would propose the committee amend its current draft to include an
authorization of appropriations for voluntary integration of
technologies that reduce or eliminate the risk posed by transport and
storage of containerized gaseous chlorine. Federal participation in
voluntary demonstration-scale projects of this type would have a
profound impact on the United States water treatment industry.
I want to thank the committee again for allowing me to give you my
thoughts on these matters. My organization and I make ourselves
available for any further discussion on these and any other matter
related to the ``Chemical Facility Anti-Terrorism Act of 2008'' upon
your request.
I would be happy to answer any of your questions.
Chairman Thompson. Dr. Pulham.
STATEMENT OF DAVID C. PULHAM, PH.D., DIRECTOR OF COMPLIANCE,
SIEGFRIED (USA), INC.
Mr. Pulham. Good morning, Chairman Thompson, Ranking Member
King and distinguished Members of the committee. My name is Dr.
David Pulham, Director of Compliance at Siegfried (USA) in
Pennsville, New Jersey. Prior to joining Siegfried, I spent 27
years with the Food and Drug Administration as a National
Expert Investigator. My responsibilities with FDA included
inspecting pharmaceutical facilities around the world and
assessing foreign regulatory agencies. As Director of
Compliance at Siegfried, I am responsible for ensuring FDA,
DEA, EPA, OSHA and DHS compliance.
Thank you for this opportunity to share with you my
company's perspective on the Chemical Facility Anti-Terrorism
Act of 2008, specifically with regard to inherently safer
technology. My remarks will address generally the issue of
inherently safer technology, reference our experience with the
State of New Jersey security provisions and conclude with our
recommendation on the bill going forward.
Siegfried's Pennsville, New Jersey, facility has been in
existence for over 70 years and manufactures both exclusive and
generic bulk pharmaceuticals with over 150 employees. Most of
Siegfried's products are controlled substances and are
therefore highly regulated by the Drug Enforcement
Administration. Due to Siegfried's commitment to compliance in
all areas, Siegfried takes great pride in the sterling
compliance record it has developed with virtually all Federal
and State agencies.
Siegfried is a member of the Synthetic Organic Chemical
Manufacturers Association, SOCMA, which is the leading chemical
industry organization representing the batch, custom and
specialty chemical industry since 1921. As a member of SOCMA,
Siegfried adheres to the principles of the ChemStewards
program, which is an environmental, health, safety and security
management system. This self-imposed program requires companies
to develop systematic approaches to environmental and chemical
risk management with independent, third-party verification.
ChemStewards incorporates SOCMA security vulnerability
assessment methodology, which is recognized by the Center for
Chemical Process Safety and is accepted by the Department of
Homeland Security for Tier 4 facilities under the Department's
Chemical Facility Anti-Terrorism Standards. SOCMA makes this
methodology publicly available in its effort to serve as a
leading industry resource for assessing security
vulnerabilities at chemical facilities.
New Jersey recently amended its Toxic Catastrophe
Prevention Act to require existing facilities to complete an
inherently safer technology review. Siegfried's assessment of
this process is that it was essentially a paperwork exercise to
document in great detail steps and considerations that we take
as a normal part of our process. Simply put, inherently safer
technology is a concept that the chemical industry invented;
and we consider it continuously as we design, modify and
enhance our production processes.
Securing our products is an ongoing responsibility. So is
complying with the comprehensive system of existing State and
Federal laws. These regulatory regimes require extensive
process hazard analysis, risk management planning and public
reporting on chemicals we handle on-site and, in some cases,
prior to handling them on-site. We feel that these regulations,
complemented by our own process-safety decisionmaking, provide
a concrete and meaningful level of consequence reduction at all
stages of the product lifecycle.
Speaking specifically of existing Federal rules, Siegfried
supports DHS's existing Chemical Facility Anti-Terrorism
Standards, which do not include any IST mandates. These rules
require comprehensive vulnerability assessments and security
plans, and those plans have to meet almost 20 rigorous security
performance standards. We encourage the committee to support
the current approach.
Mr. Chairman, I have heard people say that since the
industry already considers inherently safer technology in its
decisionmaking process and since we are already bound by
regulated regulatory regimes it should be easy for us to comply
with a new layer of IST regulation. In fact, it is never a
simple task to integrate a new set of rules imposed by a new
regulatory entity with the numerous engineering and compliance
programs we already have to manage. An IST mandate would
complicate and in some cases could undermine existing practices
or compliance. Mandating IST for companies like Siegfried that
manufacture hundreds of batches of specialty batched products
every year is a much greater exercise than what may appear on
the surface. Having to debate which approach is inherently
safer in any given case would slow down our ability to meet
customer needs, and it could be dangerous if we are compelled
to accept and go along with an approach that we personally
think may not be the lowest-risk approach. With all due
respect, this issue is vastly more complicated than most people
appreciate.
Thank you for the opportunity to share with you Siegfried's
perspective on inherently safer technology and existing Federal
security rules. I look forward to your questions.
[The statement of Mr. Pulham follows:]
Prepared Statement of David C. Pulham
February 26, 2008
Good morning Chairman Thompson, Ranking Member King, and
distinguished Members of the committee. My name is Dr. David C. Pulham,
Director of Compliance at Siegfried (USA), Inc. in Pennsville, New
Jersey. I spent 27 years with the Food and Drug Administration as a
National Expert Investigator. Part of this responsibility required
inspecting pharmaceutical facilities around the world and qualifying
foreign regulatory agencies. As Director of Compliance at Siegfried, my
responsibilities include FDA, DEA, EPA, OSHA, and DHS compliance.
Thank you for this opportunity to share with you my company's
perspective on the Chemical Facility Anti-Terrorism Act of 2008,
specifically with regard to inherently safer technology. My remarks
will speak generally to the issue of inherently safer technology,
reference our experience with the State of New Jersey's security
provisions, and conclude with our recommendation on the bill going
forward.
Siegfried (USA)'s Pennsville, New Jersey, facility manufactures
bulk pharmaceuticals and employs 150 personnel. Most of Siegfried's
products are controlled substances. Therefore, we are highly regulated
by the Drug Enforcement Administration. Siegfried takes pride in its
compliance record with all Federal and State government agencies.
Siegfried (USA) is a member of the Synthetic Organic Chemical
Manufacturers Association (SOCMA), which is the leading chemical
industry association representing the batch, custom, and specialty
chemical industry since 1921. As a member of SOCMA, Siegfried adheres
to the principles of the ChemStewards program, an environmental,
health, safety, and security management system. This self-imposed
program requires companies to develop systematic approaches to
environmental and chemical risk management with independent, third-
party verification. ChemStewards incorporates SOCMA's security
vulnerability assessment methodology, which is recognized by the Center
for Chemical Process Safety and is accepted by the Department of
Homeland Security for Tier Four facilities under the Department's
Chemical Facility Anti-Terrorism Standards. SOCMA makes this
methodology publicly available in its effort to serve as a leading
industry resource for assessing security vulnerabilities at chemical
facilities.
New Jersey recently amended its Toxic Catastrophe Prevention Act
(TCPA) rules to require existing facilities to complete an ``Inherently
Safer Technology Review.'' Siegfried's assessment of this process is
that it is essentially a paperwork exercise to document, in great
detail, steps and considerations that we take as a normal part of our
process. Simply put, inherent safety is a concept that the chemical
industry invented, and we consider it continuously as we design and
modify our production processes.
Securing our products is an ongoing responsibility. So is complying
with the comprehensive system of existing State and Federal laws. These
regulatory regimes require extensive process hazard analysis, risk
management planning, and public reporting on chemicals we handle on-
site and, in some cases, prior to handling them on-site. We feel that
these regulations, complemented by our own process-safety
decisionmaking, provide a concrete and meaningful level of consequence
reduction at all stages in the product lifecycle.
Speaking specifically of existing Federal rules, Siegfried supports
DHS's existing Chemical Facility Anti-Terrorism Standards, which do not
include any IST mandates. These rules require comprehensive
vulnerability assessments and security plans, and those plans have to
meet almost 20 rigorous security performance standards. We encourage
this committee to support the current approach.
Mr. Chairman, I've heard people say that, since the industry
already considers inherent safety in its decisionmaking process, and
since we're already bound by related regulatory regimes, it should be
easy for us to simply comply with a new layer of IST regulation. In
fact, it is never a simple task to integrate a new set of rules,
imposed by a new regulatory entity, with the engineering and compliance
programs we already have to manage. An IST mandate would complicate,
and in some cases could undermine, existing practices or compliance.
Mandating IST for companies like Siegfried that manufacture hundreds of
specialty batch products every year is a much greater exercise than
what may appear on the surface. Having to debate which approach is
inherently safer in a given case would slow down our ability to meet
customer needs. And it could be dangerous, if we are compelled to
accept, or go along with, an approach that we personally think may not
be the lowest-risk approach. With all due respect, this issue is vastly
more complicated than most people appreciate.
Thank you for the opportunity to share with you Siegfried (USA)'s
perspective on inherently safer technology and existing Federal
security rules. I look forward to your questions.
Chairman Thompson. I thank all the witnesses for their
testimony.
I remind each Member that he or she will have 5 minutes to
question the panel.
Before I start my questions, I would like to ask unanimous
consent to submit four statements for the record. One is a
statement from the National Propane Gas Association, one a
statement from the Chemical Bill Coalition, one a statement
from Greenpeace and finally a statement from the Industrial
Safety Training Council. Without objection, the statements are
inserted into the record.
[The statements follow:]
Statement of the National Propane Gas Association
February 26, 2008
The National Propane Gas Association (NPGA) appreciates the
opportunity to submit the following statement on the proposed Chemical
Facility Anti-Terrorism Act of 2008.
NPGA is the national trade association of the LP-Gas (principally
propane) industry with a membership of about 3,600 companies, including
39 affiliated State and regional associations representing members in
all 50 States. The single largest group of NPGA members are retail
propane marketers whose total membership is approximately 3,000
companies, the vast majority of which are small businesses. These
companies operate approximately 10,000 retail facilities that serve
propane customers in every State and county in the United States.
Customers use propane in residential and commercial installations, in
agricultural applications, in industrial processing, and as a clean air
alternative engine fuel for both over-the-road vehicles and nonroad
engines such as those used in forklifts.
The proposal has been released in draft in several different forms,
the latest being dated February 19, 2008. In general, the bill would
extend and revise the authority of the Department of Homeland Security
(DHS) to administer the Chemical Facility Anti-Terrorism Standards
(CFATS), which have been in their final form for less than 100 days. In
fact, the initial round of determinations of facility risk performed
through the Top Screen process have not been issued by DHS to our
knowledge. Nevertheless, the bill proposes to make major changes to the
legal environment in which the CFATS are written and administered. NPGA
urges Congress to exercise extreme caution not to enact provisions that
increase confusion in the private sector with no increase in security.
the propane industry is highly regulated for both safety and security
The propane industry is one of the most highly regulated industries
in the United States. The industry's commitment to the safety and
security of industry personnel and customers is paramount, and leads us
to support appropriate provisions at the Federal, State, and local
levels.
Since 1931, NPGA's primary mission has been to increase the safety
of propane use. Since September 11, 2001, NPGA's scope of activities
has broadened to include security considerations. Our efforts began
with intensive outreach to industry members to facilitate their
interaction with Federal officials representing agencies such as the
Department of Transportation's (DOT) FMCSA and RSPA (now known as
PHMSA) and the Department of Defense. We distributed DOT's Security
Awareness Training CD-ROM to the industry and invited key policymakers
to address our association meetings. In addition, the propane industry
sits on the Oil and Natural Gas Sector Coordinating Council providing
direct interaction with other industries and Federal security
personnel.
The industry supports background checks of industry personnel, and
performs detailed security plans required by the Department of
Transportation. These security plans are broad in scope and address
personnel security, the en route security of delivery trucks, and the
security of the propane storage facilities themselves against
unauthorized access. Perhaps the most important initiative, however,
has been the modernization of the primary propane safety standard to
include security measures. National Fire Protection Association (NFPA)
Standard 58, LP-Gas Code, is updated triennially to make continual
improvements in safety for the storage and handling of propane. This
standard is adopted by reference or by transcription in all 50 States
and has included security-specific language since the 2004 edition.
Section 6.16.5 of NFPA 58 prescribes requirements for the security and
protection against tampering for propane systems. It also requires the
facility operator to provide security measures to minimize entry by
unauthorized persons and, at a minimum, security awareness training.
Other requirements cover industrial-type fencing, guard service,
lighting and ignition source control.
congress should not enact policies that conflict with current federal
tax policies encouraging propane storage
Federal tax policy, both directly and indirectly, has been
encouraging increased storage capacity for propane for many years.
Since 1992, Federal tax law has directly encouraged increasing the use
and storage of alternative fuels, including propane. From 1992 until
2005, Section 179A of the U.S. Tax Code provided for a special
deduction for certain clean fuel refueling property, including the
storage of propane. In 2005, this deduction was succeeded by a new
Federal tax credit (Section 30C), again designed to increase the
storage capacity for alternative fuels, including propane.
Additionally, in 2005, Federal tax law added a credit for
alternative fuels (Section 6426) and alternative fuel vehicles (Section
30B). Again, these credits included propane as a recognized alternative
fuel. These credits for propane fuel and propane vehicles encourage the
increasing of propane storage capacity in a logically indirect way.
Indeed, all three credits (fuel, vehicles, and storage) work together
to advance each particular piece of the equation necessary to sustain
propane vehicle technology. The more propane vehicles you have, the
more propane fuel you need. The more propane fuel you need the more
propane storage capacity is necessary to store that fuel. The more
storage and fuel available the more likely manufacturers will want to
produce propane vehicles. This all adds up to increased use of a clean
burning alternative fuel that helps address today's environmental
concerns. Thus all these credits work to accentuate each other.
Other aspects of Federal tax policy also encourage propane storage,
also in an indirect manner. A high percentage of propane retailers are
small- to mid-size businesses. As such they are highly sensitive to how
tax law treats capital investments, such as storage. Thus dramatic
increases in expensing (the amount that a business may deduct for
capital investments immediately rather than depreciate over time) can
often dictate whether a small business will proceed with a new capital
investment. For years, the standard expensing figure has been in the
range of $25,000. However, since 2002 that figure has been increased
substantially to $125,000 and in the recently enacted Economic Stimulus
Package that figure was increased to $250,000 for the year 2008 only.
Moreover, businesses both big and small can benefit from ``Bonus
Depreciation'' which has been enacted for various periods of time over
the past 10 years, again most recently in the 2008 Economic Stimulus
Package. The provision would allow business to write off 50 percent
percent of the cost of depreciable property (capital expenditures)
acquired in 2008.
Both the expensing and depreciation provisions, in addition to the
previously mentioned credits, serves as a clear indication to the
propane industry that the Federal Government is strongly encouraging
the overall increase of propane storage capacity.
The Federal Government has consciously chosen to favor increased
storage capacity for propane in general. While we have already
mentioned the advantages as far as encouraging the use of alternative
fuel vehicles, there is another important element related to propane
use for heating and appliances. Propane used as heating fuel is largely
centered in rural and agricultural areas throughout the country due
primarily to its portable properties. In the winter when demand is at
its peak, prices for propane, as with other fuels such as natural gas,
can fluctuate greatly. Therefore, encouraging increased storage
capacity for propane makes sense for the many consumers using propane,
particularly in heating and agricultural applications. Congress should
not enact policies that will simultaneously encourage and discourage
propane storage.
concerns with direction of reauthorization
NPGA has a number of concerns with the direction being taken by the
committee in drafting the DHS reauthorization legislation.
1. DHS Should Retain An Ability To Make Determinations Based Upon Risk
(Section 2102)
NPGA is pleased that the most recent draft of the bill recognizes
that DHS needs the authority and the flexibility to use judgment in
deciding which facilities to regulate. Under the CFATS, DHS administers
the Top Screen process so that it can make judgments about whether
particular facilities need additional scrutiny and must therefore be
placed in a risk-based tier. Eliminating this ability and forcing DHS
to automatically place all facilities storing more than threshold
quantities will swamp DHS in data, making it harder for them to target
resources toward high-risk facilities.
2. Inherently Safer Technology (IST) Policy Creates an Explicit Need To
Consider Fuel Switching
NPGA is very concerned that Congress is setting forth a mechanism
by which facilities storing propane will be required to consider other
technologies or energy sources in place of those currently listed by
CFATS.
Strictly from a customer perspective, the bill requires propane
consumers to report on the possibility of substituting propane with
another fuel, using a less hazardous fuel, using smaller quantities, or
reducing propane storage. In doing so, the Government effectively tells
propane customers to create their own ``roadmap'' for switching from
propane to other fuels. With every new legislative or regulatory
mandate, the incentive to switch from clean-burning propane to less
environmentally friendly fuels such as diesel fuel or electricity
ratchets up as customers seek to remain unregulated. Worse still,
energy sources competing with propane remain largely unregulated from a
homeland security perspective, when they are not inherently safer or
more secure than propane.
Propane is a common fuel used safely by millions of homes, farms,
and businesses around the Nation. We are concerned that the
``inherently safer technology'' assessment required in Section 2110(b)
will make propane marketers and customers either reduce their propane
storage or switch from propane to other fuels not covered by the CFATS.
Specifically, the IST requirement would require propane marketers and
customers to assess, among other things, the following as it applies to
their locations: (1) Process redesign; (2) Input substitution; (3) Use
of less hazardous or benign substances; (4) Use of smaller quantities
of substances of concern; and (5) Reduction or elimination of storage,
transportation, handling, disposal, and discharge of substances of
concern.
All of these factors, but particularly Item 5, are troubling to
propane retailers and customers. By requiring propane marketers to
address reducing or eliminating propane storage, the Government is, in
effect, asking marketers to choose between proven industry safety
concerns and a supposedly more secure way of doing business.
Considering the favorable tax treatment extended by Congress to propane
discussed above, it is inappropriate at best for Congress to establish
a national policy encouraging the reduction of propane storage. NPGA
believes this is no choice at all. The safest portion of the propane
distribution chain is stationary storage, the very aspect that Congress
is suggesting could be ``inherently safer'' if it were reduced.
Enacting a policy that encourages reductions in propane storage
will have other negative impacts in the field. First, it will reduce
safety by requiring retailers to make more deliveries of smaller
quantities throughout the heating season. Not only will more trucks
need to be on the road to serve the existing demand, but it will
increase the number of transfer operations. Less on-site fuel storage
will also lead to supply bottlenecks, particularly in the busy winter
heating season, because fuel supplies will run out faster. Any
disruption to the fuel delivery infrastructure, such as winter snow and
ice storms that slow down or stop truck deliveries, could severely
impact essential deliveries of heating and cooking fuel to rural
America as well as jeopardize vital agricultural operations.
Ironically, when fuel shortages (due to bad weather, or man-made supply
chain problems) leave people without power and crops without proper
care, Congress will be the first to call into question the propane
storage and delivery system.
In the name of safety, fairness, fuel neutrality, and consistency
with existing tax preferences, NPGA strongly urges the committee to
eliminate fuels, such as propane, from inherently safer technology
reporting requirements in the draft legislation.
3. Weakening Preemption Will Weaken National Consistency of Regulation
NPGA also strongly opposes the limits the legislation seeks to
impose on Federal preemption in Section 2107. Allowing 50 individual
States and tens of thousands of localities to write more stringent laws
or regulations than currently exist at the Federal level will lead to a
hodge-podge of State chemical facility security laws, all with
differing procedures, compliance requirements and enforcement mandates.
The propane industry is already highly regulated at the State and local
level. In fact, providing States and localities the freedom to go their
own way on security will jeopardize the entire system of propane safety
regulations, since fire and building codes regulating propane are
administered at the State level. Adding numerous new State chemical
facility security laws will only create more red tape, and more
confusion. Furthermore, propane companies and customers--most of them
small businesses--will need to dedicate new financial and personnel
resources to comply with all the overlapping security requirements. To
avoid this, NPGA urges a strong statement from Congress in support of
Federal preemption of State homeland security laws.
4. There Is No Compelling Reason To Act Now
Finally, NPGA is confused as to why there is a rush to seek such
substantive changes to the DHS Chemical Facility Anti-Terrorism
Standards (CFATS). We understand that the authority to administer the
rules expires in October 2009, but they have only recently finished the
CFATS Top-Screen process which determines which chemical facilities
will be regulated and which will not (compliance letters to be sent
soon). Nonetheless, the committee via this legislation seems determined
to rewrite how DHS will administer chemical facility regulations before
DHS has a chance to test the utility of current regulations. The new
requirements in this legislation will only slow down the process of
securing vital chemical facilities as DHS will be forced to go back
through the regulatory process to address new congressional priorities.
At most, Congress should enact a simple reauthorization without
significant changes to the program.
NPGA appreciates this opportunity to submit comments to the House
Homeland Security Subcommittee on Transportation and Infrastructure
Protection. Should you have questions or require further information,
please contact us anytime.
______
Statement of the Chemical Bill Coalition
February 26, 2008
Member of Congress, we represent American agriculture, food
processing, energy, forest products, chemistry, medicine,
transportation, building materials and other businesses and local city
services that make up our national infrastructure. Protecting our
communities and complying with Federal security standards is a top
priority to us.
We are concerned that the ``Chemical Facility Anti-Terrorism
Security Act'' would cause disruptions of new Federal security
standards in the short term, and weaken infrastructure protection and
economic stability in the long term.
The Department of Homeland Security (DHS) began enforcement of
landmark new chemical security standards last month. Companies in
thousands of communities are just beginning to comply with these
significant new requirements while continuing to provide essential
products and services for our daily lives. Our industries and DHS are
investing time, training and other resources to adapt to comprehensive
security standards. However, this bill would detract from compliance
efforts and, in some cases, impede progress that is underway. We
believe that counter-productive, mid-stream adjustments to the current
law would undermine security at facilities all around the country.
Our primary concern is that the bill goes beyond requiring security
protections based on risk by creating a mandate to change products and
processes to a Government-selected ``safest'' technology. Congressional
testimony has stated that this would possibly increase risk and weaken
the businesses that it intends to protect. Such a standard is not
measurable and would likely lead to confusion and prohibitive legal
liability. The bill would also weaken protections for sensitive
security information and create overlapping and conflicting security
requirements.
Making extensive changes now is also premature. The DHS security
regulations being implemented are protecting thousands of facilities
that provide the food, water, energy, pharmaceuticals and other
chemical manufacturing that are essential for our national security and
economic vitality. Rushing approval of this bill would significantly
disrupt the recently implemented chemical security standards and create
economic uncertainty in many communities. We urge you to reconsider
this approach. While we would support straightforward legislation to
remove the sunset date and make the chemical security regulations
permanent, we strongly urge Congress to refrain from overhauling the
program at least until it has been given a fair chance to be
implemented and evaluated.
Thank you for your consideration of our views.
Agricultural Retailers Association; American Farm Bureau Federation;
American Forest & Paper Association; American Frozen Food Institute;
American Petroleum Institute; Beer Institute; Calorie Control Council;
Chemical Producers & Distributors Assn; Consumer Specialty Products
Assn; Croplife America; Environmental Technology Council; Independent
Liquid Terminals Assn; Institute of Makers of Explosives; Int'l Assn of
Refrigerated Warehouses; International Food Additives Council; Midwest
Food Processors Association; National Agricultural Aviation Assn;
National Assn of Chemical Distributors; National Association of
Manufacturers; National Assn of Truck Stop Operators; National Cotton
Council of America; National Mining Association; National Oilseed
Processors Assn; National Paint and Coatings Assn; Nat'l Petrochemical
& Refiners Assn; Petroleum Equipment Suppliers Assn; Petroleum
Marketers Assn of America; The Carpet and Rug Institute; The Fertilizer
Institute; U.S. Chamber of Commerce; USA Rice Federation.
______
Statement of Rick Hind, Legislative Director, Greenpeace Toxics
Campaign, Greenpeace
February 26, 2008
current law and department of homeland security regulations (cfats) are
inadequate; permanent legislation is essential to security
inherently safer technologies can eliminate catastrophic consequences
of a terrorist attack
``We don't want a chemical plant sitting somewhere in a place like
Boston become a bomb because it is not properly secured,''--Secretary
Chertoff, February 7, 2008.
``You know, the threat is just staring us in the face. I mean, all
you'd have to do is to have a major chemical facility in a major
metropolitan area go up and there'd be hell to pay politically. People
will say, `Well, didn't we know that this existed?' Of course, we
knew.''--Former Senator Warren Rudman (R-NH), November 2003.
The September 11 terrorist attacks successfully used our own
infrastructure against us with tragic results. They also demonstrated
that tight perimeter security, such as in the case of the Pentagon, is
incapable of preventing such attacks. Should a chemical plant be
targeted, a truck bomb, a small plane, helicopter or a high powered
rifle would easily render the industry's current reliance on fence-line
security totally useless. In fact, U.S. chemical facilities have been
referred to as ``pre-positioned'' weapons of mass destruction (WMD).
Reports during the summer of 2007 of renewed terrorist's capacity
to carry out attacks inside the United States are a sobering reminder
of the nearly 6 years of neglect following the 9/11 attacks. The
vulnerability of U.S. chemical plants to terrorism and serious
accidents such as the 1984 disaster in Bhopal, India have been widely
recognized. The potential magnitude of these risks surpasses the 9/11
attacks. Once released these chemicals and gases can remain dangerous
for up to 14 miles in an urban area (20 miles in a rural area) and put
the lives of millions of people at risk.
The nature of these risks meets any definition of a weapon of mass
destruction. The manner in which people would be killed and injured is
terrifying. Poison gases such as chlorine will literally melt the lungs
of its victims causing them to drown in their own lung fluid (pulmonary
edema). Survivors could be left with life-long disorders.
Although we would all like to believe the threat of a terrorist
attack is unlikely, U.S. intelligence officials now believe terrorist
attacks are more likely today than before the United States invaded
Iraq in 2003 (September 24, 2006, N.Y. Times). More recently on July
10, Department of Homeland Security (DHS) Secretary Michael Chertoff
told the media that he had a ``gut feeling'' that ``we are entering a
period this summer of increased risk.''
Following the 9/11 attacks it was reported that 9/11 ring leader,
Mohamed Atta, visited a Tennessee chemical plant asking lots of
questions (December 16, 2001, Washington Post). In the first 6 months
of 2007 at least five successful terrorist attacks in Iraq used
relatively small (150 to 250 pound) cylinders of chlorine gas to kill
dozens of people. As a result the DHS began briefing local bomb squads
and chemical plants across the country (April 24, 2007, USA Today).
In February and April 2007 thefts of 150 pound cylinders of
chlorine gas occurred in California prompting questions by members of
this committee to the DHS about their response to these thefts, any
other thefts and plans to eliminate these vulnerabilities by using
inherently safer technologies.
U.S. chemical facilities were not built or designed to defend
against terrorist attacks. Predicting where an attack will take place
is a fool's errand. No one predicted that Timothy McVeigh would attack
the Federal Building in Oklahoma City in 1995, killing 168 innocent
people.
On June 25, 2007, DuPont Chairman Charles O. Holliday Jr. told the
media that he worries most about a computer system failure or a
security breach at one of the company's chemical plants around the
world. ``I feel very comfortable that we've taken all the reasonable
steps, but obviously if someone wants to fly an airplane into a plant,
it's very hard to guard against it,'' said Holliday.
The Nation's most infamous example of this threat is the Kuehne
Chemical Company in South Kearny, New Jersey. According to Kuehne's own
reports to the U.S. Environmental Protection Agency (EPA), their plant
puts 12 million people in the Newark-New York City region at risk in
the event of a catastrophic release of chlorine gas stored on-site.
This is the largest single chemical plant risk in the Nation, but
according to the DHS more than 3,000 other plants each put 1,000 or
more people at risk. More than 100 U.S. plants each put a million or
more people at risk, according to their reports to the EPA.
What makes the Kuehne plant inherently dangerous is the use of
large quantities of chlorine gas to produce relatively harmless liquid
bleach (sodium hypochlorite). While Kuehne's largest business is water
disinfection, there are many safer alternatives to chlorine, including
ultra-violet light, ozone and liquid bleach. A competitor of Kuehne,
KIK Custom Products, wrote Representative Edward Markey (D-MA) a Member
of the House Homeland Security Committee on July 26, 2006. In their
letter KIK committed to converting to a safer technology that produces
``high strength liquid bleach in one continuous operation thereby
eliminating the need to ship or store chlorine'' on-site and therefore
eliminating the risks posed by large quantities of chlorine gas. KIK is
the second largest producer of household bleach in North America. More
details on their technology is at: http://www.k2pure.
com/.
What Happens When Perimeter Security Fails?
Continuing negligence by industry or Government will not be judged
kindly by posterity. Stephen Flynn, Senior Fellow in National Security
Studies at the Council on Foreign Relations wrote in his book, America
the Vulnerable, ``The morning after the first terrorist strike on this
sector, Americans will look around their neighborhoods and suddenly
discover that potentially lethal chemicals are everywhere, and be
aghast to learn that the U.S. Government has still not developed a plan
to secure them. The subsequent political pressure to shut down the
industry until some minimal new safeguards can be put in place--as we
did with commercial aviation following the 9/11 attacks--will be
overwhelming.''
In July, 2004, the Homeland Security Council estimated that
an attack on a single chlorine facility could kill 17,500
people, severely injure an additional 10,000 and result in
100,000 hospitalizations and 70,000 evacuations.
In January, 2004, the U.S. Naval Research Laboratory
testified before the Washington, DC City Council warning that
100,000 people could be killed or injured in the first 30
minutes of a catastrophic release of a tank car of chlorine or
similar chemical within blocks of Capitol Hill. They further
estimated that people could ``die at rate of 100 per second.''
In June, 2003 FBI specialist on weapons of mass destruction,
Troy Morgan, in a speech at a chemical industry conference
warned, ``You've heard about sarin and other chemical weapons
in the news. But it's far easier to attack a rail car full of
toxic industrial chemicals than it is to compromise the
security of a military base and obtain these materials.''
the 2006 interim chemical security law and regulations are fatally
flawed
The best that can be said for the new Department of Homeland
Security (DHS) chemical security regulations, ``Chemical Facilities
Anti-Terrorism Standards'' (CFATS) is that they represent an official
recognition of the widespread vulnerability of U.S. chemical plants to
terrorism.
The new DHS rules are based on a 744-word ``rider,'' Sec. 550 of
the Homeland Security Appropriations Act 2007. Sec. 550 authorizes
``interim'' regulations that will expire on October 4, 2009. It was
enacted with the expectation that Congress would expeditiously enact
permanent, comprehensive legislation to ``supersede'' Sec. 550's
regulations.
The DHS rules finalized on November 20, 2007 fail to provide
adequate protection for the Nation and communities living in the shadow
of thousands of U.S. chemical plants.
The Interim Chemical Security Law and DHS Rules (CFATS)
Prohibit the DHS from requiring any ``particular security
measure'' including safer technologies that can reduce or
eliminate the magnitude of an attack at virtually any chemical
facility.
To satisfy the chemical lobby, this was added to Sec. 550(a) to
prevent the use of safer technologies as a security measure but it also
undermines the effectiveness of the entire statute by undercutting the
DHS to credibly require ANY ``particular security measure.''
Fail to ensure priority protection of the 3,400 to 4,391
facilities each of which put 1,000 or more people at risk
according to the DHS.
Sec. 550 gives the Secretary of the DHS discretion to determine
which facilities will be considered to ``present high levels of
security risk.'' With regard to high priority facilities, the DHS rules
call for a Top Screen process that considers the consequences of an
attack but the Security Vulnerability Assessment also factor in
``threat assessments.'' If the likelihood of an attack was considered
small it could de-prioritize high-risk facilities. Over the last 4
years, the DHS has never identified more than a few hundred (360 to
272) facilities as the sites of greatest concern (putting 50,000 or
more people at risk). Given resource constraints and other anti-
regulatory tendencies, the DHS's record has been to focus on chemical
plant risks that are an order of magnitude higher than the loss of life
following the 9/11 attacks.
Fail to protect approximately 3,000 U.S. water treatment
plants as well as several other exempted categories.--
Approximately 100 water treatment plants each put 100,000 or
more people at risk.
This exemption, also in Sec. 550(a), covers public water systems
regulated by the Safe Drinking Water Act and the Federal Water
Pollution Control Act, the Maritime Transportation Security Act of
2002, facilities owned or operated by the Department of Defense,
Department of Energy or regulated by the Nuclear Regulatory Commission.
In June 2007 Secretary Chertoff spoke to water facilities operators
warning them that even though they are exempt under the interim law
they are ``on the hook because you're going to have to do this
yourselves because the consequences of ignoring risks . . . will be
quite severe.''
DHS asserted the authority to prohibit States from
establishing stronger security standards.
Without any explicit statutory authority, the DHS asserted the
authority to preempt State programs that ``frustrate'' their
regulations. Although no State has yet been cited, this policy could
have had a chilling effect on new programs and appears aimed at serving
a chemical industry agenda to prevent States, such as New Jersey, from
requiring safer more secure technologies. However, this provision was
reversed in an amendment to Sec. 550 by Senator Frank Lautenberg (D-NJ)
in the DHS omnibus spending bill in December 2007. However, the interim
law expires in October 2009 and permanent legislation must retain the
right of States to set more protective standards than the Federal
Government.
Fail to protect the public's right-to-know by asserting
authority to classify previously public information as secret,
including information used in civil or criminal enforcement
actions.
Sec. 550(c) and resulting new DHS regulations over-reach by going
beyond protecting common sense security plans and vulnerabilities into
undermining enforcement and covering up governmental incompetence or
corporate liability.
Assert the right to ``displace'' other Federal right-to-know
statutes including, the Emergency Planning and Community Right
to Know Act, Clean Air Act of 1990, Clean Water Act and CERCLA.
This directly contradicts the savings clause in Sec. 550(f) which
says, ``Nothing in this section shall be construed to supersede, amend,
alter, or affect any Federal law that regulates the manufacture,
distribution in commerce, use, sale, other treatment, or disposal of
chemical substances or mixtures.''
Fail to require meaningful involvement of plant employees in
developing Security Vulnerability Assessments and Site Security
Plans.
The DHS responded to comments saying that ``there is nothing in the
rule that prohibits chemical facilities from involving employees in
their security efforts.'' While we should be thankful for that, such a
policy fails to tap the expertise of a workforce that is formally
trained in chemical hazard protection, accident prevention and
emergency response. Employees are the first line of defense and the
eyes, ears and noses of chemical facilities. The failure to formally
involve employees in developing vulnerability assessments and security
plans is foolish from both a security and scarce resource perspective.
Fail to include whistleblower protections that would enhance
enforcement.
The DHS rules promise to set up an anonymous tip line but ignores
the long history of whistleblowers who have exposed waste, fraud and
abuse. And in this case they could save thousands of lives.
Fail to enhance enforcement by allowing citizens to sue to
enforce the law, while allowing companies liberal appeals
procedures to challenge DHS orders and decisions.
Sec. 550(d) prevents anyone but the DHS from suing a plant owner or
operator to enforce any provision of this law. Once again, the law is
balanced in favor of protecting the rights of recalcitrant facilities
and/or violators and leaving innocent citizens facing overriding lethal
risks with no legal recourse.
Prohibit the public from knowing which facilities are
``high-risk'' or ``Top Tier'' plants.
Both DHS and corporate credibility will be in jeopardy if
communities cannot determine if a local chemical plant that poses a
threat is being dealt with or is in violation or is resisting orders by
the DHS. Nor will communities have the peace of mind of knowing whether
a plant has voluntarily converted to safer technologies and no longer
poses a threat to their community.
In their Federal Register Notice of rulemaking, the DHS said, ``The
Department will continue to work with Congress on chemical security
matters.'' However, neither the President nor the Secretary of Homeland
Security has asked for additional authority from the 110th Congress to
fill in the huge gaps in Sec. 550 or to correct provisions that will
undermine its effectiveness and enforcement. Meanwhile the chemical
industry argues for waiting a few years even though Sec. 550
regulations will expire on October 4, 2009.
The failure of the Bush administration and DHS to ask Congress for
broader permanent statutory authority to correct the deficiencies in
the temporary law is irresponsible.
Prioritize the Most Dangerous Chemicals
The largest category of hazardous substances that can be
transformed into chemical weapons of mass destruction (WMDs) are toxic-
by-inhalation (TIH) gases. According to the U.S. EPA just four TIH
gases account for 55 percent of all chemical processes that threaten
communities Nation-wide. These are:
anhydrous ammonia--32.5 percent (8,343 processes);
chlorine--18.3 percent (4,682 processes);
sulfur dioxide--3 percent (768 processes);
hydrogen fluoride--1.2 percent (315 processes).
Unfortunately, the DHS has set dangerously high threshold
quantities for many of these substances such as: Anhydrous Ammonia:
10,000 lbs.; Chlorine: 500 to 2,500 lbs.
Given the successful terrorist attacks in Iraq using small
quantities of chlorine (approximately 150 lbs.) and recent thefts in
the United States, it would be prudent to establish lower threshold
quantities for such ubiquitous hazardous substances. Lower thresholds
won't necessarily trigger more regulations, they simply give the DHS a
more complete picture of where hazards are. Regulations should be
driven by populations at risk.
safer technologies can eliminate the consequences of an attack
While these chemical processes deserve high priority because of
their prevalent use at thousands of facilities, especially at high
threat facilities, there are widely available safer alternatives for
each of them. For example, the Center for American Progress (CAP)
conducted an analysis of EPA's Risk Management Program data and
identified 284 facilities that have converted since 1999. See full
report at: http://www.americanprogress.org/issues/2006/04/
b681085_ct2556757.html.
Examples of conversions from these chemicals and continuing threats
include:
More than 200 water treatment facilities (including
Washington, DC) converted to safer alternatives such as
ultraviolet light, eliminating the use of chlorine and sulfur
dioxide gas. But over 100 water treatment plants still threaten
more than 100,000 people.
Ninety-eight petroleum refineries use safer alternatives to
hydrogen fluoride (HF). But 50 refineries still threaten
millions of people with the use of HF.
At least 36 electric power plants use safer alternatives to
anhydrous ammonia gas such as dry urea. But 166 power plants
still use anhydrous ammonia gas each threatening an average of
21,506 people.
While the CAP analysis proves the technological feasibility of
safer alternatives, CAP estimates that at this rate of conversion,
without any new regulatory requirements, it will take 45 years to
eliminate hazards that pose the highest risk to America's hometowns.
The CAP analysis shows that 87 percent of the converted facilities
spent less than $1 million and half spent less than $100,000. Clearly
these conversion costs pale in comparison to the cost of disaster
response, relocating communities, defending against personal injury
lawsuits or resolving environmental clean up liability or even
conventional security costs.
A 2006 GAO report (GAO-06-150), Homeland Security DHS Is Taking
Steps to Enhance Security at Chemical Facilities, But Additional
Authority Is Needed, concluded, ``Implementing inherently safer
technologies potentially could lessen the consequences of a terrorist
attack by reducing the chemical risks present at facilities, thereby
making facilities less attractive targets.''
A Government Accountability Office report (GAO-05-165) identified
chlorine gas and 90-ton chlorine rail cars as ``among the top five
terrorist-related wastewater system vulnerabilities.'' Among the top
three recommendations: ``Replacing gaseous chemicals used in wastewater
treatment with less hazardous alternatives.'' In addition, the largest
majority of experts gave replacing these chlorine facilities the
highest priority for Federal funding.
Examples of Safer Technologies at Water Facilities
For example, the Blue Plains sewage treatment plant in Washington,
DC halted its use of chlorine and switched to safer chemicals just 8
weeks after the 9/11 attacks due to fears of another attack. The plant
had seven rail cars of chlorine on site following the 9/11 attacks. The
conversion only cost approximately $0.50 per year for each water
customer. In other words, by using safer technologies we can neutralize
and eliminate targeting by terrorists and prevent catastrophic
accidents as well at negligible costs.
Switching to safer ``drop-in'' chemicals, such as relatively
harmless sodium hypochlorite (liquid bleach) without a long-term plan
can leave lingering risks in communities where the bleach is produced.
While switching to bleach at a sewage plant clearly eliminates the
immediate hazard at that facility, the bleach formulators who use and
store large quantities of chlorine gas to make bleach still pose
serious risks to workers and surrounding communities. In July 2006, KIK
Custom Products, which operates 23 plants in the United States and
Canada, announced plans to commercialize a new process that will
eliminate the need to receive large shipments of chlorine gas. See
details at: http://www.k2pure.com/.
These bleach and water disinfectant formulators are well positioned
to guide their customers toward other safer alternatives such as ozone
and ultra-violet light (UV) which are widely available and do not pose
catastrophic hazards. UV is superior to chlorine or chlorine bleach
because it also kills deadly anthrax and the parasite cryptosporidium
which chlorine does not. In 1993 more than 100 people were killed and
400,00 were made sick by cryptosporidium when it overwhelmed the
chlorine-treated drinking water system of Milwaukee, Wisconsin.
State Preemption
As the DHS acknowledged in their proposed rule, ``Sec. 550 was
silent on preemption'' of States' authority to set stronger security
standards. However, the DHS chose to assert Federal preemption without
statutory authority in an apparent effort ``to preserve chemical
facilities flexibility to choose security measures.'' Fortunately, this
provision was reversed in an amendment to Sec. 550 by Senator Frank
Lautenberg (D-NJ) in the DHS omnibus spending bill in December 2007.
However, the interim law expires in October 2009. Any permanent
legislation must clearly retain the right of States to set more
protective standards than the Federal Government.
While few would argue that the Federal Government should not
preempt States' authority to establish minimum standards, it is self-
defeating to bar States from setting stronger security standards by
establishing a Federal limit or ceiling on security protections.
The Federal Government should welcome every State pitching in to
address the unique situation it faces. New Jersey was the first State
to implement a chemical security program that requires an assessment of
safer, more secure technologies. According to Governor Corzine, a
federally mandated rollback of New Jersey's protections ``could have
the effect of weakening chemical security and leaving New Jersey and
its neighbors--including New York City--more vulnerable to devastation
from a terrorist attack on our chemical facilities.''
The DHS appeared more concerned about protecting industry exposure
to State tort liability when it asked: ``How could State tort law
impose liability for actions specifically approved under a Federal
program?'' Is DHS attempting to shield chemical facilities from State
tort suits? How does this contribute to the safeguarding of communities
from existing and preventable threats?
Risk-Based Performance Standards & Safer Technologies
A safer technology provision was contained in the 2006 House
Homeland Security Committee passed bill, H.R. 5695. That bill required
priority chemical facilities to utilize safer, more secure
technologies, where feasible and cost effective to reduce or eliminate
the magnitude of an attack on a chemical facility. By substituting
inherently dangerous chemicals or processes with inherently safer
technologies (IST) the risk of a catastrophic release at a chemical
plant can be eliminated or dramatically reduced. IST is the best tool
available to completely mitigate facility vulnerabilities and safeguard
communities.
The DHS has wide discretion to establish ``risk-based performance
standards.'' The DHS could have chosen to establish performance
standards that deter an attack or mitigate the consequence of an attack
by safeguarding, reducing or eliminating the risk or desirability of
the facility as a target. This could have been achieved by issuing
guidance to suggest that counter measures include the use of safer,
more secure technologies to meet the performance standard or opt out of
the regulations entirely.
In fact, the DHS mentioned in their Federal Register notice of
proposed rulemaking, Annex B, page 78315, that a ``security event may
be larger than the typical EPA Risk Management Program (RMP) worst-case
analysis.'' In a 2001 U.S. Army Surgeon General study estimated that
900,000 to 2.4 million people could be killed or injured in a terrorist
attack on a U.S. chemical plant in a densely populated area. According
to the Environmental Protection Agency (EPA), 106 chemical plants
threaten a million or more people. Chlorine gas is the most common
industrial chemical hazard at the 100 highest-risk plants. According to
the Chlorine Institute, a chlorine gas cloud can drift through a city
and remain dangerous for at least 14 miles and 20 to 25 miles in rural
areas.
These alternatives include a wide range of options such as process
changes, chemical substitutions, smaller storage vessels or any other
measures that will reduce or eliminate the inherent hazard posed by the
facility's storage, use or production of an ultra-hazardous substance.
This range of options is far from requiring any ``particular security
measure,'' it is up to the plant operator to choose which safer
technology, process, chemical or storage vessel reduces or eliminates
these risks.
Only about 13 percent of the universe of facilities in the EPA's
Risk Management Program (RMP) are members of the chemical manufacturers
trade association, the American Chemistry Council. Whereas the
overwhelming majority of RMP facilities are chemical users, including:
petroleum refineries that use hydrogen fluoride; power plants that use
anhydrous ammonia and water treatment plants that use chlorine and
sulfur dioxide gas. All of these have safer alternatives already widely
in use at hundreds of facilities.
Benefits of Safer Technologies
The use of safer technologies offers a more competitive and stable
business plan with fewer regulations, potentially zero liability,
sustainable profitability, better relationships with workers and
neighboring communities and no threat of a catastrophic attack or
accident. Specifically, the use of safer technologies will likely
result in a facility no longer being subject to DHS's CFATS
regulations.
Obviously, chemical facilities located on-site at nuclear power
plants, water treatment works, iconic facilities such as Disney World,
Camp David, etc. also need to be considered for priority protection.
However, using safer technologies as a countermeasure at these
facilities will lessen the lethality that an attack on them would pose.
DHS will also be able to better utilize its limited resources ($25
million for fiscal year 2008) for more effective use of conventional
security measures to defend against and respond to attacks on targets
even where a chemical risk is removed.
Given DHS's finite resources and the late start the Nation has in
addressing chemical security it is urgent that we use safer
technologies to mitigate the consequence of an attack. By doing so we
eliminate risks, safeguard communities and save scarce money and
resources to protect targets that cannot be so neutralized (airports,
U.S. Capitol, etc.).
The Annex in the DHS proposed rule suggests that plant owners and
operators should assume that ``international terrorism'' is possible at
every facility. A better assumption would be to recognize that every
plant could be the target of someone no one anticipated. The bombing of
the Federal Building in Oklahoma City in 1995 was initially thought to
be committed by ``Middle Eastern terrorists.'' It turned out to be the
insane act of a U.S. Army-trained Gulf War veteran. How many more
Americans have been trained in the art of war since then? Other
incidents and threats ranging from Columbine, to international drug
cartels and the spectacularly failed intelligence leading up to the 9/
11 attacks, makes guessing where such an attack will come from nothing
more than a fool's errand. The only prudent thing to do is attempt to
remove unnecessary vulnerabilities as soon as technically feasible.
Even without terrorist attacks, we will save countless lives in
accident prevention.
Top Tier High-Risk Facilities
According to a June 2005 Congressional Research Service report
examining EPA's RMP database, the EPA has identified 6,883 facilities
that each put 1,000 or more nearby residents at risk and 553 of these
put 100,000 or more people at risk.
However, using a methodology that includes only \1/6\th the area
surrounding a plant, the Department of Homeland Security (DHS) has
estimated at different times a range of 3,400 to 4,391 chemical
facilities that each put 1,000 or more people at risk. Of these DHS
identified 272 facilities that each put 50,000 or more people at risk.
The DHS calculation looks at a 60 degree ``kill zone'' downwind from a
facility. The EPA's RMP program uses a methodology that creates a 360-
degree ``vulnerability zone'' around a facility. Under the RMP,
chemical plant owners and operators submit worst-case disaster
scenarios using U.S. Census data to calculate the number of people
living in each ``vulnerability zone.'' In Annex B of the DHS proposed
rule on FR page 78315 warns, ``the security event may be larger than
the typical EPA RMP worst-case analysis.''
At a minimum, any facility that endangers 1,000 or more people
should be considered a ``top tier'' or ``high-risk'' facility.
Alternative Security Plans (ASPs)
The new DHS rule allows the high priority facilities in Tier 1 and
2 to use ASPs for their Site Security Plans. However, these same
facilities cannot use ASPs for their Security Vulnerability
Assessments.
ASPs were written by and for oil and chemical industry trade
associations. All of them avoid requiring safer technologies and do not
represent the best way to safeguard communities at risk. Congress
should not allow the DHS to substitute ASPs for Site Security Plans for
high priority facilities.
Consultation With Other Agencies
As a new department with minimal resources, the DHS should
routinely collaborate and consult with other more experienced
Government agencies. In their January 2006 report (GAO-06-150) the
Government Accountability Office concluded, ``By tapping EPA's
expertise on chemical facilities and general facility safety issues,
DHS can enhance its efforts to identify high-priority facilities and
assess facility vulnerabilities as well as better target Government
resources to those facilities posing the greatest risk.''
Congress should require the DHS to consult with the EPA as the GAO
recommended and develop guidance documents to rapidly identify high-
risk facilities and promote the use of inherently safer technologies as
a mitigation and countermeasure technique to reduce risks and safeguard
communities. Similar consultation with the U.S. Chemical Safety and
Hazard Investigation Board, which has enormous experience in diagnosing
chemical accidents and recommending mitigation techniques, should be
aggressively pursued.
Buffer Zones
According to the EPA (Belke, 2000), the high number of facilities
that put residents at risk as far as 14 to 25 miles away from a release
``is primarily due to the prevalent use of 90-ton rail tank cars for
chlorine storage.'' The Chlorine Institute pamphlet 74, ``Estimating
the Area Affected by a Chlorine Release'' (1998), shows a plume can be
hazardous up to 41.5 miles.
The Bureau of Alcohol Tobacco, Firearms, and Explosives regulations
(27 CFR 555.218) prohibits the storage of a similar quantity of
explosives within 2,010 feet of inhabited buildings.
In 2006 the Netherlands and Akzo Nobel completed a $270 million
program to relocate chlorine production facilities within Holland to a
location that will eliminate the transport of chlorine by rail in the
Netherlands.
Given the large potential plume of toxic-by-inhalation substances
and large quantities of some flammables such as propane, a much larger
buffer zone is called for with regard to high risk TIH facilities.
Without the use of safer technologies to convert existing plants
into safer functioning plants, relocating them to more remote areas
should be a an option, especially if an owner/operator insists that
there is no safer alternative.
Short of relocation, the DHS should be required to issue guidance
to mitigate these threats by using smaller storage vessels that would
help reduce risks, deter and discourage potential attackers. In
addition, the DHS should facilitate owner/operator collaboration with
local government and emergency responders to conduct practice
evacuation drills. If a plant cannot substantially reduce its risks,
the owner/operators and government agencies have an obligation to
ensure that at-risk citizens can reasonably be evacuated.
New facilities should be prohibited from locating in densely
populated areas.
Brief History of Federal Inaction
While the DHS proposed rule issued December 28, 2006 contained a
``Brief History of Federal Pre-Existing Chemical Security and Safety
Programs,'' it ignored the ``general duty clause'' in Section 112r of
the 1990 Clean Air Act which gives the President and the Environmental
Protection Agency (EPA) broad authority to require chemical facilities
to prevent catastrophic releases of poison chemicals. After drafting
legislation, guidance and regulations in June 2002, the administration
withdrew it's proposals, in part, under pressure from the oil and
chemical industry.
On July 22, 2004 ``The 9/11 Commission Report'' identified four
failures in preventing an attack by the U.S. Government the first of
which was the failure of ``imagination.'' A continuing lack of
imagination today exposes millions of Americans to Bhopal magnitude
risks largely because new laws or regulations have not yet been adopted
to clarify the chemical industry's obligation to prevent catastrophic
releases at U.S. chemical plants. In June, 2002 a promising proposal
drafted by the EPA could have completed the first phase of such a
program by the middle of 2003 but it was derailed by the White House in
the fall of 2002. It was not unlike a bill (S. 1602) authored in 2001
by Senator Jon Corzine (D-NJ) and based on a bill introduced by Senator
Frank Lautenberg (D-NJ) in 1999.
The EPA's 2002 proposal included ``substituting less hazardous
chemicals for extremely hazardous ones.'' The conversion of Washington,
DC's main sewage treatment plant from chlorine to safer chemicals, just
8 weeks after 9/11, exemplifies the feasibility of such a strategy. At
the time of the attacks they had 7 90-ton rail cars of chlorine stored
on-site.
Of the 15,000 facilities required to report their worst-case
chemical disaster scenarios to the EPA's RMP, 7,728 plants pose an
``off-site consequence'' (OSC) to more than 1,000 people. Approximately
100 facilities reported an OSC to the EPA putting 1 million or more
people at risk. Approximately 65 percent of these facilities' ``worst-
case-scenarios'' are chlorine disasters. Rather than address these
risks through the new regulations suggested by the EPA, the DHS used a
new methodology that downsized the priority list of chemical plants by
43 percent to 3,400 facilities that put 1,000 or more people at risk.
EPA's 2002 chemical security proposal was slated for a media
``rollout'' at the White House. According to draft documents, ``higher
priority chemical facilities should be able to complete a vulnerability
assessment and address security vulnerabilities as described in the
guidance in 12-18 months.'' In other words many facilities could
already have eliminated or reduced their hazards by early 2004.
EPA's 2002 documents included a question-and-answer sheet for EPA
Administrator Whitman which said, ``Using existing authority under the
Clean Air Act, we believe that the guidance and regulation I have
announced today are the quickest paths to improving chemical facility
security . . . If we later find that there are legislative gaps, then
we will consider seeking legislation.''
Ultimately, the reversal by the Bush administration and the
lobbying pressure by the industry (American Chemistry Council, American
Petroleum Institute, etc.) paid off and chemical security legislation
was excluded from the Homeland Security Act signed into law in November
2002.
In March, 2003 a report by the General Accounting Office (GAO)
concluded ``EPA has not attempted to use these Clean Air Act provisions
[because] EPA is concerned that such an interpretation would pose
significant litigation risk''. The GAO concluded that chemical facility
security would be more effectively addressed by passage of specific
legislation.
In December 2003 President Bush further undermined EPA's authority
and issued a directive (Directive/HSPD-7) limiting EPA's role on
chemical security to ``drinking water and water treatment systems.''
Under questionable legal authority, this directive attempts to shift
responsibility for 15,000 chemical plants to the DHS, which at the time
had no legislative authority, experience or inclination to regulate
this industry.
In January 2005, former White House homeland security deputy,
Richard Falkenrath told the Senate Homeland Security and Governmental
Affairs Committee, ``the Federal Government has made no material
reduction in the inherent vulnerability of hazardous chemical targets
inside the United States. Doing so should be the highest critical
infrastructure protection priority for the Department of Homeland
Security in the next 2 years.''
In his book, ``America the Vulnerable'' Stephen Flynn, of the
Council on Foreign Relations warned, ``The chemical industry deserves
urgent attention because the stakes are high, the opportunities for
terrorists are rich, and no credible oversight process exists. It is
the very ubiquity of the U.S. chemical industry that gives it potential
to be a serious source of national alarm.''
In 2006 an intensive industry lobbying campaign successfully killed
comprehensive chemical security legislation (H.R. 5695 & S. 2145) that
was voted out of the authorizing committees in the House and Senate in
2006. Instead, the industry worked closely with Republican leaders to
draft a 740-word ``rider'' to the 2007 DHS Appropriations bill. The
only major concession they made was to keep it an ``interim'' 3-year
statute until Congress enacts permanent legislation. In 2007, the
industry is urging Congress NOT to change this temporary statute.
To better understand the lobbying resources the industry used to
derail legislation in 2006 we surveyed the lobbying records of the
relevant industries in the Office of the Secretary of the Senate at:
http://sopr.senate.gov.
Greenpeace identified 215 industry lobbyists that listed chemical
security as part of their portfolio in 2006. Based on their lobby
reports we estimate that industry lobbyists spent between $16.4 and
$74.5 million (less than half of their total reported spending) to
lobby on chemical plant security legislation in 2006. Lobby
organizations identified included 13 trade associations such as the
American Chemistry Council (ACC), American Petroleum Institute (API),
U.S. Chamber of Commerce (including CEO Thomas Donahue), Edison
Electric Institute (EEI), 30 member companies such as Dow Chemical,
ExxonMobil and Halliburton and 13 lobby firms such as Akin & Gump and
Holland & Knight.
In comparison, the 2007 fiscal budget for chemical security at the
DHS was only $10 million. DHS is asking for an increase of $15 million
for a total of $25 million for their 2008 fiscal budget on chemical
security.
Our survey of lobbying records may have underestimated industry
spending because we excluded lobbyists who did not specifically list
chemical security legislation on their lobby reports. A notable
example, the National Association of Manufacturers (NAM) was not
included in the survey even though they registered to lobby on chemical
security in 2005, signed on to industry letters in 2006, and formally
commented on DHS proposed regulations in 2007. As a result, none of
NAM's 56 lobbyists and $15 million budget were not counted as part of
this lobbying campaign. It is unclear whether this is a violation of
the LDA or the result of a split within the NAM.
Alternatively, member companies of the Association of American
Railroads (AAR), such as CSX, BNSF & Norfolk Southern, are also members
of NAM. Yet the AAR testified in support of the use of safer chemicals
as a way to eliminate industry vulnerability and liability to potential
terrorist attacks on rail cars carrying hazardous chemicals.
Of the 215 chemical security lobbyists we identified, 90 directly
represent the ACC (the trade association of major chemical
manufacturers), or its member companies. However, the 2,000 chemical
plants owned and run by ACC members account for only 13 percent of the
15,000 chemical facilities the EPA has identified as posing a risk to
communities. Most of the rest are ``users'' of chemicals such as
refineries, water treatment plants, power plants and paper mills. It is
in these sectors where more than 200 plants have converted to safer
chemicals or processes since 9/11.
Our survey also identified chemical front groups and allies such as
the Agricultural Retailers Association (ARA), led by Dow and other
large firms and the Farm Bureau. Every lobbyist registered with the ARA
as well as the Farm Bureau also reported lobbying on chemical security
in 2006 even though most high-risk plants are not located in rural
areas.
Deadly Accidents
The 1984 Union Carbide's Bhopal, India plant had the worst
industrial accident in history. Forty tons (half a rail car) of
methylisocyanate (MIC) leaked into the community at midnight killing
8,000 people within days and claiming another 12,000 lives since.
In June, 2004, three people were killed in a train accident in a
remote area southwest of San Antonio, Texas when a tank car carrying
chlorine broke open in the 25 mph crash, releasing a portion of the
tank car contents.
On January 6, 2005 ten people were killed, 58 hospitalized and
hundreds sought treatment in Graniteville, South Carolina when chlorine
was released again when one train slammed into a parked train in the
middle of the night. The cars involved were allegedly state-of-the-art
construction.
Both of these tragedies could have resulted in a much higher number
of fatalities and injuries if they had occurred in densely populated
areas.
Comprehensive and Permanent Chemical Security Legislation Is Urgently
Needed
We have lost over 6 years since the 9/11 attacks. Legislation in
name only will not protect communities. Programs limited to fence-line
or perimeter security will not prevent an attack or eliminate the
consequence of a successful attack.
A key test of whether chemical facility security legislation will
protect the millions of Americans still at risk is whether it contains
minimum standards and truly protective provisions that:
Require all plants to assess the feasibility of safer more
secure methods and technologies that can eliminate the
consequences of an attack on a chemical plant.
Require ``high-risk'' facilities to use safer methods,
technologies or chemicals.
Ensure that the 3,400 to 4,400 facilities that DHS
identified as posing a risk to 1,000 or more people are
included in the ``high-risk tier.''
Includes protection of approximately 3,000 U.S. water
treatment plants and other chemical facilities currently
explicitly exempted by the temporary law.
Expedite deadlines by when DHS will require and approve Site
Security Plans.
Require meaningful involvement of plant employees in
developing Security Plans.
Include whistle-blower protections to enhance enforcement.
Provide basic information to the public on facility
compliance or non-compliance of the law.
Ensure the right of all States to establish stronger
security standards.
Enhance enforcement by allowing citizen suits.
Q & A on Sec. 2110 ``Methods to Reduce the Consequences of a Terrorist
Attack''
Are all facilities required to use or implement safer methods or
technologies?
No. Only facilities in the ``high-risk'' tier would be required to
implement safer methods or technologies. Other facilities would merely
be required to assess safer methods.
What if it is not feasible or too costly to implement safer methods
or technologies?
No facility would be required to implement safer technologies if
they are either infeasible or too costly or would result in greater
risks.
Will converting high-risk plants to safer methods or technologies
financially burden chemical facilities?
No. A survey by the Center for American Progress identified 284
facilities that switched to safer methods since 1999. They found that
87 percent spent less than $1 million, and one half reported spending
less than $100,000. Thirty-four percent of survey participants expected
to save money or improve profitability because safer methods reduce the
need for barriers, secondary containment, security training, and
liability concerns. The Washington, DC sewage treatment plant converted
90 days following the 9/11 attacks for less than $0.50 per water
customer per year.
Will this result in shifting risks rather than reducing them?
No. Safer methods will not be required unless they ``significantly
reduce'' the consequences of an attack. The DHS will also ensure that
facilities use methods that significantly reduce risks at a plant and
do not accept halfway steps that merely shift risks elsewhere. In fact,
there are now hundreds of real-world examples of water treatment,
electric power plants and petroleum refineries that have already
switched without shifting risks.
Will requiring high-risk facilities to use safer methods put the
DHS in the business of micromanaging chemical facilities?
No. Facilities are free to choose any of their own methods or opt
out if they can show the DHS that there is no feasible, cost-effective
or safer method for their facility (see list of examples below).
Is it the role of government to require safer methods to be used in
the private sector?
The FAA has issued regulations on security and safety for decades.
The feasibility and cost-effectiveness are routinely considered and
balanced against security and safety needs. For example, after 9/11
detailed regulations to harden cockpit doors were sped into force for
thousands of different jet liners and airplanes, and X-ray machines for
all airline baggage were mandated at hundreds of airports.
Is this proposal more appropriate in environmental legislation than
in a security bill?
No. The June 2006 National Academy of Sciences study, commissioned
by the DHS, endorsed the adoption of safer technologies as ``the most
desirable solution to preventing chemical releases'' from terrorist
attack. The Association of American Railroads in testimony before
Congress said, ``Railroads agree, and strongly support efforts aimed at
finding and utilizing `inherently safer technologies' as substitutes
for hazardous materials, especially TIH.''
Range of Examples of Safer Methods Included but not Limited to in Sec.
2110
``METHOD TO REDUCE THE CONSEQUENCES OF A TERRORIST ATTACK.--For
purposes of this section, the term `method to reduce the consequences
of a terrorist attack' includes--
(1) input substitution;
(2) catalyst or carrier substitution;
(3) process redesign (including reuse or recycling of a substance
of concern);
(4) product reformulation;
(5) procedure simplification;
(6) technology modification;
(7) use of less hazardous substances or benign substances;
(8) use of smaller quantities of substances of concern;
(9) reduction of hazardous pressures or temperatures;
(10) reduction of the possibility and potential consequences of
equipment failure and human error;
(11) improvement of inventory control and chemical use efficiency;
and
(12) reduction or elimination of the storage, transportation,
handling, disposal, and discharge of substances of concern.''
Additional Expert Opinions on Safer Technologies
2006 GAO report (GAO-06-150), Homeland Security DHS Is Taking Steps
to Enhance Security at Chemical Facilities, But Additional Authority Is
Needed, concluded, ``Implementing inherently safer technologies
potentially could lessen the consequences of a terrorist attack by
reducing the chemical risks present at facilities, thereby making
facilities less attractive targets.''
May 2006 report by the National Academy of Sciences, ``Terrorism
and the Chemical Infrastructure: Protecting People and Reducing
Vulnerabilities,'' recommended more research on new technologies but
stated, ``The most desirable solution to preventing chemical releases
is to reduce or eliminate the hazard where possible, not to control it.
This can be achieved by modifying processes where possible to minimize
the amount of hazardous material used, lower the temperatures and
pressures required, replace a hazardous substance with a less hazardous
substitute, or minimize the complexity of a chemical process.''
``Railroads agree, and strongly support efforts aimed at finding
and utilizing `inherently safer technologies' as substitutes for
hazardous materials, especially TIH.''--Association of American
Railroads (AAR) President, and CEO Edward R. Hamberger in testimony
before the House Transportation and Infrastructure Committee's Railroad
Subcommittee.
Retired Rohm and Haas engineer, Dennis Hendershot advised, ``The
first solution to a process safety problem should always be to get rid
of the hazard, not control it.''
Trever Kletz, formerly with Imperial Chemical Industries (ICI)
said, ``The very best way to prevent an explosion is to simply replace
the material that explodes with one that does not or at least keep the
stock down so low that it hardly matters if it all leaks out.''
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______
Statement of Russell Melancon, President and CEO, Industrial Safety
Training Council
February 26, 2008
i. introduction
My name is Russell Melancon and I am the President and Chief
Executive Officer of the Industrial Safety Training Council (ISTC). I
want to thank you Mr. Chairman and Members of the committee for this
opportunity to submit written testimony regarding the proposed Chemical
Facility Anti-Terrorism Act of 2008. This testimony supports the ISTC's
legislative recommendations to accomplish the following four goals:
Make explicit that a chemical facility that is also a
regulated facility under the Maritime Transportation Security
Act (MTSA) must comply with the Chemical Facility Anti-
Terrorism Act of 2008 and/or related regulations for personnel
surety purposes;
Provide legislative authority for public and private sector
entities, which obtain a personnel surety Alternative Security
Program (ASP) designation, to submit names to the Department of
Homeland Security (DHS), or a designated agency such as the
Transportation Security Administration (TSA), for processing
against the Consolidated Terrorist Watch List;
Provide legislative authority for public and private sector
entities, which obtain a personnel surety ASP designation, to
submit fingerprints to the Criminal Justice Information Service
(CJIS) at the Federal Bureau of Investigation (FBI) so as to
supplement the ISTC's existing identification verification
process and also supplement the ISTC's existing criminal
history background check; and
Establish a method by which public and private sector
entities, which obtain a personnel surety ASP designation, may
submit names to the appropriate Federal agency in order to
perform a range of immigration status checks.
ii. background
The ISCT is a 501(c)3 not-for-profit training and educational
organization located in Southeast Texas. The ISTC and thirteen other
safety councils, located throughout Texas, the Gulf Coast, and several
other States, comprise the Safety Council Security Consortium (SCSC).
Both the ISTC and the SCSC are key parts of the highly regulated
chemical industry. Together, the ISTC and the SCSC operate an
established, highly successful and comprehensive identification
verification and background screening process for contractors and their
employees as well as facility employees working at over 75 chemical and
refining facilities. The ISTC also provides safety training and site-
specific job safety orientations for facility workers.
The ISTC/SCSC identification verification employs a layered
identification process using several identifiers, including Social
Security numbers, dates of birth, and a visual comparison of an
individual against a photograph on a Government-issued identification
document. The identity verification portion of the ISTC/SCSC process is
completed in an average of 20 minutes. The ISTC/SCSC has conducted
identification verification checks on more than 300,000 workers seeking
admittance to chemical and refining facilities.
The ISTC/SCSC has also conducted comprehensive criminal history
background checks on almost 200,000 of these workers. When a
participating chemical or refining facility hires a contractor or new
employee, the facility sends the worker to the appropriate safety
council for training and background screening. The ISTC/SCSC utilizes a
nationally recognized consumer reporting agency (CRA) to conduct these
background checks. This CRA is experienced in conducting name-based
background screening and is fully compliant with all of the privacy and
consumer protections in Federal and State Fair Credit Reporting Acts.
The background check searches criminal history records on Federal,
State, and local levels, including physical searches of court-based
State and local criminal history records. All criminal history checks
search felony and misdemeanor convictions (from the previous 7 years),
pending arrests, outstanding warrants, and deferred adjudications.
Additionally, the screening process includes a search of motor vehicle
reports as well as a Patriot Act search against the Office of Foreign
Assets Control (OFAC) lists, which contain the names of individuals who
are ``specially designated nationals,'' and who are ``blocked'' from
conducting business with U.S. persons for various reasons.
The rejection rate for the baseline background screening process is
5 to 8 percent. The ISTC/SCSC screening program works rapidly to
provide the results of a full screen in an average of 2 days time,
allowing workers to begin jobs quickly. This is especially important
due to the near reliance on transient workers at chemical and refining
facilities. The ISTC/SCSC background screening process is both thorough
and timely, but it is also cost-effective. The ISTC/SCSC is able to
perform the identification verification and background screening
process for an initial fee of about $55 per worker.
The ISTC/SCSC process also provides, in addition to the rigorous
baseline background screening, a customized series of additional
services, which allow chemical and refining facilities and their
contractors to obtain various types of background checks based upon the
facility's and/or the contractor's specific security needs and
preferences in view of an individual's expected duties and
responsibilities at a facility. These additional checks can include:
Civil records of lawsuits filed by or against the applicant;
Educational verification;
Prior employer verification;
Military records checks;
Credit checks;
Professional licenses and registration checks;
Numerous other categories of background data including
license verification and workers' compensation reports; and
Background screens run by the previous employers of an
applicant.
Once the identification verification and background screen is
complete, the ISTC/SCSC process returns a graded or tiered report,
which chemical and refinery facility owners and operators use to make a
risk-based determination of whether the individual's background is
appropriate for a particular assignment.
The ISTC/SCSC graded reports present an individual's grade using a
number scale:
An individual with a clear record, or no hits, would receive
a grade of ``00;''
An individual with hits for non-violent misdemeanors would
receive a grade of ``01;''
An individual with hits for violent misdemeanors would
receive a grade of ``02;''
An individual with hits for lesser felonies would receive a
grade of ``03;''
An individuals with hits for 03 felonies, and 02
misdemeanors would receive a grade of ``04;''
An individual with hits for more serious felonies would
receive a grade of ``05;''
An individual with hits for 05 felonies, and 02 misdemeanors
would receive a grade of ``06;'' and
An individual that showed hits on the Patriot Act (OFAC)
search would receive a grade of ``07.''
Most applicants have a clear record, or a record with only non-
violent misdemeanors:
About 77 percent of the graded background screens return a
grade of 00;
About 11 percent return a grade of 01;
About 4 percent return a grade of 02;
About 1 percent return a grade of 03;
Less than 1 percent return a grade of 04;
About 5 percent return a grade of 05;
About 1 percent return a grade of 06; and
Less than 1 percent return a grade of 07.
Finally, the ISTC/SCSC background check process from the initial
application to the graded report is privacy-protective and applicant-
friendly. Because the ISTC/SCSC background screening program represents
an industry, non-governmental solution incorporating a national CRA,
the process is fully compliant with State and Federal Fair Credit
Reporting Act (FCRA) requirements, as well as all relevant State and
Federal privacy protections. In compliance with State and Federal
FCRAs:
Criminal history information older than 7 years is not
reported.
Only open arrests and criminal convictions are reported.
Potential employers provide applicants with ``pre-adverse
action'' notification if the report returns information that
would preclude the applicant from receiving a job or being
denied access to a chemical or refining facility site based on
information in the screen results. This notice must be sent
before the employer takes any adverse action.
The applicant has rights under the FCRA to dispute negative
information and have inaccurate information corrected.
The employer must allow a ``reasonable'' time for the
applicant to dispute negative information before taking an
adverse action.
iii. legislative recommendations
Section 550 of the Chemical Facility Act required DHS to promulgate
regulations ``establishing risk-based performance standards for
security of chemical facilities.'' Pub. L. 109-295, sec. 550.
Accordingly, on April 2, 2007, DHS expressly and appropriately adopted
a regulatory approach in the DHS Chemical Facility Anti-Terrorism
Standards (CFATS) regulations that increases the level of security as
the level of risk increases. This risk-based, tiered approach to
security reflects the fact that the working environment in chemical and
refining facilities is unique to the chemical industry and presents
unique challenges.
A private sector solution to personnel surety requirements is
consistent with the ``alternative security program'' (ASP) approach in
the CFATS regulations. The ISTC/SCSC recommends an ASP system that
allows the chemical industry to use authorized third parties to help
meet personnel surety requirements. The ISTC/SCSC process is a uniform
and consistent credentialing system with high recognition value in the
areas in which the ISTC/SCSC process operates. More than 75 chemical
and refining facility owners and 2,240 contractor companies participate
in the ISTC/SCSC process. As described earlier, the ISTC/SCSC process
is comprehensive and proven to provide its chemical industry
participants with an appropriately high level of security. The ISTC/
SCSC technologies are already in place, and the system has been
producing successful results for many years. Chemical and refining
facilities should be permitted to continue using established personnel
surety solutions under any new regulatory regime.
However, in order for the ISTC/SCSC process and other private
sector personnel surety alternatives to be approved by DHS as an ASP,
the private sector must be able to demonstrate that the ASP can provide
a level of security equal to or greater than that provided by a
Government-based approach. Therefore, in order for the ASP system to
have any meaningful effect, private sector entities require the same
level of access to necessary security information as is provided under
other Government-based personnel surety solutions. In order to preserve
the highly effective personnel surety processes currently in place at
chemical and refining facilities Nation-wide, the ISTC recommends that
the proposed Chemical Facility Anti-Terrorism Act include provisions
that:
Make explicit that a chemical facility should be regulated
as a chemical facility and not as a maritime facility for
personnel surety purposes;
Allow private sector ASPs to submit names to DHS for
processing against the Consolidated Terrorist Watch List;
Allow private sector ASPs to submit fingerprints to the
FBI's Criminal Justice Information Service (CJIS) database for
identification verification and a criminal history background
check; and
Establish a method by which private sector ASPs may submit
names to the appropriate Federal agency in order to perform
immigration status checks.
A. Regulate Chemical Facilities as Chemical Facilities
In compliance with the existing CFATS regulations, the ISTC/SCSC
process provides a robust, nuanced, responsive, privacy-sensitive and
inexpensive identification verification and background check that
satisfies the risk-based performance standards set forth in CFATS. The
chemical industry should be permitted to continue to use personnel
surety processes and procedures developed to satisfy the industry's
unique security challenges. The ISTC/SCSC believes that applying
outside solutions, such as the Transportation Worker Identification
Credential (TWIC) program to ISTC/SCSC participating chemical and
refining facilities would be inappropriate because TWIC lacks many
characteristics of the existing ISTC/SCSC process.\1\
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\1\ On October 13, 2006, the President signed into law the Security
and Accountability for Every Port Act (SAFE Port Act) amending the
Maritime Transportation Security Act of 2002. These laws require DHS to
develop a biometric credential to serve as a transportation security
card allowing individuals to gain access to secure areas of a vessel or
maritime facility. The TWIC process was developed to implement the SAFE
Port Act.
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The strength of the ISTC/SCSC process allows chemical and
refinery owners and operators greater flexibility to decide
whether an individual should be permitted any unescorted access
within the facility or whether the individual should be
restricted to employment in non-sensitive areas. TWIC merely
provides a pass/fail clearance for a worker to access the
entire facility without distinguishing which workers may enter
more sensitive areas within the facility. Under TWIC, an
individual who is denied a credential is also denied the
possibility of any form of employment.
As stated under the DHS Chemical Regulations, DHS believes
that the level of screening for employees should be
commensurate with the level of access provided. The ISTC/SCSC
screening process provides exactly this kind of nuanced
approach. The TWIC enrollment program merely identifies whether
an applicant is eligible or ineligible to receive a TWIC.
Industry stakeholders have expressed concerns that certain
disqualifying offenses may be too stringent under TWIC and
could lead to employees unnecessarily losing their jobs
regardless of the level of security risk which their particular
employment may present.
As discussed earlier, the chemical industry's heavy and
necessary reliance on transient workers requires that these
workers be credentialed quickly. According to the TWIC proposed
rule, it could take 30 to 60 days for the TSA to perform
background checks, produce the TWIC cards, and issue these
cards to employees.
Because of the transient nature of chemical industry
employment, neither employees nor employers find it financially
attractive to invest significant moneys on a credential that an
employee may carry for only a few short months. In contrast to
the ISTC/SCSC baseline check at a cost of $55, a new TWIC card
must be purchased by the employee for $132.
The ISTC/SCSC process is in place right now and continues to
process thousands of prospective workers each week. It is a
proven process with many years of recorded success. TSA has
made progress toward full implementation of the TWIC program,
but only in the maritime sector and without a strict timeline
for completion. TWIC is not ready for full-scale implementation
in chemical and refining facilities across the country.
Implementation of the TWIC process for personnel surety could well
result in a personnel surety gap while facilities wait for the TWIC
process to become fully operational. Distribution of access cards to
employees through an incomplete TWIC process without adequate
compliance with personnel surety requirements could allow persons who
pose a terrorist threat to compromise a chemical or refining facility.
Chemical facility security requires a risk-based and performance-based
approach that is not met by the standards set for the maritime sector.
B. The Consolidated Terrorist Watch List
In order to ensure that private sector entities have a meaningful
ability to provide the level of security necessary to qualify as an ASP
under the proposed legislation, the ISTC/SCSC recommends that the
proposed legislation permit ASPs to submit names for checking against
all Federal watch lists and anti-terrorist databases. DHS already
provides a process for TWIC vendors to submit names to the TSA to be
checked against the Consolidated Terrorist Watch List. DHS should
assure that the same comprehensive terrorist watch list check is
conducted for applicants and employees of chemical facilities,
contractor employees, and visitors requiring unescorted access to
chemical facilities.
The ISTC and the SCSC have already submitted a request to DHS to
enhance the ISTC/SCSC's ability to check for terrorist ties. DHS has
indicated that it will, ``designate a secure portal or other method for
the submission of application data for each employee or contractor.''
The ISTC and the SCSC look forward to working with DHS to incorporate
this step into the existing ISTC/SCSC process. The ISTC/SCSC
recommendation would authorize DHS to move forward with any plans to
allow owners and operators and their designated third party agents to
submit names to be checked against the combined terrorist watch lists.
C. CJIS
The ISTC is planning to implement a fingerprint-based, live-scan
``gatekeeper'' system into its existing process. Under this system,
individuals who qualify for an ISTC credential would obtain an
identification card that includes a digitized representation of their
fingerprints. That card, prior to entrance into a secure portion of the
chemical facility, would be processed through a live-scan system which
compares the digitized print on the card with the live fingerprint of
the person seeking admittance.
To make the collection and use of worker biometric information more
than just a tool for identification verification, the ISTC/SCSC
supports inclusion of language in the proposed bill that would allow
the ISTC and all ASPs providing personnel surety solutions the
authority to submit to CJIS the fingerprints of workers and other
individuals requiring unescorted access to chemical and refining
facilities. The ISTC advocates that all approved ASPs have the ability
to include a search of FBI criminal history records to supplement
already robust identification verification and criminal history
background check processes.
D. Immigration Checks
The ISTC/SCSC process has the ability to include a customized
series of immigration checks that can supplement the baseline search.
However, as additional Federal programs are developed to monitor
various immigration records, such as immigration status and employment
eligibility, the ISTC/SCSC endorses legislative language that would
ensure that private sector ASPs may participate in these programs.
iv. conclusion
Today, the need to maintain high levels of security at chemical
and refining facilities is self-evident. The ISTC/SCSC recommends that
if a chemical or refining facility has identified a private sector
solution that can meet the personnel surety needs and legal
requirements at a particular facility, that customized solution should
be preserved as an ASP under any proposed chemical facility security
legislation. Chemical facilities should be regulated by chemical laws
and regulations that reflect the unique needs of the industry. Thus,
private sector ASPs that provide personnel surety programs should be
enabled with access to the information necessary to fully and
comprehensively perform these security functions.
The ISTC and the SCSC appreciate the opportunity to provide this
written testimony, and we urge you to contact us if we can provide
additional information concerning this vitally important matter.
Chairman Thompson. Mr. Stephan, I want to talk a little bit
about the current CFATS regulation, and I want to talk a little
bit about an example. Since our Ranking Member is here from the
New York area and Mr. Pascrell is here from New Jersey, I will
be a little more specific.
As I understand it, a plant that produces industrial
chemicals like chlorine and is located 5 miles outside of New
York City would be subject to chemical security regulations. Is
that correct?
Mr. Stephan. Sir, that would depend on the chemical of
interest that was part of the Appendix A list of approximately
322 chemicals at or above a certain threshold quantity defined
in that appendix.
Chairman Thompson. All right. Now if that same plant was
just outside of Manhattan but instead was a water treatment
facility, would it have to implement chemical security
safeguards?
Mr. Stephan. Sir, the CFATS regulatory program by
congressional exemption does not apply to any wastewater or
water treatment--wastewater or water facilities across the
country.
Chairman Thompson. But I think you see where we are headed.
That is a significant potential target of a facility such as
that----
Mr. Stephan. Yes, sir.
Chairman Thompson [continuing]. And I think we are just
trying to establish that as part of the record.
Mr. Wattier, do you have any opinion on that?
Mr. Wattier. Well, I think I stated in my statement, sir,
that we think it is a significant----
Chairman Thompson. Speak directly into the mike.
Mr. Wattier. We think it is a significant issue, and that
is why we are here today--at least I am here today--to suggest
that the Homeland Security Department ought to have some
authority over this matter to secure the chlorine.
Chairman Thompson. Can you share with us how you think IST
has benefited your facility?
Mr. Wattier. Well, in addition to obviously reducing the
risk, which is our primary motivation, there would be a lot of
other benefits of reducing the storage of chlorine on-site.
There are a number of regulatory requirements that go along
with the storage of gaseous chlorine that involve everything
from worker training to there is obviously the public
information aspect of this that would be much preferable if
chlorine was not stored on-site. So there are a whole host of
regulatory requirements that come in when you are handling
gaseous chlorine that I think would be eliminated or
streamlined by reducing or eliminating the amount of chlorine
that you have on-site, the chlorine gas.
Chairman Thompson. Thank you.
Dr. Pulham, are those facilities owned by Siegfried
presently in compliance with all New Jersey laws?
Mr. Pulham. Yes, we are.
Chairman Thompson. In pursuit of those compliance laws I
would assume that you committed considerable capital resources
and man hours toward meeting those requirements?
Mr. Pulham. We have, Mr. Chairman. But, in our business,
pharmaceutical manufacturing, it is integrated with a process.
So in developing a process and understanding its optimization
IST is part of the process. It is not new to us. It is
something that we have always done and have had to do to make
our products safe not only for patients but also from exposure
to employees.
Chairman Thompson. So as a normal, everyday business
practice you look for, obviously, the safest technology
possible?
Mr. Pulham. Yes, sir. We look to optimize the processes.
But, as I said in my comments, it is not that easy. Because we
are regulated by FDA, we are regulated by DEA, our customers
are also regulated by FDA. So for us to effect a change in a
process can take from 2 to 3 years because of all the approvals
that a change has to go through. But inherent in that review or
the change in a process is, absolutely, safety and
environmental concerns. It is all part of our daily development
and optimization of chemical manufacturing.
Chairman Thompson. Thank you.
Mr. Stephan, we put in this proposed print a budget of
about $325 million; and that basically takes into consideration
moneys you are spending already. Have you had an opportunity to
look at that number and do you have an opinion on it at this
point?
Mr. Stephan. Sir, I have not had an opportunity to view any
of the possible pieces of legislation or had any number
associated with them so far.
As you know, we have put in a 2009 request for $63 million
to cover current CFATS requirements in the current regulated
community, which assumes around 5,000 facilities. If we would
add, for example, water and wastewater treatment facilities, we
could probably double or more the number of high-risk
facilities that would enter the CFATS framework; and I am not
certain whether or not that number includes new requirements
dealing with Ammonium Nitrate point-of-sale registration and
regulation.
Chairman Thompson. As well as some red team exercises and
some other things?
Mr. Stephan. Yes, sir.
Chairman Thompson. I yield 5 minutes to the Ranking Member.
Mr. King. Thank you, Mr. Chairman.
Secretary Stephan, let me just follow up on a point the
Chairman was making before.
Let me also, at the outset, again commend you for the
outstanding work I think you have done in your position. It is
a thankless job. You are doing a terrific job at it, I believe,
so I wanted to put that on the record.
Just to be clear, following up with what the Chairman said,
do you believe it is important to include water and wastewater
treatment facilities in the legislation?
Mr. Stephan. Sir, I think the additional regulatory
authority is a very complex issue. But I think, as the Chairman
or Secretary Chertoff has stated numerous times, that we do
believe we have a gap in terms of the water sector or the
wastewater sector across certain facilities. Just let me give
you an example what I mean by that. This is kind of the same
situation we had with the chemical industry writ large prior to
CFATS.
Lots of people in the water and wastewater business have
made important security investments and significant security
investments since September 11. Others have not. For those that
have made security investments, it is very difficult for me to
measure the effectiveness of those investments against various
or multiple terrorist threat vectors or hazards. So I do not
have the knowledge of understanding that I do underneath the
CFATS framework with respect to the water and wastewater world.
But we do have elements of that community, major elements
of that community that are taking this very seriously. They
have probably one of the best information-sharing networks that
we have across our sectors. They have probably the best
education, training and awareness programs for their sector
members at the facility level of all the 17 critical
infrastructure sectors, some of the most committed leadership
on the part of the other Federal agencies, like the EPA, DHS,
the FBI, State and local associations and the water sector or
private council sector members themselves.
So, again, a complex situation, but we do believe there is
a security gap inherent with the fact that these pieces do fall
outside any established regulatory framework. It just makes
them less-known quantities to us.
Mr. King. Dr. Pulham, if I could ask you at a very
practical level, is there any conflict in complying with New
Jersey's inherently safer technology, regulations and DHS's
regulations?
Mr. Pulham. I don't see a conflict. I just don't quite
understand the need, to be honest. As I said, this IST is so
inherent in our business. We went through the assessment that
the State of New Jersey required us to do, and it was about a
week-long exercise with 10 to 15 of our people facilitated by a
safety expert, and there were no recommendations. So the
measures that we take just to run a pharmaceutical chemical
business incorporates these provisions.
Mr. King. I guess the point I was trying to make from our
perspective is, whether we like it or not or you like it or
not, New Jersey is an activist--I am just wondering, is there
anything the Department is doing interfering with that? Is
there anything New Jersey is doing interfering with the
Department and do you feel that both are in sync and can you
work with both? Whether you want to or not, as a practical
matter, can you do it and are you doing it?
Mr. Pulham. I think, practically, we could.
Again, I am not so sure that I quite appreciate the need,
but I think certainly that if it were a requirement we would do
it, obviously.
Mr. King. On the issue of background checks, Secretary
Stephan, have you had a chance to look at the Committee Print
as to how far it goes, it doesn't go?
Mr. Stephan. Sir, I believe there are a lot of parallels in
a previous edition. I understand there is an edition of the
Committee Print that came out last night or early this morning.
I have not yet seen that document. But in previous editions I
think there are some pretty close parallels between what you
have in your proposed legislation and what we have currently
inside the CFATS regulation.
Mr. King. I would like to yield to Ms. Brown-Waite, if she
wants to follow-up on that issue, because she is very concerned
with it.
Ms. Brown-Waite. I thank the gentleman for yielding.
We have got to be concerned that the draft that we have
seen of the bill actually doesn't have the specific language in
there requiring background checks. It sets up the parameters
for the background checks but doesn't actually require the
background checks. I think all Americans need to be concerned.
How can we believe that these chemical facilities are really
safe if we are not requiring background checks on those who are
at the highest-risk facilities?
I would appreciate your comment on that.
Mr. Stephan. Yes, ma'am, we agree with you.
I, again, have not seen the latest version of--as this is a
very continuously-evolving draft piece of legislation. Trying
to keep up with this has been a bit of a challenge.
But inside the current CFATS regulation there is a mixture
of things that have to be considered as part of the facility
security plan. They include personal identification,
verification and authentication, you are who you say you are; a
background check against commercially available private sector
databases to do a criminal records-type investigation;
verification of validation of right to work or authorization to
work under the I-9 process; and then a check against a system
that would verify whether or not the individual of concern
would have unrestricted, unfettered access to key elements or
assets inside a facility's perimeter against a possible
terrorist nexus or terrorist ties. We feel all those four
components are critical in terms of the personnel surety
function of a security plan.
Ms. Brown-Waite. And the criminal background checks?
Mr. Stephan. Yes, ma'am, the criminal background checks
using publicly or commercially available databases, that is a
requirement in the current CFATS regulation.
Mr. King. Ms. Brown-Waite, I would like to reclaim my time.
I would just like to say, Mr. Chairman, again, as this
process goes forward, and speaking for Mr. Lungren, we look
forward to working with you and Ms. Jackson Lee and also the
Department to make sure we get it right; and all indications
are that this is going forth the way both sides would like it
to.
With that I thank you, and I yield back.
Chairman Thompson. Thank you. I can assure you we will take
the background situation into consideration.
If I am not mistaken, Dr. Pulham, for the record,
background checks for all your employees at your company is
mandatory?
Mr. Pulham. Yes, sir, for employees, contractors, anyone
who comes on-site and customers.
Chairman Thompson. Mr. Wattier.
Mr. Wattier. Preemployment background checks are required
for all of our employees at the city of Long Beach, yes, sir.
Chairman Thompson. Thank you very much.
I yield 5 minutes to the gentlelady from California, Ms.
Sanchez.
Ms. Sanchez. Thank you, Mr. Chairman, and thank you for
holding such an important hearing; and thank you, gentlemen,
for being before us.
Assistant Secretary Stephan, in your testimony, you
provided an overview of the consultation and outreach that the
Department conducted as it began to implement the Chemical
Facility Anti-Terrorism Standards as required by the fiscal
year 2007 Homeland Security Appropriations Act; and you
mentioned initial outreach at the corporate level, publicity of
the role to security partners, presentations at chemical
industry conferences and coordination with the State and local
officials. I think that is all great. But my concern was did
you mention any--you didn't mention any direct outreach to
labor, the people who actually work in your facilities and
would be directly affected by any security threat and who would
also in a sense be the first responders or be the direct
attacks and would be the first ones at the incident and the
first ones to have some type of response to that.
So my question is, did the Department do any outreach,
request any information, have anybody at the table that will be
from, for example, labor unions during this initial and ongoing
implementation of the CFATS?
Mr. Stephan. Yes, ma'am. I think through two principal
means. First, through the publication of this regulation in its
advance notice form and the Appendix A draft piece. We did that
through the Federal Register process and received a number of
comments from labor unions, environmental groups and others
that would have the concerns that you mention.
We also, in concert with the leeway we have to conduct
listening sessions, basically invited lots of folks with
interest in this ongoing evolution of the regulation and the
Appendix A piece to come and provide their comments to us.
I would have to go back and check with my staff to verify
that labor union representatives or environmental groups were
indeed among those audiences. I don't have personal knowledge
of everybody that was in those listening sessions. But I think
principally through the Federal Register process, as well as
the listening sessions, we were able to gather sufficient
comments from those types of organizations.
Ms. Sanchez. So what you are saying is you basically left
it up to labor unions to look through the Federal Register to
figure out that they were going to be involved in the process.
You didn't really make an outreach to the workers' groups to
see if they--I mean, they have a direct--as I said, they have a
direct effect to this and they are the first responders, in a
sense.
Mr. Stephan. A member of my staff advised me--that does
have personal knowledge--that we did make two outreach efforts
and conducted two listening sessions specifically with labor
union groups and their representatives during the final rule
development as well as the Appendix A piece.
Ms. Sanchez. Great. I would like to get that information,
for you to go back and to document for me how you did the
outreach to the workers who actually would be affected by the
regulations and who would actually be affected by any incident
that might happen.
Mr. Stephan. Yes.
Ms. Sanchez. I would also like to know what you are going
to do in the future to keep these people in the process.
Mr. Stephan. I guess we will go back and use the same
process that we--any type of possible change or amendment to
the documents, the regulation itself or the Appendix A, will go
back to the Federal Register piece. We will mobilize the same
system we used to convene these two sessions with those types
of organizations and continue to make this as inclusive as
possible as we go forward.
Ms. Sanchez. I would suggest that instead of treating them
as you would the normal public in just the Federal Register
process, that because they are so heavily involved, because
they are really the ones who might be involved in some type of
attack, and because they are the ones who are the eyes and ears
to what is happening, you might want to figure out some way in
which you make sure that they are involved and helping in the
process. I have always found that these groups have first-hand
knowledge of things that might occur, just as I am sure one of
the employers might--you know, when you are trying to figure
out how to make a process better down on the plant floor you
probably ask your employees because they are the ones who are
doing the motions every single day. Am I not correct about
that?
Mr. Pulham. Absolutely.
Ms. Sanchez. So they might have some knowledge.
Mr. Stephan. We will follow the two-track approach, the
Federal Register notice, and we will convene the listening
sessions with those types of groups represented as we have done
to get to this point.
Ms. Sanchez. Great. The Department's current process
classifies chemical facilities into four different tiers based
on risk. In this process, what is the most important factor in
determining whether a facility is high-risk?
Mr. Stephan. I think at this point in time the most
important factor is direct impact on human public health and
safety, human lives and injuries that would be suffered in the
event of a terrorist attack against that type of facility
housing the chemical of interest above a certain threshold
quantity. So public health and safety, human lives and
injuries.
Ms. Sanchez. I also have a question, and I am glad that
Long Beach Water is here today. Obviously, right in my own
backyard. I want to always let you know we really value the
fact that you come out here and that you testify before our
committee; and, of course, I think Californians do it better
than New Yorkers.
Mr. King. I move to----
Ms. Sanchez. So we are only interested in the cutting
ground with respect to what you are working on.
My big question is, the project that is your on-site
chlorine gas generation demonstration project, you say that the
system will reduce the amount of chlorine gas being shipped to
our Nation's railways, which of course will reduce the risk,
especially out the highway, if you will, and our people out
there, how long will it take you to complete all the phases of
this project? Your testimony said that it costs between $2
million and $3 million to implement this new system. How are
you going to recover that? How is it going to affect your
costs? I am just trying to get a feel for how others upgrade to
protect our citizenry and yet at the same time figure how we
are going to afford it.
Mr. Wattier. Well, $2 million to $3 million--to put that in
context, our total annual budget--annual operating and capital
budget at the Long Beach Water Department is about $100
million. So a $2 million to $3 million one-time expenditure,
while significant, is something that is certainly achievable
within our financial capabilities. In fact, a number of
utilities around the country of our size, even before 9/11,
chose on their own to make some of these conversions. So there
are a number of them that have already made this conversion
within their own financial capability.
There will also be additional increased, ongoing operations
and maintenance costs associated with any conversion to any
alternative technology, but those are also financial
obligations that we think are well within our financial
capability. So we will handle them within our local financial
capability through our revenues that we get from our
ratepayors.
Ms. Sanchez. Remind me if your particular agency has to go
through a regulatory process in order to decide what it is that
you are charging your customers.
Mr. Wattier. Well, under California law, there are various
processes we have to go to change our rates every year and have
a formal public hearing process and all that. We think again
this can be incorporated within that existing process.
Ms. Sanchez. What advice would you offer to other water
treatment facilities that are considering implementing this
type of process?
Mr. Wattier. Well, again, I think there are several
alternatives that should be considered. The one that we are
pursuing is something that many people didn't view as a proven
technology a few years ago, nor did we. But we have tested it
out, and we are now comfortable that this technology is now
reliable to the extent that we are ready to move ahead.
I would encourage my colleagues to talk to their other
utilities who have made changes to review what has been done to
see what has worked and what has not worked. The water
associations have already done a lot of that good communication
sharing among the utilities, and so I would just encourage
people to look at what others have done and get some lessons
learned and then find the thing that works for them.
It will be a case-by-case, very site-specific analysis.
Because in some cases space constraints might direct you in one
direction versus another. In some cases, electrical capability
might move you in one direction. But there are several
alternatives. I would encourage my colleagues to consider the
full gamut and then pick the one that works best for them.
Ms. Sanchez [presiding]. Great. Thank you for your
testimony today.
I will now recognize for 5 minutes Mr. Broun.
Mr. Broun. Thank you, Madam Chairwoman.
I want to begin by saying that I am an original intent
constitutionalist and I believe that the main function of the
Federal Government should be the defense of our Nation, whether
it is national defense or homeland security. I was very honored
and pleased to be assigned to this committee, and I believe
that the main purpose of this committee is to authorize the
functions of DHS. I believe it to be relevant the committee
must pass an authorization bill before the House considers a
DHS appropriations bill later this spring, and so I encourage
the Chairman and this committee to do exactly that.
Now, having said that, Secretary Stephan, I have had an
opportunity to sit down with those in the industry that have
significant concerns about the effect that this Committee Print
has on the implementation of the current regulations. I think
it is important to secure our Nation's high-risk chemical
facilities. But, in doing so, it is important that new
legislation does not disrupt the work that DHS is currently
doing to secure these facilities.
Do you believe that the industry's concerns are valid and
what impact would this Committee Print have on the
implementation of the current regulations? If you would in your
response I would like for you to address its impact on the
Maritime Transportation Security Act regulated facilities.
Mr. Stephan. We would have a concern that any potential
regulation--again, not having seen the latest draft out of the
committee--would involve a complex and very complicated rule-
making process that would involve a considerable amount of
time. So from several dimensions I come at you with this plea
for assistance. Please do no harm in developing a new proposed
piece of legislation to the current CFATS implementation. It is
very important to sustain the momentum, sustain the important
partnership relationships and keep this moving. Because we
absolutely need to do this, especially in light of the fact at
the end of this year we will be undergoing a transition of
administration one to another and we need to keep the
continuity and the flow moving.
Also, people have begun to make very significant
investments on the private sector side with respect to the
current CFATS requirements; and if those change to a
significant degree we now no longer offer continuity and
consistency and stability in terms of our private sector
partners that are absolutely trying to do the right thing.
Again, taking this very seriously, there is no one I work with
on a daily basis in the industry that is not taking this very
seriously; and we want to do the right thing here.
This also throws curve balls to our State and local
government counterparts that have to take a very complex role
in a partnership in the planning process and the implementation
process itself.
So, again, lots of people at stake here, lots of momentum,
lots of continuity.
Sir, what specific aspect of the MTSA rule would you like
me to address?
Mr. Broun. Well, the industry leaders that came and visited
with me about it were just concerned about the implementation;
and their concern was that the current regulations are being
complied with and they are just concerned about any new
regulations being put on top of the current ones, not only the
cost but the implementation of such. So that is the reason I
ask you.
Mr. Stephan. Yes, sir. I think the same logic that I just
articulated would apply in the case of the MTSA-regulated
facilities and also for the committee's awareness. We have a
working group with the Coast Guard and actually TSA to make
sure that we are harmonizing the various security-related
authorities regarding hazardous materials, chemicals of
interest, so on and so forth, between the three principal DHS
components that have a dog in this fight--again, the Office of
Infrastructure Protection, TSA and Coast Guard--to make sure
that we are harmonizing and that there is not a seam or a gap
between us that could be exploited by our adversaries.
Mr. Broun. Do we have any data or even a guesstimate about
what these unfunded mandates are going to cost the industry and
government across the Nation that ultimately the consumer is
going to have to pay?
Mr. Stephan. No, sir, I have not had time to conduct that
analysis. In fact, I have diverted considerable resources from
CFATS implementation to figuring out the new Ammonium Nitrate
authority going down to the point-of-sale.
So, again, I have a limited resource pool now; and you
ladies and gentlemen should be aware of this. This is a year of
program build for CFATS. We are building up personnel, we are
building up capability, and we are building up a boots-on-the-
ground partnership effort here this year. Any significantly
impactful new legislation with additional requirements has the
potential of pulling more resources off implementation of the
current regulation into something else, and some of the
provisions that I have seen in previous aspects of the
legislation have appeared to me to be a very significant cost
behind them or associated with them.
Mr. Broun. Thank you. I yield back.
Ms. Sanchez. Thank you, Mr. Broun.
I just want to also make a note. Staff tells me that this
will not take place until October, 2009, is that correct?
Mr. Stephan. In my understanding, the goal or the intent of
the legislation is to do something about the inevitable sunset
of the current CFATS authority October 1, 2009.
Ms. Sanchez. Great. I just wanted to put that on the
record.
My good friend from North Carolina, Mr. Etheridge, for 5
minutes.
Mr. Etheridge. Thank you, Madam Chairwoman.
Let me thank each of you for being here this morning.
Dr. Pulham, I have heard from chemical facilities in North
Carolina that there are some problems with the chemical
terrorism vulnerability information that DHS is asking--that
they are asking for under CFATS. My question to you, has DHS
classification of CVI been a problem that keeps you and your
colleagues from controlling your own information or knowing
what you are able to do with it? Also, have you been precluded
from sharing information with State and local authorities
because the information has been classified CVI?
Mr. Pulham. As I said in my opening comments, Siegfried is
a little different from many pharmaceutical manufacturers in
that the lion's share of our product line is controlled
substances. So, by nature, some of the information is not
readily available just for security reasons. But we are very
controlled by DEA, we are very controlled by FDA and also DEP.
So all of our systems and all of our processes are very
transparent to authorities. So in this way it has not been a
problem for us at Siegfried.
Mr. Etheridge. Okay. Thank you.
Assistant Secretary Stephan, let me follow that up with
you. What is DHS doing to rationalize the classification regime
of CVI so that companies can maintain control over their
proprietary information, ensuring the proper running of their
businesses, and appropriately communicate with local law
enforcement about their security needs without risking the
disclosure of classified information?
Mr. Stephan. Sir, thank you for your question.
First of all, CVI is a very important program. We are
asking industry to give us information that is very
comprehensive, very detailed. We have never had this
granularity before in terms of vulnerability and security
information, hence, the need to make sure 1,000 percent
protection of this type of information.
But also we feel it very important--in fact, it is a
requirement--to make sure that that information gets into the
hands of those with a need to know, and those who have been
properly certified and cleared to have access to that
information, to include State and local officials, law
enforcement, first responders, emergency managers--absolutely
No. 1 goal of this program.
But we have to do it in a controlled way so that we don't
in some way, shape or form inadvertently have this information
end up in the hands of terrorist planners and operators. That
is the No. 1 goal, as well, of this program.
We pushed the initial user guide, defining the CVI program
guide, attempting to make it user-friendly. We have had some
very overwhelming feedback in terms of certain aspects of that
user's guide. Because of that feedback, we have had from the
private sector, State and local folks--in fact, we have got a
working group set up specifically with State and local
government partners to help us sign these issues out.
Our Office of General Counsel is in the process of
modifying that into a second user's guide that I believe will
answer the concerns of both industry that has to work with this
new regime as well as the State and local officials they would
have to work the regime.
Mr. Etheridge. All right. Let me follow that up with
another one, because, as you know, there is a great deal of
concern about the security--chemical security regulation as it
relates to rural and small businesses, and really, rural and
small water systems because there are a lot of them in this
country. There are very few water systems the size of New York
and San Diego and large systems; there are a lot of small ones.
Could you please explain any efforts the Department is
trying to take to mitigate these concerns and whether any
subsequent legislation should include some specific exemptions
for small systems where we will have a tough time complying or
may not be able to comply with the major changes that would not
have resources?
Mr. Stephan. Yes, sir. Currently, there are no water
systems or wastewater systems that have fallen inside the
regulatory authority of the CFATS regimes. So those are
completely off the table in terms of this program, for me, in
terms of some of the things that represent concern to small
businesses, household farmers across the country.
Through the appendix A process, we have attempted very
clearly to articulate the fact that the intent of this
authority is not to impact small businesses, small households,
individual family farms across America that really don't
represent a significant public health and safety risk. So we
have upped the threshold screening quantities where people
would have to enter in the first part----
Mr. Etheridge. What is that threshold?
Mr. Stephan. Sir, it varies by chemical. For example, for
ammonia nitrate, it is 2,000 pounds. But we have gone out
because we have found that the 2,000-pound piece could, in
fact, get us hypothetically down to the individual farmsteads
across the country; so we have put a temporary hold on any
regulatory compliance requirements to the top screen entry
process for those folks until we go through this first wave of
data that will take us down to the distributor level.
Then we are going to push out a second questionnaire, an
automated questionnaire, to the distributors to really help us
zero in on where in the farming operations community--
principally, pesticides or fertilizers--do we have people that
do hold in store for significant amounts of time the quantities
of these kinds of substances that we are concerned about.
So I think we have done a lot, listening to the concerns,
finding out more about the operational nature of the food and
ag world and how CFATS is critically impacted. We have frozen
those things where we need more time and more information, and
we will deal with them during the summer time frame as we
gather the analysis from this first round of data.
Mr. Etheridge. Thank you. I yield back.
Ms. Sanchez. I thank the gentleman from North Carolina. Now
we will have 5 minutes with Mr. Dent.
Mr. Dent. Thank you. I guess my question will be to Dr.
Pulham.
This whole notion of inherently safer technologies, it
seems to be a practice that was born out of industry; is that
correct, sir?
Mr. Pulham. Yes, sir.
Mr. Dent. I guess the question I have too is, I represent
an area where we have a large company that actually designs and
builds chemical plants and gas plants. One thing that I guess
concerns me: It is always in my understanding that some of the
most toxic and dangerous chemicals produced are often used in
the manufacture of semiconductors. Is that an understanding
that you have as well?
Mr. Pulham. It is. But that is not my area; mine is
pharmaceuticals.
Mr. Dent. It seems to me that this inherently safer
technology is an engineering practice or a process. Is that a
fair assessment?
Mr. Pulham. Yes. It begins right from drug discovery and it
goes all the way through development, scale-up, pilot and
commercial manufacturing.
Mr. Dent. If we, as a Congress, were to mandate inherently
safer technology under certain circumstances for those high-
risk facilities or, I guess, most hazardous of chemicals, do
you believe that we would in some circumstances maybe be
incenting those facilities to manufacture those particular
chemicals offshore as opposed to in the United States?
Mr. Pulham. It certainly has happened in the pharmaceutical
industry. When the regulations have become too strict or too
onerous, companies have outsourced some of the supplies of--
some of the, certainly, early raw materials to offshore
manufacturers. So I wouldn't be at all surprised if that were
true also in this case.
Mr. Dent. What is a typical wage you would pay to somebody
working in a chemical plant or a gas plant?
Mr. Pulham. Fifty dollars an hour.
Mr. Dent. Fifty dollars an hour. So I guess what you are
suggesting is that we should be very careful in terms of how we
proceed on this issue. I understand why.
Mr. Pulham. If I could just add, having worked for FDA for
27 years, I have seen it many times where we take tough
regulatory positions, try to impose a lot of GMP or other
requirements on companies, and so the company will just provide
that material from one of its other facilities in Europe or the
Far East or the Mideast.
So the thinking is that we are very strict in controlling
these companies, when, in fact, we are losing control because
they are now manufactured offshore, we have less control, less
oversight of the facility and the quality of the product.
Mr. Dent. Is inherently safer technology more of a--it
seems to be more of a--is it more of a workplace safety process
or procedure than it is a chemical plant security tool?
Mr. Pulham. No, sir. It is more of a process safety and
more--to deal with the process and the product than it is with
security. So----
Mr. Dent. Yes. I guess that is the point, I guess, I am
trying to make. How will this affect the overall security of a
plant as opposed to the actual safety of the work site, which
of course is important, but is that the role of the homeland
security community?
Mr. Pulham. Right. In my view, it has more to do with the
safety of the product and the manufacturing process than it
does with security of the site. So the way we optimize
processes, the way we control the reactants and ingredients
that go into the processes to obtain ultimate yield in a safe
environment for the operators is of utmost concern with the IST
aspect in my view, not necessarily in the security of the site.
Mr. Dent. Understood. I guess my next question will be
then, I guess, to Mr. Wattier.
How will the implementation of this IST affect the
operation of water treatment facilities? How will the burden of
installing these technologies affect the water use rates of
local taxpayers who ultimately, you know, have to pay for the
implementation of these technologies?
Mr. Wattier. Well, again, we estimated for our situation a
$2 million to $3 million one-time cost which again--put that in
the context of a $100 million budget, we would incorporate that
into our long-term rate setting. Then the ongoing costs would
certainly be less than 1 percent of our ongoing operations and
maintenance costs, comparing--switching to an on-site
generation technology as opposed to the current practice of
buying chlorine.
So I don't see any significant ongoing impact on our rates
in terms of the O&M costs.
Mr. Dent. Thank you.
Do you also feel the regulatory scheme for water
purification facilities, currently in existence under the Safe
Drinking Water Act and the Waste Water Treatment Act, is
appropriate to ensure the physical security of our water
treatment facilities? Are these facilities safe now?
Mr. Wattier. I believe that they can be made safer by
assistance from the Department of Homeland Security.
That was my testimony, sir.
Mr. Dent. Okay. I will yield back my time.
Ms. Sanchez. I thank the gentleman.
Next on the list would be Mr. Pascrell for 5 minutes.
Mr. Pascrell. Thank you, Madam Chairwoman.
I just wanted to make clear in my own mind, we are talking
about the control and protection of particularly lethal
chemicals and their mixtures. We have already determined that
modern technology could bring us to the point of recommending
different mixtures to prevent or minimize the amount of damage
that could be done in an accidental or an intentional attack.
Second, we are talking also about the security of the
facility within which this process takes place, be it fencing,
be it personnel, be it modern technology. I wanted to make that
very clear because I am very disappointed when we talk about
fear.
See, we don't want to establish fear in people. Yet, how
about these questions, how much will it cost the consumer? You
know, establish that fear in people so, oh, my God, it is going
to cost that much.
You said, Secretary Stephan, in your explanation of your
chemicals of interest list, we are talking about chemicals that
are toxic, that are flammable, explosive chemicals that have
the potential to create significant adverse consequences, in
your own words.
Mr. Stephan. Yes, sir. Correct.
Mr. Pascrell. You talked about theft and aversion of these
chemicals, that if they are stolen, they have the potential to
go into the hands of the wrong people.
Mr. Stephan. That is correct, sir.
Mr. Pascrell. And risk for sabotage if they are mixed with
readily available materials have the potential to create
significant adverse consequences for human life.
Most of that is your own words, right, Mr. Secretary.
Mr. Stephan. Yes, sir.
Mr. Pascrell. Now, Dr. Pulham, I am proud to say that the
State of New Jersey is a standard-bearer nationally for
chemical security and chemical security protections, and I
believe the State should be applauded for that. In fact, New
Jersey passed the Toxic Catastrophic Prevention Act way back in
1986 when, I imagine, few people even believed chemical
security was an issue.
In April of last year the Department of Environmental
Protection proposed amendments to the act to require all
companies subject to the program to evaluate the potential of
incorporating inherently safer technologies at the facilities.
I think it is worth noting that in New Jersey, the inherently
safer technology requirement under the chemical sector best
practice standards, something like that, represents a
practicality issue, practicability test. It is not mandatory
that a covered facility implement this process, only that they
evaluate it.
So, Dr. Pulham, the Committee Print for the Chemical
Facility Anti-Terrorism Act calls for the same kind of non-
mandatory IST approach for the great majority of facilities
like yours--like yours--which seem to be operating just jim-
dandy. Yet in your testimony, you call for this committee to
take a less rigorous approach to IST standards. You even
referred to this as paperwork, this is basically paperwork.
Why can't it be implemented by the Federal Government if
inherent safety is a concept that the chemical industry
invented, as you said, and we consider it continuously as we
design and modify our production processes? Can you tell this
committee why you believe facilities like yours in New Jersey
should not have to even evaluate ICT standards when they have
not hindered your ability to operate profitably and efficiently
in the State of New Jersey?
I can't wait to hear this answer.
Mr. Pulham. What I said was that we went through the
requirements, we did an IST evaluation, we did an SVA
assessment, we did all of those----
Mr. Pascrell. You followed the law?
Mr. Pulham. We did all of those evaluations and found that
there were no opportunities for improvement. They had no impact
because the nature of our business required that we already had
these implemented. That is what I meant.
Mr. Pascrell. You are still working in a profit and you are
still working efficiently in the State of New Jersey underneath
this ``paperwork,'' as you call it, standard?
Is that what you are trying to tell us?
Mr. Pulham. I would say underneath the requirements for a
pharmaceutical/chemical manufacturer which incorporates these,
absent this requirement to go through the assessment.
Mr. Pascrell. So many of the facilities in New Jersey are
already operating under the American Chemistry Council's
Responsible Care Program, as you well know.
Are any of your facilities already operating under a
security program such as the Responsible Care Program? Because
it is basically a private program. Are any of yours?
Mr. Pulham. Yes. Yes.
Mr. Pascrell. Will the new CFATS regulations which we are
talking about require those facilities to make significant
security upgrades?
Mr. Pulham. Since the red line came out again last night, I
don't know all of the requirements. So that is hard for me to
assess.
Mr. Pascrell. How do you feel about the Committee Print's
provision enabling facilities to submit alternative security
procedures that are produced for other regulatory purposes, in
whole or in part, to meet the security assessment or the
security plan improvement? How do you feel about that?
Mr. Pulham. The DEA mandates certain security, physical
security requirements on us, so--we can't deviate from those,
so we have fences with razors, we have cameras all along the
fence lines. We have card access not only to the facility, but
to each building within the facility, restricted access. We
have vaults that have certain construction requirements that we
are mandated to have to store certain products in. So our
physical security program is pretty well established by the
requirements of the DEA.
Mr. Pascrell. Well, we would--can I just finish my
statement I just started?
Ms. Sanchez. Mr. Pascrell, you are 3 minutes over.
Mr. Pascrell. I know. Can I ask--I am not going to ask a
question, but make a statement.
Ms. Sanchez. Make a statement. Make it short.
Mr. Pascrell. Thank you, Madam Chairwoman. This is very
important. We have to understand the urgency of this particular
situation.
Why was this committee a few years ago so concerned about,
for instance, the 2-mile stretch on the Turnpike then? There
was good reason. We just didn't invent it. We didn't wake up
one morning and say, Oh, I wonder what is happening in the
chemical industry over in New Jersey.
We are talking about the whole country, first of all. There
was a vulnerability. So for you to talk about paperwork to me
is very demeaning when the State--I know the work that this
State put in on trying to put the process together, and I would
ask you, because of the urgency, to take a second look at this
before coming out, guns blazing, because I am ready myself.
Thank you, Madam Chairwoman.
Ms. Sanchez. Dr. Pulham, before we go on, I just have a
quick question with respect to the offshoring issue. Do you
have any knowledge of any facilities that are leaving New
Jersey because of New Jersey's chemical security regulations
regarding IST?
Mr. Pulham. Not specifically the chemical security
regulations.
Ms. Sanchez. Thank you, Doctor.
Next we will have Mr. Davis of Tennessee for 5 minutes.
Mr. Davis.
Mr. Davis of Tennessee. Thank you, Madam Chairwoman. I
would like to thank the panel as well. Thank you for being here
today. Thank you for what you do in our economy and in our
country. I would like to start with Secretary Stephan, if I
may.
The Committee Print includes the requirements that the
Department in certain situations mandate inherently safer
technologies that reduce the risk of terrorist attacks. Is
there a good definition of what inherently safer technologies
are?
Mr. Stephan. Sir, I think the concept of inherently safer
technologies means many things to many people. In some cases it
may refer to a process, in some cases it may refer to the
reduction of a chemical, in some cases it may refer to the
elimination of a chemical on a particular facility's premises.
So I am not sure that I understand clearly a single definition
of that term.
Mr. Davis of Tennessee. It always concerns me when we are
asking an organization or group or any entity to move forward
when there is not a clear, concise definition. So I hope we can
move forward on that.
Does the Department have a methodology developed to assess
the differing levels of risk for certain processes versus other
processes?
Mr. Stephan. Sir, our methodology is a security-based
methodology. It deals with aspects of consequentiality in terms
of public health and safety.
The next phase, we will take a look at the impacts on
national/regional economy, national mission accomplishments,
such as impacts on the national security establishment if
certain things were to happen at a certain chemical facility.
We do not have a methodology in place that would evaluate
different processes or safety-related processes.
I would suggest that perhaps the EPA that regulates the
safety process world of the chemical industry might be a better
place to go for that answer.
Mr. Davis of Tennessee. Considering that the Department of
Homeland Security issued the current regulations only 8 months
ago, do you believe Congress should be acting now to codify and
expand these regulations? Or should we wait and see if what we
have already done is working well?
Mr. Stephan. Sir, in my opinion, as the implementer of the
existing, very complex set of rules and regulations that we
have to push out the door, I have to maintain 100 percent focus
on getting what we currently have in terms of authority and in
terms in writing a rule that is very complex and reaches across
the United States. I have got to dedicate everything I have to
getting that out the door. Significant new changes beyond
simply allowing the current CFATS authority to continue beyond
October 1, 2009, would not be my preferred way to do business.
I would also ask that the committee consider the concept of
time in terms of lessons learned in the implementation of the
existing program and how they might apply to future legislation
for something that has only been around for a few months. We
don't have the lessons learned captured in granular detail;
they just haven't appeared, so that they would be useful to you
in some future legislation effort that would involve a
rulemaking.
So I would say, give us some time to get this in place.
Don't allow the wind taken out of the sails and let us go full
blown to getting this program up and running in transition to
the incoming administration, as it should be.
Mr. Davis of Tennessee. Thank you, Mr. Secretary.
Dr. Pulham, you stated that being mandated to adopt IST
could be dangerous. Could you explain that statement?
Mr. Pulham. Pardon me?
Mr. Davis of Tennessee. You have stated that mandating IST
could be dangerous. Can you explain that statement?
Mr. Pulham. Yes. What I mean is, if someone mandated us to
use an alternate chemical, for example, or an alternate
process, and we had to do that even though our own assessment
was that it was not the safest, that could be dangerous. You
know, the developers, the innovators of a process and a product
are really the experts in that process and the ramifications of
it. So I am concerned there is a potential that if someone from
the outside then takes a look at this process and mandates
changes in it without knowing all of the related issues with
it--so we have worked with the process for 10 years maybe
bringing it to market, and we know all of the aspects of it,
and if we are mandated from the outside to consider an
alternate process or an alternate free agent, for example, that
in our view is not as safe, that could be, in my view,
dangerous.
Mr. Davis of Tennessee. Do you have concerns that you would
have people other than scientists making those mandates?
Mr. Pulham. People that maybe are not as experienced with
the process as are our scientists. So we have quite a staff of
Ph.D.'s in various disciplines that develop a process based on
the literature and their experience with it at a laboratory
scale, and then it is scaled up to commercialization. So if
someone that hasn't--doesn't have that in-depth knowledge tries
to modify it or mandate a modification to it, I think there is
a potential it could be more dangerous, rather than less.
Mr. Davis of Tennessee. Thank you. I yield back.
Ms. Sanchez. The gentlewoman from Texas, Ms. Jackson Lee,
for 5 minutes.
Ms. Jackson Lee. Let me thank the witnesses for their
presentation and express how important this issue is to all of
us. I hope that with the Committee Print we can find a
constructive road map and legislative document that is going to
put in place security for Americans.
I want to go to the issue of the background checks, Mr.
Stephan, and note my colleagues had mentioned that the
background checks were not mandatory. Of course, in the
Committee Print on page 8, we have a listing of the issues that
should be addressed in doing background checks and suggesting
that they should be done.
Is a background check being mandatory something that the
administration would support?
Mr. Stephan. No. In terms of the current CFATS regulation,
that is one of the criteria that would constitute part of the
security plan in terms of the performance measure that we have
against personnel surety, that a criminal background check
using publicly available commercial databases is an important
component of a security plan.
Ms. Jackson Lee. Is it now mandatory or as one of the
elements of the security plan?
Mr. Stephan. As you will recall, based on the authority we
have, we don't have the authority to make any single element
mandatory inside the CFATS framework. But that is one of the
recommendations we have inside the----
Ms. Jackson Lee. Or if the legislation made it mandatory,
you would have the authority. So I am asking you, in terms of
Committee Print, would that make for a more secure setting to
require that background checks be done?
Mr. Stephan. We support a requirement for a background
check, as stated in the interim final role for the CFATS final
regulation.
Ms. Jackson Lee. Would you go to the next level of making
sure that there is an element in that? I am asking you, do you
want to make that element mandatory?
Mr. Stephan. I don't want to make any statement in favor of
or against a piece of proposed legislation I haven't had a
chance to look at. But generally, I am supportive of the
concept of a background check, a criminal background check, as
part of the personal surety element of a----
Ms. Jackson Lee. So you would be open to the structure that
presently exists, where it is an element; or you might be open,
as well, to where it might be mandatory?
Mr. Stephan. If the current CFATS authority allowed me to
make that piece mandatory, I believe that would be a wise thing
to do.
Ms. Jackson Lee. Okay.
Let me also ask you that you have gotten a budget under the
fiscal year 2008 budget, and it is my understanding that
Congress has provided the CSCD a substantial boost from the
President's budget.
My question is, do you now have enough funding for
inspectors and for training?
Mr. Stephan. In terms of--this program is being implemented
in phases, and in terms of the program work activities and
objectives, milestones, deliverables for fiscal year 2008, the
answer is ``yes.'' We, of course, bleed over now into the 2009
request where the administration has requested $63 million; and
I believe that is an adequate amount of money to realize our
goals and objectives for the program in fiscal year 2009.
Ms. Jackson Lee. You believe that or you really are
committed and dedicated to the fact that you have enough money?
Mr. Stephan. There is not a 100 percent, certain thing
anywhere in my life. Again, the budget assumes a regulated
universe of 5,000 facilities. Based upon our preliminary
tiering analysis, that we are doing now, if that universe of
regulated facilities exceeds 5,000, then of course we would
have to go back within the administration and talk about that,
and then of course come over here following a process to have a
dialog with you.
But if you assume 5,000 is the number of facilities that
would fall in this framework, the budget numbers that you have
seen from the administration are adequate to do the job.
Ms. Jackson Lee. Well, let me thank you for supporting the
administration. I frankly believe they are not.
Let me quickly raise this question, Dr. Pulham, to tell
me--and I want to get it out to answer it before the bell goes
off--to speak to the lack of difficulty in implementing the
IST, which has been discussed before, which is contemplated in
the Committee Print.
The second question is: The value of creating chemical
security excellence centers so that you involve the academic
community in devising new technology as it relates to security
in that arena?
Mr. Pulham. Yes, ma'am.
As I said earlier, our industry is heavily regulated by DEA
and FDA. So for us to make a change in a process is not an easy
thing and would take from 2 to 2\1/2\ years to implement. Our
customers have applications with FDA that have to be amended.
We would have to change our process. They would have to
reformulate the drug product, do studies, stability studies and
efficacy studies; and all that would have to go through FDA
approval.
In addition, the DEA controls a quota that we are allowed
to produce against. So it is very difficult for us to make a
change in a process without severely interrupting the supply to
our customers, or we are certainly taking a long time to affect
the supply.
From a security point of view, we have, as I mentioned
earlier, many layers of security at our facility because of the
nature of the compounds that we handle. So we have things from
card access to cameras to guards at all the entrances and
exits. So just because of the nature of our business, we are
very heavily controlled by DEA and the types of security
systems that we have to have in place.
Ms. Jackson Lee. You wouldn't have any problem complying
with the rules?
Mr. Pulham. Implementing a change would be difficult, so if
we said we had to change the process, that would be difficult
for us to do in a timely manner.
Ms. Jackson Lee. Madam Chairwoman--did you answer the
question about the academic collaboration that institutions of
higher learning on cutting-edge technology?
Mr. Pulham. Yes, ma'am. We have academic advisors so we
have advisors at the university level to consult on chemistry
and medicinal chemistry aspects of our business. So that would
not be difficult.
Ms. Sanchez. The gentlewoman's time has expired.
I will now call on Mr. McCaul for 5 minutes.
Mr. McCaul. Thank you, Madam Chairwoman.
Thank you to the witnesses for being here today. I had a
couple of follow-ups from my colleague from Texas on some of
the questioning--the background, background checks
specifically; and I believe, Colonel Stephan, you said that
would be a wise thing to do to make those mandatory. Is that
correct?
Mr. Stephan. Yes, sir, in terms of the criminal background
checks that we currently have as a consideration inside the
existing CFATS rule, yes.
Mr. McCaul. I would have to agree with that opinion, as
well. The current draft of the Committee Print will include
provisions regarding these checks, and it requires the
Secretary to provide an appeal and a waivers process to
employees who undergo the background check.
Could you tell me how the Department can meet that
requirement and who would bear the cost of that?
Mr. Stephan. Sir, again, not having seen the current
Committee Print, I am not able to probably provide the level of
detail that is required. But right now, inside the existing
CFATS regulation, we have the industry consider using
commercially or publicly available data bases through which to
conduct a criminal background investigation.
We also have a consideration for a check of terrorist
nexus, or terrorist ties, in terms of people to have unescorted
access to certain preidentified critical areas of inside a
facility where the most harm could be done if impacted by a
terrorist attack.
In practical terms, the only way to get to that problem 100
percent is to go through the terrorism screening database. That
is an inherently governmental function, and we would have to--
and of course, under the CFATS rule, are now working with our
TSA partners in the screening coordination office inside the
DHS headquarters to figure out how we would make that available
through a secure, automated portal setup with the facilities
that would be presenting us a list of people that run through
that check process.
Mr. McCaul. I think that would be--in implementing this,
assuming this passes, I think that would be an excellent idea
to have that nexus or the ability to check it with the
terrorist list as well.
Currently, that is not being done, right?
Mr. Stephan. Currently, it is not. We are not at that phase
of the regulation's implementation at that point. But that is a
thing that is looming on the horizon for about two phases from
now.
Mr. McCaul. Is the current background check that is
implemented more along the lines of an NCIC, sort of FBI
background check?
Mr. Stephan. It is a background check that the facility
would initialize or get under way through commercially or
publicly accessible databases. Some facilities are working with
the FBI; some are working with local law enforcement. There are
a variety of ways that the individual facilities are tackling
this issue.
Mr. McCaul. Okay. Thank you.
With respect to the administration's budget request, $63
million, do I understand you correctly that that would be
sufficient to carry out your duties? Or would you need
additional resources?
Mr. Stephan. Sir, based upon the universe of things that
are known to me at this point in time, principally I am
assuming, until I get my analysis completed here within the
coming weeks, that I am looking at about 5,000 facilities
across the country. All of our manpower and budget
justifications to this point have been against that baseline.
So I am happy if the baseline stays at $5,000 that the
resources request that you have seen, as Members of Congress,
are sufficient to do the job. If we go beyond our regulated
universe of 5,000 facilities, then I am going to have to go and
do another costing analysis and run that up my chain of
command.
Mr. McCaul. You will certainly let us know about that if
that happens, right?
Mr. Stephan. Sir, you will be among the first to know.
Mr. McCaul. If a subcommittee amendment was added to the
bill that addressed technical and academic requirements for the
head of the Office of Chemical Security, how would this
language compare with the Department's current plans for
leadership of this office?
Mr. Stephan. Sir, I think in the previous versions of this
proposed legislation that I have seen, it kind of puts lots of
different technical, professional, managerial, leadership
qualifications all into the--all into one person. I am not
quite sure that that person exists, to be quite honest with
you. It is an incredible amount of detail in terms of those
specific technical, professional, leadership and managerial
qualifications.
The concept the Department is pursuing is to achieve all of
those various technical, professional, leadership and
management qualifications through a leadership team of three
individuals. One would be a senior-executive-level technical
advisor; one would be a senior-executive-service-level deputy
director; and one would be a senior-service-executive-level
principal director for the office. So a three-person team at
the senior-executive level, that between them they would have
the mix of all of the things that I have seen in the way of
personnel qualifications in, initially, the amendment of Ms.
Jackson Lee and, finally, the most recent version of the----
Mr. McCaul. In your opinion, does that language give you
enough flexibility to hire the right person for the job?
Mr. Stephan. No, sir, I don't believe that it does. In
fact, I believe I will be on a possibly never-ending search for
that particular individual, because there are so many embedded
qualifications inside that one position. If that person does
exist, they are probably making a lot more money somewhere in
the public sector than I will ever be able to pay them.
Mr. McCaul. That is very good to know.
One last question, Madam Chairwoman. I would respectfully
request this committee pass an authorization bill before the
House considers the DHS appropriations bill. I think it is
relevant to this committee. I think if we want to remain
relevant, we need to do that.
So I will yield back.
Ms. Sanchez. I will remind Mr. McCaul that it has always
been our intent every year to try to pass an authorizing
committee, even though most of the time the Senate doesn't get
that bill out of conference with us. So we will probably try
once again. I can't speak for the Chairman himself, but I would
imagine he would like to see that.
I would like to give now 5 minutes--recognize Mr. Markey of
Massachusetts for 5 minutes.
Mr. Markey. Thank you, Madam Chairwoman, very much.
Mr. Stephan, as you know, the legislation requires the
highest-risk facilities to implement methods to reduce the
consequences of a terrorist attack, such as substituting
smaller shipments of less toxic chemicals for the ones that are
being used. These methods would only be required when they are
technically feasible, when they would not make it impossible
for the company to continue to do its business, and when they
would not result in the creation of a new, high-risk facility
somewhere else.
Does the Department support these provisions?
Mr. Stephan. Sir, again, not having seen those provisions
in terms of the most recent draft of the Committee Print, I
think I would like to make a point that I am a security guy,
and I am very comfortable talking about things in my area of
core competency, which is security.
When we start talking about process safety, reduction of
chemicals, possible rippling effects across the national
economy, I soon get out of my area of core expertise as well as
out of the area of core expertise of the inspectors that we
would have on the ground. I would feel very bad one day if I
woke up, and because of a decision that we made, for example,
to reduce a chemical, change a process, eliminate a chemical
and approve that as part of somebody's chemical facility
security plan three States over, we have now somehow
inadvertently stopped the flow of safe drinking water into a
very large----
Mr. Markey. No.
I am saying, the legislation in the earlier drafts, as
well, contains similar language. Would you support it if those
concerns which you just mentioned were dealt with and were
giving you the flexibility to deal with it?
Mr. Stephan. Sir, again, I would like to not make myself,
by virtue of this proposed legislation, into a safety or a
process expert. I want to maintain my security core competency
and make----
Mr. Markey. That is what we are trying to do. We are trying
our best to reduce the need to have you do your job by
obviously substituting less dangerous chemicals, so you have
less to work on.
As you know, there have been numerous attacks in Iraq using
chlorine cylinders as weapons. According to press reports
several weeks ago, undercover New York Police Department
investigators secretly set up a fake water purification company
last year to demonstrate how easily and anonymously terrorists
could purchase toxic chlorine on the Internet for a deadly
chemical strike against the city.
Evidently, last June, undercover officials successfully
purchased three 100-pound cylinders of chlorine using the
Internet and were never once asked for an ID. They concluded
that at the present time, few, if any, barriers stand in the
way. That is the New York Police Department.
Do you think the vendors of chlorine and other dangerous
chemicals should be required to verify the identity and
legitimacy of orders of these dangerous chemicals, since that
sort of validation is already required for the sales of
radioactive materials that could be used to make a dirty bomb?
Mr. Stephan. Sir, let me answer that question by just
reading you very briefly from the current regulation that
addresses your question, I think, fairly clearly.
Inside our performance-based standard No. 6 under the
current CFATS regulation, Theft and Diversion, we have a know-
your-customer provision. The facility has an active documented
know-your-customer program that includes a policy refusing to
sell chemicals of interest to those who do not meet pre-
established customer qualification criteria such as a
confirmation of identity, verification, and/or evaluation of
on-site security, verification that shipping addresses are
valid business locations, confirmation of financial status,
establishment of normal business-to-business payment terms and
methods, e.g., not allowing cash sales----
Mr. Markey. No. I can hear what the intent is. As a result
of that existing regulation, are you coordinating now with the
New York Police Department, given their investigation?
Mr. Stephan. Sir, we coordinate on a lot of issues on a
day-to-day basis with New York City.
You have to understand where we are in terms of the phase
of implementation of the CFATS reg. This will be a piece, part
and parcel, of the security planning process----
Mr. Markey. Do you know what went wrong in New York City,
why they were able to purchase this chlorine online?
Mr. Stephan. Sir, I am not sure what went wrong. What I can
tell you is, when this regulation takes effect and we get to
this phase of CFATS implementation, the chances for something
like that happening diminish quite greatly.
Mr. Markey. You are saying that this language in our bill
would be complementary rather than contradictory to what your
policy is?
Mr. Stephan. I fully support the language that I just read
to you, and if your language in any way, shape or form is close
to this, we can take a look at it.
But you should also know that that facility in question
actually just completed a top-screen process, as do the other
five companies under that corporate label; and they are
involved now in the first phase of our regulatory process.
Mr. Markey. One final question: Do you agree that DHS
should be able to enforce security regulations at all dangerous
chemical facilities, including water treatment facilities?
Mr. Stephan. Sir, I believe that we ought to be able to
enforce security regulations according to the authority that is
provided to us by the U.S. Congress. Right now, we do not have
the authority----
Mr. Markey. Would you object to us giving you that
authority?
Mr. Stephan. At this point in time, I am not able to give
you a ``yes'' or ``no'' answer because the issue of regulating
water and wastewater treatment facilities, for example, bears
considerable dialog between Members of Congress and the
Department. We would be happy to engage you in that dialog to
make sure that the ramifications are fully including water and
wastewater treatment facilities are fully understood by all
parties involved.
Mr. Markey. I understand that. But if we gave you that
authority, you would be able to implement it, I assume?
Mr. Stephan. Sir, if you give us the authority, I am going
to implement whatever authority you give us that is signed off
by the President of the United States, absolutely.
Mr. Markey. Thank you very much, Madam Chairwoman.
Ms. Sanchez. I thank the gentleman from Massachusetts.
I now recognize Mr. Green of Texas for 5 minutes.
Mr. Green. Thank you, Madam Chairwoman.
Let's start with the background checks. The appeal process
is of some concern, and it is of some concern because we have
had Members of Congress who have found themselves on watch
lists and have had some difficulty extricating themselves.
Can you tell me a little bit more about how this process
would work, such that a person who really shouldn't be in a
position of possibly losing a job or of being put in a position
where he is under suspicion, or she, can extricate himself or
herself?
Mr. Stephan. Sir, are you referring to an appeals process
associated with the new proposed legislation?
Mr. Green. Yes.
Mr. Stephan. Sir, I am not familiar with that new proposed
legislation, so I am not able to really answer that question.
Mr. Green. Okay. You agree that there will be one based on
the legislation?
Mr. Stephan. Sir, I believe that part and parcel of a
background check requirement, an appeals process is in line
with the principles of American democracy and government. We
have a very--in terms of all the aspects of the current CFATS
rule, we have a fairly extensive appeals process to find in the
rule itself, the main body of the rule, for very technically
complicated--many steps, a process that actually represents a
very open, fair and honest petition process with multiple
layers, or sequences, for someone to walk through if they feel
that they have a grievance in terms of any aspect of CFATS.
Now, again, the new proposal, I am not familiar with you-
all's provisions.
Mr. Green. I understand that. Let me strike what I said
about the new proposal and talk about what you have currently,
so that I can get some indication of what you currently have,
as to how you will handle future circumstances.
With your current rules, have you had a circumstance where
persons have been on your list of persons who are under
suspicion, and they have had to hire lawyers to extricate
themselves?
Mr. Stephan. Sir, the answer to your question is ``no''
because we have not yet gotten to that phase of implementation
of our program. That will occur probably 6 to 8 months from
now. We are in the security plan development process, so we
just haven't come to that bridge yet in CFATS implementation.
Mr. Green. When you come to that bridge, is this system one
that anticipates that persons will have legal counsel?
Mr. Stephan. I believe that the appeals process that is
outlined in the regulation has that provision and other
technically complex pieces.
I would ask, sir, that your staff and perhaps my staff can
get together. We can give you a full briefing in terms of where
we are currently with CFATS. I am just not able to do that with
you in great detail.
Mr. Green. If it does anticipate legal counsel, does the
person who is challenging a ruling have to hire the counsel
himself or herself?
Mr. Stephan. Sir, I don't have that degree of familiarity
with that piece of the process. So I would ask that we be able
to come to you and give you a more technically detailed
briefing or presentation on this.
Mr. Green. With reference to the chemical security
regulations, is it your opinion that water plants should not be
regulated?
Mr. Stephan. Sir, it is my opinion that the question of
regulating water plants has a lot of nuances to it. They are
currently, as you know, not inside our regulatory authority.
There are certain aspects of the Bioterrorism Act of 2002
that give the EPA a bit of regulatory authority relative to
security in that space. We don't currently have it.
I think we need to have a dialog with you all to understand
the ramifications and the consequences of including, one way or
another, water, wastewater plants into a regulatory framework.
Mr. Green. Thank you, Madam Chair.
Ms. Sanchez. I thank the gentleman from Texas.
Seeing no other Members, I thank the witnesses for their
valuable testimony and the Members for their questions. The
Members of the committee may have additional questions for the
witnesses. We will ask you to respond quickly to those in
writing.
Ms. Sanchez. Hearing no further business, the committee
stands adjourned.
[Whereupon, at 11:56 a.m., the committee was adjourned.]