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[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]

    H.R. 2868, THE ``CHEMICAL FACILITY ANTI-TERRORISM ACT OF 2009''

=======================================================================

                                HEARING

                               before the

                     COMMITTEE ON HOMELAND SECURITY

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 16, 2009

                               __________

                           Serial No. 111-25

                               __________

       Printed for the use of the Committee on Homeland Security

      Available via the World Wide Web: http://www.gpo.gov/fdsys/

                               __________

                      U.S. GOVERNMENT PRINTING OFFICE
  51-493 PDF               WASHINGTON : 2011
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20402-0001

                     COMMITTEE ON HOMELAND SECURITY

               Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California          Peter T. King, New York
Jane Harman, California              Lamar Smith, Texas
Peter A. DeFazio, Oregon             Mark E. Souder, Indiana
Eleanor Holmes Norton, District of   Daniel E. Lungren, California
    Columbia                         Mike Rogers, Alabama
Zoe Lofgren, California              Michael T. McCaul, Texas
Sheila Jackson Lee, Texas            Charles W. Dent, Pennsylvania
Henry Cuellar, Texas                 Gus M. Bilirakis, Florida
Christopher P. Carney, Pennsylvania  Paul C. Broun, Georgia
Yvette D. Clarke, New York           Candice S. Miller, Michigan
Laura Richardson, California         Pete Olson, Texas
Ann Kirkpatrick, Arizona             Anh ``Joseph'' Cao, Louisiana
Ben Ray Lujan, New Mexico            Steve Austria, Ohio
Bill Pascrell, Jr., New Jersey
Emanuel Cleaver, Missouri
Al Green, Texas
James A. Himes, Connecticut
Mary Jo Kilroy, Ohio
Eric J.J. Massa, New York
Dina Titus, Nevada
Vacancy
                    I. Lanier Avant, Staff Director
                     Rosaline Cohen, Chief Counsel
                     Michael Twinchek, Chief Clerk
                Robert O'Connor, Minority Staff Director

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security:
  Oral Statement.................................................     1
  Prepared Statement.............................................     2
The Honorable Peter T. King, a Representative in Congress From 
  the State of New York, and Ranking Member, Committee on 
  Homeland Security..............................................     3
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California:
  Prepared Statement.............................................     5

                               WITNESSES
                                Panel I

Mr. Philip R. Reitinger, Deputy Under Secretary, National 
  Protection and Programs Directorate, Department of Homeland 
  Security:
  Oral Statement.................................................     6
  Joint Prepared Statement with Sue Armstrong, Director, 
    Infrastructure Security Compliance Division, Office of 
    Infrastructure Protection, Department of Homeland Security...     7

                                Panel II

Mr. Paul Baldauf, Assistant Director, Radiation Protection and 
  Release Prevention, New Jersey Department of Environmental 
  Protection:
  Oral Statement.................................................    47
  Prepared Statement.............................................    49
Mr. Marty Durbin, Vice President, Federal Affairs, American 
  Chemistry Council:
  Oral Statement.................................................    53
  Prepared Statement.............................................    55
Mr. Neal Langerman, Principle Scientist and Chief Executive 
  Officer, Advanced Chemical Safety, Inc.:
  Oral Statement.................................................    58
  Prepared Statement.............................................    59
Mr. Martin Jeppeson, Director of Regulatory Affairs, California 
  Ammonia Company:
  Oral Statement.................................................    67
  Prepared Statement.............................................    69

                             FOR THE RECORD

The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Chairman, Committee on 
  Homeland Security:
  Statement of Rick Hind, Legislative Director, Greenpeace.......    87
  Statement of Elizabeth Hitchcock, U.S. Public Interest Research 
    Group........................................................    38
The Honorable Charles W. Dent, a Representative in Congress From 
  the State of Pennsylvania:
  Letters Submitted For the Record...............................    22

                                APPENDIX

Questions From Hon. Christopher P. Carney of Pennsylvania........   101

 
    H.R. 2868, THE ``CHEMICAL FACILITY ANTI-TERRORISM ACT OF 2009''

                              ----------                              

                         Tuesday, June 16, 2009

                     U.S. House of Representatives,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:05 a.m., in Room 
311, Cannon House Office Building, Hon. Bennie G. Thompson 
[Chairman of the committee] presiding.
    Present: Representatives Thompson, Norton, Jackson Lee, 
Cuellar, Carney, Clarke, Richardson, Pascrell, Cleaver, Green, 
Himes, Titus, King, Smith, Souder, Lungren, McCaul, Dent, 
Broun, Miller, Olson, Cao, and Austria.
    Chairman Thompson [presiding]. The Committee on Homeland 
Security will come to order.
    The committee is meeting today to receive testimony on H.R. 
2868, the Chemical Facility Anti-Terrorism Act of 2009.
    At the outset, let me indicate that we have been told that 
the air is out in all of Cannon. So I would assume that that 
means the testimony we receive today will not include hot air, 
but only the truth. We have been told that the maintenance 
personnel are working on it. So shedding coats and other things 
would absolutely be in order if the need arises.
    Otherwise, good morning.
    When I assumed the Chairmanship of this committee, I 
identified the needs to shield the Nation's critical 
infrastructure from foreign and domestic terrorism as one of 
the many key goals in charting the course toward freedom from 
fear.
    To that end, reauthorization of the Department of Homeland 
Security's chemical security program, the Chemical Facilities 
Anti-Terrorism Standards program, before it expires on October 
2009 is a major priority.
    Yesterday, I was pleased to introduce H.R. 2868, which not 
only reauthorizes CFATS, but also enhances it in a number of 
critical ways. H.R. 2868, Chemical Facility Anti-Terrorism Act 
of 2009, is a product of over 6 months of stakeholder meetings 
and bipartisan discussions between the Committees on Homeland 
Security and Energy and Commerce. In the end, we have produced 
a bill that is both comprehensive and common-sense.
    I have made no secret of my disappointment that past 
efforts to enhance chemical security legislation been bogged 
down between and because of jurisdictional conflicts.
    This Congress, I have a partner that shares my commitment 
to enacting comprehensive chemical security legislation this 
year: Henry Waxman, the Chairman of Energy and Commerce 
Committee.
    At our direction, over the past 6 months, committee staff 
worked in an open and bipartisan manner and sought input from a 
wide range of experts and stakeholders, including: The 
Department of Homeland Security; large and small chemical 
manufacturers; fertilizer manufacturers; petroleum and propane 
manufacturers and distributors; the explosive industry; key 
associations in the chemical sector; the State of New Jersey--I 
really wish Mr. Pascrell was here to hear that; representatives 
from labor unions that represent chemical facility workers; 
drinking water and wastewater organizations; academic and other 
experts.
    Today's hearing will continue in that open and 
collaborative spirit. While at introduction the bill does not 
yet have a Republican cosponsor, I am hopeful that, in the end, 
it will garner bipartisan support just as similar committee-
developed legislation has received.
    After all, many of the key provisions that were accepted 
during the negotiations were offered by Republican staff. 
Today, in addition to discussing the new legislation, we will 
also be discussing how things are going with the implementation 
of CFATS.
    As a close observer, I give credit to the Department for 
the good job it has done so far in promulgating and enforcing 
the CFATS regulations. There have been a few missteps, but the 
Department has adapted quickly and made adjustments as 
necessary.
    The legislation we will discuss today represents a 
continuation of that effort. As the CFATS program has been 
implemented, it is evident that there are a number of areas 
that need to be addressed legislatively. These include: The 
current exemption on security regulations for drinking water, 
wastewater, and port facilities; the absence of strong 
whistleblower protection; restrictions of citizen suits; and 
absence of the requirement that facilities include methods to 
reduce consequences of terror attacks--a best practice in the 
chemical sector--in their vulnerability assessments.
    The introduced version of H.R. 2868, together with 
forthcoming provisions that the Energy and Commerce Committee 
plans include, will take each of these issues on directly.
    I look forward to hearing from our witnesses today as we 
move forward with reauthorizing and enhancing the CFATS 
program. Thank you.
    [The statement of Chairman Thompson follows:]
           Prepared Statement of Chairman Bennie G. Thompson
    Good morning.
    When I assumed the chairmanship of this committee, I identified the 
need to shield the Nation's critical infrastructure from foreign and 
domestic terrorism as one of my key goals in Charting the Course 
Towards Freedom from Fear.
    To that end, reauthorization of the Department of Homeland 
Security's chemical security program--the ``Chemical Facilities Anti-
Terrorism Standards'' program--before it expires in October 2009 is a 
major priority.
    Yesterday, I was pleased to introduce H.R. 2868 which not only 
reauthorizes CFATS but also enhances it in a number of critical ways.
    H.R. 2868, the ``Chemical Facility Anti-Terrorism Act of 2009,'' is 
the product of over 6 months of stakeholder meetings and bipartisan 
discussions between the Committees on Homeland Security and Energy and 
Commerce.
    In the end, we have produced a bill that is both comprehensive and 
common-sense.
    I have made no secret of my disappointment that past efforts to 
enact chemical security legislation been bogged down because of 
jurisdictional conflict.
    This Congress, I have a partner that shares my commitment to 
enacting comprehensive chemical security legislation this year--Henry 
Waxman--the Chairman of the Energy and Commerce Committee.
    At our direction, over the past 6 months, committee staff worked in 
an open and bipartisan manner and sought input from a wide range of 
experts and stakeholders including:
   the Department of Homeland Security;
   large and small chemical manufacturers;
   fertilizer manufacturers;
   petroleum and propane manufacturers and distributors;
   the explosives industry;
   key associations in the chemical sector;
   the State of New Jersey;
   representatives from labor unions that represent chemical 
        facility workers;
   drinking water and wastewater organizations, and
   academic and other experts.
    Today's hearing will continue in that open, collaborative spirit.
    While, at introduction, the bill does not yet have a Republican 
cosponsor, I am hopeful that, in the end, it will garner bipartisan 
support just as similar committee-developed legislation has received.
    After all, many of the key provisions that were accepted during the 
negotiations were offered by Republican staff.
    Today, in addition to discussing the new legislation, we will also 
be discussing how things are going with the implementation of CFATS.
    As a close observer, I give credit to the Department for the good 
job it has done so far in promulgating and enforcing the CFATS 
regulations.
    There have been a few missteps, but the Department has adapted 
quickly and made adjustments as necessary.
    The legislation we will discuss today represents a continuation of 
that effort.
    As the CFATS program has been implemented, it is evident that there 
are a number of areas that need to be addressed legislatively.
    These include: (1) The current exemption on security regulations 
for drinking water, wastewater, and port facilities; (2) the absence of 
strong whistleblower protections; (3) restrictions of citizen suits; 
and (4) the absence of a requirement that facilities include methods to 
reduce consequences of terrorist attacks--a ``best practice'' in the 
chemical sector--in their vulnerability assessments.
    The introduced version of H.R. 2868--together with forthcoming 
provisions that the Energy and Commerce Committee plans include--will 
take each of these issues on--directly.
    I look forward to hearing from our witnesses today, as we move 
forward with reauthorizing and enhancing the CFATS program.
    Thank you.

    Mr. King. I now recognize the Ranking Member of the full 
committee, the gentleman from New York, Mr. King, for an 
opening statement.
    Thank you very much, Mr. Chairman. Like you, I look forward 
to the testimony today.
    I must say at the outset, though, that I do have very real 
concerns about going forward with this legislation. We adopted 
very comprehensive legislation back in 2006.
    Mr. Lungren was in the forefront of the negotiations and 
discussions where we forged, I thought, very real and workable, 
amenable compromises. As the Chairman said in his opening 
statement, the Department has made real progress.
    My understanding is that the President and the 
administration and the Department itself are asking that the 
legislation be extended for 1 year, that we do not rush to 
judgment, that we do not rush to revise the bill or to change 
it, but give the Department 1 year to fully comply with and 
implement the legislation, which was passed in 2006.
    Rand Beers, when testifying before the Senate as the 
President's nominee for under secretary, also requested that a 
1-year extension be granted. My understanding is that the 
homeland security appropriations bill, which will be on the 
floor tomorrow or Friday, has included a 1-year extension.
    So, we have the appropriations bill going forward with a 1-
year extension, and yet we are attempting to revise the bill. 
That shows, I think, part of the weakness of not having an 
authorization bill, because we have the Appropriations 
Subcommittee on Homeland Security setting policy. We are coming 
in afterwards, setting different policy. That, I think, shows 
the inherent weakness in the multiplicity of jurisdictional 
committees in this issue of homeland security.
    So, I have real concerns, and I see no purpose for rushing 
forward today against the wishes of the President, against the 
wishes of the Department, and against the wishes of the 
appropriations committee.
    Now, I have real concerns about the issue of third-party 
suits. I would be interested in the testimony from the 
Department as to how they feel about having citizens bring 
lawsuits off of this legislation.
    Again, the overall concern I have is that, in many ways, we 
are giving the environmental lobby too much of an in here. This 
is a homeland security issue; it is not environmental.
    Obviously, there are environmental concerns, but the prime 
concern here should be homeland security, keeping Americans 
safe, and saving the lives of Americans. We get into the whole 
issue of inherently safer technology. I recall with some 
anguish listening to the debates between Mr. Lungren and Mr. 
Markey in 2006 over inherently safer technology.
    I thought the compromise we worked out at that time made 
sense, because, without oversimplifying it, inherently safer 
technology is a concept. I just think it is dangerous for us to 
be jumping the gun, coming in a year before the Department 
wants to have all of its regulations and policies in place, and 
imposing a concept of security, rather than actual science and 
precise methodologies.
    So, again, I look forward to the testimony. Mr. Chairman, I 
have to say, I have real concerns about the direction in which 
we are going. I am wondering, how much of this is almost wasted 
effort, in view of what the appropriations committee is going 
to be doing on the House floor this week and what I assume the 
Senate will be doing. We will be coming in too late with 
legislation, which serves no real purpose.
    So with that, I still look forward to the hearing, and I 
thank the Chairman for his courtesy. I yield back the balance 
of my time.
    Chairman Thompson. Thank you very much. I am happy to see 
my Ranking Member supports my President. I look forward to 
further----
    Mr. King. Somebody has to.
    Chairman Thompson [continuing]. Opportunities to do that. 
Obviously, there are points of disagreement. That is why we are 
here.
    Other Members of the committee are reminded that, under the 
committee rules, opening statements may be submitted for the 
record.
    [The statement of Honorable Loretta Sanchez follows:]
          Prepared Statement of the Honorable Loretta Sanchez
    I am pleased that today the full Committee on Homeland Security is 
holding this hearing on H.R. 2868, the Chemical Facility Anti-Terrorism 
Act of 2009.
    Last Congress, a similar bill was presented in this committee and 
reported out.
    However, I was disheartened when that legislation did not move 
through Congress.
    To this end, I am thankful for the leadership that Chairman 
Thompson has shown in engaging Chairman Waxman of the Energy and 
Commerce Committee and working to find a compromise to move this bill 
forward.
    I am also glad to see that an amendment I successfully proposed 
last Congress, requiring a minimum level of security training for all 
chemical facility employees, was included in the underlying legislation 
this Congress.
    This provision, in Section 2103 will ensure that employees at 
chemical facilities will receive annual training that will improve the 
overall security of these facilities.
    Oftentime, these employees are at the front lines and affected 
first by any crisis or accident at a facility.
    This training is comprehensive and educates employees about the 
security procedures in their workplace.
    Furthermore the training must:
   Provide an analysis of the potential hazards at the 
        facility,
   Explain the specific prevention, preparedness, and response 
        plan for the facility,
   Provide an opportunity to reduce the vulnerabilities of the 
        facility, and
   Provide the opportunity to discuss and practice emergency 
        response procedures.
    These requirements will ensure that chemical facility workers have 
the tools to try to prevent an incident and, follow an effective 
response plan if a terrorist incident occurs.
    We need to prepare these employees to effectively protect 
themselves, their coworkers, and the facility as a whole and I am 
pleased to see this provision included in H.R. 2868.
    I hope today's hearing is productive and I look forward to this 
legislation moving swiftly through the committee process.

    Chairman Thompson. I welcome our first panel of witnesses. 
Our first witness is Mr. Philip Reitinger. Mr. Reitinger is the 
deputy under secretary and currently acting under secretary for 
the National Protection and Programs Directorate at DHS. Prior 
to joining DHS, Mr. Reitinger served as the chief 
infrastructure strategist at Microsoft.
    Our second witness is Ms. Sue Armstrong. Ms. Armstrong 
serves as the director of the Infrastructure Security 
Compliance Division within the Office of Infrastructure 
Protection at DHS. She is responsible for development and 
implementation of existing CFATS regulation.
    Without objection, the witnesses' full statements will be 
inserted in the record.
    Mr. Reitinger and Ms. Armstrong provided one joint 
testimony. I now recognize Mr. Reitinger to summarize their 
joint statement for 5 minutes.

  STATEMENTS OF PHILIP R. REITINGER, DEPUTY UNDER SECRETARY, 
  NATIONAL PROTECTION AND PROGRAMS DIRECTORATE, DEPARTMENT OF 
HOMELAND SECURITY, AND SUE ARMSTRONG, DIRECTOR, INFRASTRUCTURE 
    SECURITY COMPLIANCE DIVISION, OFFICE OF INFRASTRUCTURE 
          PROTECTION, DEPARTMENT OF HOMELAND SECURITY

    Mr. Reitinger. Thank you, Chairman Thompson, Ranking Member 
King, and distinguished Members of the committee. It is indeed 
an honor to appear before you today to address the Department's 
authority over high-risk chemical facilities through the 
Chemical Facilities Anti-Terrorism Standards, or CFATS, program 
and to discuss the Department's views on its reauthorization.
    As the committee is aware, Section 550 of 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 the CFATS interim 
final rule on April 9, 2007. Specifically, Section 550(a) of 
the act authorized the Department to adopt rules requiring 
high-risk chemical facilities to complete security 
vulnerability assessments for SVAs, develop site security plan, 
or SSPs, and implement protective security measures necessary 
to meet risk-based performance standards established by the 
Department.
    Section 550, however, expressly exempted from these rules 
certain facilities regulated under other Federal statutes. For 
example, Section 550 exempts facilities regulated by the United 
States Coast Guard pursuant to the Maritime Transportation 
Security Act; drinking water and wastewater treatment 
facilities regulated under Section 1401 of the Safe Drinking 
Water Act and Section 212 of the Federal Water Pollution 
Control Act, respectively, are similarly exempted, as are some 
other facilities.
    Since publication of the interim final rule in April 2007, 
the Department has made significant progress in implementing 
the CFATS program. I would like to highlight some of this 
progress.
    We have reviewed over 36,500 top-screen consequence 
assessment questionnaires. In June 2008, we notified 7,010 
preliminarily tiered facilities of the Department's initial 
high-risk determination and of the facilities' requirement to 
submit security vulnerability assessments.
    We received and are reviewing over 6,100 SVAs. We have 
recently began to notify facilities of their final high-ranking 
determination, tiering assignments, and requirements to 
complete and submit SSPs or alternative security programs.
    Per Section 550, the CFATS program is scheduled to expire 
in October 2009. The President's fiscal year 2010 budget 
request would extend the authorization for a period of 1 year 
to October 2010 to allow time for Congress and the 
administration to develop an appropriate reauthorization bill.
    To this end, we have enjoyed a constructive dialogue with 
Congress, particularly this committee, as it works on new 
authorizing legislation for CFATS. We urge that, in authorizing 
continued implementation of this important program, Congress 
provide adequate time and resources to implement any new 
requirements under the legislation.
    We are in the process of reviewing the most recent, current 
reauthorization bill. In general, we support some aspects of 
the bill, but do have concerns with other sections of the bill, 
particularly the provision relating to citizen suits.
    We look forward to our continued collaboration with the 
committee to ensure that chemical sector security regulatory 
effort achieves success in reducing risk in the chemical sector 
and protects the public.
    In addition to our Federal Government partners, success is 
dependent upon continued cooperation with industry and State 
and local government partners as we move towards a more secure 
future.
    I am accompanied today by Sue Armstrong, who leads the 
CFATS program at DHS. Sue has been involved in this program 
since it was first established and can assist in answering the 
Members' questions regarding its implementation.
    Thank you for the opportunity to appear today, and Sue and 
I are happy to answer any questions the committee may have.
    [The joint statement of Mr. Reitinger and Ms. Armstrong 
follows:]
   Joint Prepared Statement of Philip R. Reitinger and Sue Armstrong
                             June 16, 2009
    Thank you, Chairman Thompson, Ranking Member King, and 
distinguished Members of the committee. It is a pleasure to appear 
before you today to address the Department's authority over high-risk 
chemical facilities through the Chemical Facility Anti-Terrorism 
Standards (CFATS) program. We have made significant progress since 
CFATS' implementation. We have reviewed over 36,500 facilities' Top-
Screen consequence assessment questionnaires. In June 2008, we notified 
7,010 preliminarily tiered facilities of the Department's initial high-
risk determination and of the facilities' requirement to submit 
Security Vulnerability Assessments (SVAs). We received and are 
reviewing over 6,100 SVAs; we have recently begun to notify facilities 
of their final high-risk determinations, tiering assignments, and the 
requirement to complete and submit Site Security Plans (SSPs) or 
Alternative Security Programs (ASPs). CFATS currently covers 
approximately 6,400 high-risk facilities Nation-wide, which reflects 
changes related to chemicals of interest that facilities have made 
since receiving preliminary tiering notifications in June 2008.
                     chemical security regulations
    Section 550 of 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 authorized the Department to adopt rules requiring high-risk 
chemical facilities to complete SVAs, develop SSPs, and implement 
protective measures necessary to meet risk-based performance standards 
established by the Department. Section 550, however, expressly exempts 
from those rules certain facilities that are regulated under other 
Federal statutes. For example, Section 550 exempts facilities regulated 
by the United States Coast Guard pursuant to the Maritime 
Transportation Security Act (MTSA); drinking water and wastewater 
treatment facilities regulated under Section 1401 of the Safe Water 
Drinking Act and Section 212 of the Federal Water Pollution Control 
Act, respectively, are similarly exempted. In addition, Section 550 
exempted facilities owned or operated by the Department of Defense and 
the Department of Energy, and certain facilities subject to regulation 
by the Nuclear Regulatory Commission.
    The following core principles guided the development of the CFATS 
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 
participation by all stakeholders--Federal, State, local, and the 
private sector--is 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, members of industry, academics, and Federal 
Government partners, we leveraged vital knowledge and insight to 
develop the regulation.
    (2) Risk-based tiering will ensure that resources are appropriately 
deployed.--Not all facilities present the same level of risk. The 
greatest level of scrutiny should be focused on those facilities that, 
if attacked, present the most risks and could endanger the greatest 
number of lives.
    (3) Reasonable, clear, and equitable performance standards will 
lead to enhanced security.--The CFATS rule includes enforceable risk-
based performance standards. High-risk facilities have the flexibility 
to select among appropriate site-specific security measures that will 
effectively address risk. The Department will analyze each tiered 
facility's SSP, to see if it meets CFATS performance standards; if 
necessary, DHS will 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. Building on that progress in implementing the 
CFATS program will raise the overall security baseline of high-risk 
chemical facilities.
    Appendix A to CFATS 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 or health if intentionally released or detonated;
    (2) Theft/Diversion--chemicals that have the potential, if stolen 
        or diverted, to be used or converted into weapons that could 
        cause significant adverse consequences for human life or 
        health; and
    (3) Sabotage/Contamination--chemicals that, if mixed with other 
        readily available materials, have the potential to create 
        significant adverse consequences for human life or health.
    The Department established a Screening Threshold Quantity for each 
chemical based on its potential to create significant adverse 
consequences for human life or health in light of the security issues 
listed above.
                         implementation status
    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 SVAs and to develop SSPs. CSAT is a suite 
of on-line applications designed to facilitate compliance with the 
program; it includes user registration, the initial consequence-based 
screening tool (Top-Screen), an SVA tool, and an SSP template. Through 
the Top-Screen process, the Department can initially identify and sort 
facilities based on their associated risks.
    If a facility is not designated as low-risk during the Top-Screen 
process, the Department assigns the facility to one of four preliminary 
risk-based tiers, with Tier 1 indicating the highest level of risk. 
Those facilities must then complete SVAs and submit them to the 
Department. Results from the SVA inform the Department's final 
determinations as to whether a facility is high-risk and, if it is 
high-risk, of the facility's final tier assignment. To date, the 
Department has received over 6,100 SVAs. Each one is carefully reviewed 
for its physical, cyber, and chemical security content.
    Only facilities that receive a final high-risk determination letter 
under CFATS will be required to complete and submit an SSP or an 
Alternative Security Program. DHS's final determinations as to which 
facilities are high-risk are largely based on each facility's 
individual consequentiality and vulnerability as determined by the Top-
Screen and SVA.
    After approval of their SVAs, the final high-risk facilities are 
required to develop SSPs (or ASPs) that address their identified 
vulnerabilities and security issues. The higher the risk-based tier, 
the more robust the security measures and the more frequent and 
rigorous the inspections will be. The purpose of inspections is to 
validate the adequacy of a facility's SSP and to verify that measures 
identified in the SSP are being implemented.
    In May, the Department issued about 140 final tiering determination 
letters to the highest risk (Tier 1) facilities, which confirm their 
high-risk status, and begin their time frame (120 days) for submitting 
an SSP. Following preliminary authorization of the SSPs, the Department 
expects to begin performing inspections in the first quarter of fiscal 
year 2010, starting with the designated Tier 1 facilities.
    Along with issuing the initial set of final tiering determination 
notifications, the Department launched the SSP tool, which was 
developed by DHS with input from an industry working group. A critical 
element of the Department's efforts to identify and secure the Nation's 
high-risk chemical facilities, the SSP enables final high-risk 
facilities to document their individual security strategies for meeting 
the Risk-Based Performance Standards (RBPS) established under CFATS.
    Each final high-risk facility's security strategy will be unique, 
depending on its risk level, security issues, characteristics, and 
other factors. Therefore, the SSP tool collects information and data on 
each of the 18 RBPS for each facility. The RBPS cover the fundamentals 
of security, such as restricting the area perimeter, securing site 
assets, screening and controlling access, cyber, training, and 
response. The SSP tool also recognizes that facilities typically 
administer most security measures on a facility-wide basis but that 
facilities also customize security for certain assets. That being the 
case, facilities can describe facility-wide and/or asset-specific 
security measures. Moreover, the Department understands that the 
private sector in general and, the CFATS-affected industries in 
particular are dynamic. The SSP tool allows facilities to involve its 
subject-matter experts from across the facility, company, and 
corporation, if appropriate, in completing the SSP and to submit a 
combination of existing and planned security measures to satisfy the 
RBPS. The Department expects that most approved SSPs will consist of a 
combination of existing and planned security measures. It will be 
through a review of the SSP, in conjunction with an on-site inspection, 
that DHS will determine whether a facility has met the requisite level 
of performance given its risk profile and thus whether its SSP should 
be approved.
    With the launch of the SSP tool, DHS also issued the Risk-Based 
Performance Standards Guidance document. The Department developed this 
guidance to assist high-risk chemical facilities subject to CFATS in 
considering appropriate protective measures and practices to meet the 
RBPS. It seeks to help facilities comply with CFATS by describing in 
greater detail the 18 RBPS and by providing examples of various 
security measures and practices that could be considered by facilities 
to achieve the appropriate level of performance for the RBPS at each 
tier level. This guidance also reflects public and private sector 
dialogue on the RBPS and industrial security, including public comments 
on the draft guidance document. High-risk facilities are free to make 
use of whatever security programs or processes that they would like, 
provided that they achieve the requisite level of performance under the 
CFATS RBPS. The guidance will help high-risk facilities gain a sense of 
what types and combination of security measures may satisfy the RBPS.
    To provide a concrete example: in the case of a Tier 1 facility 
with a release hazard security issue, the ``restrict area perimeter'' 
performance standard at the Tier 1 level may involve 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. Among other options, a 
facility could, install cable anchored in concrete block along with 
movable bollards at all active gates, or it could ``landscape'' its 
perimeter with large boulders, steep berms, streams, or other obstacles 
that would thwart a wheeled vehicle. As long as the specific measures 
in the SSP are sufficient to address the performance standards, the 
Department would approve the plan.
              outreach efforts and program implementation
    Since the release of CFATS in April 2007, the Department has taken 
significant steps 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 regularly updated the 
Sector Coordinating and Government Coordinating councils of sectors 
impacted by CFATS, including the Chemical, Oil and Natural Gas, and 
Food and Agriculture Sectors. We have also made it a point to solicit 
feedback from our public and private sector partners as we interact 
with them and, where appropriate, to reflect that feedback in our 
implementing activities. We have presented at numerous security and 
chemical industry conferences, participated in a variety of other 
meetings of relevant security partners, established a Help Desk for 
CFATS questions, and developed and regularly updated a highly-regarded 
Chemical Security Web site. These efforts are having a positive impact: 
approximately 36,500 facilities have submitted Top-Screens to the 
Department via CSAT.
    Additionally, the Department continues 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 standards under CFATS, facilities 
likely will need to develop effective working relationships--including 
a clear understanding of roles and responsibilities--with local 
officials who would aid in delaying and responding to potential 
attacks. To facilitate these relationships, our inspectors have been 
actively working with facilities and officials in their assigned areas, 
and have participated in almost 100 Local Emergency Planning Committee 
meetings to give a better understanding of CFATS' requirements.
    We are also pursuing efforts on several levels to identify 
facilities that may meet the threshold for potential CFATS compliance 
but have not yet registered with CSAT or filed a Top-Screen. We have 
recently completed pilot efforts at the State level with New York and 
New Jersey to identify such facilities in those jurisdictions; we will 
use those pilots to design an approach that all States can use to 
assist in this effort. Further, we are in the process of commencing 
targeted outreach efforts to certain segments of industry where we 
believe compliance may not be at the level it should be.
    We continue to build the Infrastructure Security Compliance 
Division that is implementing CFATS. We have hired or are in the 
process of on-boarding over 125 people, and we will continue to hire 
throughout this fiscal year to meet our goals. Likewise, we continue 
our relationship with the Federal Protective Service to detail 
personnel with extensive physical security experience. The budget 
request for fiscal year 2010 contains an increase to support the 
hiring, training, equipping, and housing of additional inspectors to 
support the CFATS program as well as to continue to deploy and maintain 
compliance tools for covered facilities.
                            new legislation
    We have enjoyed a constructive dialogue with Congress as it works 
on new draft authorizing legislation for CFATS. CFATS is enhancing 
security by helping to ensure high-risk chemical facilities throughout 
the country have security postures commensurate with their level of 
risk; thus, we support a permanent authorization of the program. Since 
the Department's authority under Section 550 is due to sunset on 
October 4, 2009, the administration's fiscal year 2010 budget includes 
a request for a 1-year extension of the statutory authority for CFATS. 
We look forward to working closely with Congress to extend the program 
permanently. We urge that, in authorizing continued implementation of 
this important program, Congress provide adequate time and resources to 
implement any new requirements under the legislation and ensure that 
new requirements would not require the Department to extensively 
revisit aspects of the program that are either currently in place or 
will be implemented in the near future. Throughout our discussions with 
Congressional committees, including the Committee on Homeland Security, 
the Department has communicated a series of issues for consideration to 
be discussed as part of any legislative proposal involving CFATS.
    As DHS has stated before, we believe that there is an important gap 
in the framework for regulating the security of chemicals in the United 
States, namely drinking water and wastewater treatment facilities. We 
need to work with the Congress to close this gap in order to secure 
substances of concern at these facilities and protect the communities 
they serve. Drinking water and wastewater treatment facilities that 
would be considered high-risk due to the presence of substances of 
concern should be regulated; however, we do recognize the unique public 
health and environmental requirements and responsibilities of such 
facilities. For example, we understand that a cease operations order 
that might be appropriate for a chemical facility under CFATS could 
have significant public health and environmental consequences when 
applied to a water facility.
    In addition, the Department's current authority under Section 550 
does not extend to certain exempt facilities, including those regulated 
by the U.S. Coast Guard under MTSA and by the Nuclear Regulatory 
Commission. Because CFATS and MTSA both address chemical facility 
security, there certainly should be harmonization, where applicable, 
between these programs. We are working with the Coast Guard to review 
the processes and procedures of both programs in an on-going dialogue. 
We also support further clarification in the statute concerning the 
type of nuclear facilities exempt from CFATS.
    CFATS currently provides facilities with flexibility to assess and 
determine what measures to include in their SSPs to meet the RBPS. This 
includes adoption of safer technologies, where appropriate. Under 
CFATS, facilities are also required to submit a revised Top-Screen when 
they make a material modification to their operations. Based on revised 
Top-Screens many facilities have already made voluntary changes to, 
among other things, their chemical holdings and distribution practices 
(for example, completely eliminating use of certain chemicals of 
interest). We support such voluntary measures when they reduce risk.
    In the area of enforcement, we support eliminating the requirement 
that an Order Assessing Civil Penalty may only be issued following the 
issuance of an Administrative Order for compliance. This would greatly 
streamline the civil enforcement process, thereby enhancing the 
Department's ability to obtain compliance from facilities. We also 
support language that would authorize the Department to enforce 
compliance by initiating a civil penalty action in district court or 
commencing a civil action to obtain appropriate relief, including 
temporary or permanent injunction.
    The Department has significant concerns with the citizen suit 
provision being contemplated under some legislative proposals.
    The Department is concerned about the potential for disclosure of 
sensitive or classified information in such proceedings. Similarly, the 
Department urges that it retain discretion in determining the manner 
and extent to which information about the reasons for placing a 
facility in a given tier is divulged, as those reasons may involve 
classified information.
                               conclusion
    The Department is collaborating extensively with the public, 
including members of the chemical sector and other interested groups, 
to work toward achieving our collective goals under the CFATS 
regulatory framework. In many cases, 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 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 experienced 
considerable success. We look forward to collaborating with the 
committee to ensure that the chemical security regulatory effort 
achieves success in reducing risk in 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 may have.

    Chairman Thompson. I thank you for your testimony. I remind 
each Member that he or she will have 5 minutes to question the 
panel.
    I now recognize myself for the first question.
    Getting right to it, in your statement, you noted that the 
Department's request for a 1-year extension of CFATS, you 
followed that by saying that you look forward to working with 
Congress to extend the program permanently. So it's fair to 
characterize a 1-year extension proposal as a backstop to 
ensure that CFATS isn't interrupted if Congress is unable to 
complete its work before October 2009, when the program is 
scheduled to sunset?
    Mr. Reitinger. Thank you, sir. I would say that the 
proposal for a 1-year extension is so that we would have time 
to work on an appropriate reauthorization of the bill. 
Obviously, we believe this is a critical program that needs to 
continue, and we would like to work with the committee to have 
the most effective reauthorization possible.
    A 1-year extension would give us the time to move forward 
and achieve the best possible authorization bill, and that was 
why it was requested in the President's budget. Thank you, sir.
    Chairman Thompson. So where are you along the way if this 
bill that we are considering now becomes law?
    Mr. Reitinger. If the question, sir, relates to, where are 
we on implementation of the CFATS regime?
    Chairman Thompson. That is correct.
    Mr. Reitinger. We are substantially into the implementation 
of the regime. As my testimony indicated, we have issued an 
interim final rule. The appropriate top screens have been 
submitted, and we are now in the process of identifying 
facilities on a rolling basis of where they are tiered with a 
recent notification to roughly 140 facilities that they are 
within the top tier or tier one.
    As a result of that, they will be required to issue or to 
provide to DHS site security plans within 120 days. We will 
continue to do those notifications, review them, approve them, 
or engage in discussions with the regulated facilities, and 
move forward on implementation throughout all of the tiers and 
begin the inspections process, which would be the next step, 
during the next fiscal year.
    Chairman Thompson. So if the bill passes before the sunset 
occurs, what interruption do you see occurring?
    Mr. Reitinger. Sir, if the bill were passed before the 
reauthorization, I think there would be no interruption in the 
actual regime. However, we would like the opportunity to 
continue to work with the committee to make sure that the 
reauthorization is as effective as possible.
    Chairman Thompson. The other issue speaks to this issue 
around civil suits. Now, am I to say to you that civil suits 
under this legislation is still subject to certain sensitive 
material and that, even if a lawsuit was brought, based on 
existing law, there are certain items that would not be 
available for public review in this civil suit?
    Mr. Reitinger. Sir, I would need to spend, I think, more 
time to fully understand the nature of the language in H.R. 
2868. I would say that, in general on civil suit provisions, I 
have a concern that civil litigation involving the CFATS regime 
would lead to a higher likelihood of disclosure of sensitive 
information covered under the existing CVI regime.
    As the committee knows, that information is highly 
sensitive and would be of use to people who wanted to do harm 
to the Nation or the public. Therefore, I think it is important 
to give full consideration to all of the different factors that 
are involved.
    Also, somewhat concerned with regard to civil suits that--I 
am sorry, sir.
    Chairman Thompson. Well, without going through it, but are 
you aware that there are certain--and maybe you need to study 
it a little more--but there are some classifications in the 
bill that would prevent access to this information?
    Mr. Reitinger. I understand that, sir, and we would be 
happy to work with the committee to make sure that those are as 
effective as possible. I am generally concerned, though, that 
civil litigation leads to, no matter what the protections are, 
a higher likelihood of disclosure of information.
    So I would want to work effectively with the committee to 
make sure that those protections were optimal for ensuring 
sensitive information were not released.
    Chairman Thompson. But you do--and I am not trying to 
debate it, but in America, that is one of the ways that our 
citizens have access to things they disagree with is the court 
of law. What we have tried to do is craft in this bill access, 
but also protect some of the secret or top-secret issues 
associated with it.
    Mr. Reitinger. I understand, sir. Obviously, there is 
always a balance between availability to information possessed 
by Government, the First Amendment implications of that, and 
protection of sensitive information that could be used to harm 
the public.
    I understand that. That is a difficult balance to draw, and 
we would be happy to work with the committee going forward.
    I am not, however, in a position to take a formal position 
on the bill that the committee introduced yesterday at this 
point in time, and I apologize for that.
    Chairman Thompson. Thank you.
    I yield to the Ranking Member from New York.
    Mr. King. Thank you, Mr. Chairman.
    Mr. Chairman, when I assumed my position as Ranking Member 
back in January, I did not think I would be sitting here as the 
defender of the Obama administration and their policies, but I 
do believe, in a bipartisan way, that when we believe the 
administration is right, we should stand with them. I believe 
they are right, in some respects.
    As far as the 1-year extension, Mr. Reitinger, in your 
testimony, you said that you wanted to work with Congress to 
make the implementation of the regulations and legislation as 
effective as possible, and you believed it would take over the 
course of the next year to do that.
    Now, the legislation has been introduced. I am not trying 
to play word games here, but you must not believe that this 
legislation is as effective as it could be and is not the most 
effective piece of legislation. We are talking about a very 
complex area. That is why I believe extending it out for a year 
makes a lot more sense, rather than rush to judgment.
    What would you envision doing over the next year, assuming 
that the bill passes on the floor, the appropriations committee 
prevails, and there is a 1-year extension? What do you have in 
mind as far as what has to be done during the course of that 
year, as opposed to rushing it through within the next few 
weeks?
    Mr. Reitinger. So, sir, once again, I am not in a position 
to take a DHS or administration position on the bill itself.
    But, certainly, you know, within whatever time frame is 
allowed, we would intend to work effectively with the committee 
to make sure that we crystallize a position and provide the 
best advice possible we can to the committee so that the bill 
addresses the needs that are--that the committee is already 
discussing, and includes appropriate resolution of all of the 
issues that are included within the bill.
    Mr. King. On the issue of civil suits, have you considered 
how much time would go into responding to lawsuits, how much 
manpower and personnel would have to be expended to do this? My 
understanding is that right now senior officials in the 
Department have to testify before 108 committees and 
subcommittees of Congress, which is an extraordinary waste of 
time.
    You add to that lawsuits being brought. As you said, there 
has to be a balance between security and what is open to the 
public. But have you looked into the amount of manpower that 
would be required and personnel hours required it were open to 
civilian lawsuits?
    Mr. Reitinger. No, sir. I can't say that it is, I think, 
possible to determine that in advance.
    My understanding is that there are some civil suit 
provisions that are rarely exercised and take little time and 
there are others that are rapidly or often exercised and take 
more time.
    Certainly, reviewing such civil suit information and if 
testimony from the Department was required, it would take some 
time from the Department. We would want to work, if a civil 
suit provision were included, with the committee to make sure 
that there was as little risk of disclosure of information as 
possible and that the diversion from other substantive work 
that the Department is undertaking was as limited as possible.
    Certainly, it is true that any civil suit provision at 
least raises the specter of some diversion of resources.
    Mr. King. Now, as I understand it, this will be the first 
time that the Department would be open to civil lawsuits. Is 
that true?
    Mr. Reitinger. I do not know of any other provisions where 
the Department is open, but I can't say, sir, that I have 
talked with our office of general counsel and had them conduct 
an exhaustive survey yet.
    Mr. King. Could you expand at all upon your concern with 
the danger of vital information being disclosed as a result of 
these lawsuits, whether it is in discovery or in part of the 
proceeding?
    Mr. Reitinger. Well, sir, I perhaps have some degree of 
innate caution about this. Having spent a large chunk of my 
career as a litigator, first on the civil side and then on the 
criminal side, and understanding what the scope of discovery 
and information disclosure is, I think that inevitably there is 
some risk of disclosure of information. This information is 
very sensitive and is, indeed, pursuant to the authorizing 
legislation, treated as classified for some particular 
purposes.
    That said, as the Chairman indicated before, there are 
First Amendment concerns; the public needs access to 
information. Those need to be carefully balanced. I would want 
to have the Department continue to work effectively with the 
committee as it has been to make sure that balance is drawn in 
the appropriate place.
    Mr. King. If I could just make one more statement for the 
record as to why this should not be rushed and why we should 
wait out the year.
    My understanding is that two of the senior positions at 
DHS, the assistant secretary for infrastructure protection and 
the under secretary for national protection and programs 
directorate, have not been filled and they have a vital role to 
play in implementation of the regulations and carrying forth of 
the legislation. Is that true?
    Mr. Reitinger. Neither of those positions has been filled 
yet, sir.
    Mr. King. They would play a vital role in this legislation 
being implemented?
    Mr. Reitinger. Yes, sir.
    Mr. King. I yield back.
    Chairman Thompson. The Chair now recognizes other Members 
for questions they may wish to ask the witnesses.
    In accordance with our committee rules, I will recognize 
Members who are present at the start of the hearing based on 
seniority on the committee, alternating between majority and 
minority. Those Members coming in later will be recognized in 
the order of their arrival.
    The Chair now recognizes for 5 minutes the gentleman from 
Pennsylvania, Mr. Carney.
    Mr. Carney. Thank you, Mr. Chairman.
    I would like to thank you, Mr. Reitinger and Ms. Armstrong, 
for joining us today.
    Ms. Armstrong, I actually have a question for you to start 
off. Now, as I understand it, present regulations and tiering 
structures, about 10 percent of underground natural gas 
reservoirs are subject to additional CFATS security 
requirements. Is that correct?
    Ms. Armstrong. There are underground natural gas storage 
facilities that are subject to CFATS, primarily based on the 
amount of methane stored there.
    Mr. Carney. Okay. TSA and PHMSA also recommend and monitor 
security practices at these facilities, as well?
    Ms. Armstrong. If there is a pipeline nexus, yes.
    Mr. Carney. Okay, just a pipeline nexus. Okay, all right.
    Are there any conflicts between CFATS and TSA and PHMSA on 
how they monitor and regulate, if you are storing the gas, 
and--monitoring the system, is there----
    Ms. Armstrong. No, we actually have worked fairly closely 
with TSA, their rule--on their freight rail rule. We coordinate 
with them on a routine basis as we identify facilities that are 
subject to CFATS or are in some cases with other agencies 
exempt.
    Mr. Carney. Okay. Now, when CFATS was first written, first 
developed, do you think it was intended to regulate, include 
underground natural gas storage?
    Ms. Armstrong. CFATS was designed to regulate the security 
of chemicals of interest, as published in our appendix A, which 
is 322 chemicals that--at or above screening threshold 
quantity, holding those chemicals triggers compliance with 
CFATS.
    Mr. Carney. Does that include natural gas and if CFATS has 
a role to play in this?
    Ms. Armstrong. It includes fuel mixtures that have a 
chemical of interest in them, such as pentane, butane, or 
methane.
    Mr. Carney. Understood. Cleared that up.
    In your mind, are the regulations sufficient? Are they too 
much? Or are they--do they conflict with TSA or PHMSA?
    Ms. Armstrong. Sir, I don't see any conflicts with TSA and 
CFATS.
    Mr. Carney. Okay. No further questions at this time.
    Chairman Thompson. Thank you.
    We now recognize the gentleman from California, Mr. 
Lungren, for 5 minutes.
    Mr. Lungren. Thank you very much, Mr. Chairman.
    First, Ms. Armstrong, I want to thank you and the others in 
the Department who have worked hard to make CFATS work. We 
tried to get CFATS as freestanding legislation. We did not get 
that, but we did have it in appropriation language, which 
allowed us to go forward with H.R. 2868. I think the spirit of 
cooperation in the industry and the work done at DHS has been 
very helpful to the security of this country.
    There is one fact I would like to establish. As I 
understand, our staff has broken down the various steps in the 
CFATS regulatory process. They have broken it down into eight 
steps.
    According to their analysis, we are at about step five 
currently. In other words, we are in the middle of the process 
making sure it is a completed, matured process. Would that be 
correct, as far as you are concerned?
    Ms. Armstrong. On May 15, we took another step in the 
program to move from reviewing security vulnerability 
assessments submitted by CFATS facilities to completing review 
of the initial group of preliminary tier-one SVAs and issued 
approximately 140 facilities of final tiering notification, 
which included the deadline for their submission of their site 
security plan, which for that group is September 15.
    Mr. Lungren. But for the completed CFATS regulatory 
process, the last step would be for DHS to conduct inspections, 
both targeted and random, to ensure the facility's compliance 
with its SVA. We are not there yet, correct?
    Ms. Armstrong. Correct. We have not done any inspections. 
Our inspectors have done a number over the past couple of 
months of compliance assistance visits to make sure we 
understand the content of a facility's security----
    Mr. Lungren. More directly, my question is this: We have 
not completed the process of the entire regulated community at 
this point so that we would be at full maturity, correct?
    Ms. Armstrong. Correct. We have not verified content of 
site security plans.
    Mr. Lungren. I have concerns about us passing legislation 
when we haven't even finished the process of CFATS, which you 
and the industry have been working on in order to evaluate how 
we are doing at that point in time.
    Excuse me. Is it ``Reitinger'' or ``Reitinger''? Or 
something else?
    Mr. Reitinger. Sir, I will answer to just about anything.
    Mr. Lungren. I know that. But I like to get it--I remember, 
``I before E except after C or pronounced as A as in neighbor 
and weigh.'' But that is only how you spell it. How do you 
pronounce it?
    Mr. Reitinger. I think my name is roughly unpronounceable, 
but I generally say ``Reitinger.''
    Mr. Lungren. Reitinger, okay. Mr. Reitinger, with respect 
to the issue of civil lawsuits, if I were to tell you there 
were potentially 304 million civil lawsuits, would that disturb 
you?
    Mr. Reitinger. Yes, sir.
    Mr. Lungren. Well, the language which Section 2116 has 
introduced says, ``any person may commence a civil action on 
the person's own behalf against any person, including the 
United States or other governmental instrumentality or agency 
who is alleged to be in violation of any standard, regulation, 
condition, requirement, prohibition, or order which has become 
effective pursuant to this title.''
    Now, you are a former civil litigator. I am a former civil 
litigator. Normally, you have, not an expanded universe, but 
rather a contracted universe of potential litigants, however 
this language says any person. Don't you think that is a little 
bit of an overreach?
    Mr. Reitinger. Sir, I regret, again, I am not in a position 
to take a position.
    Mr. Lungren. Okay. Well, I will say that I think it is an 
overreach. Anybody involved in the civil litigation arena knows 
that if you have a potential universe of litigants who have no 
skin in the game, then there doesn't need to be any single 
allegation that they have suffered a loss as a result of this. 
There is no indication that they have been injured.
    So what you would have, for the first time since the 
creation of DHS, is a requirement that the Department be liable 
to uninjured third parties in civil lawsuits. So I know you 
want to very careful about what you say.
    You have said the administration has concerns about civil 
lawsuits. I would suggest it is more than just a concern with 
civil lawsuits. Rather, it is a concern with civil lawsuits 
that are open to anybody in the United States, yet it is not 
even limited to just the United States. I will limit my 
question to any person in the United States, but it doesn't 
even have to be that limited solely to millions of potential 
lawsuits.
    One of my concerns is that we have had the industry work in 
collaboration with the Department with a certain level of 
trust. Would that trust in some ways be undermined by the 
possibility of lawsuits down the line, undetermined at this 
point in terms of its nature and its number?
    Although you would say we will try to make sure we keep 
this information secure, do we recall not many years ago that 
we required, as a matter of law, all nuclear facilities to have 
their blueprint available to the public on the Internet? If 
that is not a problem in terms of terrorism, I think this would 
be.
    So I thank you for your testimony.
    Mr. Reitinger. Thank you, sir.
    Chairman Thompson. Thank you.
    Since the gentleman from California raised the lawsuit 
possibility, I want to read you what is in the act itself under 
hearing today. It says, ``The bill requires a 60-day notice 
before a suit can commence. If the secretary takes action to 
fix a problem or require compliance in that time, the suit is 
terminated. In addition, the court is only allowed to issue 
orders directing specific action on the part of the agency or 
facility in civil fines that are returned to the Treasury. 
Thus, there is no incentive for frivolous lawsuits.''
    In other words, if you want to sue under this lawsuit, you 
have to notify the Government within 60 days, and then the 
Government has 60 days to fix the violation that you are 
alleging. If so, the suit goes away.
    Mr. Lungren. Would the gentleman yield on that?
    Chairman Thompson. I yield to the gentleman from 
California.
    Mr. Lungren. By the terms of what the gentleman has just 
said, it requires action on behalf of the Department presumably 
to investigate the allegations contained in the lawsuit before 
they can make a judgment as to whether or not it is worthy of 
remedy and then they can remedy it.
    I thank the Chairman.
    Chairman Thompson. Well, thank you. Sixty days, we think, 
is good enough to see whether something is broken. Obviously, 
whatever needs fixing, we can fix by filing it with the court 
indicating so.
    We will now recognize the gentleman from Kansas City, Mr. 
Cleaver, for 5 minutes.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Mr. Reitinger, in July, you notified 7,000 facilities of 
their initial high-risk assessment. Of the 7,000, 141 of them 
have been assigned tier-one status. My concern is that the 
time-line with regard to the rest of the tier assignment, as 
well as the requirements to complete and submit site security 
plans.
    Mr. Reitinger. Yes, sir. So I will give a quick answer and 
then ask Ms. Armstrong to supplement where we are in the 
process, because she is--her level of detail knowledge far 
exceeds mine.
    As you said, we have done the first notifications to some 
of the highest-risk facilities. We will be, over the next few 
months, notifying the remainder of those who have been tiered. 
They will all have 120 days after notification to submit site 
security plans.
    Let me ask Ms. Armstrong if she can supplement that.
    Ms. Armstrong. Certainly. Sir, you are correct. Last year 
right about this time, on June 23, we notified 7,010 facilities 
of their preliminary tiering determination and their 
requirement to do an SVA, security vulnerability assessment. We 
have moved in the last couple of weeks, last month or so, into 
making final tiering notifications based on SVA review.
    One thing to remember about the CFATS numbers is that they 
are constantly changing, because new facilities are filing a 
top screen and starting their clock, if you will, if they 
screen in.
    Facilities are also resubmitting top screen, notifying the 
Department that they have made, for example, a material 
modification at the site and their COI holdings are now 
different, and they are putting us on notice of that, as 
required in the rule. So that is why you see some of the 
changes in the numbers.
    The time frame we are on right now is to, by the end of 
this month, notify a group of tier-two facilities of their 
final tiering determination and site security plan requirement 
and then move into perhaps, as time goes on, monthly 
notifications of threes and fours as their SVAs are reviewed.
    Mr. Cleaver. Now, what is the on-going process? I mean, 
after you have--site security plan has been authorized, does 
DHS then require another assessment every year, every 6 months? 
I mean, what are we going to do in the on-going plan to make 
sure that we have, in fact, done the--made the proper step--
taken the proper steps with regard to security?
    Ms. Armstrong. Well, the rule itself speaks to the time 
frame that facilities are on, but to--suffice it to say that, 
once we accept a site security plan, we will inspect the 
facility. We will be inspecting tier-one facilities under the 
current construct every year and tier-two every 2 years.
    Mr. Cleaver. Okay.
    Ms. Armstrong. Then handle the threes and fours 
accordingly.
    Mr. Cleaver. Okay, yes, that was my concern, whether it 
was--whether we were going to do a one-time visit and that is 
it or rotating or reoccurring visits. You are saying----
    Ms. Armstrong. Correct. There will be----
    Mr. Cleaver [continuing]. Once a year?
    Ms. Armstrong [continuing]. Inspection cycle for each 
facility, depending on its tier.
    Mr. Cleaver. All right.
    Thank you, Mr. Chairman.
    Chairman Thompson. Thank you.
    We now recognize the gentleman from Texas, Mr. McCaul, for 
5 minutes.
    Mr. McCaul. Thank you, Mr. Chairman.
    Let me thank the panel and thank you, Mr. Reitinger, for 
your service, not only in the Justice Department, where I 
worked, as well, but also on the CSI cybersecurity commission, 
making recommendations to the President regarding 
cybersecurity, many of which were adopted. It was great work, 
and I am glad to see you in the Department serving this country 
well.
    I just have a couple of questions. I don't want to sound 
redundant, but I am curious. When did you get a copy of this 
draft legislation, Mr. Reitinger?
    Mr. Reitinger. Sir, first, let me briefly thank you and 
thank you for your leadership of the CSIC commission. It was a 
pleasure to serve under your Chairmanship there.
    Mr. McCaul. Thanks.
    Mr. Reitinger. In terms of the legislation, I personally 
reviewed a draft copy last week. I believe the formal copy was 
just introduced yesterday, so I have begun to review that now, 
but have not completed it yet.
    Mr. McCaul. Okay. In your testimony last week, you 
testified that the President and the Department requested a 1-
year reauthorization or extension, as the Ranking Member has 
pointed out, to have more time to work effectively with the 
Congress for a permanent reauthorization. To me, that seems to 
make eminent sense. It seems like a reasonable request on the 
part of the administration.
    Can you perhaps explain to this committee why it is 
important for the Department--and the President clearly also 
believes it is necessary--to have this 1-year extension?
    Mr. Reitinger. Yes, sir. At least it seems to me, based on 
the questions around the table, that there is near consensus 
that the CFATS regime is--has been an essential step forward 
towards protecting chemical site security. Obviously, we did 
not want the regime to lapse while further discussions were 
taking place about a reauthorization of the program, and so the 
President requested a 1-year extension to give time for the 
discussions around what that authorization might look like.
    Mr. McCaul. I would submit to the Chairman that it is 
certainly the position on our side, that a 1-year extension 
makes eminent sense to get the bill right. However, that is 
just our view.
    The litigation issues concern me, as well. An uninjured 
plaintiff can bring a third-party lawsuit. This could include 
almost anybody, which could tie down the Department with 
extensive litigation. You and I, having worked in the Justice 
Department, know the burden of that type of litigation.
    Is this the first time the Department will be open to these 
types of lawsuits?
    Mr. Reitinger. Yes, sir. I cannot specifically say it would 
be the first time. I am not aware of other provisions like 
this. But I have not done either the exhaustive research 
myself, nor do I have access to the appropriate legal schools 
to do that anymore, nor have I asked our Office of General 
Counsel to engage in that inquiry yet, but----
    Mr. McCaul. Based upon my experience, I can tell you, it 
will increase their workload and their burden. I think it will 
perhaps jeopardize some of the protected information, as the 
gentleman from California discussed.
    We have critical infrastructures that want to work with the 
Government cooperatively. If this litigation risk calculation 
arises where this type of protected information could 
potentially be disclosed in a public lawsuit, I think, it will 
hurt our relationship with the private sector, in terms of our 
goals with security being the ultimate issue.
    Finally, with respect to implementing inherently safer 
technologies, you stated in your testimony that the CFATS 
regulations did not prohibit companies from implementation 
today, is that correct?
    Mr. Reitinger. Yes, sir.
    Mr. McCaul. Okay. Now, this would actually mandate that 
implementation. Do you think the Department is in a position to 
be able to make those kinds of evaluations? Or is the private 
sector and the market a better place to make those decisions?
    Mr. Reitinger. Sir, what I would say is, as you point out, 
the existing regime allows for regulated entities to use 
inherently safer technologies to tier down or perhaps tier out 
or as a part of their protected plans, but it is not mandatory.
    Were we responsible for judging whether ISTs--whether they 
should be imposed and what those particular ISTs should look 
like, we would--although we are developing expertise in our 
chemical inspector corps, we would need to go farther and 
certainly bring in some additional experts to be able to 
effectively fulfill that mission.
    Mr. McCaul. I see my time is expired. Thank you.
    Chairman Thompson. Thank you very much.
    Ms. Armstrong, for the record, since you have primary 
responsibility for CFATS and some other responsibilities 
directly related to where we are, are you familiar with this 
legislation? Have you been provided a draft routinely by 
committee staff?
    Ms. Armstrong. Yes, sir.
    Chairman Thompson. Over what period of time?
    Ms. Armstrong. I believe we saw an April draft and an early 
June draft, in addition to the bill that was released last 
night.
    Chairman Thompson. So basically you have had knowledge of 
everything going on so far?
    Ms. Armstrong. Yes, sir.
    Chairman Thompson. Thank you.
    The other point I want to make is that every other piece of 
legislation related to this--Clean Water Act, Safe Drinking 
Water Act, Toxic Substance Control Act, Water Pollution Control 
Act, Atomic Energy Act--all of them have references to civil 
suits. Clearly, because we are a Nation of laws, our citizens 
have to have an opportunity to have their day in court, whether 
they are right or wrong.
    What we have done with this 60-day provision is to screen 
out what we think frivolous lawsuits would work an undue burden 
on the agency by saying the secretary can take that complaint 
within 60 days, file whatever response with the court, and go 
away. That is the intent of the legislation.
    We now recognize Ms. Clarke, from New York, for 5 minutes.
    Ms. Clarke. Thank you, Mr. Chairman. I, too, find this 
whole topic of civil litigation somewhat intriguing and just 
wanted to get a sense from both of you--and good morning. It is 
good to see you again, Under Secretary Reitinger and Assistant 
Secretary Ms. Armstrong.
    There has been discussion today about civil suits and how 
they will impact the functioning of the Department. Is DHS 
subject to suit under environmental statutes?
    Mr. Reitinger. I am going to defer that question to Ms. 
Armstrong.
    Ms. Armstrong. Just for the record, I am the director of 
the Infrastructure Security Compliance Division, though thank 
you for the promotion.
    Ms. Clarke. Okay, we have to fix the materials here. Go on.
    Ms. Armstrong. In terms of subject to environmental 
litigation, I would say, at a very high level, the Department 
is subject to NEPA-type requirements when we impact the 
environment, but I don't know of any provisions that we are 
expressly subject to under how we implement CFATS at this point 
in time.
    Ms. Clarke. Okay. So, I mean, are we splitting hairs here? 
Or would you say that the Department is subject, particularly 
in the area of environment?
    Mr. Reitinger. Let me see if I can supplement what I have 
said, Ms. Clarke. I worry about several things with civil suits 
that amount to concerns about a provision that would subject 
the Department to civil suits in these circumstances. One is 
disclosure of confidential information. Another is diversion of 
resources.
    As I said before, while I--there are clear reasons why one 
might want to empower private citizens to bring these sorts of 
actions, and there are also concerns about public access to 
information, those have to be carefully balanced about with 
respect to both maintaining the confidentiality of highly 
sensitive information and enabling the Department to 
effectively implement the regime, you know, from the--you know, 
less importantly at the politically level, but much more 
importantly down through the subject matter experts.
    So I would want to be very sure that any legislation drew 
the right balance to enable the strongest possible protections 
for chemical facilities and, therefore, strongest possible 
protections for the public.
    Ms. Clarke. So are you saying that you are not in favor of 
citizens being able to bring suit if it is warranted? I mean, I 
understand your position with respect to privacy of the 
information that may be contained regarding chemical 
facilities, but your emphasis seems to be very heavily on that. 
You know, you say you are trying to strike a balance, but it 
just doesn't come across that way.
    Mr. Reitinger. So I would say that, I am not in a position 
to take a formal position on the bill that was introduced 
yesterday. But I and the Department have significant concerns 
about civil suits in the context of CFATS.
    Ms. Clarke. Are you aware that the Nuclear Regulatory 
Commission is subject to citizen suits, as well, and, in any 
given year, it is sued 10 to 15 times within that year? This 
is--you know, in mind, is there any real reason to expect that 
there will be like a flurry of litigation with regard to 
citizen suits being included in this bill?
    Mr. Reitinger. Ms. Armstrong may have additional 
information.
    The one other thing I would point out, ma'am, is that there 
are obviously a very large number of high-risk chemical 
facilities around the country around----
    Ms. Clarke. Some very close to New York City.
    Mr. Reitinger. Understood, ma'am. So I think that bears a 
potential risk for a high amount of litigation. But I am not in 
a position now to do a comparative analysis with the Nuclear 
Regulatory Commission provisions.
    Ms. Clarke. Well, we will just hope you will bear that in 
mind as you go through your review of the provision within this 
bill.
    Having said that, Mr. Chairman, I yield back the balance of 
my time.
    Chairman Thompson. Thank you very much.
    The gentleman from Pennsylvania, Mr. Dent, is recognized 
for 5 minutes.
    Mr. Dent. Thank you, Mr. Chairman.
    I want to say first that I have letters here from over 40 
organizations opposing H.R. 2868, the Chemical Facility 
Antiterrorism Act of 2009. These organizations include the Farm 
Bureau, Trucking Association, Chamber of Commerce, and many 
others. I would like to submit these for the record.
    Chairman Thompson. Without objection.
    [The information follows:]
     Letters Submitted for the Record by Honorable Charles W. Dent
                                                     June 11, 2009.
    Dear Member of Congress: We represent American businesses and local 
city services that provide millions of jobs and our national 
infrastructure. Protecting our communities and complying with Federal 
security standards is a top priority for us.
    We ask that you cosponsor H.R. 2477, ``The Chemical Facility 
Security Authorization Act'', to reauthorize the DHS chemical facility 
security standards enacted by Congress in 2006. Extending the sunset 
date for the chemical security regulations would provide the certainty 
needed to both protect our citizens and enable our economic recovery.
    However, we strongly urge you to oppose disrupting this security 
program by adding provisions that would mandate Government-favored 
substitutions, weaken protection of sensitive information, impose 
stifling penalties for administrative errors, create conflicts with 
other security standards or move away from a performance (or risk-
based) approach.
    For example, last year's ``Chemical Facility Anti-Terrorism Act'' 
could have caused disruptions of new Federal security standards and 
reduced jobs in the short term, and in the long term weakened 
infrastructure protection and economic stability.
    Our top concern is that legislation could go beyond security 
protections by creating a mandate to substitute products and processes 
with a Government-selected technology. Congressional testimony found 
that this could actually increase risk to the businesses that the bill 
intends to protect. Such a standard is not measurable and would likely 
lead to confusion, loss of viable products, prohibitive legal 
liability, and business failures.
    We ask that you ensure that any security legislation avoid overlap 
and conflict with existing Federal security requirements, such as the 
U.S. Coast Guard's ``Maritime Transportation Security Act.'' Any 
proposal must also protect from release any sensitive security 
information on site vulnerability.
    Companies in thousands of communities are complying with the 
landmark new DHS chemical security standards while continuing to 
provide essential products and services for our daily lives. We believe 
that counter-productive adjustments to the current law would undermine 
security and endanger businesses in communities all around the country. 
Thank you for your consideration of our views.

Agricultural Retailers Association; American Exploration & Production 
Council; American Farm Bureau Federation; American Forest & Paper 
Association; American Petroleum Institute; American Trucking 
Association; Chemical Producers and Distributors Assn; Consumer 
Specialty Products Association; Croplife America; Edison Electric 
Institute; Environmental Technology Council; Institute of Makers of 
Explosives; International Assn of Drilling Contractors; International 
Assn of Refrigerated Warehouses; International Dairy Foods Association; 
International Liquid Terminals Association; International Warehouse 
Logistics Association; Midwest Food Processors Association; National 
Agricultural Aviation Association; National Association of Chemical 
Distributors; National Association of Manufacturers; National Mining 
Association; National Oilseed Processors Association; National Paint 
and Coatings Association; National Pest Management Association; 
National Petrochemical & Refiners Assn; National Propane Gas 
Association; North American Millers' Association; Petroleum Equipment 
Suppliers Association; Petroleum Marketers Association of America; 
Synthetic Organic Chemical Manufacturers Assn; The Fertilizer 
Institute; USA Rice Federation; U.S. Chamber of Commerce.
                                 ______
                                 
                                                     June 12, 2009.
The Honorable Bennie Thompson,
Chairman, Committee on Homeland Security, 176 Ford House Office 
        Building, Washington, DC 20515.
The Honorable Peter King,
Ranking Member, Committee an Homeland Security, 117 Ford House Office 
        Building, Washington, DC 20515.
    Dear Chairman Thompson and Ranking Member King: As the Committee on 
Homeland Security moves toward consideration of legislation to ensure 
the security of our Nation's chemical facilities, the undersigned agri-
business community organizations would like to highlight several 
concerns that we believe must be addressed in any legislation 
ultimately approved by the committee. We look forward to working with 
you to provide solutions to our issues of concern as legislation moves 
through the legislative process.
    We believe homeland security and the protection of America's food 
supply is a top priority. The Nation's agricultural industry continues 
to take pro-active steps to properly secure crops and livestock as well 
as critical crop input materials such as fertilizer and pesticides 
throughout the distribution chain. Our organizations and members are 
working closely with the Department of Homeland Security (DHS) to 
implement and ensure compliance with the Chemical Facility Anti-
Terrorism Standards (CFATS) regulations. We encourage you to maintain 
the existing regulations and allow DHS to complete the first phase of 
their implementation.
    We also want to raise with you our concerns with certain provisions 
in the ``Chemical Facility Anti-Terrorism Security Act of 2009,'' which 
we believe would disrupt the current partnership that exists between 
DHS and the private sector and detrimentally impact American 
agriculture. Our key areas of concern include:
    Inherently Safer Technology (IST).--While some may believe that IST 
is a valid goal at a manufacturing site for OSHA Process Safety 
Management (PSM) reasons, the requirement to assess the use of product 
substitution at all regulated chemical facilities, including 
manufacturers, wholesale distributors and retailers, as proposed in 
draft legislation, could have a devastating impact on American 
agriculture. If an IST mandate is put in place for the Nation's 
agricultural industry, such a mandate could jeopardize the availability 
of lower-cost sources of plant nutrient products or certain 
agricultural pesticides used by farmers and ranchers, as well as 
products which are used for specific agronomic reasons.
    It is disconcerting that this legislation actively discourages the 
use of products which are vital to American agriculture in all levels 
of the supply chain. In the report accompanying H.R. 5577, the 
``Chemical Facility Anti-Terrorism Act of 2007,'' the committee 
recognized the unique issues associated with IST and the agricultural 
sector. The committee explicitly stated in its report, ``It is not the 
intention of the committee to promote or discourage the use of any 
particular chemical in agriculture though the provisions in this 
section.'' We therefore request that you alter the legislation to 
reflect the committee's intent with regards to the impact of IST on 
American agriculture and remove any language, for agricultural 
facilities, which implicitly or explicitly discourages the use of 
products.
    Inclusion of MTSA Regulated Facilities.--The Maritime 
Transportation Security Act (MTSA) of 2002 is designed to protect our 
Nation's ports and chemical facilities located therein. MTSA facilities 
are required to conduct the same vulnerability assessments and develop 
security plans just as facilities regulated under CFATS. Due to the 
strong regulations currently in place, these facilities, which are 
regulated by the U.S. Coast Guard, were exempted by statute from the 
CFATS legislation. To continue to maintain this successful program and 
avoid duplicative regulation, it is necessary to maintain the MTSA 
exemption. We encourage you to alter the draft legislation to 
acknowledge and maintain the Coast Guard's important role and long-term 
commitment to the protection of chemical facilities currently located 
along our Nation's navigable waterways.
    Third-Party Lawsuits.--The Ag Security Working Group is alarmed 
that the ``Chemical Facility Anti-Terrorism Act of 2009'' includes 
provisions allowing for private rights of action against regulated 
parties and against DHS to enforce compliance with applicable 
requirements. Such private rights of action provisions have fostered 
enormous amounts of litigation in other contexts and have no place in 
the legislation under consideration. First, we believe that these 
provisions increase the likelihood of disclosure to the public of 
sensitive security information. We also believe that these provisions 
provide a disincentive for chemical facility employees to take 
responsibility for implementing the legislation's provisions due to the 
personal liabilities associated with being named in a citizen's suit. 
In addition, we believe that citizen suits jeopardize cooperation 
between DHS and the regulated entity, specifically in an instance when 
cooperation is crucial for the protection of our Nation's critical 
infrastructure.
    Information Protection.--A facility's information should be 
protected to the highest degree. Information should be treated as 
classified material in a court setting and should not be released to 
the general public. Section 2110 of the draft bill weakens certain 
information protection provisions and potentially exposes sensitive 
vulnerability information to the public domain. As the Federal 
Government has recently learned with the release of sensitive nuclear 
information, once information is released to the public, it can not be 
retrieved. Security vulnerability assessments and site security plans 
can provide those very terrorists that this legislation intends to 
protect us against with a roadmap to attack our Nation's critical 
infrastructure, an circumstance that this legislation seeks to 
mitigate. We believe it is necessary to treat this information as 
Critical-Terrorism Vulnerability Information (CVI) as currently defined 
by DHS.
    Federal Preemption.--The agribusiness community is particularly 
concerned that Congress intends to encourage the creation of a 
patchwork of conflicting rules that stretch across Federal, State, and 
local lines. The DHS CFATS regulations should pre-empt inconsistent 
State and local chemical security laws and rules by preempting State or 
local requirements only if (1) there is an actual conflict between the 
two, or (2) the State or local program ``frustrates the purpose'' of 
the Federal program. Neither of these problems appears to be occurring 
with the way existing State programs are being implemented; thus, 
Congress should not need to act to ``save'' any current programs.
    We support efforts in Congress to permanently authorize the 
existing DHS CFATS regulations. However, any legislation considered by 
the Committee on Homeland Security, or on the House floor, needs to 
take into account the regulatory and economic impact on American 
agriculture and the consumer for whom we provide essential food, fiber, 
and bioenergy.
    We look forward to working with you both in a cooperative manner as 
the committee moves this measure forward. Thank you for your 
consideration of our concerns and unique perspectives shared in 
American agriculture.
            Sincerely,
American Farm Bureau Federation; Agricultural Retailers Association; 
CropLife America; Chemical Producers and Distributors Association; 
National Agricultural Aviation Association; National Cattlemen's Beef 
Association; National Corn Growers Association; National Council of 
Farmer Cooperatives; The Fertilizer Institute.
                                 ______
                                 
                                                     June 15, 2009.
The Honorable Bennie G. Thompson,
Chairman, Committee on Homeland Security, U.S. House of 
        Representatives, Washington, DC 20515.
RE: Reauthorization of Chemical Facility Anti-Terrorism Standards 
(CFATS)

    Dear Chairman Thompson: On behalf of the member companies of the 
Chemical Industry Council of California (CICC) \1\ and the California 
Manufacturers & Technology Association (CMTA),\2\ we write to urge the 
Committee on Homeland Security to reauthorize the Department of 
Homeland Security (DHS) Chemical Facility Anti-Terrorism Standards 
(CFATS) enacted by Congress in 2006. The security of our California 
chemical and chemical user facilities ranks among our highest 
priorities and as such we have proactively collaborated with the 
Governor's Emergency Management Agency (Cal/EMA), the State's Regional 
Terrorist Threat Assessment Centers (RTTAC's), the DHS Regional 
Offices, and the FBI InfraGard chapters throughout the State. Our 
organizations believe extending the chemical security regulations will 
provide the certainty needed to protect workers and the general public, 
critical infrastructure and jobs, and the environment from violent and 
reckless acts of terrorism.
---------------------------------------------------------------------------
    \1\ The Chemical Industry Council of California (CICC) is a 
voluntary State-wide trade association comprised of large and small 
chemical manufacturers and distributors throughout California. CICC 
represents multiple facilities including: forty-three (43) 
manufacturing plants; five (5) research laboratories; and sixty-seven 
(67) sales, service, and distribution centers. Our California members 
account for annual sales in excess of $3,000,000,000 and directly 
employ more than 5,700 workers, with combined annual payroll in excess 
of $283,000,000. An additional 11,000 indirect jobs are created by CICC 
member companies with an additional combined annual payroll of some 
$360,000,000.
    \2\ The California Manufacturers & Technology Association (formerly 
the California Manufacturers Association) works to improve and enhance 
a strong business climate for California's 30,000 manufacturing, 
processing, and technology-based companies. Since 1918, CMTA has worked 
with State government to develop balanced laws, effective regulations, 
and sound public policies to stimulate economic growth and create new 
jobs while safeguarding the State's environmental resources. CMTA 
represents businesses from the tire manufacturing community--an 
economic sector that generates more than $250 billion every year and 
employs more than 1.5 million Californians.
---------------------------------------------------------------------------
    However, we are compelled to express strong opposition to proposals 
which threaten to compromise the anti-terrorism security and law 
enforcement aspects of the program. Among these are new provisions 
which would add mandates for chemical substitutions, weaken protection 
of sensitive information, impose stifling penalties for administrative 
errors, create conflicts with other security standards or move away 
from a performance (or risk-based) approach.
    California recently enacted comprehensive science-based ``Green 
Chemistry'' environmental legislation to identify and prioritize 
``chemicals of concern'' and to enable a search for safer alternatives 
employing multi-media life cycle analysis to avoid the unintended 
negative consequences of improper substitutions. In contrast, we 
believe the concepts in the CFATS reauthorization proposal regarding 
Inherently Safer Technologies (IST) should more appropriately be 
debated in the context of environmental legislation rather than anti-
terrorist legislation.
    Further, California passed legislation in 2005 to protect sensitive 
critical infrastructure vulnerability assessments from disclosure under 
its Public Records Act. Weakening Federal protections for critical 
infrastructure information is moving in the wrong direction, and CICC 
and CMTA urge you to reject such provisions.
    Chemical manufacturers, distributors, and downstream users of 
chemicals throughout California are complying with landmark CFATS 
legislation while continuing to provide essential products and services 
for daily life. CICC and CMTA strongly believe the aforementioned 
provisions (i.e., imposing IST, and softening security protections for 
critical infrastructure information, et al) if implemented will prove 
to be counter-productive; and will undermine security, endanger 
communities, and place critical infrastructure at greater risk--not 
only in California but all around the country. We urge the committee to 
reject such measures. Thank you for your consideration.
            Sincerely,
                                            John R. Ulrich,
                                          Executive Director, CICC.
                                                Mike Rogge,
                              Director, Environmental Policy, CMTA.
                                 ______
                                 
                                                      June 4, 2009.
The Honorable Joe L. Barton,
2109 Rayburn HOB, Washington, DC 20515.
    Dear Congressman Barton: The Texas Chemical Council (TCC) urges you 
to support legislation to reauthorize the Department of Homeland 
Security (DHS) chemical facility security standards which were enacted 
by Congress in 2006.
    TCC is a State-wide trade association representing 77 chemical 
manufacturers operating more than 200 manufacturing facilities in 
Texas. Our industry has invested more than $50 billion in physical 
assets in the State and pays over $1 billion annually in State and 
local taxes. TCC's members provide approximately 70,000 direct jobs and 
over 500,000 indirect jobs to Texans across the State.
    TCC supports Congress enacting into statute the regulatory 
framework known as the ``Chemical Facility Anti-Terrorism Standards'' 
that the DHS carefully established and is now enforcing. Removing the 
sunset date and making the chemical security regulations permanent 
would provide the certainty needed to both protect our citizens and 
support our Nation's economic recovery.
    TCC is strongly opposed to legislation that would disrupt this 
security program by adding provisions that would mandate Government-
favored substitutions, weaken protection of sensitive information, 
impose onerous penalties for administrative errors, create conflicts 
with other security standards or move away from a risk-based approach. 
We ask that you oppose legislation that would go beyond security 
protections and create a mandate to substitute products and processes 
with a Government-selected technology. TCC also requests that you 
ensure that any security legislation avoid overlap and conflict with 
existing Federal security requirements, such as the U.S. Coast Guard's 
``Maritime Transportation Security Act.''
    Our members' highest priority is protecting their employees and the 
communities where they live and work. We feel this is being 
accomplished through compliance with the landmark new DHS chemical 
security standards. We ask that you oppose counter-productive changes 
to the current law that would undermine security and endanger 
businesses and communities. We appreciate your consideration of our 
concerns. If you have any questions or would like additional 
information, please do not hesitate to contact me.
            Sincerely,
                                          Hector L. Rivero,
                                                 President and CEO.
                                 ______
                                 
                                                     June 11, 2009.
The Honorable Nancy Pelosi,
Speaker of the House, House of Representatives, Washington, DC 20515.
    Dear Speaker Pelosi: The undersigned organizations representing 
wastewater and drinking water utilities throughout the Nation, write to 
express our concerns with jurisdictional conflicts arising over 
reauthorization of the Chemical Facilities Anti-Terrorism Act (CFAT) 
with respect to drinking water and wastewater utilities. If these 
conflicts are not resolved, we believe that security at drinking water 
and wastewater facilities will potentially be placed at greater risk.
    Over the last several months, we have communicated with the House 
Homeland Security Committee, Energy and Commerce Committee, and 
Transportation and Infrastructure Committee setting forth our concerns 
over the prospect of multiple Federal agencies regulating chemical 
security at drinking water and wastewater treatment plants. We have 
urged the committees to draft legislation that places both drinking 
water and wastewater facilities under one security program at a single 
Federal agency. We believe this approach is the only way to ensure the 
highest level of security at these facilities while avoiding 
duplicative and overly burdensome regulatory regimes that will lead to 
increased costs to taxpayers with no appreciable public benefit.
    However, we understand that the House Committee on Homeland 
Security intends to assert jurisdiction over chemical security at 
wastewater treatment utilities when it marks up a CFATS reauthorization 
bill on June 18 for the program administered by the Department of 
Homeland Security (DHS). On May 20, the House Committee on Energy and 
Commerce released draft legislation entitled the Drinking Water System 
Security Act which proposes a regulatory regime for security at 
drinking water facilities under the Environmental Protection Agency 
(EPA), per an agreement between HS Chairman Bennie Thompson and E&C 
Chairman Henry Waxman. To date, there has been no similar agreement 
between Chairman Thompson and T&I Chairman James Oberstar, though we 
understand that Mr. Oberstar intends to introduce separate wastewater 
security legislation as early as this week. We believe that wastewater 
treatment utilities should be placed under the jurisdictional authority 
of the EPA and its security program along with drinking water 
utilities,
    If wastewater utilities are regulated under a CFATS program at DHS 
while drinking water utilities are regulated under a security program 
at EPA, separate security programs for water supply and wastewater 
treatment operators will be in place, thereby creating duplication of 
efforts, increased costs to ratepayers, and compliance mandates for two 
Federal programs without any discernable public benefit. The 
problematic nature of this approach is best crystallized by the example 
of water and wastewater utilities that are jointly owned and managed by 
a single entity. Under separate Federal agency authorities, these 
facilities would face the prospect of being regulated by two different 
Federal agencies for the same policy purpose. Indeed, we believe a 
splintered Federal regulatory oversight approach will result in greater 
security vulnerabilities at wastewater and drinking water systems vis-
a-vis intentional acts of terrorism.
    Therefore, we ask your assistance and support in our efforts to 
sort out these juridictional issues. Specifically, we ask your support 
that wastewater treatment utilities be granted an exemption from the 
CFATS program at DHS with the understanding that these utilities will 
be placed under the jurisdictional authority of the EPA and its 
security program, along with drinking water utilities. We also request 
that the Committee on Transportation and Infrastructure receive a 
jurisdictional referral on the CFATS reauthorization bill in order to 
appropriately incorporate wastewater utilities into the overall House 
legislative package on chemical security.
    We appreciate your consideration and assistance with this matter. 
If you have any questions or wish to discuss this matter further, 
please contact Patricia Sinicropi, Legislative Director of the National 
Association of Clean Water Agencies.
            Sincerely,
                                                  Ken Kirk,
  Executive Director, National Association of Clean Water Agencies.
                                           Diane VanDe Hei,
    Executive Director, Association of Metropolitan Water Agencies.
                                               Wade Miller,
                         Executive Director, WateReuse Association.
                                              Bill Bertera,
                  Executive Director, Water Environment Federation.
                                           Catherine Smith,
 Executive Director, California Association of Sanitation Agencies.
                                                 Tim Quinn,
      Executive Director, Association of California Water Agencies.
                                 ______
                                 
                                                     June 15, 2009.
The Honorable James L. Oberstar,
Chairman, House T&I Committee, U.S. House of Representatives, 
        Washington, DC, 20515.

The Honorable John L. Mica,
Ranking Member, House T&I Committee, U.S. House of Representatives, 
        Washington, DC, 20515.

The Honorable Eddie Bernice Johnson,
Chairman, House T&I Subcommittee on Water Resources and Environment, 
        U.S. House of Representatives, Washington, DC, 20515.

The Honorable John Boozman,
Ranking Member, House T&I Subcommittee on Water Resources and 
        Environment, U.S. House of Representatives, Washington, DC, 
        20515.
    Dear Chairman Oberstar, Ranking Member Mica, Chairwoman Johnson, 
and Ranking Member Boozman: The National Association of Clean Water 
Agencies (NACWA), the leading advocacy organization representing the 
Nation's municipal wastewater treatment agencies supports the 
Wastewater Treatment Works Security Act of 2009. The bill, introduced 
by Rep. Eddie Bernice Johnson (D-Texas), Chair of the House 
Transportation and Infrastructure Subcommittee on Water Resources and 
Environment, would place wastewater facilities under the same security 
program as drinking water facilities at the U.S. Environmental 
Protection Agency (EPA). We believe this approach is the only way to 
ensure a consistent level of security at these facilities while 
avoiding duplicative and overly burdensome regulatory regimes that will 
lead to increased costs to taxpayers with no appreciable public 
benefit.
    However, we understand that the House Committee on Homeland 
Security intends to assert jurisdiction over chemical security at 
wastewater treatment utilities when it marks-up a CFATS reauthorization 
bill on June 18 for the program administered by the Department of 
Homeland Security (DHS). If wastewater utilities are regulated under a 
CFATS program at DHS while drinking water utilities are regulated under 
a security program at EPA, separate security programs for water supply 
and wastewater treatment operators will be in place, thereby creating 
duplication of efforts, increased cost to ratepayers, and compliance 
mandates for two Federal programs without any discernible public 
benefit.
    The problematic nature of this approach is best crystallized by the 
example of water and wastewater utilities that are jointly owned and 
managed by a single entity. Under separate Federal agency authorities, 
these facilities would face the prospect of being regulated by two 
different Federal agencies for the same policy purpose. Indeed, we 
believe a splintered Federal regulatory oversight approach will result 
in greater security vulnerabilities at wastewater and drinking water 
systems vis-a-vis intentional acts of terrorism.
    NACWA recognizes Congress' interest in ensuring the best possible 
protections for the Nation's critical infrastructure but including 
publicly owned treatment works (POTWs), whose sole mission is the 
protection of public health and the environment, into regulations aimed 
at securing private chemical plants is not a sound approach. POTWs are 
already heavily regulated under the Clean Water Act (CWA), which is 
administered by EPA and overseen by the T&I committee.
    NACWA has worked diligently with EPA's water security division on 
effective security protocols to protect their facilities.The 
Association developed a suite of vulnerability self-assessment tools 
(VSAT TM) that was distributed broadly for use by wastewater 
and drinking water agencies and also worked to develop its chlorine gas 
decision tree to help utilities assess the feasibility of switching to 
alternative disinfection method. The CFATS bill has the potential to 
undermine both this work and EPA's ability to implement the CWA by 
giving overly broad discretion to DHS.
    Clearly, any new legislation focusing on security at wastewater 
treatment facilities should fall under the oversight of the T&I 
committee. NACWA fully supports the committee in its efforts to assert 
jurisdiction over wastewater treatment sector security through the 
Wastewater Treatment Works Security Act of 2009 and we look forward to 
working with you on these efforts going forward.
            Sincerely,
                                                  Ken Kirk,
                                          NACWA Executive Director.

    Mr. Dent. Thank you.
    Also, Mr. Reitinger, good to see you again.
    Ms. Armstrong, good to be with you, too.
    I want to say a few things first, Mr. Reitinger. How many 
IST specialists do you have on staff currently in DHS?
    Mr. Reitinger. Sir, I think the answer is none, because we 
don't have any positions that are formally IST specialists, but 
I think we are in the process of hiring chemical inspectors who 
may have some--will have an increasing degree of knowledge 
generally around chemical facility security.
    Mr. Dent. That is not particularly reassuring, but I 
understand. With the $19 million increase in the President's 
fiscal year 2010 budget request for the Office of 
Infrastructure Protection, how many IST specialists will you 
hire? Would you hire two or three people with some background?
    Mr. Reitinger. Sir, again, I don't know that we have anyone 
that I would firmly say now is an IST specialist, because we 
are budgeting under the current regime.
    Ms. Armstrong, can you supplement that answer?
    Ms. Armstrong. Certainly. I would agree that we don't have 
anybody that is by title an IST specialist on staff. We have 
hired chemists, chemical engineers, inspectors, and other 
program staff for the program. The budget increase is to allow 
us to continue to staff up to full complement and to continue 
to deploy and maintain compliance tools for industry.
    Mr. Dent. Okay, so you have a limited staff. Following up 
on Mr. McCaul's question, I would like to ask a yes-or-no 
question. Do you believe that requiring IST implementation is 
necessary or simply preferable? I think we need it on the 
record.
    Mr. Reitinger. Sir, I regret, giving you a yes-or-no answer 
would require me taking a specific position on the bill, and I 
am not ready to do that. What I can say is that the current 
regime allows for companies to use inherently safer 
technologies in either tiering out or in responding to--
including within their site security plan, excuse me, tiering 
out or reducing their tier.
    Therefore, we would be happy--and we would be happy to work 
with Congress to have the best possible provision going 
forward.
    Mr. Dent. Understood. I have another issue. As you know, 
many industry- and company-specific studies show massive costs 
to substitute chemical products. This committee has discussed 
this issue numerous times over the years.
    Has there been any DHS analysis of the cost required to 
mandate product substitution for chemical facilities? Has there 
been any analysis on potential job loss as a result of 
mandating such a substitution?
    Mr. Reitinger. Let me defer that question to Ms. Armstrong.
    Ms. Armstrong. Thank you. I don't--we are not in ISCD at 
the point of such specific analysis. The Science and Technology 
Directorate of the Department is doing and should complete this 
summer a literature review related to the topic of IST to start 
building a base of information on that topic.
    Mr. Dent. Do you agree that IST is essentially an 
engineering practice? Do you agree that IST really deals more 
with workplace safety issues, perhaps, than plant security 
issues?
    Ms. Armstrong. I think that there is enough debate in 
industry and academia, et cetera, that I can't take a position 
on that very topic.
    Mr. Dent. However, somebody will have to implement this, 
and we have to understand what it is and what it is not. I have 
talked with a number of engineers who tell me that this is 
really a workplace safety issue. It is not a chemical plant 
security issue. Therefore, it should not be mandated into 
legislation.
    If we are going to mandate such a practice, we ought to 
know what we are doing here. I would appreciate receiving some 
guidance from the Department.
    I think you are right to ask for this 1-year extension on 
the CFATS regulations because of these types of questions for 
which you may be unable to provide an answer or you may not be 
permitted to do so. Therefore I would appreciate some 
clarification on that point.
    Another question: Has there ever been any analysis or study 
completed that shows MTSA is not working or MTSA facilities are 
unsafe?
    Ms. Armstrong. I don't think that there has been any 
specific analysis at that question. I am sure that the Coast 
Guard has requirements to provide reports on progress in 
implementing MTSA.
    Mr. Dent. Has DHS conducted a strict assessment of the 
current CFATS program? If so, has it been presented to the 
Congress?
    Ms. Armstrong. We don't have a requirement at this point in 
time to provide a sort of annual congressional report.
    Mr. Dent. Okay, thank you.
    Chairman Thompson. Thank you very much.
    Ms. Armstrong, Mr. Dent talked about staffing. Am I to 
understand that some of the requirements for CFATS and others 
is on-going and that you are, in fact, still hiring as we 
speak, whether this legislation passes or not?
    Ms. Armstrong. Yes, sir, we are continuing to hire. I have 
a selection certificate for three positions to bring security 
specialist expertise to the program on my desk. As of this 
date, we either have on-board or are in the process of on-
boarding approximately 125 people.
    Chairman Thompson. Thank you. With respect to the 
legislation, we are talking about an additional $100 million to 
provide the Department for both regulatory and staffing 
requirements to implement it. So we are indeed not adding 
burden to the agency without providing the resources to do the 
job.
    I now recognize the gentleman from Texas for 5 minutes, Mr. 
Cuellar.
    Mr. Cuellar. Thank you, Mr. Chairman.
    I guess what a lot of us are trying to do is find a balance 
between security and, of course, industries that we represent. 
As you know, in Texas, the chemical industry down there, we 
have over 77 chemical manufacturers operating more than 200 
facilities, a lot of jobs are created, and I know there has 
been concern.
    I appreciate you working with myself, but I think with Al 
Green on some language. I am in particular talking about 
Section 2111 and 2103, and I believe you also have shown a 
willingness to work with us on some report language. I 
certainly want to work with you on that report language, but I 
do want to thank you for enhancing that language on that, 
whether it comes as a form of a manager's amendment or 
whatever--you are going to use.
    So I know Al Green has shown some concern, so I want to 
thank you and look forward to working with you to further 
enhance the language to address some of the issues, Mr. 
Chairman.
    Thank you.
    Chairman Thompson. Thank you very much. The gentleman 
yields back?
    Mr. Cuellar. Yes, sir.
    Chairman Thompson. I recognize Mr. Cao for 5 minutes.
    Mr. Cao. Thank you, Mr. Chairman.
    Mr. Secretary, my main concern in connection with this bill 
is the mandatory implementation of IST. Small businesses, which 
make up the bulk of my district's local economy, will pay tens 
of thousands of dollars to implement these measures. The impact 
of this bill on the agriculture industry will be enormous.
    According to the Louisiana Department of Agriculture, more 
than 30,000 farms in our State will be affected at a cost of 
more than $120 million. To quote the State agriculture 
commissioner, ``If we are not very careful with how we regulate 
the cost of implementation of this bill and jumps in fertilizer 
costs could cost food inflation upwards of 10 percent. At the 
rate we are going in this country, we will have regulated 
ourselves into a position in which we can't feed ourselves.''
    How is evaluating alternative processes that are necessary 
to produce synthetics, such as rubber, paint, and fertilizer, 
among others related to homeland security?
    Mr. Reitinger. Sir, let me say that, first off, with regard 
to agricultural end users under the CFATS regime, my 
understanding is that, in December 2007, an extension was 
granted to submit top screen. So there are no current 
regulatory requirements under the CFATS regime with regard to 
them.
    I could ask Ms. Armstrong to supplement that answer.
    Ms. Armstrong. That is correct. At the time of publication 
of Appendix A to CFATS, we noted that there was an unintended 
consequence of the rule in that, at current screening threshold 
quantities, we would screen in potentially individual homes, 
small businesses, and farms, which was not the intent of the 
CFATS program. It is to identify and protect high-risk chemical 
facilities.
    So we did issue an indefinite extension for certain 
agricultural chemical end-users, and we are working right now 
to resolve that situation.
    Mr. Cao. Besides the unintended consequences that you just 
outlined, what other unintended consequences do you know of 
that may result due to this bill?
    Mr. Reitinger. If the question is the bill that was 
introduced yesterday, I regret I will need a little more time 
to look at the bill to formulate a position and work 
effectively with the committee. But you have my personal 
commitment to work effectively with the committee on the 
authorization language.
    Mr. Cao. My second concern in connection with this bill is 
the inherent jurisdictional conflicts between DHS and EPA and 
between DHS and the U.S. Coast Guard. Do you have procedures in 
place that will resolve this conflict?
    Mr. Reitinger. Let me talk about this--both of those 
things, and then perhaps Ms. Armstrong may want to supplement 
that.
    With regard to the issue with MTSA, we are in on-going 
discussions with the Coast Guard to work towards harmonization 
of the CFATS and MTSA regimes so that we have a consistent 
level of protection across both MTSA and CFATS.
    With regard to wastewater and water treatment facilities, 
drinking water facilities, we believe that there is a coverage, 
a security gap with regard to them that needs to be addressed.
    Ms. Armstrong. I would just add that we don't have a 
conflict with either EPA or the Coast Guard. To echo the point, 
currently, water and wastewater treatment facilities are exempt 
from CFATS, and we are working very closely with the Coast 
Guard within DHS to harmonize our approach to both MTSA and 
CFATS implementation.
    Mr. Cao. Thank you, Mr. Chairman. I yield back the balance 
of my time.
    Chairman Thompson. Thank you.
    For the record, again, Ms. Armstrong, you clarified the 
agricultural concern. Basically, this legislation adds no new 
burden on agriculture. CFATS is CFATS. It is already law.
    So whatever concern that individuals would have, it 
wouldn't be with this bill. It would be with existing law from 
a CFATS standpoint.
    Ms. Armstrong. Yes.
    Chairman Thompson. Am I correct?
    Ms. Armstrong. That is correct, sir, yes.
    Chairman Thompson. Thank you.
    The Chair now recognizes the gentlelady from Nevada for 5 
minutes, Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman.
    I would address this to both of you. On May 4, 1988, there 
was an explosion at the PEPCON facility. That was a rocket fuel 
manufacturer that had been built originally, you know, in kind 
of an isolated area of the desert. But by the time it exploded, 
it was surrounded by the suburbs of Henderson.
    As a result of that explosion, two workers were killed, 372 
people were injured, and $100 million in damage was done up to 
10 miles away to buildings, homes, other facilities. Resulting 
from that, the Nevada legislature enacted a very tough storage 
disclosure, safety law to prevent that from happening again.
    Now, we want to keep workers and residents safe and 
facilities secure, but we don't want to create a kind of 
bureaucratic nightmare where there are all these kind of 
conflict regulations and duplication of reports that have to be 
filed.
    Would you address how you work with States and how this 
regulation or legislation might interact with what we have 
already got in place?
    Mr. Reitinger. I will give a quick response and then ask 
Ms. Armstrong to supplement it.
    The point I would make on pre-emption is that there is 
nothing in the current regime that prohibits States from 
implementing regimes that are more protective, facilities or 
people in the States than the existing regime, at least insofar 
as those regimes do not expressly conflict with the purpose of 
CFATS.
    In addition, I know that well prior to my arrival at the 
Department of Homeland Security, Sue and her team and other 
people across the Department were working very effectively with 
States and local governments to ensure we had the best regime 
possible.
    With that, I will ask her to supplement.
    Ms. Armstrong. Thank you. One of the kind of tenants of 
CFATS is that we don't intend it to conflict with existing 
regulatory compliance that is out there, as we know there are 
many, many, many Federal and State programs. So we built the--
in particular, the site security plan template for CFATS to 
allow reporting and articulating how a facility is in 
compliance with other regulations, if that facility is, indeed, 
covered by CFATS due to holdings of chemicals of interest.
    I would echo that we have worked very closely with States. 
We recognize homeland security advisers as authorized CVI users 
and share information with them to help them better secure 
facilities that are in their jurisdiction.
    If you look at the risk-based performance standards that 
underlie CFATS, there are a few that do speak to the working 
relationship between owners and operators and their first 
responders in State and local jurisdictions. We will be looking 
for multi-jurisdictional joint planning and exercising of those 
plans at high-risk chemical facilities.
    Ms. Titus. Thank you, Mr. Chairman. I yield back.
    Chairman Thompson. Thank you.
    The Chair now recognizes the gentleman from Michigan, is--
oh, Olson, I am sorry, Olson from Texas.
    Mr. Olson. Thank you very much, Mr. Chairman.
    I have a couple questions, again, getting back to CFATS. As 
my colleague from California mentioned, there is an eight-step 
process that the Department is going through. We are 
essentially at step five.
    We have three steps remaining, with facilities completing 
their site security plans, followed by a DHS review--and either 
approving or rejecting their plans. Then, finally, DHS conducts 
inspections.
    This has been a 3-year process to get to where we are on 
``step five.'' How much longer will it take to get through the 
next three steps, and get the CFATS program fully running?
    Mr. Reitinger. I would start by saying, the CFATS program 
is up and running. We haven't completed all the steps yet. But 
as I think the time line shows, we have been working very 
avidly to do that and, I think, have made steady progress.
    In terms of where we--the last step is essentially that 
inspections I think on the eight-step program you did. My 
understanding is that those inspections will start during the 
next fiscal year, but let me ask Sue to supplement that.
    Ms. Armstrong. That is correct. We anticipate doing the 
first inspections of tier-one facilities in the first quarter 
of fiscal year 2010.
    Mr. Olson. Okay, that makes sense. That is why the 
administration is asking for the 1-year extension. It will be 
fully up and running at the eighth step of the process by the 
end of the year.
    One other question I would like to ask is about the 
Maritime Transportation Security Act. How many facilities that 
are affected by the MTSA from CFATS have claimed an exemption?
    Ms. Armstrong. In the initial submission of top screens and 
preliminary tiering, 365 facilities claimed full exemption 
under MTSA and 135 claimed partial extremism under--due to 
MTSA.
    Mr. Olson. Three hundred seventy-five whole and 135 
partial?
    Ms. Armstrong. Partial.
    Mr. Olson. Is that correct? Okay. How many inspectors will 
you have at the end of 2010? We have talked about a lot of the 
manpower needs that will probably arise if we do have the 
inherently safer technology and the civil suits while leaving 
the Department exposed to them, so it certainly sounds like you 
will have to grow the Department. Are you going to have the 
manpower of inspectors at the end of 2010?
    Mr. Reitinger. Yes, sir. For those of you who were at the 
committee hearing I testified at last week, you know that 
continuing to expand the personnel resources in the National 
Protection and Programs Directorate is my personal top 
priority. We have some great people, and we need to continue to 
get more of them.
    The plan for fiscal year 2010 in terms of field inspectors 
is to have 135 CFATS inspectors and 20--throughout a term--20 
FTE, 40 FTP--full-term positions--or, sorry, full-time 
positions--and who are cross-trained, ammonium nitrate CFATS 
inspectors during the fiscal year 2010.
    Mr. Olson. Okay. Thank you very much.
    One final question. I have a little more time than I 
thought I would have, and the Texas Chemical Council has 
written to me, that they are concerned about some of the 
overlap in conflict that may exist with the Maritime 
Transportation Security Act, the MTSA, which we talked about 
earlier.
    As you know, they have begun hiring. I believe they have 
hired over 200 maritime inspectors in the last year. These 
inspectors will oversee the MTSA facilities. How do you think 
they can inspect over 7,000 facilities with 200 inspectors? I 
mean, those numbers don't seem to match up. Do you have any 
comments?
    Mr. Reitinger. I am not sure I understood the question, 
sir. The----
    Mr. Olson. Let me rephrase my question. Again, this is 
under the MTSA, but there are 7,000 facilities that are covered 
by the MTSA. Last year the Coast Guard began hiring their 
inspectors. They have about 200 currently. So we have 200 
inspectors who are basically tasked with inspecting over 7,000 
facilities. That is quite a big discrepancy in numbers.
    I just wanted to get your thoughts on how they can make 
that work.
    Mr. Reitinger. Sir, I would have to defer that question to 
the Coast Guard. I don't think it is appropriate for me to 
comment on their resourcing of their statutory missions. I am 
sorry.
    Mr. Olson. I appreciate the answer, and I appreciate your 
time. Thank you both very much.
    I yield back my time, Mr. Chairman.
    Chairman Thompson. Thank you.
    The Chair now recognizes the gentlelady from California, 
Ms. Richardson, for 5 minutes.
    Ms. Richardson. Thank you, Mr. Chairman.
    I would like to take this opportunity to get us back on 
track of the actual bill itself, which is the Chemical Facility 
Anti-Terrorism Act of 2009. It is my understanding the reason 
why we are considering this bill is for very serious reasons, 
and I think the public needs to get back on track of that 
discussion.
    No. 1, we are talking about it because there is the 
potential release of toxic, flammable, and explosive chemicals 
that could have a potential to create adverse consequences for 
human life and health. So when we talk about a year, we are 
talking about on-going possibilities that the American people 
are facing on a day-to-day basis.
    The second concern is theft and diversion, chemicals that 
have the potential to be stolen or diverted and to be used and 
converted into weapons that could cause significant, adverse 
consequences for human life.
    Then the third reason is the potential for sabotage and 
contamination.
    Now, sir, in your own testimony, on page 6, you say, ``As 
DHS has stated before, we believe that there is an important 
gap in the framework of regulating the security of chemicals in 
the United States, namely drinking water and wastewater 
treatment facilities. We need to work with Congress to close 
this gap in order to secure the substances of concerns at these 
facilities and protect the communities that they serve.''
    ``Drinking water and wastewater treatment facilities that 
would be considered high-risk due to the presence of substance 
of concern should be regulated. However, we do recognize the 
unique public health and environmental requirements and 
responsibility of such facilities. For example, we understand 
that a cease-operations order that might be appropriate for a 
chemical facility under CFATS could have a significant public 
health and environmental consequence when applied to a water 
facility.''
    In my district, we have several chemical facilities. My 
whole comment is, it is my understanding, we have waited on 
legislation such as this for 3 years. My comment is, I am not 
willing to continue to put the residents that I am responsible 
to ensure that we have the adequate protections and preparation 
in place to wait another year.
    In closing, I just wanted to reiterate, because I have 
heard several questions from my colleagues, and you didn't say 
this in the answer, and I think it is important to restate, and 
then I would ask your comment on.
    According to the legislation that we have before us, it is 
intended to reduce the consequences of a terrorist attack. The 
bill authorizes the DHS secretary to require the implementation 
of inherently safer technologies, or IST, for tier one and tier 
two, which are the highest-risk tiers.
    However--and this is, I think, the thing that needs to be 
repeated here today--however, before the secretary can require 
the implementation of an IST bill, he or she--but in this case, 
he--must make the factual determination of that implementation. 
Within the secretary, the secretary has the purview to 
determine, is it technically feasible? Is it cost-effective? 
Will it lower the overall risk that is not--without 
disproportionately shifting the risks elsewhere in the supply 
chain and, No. 4, would not impair the ability of the facility 
to continue its operations in its current location?
    So the legislation is quite clear and gives the secretary a 
tremendous amount of discretion and flexibility to adjust. Do 
you agree? Do you understand that? Have you read this?
    Mr. Reitinger. I have read that provision, ma'am. I am not 
in a position to take a position on it yet, but I understand 
that the committee has made efforts to ensure that the 
secretary retains discretion in that space.
    I would like to go to what you said before. Certainly, as 
your quoting of my testimony points out, we believe that there 
is a gap around wastewater treatment and drinking water 
facilities that ought to be addressed.
    I would also say that we at the Department do not intend to 
sit on our hands, but intend to move forward and continue 
implementation of CFATS as we have been doing to do our 
absolute best under the existing regime or whatever regime may 
come to protect the public from the risk of the release of the 
various threats and vulnerabilities you pointed out.
    Ms. Richardson. We both have different jobs. Your job is to 
implement the legislation and then ensure that the laws are 
carried out. Our job is to create the legislation to make sure 
that that happens. I think there is a role for both of us.
    So, again, I want to come back to my point of the 
secretary's flexibility, because there were questions here of 
my colleagues. The secretary does have the flexibility that, if 
it is not technically feasible, if it is not cost-effective, if 
it would lower the overall risks and disproportionately shift 
the risks elsewhere in the supply chain, and if it would impair 
the ability of the facility to operate, the secretary has the 
discretion to step forward, and that needs to be clearly said 
in testimony.
    Mr. Reitinger. Thank you.
    Ms. Richardson. Do you agree?
    Mr. Reitinger. My understanding is that is what the bill 
provides.
    Ms. Richardson. Okay.
    Mr. Reitinger. We would be happy to continue to work with 
Congress----
    Ms. Richardson. I just wanted to make sure you acknowledged 
that. Thank you, sir.
    Chairman Thompson. Thank you very much.
    The Chair now recognizes the gentleman from Indiana for 5 
minutes, Mr. Souder.
    Mr. Souder. Thank you, Mr. Chairman. The more I hear, the 
more concerned I get.
    To follow from Congresswoman Richardson, do you, Mr. 
Reitinger, agree that--since 9/11--the reason for the creation 
of the Department of Homeland Security was terrorism, and 
rather than having kind of a mission creep it has been more 
like a potential mission leap. Do you view any of your 
responsibilities in dealing with the risk of these chemical 
facilities when there is a flood, a hurricane, or tornado? Or 
is your focus solely on terrorism?
    Mr. Reitinger. Let me defer that question to Ms. Armstrong, 
who is much more deeply familiar with the statutory----
    Ms. Armstrong. Well, CFATS is in and of itself a security 
regulatory program with a definite anti-terrorism bent to it. 
As we heard, it is focused at looking at three main types of 
security issues: the potential for a toxic, flammable, or 
explosive release at a facility----
    Mr. Souder. But caused by a terrorist or just----
    Ms. Armstrong. Caused by a----
    Mr. Souder [continuing]. From an industrial accident, for 
example? Do you view yourself as trying to make things safer 
from an industrial accident or from terrorism?
    Ms. Armstrong. From an intentional act, yes, sir.
    Mr. Souder. Okay. Looking at it as an intentional terrorist 
act, how do you move from, say, protecting a facility to 
micromanaging what a facility might make? In other words, do 
you view part of your mission as telling a facility that given 
some of the guidelines, if they don't shut down, in order, for 
example, to take a product that is more expensive and less 
effective, because you have concluded that it is safer from 
terrorists?
    Ms. Armstrong. Well, there is no requirement to do that at 
this point in time, but I would be not inclined to tell 
industry how to do its business and what a cost-effective 
process is for a particular facility. Our focus is on security.
    But if I could go back to your original point, the ISCD is 
one division in the Office of Infrastructure Protection, and 
the larger mission of I.P. is to coordinate the national effort 
to protect all CI/KR across all 18 sectors. I.P. has a distinct 
role in incident management to support CI/KR owners and 
operators when there is an incident to help them with doing 
damage assessment, to help provide credentialing and access to 
damaged facilities for workers who need to get back to get a 
facility back up on-line, or to--and also to participate as the 
infrastructure liaison in a joint Federal office.
    Mr. Souder. Are you thinking like in a traditional FEMA 
function?
    Ms. Armstrong. No, we are focused--FEMA is focused on human 
lives and disaster response. We are focused on helping owners 
and operators get back up and operating to provide key things 
like clean water, food, et cetera.
    Mr. Souder. The challenge that I have, whether it be these 
random lawsuits which commonly occur--I remember where I--in an 
earlier life, when I worked for the senator from Indiana, that 
there was an aluminum facility where at least a few people who 
would certainly file a lawsuit, using whatever angle they 
could, were convinced that this aluminum company was replacing 
the cows at night because they were dying during the day due to 
pollutants and, therefore, they were doing this at night. They 
would have found any reason to try to harass this facility.
    My congressional district is the No. 1 manufacturing 
district in the United States. Every single thing is a 
collection of chemicals. Agriculture needs chemicals, and when 
two hydrogen facilities went down because of Katrina, even 
though steel production only requires a little bit of hydrogen, 
all the steel industry would have gone down. The auto industry 
would have gone down. The truck industry would have gone down.
    Any time there are additional lawsuits, there is a cost. 
Any time there are regulations that may not be directly related 
to the issue at hand, there is an increase in cost.
    Where the average unemployment rate is 15 percent in my 
eight counties, it puts the companies there at additional risk 
of being unable to produce. It puts them at additional cost to 
the consumers in a time when this Government is worried about 
deflation, not inflation. It puts additional cost on the 
consumers while they are making less.
    There needs to be a definite, clearly stated terrorism 
risk, rather than just micromanaging potential things that 
might be preferable, which could blow up 10 people here or 
there. I am worried that we are drifting away from our 
original, targeted mission.
    I yield back.
    Chairman Thompson. Thank you.
    The Chair would like, with unanimous consent, to enter into 
the record a statement for this hearing from U.S. PIRG, 
federation of State PIRGs, without objection.
    [The information follows:]
    Prepared Statement of Elizabeth Hitchcock, U.S. Public Interest 
                             Research Group
                             June 16, 2009
    Chairman Thompson, Representative King, Members of the committee: I 
am Elizabeth Hitchcock, public health advocate for the U.S. Public 
Interest Research Group. U.S. PIRG is the federation of State PIRGs, 
which are non-profit, non-partisan public interest advocacy 
organizations with 1 million members across the country.
    We are pleased to present our views at this hearing on the Chemical 
Facilities Anti-Terrorism Act of 2009. The State PIRGs have long been 
concerned with the important issues of toxic hazards in our 
communities, and the ability of the Federal Government to protect us 
from preventable hazards. We commend you for your efforts to improve 
security and safety at U.S. chemical facilities, including last year's 
passage of H.R. 5577 in this committee, and are happy to support the 
legislation before the committee today.
    Attached to this testimony is a letter from the more than 50 labor, 
public health, first responder, environment and other public interest 
organizations with whom U.S. PIRG joins in advocating comprehensive 
action on chemical security this year.
                                summary
    In August 2008, a huge explosion occurred at Bayer CropScience 
chemical plant in Institute, WV, killing two employees and sickening 
six volunteer firefighters. The blast was felt 10 miles away, and a 
tank weighing several thousand pounds ``rocketed 50 feet through the 
plant.'' The tank luckily did not go in the direction of a tank holding 
methyl isocyanate, or MIC, the same chemical that killed thousands in 
the 1984 chemical plant explosion in Bhopal, India.\1\
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    \1\ House Energy and Commerce Committee Majority Staff, MEMORANDUM: 
Supplemental Information Regarding the 2008 Bayer Chemical Plant 
Explosion, April 21, 2009.
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    In October 2006, an after-hours chemical fire at a hazardous waste 
handling facility in Apex, North Carolina triggered multiple 
explosions, and created a toxic gas cloud that forced officials to 
evacuate 17,000 residents. Low winds and steady rain helped rescue the 
town by suppressing the toxic cloud. It truly was a miracle that no one 
died or was seriously injured.\2\
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    \2\ CASE STUDY: Fire and Community Evacuation in Apex, North 
Carolina, Environmental Quality Company, April 16, 2008, available at 
http://www.csb.gov/investigations/detail.aspx?SID=15&print=y.
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    The safety and security of America's communities should not be a 
question of good fortune or circumstance. The United States needs 
comprehensive chemical plant security legislation that includes safer 
and more secure technologies as the most effective way to reduce 
chemical threats. Despite repeated attempts since 1999, Congress has 
been unable to pass a comprehensive chemical security bill. With 
security experts listing chemical plants as a vulnerable and deadly 
part of our Nation's infrastructure, the implications of this delay are 
at once ominous and a missed opportunity.
    Across the country, there are more than 7,000 chemical facilities 
that each put any of 1,000 or more people at risk of serious injury or 
death in the event of a chemical release from the facility. In March 
2008, the Congressional Research Service reported that 100 of these 
plants each put more than 1 million people at such risk.
    In 2006, the House Homeland Security Committee passed a strong 
bipartisan bill. Regrettably, that effort was derailed in favor of a 
much weaker temporary program set to expire in October of this year. 
The interim chemical security law enacted in 2006 does little to 
eliminate the risks to our communities from these facilities. It 
prohibits the Department of Homeland Security from requiring safer more 
secure chemicals or processes that can eliminate or dramatically reduce 
the consequence of an attack. It also exempts thousands of chemical 
facilities such as water treatment facilities. We urge the committee to 
work quickly to pass a protective and comprehensive bill before the 
expiration of the existing CFATS program.
    Congress should pass, and the President should sign, a chemical 
security bill that dramatically enhances security by:
   Reducing the consequence of an attack through the use of 
        safer, more secure chemicals and processes where feasible;
   Involving plant employees including hourly workers and their 
        representatives in developing plant security programs;
   Ensuring that both chemical companies and Government are 
        accountable;
   Allowing States to set more protective security standards;
   Including all categories of facilities such as water 
        treatment plants.
    Enacting a comprehensive law will provide essential protections to 
millions of workers and communities now living in the shadow of 
preventable disasters.
    Any legislation that Congress considers should replace dangerous 
toxics with safer alternatives where feasible and set a floor, not a 
ceiling, for stronger State chemical security laws. A May 2006 National 
Academy of Sciences study found that ``the most desirable solution to 
preventing chemical releases is to reduce or eliminate the hazard where 
possible, not to control it.'' This means that the most certain way to 
make chemical plants safer and more secure is, where feasible, to 
eliminate the toxic chemicals that are the source of the danger by 
switching to safer and more secure technologies.
    Fortunately, many safer alternatives are readily available. 
Hundreds of water treatment plants, power plants, and manufacturers 
have already switched to safer technologies and eliminated toxic 
exposure threats from these facilities to an estimated 38 million 
Americans. Most chemical manufacturing facilities have not adopted 
available safer technologies, and we need a chemical security bill that 
addresses these remaining chemical threats.
    A deliberate or accidental release of toxic chemicals could have 
grave consequences, and action is long overdue to address these 
preventable chemical hazards. We urge the committee to pass chemical 
plant safety and security legislation that uses American ingenuity to 
substitute available safer and more secure alternatives for toxic 
chemicals where feasible and prevents preemption of State chemical 
security laws.
           chemical plant threats are widespread and ominous
    Chemical plants pose a unique and serious threat because they are 
widely distributed in hundreds of communities across the country, and a 
single strategic strike could release toxic chemicals capable of 
killing thousands.
    Of the more than 15,000 chemical plants in the United States, the 
Environmental Protection Agency (EPA) \3\ estimates that 100 put any of 
more than 1 million Americans at risk of death or serious injury from 
the release of toxic chemicals. Another 700 facilities place at least 
100,000 in harm's way, and an additional 3,000 facilities put 10,000 or 
more at risk. Stephen Flynn with the Council on Foreign Relations 
described \4\ chemical plant dangers as ``[t]he equivalent of weapons 
of mass destruction prepositioned in some of the most congested parts 
of our country.''
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    \3\ Voluntary Initiatives Are Under Way at Chemical Facilities but 
the Extent of Security Preparedness Is Unknown, United States General 
Accounting Office, Mar. 2003, available at http://www.gao.gov/
new.items/d03439.pdf.
    \4\ Angie C. Merek, The Toxic Politics of Chemicals. Securing 
chemical plants: legislation and obfuscation, U.S. News and World 
Report, Jan. 15, 2006, available at http://www.usnews.com/usnews/news/
articles/060123/23chemical.htm.
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                 current chemical security legislation
    The bill before the committee establishes a more protective program 
that requires an assessment of safer and more secure chemicals by the 
facilities posing a risk to American communities and would require, in 
certain limited circumstances, implementation by the facilities in the 
two highest-risk tiers. The bill is the product of months of work by 
the staff of the committee with input from our ``blue-green'' coalition 
of labor, public health, first responder, environment, and other public 
interest organizations, as well as the input of a variety of other 
stakeholders.
                serious threats call for real solutions
    Legislation passed by Congress must adhere to three principal 
concepts if it is to effectively protect against loss of human life by 
securing chemical plants.
   It must reduce the consequence of an attack at a facility 
        through the use of safer more secure chemicals and processes. 
        This encompasses a broad array of technological improvements 
        including safer and more secure chemicals, real-time production 
        methods that use up hazardous chemicals without accumulation, 
        process redesign, reducing hazardous pressures or temperatures, 
        and improving chemical use efficiency. Such technological 
        improvements make chemical plants less attractive terrorist 
        targets. Because physical security measures alone are not 
        failsafe, safer more secure chemicals and processes offer the 
        best protection for local communities by incorporating measures 
        that will reduce or eliminate the loss of human life in the 
        event of a successful attack.
   It must involve plant employees, including hourly workers 
        and their representatives, in developing plant security 
        programs. Workers at the facility have a vested interest in a 
        safer and more secure facility because, simply put, they would 
        be hurt first and worst in the event of an attack on the 
        facility. Because of their intimate knowledge of their own 
        workplaces they are also able to identify ways to reduce the 
        consequences of an attack. Employees and their representatives 
        should also be afforded basic rights to join inspections.
   It must require Government oversight of chemical security. 
        As with other anti-terrorism efforts, oversight of security at 
        chemical plants should be a collaborative effort between 
        Federal, State, and local governments. Specifically, Federal 
        legislation must preserve the authority of States to establish 
        more stringent security standards when necessary. States occupy 
        a superior position to determine when local circumstances 
        dictate additional security measures. State and local 
        governments can also develop innovative security approaches, 
        such as those already adopted by New Jersey and Maryland, which 
        can instruct other State and Federal efforts.
        experts have repeatedly warned of chemical plant threats
    For years, Government and private security experts have repeatedly 
warned of the inherent threats at chemical plants. Prior to 2001, the 
focus of concern was on catastrophic chemical accidents, such as the 
1984 Union Carbide accident in Bhopal, India \5\ that killed thousands 
of people and serious injured countless more. Since September 11, 
expert warnings have increased in frequency and gravity, and now 
include the realistic potential for tactical terrorist attacks on 
chemical plants.
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    \5\ Edward Broughton, ``The Bhopal disaster and its aftermath: a 
review'', Environmental Health, 2005; 4:6. May 10, 2005, available at 
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1142333.
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   The Justice Department \6\ repeatedly warned of the 
        terrorist threats at chemical facilities and concluded that the 
        risk of an attempt in the foreseeable future to cause an 
        industrial chemical release is both real and credible.
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    \6\ See Note 3.
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   In 2002, the U.S. Army Surgeon General concluded \7\ that as 
        many as 2.4 million people could be killed or injured in a 
        terrorist attack against a chemical plant in a densely 
        populated area.
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    \7\ Pianin, Eric. Study Assesses Risk of Attack on Chemical Plant. 
The Washington Post. Mar. 12, 2002, available at http://
www.washingtonpost.com/ac2/wp-dyn/A10616-2002Mar11.
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   Since 2003, the Department of Homeland Security (DHS) and 
        the Environmental Protection Agency (EPA) \8\ have consistently 
        stated that exclusive reliance on voluntary security efforts by 
        the chemical industry are not sufficient to assure protection 
        of public health and safety.
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    \8\ See Note 3.
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   In 2004 Stephen Flynn of the Council on Foreign Relations 
        wrote in his book, America the Vulnerable,\9\ that ``[t]he 
        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.''
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    \9\ Flynn, Stephen. America the Vulnerable: How Our Government is 
Failing to Protect Us from Terrorism. New York: HarperCollins, 2004.
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   Appearing before the Senate Homeland Security and Government 
        Affairs Committee in January 2005, President Bush's former 
        Deputy Homeland Security Adviser Richard Falkenrath \10\ 
        testified that ``[o]f all the various remaining civilian 
        vulnerabilities in America today, one stands alone as uniquely 
        deadly, pervasive and susceptible to terrorist attack: toxic-
        inhalation-hazard industrial chemicals . . . To date the 
        federal government has made no material reduction in the 
        inherent vulnerabilities of hazardous chemical targets inside 
        the United States.''
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    \10\ Department of Homeland Security Oversight: Hearing Before the 
Senate Committee on Homeland Security and Governmental Affairs, 109th 
Congress (2005). (Statement of Richard A. Falkenrath, Visiting Fellow, 
The Brookings Institution), available at http://hsgac.senate.gov/
public/_files/HSGACFalkenrathStatement.pdf.
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   In a February 2008 news release, Association of American 
        Railroads President & CEO Edward R. Hamberger said, ``We can no 
        longer continue to risk the lives of millions of Americans by 
        using, transporting and storing highly toxic chemicals when 
        there are safer alternatives commercially available. It is time 
        for the nation's big chemical companies to stop making the 
        dangerous chemicals that can be replaced by safer substitutes 
        or new technologies currently in the marketplace.''
            states acting to fill the chemical security void
    In the absence of Federal efforts to secure chemical plants, three 
States, New Jersey, Maryland, and New York, have taken actions to 
improve the security and safety of chemical plants within their 
borders.
   In October 2001 New Jersey became the first State to begin 
        to assess and address chemical plant security. Under the 
        Domestic Security Preparedness Act, the New Jersey Department 
        of Environmental Protection established best security practices 
        for the State's 140 chemical facilities. These best practices 
        include requirements to assess and remedy security 
        vulnerabilities, and to conduct a review of the potential for 
        adopting inherently safer technologies that could dramatically 
        reduce or eliminate chemical plant threats.
   In July 2004, New York adopted chemical plant security 
        measures when it passed the Anti-Terrorism Preparedness Act. 
        Pursuant to the Act, the New York Office of Homeland Security 
        oversees the development of vulnerability assessments at 
        certain chemical plants. Although the New York law takes an 
        important first step, it does not give the State any authority 
        to require specific security improvements and is therefore 
        weaker than the Maryland program.
             safer and more secure chemicals and processes
    The most effective method to secure chemical facilities is to 
replace dangerous chemicals and processes with safer alternatives when 
such alternatives are feasible and cost-effective. Safer chemicals and 
processes can effectively reduce the consequences of a successful 
terrorist attack.
   The National Research Council asserts that ``[t]he most 
        desirable solution to preventing chemical releases is to reduce 
        or eliminate the hazard where possible, not to control 
        it.''\11\
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    \11\ Terrorism and the Chemical Infrastructure, National Research 
Council, May 2006, available at http://www.nap.edu/
catalog.php?record_id=11597#toc.
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   According to the Government Accountability Office, 
        ``[i]mplementing 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 terrorist targets.''\12\
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    \12\ DHS Is Taking Steps to Enhance Security at Chemical 
Facilities, but Additional Authority Is Needed, Government 
Accountability Office, Jan. 2006, available at http://gao.gov/
new.items/d06150.pdf.
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   According to report prepared for EPA, four toxic gases 
        account for 55% of the chemical processes that pose off-site 
        consequences to surrounding communities.\13\ These toxics 
        substances are chlorine gas, anhydrous ammonia, hydrogen 
        fluoride and sulfur dioxide. All four chemicals have readily 
        available and proven safer alternatives that are cost 
        effective.\14\ Alternatives typically include: using alternate 
        chemical or process, using the chemical in a less dangerous 
        form (a less concentrated one, or aqueous instead of gaseous, 
        for example), or generating the chemical as needed on-site 
        without storage. For example:
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    \13\ Belke, James C., Chemical accident risks in U.S. industry--A 
preliminary analysis of accident risk data from U.S. hazardous chemical 
facilities, Environmental Protection Agency, Sept. 2000, available at 
http://www.epa.gov/ceppo/pubs/stockholmpaper.pdf.
    \14\ Preventing Toxic Terrorism: How Some Chemical Facilities Are 
Removing Danger To American Communities, Center for American Progress, 
Apr. 2006, available at http://www.americanprogress.org/issues/2006/04/
b681085_ct2556757.html.
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     More than 200 water treatment facilities (including 
            Washington, DC) have 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.\15\
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    \15\ Preventing Toxic Terrorism: How Some Chemical Facilities Are 
Removing Danger To American Communities, Center for American Progress, 
Apr. 2006, available at http://www.americanprogress.org/issues/2006/04/
b681085_ct2556757.html.
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     Ninety-eight petroleum refineries use safer alternatives 
            to hydrogen fluoride (HF). But 50 refineries still threaten 
            millions people with the use of HF.\16\
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    \16\ Needless Risk: Oil Refineries And Hazard Reduction, U.S. PIRG, 
August 2005, available at http://www.uspirg.org/home/reports/report-
archives/healthy-communities/healthy-communities/needless-risk-oil-
refineries-and-hazard-reduction#5B_967IsFWvKGMKfKGZkNw.
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                               conclusion
    We commend you, Mr. Chairman, for conducting this important 
hearing. We hope that you find our comments helpful. We look forward to 
working with you and your committee staff to move legislation 
addressing these concerns forward. We would also be happy to discuss 
other possible actions under the committee's jurisdiction to protect 
Americans against unnecessary risk from highly toxic chemicals in their 
communities.

    Chairman Thompson. The Chair now recognizes the gentleman 
from New Jersey for 5 minutes, Mr. Pascrell.
    Mr. Pascrell. Thank you, Mr. Chairman.
    Mr. Chairman, I have a different definition of mission 
creep. That is when you listen to citizens' phone calls without 
justifiable reason or a court order. That is mission creep.
    We have been discussing this issue for 4 years. We have had 
bipartisan support, moving in a very specific direction to try 
to resolve problems rather than create them.
    Now, the question I have for the deputy under secretary and 
madam assistant secretary of Homeland Security deals with the 
subject of delegating oversight responsibility to State 
governments.
    Now, New Jersey, which has a large chemical industry, it is 
a standard-bearer nationally for chemical security protections. 
I believe that in many ways the Federal Government is catching 
up to New Jersey through the critical legislation we are 
considering today, which I totally support.
    In fact, New Jersey passed the Toxic Catastrophic 
Prevention Act of 1986, when I imagine few people even believed 
chemical security was an issue. It is an issue, but New Jersey 
has successfully implemented these standards in a State that is 
not only the most densely populated in the Nation and amongst 
the most active in commerce, but also in a State that has 800 
different chemical facilities, including 45 facilities that 
manage extraordinary hazardous materials. As we all know, New 
Jersey is home to the most dangerous 2 miles in America, just 
to get the picture here.
    You know, beyond special interests of a specific industry, 
we ought to consider the safety interests of the American 
people, specifically those who live near these chemical 
facilities. I think that is important.
    We have seen over the last 4 years what happens, God 
forbid, if there is any kind of a man-made or just an accident 
disaster, the toxic chemicals that would affect many lives and 
kill many people, not only in those 2 miles.
    I believe that the States should play a greater role, Mr. 
Chairman, in the oversight of this new and much-needed chemical 
security regime. A similar relationship is shared between the 
States and the EPA, the Environmental Protection Agency, with 
regards to environmental protections. It already exists.
    So, Mr. Under Secretary and Madam Assistant Secretary, let 
me ask you both: Do you believe that the Department of Homeland 
Security can support permissive enabling language delegating 
some oversight responsibility to State governments in the 
Chemical Facility Anti-Terrorism Act of 2009? I would ask you 
to be specific.
    Thank you.
    Mr. Reitinger. So I will take a crack at that first, sir. 
The current statutory regime authorizes States to go beyond 
CFATS, in the sense that it does not pre-empt State regulation 
that is more restrictive and does not conflict with the basic 
purposes of CFATS, and the regulations do the same.
    So States, in essence, already have the capability if they 
want to go farther than CFATS to do it. At the same time, I 
think it is important to have a comprehensive and baseline 
national regime that sets a floor across the country or a 
baseline that ensures that we have a sufficient level of 
protection in order to address the risk of a terrorist act to 
protect the public around the country.
    The other thing I would say is that we are working very 
effectively with States--and with New Jersey in particular--on 
not only the CFATS regime, but in the case of New Jersey, 
ensuring that there is sufficient outreach to the private 
entities in the State so that we can have a greater degree of 
assurance that everyone who is subject to CFATS and should 
submit a top screen is aware of that requirement and does so.
    With that, let me ask Ms. Armstrong if she would like to 
supplement the answer.
    Ms. Armstrong. Thank you. I would just add that, at this 
stage in CFATS, the program itself, we are working to manage 
risk at the national level, and we are also working to 
implement the program at the national level. By that, I mean 
ensuring consistency in our interactions with covered 
facilities, particularly when we do inspections. So I think it 
is important to ensure that there is a national level oversight 
of the program as we move forward.
    I would also add that, indeed, one of the witnesses that 
you will be hearing from next from New Jersey helped us in a 
pilot that we did both with New York and New Jersey to come up 
with a way to engage States to help us identify facilities that 
perhaps should be in compliance with CFATS, but for whatever 
reason are not at this point in time.
    Mr. Pascrell. Just in conclusion, Mr. Chairman, thank you 
both. I am not in any way suggesting do not have a national 
baseline. What I am suggesting is a delegation of some of the 
oversight responsibility--everybody has skin in this game. This 
is critical. This is important. This is life and death. I think 
we ought to take a look at that.
    Thank you, Mr. Chairman.
    Chairman Thompson. Thank you very much.
    The Chair now recognizes the gentleman from Ohio for 5 
minutes, Mr. Austria.
    Mr. Austria. Do you believe that these authorized amounts 
for grants are adequate in accomplishing what we are setting 
out to do and we will achieve the desired effects we are trying 
to accomplish with this plan?
    Mr. Reitinger. Sir, I would need, I think, to spend more 
time with the bill before I could do a full cost analysis and 
prepare a budget proposal for what implementation of the regime 
would be.
    As Ms. Armstrong said before, we are actively budgeting and 
working to fulfill our mission under the existing regime and 
under whatever changes Congress may impose.
    Ms. Armstrong. I don't have anything to add. I concur.
    Mr. Austria. Okay. Again, I think it is important that we 
make sure while we are going through this difficult time that 
we are not burdening the industry with duplicative and nebulous 
regulations that are going to hurt businesses during a 
difficult economic time.
    Mr. Chairman, if it is all right, I will just submit the 
rest of my statement, for the record.
    Chairman Thompson. Thank you very much.
    The Chair now recognizes the gentlelady from Texas for 5 
minutes, Ms. Jackson Lee.
    Ms. Jackson Lee. Mr. Chairman, let me thank you very much. 
Maybe I should say it: Thank you, thank you, thank you.
    Because as I have been briefed and listened to some of the 
questioning, I respect greatly the interest and concern. As I 
have lived through the legislative process in this Nation, I 
realize that we work through compromise. We work through 
collaboration. We seek a bipartisan solution.
    As I know this new administration, I think they have been 
the marker for bipartisan collaboration. We are delighted to be 
able to work with the administration to get this right. We want 
to work with the industry of which a number of representatives 
will be on the second panel.
    But might I suggest, in the words of a wonderful icon of 
this Nation, Dr. Martin Luther King, if not now, then when? 
When are we going to wake up that we are only sitting on the 
fringes of a potential Bhopal? How many times have we seen an 
incident and we speak to the words of, ``We wish we could have, 
would have, and should have''?
    The tragedy of 9/11, the horrific tragedy of 9/11, got us 
to thinking about aviation security. It began to analyze our 
border entry process, and we made changes, but 3,000-plus souls 
lost their life.
    Before Three Mile Island in the United States, how many of 
us thought about nuclear spills and the catastrophe that would 
happen to a nuclear plant? I don't know how many of us were 
focused. We lived with Three Mile Island. It was a neighbor of 
that community. Didn't expect anything to happen.
    So, frankly, I want the industry--of which I have had the 
pleasure of speaking before a number of organizations--to call 
us to speak to you again, because this has to happen. The 
synergy and the timing is here and now.
    The Chairman of the Energy and Commerce Committee is an 
original cosponsor with myself, Mr. Markey, and Chairman 
Thompson. Frankly, it is now time to move on this legislation.
    We have worked for a period of time. I have visited 
particularly, Mr. Reitinger and Ms. Armstrong, wastewater 
plants sitting comfortably in the midst of residential 
neighborhoods, in rural communities, seemingly tranquil and 
mild and unapproachable. I have not been necessarily impressed 
with the security there, because they don't think about those 
issues.
    But we in the Congress are the ones that are supposed to 
think about the security of America. We have to be the forward-
thinking individuals.
    So let me just pose these questions to both of you. I 
noticed that the President extended his budget request--a 1-
year extension was sought in the anticipation that Congress 
would act on a free-standing legislation for CFATS to make 
CFATS permanent.
    My question then is, is the 1-year extension to work with 
Congress so that we can act on a free-standing legislation to 
make CFATS permanent, is that correct, this 1-year extension in 
the President's budget? Do you have that understanding?
    Mr. Reitinger. The 1-year extension is to provide time to 
work with Congress--for the Department to work with Congress on 
a longer reauthorization.
    Ms. Jackson Lee. So we can collaborate.
    Let me quickly go to--Ms. Armstrong, do you have that 
understanding?
    Ms. Armstrong. Yes, ma'am.
    Ms. Jackson Lee. Thank you. Let me quickly go to dealing 
with wastewater. There is a concern that this has had the 
effect of making an uneven security landscape. I am talking 
about the regulations under CFATS and the Maritime 
Transportation Security Act.
    If these facilities are included under CFATS--and I am 
speaking of water and wastewater facilities--or in the case of 
drinking water facilities regulated by EPA--using regulations 
similar to CFATS, can your office--and I want both of you--
effectively coordinate and cooperate with the Coast Guard and 
the EPA to ensure that security grants are met without 
duplication or contradiction, as is required in this bill?
    It is important, especially in the case of the Maritime 
Transportation Security Act facilities, that companies are not 
caught in between the Coast Guard and infrastructure protection 
and that they will continue to deal directly with the Coast 
Guard, there be one face from DHS for security regulations for 
these facilities.
    Mr. Reitinger, you mentioned earlier you don't want to 
speak for the Coast Guard. I don't ask you to speak for them, 
but I want to know, if we get this right, if we get wastewater 
and water treatment in the bill working the way it should be, 
can we expect from this administration a collaborative effort 
to make this work to secure America, Mr. Reitinger and Ms. 
Armstrong?
    Mr. Reitinger. So they are a little different. Let me 
respond to both of them ma'am.
    With regard to working with the Coast Guard, either under 
the existing regime or any follow-on regime, you can expect the 
National Protection and Programs Directorate to work 
effectively and cooperatively with the Coast Guard to ensure we 
are providing the most effective protections for the regulated 
facilities and not randomizing our stakeholders by working 
towards harmonization of regimes so we have a consistent level 
of protection.
    With regard to the wastewater and water treatment 
facilities, you can expect us to work effectively with EPA. I 
think we both agree that there is a gap with regard to coverage 
of those types of facilities right now that needs to be 
addressed.
    Ms. Jackson Lee. Ms. Armstrong.
    Ms. Armstrong. I would just add that I take very seriously 
my responsibility to work within the Department and with other 
Federal agencies to harmonize regulatory programs.
    Ms. Jackson Lee. Mr. Chairman, did I just ask them--if we 
have this in this legislation, can you work--will you be 
working with those respective parties, if this regulation--if 
this language on wastewater and water get in this legislation 
or in this legislation?
    Mr. Reitinger. I apologize, ma'am. I thought I answered the 
question, but let me be clearer.
    Under the existing regime or on any follow-on regime, 
including this legislation, we will work those parties.
    Ms. Armstrong. I agree. We are currently working with the 
Coast Guard actively. If we need to because of the provisions 
of this bill, we will certainly work alongside EPA.
    Ms. Jackson Lee. Thank you, Mr. Chairman.
    I yield back.
    Chairman Thompson. Thank you very much.
    I thank our first panel of witnesses for their valuable 
testimony and the Members for their questions.
    Before being dismissed, I would remind our first panel of 
witnesses that the Members of the committee may have additional 
questions for you. We will ask you to respond expeditiously in 
writing to those questions. Thank you very much.
    I now ask the clerk to prepare the witness table for our 
second panel of witnesses.
    Mr. Pascrell [presiding]. Okay. We are into the second 
panel. I want to welcome you all.
    First, Mr. Paul Baldauf. Mr. Chairman, Ranking Member, it 
is my pleasure to introduce Mr. Baldauf. He serves as assistant 
director for radiation protection and release prevention, New 
Jersey Department of Environmental Protection. He is the 
assistant director.
    He manages three bureaus devoted to various aspects of 
radiation protection, one bureau charged with preventing the 
release of toxic and hazardous substances from industry. These 
duties include a substantial role in the development and 
implementation of homeland security initiatives.
    He holds a B.S. degree in mechanical engineering from 
Pennsylvania State University, an M.S., a master of science 
degree in civil and environmental engineering from Rutgers 
University, correct?
    I want to point out that he has a very rare credential, in 
that he has an M.A., master's degree in homeland security 
studies from the Naval Postgraduate School, which is under 
sponsorship of the Federal Department of Homeland Security. I 
think it is testament to Paul's commitment to his work. Mr. 
Baldauf is also a licensed professional engineer in the States 
of New Jersey and New York and in Pennsylvania.
    Our second witness will be Mr. Martin Durbin. Mr. Martin 
Durbin serves as the vice president of Federal affairs for the 
American Chemical Council. During his tenure with the ACC, Mr. 
Durbin has served as the head of the site, cyber, and value 
chain security through the business of security. You must be 
very busy.
    Our third witness is Dr. Neal Langerman. Dr. Langerman 
serves as the principal scientist and CEO for Advanced Chemical 
Safety, Incorporated. His experience includes working with 
companies to improve chemical-handling practices, developing 
emergency response teams, and upgrading industrial safety 
procedures. He has been a member of the American Chemical 
Society for 45 years.
    Then, fourth is the final witness. It will be Mr. Martin 
Jeppeson. Mr. Jeppeson serves as the director of the regulatory 
affairs for the California Ammonia Company, the majority 
supplier of ammonia in California. His experience includes work 
on issues of safety, health, transportation, environmental 
issues and government, labor, and education.
    Without objection, the witnesses' full statements will be 
inserted in the record. We say that because we like you to 
speed up the process if you want to summarize.
    I want to recognize Mr. Baldauf to summarize his statement 
for 5 minutes.
    Mr. Baldauf.

   STATEMENT OF PAUL BALDAUF, ASSISTANT DIRECTOR, RADIATION 
  PROTECTION AND RELEASE PREVENTION, NEW JERSEY DEPARTMENT OF 
                    ENVIRONMENTAL PROTECTION

    Mr. Baldauf. Thank you.
    Good morning, Chair, Ranking Member, and the committee 
Members. It is an honor to testify here today.
    I would like to focus my testimony on New Jersey's 
experience in implementing a homeland security program over the 
past 6 years, with special attention to our requirement for 
inherently safer technology evaluation.
    In a very quick summary, New Jersey adopted its security 
statute in October 2001, formerly adopted chemical sector best 
practices in September 2003, and formerly adopted chemical 
standards in November 2005.
    At this point, we have 6 years of on-the-ground experience 
implementing our best practices and standards for our universe 
of approximately 800 chemical facilities.
    In addition, the Toxic Catastrophe Prevention Act, which 
regulates sites that store extraordinarily hazardous 
substances, are also required to conduct inherently safer 
technology analysis.
    IST analysis, if you are subject to them, you are required 
to evaluate reducing the amount of extraordinarily hazardous 
substances you have on-site, substituting less hazardous 
materials if possible, using extraordinarily hazardous 
substances in a least hazardous process condition or form, and, 
lastly, designing equipment and processes to minimize the 
potential for equipment failure or human error.
    We have been extremely pleased over the years with the 
compliance levels we have seen to our standards. Initially, IST 
evaluation was required of 45 TCPA facilities out of a total 
universe of 157 chemical facilities that were subject to our 
standards.
    All 45 of those facilities conducted an IST evaluation. All 
those facilities documented having implemented some form of IST 
or similar risk reduction initiatives over time.
    Thirty-two percent provided a specific schedule for 
implementing additional IST. An additional 19 percent 
identified additional IST measures, but have yet to submit the 
implementation schedule.
    It is very clear to us that IST evaluation is not overly 
burdensome to the chemical sector and simply represents good 
business practice for any facility storing or utilizing 
extraordinarily hazardous materials from an economic, workers' 
safety, and regulatory compliance standpoint.
    In May 2008, the DEP took one additional regulatory step to 
require all companies subject to the TCPA program to evaluate 
IST. Beyond chemical plants, this rule covers additional 
sectors, such as food, water, wastewater, refineries, and 
energy.
    Forty-two water, wastewater, food, petroleum and energy 
facilities are required to submit an IST evaluation to the 
Department by September 2008. All of the 19 chemical reports 
evaluated to date were found to be deficient. The most common 
deficiencies include a failure to identify all potential IST 
alternatives and failure to provide justification for 
determination of infeasible option.
    IST in some form has been a practice in the chemical sector 
for many years, but it is a relatively new concept to the other 
covered sectors, so we expect long-term compliance in the non-
chemical sector areas to happen, and it will compare favorably, 
but there is going to be a lead time, we believe, to bringing 
these other sectors up to speed.
    Briefly, with respect to the Chemical Facility Anti-
Terrorism Act of 2009, some comments. Section 2109, Federal 
pre-emption, we fully support this language since States retain 
the unqualified authority to adopt enhanced security 
requirements based upon risk and consequence factors within 
their State.
    The proposed act would capture chemical facilities 
currently exempt from the existing CFATS, expand the universe 
of regulated sites, and require assessments of methods to 
reduce the consequences of a terrorist attack at high-risk 
sites. Overall, the act addresses many of the comments 
previously submitted by New Jersey.
    One final policy point we would like to respectfully make. 
We strongly recommend consideration of permissive enabling 
language toward delegating oversight responsibility to State 
governments, along with appropriate levels of Federal funding 
to support homeland security efforts.
    This is standard practice and the way most Federal 
environmental laws have worked through the years, where U.S. 
EPA or U.S. NRC may at its discretion delegate program 
implementation responsibility to qualified States.
    In our case, we have a maturing State oversight program 
already in place and, frankly, know our facilities much better 
than DHS, in our opinion. We feel well qualified to undertake 
delegated responsibilities and would ask for consideration in 
adding such permissive authority to the draft bill.
    I would like to once again thank the Chairman, Ranking 
Member, and Members of the committee for this opportunity to 
address you. We would happy to entertain any questions you may 
have and are available at any time should additional 
information be valuable to the critical work of your committee.
    Thank you.
    [The statement of Mr. Baldauf follows:]
                   Prepared Statement of Paul Baldauf
                             June 16, 2009
    Good morning Chairman Thompson, Ranking Member King and Members of 
the House Committee on Homeland Security. My name is Paul Baldauf and I 
serve as the Assistant Director of Radiation Protection and Release 
Prevention for the New Jersey Department of Environmental Protection 
(DEP). I have lead responsibility along with DEP Director of Operations 
Gary Sondermeyer for implementation of New Jersey's homeland security 
program for chemical facilities under the direction of DEP Acting 
Commissioner Mark N. Mauriello and Director Richard L. Canas of our 
Office of Homeland Security and Preparedness (OHSP). I would first like 
to thank the committee for the opportunity to appear before you to 
discuss the Chemical Facility Anti-Terrorism Act of 2009 and 
specifically the on-going inherently safer technology and chemical 
sector security initiatives within the State of New Jersey.
    Chemical plant security is a subject that Governor Jon S. Corzine 
has maintained as a top priority while serving in the United States 
Senate and over the past 3\1/2\ years as our Governor. We view our 
Chemical Standards, including requirements for inherently safer 
technology evaluation, as vital to providing New Jersey with an 
accurate reflection of our current state of security preparedness, as I 
will further outline in my testimony.
    In response to the risks posed by a possible terrorist attack on 
New Jersey's chemical facilities, New Jersey has taken significant 
steps to strengthen the security precautions at these plants. At this 
point we have close to 6 years of on-the-ground experience in 
implementing a homeland security program for all chemical facilities 
operating in our State. Best Security Practices were adopted for the 
Chemical Sector working cooperatively with industry leaders through the 
Infrastructure Advisory Committee on September 18, 2003. Since November 
2005, New Jersey went further and adopted enforceable plant security 
practices for its chemical facilities as well as requirements for 
facility security assessments to evaluate potential security threats 
and vulnerabilities. The facilities that pose the most significant 
risks are subject to the State's Toxic Catastrophe Prevention Act 
(TCPA) program, which incorporates EPA's Risk Management Program but is 
stricter and broader in scope. I shall begin with a brief overview of 
New Jersey's domestic security preparedness activities, and then turn 
to the specific reasons why the evaluation of inherently safer 
technologies in the chemical industry is of vital importance.
     overview of new jersey's domestic security preparedness effort
    New Jersey's unique vulnerabilities have made us a leader among 
States in initiating and implementing measures to counter potential 
terrorist operatives, to reduce the risk of attack at critical 
infrastructure facilities, and to reduce the potential impacts to 
public health and safety if any such attacks should occur in the 
future. New Jersey undertakes these efforts through our Domestic 
Security Preparedness Task Force (Task Force), chaired by Director 
Richard L. Canas of our OHSP.
    As Assistant Director of Radiation Protection and Release 
Prevention, I serve as the DEP liaison to the chemical, nuclear, and 
petroleum sectors of our critical infrastructure. Through the Task 
Force and the OHSP, I also participate in New Jersey's preparedness and 
response effort for other sectors. In addition, I serve as a subject 
matter expert to the State, Local, Tribal, and Territorial Government 
Coordinating Council's Chemical Vulnerability Information Working 
Group.
    The Task Force has undertaken a comprehensive program to reduce 
terror risk, to ensure preparedness at critical infrastructure 
facilities, and to test the efficacy of both public agencies and the 
private sector in responding to acts of terrorism. Every Task Force 
agency and every sector of our critical infrastructure has developed, 
through public-private collaboration, a series of ``Best Practices'' 
for domestic security. Each set of Best Practices was reviewed and 
approved by the Task Force and the Governor. Every Task Force agency 
and every sector of our critical infrastructure has also participated 
in appropriate exercises to test the strengths and limits of terror 
detection and response capability.
      new jersey's toxic catastrophe prevention act (tcpa) program
    New Jersey has managed an oversight program to increase safety at 
chemical plants and other facilities that store or utilize 
extraordinarily hazardous materials for over 20 years. The Toxic 
Catastrophe Prevention Act (TCPA) program was created in 1986 as a 
result of a chemical accident in Bhopal, India that killed thousands of 
nearby residents. Several chemical facilities in New Jersey had 
experienced minor accidents prior to this time, clearly indicating that 
a similar risk existed in New Jersey. The TCPA requires facilities that 
handle extraordinarily hazardous substances above certain inventory 
thresholds to prepare and implement risk management plans. The plans 
must include detailed procedures for safety reviews of design and 
operation, operating procedures, maintenance procedures, training 
activities, emergency response, process hazard analysis with risk 
assessment and self-auditing procedures. An extraordinarily hazardous 
substance is defined as a substance, which if released into the 
environment would result in a significant likelihood of causing death 
or permanent disability.
    In 1998 the program adopted USEPA's 112(r) Accidental Release 
Prevention Program (40 CFR 68) by reference. This program included 
additional toxic substances and highly flammable substances. It also 
required each facility to complete a worst-case scenario analysis. The 
worst-case scenario models the resultant toxic cloud to a predetermined 
concentration. The USEPA end-point concentrations are approximately 
one-tenth of the concentration that would cause death to persons 
exposed.
    On August 4, 2003, the re-adoption of the TCPA rules added reactive 
hazards substances to the list of extraordinarily hazardous substances 
covered under the program. Industrial accidents in New Jersey resulting 
from reactive hazards demonstrated the need to include reactives under 
the TCPA program. Owners and operators having listed reactive hazard 
substances in quantities that meet or exceed thresholds are required to 
develop risk management plans to reduce the risk associated with these 
unstable substances. In addition, and the focus of this testimony, this 
re-adoption included a requirement that owners and operators evaluate 
inherently safer technology for newly designed and constructed covered 
processes.
    In April, 2007 the DEP proposed amendments to the TCPA rule to 
require all companies subject to the program to evaluate the potential 
of incorporating inherently safer technology at their facility. This 
proposal also covers many sectors such as food, water/wastewater, 
petroleum, and energy which are outside the chemical industry. A 
relatively small number of facilities within these sectors store 
threshold amounts of extraordinarily hazardous substances. A final rule 
requiring the evaluation of inherently safer technology at all TCPA 
sites was adopted on May 5, 2008.
                chemical sector best practices standards
    New Jersey recognizes that facilities in the Chemical Sector are 
diverse in size, complexity, and potential for off-site impacts to the 
community and therefore a blanket approach to addressing security 
concerns may not be practical. The Best Practices represent a risk-
based approach to security consisting of a site-specific vulnerability 
assessment that evaluates threats to a facility's operation, its 
particular vulnerabilities and likely consequences of a chemical 
release, and the physical and procedural security measures already in 
place. The Chemical Sector Best Practices were predominantly derived 
from the Security Code of the American Chemistry Council's Responsible 
Care program.
    Subsequently the Task Force determined that additional measures 
were necessary to ensure that appropriate prevention and response 
measures are implemented by the chemical sector to address emerging 
domestic security threats. As a result, Chemical Sector Best Practices 
Standards (Standards) were put in place on November 21, 2005.
    The Standards require chemical sector facilities to, among other 
things:
   comply with the Chemical Sector Security Best Practices;
   conduct a terrorism-based security vulnerability assessment; 
        and
   develop a prevention, preparedness, and response plan to 
        minimize the risk of a terrorist attack.
    In addition, chemical sector facilities subject to TCPA are 
required to conduct a review of the practicability and potential for 
adopting inherently safer technology.
                      inherently safer technology
    Facilities required to conduct an inherently safer technology 
review must evaluate:
   reducing the amount of extraordinarily hazardous substances 
        materials that potentially may be released;
   substituting less hazardous materials;
   using extraordinarily hazardous substances in the least 
        hazardous process conditions or form; and,
   designing equipment and processes to minimize the potential 
        for equipment failure and human error.
    I must emphasize that the inherently safer technology requirement 
under the Standards represents a practicability test; it is not 
mandatory that a covered facility implement IST, only that they 
evaluate. The results of the evaluations are held at the facility site, 
and are made available to DEP inspectors during an on-site visit.
    Compliance with the Standards was required within 120 days of the 
effective date, March 21, 2006. We have been extremely pleased with the 
compliance levels we have seen to our standards. Compliance of the New 
Jersey requirements exceeded 98 percent. The Standards applied to 
facilities that are subject to either the Toxic Catastrophe Prevention 
Act (TCPA) or the Discharge Prevention, Containment, and Countermeasure 
(DPCC) program, and report under certain Standard Industrial 
Classification (SIC) or North American Industrial Classification System 
(NAICS) codes. Of the total 157 facilities covered under the Standards, 
45 are regulated TCPA facilities required to perform IST analysis. In 
all cases, facilities required under the Standards to conduct IST 
review have done so. All of these facilities have documented that they 
have previously implemented IST or similar risk reduction measures. 
Thirty-two percent of the facilities have provided a schedule to 
implement additional IST or other risk reduction measures, and 19 
percent have identified additional IST or risk reduction measures but 
have not yet scheduled their completion. The remaining 49 percent of 
the facilities had no additional recommendations. It should be noted 
that these are facilities that have been regulated under the TCPA 
program for many years resulting in the past implementation of IST and 
risk reduction measures.
    The TCPA rule amendment requiring IST evaluation required all 
sites, regardless of their industry sector affiliation, to submit IST 
evaluations to the DEP by September 2, 2008. The total universe of all 
covered facilities in New Jersey is 87. The IST rule covered, for the 
first time, 42 water, wastewater, food, petroleum, and energy sector 
sites. The 45 chemical sector sites which had previously conducted an 
IST evaluation were required to submit their previous evaluation to 
achieve compliance. All TCPA sites completed and submitted their IST 
evaluation to the DEP. The DEP prioritized the review of the reports by 
sector to ensure consistency and efficiency. The water/wastewater 
sector includes 13 TCPA sites in New Jersey. It is important to note 
that the TCPA program has evolved from regulating over 300 water/
wastewater facilities in 1987 to our current number of 13. The majority 
of these facilities have already deregistered from the TCPA program 
through a combination of IST implementation and consolidation over the 
last 20 years.
    The DEP has completed the initial review of 19 of the 42 new IST 
evaluations with the remaining 23 expected to be completed by July 31, 
2009. All of the 19 non-chemical sector reports evaluated to date were 
found to be deficient with each owner being granted 60 days to rectify 
outstanding issues. The most common deficiencies included failure to 
identify all potential IST alternatives and failure to provide 
justification for determination of an infeasible option. In terms of 
feasibility, sufficient documentation was not provided to support 
statements of economic, public health and safety, and technological 
infeasibility. It is important to note that IST in some form has been a 
practice in the chemical sector for many years, but is a relatively new 
concept to many of the other covered sectors. However, we do expect 
that in the long term the results of the non-chemical sector sites will 
compare favorably with those of the chemical industry subject to the 
Standards.
    I believe that our compliance results clearly indicate that the 
evaluation of inherently safer technology is not overly burdensome on 
industry and is an effective tool for critically evaluating the risk 
reduction opportunities available at a specific facility. It is clear 
to us that IST analysis is simply good business practice for any 
facility storing or utilizing extraordinarily hazardous materials from 
an economic, worker safety and regulatory compliance standpoint.
    But these measures alone are merely a starting point. Our knowledge 
of both the threat and the appropriate response is evolving daily. As 
we implement the ``Best Practices'' and work with facilities on site-
by-site review of security vulnerabilities, we also have begun a 
process to review what additional regulatory measures may be 
appropriate to harden potential targets, to reduce risk to surrounding 
communities, and to involve workers and communities in the process.
              chemical facility anti-terrorism act of 2009
    New Jersey has expressed serious concerns on a number of occasions 
about any language in Federal regulations that has the potential to 
preempt existing State chemical security initiatives or limit future 
State actions to address unique vulnerabilities. Section 2109, Federal 
Preemption, clearly allows States to adopt or enforce any regulation, 
requirement, or standard of performance with respect to a covered 
chemical facility that is more stringent than a regulation, 
requirement, or standard of performance issued under Title XXI. We 
fully support this language since States retain the unqualified 
authority to adopt enhanced security requirements based upon risk and 
consequence factors within that State.
    The proposed Act would capture chemical facilities currently exempt 
from the existing Chemical Facility Anti-Terrorism Standards, 6 CFR 
Part 27, expand the universe of regulated sites, and require 
assessments of methods to reduce the consequences of a terrorist attack 
at high-risk sites. Overall, the Act addresses many of the comments 
previously submitted by New Jersey on 6 CFR Part 27.
    Section 2106, Timely Sharing of Threat Information, requires the 
owner or operator of a covered chemical facility to provide information 
in a timely manner about any significant security incident or threat to 
their facility. To ensure a similar timely notification to local law 
enforcement and emergency response organizations, an additional 
requirement to notify the appropriate fusion center for that 
jurisdiction is warranted.
    As we have testified in the past, we do continue to strongly 
recommend consideration of permissive enabling language toward 
delegating oversight responsibility to State governments, along with 
appropriate levels of Federal funding to support homeland security 
efforts. This would include a petition process to DHS by interested 
State governments and granting of delegated authority on a 
discretionary basis. In the case of New Jersey, the actions taken in 
chemical security preparedness since September 11 have left the State 
well qualified to undertake such delegated responsibilities. State 
security (Office of Homeland Security and Preparedness and New Jersey 
State Police) and the chemical process safety experts (Department of 
Environmental Protection) are intimately familiar with the chemical 
facilities in question and have conducted multiple security and safety 
inspections at each site over the last 6 years. Leveraging and 
augmenting State resources is vital to ensuring that our chemical 
facilities are adequately protected from acts of terrorism.
                               conclusion
    Although New Jersey took critical steps to address chemical 
facility security well over 5 years ago, we recognize that most States 
have not taken formal regulatory action and therefore, Federal 
regulations to create minimum national chemical facility security 
standards are essential. At the same time, it is also important not to 
penalize those pro-active States and allow the States to retain the 
authority to adopt enhanced security requirements if States determine 
they are necessary. No two States are alike, and the risks posed by 
every facility present unique challenges based on location, population 
size, and other factors. Security standards that are appropriate to 
safeguard a facility in a rural area, for example, may not be 
sufficient for a facility located in one of the most densely populated 
and heavily traveled sections of the country. Simply put, one size does 
not fit all.
    New Jersey's critical infrastructure concentration and high 
population density may have no comparison in the United States; our 
State needs to retain the ability to go beyond any Federal security 
baseline standard to ensure that our preparedness is measured in line 
with our potential vulnerabilities. We need Federal standards, but they 
must be a floor ensuring a base level of protection, not a ceiling that 
constrains our ability to protect our citizens, as well as our 
neighbors. Governor Corzine has gone on record previously to express 
his concern for the safety of New Jersey's residents. In serving 
Governor Corzine, it is our duty to protect the citizens of our State 
and it is imperative that Federal legislation enhances New Jersey's 
ability to protect our chemical sector critical infrastructure.
    I once again would like to thank you Chairman Thompson, Ranking 
Member King and Members of the House Committee on Homeland Security. On 
behalf of DEP Acting Commissioner Mark N. Mauriello and Director of 
Homeland Security and Preparedness Richard L. Canas, I sincerely want 
to thank you for the opportunity to share some of New Jersey's 
experience in implementing our chemical security and inherent safety 
program. We would be happy to entertain any questions you may have and 
are available at any time should additional information be valuable to 
the critical work of your committee.

    Mr. Pascrell. Thank you, Mr. Baldauf.
    Mr. Durbin.

  STATEMENT OF MARTY DURBIN, VICE PRESIDENT, FEDERAL AFFAIRS, 
                   AMERICAN CHEMISTRY COUNCIL

    Mr. Durbin. Thank you, Mr. Chairman, Ranking Member, and 
Members of the committee. Thanks for the invitation to be here 
today to testify on this important topic on behalf of the 
American Chemistry Council.
    In short, security in all its dimensions is a top priority 
for ACC members, and our record of accomplishment and 
cooperation with Congress, DHS, other Federal and State 
agencies is well established. Since 2001, ACC's member 
companies have invested $7.7 billion in security enhancements 
under our own responsible care security code.
    The effectiveness of ACC's mandatory security program has 
been broadly recognized. In fact, our code not only provided a 
model for State-level chemical security programs in New Jersey, 
New York, and Maryland, but was deemed equivalent to the Coast 
Guard's Maritime Transportation Security Act.
    While we are understandably proud of our members' 
performance under the code, it is important to acknowledge that 
many non-ACC member companies out there have also taken 
aggressive action to enhance security through industry 
programs.
    But turning to the DHS regulatory program, we believe CFATS 
is by far the most robust, comprehensive, and demanding 
chemical security program to date. CFATS is a strong regulatory 
program that takes an effective approach, set a high bar 
through performance-based standards, and then holds facilities 
accountable.
    This approach allows facilities to utilize a full range of 
potential security measures to address vulnerabilities 
identified by the Department's assessment tool.
    The ACC not only called for the legislation that 
established these regulations, but at each step of the process 
our member companies volunteered to pilot core program elements 
and assisted DHS in rapidly and successfully developing the 
tools needed to implement the program and meet the regulatory 
deadlines.
    DHS should be commended for the speed with which they have 
developed and implemented this comprehensive program, and DHS 
staff demonstrated outstanding commitment and effort. So we 
would urge Congress to provide the agency with the resources 
necessary to fully and quickly implement this important 
program.
    The legislation being considered by this committee, we 
believe, represents an important step in making CFATS 
permanent. We are pleased to see that H.R. 2868 reflects many 
of the security measures that have been and will be implemented 
under CFATS. We appreciate the efforts made to minimize 
duplication of effort by facilities that have already acted and 
will take further action under the program.
    However, I would like to highlight a few provisions that we 
have discussed with the committee where we continue to have 
questions and concerns. For example, we believe the provision 
that would give DHS authority to mandate methods to reduce 
consequences is unnecessary.
    Through its use of risk-based performance standards, CFATS 
essentially drives each facility to consider all possible risk-
reduction options when developing a site security plan, 
including methods to reduce consequences or inherently safer 
approaches.
    Further, the highest-risk facilities subject to CFATS have 
a strong incentive to implement security enhancements that 
could move the facility to a lower-risk tier or potentially 
even move it out of the program. While you can't mandate 
innovation, CFATS allows DHS to unleash the ingenuity, 
expertise, and resources of the chemical sector.
    In addition, there has been much discussion already this 
morning, but we feel the provision that provides for citizen 
suits is both unnecessary and potentially counterproductive. 
Unlike an environmental statute, CFATS is not a series of 
prescriptive, statutory measures, like emissions standards or 
discharge limitations. It will therefore be difficult for a 
citizen or a judge to ascertain if a standard is being met or 
to decide what needs to be done to address an alleged 
deficiency.
    We also share the agency's stated concern about the 
potential for disclosure of sensitive or classified information 
in judicial proceedings.
    However, let me be clear that we fully support strong 
enforcement of the act, so we would, again, urge Congress to 
provide DHS with necessary staff and resources to ensure 
compliance.
    Now, while we have strong views on these issues, I want to 
acknowledge the willingness of both this committee and the 
Energy and Commerce Committee to seek our input and consider 
our viewpoint. We have had constructive discussions, and I 
remain hopeful that our concerns can be addressed as the 
legislative process continues.
    The crucial partnership between our industry and the 
Federal Government requires each of us to do our part. ACC and 
its member companies are committed to safeguarding our 
facilities, and we will continue to work with Congress and DHS 
in that spirit.
    Thank you.
    [The statement of Mr. Durbin follows:]
                   Prepared Statement of Marty Durbin
    Mr. Chairman, Ranking Member King, and Members of the committee, my 
name is Marty Durbin, and I am Vice President, Federal Affairs for the 
American Chemistry Council (ACC). Thank you for this opportunity to 
again speak with you on behalf of the Council's members on the 
important subject of security in the business of chemistry, a critical 
sector of America's infrastructure.
    My testimony today will highlight three primary points as we 
present our view of the pending legislation:
    1. Security is and will remain a top priority for our members. 
        Following 9/11, ACC members launched the mandatory Responsible 
        Care Security Code to enhance physical and cyber security at 
        their facilities and throughout their supply chain. When it 
        comes to security, our members are committed to a process of 
        continuous improvement.
    2. Since passage of Federal chemical security legislation in 2006--
        an effort ACC strongly supported--the Department of Homeland 
        Security (DHS) has moved swiftly to set meaningful, risk-based 
        standards for the entire industry under the Chemical Facility 
        Anti-Terrorism Standards (CFATS). Along with thousands of our 
        industry partners, ACC members continue the steady 
        implementation of CFATS.
    3. ACC welcomes the efforts of both Congress and DHS to make CFATS 
        permanent, review how the program is working, and ensure DHS 
        has the resources required to do its job.
              1. security and safety--acc's top priorities
    ACC represents 140 leading companies who manufacture approximately 
85 percent of basic industrial chemical production in the United 
States. The business of chemistry is an important part of our Nation's 
economy and employs more than 850,000 Americans, and produces 19 
percent of the world's chemicals. ACC member companies manufacture 
essential products critical to everyday items that keep the economy 
moving and are essential to developing the greener, cleaner, more 
competitive economy the Nation seeks. More than 96 percent of all 
manufactured goods are directly touched by the business of chemistry. 
Our members provide the chemistry that is used to produce life-saving 
medications and medical devices, body armor used by our military and 
law enforcement officers, light weight components for vehicles, energy-
saving insulation and windows, silicon for solar panels, wind turbine 
blades and so much more.
    Because of our critical role in the economy and our responsibility 
to our communities, security is a priority for ACC members. In 2001, 
our members adopted an aggressive security program that became the 
Responsible Care Security Code (RCSC). It is part of the overall 
Responsible Care initiative which is ACC's signature program of ethical 
principles and management systems designed to continuously improve our 
members' safety, health, environmental, and security performance.
    Implementation of Responsible Care is mandatory for all members of 
the American Chemistry Council, as well as for Responsible Care Partner 
companies, who represent chemical transporters, distributors, 
warehouses, logistics planners and others along the supply chains. In 
developing the Code, we consulted closely with first responders and 
government agencies at all levels. With its risk-based provisions, the 
RCSC provided a model for State-level chemical security regulatory 
programs in New Jersey, New York, and Maryland and was deemed 
equivalent to the U.S. Coast Guard's Maritime Transportation Security 
Act program.
    To date, ACC members have invested $7.7 billion in security 
enhancements under the RCSC which requires an assessment of security 
risks; implementation of protective measures at facilities; and 
evaluation and protection of products throughout a company's value 
chain. Certification of the management system is conducted by 
independent, credentialed third-party auditors.
    The Code has won praise from Congress, senior DHS officials, and 
the media. While we are understandably proud of our member's 
performance under our Code, it is important to acknowledge that non-ACC 
members have also taken aggressive action to enhance security at their 
facilities through similar industry programs.
    Our Security Code also covers the crucial area of cyber security, 
to protect our highly automated operations from being attacked 
electronically. Here again, the efforts of ACC members provide a model 
to other industries employing similar automated systems.
    We were gratified that the Obama administration has made 
cybersecurity a top priority. Along with physical security, ACC members 
actively addressed cybersecurity issues immediately following 9/11 and 
by June 2002, they developed and began implementation of the Chemical 
Sector Cyber Security Strategy. Additionally, the ACC's Chemical Sector 
Cyber Security Program created a Cyber Security Guidance Document, 
which not only was referenced by the Bush administration's National 
Strategy to Secure Cyberspace of 2003, it is still in use today. A 2009 
Program Update can be found on the Obama administration's Web site--
``Making Strides to Improve Cyber Security in the Chemical Sector.''
    ACC participated in the White House 60-Day Cyber Policy Review and 
our professionals work closely with the DHS National Cyber Security 
Division (NCSD) in many areas including: National Cyber Storm 
exercises, information sharing pilot programs, development of the 
Roadmap to Control Systems Security for the Chemical Sector.
    In short, security in all its dimensions is a top priority for ACC, 
and our record of accomplishment and cooperation with Congress, DHS and 
other agencies is well established.
  2. dhs is moving aggressively to enforce regulations, and chemical 
              facilities are moving aggressively to comply
    Last month, DHS issued its site security plan requirements and 
Risk-Based Performance Standards Guidance to assist high-risk chemical 
facilities in selecting and implementing the specific measures they 
will adopt to meet the DHS performance standards.
    This guidance makes it perfectly clear that the current DHS 
chemical security rules are tough yet appropriately flexible. ``Among 
other things, CFATS established eighteen Risk-Based Performance 
Standards (RBPSs) that identify the areas for which a facility's 
security posture will be examined, such as perimeter security, access 
control, personnel surety and cyber security,'' DHS explains.
    The Department adds, ``To meet the RBPSs, covered facilities are 
free to choose whatever security programs or processes they deem 
appropriate, so long as they achieve the requisite level of performance 
in each applicable area.'' DHS inspectors will review each of these 
submitted plans and only approve them when they meet the established 
performance level.
    For ACC members, this is exactly what a strong regulatory approach 
must do--set a high bar through performance-based standards and then 
hold facilities accountable. The approach taken by CFATS allows 
facilities to utilize a full range of potential security enhancements--
including ``methods to reduce consequences'' or ``inherently safer'' 
approaches--to address potential security vulnerabilities identified by 
the Department's assessment tool.
    CFATS is by far the most robust, comprehensive, and demanding 
chemical security regulatory program to date. It will require 
significant additional investment from ACC member company facilities 
deemed ``high risk.'' In fact, DHS anticipates that an additional $8 
billion will be needed to implement CFATS over the first 8 years of the 
program.
    Yet, despite the cost and other requirements for compliance, ACC 
not only called for these regulations, but at each step of the process 
our member companies volunteered to pilot core program elements and 
assist DHS in rapidly and successfully developing the tools needed to 
implement the program and swiftly meet their regulatory deadlines.
    While most regulatory programs can take years to develop, DHS, with 
the support of the industry, has proposed and finalized a comprehensive 
regulation, evaluated the risk of over 35,000 facilities, required 
detailed risk assessments from over 7,000 of these facilities that were 
deemed high-risk, and now has those high-risk sites implementing 
security measures--all within the 3 years currently granted for this 
program--a significant accomplishment. ACC members are committed to 
security and to working with DHS and Congress to protect the Nation's 
chemical infrastructure, and we are grateful DHS has developed an 
effective program.
  3. congress must provide dhs with all resources required to protect 
              chemical facilities and make cfats permanent
    CFATS lays out clear, comprehensive requirements for covered 
chemical facilities on an aggressive timeline, and DHS and these sites 
are implementing the rule as rapidly as possible. DHS personnel have 
already conducted reviews of site-specific vulnerability information 
and are now assisting facilities as they develop site security plans. 
DHS is in the process of visiting the regulated sites to review and 
approve each of these security plans. This will include assessing how 
each facility has addressed the applicable risk-based performance 
standards for facilities in its risk tier--a complex, site-specific, 
evaluation.
    While DHS has gotten off to a solid start, there is a crucial need 
for Congress to support DHS' budget requests and make CFATS permanent. 
DHS staff has demonstrated outstanding commitment and effort to date, 
so we urge Congress to provide the agency with the necessary resources 
to handle the workload and to ensure that chemical facility security is 
properly implemented in a timely manner.
 4. acc comments on ``the chemical facility antiterrorism act of 2009''
    The legislation drafted by Chairman Thompson and the committee 
represents an important first step to establishing permanent chemical 
facility security regulations. ACC clearly supports that goal. We're 
pleased to see the draft bill reflect many of the security measures 
that will be implemented under CFATS, and we appreciate the efforts 
made to minimize duplication of effort by facilities that have already 
acted or will take further action under the program.
    However, I'd like to highlight a few provisions we've discussed 
with the committee where we continue to have questions and concerns. 
For example, we believe the provision that would give DHS authority to 
mandate process changes is unnecessary. Through its use of risk-based 
performance standards, CFATS essentially drives each facility to 
consider all possible risk reduction options--including ``methods to 
reduce consequences'' or ``inherently safer'' approaches when 
developing a site security plan. We believe that Congress should not 
abandon a strategy to enhance security that employs performance-based 
security standards to avoid the potential for shifting risk, and allows 
DHS to unleash the ingenuity, expertise, and resources of the chemical 
sector. The reason this occurs is that the highest risk facilities 
subject to CFATS face significant cost to implement the stringent 
requirements and thus have a strong incentive to implement enhancements 
that could move the facility to a lower-risk tier, or potentially even 
move it out of the program. This is a substantial incentive to reduce 
regulatory requirements.
    A fair amount of discussion around inherently safer approaches and 
chemical security has tended to focus on the consideration of chemical 
substitution. It is important to remember the inherent value or benefit 
of chemicals like chlorine to modern society. For example, there are no 
chlorine-free processes that produce silicon of the purity required for 
products such as integrated circuits. Nor is there an economically 
viable chlorine-free route to the production of titanium. In these 
instances, you cannot simply eliminate potential security risks, you 
must work to manage or mitigate them.
    In addition, we feel the provision that provides for ``Private 
Right of Action'' is counterproductive to the ultimate success of 
CFATS. Unlike environmental statutes, CFATS is not a series of 
prescriptive statutory measures with which compliance is mandatory, 
like emission standards or discharge limitations, and therefore it is 
much more difficult for an outsider--whether it be a citizen or judge--
to ascertain if a standard is being met or to decide what needs to be 
done to address an alleged deficiency.
    In its earliest stages, one of the goals of the program is to have 
more secure sites through a collaborative effort between DHS and the 
regulated community. Creating a litigious environment will most 
certainly undermine such an effort. If Congress truly believes that DHS 
will have a problem with running the program, it should ensure that it 
has staff and resources to do the job and allow DHS to have a tight 
grip on compliance.
                             in conclusion
    We agree with Congress that our shared priority is to enhance 
security at sites Nation-wide. CFATS is already driving over 7,000 
high-risk facilities toward that goal as we speak. We ask that Congress 
provide DHS the support necessary to implement the current program.
    The crucial partnership between our industry and the Federal 
Government requires each of us to do our part. ACC and its member 
companies are committed to safeguarding America's chemical facilities, 
and will continue to work with Congress and DHS in that spirit.

    Mr. Pascrell. Thank you, Mr. Durbin.
    Dr. Langerman.

  STATEMENT OF NEAL LANGERMAN, PRINCIPLE SCIENTIST AND CHIEF 
       EXECUTIVE OFFICER, ADVANCED CHEMICAL SAFETY, INC.

    Mr. Langerman. Thank you, Chairman Pascrell, Ranking 
Member, Members of the committee.
    I am Neal Langerman. I am a Ph.D. chemist. I have 30 years 
of experience as a consultant helping industrial clients handle 
chemical safety and regulatory issues.
    I have worked on these issues for 20 years through my 
professional organization, the American Chemical Society, a 
scientific and educational organization of 154,000 chemists and 
chemical engineers.
    I would like to share the society's policy recommendations 
on the use of inherently safer technologies and on the 
regulation of research labs and give an example to help put 
these recommendations in context.
    Inherently safer technologies are vital to the goals of 
homeland security to secure the Nation's chemical 
infrastructure and safeguard against the consequences of 
terrorist attack.
    Achieving these goals requires research, development, 
technology investments. In particular, ACS has long advocated 
Federal support of green chemistry research and development as 
a means to develop safer technologies.
    ACS has also been concerned about the role that regulations 
play in slowing down innovation, particularly in laboratory 
settings, when regulations intended for industrial settings are 
inappropriately applied. For example, the proposed CFATS rule 
under the 2006 law unintentionally captured most research and 
academic laboratories into the top screen process.
    The proposed legislation adds the requirement to assess 
inherent safety options at covered facilities. It should be 
noted that changing processes to eliminate inherent risk is 
only one of many approaches to achieve risk reduction, and its 
application is complex and nuanced. Professionals in the real-
world context need to apply IST principles and processes where 
appropriate.
    This can perhaps best be appreciated through a recently 
published example. In order to reduce the quantity of nitrogen 
oxide air pollutants emitted from a boiler, a design team chose 
an ammonia-based catalytic reducer to convert nitrogen oxide to 
nitrogen and water.
    The initial design proposed bringing liquid ammonia to the 
reactor through a 600-foot pipe. Ammonia is toxic if inhaled, 
and inherent safety strategies suggested that a less hazardous 
solution of ammonia and water, also known as ammonium 
hydroxide, be substituted.
    As the formal safety review proceeded, it was determined 
that ammonium hydroxide option had the potential to release 
7,900 pounds of ammonia, while the liquid ammonia process could 
only release 530 pounds. Further, the liquid ammonia process 
provided better overall operating efficiency. The design team 
ultimately concluded the original plan was the safer option.
    This example illustrates several issues for this committee 
to consider. Existing internal process safety engineering 
programs and the existing regulatory structure provides strong 
incentives to examine and implement the safest possible 
options.
    The review of the design options in this example was 
conducted as part of the company's process hazardous analysis. 
It met the requirements of the OSHA standard but was not driven 
by them.
    The chemical enterprise has considerable experience 
advancing in inherent safety, training chemists and engineers 
with the concept, incorporating it into internal process safety 
management programs. Ideally, an IST approach is integrated 
into the original designs of a process that can also be 
achieved when experts familiar with the plant modify existing 
technology.
    This distinction must be noted, as much of the proposed 
legislation's emphasis is on existing facilities, some 
constructed several decades ago. Great care must be taken to 
ensure that the new processes do not create unrecognized 
health, safety, or environmental impacts. Careful application 
of IST options requires addressing multiple technical issues, 
including the volume and hazard of the materials and the 
frequency, consequence and severity of potential releases.
    Considerable effort must also be expended to develop, scale 
up, test, and install new, safer processes. ACS believes that 
the most effective steps to further infrastructure protection 
will likely include incentives such as grants, tax incentives, 
preferential government purchasing, and award programs.
    The law must provide sufficient flexibility to both DHS and 
the regulated community to enhance security in an efficient and 
efficient manner. I thank you for the opportunity to share 
these thoughts today, and I look forward to answering your 
questions.
    [The statement of Mr. Langerman follows:]
                  Prepared Statement of Neal Langerman
                             June 16, 2009
    Good morning. My name is Dr. Neal Langerman. I am a Ph.D. chemist 
and I have more than 30 years of experience in the field of chemical 
safety. I helped establish and run my first consulting firm, Chemical 
Safety Associates, in 1980 and am now the Principal Scientist and CEO 
of Advanced Chemical Safety, Inc., which I founded and have led since 
1997. In that role, I provide training to industrial clients in all 
areas related to chemical management and consulting on chemical, 
safety, and regulatory issues.
    I have authored numerous manuals, peer-reviewed publications, and 
reports, and led seminars, workshops, and meeting symposia on topics 
related to chemical safety, and serve on the editorial board of the 
Journal of Chemical Health & Safety.
    I have also worked on these issues for 20 years through my 
professional organization, the American Chemical Society (ACS). I am a 
past chair and now the treasurer of ACS's Division of Chemical Health 
and Safety and serve as a consultant to the ACS Committee on Chemical 
Safety.
    The American Chemical Society is a scientific society of chemists 
and chemical engineers. It was created in 1876 and today is the world's 
largest scientific society with a membership of more than 154,000. It 
also has the distinction of having a national charter of incorporation 
passed by Congress in 1937 and signed by President Franklin Delano 
Roosevelt.
    I'm here to share some of the thoughts ACS has developed on the use 
of Inherently Safer Technologies \1\ and on the regulation of research 
labs.\2\
---------------------------------------------------------------------------
    \1\ The official American Chemical Society Position Statement on 
Inherently Safer Technology for Chemical and Related Industrial Process 
Operations is presented in Attachment 1.
    \2\ The official American Chemical Society Position Statement on 
Regulation of Laboratory Waste is presented in Attachment 2.
---------------------------------------------------------------------------
    Inherently safer industrial technologies for the production, 
transport, and use of industrial and agricultural chemicals, 
pharmaceuticals, and both commodity and advanced materials is vital to 
homeland security, including the protection of the public and of 
critical infrastructure. Achieving these goals requires research, 
development, and technology investments to help secure the Nation's 
chemical infrastructure and safeguard against the consequences of a 
terrorist attack.
    For many years, ACS has encouraged the Federal Government to take a 
leading role in developing technology. In particular, ACS has long 
advocated Federal support of green chemistry research & development as 
a means to develop safer technologies. ACS has also been concerned 
about the role that regulations play in slowing down innovation, 
particularly in laboratory settings, when regulations intended for 
industrial settings are inappropriately applied.
    While many industrial processes and sectors use various definitions 
of inherently safer technologies, the term collectively captures a 
group of processes and technologies that improve safety by greatly 
reducing or eliminating hazards through a permanent and inseparable 
element of the process. Thus, safety is built into the process from the 
outset, not added on, and hazards are reduced or eliminated, not simply 
controlled. This is not a new or recent idea. In fact, industries have 
applied this concept for many decades.
    Many organizations involved in the chemical, pharmaceutical, and 
related process industries have strongly advocated and advanced 
inherent safety, supporting the work of professional societies and 
academic institutions, utilizing the concept in training chemists and 
engineers, and incorporating it into internal process safety management 
programs. Inherent safety is a well recognized engineering process 
concept that is based on the belief that a hazard can be moderated or 
eliminated, thereby reducing risk and possibly removing the risk 
altogether.
    There is a rich literature addressing the technical aspects of IST. 
The publications of Dennis Hendershot,\3\ for example, discuss methods 
of implementation as well as limitations and circumstances wherein IST 
may not produce the safest design. Many of the publications of the 
Center for Chemical Process Safety, such as ``Inherently Safer Chemical 
Processes: A Life Cycle Approach, 2nd Edition'' discuss design and 
operations considerations for reducing the risks associated with 
chemical processes. These publications and many others show that 
inherently safer systems and technologies can make adverse events less 
likely and (when an event occurs) less severe. They also show that 
other important factors must be taken into consideration.
---------------------------------------------------------------------------
    \3\ Hendershot, D.C. (2008). ``Incorporating Inherent Safety into 
Process Hazard Studies.'' 1st Latin American Process Safety Conference 
and Exhibition, May 27-29, 2008, Buenos Aires, Argentina.
    Amyotte, P.R., A.U. Goraya, D.C. Hendershot, and F.I. Khan (2007). 
``Incorporation of Inherent Safety Principles in Process Safety 
Management.'' Process Safety Progress 26, 4 (December), 333-346.
    Hendershot, D.C. (2007). ``Rethink Your Approach to Process 
Safety.'' Chemical Processing 70, 9 (September), 36-40.
    Hendershot, D.C. (2006). ``An Overview of Inherently Safer 
Design.'' Process Safety Progress 25, 2 (June), 98-107.
    Hendershot, D.C., J.A. Sussman, G.E. Winkler, and G.L. Dill (2006). 
``Implementing Inherently Safer Design in an Existing Plant.'' Process 
Safety Progress 25, 1 (March), 52-57.
    Hendershot, D.C., and J.P. Gupta (2004). ``Inherently Safer 
Design.'' Lees' Loss Prevention in the Process Industries, 3rd Edition. 
ed. M.S. Mannan, 32/1-32/24. Oxford, UK: Butterworth-Heinemann.
    Hendershot, D.C. (2004). ``Engineering Design for Safety: 
Inherently Safer Design.'' Annual Ramazzini Days 2004, International 
Scientific Conference, Preventing Chemical Accidents: Lessons Learned 
Since the Bhopal Disaster in 1984, October 28-29, 2004, Session IV: 
Advances in Preparation. Carpi, Italy: Collegium Ramazzini.
    Hendershot, D.C. (2004). ``Inherently Safer Design.'' Accident 
Precursor Analysis and Management: Reducing Technological Risk Through 
Diligence, ed. J.R. Phimister, V.M. Bier, and H.C. Kunreuther, 103-117. 
Washington, DC: The National Academies Press.
---------------------------------------------------------------------------
    IST may include engineering changes, material substitution, or 
quantity reduction, and is only one of many approaches that may be 
employed to achieve risk reduction. A successful approach to changing 
technology in this area comes through an application of system safety 
analysis that extends from the top to the bottom of the organization. 
Designing safer systems also includes safer practices and an 
organizational prejudice toward safety.
    Ideally, an IST approach is integrated into the original design and 
engineering of a process to lower operational risk. This is best done 
at the initial conceptual design stage, but can also be achieved by 
modifying existing technology. The distinction must be noted, as much 
of the emphasis of the Chemical Facility Antiterrorism Act of 2009 is 
aimed at existing facilities--some constructed several decades ago.
    The chemical enterprise has considerable experience in developing 
and implementing inherently safer systems and welcomes creative 
approaches for encouraging additional IST research and development. 
Several recent industry association security codes require member 
companies to conduct vulnerability assessments of their facilities as a 
condition of continued membership. These codes recommend consideration 
of inherently safer and more secure technologies, especially during 
facility design, redesign, or modernization.
    The proposed legislation adds a strong requirement for implementing 
something like Inherently Safer Technologies at facilities covered 
under the Chemical Facility Antiterrorism Act. However, application of 
IST is a complex and nuanced process. Professionals, in a real-world 
context, need to apply these principles and processes where 
appropriate. This can perhaps be appreciated through some examples.
                        inherently safer design
    It is generally thought that designing a unit to achieve the 
maximum inherent safety is straightforward. The design team is 
typically guided by the strategies of ``minimize'', ``substitute'', 
``moderate'', and ``simplify'' and chooses the design which provides 
the best balance of process safety with production efficiency. This 
approach seems reasonable when one considers the meaning of the four 
terms. ``Minimize'' refers to reducing the quantities of hazardous 
substances to the lowest practical amount, consistent with production 
requirements. ``Substitute'' refers to using a less hazardous material. 
``Moderate'' refers to using safer conditions, such as lower 
temperature or pressure. And, ``simplify'' refers to designing the 
process to reduce the potential for human and operating errors and 
making the unit by design more tolerant of upset conditions.
    A case study recently published in the peer-reviewed Journal of 
Hazardous Materials illustrated the complexity of achieving a 
reasonable balance of safety and efficiency in its discussion \4\ of 
modifications to an existing boiler.
---------------------------------------------------------------------------
    \4\ Study, K. (2007), ``A real-life example of choosing an 
inherently safer process option'', J. Hazardous Materials, 142, 771-
775.
---------------------------------------------------------------------------
    The facility was working to meet new environmental regulations that 
required the reduction of nitrogen oxides (NOX) air 
pollutants emitted from the boiler. A design team chose the technology 
to clean-up the emissions: a reactor that used ammonia gas to reduce 
the NOX. The initial design proposed bringing liquid ammonia 
approximately 600 ft through a 2-inch pipe to a vaporizer which would 
convert the liquid ammonia to its gaseous form. The gas would then be 
injected into the reactor, reducing the NOX into simple 
nitrogen and water vapor. Due to process safety concerns related to 
piping the liquid ammonia over 600 feet, the design was reviewed using 
the strategies of inherently safer design/technologies.
    ``Substitute'' and ``moderate'' strategies were investigated to 
lower the overall risk. The design team proposed to replace the liquid 
ammonia, which is toxic if inhaled, with a less hazardous solution of 
ammonium hydroxide in water.
    However, as the formal hazard and safety review proceeded, it was 
determined that the ammonium hydroxide in water option had the 
potential to release 7,900 lbs of ammonia while the liquid ammonia 
process would only release 530 lbs. Further, the liquid ammonia process 
provided better overall operating efficiency. The design team 
ultimately selected liquid ammonia as the lower risk, inherently safer 
process, even though the initial consideration suggested this was not 
the ``safer'' alternative.
    This example illustrates that deciding among several designs 
requires evaluating a variety of metrics, including volume of hazardous 
materials, area affected by and frequencies of releases, consequence 
and severity of releases, and the life-cycle costs. This particular 
review of the design options for inherently safer characteristics was 
conducted as part of the company's process hazard analysis. It met 
``management of change'' requirements of OSHA's Process Safety 
Management standard, in which ``contemplated changes to a process must 
be evaluated to fully assess their impact on employee safety and 
health.''\5\ However, it was not driven by the OSHA requirements.
---------------------------------------------------------------------------
    \5\ ``Process Safety Management.'' U.S. Department of Labor, 
Occupational Safety and Health Administration. OSHA 3132. 2000, 22.
---------------------------------------------------------------------------
                minimization of hazardous materials \6\
---------------------------------------------------------------------------
    \6\ Hendershot, D.C., J.A. Sussman, G.E. Winkler, and G.L. Dill 
(2006). ``Implementing Inherently Safer Design in an Existing Plant.'' 
Process Safety Progress 25, 1 (March), 52-57.
---------------------------------------------------------------------------
    While my last example illustrated the complexity of decisions about 
inherent safety, the next example should showcase its benefits.
    A facility brought in a design team to study the replacement of a 
large aging bromine gas storage tank with smaller bromine cylinders. 
The design team was instructed to evaluate the overall hazards 
associated with bulk storage versus the smaller cylinders, which 
require increased frequency of transportation. After review, the design 
team recommended that the cylinders option be implemented. The existing 
tank had a capacity of 100 cubic feet (19,000 lbs) and was refilled 
once every couple of months from a 15,000-lb highway tanker. The 
transfer from the tanker to the storage tank was done outside, using 
low pressure nitrogen to drive the liquid. The bulk tank was inside a 
containment building, protected with a caustic scrubber.
    The proposed replacement used the ``minimize'' strategy of IST. Two 
16-cubic-foot (3,100-lb) cylinders of bromine, the size of helium 
cylinders used to fill balloons in grocery stores and parties, would 
replace the 1,000 cubic foot tank. This would reduce the overall 
quantity of bromine on-site by 67%. It would require the truck to 
deliver a single 16-cubic-foot cylinder about once per month. In 
addition, the quantity change resulted in the facility no longer being 
regulated under the U.S. EPA Risk Management Program.
    The design team performed both ``consequence analysis'' and a 
``quantitative risk assessment''. The results of these studies clearly 
supported the reduced risk approach, and the decision was made to 
switch to the smaller cylinders.
                        unintended consequences
    Finally, I want to offer a word of caution about unintended 
consequences of some of the measures that may be considered in these 
discussions.
    The draft wording of the Chemical Facility Anti-Terrorism Standards 
(CFATS) regulations under the 2006 law unintentionally captured most 
research and academic laboratories into the Top Screen process. Had 
this wording remained in force, much effort would have been expended by 
both DHS and the research community which would not have enhanced 
security. In cooperation with a number of organizations, including ACS, 
a task force worked with DHS to modify the Appendix A list and thereby 
reduce the number of research institutions which were required to file 
a Top Screen report.
    ACS endorses regulations targeted specifically to research 
laboratories in academia, Government, and industry, rather than 
regulations that accidentally capture labs in rules developed for 
industrial settings. In applying regulations designed to address large-
scale industrial operations to smaller laboratories, disproportionate 
environmental regulatory burdens are inappropriately placed on many 
academic, commercial, and Government laboratories. By applying an 
industrial regulatory scheme to laboratories, unintended, ineffective, 
and inappropriate burdens are placed on these facilities, thus slowing 
U.S. innovation.
    Unfortunately, substantive issues remain unresolved. For instance, 
the screening threshold for nitric acid, a very common laboratory 
reagent, requires that a campus with fewer than 50 bottles of the acid 
distributed among more than 1,000 teaching and research laboratories 
scattered across a campus must file a Top Screen report, and possibly 
be required to implement the same security vulnerability reviews and 
procedures as that of a major chemical facility. The security 
vulnerability tools and procedures applicable to a chemical 
manufacturing facility are not well-suited to an academic campus. A 
performance model similar to OSHA's ``Laboratory Standard'' would be 
better.
    These illustrations are only a few examples among many which 
demonstrate several issues for this committee to consider. First, 
existing process safety engineering programs, performed under both 
regulatory and corporate umbrellas, are adequate to invoke and 
implement an IST approach when appropriate. Second, the implementation 
of one or more IST strategies at a particular process unit may or may 
not result in enhanced security. The only justification for 
implementing a technology must be in solid engineering and science. 
Third, the law must provide sufficient flexibility to both the DHS and 
the regulated community to enhance security in an efficient and 
effective manner.
    ACS has consistently supported research and development initiatives 
that promote advancements in inherent safety and risk reduction. For 
example, ACS is a strong supporter of the Green Chemistry Research and 
Development Act, which has been passed by the House in the last three 
Congresses and is expected to be considered in the Senate this year. 
The Act seeks to promote green chemistry by authorizing a coordinated 
green chemistry research and development program at the National 
Science Foundation, the Department of Energy, and other agencies. Such 
a program would enhance green engineering, which is the practical 
application of green chemistry to develop simpler, more cost efficient, 
and generally safer and environmentally benign processes. It also 
recognizes that the elimination of all hazardous industrial materials 
and processes is not currently feasible, but that methods to minimize 
the risks associated with their use can be employed.
                         policy recommendations
   ACS supports increased attention on safer technologies and 
        believes the focus should be on a broad portfolio of timely and 
        effective methods of reducing risk and mitigating potential 
        damage.
    The portfolio of risk reduction methods and tools should include 
        IST and other inherent safety techniques. However, when risk 
        analyses require replacing or significantly modifying current 
        process technologies, considerable effort must be expended to 
        develop, scale-up, test, and install new, safer processes. 
        Great care must be taken to ensure that the new processes do 
        not result in inferior products or create unrecognized health, 
        safety, or environmental impacts.
    While scientists and engineers have made great strides in 
        understanding the impacts of industrial processes and products 
        over the past several decades, there is still no guaranteed 
        formula for developing inherently safer production processes. 
        In the future, chemical, and related industries will benefit 
        greatly from increased educational and professional development 
        and training of scientists and engineers in the disciplines of 
        green chemistry and engineering, risk analysis, and industrial 
        ecology.
   ACS supports involvement of Federal agencies in researching 
        and facilitating the advancement of safer technologies.
    Several Federal agencies, including but not limited to the 
        Environmental Protection Agency (EPA), Department of Homeland 
        Security (DHS), the Occupational Safety and Health 
        Administration (OSHA), actively work with the manufacturing 
        sector to promote safer and more secure facilities. These 
        agencies, through their collaborations and oversight of the 
        manufacturing sector, have a keen understanding of private-
        sector efforts being developed and implemented to further the 
        advancement of safer and more secure facilities. ACS believes 
        that these agencies should support and encourage research and 
        development--both in the public and private sector--to foster 
        cost-effective, inherently safer chemistries and chemical 
        processes. ACS also believes that these agencies, in 
        collaboration with other appropriate agencies should evaluate, 
        and where appropriate, make recommendations on potential 
        incentives and disincentives that would best encourage the 
        private sector to advance continued improvement in their safety 
        and security performance. The National Research Council has 
        made similar recommendations,\7\ stating, among other 
        recommendations, that:
---------------------------------------------------------------------------
    \7\ ``Terrorism and the Chemical Infrastructure: Protecting People 
and Reducing Vulnerabilities'', (2006), The National Academic Press.
---------------------------------------------------------------------------
     ``DHS should support research and development to foster 
            cost effective, inherently safer chemistries and chemical 
            processes,'' and;
     ``DHS should support research to determine the 
            combinations of incentives and disincentives that would 
            best encourage the private sector to invest in safety and 
            security. This will require research to identify the nature 
            of the interdependencies and weak links in the supply chain 
            and consideration of public-private partnerships to 
            encourage voluntary adoption of protective measures by the 
            weakest links in the chain.''
    In the long term, both the public and industry will benefit from 
the discovery of economically viable, inherently safer technologies. 
The benefits to the public of safer technology are obvious. For 
industry, moving towards a safer industrial model will lead to lower 
insurance and risk costs while ensuring the safety of customers and 
employees and protecting investors from excessive risk. ACS also 
supports examination of the potential of public-private partnerships to 
encourage voluntary adoption of protective measures.
                               conclusion
    In conclusion, the existing regulatory structure, under the U.S. 
EPA Risk Management Program and the U.S. OSHA Process Safety Management 
standard, provide strong incentives to examine and implement IST. These 
programs work in natural conjunction with Homeland Security's mandate 
to enhance infrastructure security. The provisions of the Chemical 
Facility Antiterrorism Act of 2006 provide a sufficient legislative 
framework for this purpose.
    The most effective steps to further infrastructure protections will 
likely include incentives, rather than new regulations. Tools that the 
Government could and should invoke to this end include the following:
   Grants in support of research by universities, industry, and 
        Government to develop inherently safer and environmentally 
        benign processes and technologies, renewable energy, fuels, and 
        chemical feedstocks, and other research needs.
   Tax incentives that encourage private investment in research 
        and development of inherently safer technologies and processes.
   Tax incentives and patent subsidies that allow safer 
        technologies to compete in the market, particularly when their 
        up-front costs and risks are higher than for conventional 
        technologies.
   Guaranteed preferential Government purchasing of safer and 
        more sustainable technologies.
   Award programs, such as the Presidential Green Chemistry 
        Challenge Awards, that recognize businesses that incorporate 
        sustainability and safety principles into their overall goals 
        and objectives. Such recognition will help foster replication 
        by others in industry.
    The ACS believes that support for research guided by the principles 
of sustainability, green chemistry, and green engineering, combined 
with industrial incentives for the adoption of safer technologies and 
new regulatory strategies that promote safer products and processes, 
will be instrumental in meeting the challenges of enhancing national 
and homeland security, protecting human health and the environment, and 
strengthening the economy.
    I would like to thank the committee for the opportunity to share 
these thoughts here today, and I am ready to answer any questions 
committee members may have. Thank you.
                              Attachment 1
inherently safer technology for chemical and related industrial process 
                               operations
                              acs position
    Inherently safer industrial technologies for the production, 
transport, and use of industrial and agricultural chemicals, 
pharmaceuticals, and both commodity and advanced materials is a vital 
concept that is currently the focus of significant activity in a wide 
range of forums in the industrial, academic, and governmental arenas. 
While many industrial processes and sectors use various definitions of 
this term, collectively, they capture a group of processes and 
technologies that improve safety by greatly reducing or eliminating 
hazards through a permanent and inseparable element of the process. 
Thus, safety is built into the process, not added on, and hazards are 
reduced or eliminated, not simply controlled.
    Where feasible, inherently safer process technology can greatly 
reduce potential threats to public and worker safety, health, the 
environment and plant and public infrastructure from a variety of 
scenarios that might result in the release--fugitive or otherwise--of 
hazardous and toxic materials.
    Many organizations involved in the chemical, pharmaceutical, and 
related process industries have strongly advocated and advanced 
inherent safety, supporting the work of professional societies and 
academic institutions, utilizing the concept in training chemists and 
engineers, and incorporating it into internal process safety management 
programs. Inherent safety is a well-recognized engineering process 
concept that is based on the belief that a hazard can be moderated or 
eliminated, thereby reducing risk and possibly removing the risk 
altogether. Certainly an inherently safer system or technology can make 
hazardous events less likely and less intense if there is an accident.
    Change in ``technology'' is one aspect of inherent safety. The term 
inherently safer technology (IST) has received considerable attention 
in recent years, but it is only one of many approaches that may be 
employed to achieve risk reduction. A successful approach to changing 
technology in this area will come about through a holistic application 
of safety analysis that extends from the top to the bottom of the 
organization, designing safer systems which include safer practices and 
an organizational prejudice toward safety.
    ACS has consistently supported research and development initiatives 
that promote advancements in inherent safety and risk reduction. For 
example, ACS is a strong supporter of the Green Chemistry Research and 
Development Act, which is now being considered by Congress. The Act 
seeks to promote green chemistry by authorizing a coordinated green 
chemistry research and development program at the National Science 
Foundation, the Department of Energy, and other agencies. Such a 
program would enhance green engineering, which is the practical 
application of green chemistry to develop simpler, more cost-efficient, 
and generally safer and environmentally benign processes. It also 
recognizes that the elimination of all hazardous industrial materials 
and processes is not currently feasible, but that methods to minimize 
the risks associated with their use can be employed.
    The Federal Government has made homeland security, including the 
protection of the public and critical infrastructure, a priority. To 
achieve that goal, it is necessary to make research, development, and 
technology investments that would help secure the Nation's chemical 
infrastructure and safeguard against the consequences of a terrorist 
attack.
    The chemical enterprise has considerable experience in developing 
and implementing inherently safer systems and should welcome creative 
approaches for encouraging additional IST research and development. 
Several recent industry association security codes require member 
companies to conduct vulnerability assessments of their facilities. 
These codes recommend consideration of inherently safer and more secure 
technologies, especially during facility design or redesign.
                            action requests
   The American Chemical Society (ACS) supports increased 
        attention on safer technologies and believes the focus should 
        be on a broad portfolio of timely and effective methods of 
        reducing risk and mitigating potential damage.
    The portfolio of risk reduction methods and tools should include 
        IST and other inherent safety techniques. However, when risk 
        analyses require replacing or significantly modifying current 
        process technologies, considerable effort must be expended to 
        develop, scale-up, test and install new, safer processes. Great 
        care must be taken to ensure that the new processes do not 
        result in inferior products or create unrecognized health, 
        safety, or environmental impacts.
    While scientists and engineers have made great strides in 
        understanding the impacts of industrial processes and products 
        over the past several decades, there is still no guaranteed 
        formula for developing inherently safer production processes. 
        In the future, chemical and related industries will benefit 
        greatly from increased educational and professional development 
        and training of scientists and engineers in the disciplines of 
        green chemistry and engineering, risk analysis, and industrial 
        ecology.
   ACS supports involvement of Federal agencies in researching 
        and facilitating the advancement of safer technologies.
    Several Federal agencies, including but not limited to the 
        Environmental Protection Agency (EPA), Department of Homeland 
        Security (DHS), the Occupational Safety and Health 
        Administration (OSHA), actively work with the manufacturing 
        sector to promote safer and more secure facilities. These 
        agencies, through their collaborations and oversight of the 
        manufacturing sector, have a keen understanding of private-
        sector efforts being developed and implemented to further the 
        advancement of safer and more secure facilities. ACS believes 
        that these agencies should support and encourage research and 
        development--both in the public and private sector--to foster 
        cost-effective, inherently safer chemistries and chemical 
        processes. ACS also believes that these agencies, in 
        collaboration with other appropriate agencies should evaluate, 
        and where appropriate, make recommendations on potential 
        incentives and disincentives that would best encourage the 
        private sector to advance continued improvement in their safety 
        and security performance. Similar actions have also recently 
        been recommended by the National Research Council.\1\
---------------------------------------------------------------------------
    \1\ Terrorism and the Chemical Infrastructure: Protecting People 
and Reducing Vulnerabilities, The National Academies Press, 2006.
---------------------------------------------------------------------------
    In the long term, both the public and industry will benefit from 
        the discovery of economically viable, inherently safer 
        technologies. The benefits to the public of safer technology 
        are obvious. For industry, moving towards a safer industrial 
        model will lead to lower insurance and risk costs while 
        ensuring the safety of customers and employees and protecting 
        investors from excessive risk. ACS also supports examination of 
        the potential of public-private partnerships to encourage 
        voluntary adoption of protective measures.
            Attachment 2--Public Policy Statement 2006-2009
                     regulation of laboratory waste
                              acs position
    In applying regulations designed to address large-scale industrial 
operations to laboratories, disproportionate environmental regulatory 
burdens are inappropriately placed on many academic, commercial, and 
Government laboratories. Research, development, instructional, and 
service laboratories generate a broad range of small quantities of 
hazardous wastes, but are forced to individually manage each type of 
waste with the same rigor applied to those who create large amounts of 
relatively few wastes. By applying an industrial regulatory scheme to 
laboratories, unintended, ineffective, and inappropriate burdens are 
placed on these facilities.
    The American Chemical Society is committed to environmental, 
health, and safety in all of the operations of the chemical enterprise, 
but excessive regulation of laboratories hampers their efficiency and 
effectiveness and slows the progress of science and technology. To this 
end, the American Chemical Society makes the following recommendations.
Consistent Interpretation of Regulations by State and Federal Agencies
    The U.S. regulatory system involves multiple Federal and State 
regulators. This often leads to inconsistent interpretations and makes 
development of ``best practices'' for waste management treatment 
difficult. State regulations must be at least as stringent as related 
Federal ones. For consistency, when a State regulation is identical to 
the Federal, that regulation should be interpreted and enforced in an 
identical manner.
   ACS encourages consistent interpretation and enforcement of 
        regulations at the State and Federal levels.
Simplification of Paperwork
    In the current regulatory system, laboratories are burdened by 
duplicative, unnecessary, and ineffective paperwork. As an example, 
laboratories are required to notify waste disposal facilities of EPA's 
disposal requirements for each waste. This requirement for land 
disposal restriction notification is duplicative because these disposal 
facilities already know how they are required to handle the wastes and 
any information relevant to health and safety issues is transmitted by 
the laboratories on other required forms. The burden of this useless 
form is almost exclusively placed on laboratories since it must only be 
completed once for each type of waste. Major industrial facilities 
disposing of large amounts of routine waste complete the form only at 
the inception of a new process, but laboratories have to treat most 
wastes as unique and fill out the paperwork for each shipment
   ACS recommends the elimination of unnecessary paperwork and 
        encourages the use of more efficient transfer of information 
        through means such as electronic systems.
Hazardous Waste Identification
    Identifying regulated hazardous waste is a challenging task in the 
laboratory setting. Currently, some jurisdictions effectively require 
that research scientists perform these tasks. This can lead to 
inconsistency in making these determinations. EPA and State agencies 
should issue policies that clarify that other qualified individuals are 
empowered to make these waste determinations based on appropriate 
information supplied by the laboratory scientists.
   ACS recommends that regulatory interpretations and 
        implementation be established that clearly allow scientists and 
        other qualified personnel to work together to identify and 
        minimize hazardous waste generated in laboratories. This 
        proposal could provide the basis for solving many of the 
        problems discussed herein.
Treatment of Hazardous Waste in the Laboratory Without A Permit
    Current Environmental Protection Agency (EPA) and State regulations 
have been interpreted to require costly permits or burdensome 
conditions for the treatment of even very small quantities of waste in 
a laboratory. Allowing laboratories the ability to treat limited 
quantities on-site would minimize waste and reduce costs.
   ACS recommends that legislation, rulemaking, and guidance 
        allow qualified laboratory personnel to treat small quantities 
        of hazardous waste without a permit.
One EPA ID Number Per Campus
    EPA requirements have created a situation where hazardous waste 
generators on the same campus have an identification (ID) number for 
each city block. Institutions with many laboratory buildings separated 
by roads are required to obtain different site ID numbers for different 
parts of their property. This inhibits centralized hazardous waste 
management and requires redundant record-keeping.
   ACS recommends that the definition of ``on-site'' be 
        modified to allow generators with multiple laboratory buildings 
        on contiguous properties to have a single EPA ID number.
Waste Accumulation Times for Efficiency and Pollution Prevention
    Unlike most other generators, laboratories generate very small 
quantities of many types of waste. Multiple shipments of small 
quantities are expensive. Accumulation of larger waste quantities 
enables cost-effective pollution prevention. EPA has set precedents by 
allowing flexibility for longer accumulation times of 180 to 270 days 
to achieve specific policy goals.
   ACS recommends that laboratories be allowed to accumulate 
        hazardous wastes for longer periods in order to allow more 
        efficient waste shipments and cost-effective pollution 
        prevention.
Redundant Regulation of Mixed Waste
    Laboratories in academic, medical, and pharmaceutical research 
facilities generate mixed wastes that contain both low-level 
radioactive and hazardous chemical components. EPA and the Nuclear 
Regulatory Commission (NRC) have ended the unnecessary and inefficient 
dual regulation of most mixed wastes from laboratories. However, common 
radiation-containing laboratory solvents that could be ignited are 
still redundantly regulated for both radioactive and flammable 
components in spite of the fact they could be safely and efficiently 
managed under a single scheme.
   ACS proposes that the NRC and EPA avoid the unnecessary and 
        inefficient dual regulation of laboratory mixed waste. 
        Specifically, ACS proposes that NRC and EPA modify their rules 
        to allow disposal of laboratory solvents with negligible levels 
        of radioactivity under a single scheme.

    Mr. Pascrell. Mr. Jeppeson.

 STATEMENT OF MARTIN JEPPESON, DIRECTOR OF REGULATORY AFFAIRS, 
                   CALIFORNIA AMMONIA COMPANY

    Mr. Jeppeson. Thank you, Mr. Chairman, Ranking Member, and 
distinguished Members of the committee.
    I am Martin Jeppeson, director of regulatory affairs for 
the California Ammonia Company, CALAMCO, and I have worked 
there since 1996. Prior to that, I served in the United States 
Army, and I retired as a lieutenant colonel in the special 
forces branch.
    Thank you all for the opportunity to provide you with my 
views and concerns regarding the Chemical Facility 
Antiterrorism Act of 2009.
    CALAMCO is a member of the Fertilizer Institute, and we are 
a nonprofit farmer cooperative made up of approximately 1,200 
growers and fertilizer dealers throughout California.
    We specialize in providing nitrogen fertilizers, such as 
anhydrous ammonia, ammonium hydroxide, and liquid ammonium 
nitrate to these agricultural entities. We are only one of two 
ammonia terminals in the State of California and account for 
approximately 80 percent of all the ammonia used in California.
    Fertilizer is essential to food production, and it accounts 
for 40 percent to 60 percent of the food--of the percent of the 
world's food supply. Because food production depletes the 
soil's nutrients, farmers really rely on fertilizer to keep the 
soil productive harvest after harvest.
    DHS's Chemical Facilities Anti-Terrorism Standards, CFATS, 
regulates facilities that possess several fertilizers, 
including anhydrous ammonia, ammonium hydroxide, ammonium 
nitrate, potassium nitrate, and sodium nitrate, if threshold 
quantities are exceeded.
    The result: Every aspect of the fertilizer industry falls 
under the DHS regulation, manufacturer, wholesaler, retailer, 
and potentially the farmer.
    This morning, I would like to focus my comments on 
inherently safer technology. We believe the requirement for all 
regulated facilities to assess the use of product substitution 
as proposed could have a devastating impact on American 
agriculture.
    The chemistry behind the production of nitrogen fertilizer 
limits the manufacturer of options with regards to IST. 
Anhydrous ammonia must be produced before other nitrogen 
fertilizers can be produced. As a result, there is no IST which 
could eliminate anhydrous ammonia at the manufacturing level.
    The applicability of these provisions to an agricultural 
retail operation is different, however. Their options are 
similar to those available to CALAMCO: Either switch to a safer 
product or reduce the quantity on site. Both options 
potentially remove several CFATS-regulated products from the 
farmer's agronomic toolbox.
    Only with the broad understanding and analysis of the 
fertilizer supply chain can we conclude that it is not 
economically feasible to switch to alternative products. An 
individual retailer may determine that it is feasible to switch 
from anhydrous ammonia or ammonium nitrate to an unregulated 
product such as urea, but it is unreasonable to assume that 
each regulated entity can adequately analyze the impact of 
their IST decisions on the rest of the fertilizer supply chain.
    Because of that, we believe it is the responsibility of 
this committee to understand and address the impact of these 
potential requirements.
    As the Center for American Progress stated in its report 
entitled ``Chemical Security 101,'' what you don't have can't 
leak or be blown up by terrorists. Similarly, in agriculture, 
what you don't have can't help you grow our Nation's food 
supply.
    I am also concerned about the impact of an IST assessment 
on smaller businesses. It is unknown how the process described 
in Section 2111 will be implemented. We anticipate that the 
team analyzing ISTs would require a chemical engineer, a 
process safety engineer, and a legal and risk-management 
perspective.
    While a manufacturing facility may have these individuals 
on staff, a facility such as CALAMCO, that only employs 34 
individuals, or a small agricultural retailer will not. We 
anticipate that the cost to perform such an assessment will be 
substantial.
    Due to strong regulation by the Coast Guard, facilities 
regulated under MTSA were exempted by statute from CFATS 
authorizing legislation. The current draft legislation 
acknowledges and maintains the Coast Guard's important role 
with regards to security, but we are distressed that facilities 
which have been successfully regulated, inspected, and secured 
for more than 5 years, such as our facility in Stockton, would 
have additional requirements imposed by this legislation.
    In closing, I would encourage the committee to simply 
reauthorize the existing regulations for a 3-year period and 
allow DHS to complete the first phase of implementation before 
altering the existing program.
    Thank you for allowing me to provide my perspectives on 
this legislation, and I look forward to answering your 
questions.
    [The statement of Mr. Jeppeson follows:]
                 Prepared Statement of Martin Jeppeson
                             June 16, 2009
    Good morning Chairman Thompson, Ranking Member King and 
distinguished Members of the committee. I am Martin Jeppeson, director 
of regulatory affairs at the California Ammonia Company--CALAMCO. I 
have been with CALAMCO for more than 10 years and am responsible for 
all aspects of regulatory compliance, including safety, security, and 
environmental regulation. I was previously in the U.S. Army for 24 
years and reached the rank of lieutenant colonel. I am a Certified 
Safety Professional, Associate in Risk Management and Certified in 
Homeland Security Level 5.
    I appreciate the opportunity to appear before you this morning and 
look forward to providing you with my views and concerns regarding the 
``Chemical Facility Anti-Terrorism Act of 2009,'' as currently in draft 
form.
    CALAMCO is a non-profit farmer cooperative made up of approximately 
1,150 grower-members throughout California, and we also have 42 
fertilizer dealer stockholders. We are headquartered in Stockton, 
Calif., and operate terminals at the Port of Stockton and in Sycamore. 
CALAMCO specializes in providing nitrogen fertilizers to its grower 
members and authorized dealers, including anhydrous ammonia, ammonium 
hydroxide (or aqua ammonia) and liquid ammonium nitrate. We are one of 
only two ammonia terminals in the State of California and account for 
approximately 80 percent of all of the ammonia used in California. Our 
authorized fertilizer dealers are located throughout California and 
distribute our product to our farmer customers and shareholders.
    CALAMCO's mission is to reduce fertilizer costs for our farmer 
owners and ensure a reliable supply of nitrogen. We import 
approximately 225,000 tons of anhydrous ammonia, primarily from 
Trinidad, via bulk vessel into the Port of Stockton, where we transload 
the product into large storage vessels, and subsequently to rail cars 
or trucks for delivery to our authorized dealers.
    CALAMCO is a member of The Fertilizer Institute (TFI), the leading 
voice of the Nation's fertilizer industry, representing manufacturers, 
wholesale distributors, importers, retailers, and transporters of 
fertilizer. TFI and its members have worked closely with the Department 
of Homeland Security (DHS) to establish appropriate standards and 
ensure compliance with the Chemical Facility Anti-Terrorism Standards 
(CFATS).
                               fertilizer
    Fertilizer is essential to food production. The use of fertilizer 
currently accounts for 40 to 60 percent of the world's food supply. 
Because food production depletes the soil's supply of nutrients, 
farmers rely on fertilizer to keep the soil productive harvest after 
harvest.
    The three main fertilizer nutrients are nitrogen, phosphorous, and 
potassium. My testimony today will focus on the nitrogen industry. To 
make nitrogen fertilizer, fertilizer manufacturers take nitrogen out of 
the atmosphere and convert it into a form plants can easily use by 
combining the nitrogen with hydrogen from natural gas to form anhydrous 
ammonia. Anhydrous ammonia is then used to create other nitrogen 
fertilizer products, such as ammonium nitrate, urea, urea ammonium 
nitrate and aqua ammonia, to name a few. Ammonia can also be directly 
applied as a fertilizer. It is the cheapest and most widely used form 
of nitrogen.
                      the fertilizer supply chain
    The fertilizer supply chain is made up of manufacturers, importers, 
wholesale terminals, such as CALAMCO, and the agricultural retailer or 
farm supply store, which provides product directly to the farmer 
customers. In the past decade, much of the nitrogen industry in the 
United States has shut down primarily due to the high cost of energy, 
increasing our reliance on foreign sources of nitrogen and increasing 
the importance of terminals such as CALAMCO. Because of CALAMCO's role 
in distributing ammonia in California, I believe I am in a unique 
position to identify the impact of proposed changes to the existing 
CFATS regulations, both to our terminal operations, our authorized 
retailer dealers and in the end, our farmer customers.
                  the fertilizer industry and security
    The fertilizer industry has a long history of protecting our 
products and the facilities where we produce and store those products. 
Much of the fertilizer supply chain was regulated in 2002, with the 
passage of the Maritime Transportation Security Act of 2002. For 
example, CALAMCO's facility at the Port of Stockton falls under these 
regulations.
    From the time it was first introduced until it was signed into law 
by President George W. Bush in December 2007, TFI supported the 
``Secure Handling of Ammonium Nitrate Act.'' TFI appreciates the 
support of the Chairman for his leadership in securing a common sense 
set of rules and regulations for the safe sale of ammonium nitrate. The 
fertilizer industry further looks forward to working with DHS to ensure 
this important product is monitored throughout the distribution chain.
                                 cfats
    As you are aware, Congress authorized DHS to regulate the Nation's 
highest risk chemical facilities in October 2006. In the regulation, 
which became effective on November 20, 2007, DHS subjects to regulation 
several fertilizers if designated quantities are exceeded. These 
include: anhydrous ammonia, 10,000 lb. screening threshold quantity 
(STQ); aqua ammonia, 20,000 lb. STQ; ammonium nitrate, 2,000 lb. STQ; 
potassium nitrate, 400 lb. STQ; and sodium nitrate, 400 lb. STQ.
    With the thresholds set at these levels, every aspect of the 
fertilizer industry falls under the DHS regulation--the manufacturer, 
the wholesale terminal, the agricultural retailer and potentially, the 
farmer. In TFI's May 8, 2007, comments to DHS on the proposed list of 
chemicals and thresholds, TFI requested clarification on the 
applicability of CFATS to the farming community, commenting, ``An 
average nurse tank contains approximately 1,000 gallons, which is 
equivalent to more than two tons of anhydrous ammonia [4,000 lbs.]. An 
eighty-acre field would require the application of four nurse tanks of 
anhydrous ammonia, bringing into regulation [every] farm with an 
eighty-acre field.''
    In a Dec. 21, 2007, letter from Assistant Secretary for 
Infrastructure Protection Robert Stephan, DHS chose to stay the 
regulation with respect to the fertilizer industry's farmer customers, 
stating, ``DHS intended to limit the coverage of that requirement, as 
related to farmers and other agricultural users of the chemicals of 
interest, by revising screening thresholds and counting rules for 
certain chemicals. Since publication of the final list of CFATS 
chemicals, however, additional questions and concerns have been raised 
regarding the applicability of the Top-Screen requirement to 
agricultural facilities and operations.'' This decision by DHS left the 
entire fertilizer supply chain regulated, with the exception of the 
industry's farmer customers.
    TFI and its member companies support DHS in its efforts to 
implement regulations, such as CFATS, that ensure the security of crop 
nutrients that are produced, transported, and distributed by the 
fertilizer industry. What is important to recognize and analyze, 
however, is the impact of changes to the CFATS regulation on not just 
fertilizer manufacturers, but all aspects of the fertilizer supply 
chain and still, potentially, our farmer customers.
    DHS has acted aggressively to establish a comprehensive regulatory 
regime which we support. While neither of CALAMCO's operations is 
regulated under CFATS, I can assure you that our industry is regulated 
and many of CALAMCO's authorized dealers are regulated. It is with this 
understanding that I now provide you with specific comments about the 
impact of problematic provisions in the legislation before the 
committee.
                     inherently safer technologies
    We fundamentally disagree with the notion that chemical facility 
security legislation should mandate the use of inherently safer 
technologies (IST), and we do recognize that IST is a part of every day 
life in the manufacturing portions of our industry. We believe the 
requirement for all regulated facilities to assess the use of product 
substitution, including manufacturers, wholesale distributors, and 
retailers, as proposed in the draft legislation, could have a 
devastating impact on American agriculture. Such a mandate could 
jeopardize the availability of lower-cost sources of plant nutrient 
products, which our farmer customers depend on for specific agronomic 
reasons. I would now like to explain how a mandate to assess or 
implement IST could impact each aspect of the fertilizer supply chain.
    As defined in Sec. 2101, IST or ``methods to reduce the consequence 
of a terrorist attack'' means, ``the elimination or reduction in the 
amount of a substance of concern . . . through the use of alternative 
substances, formulations or processes; the modification of pressures, 
temperatures or concentrations of a substance of concern; and the 
reduction or elimination of on-site handling of a substance of concern 
through improvement of inventory control and on-site handling.''
    The chemistry behind the production of nitrogen fertilizer limits a 
manufacturer's options with regards to IST. Manufacturers of nitrogen 
fertilizer must produce anhydrous ammonia, a toxic by inhalation 
chemical, before they can produce any other form of nitrogen 
fertilizer. As a result, there is currently no IST which could result 
in the elimination of anhydrous ammonia at the manufacturing level. 
This determination is simple to come by, when there are no other 
options for producing nitrogen fertilizer. Our industry's primary 
concern, therefore, is not the ability of the owner or operator of a 
covered manufacturing facility to continue the business of its 
facility. Our industry's concern is the impact of an IST assessment or 
mandate on the fertilizer supply chain.
    The ability to make changes to formulations, processes, pressures, 
and temperatures does not apply throughout the supply chain. The only 
alternative which exists when a facility's business is to sell products 
to the farmer or to move products through the supply chain is the use 
of safer nitrogen fertilizer products, or to store less on-site. These 
provisions therefore, when applied to CFATS-regulated terminal or 
agricultural retailers, implicitly and explicitly discourage the use of 
products which are vital to our Nation's food production.
    Within a wholesale distribution facility, such as CALAMCO, our 
options are to decrease the product stored on-site or switch to a 
``safer'' alternative. As I previously mentioned, CALAMCO meets 
approximately 80 percent of California's anhydrous ammonia needs. As 
such, our facility is a major import terminal. Even the Center for 
American Progress report recognized that a major ``marine cargo 
terminal which receives, stores and transfers several hundred million 
pounds of anhydrous ammonia each year'' has ``no single-facility 
alternative.'' Furthermore, even given the minor protections that were 
included in the draft legislation, which I have reviewed, it would be 
difficult for DHS to force our facility to switch to an alternative 
product. After all, the business of our facility isn't just to supply a 
crop nutrient to farmers; it is to supply the State of California with 
anhydrous ammonia. Were our facility, however, to be a major fertilizer 
terminal, the protections included in the legislation would apply with 
far less certainty.
    The applicability of these provisions to an agricultural retail 
operation is different, however. The options for IST at this level are 
similar to the options which are applicable to CALAMCO. The choices 
presented to the retailer are to switch to a ``safer'' product or 
reduce the amount of product on-site at the facility. If these 
facilities are regulated in the highest tiers, DHS could even force an 
agricultural retailer to switch to a ``safer'' nitrogen fertilizer 
product, potentially removing CFATS-regulated products, such as 
anhydrous ammonia, aqua ammonia, ammonium nitrate, potassium nitrate, 
and sodium nitrate from the farmer's agronomic tool box. The 
protections which apply to the ammonium nitrate producer or the 
anhydrous ammonia terminal do not apply in the same way to our 
agricultural retail operation. The business of our authorized dealers, 
the agricultural retailers, and farm supply stores, is to provide 
fertilizer to the farmer. Not a specific fertilizer, but fertilizer in 
general. The limited protections in this legislation therefore do not 
adequately protect an agricultural retailer from being forced to 
eliminate the use of anhydrous ammonia or ammonium nitrate at their 
facilities. As long as these facilities will be able to continue to 
sell a fertilizer, not necessarily a fertilizer needed by the community 
which they supply, but any fertilizer, DHS will have the ability to 
mandate the implementation of IST, which in this population segment 
means the elimination of products.
    We are further concerned about the assessment of IST in this 
segment of the agricultural community. Given the liabilities that could 
result from continuing to sell a DHS-regulated product as opposed to 
switching to a safer alternative, the lack of understanding at a small 
agricultural facility regarding the meaning of an IST assessment and 
the poor communication about requirements for this portion of the 
regulated community, it is unknown exactly what impact a mandate to 
assess the use of safer products will have on the farmers which we 
supply, the terminals like CALAMCO that are responsible for moving the 
products and the manufacturers which produce the products which we 
move.
    It is only with this broad understanding and analysis of the 
fertilizer supply chain, and the supply chains of other segments of the 
regulated community, that we can conclude understand that it is not 
economically feasible to switch to alternative products that would 
threaten our Nation's economy and food supply. It is reasonable to 
assume that an individual agricultural retailer may determine that it 
is ``economically feasible'' to switch away from anhydrous ammonia and 
ammonium nitrate to unregulated products such as urea, but it is 
unreasonable to assume that each regulated entity, including the 
manufacturers, terminals, and retailers, can adequately analyze the 
impact of their IST decisions on the rest of the fertilizer supply 
chain. We believe it is the responsibility of this committee to 
understand and address the impact of these potential requirements on 
each regulated supply chain, especially ours, which accounts for 40 to 
60 percent of the world's food supply. As the Center for American 
Progress stated in its November 2008 report entitled Chemical Security 
101, ``What you don't have can't leak, or be blown up by 
terrorists.''\1\ Similarly, in agriculture, what you don't have can't 
help grow our Nation's food supply.
---------------------------------------------------------------------------
    \1\ Paul Orum, ``Chemical Security 101,'' Center for American 
Progress. November 2008.
---------------------------------------------------------------------------
    I would now like to provide an analysis of the estimated economic 
impact on the fertilizer supply chain.
    If an agricultural retailer were to switch from anhydrous ammonia 
to a different nitrogen fertilizer product, the likely alternative 
would be urea. Anhydrous ammonia is the cheapest form of nitrogen and 
often the most appropriate for certain crops. In California, anhydrous 
ammonia is most commonly applied on corn, wheat, alfalfa, tomatoes, 
cotton, and onions. Similarly, in the Midwest, you find anhydrous 
ammonia applied to our Nation's corn crop. The additional cost for a 
typical 1,000-acre corn farm utilizing urea instead of anhydrous 
ammonia, given the current cost and nitrogen content of each product, 
would exceed $15,000. However, this does not provide an accurate and 
fully comprehensive picture as this cost increase would only hold true 
if there was ample additional urea available at today's prices. The 
United States, however, is already the world's largest importer of 
nitrogen fertilizer and the second largest importer of urea, accounting 
for a full 17 percent of urea traded in the world. If the United States 
had to turn to the world market to import an additional 7,576,066 tons 
of urea to replace the nitrogen in anhydrous ammonia--a 116 percent 
increase (more than double) from our level of imports in the latest 
fiscal year 07/08--it would drive the world price of urea sky high. A 
higher imported urea price would mean significantly higher urea prices 
paid by U.S. farmers, as the U.S. currently imports 75 percent of its 
total solid urea supply. This would result in a significant increase 
from the $15,000 estimate, which I previously noted for a typical 
1,000-acre corn farm.
    Furthermore, we estimate that the cost for a U.S. manufacturer of 
nitrogen fertilizers to alter an existing facility to accommodate for 
the change in demand would be substantial. To build a 1,000-ton-per-day 
urea liquor plant on an existing site would cost approximately $120 
million. It would cost an additional $60 million to granulate, dry, and 
store the dry urea. To build a 1,500-ton-per-day urea ammonium nitrate 
(UAN) solution plant, you would need both a urea liquor and nitric acid 
facility. In addition to the $120 million urea liquor plant, you would 
need a nitric acid plant at the approximate cost of $60 million. On-
site storage for a 50,000-ton UAN tank would cost an additional $8 
million. The upgrades described above would likely take 2 years from 
the point of ground-breaking to complete and the essential production 
equipment would need to be imported.
    While nitrogen manufacturers do not typically employ more than 170 
individuals, these jobs tend to be staples within the foundation of 
their communities, averaging an annual salary of $70,000, often in 
communities where ours are the best-paying jobs.
    I am also concerned about the impact of an IST assessment on small 
businesses and non-profit entities such as CALAMCO. It is unknown how 
the process described in Sec. 2111 will be implemented, including which 
individuals will need to participate or the legal liabilities that will 
exist due to the assessment. The legislation describes a process which 
must consider the technical viability, costs, avoided costs (including 
liabilities), saving, and applicability of each IST method which is 
considered. We anticipate that the team responsible for analyzing the 
ISTs would require a chemical engineer, process safety engineer, and a 
legal and risk management presence. While a manufacturing facility may 
have these individuals on staff, and a facility such as CALAMCO that 
employs 34 individuals may have some of these individuals on staff, a 
small agricultural retailer will not. We anticipate that the cost to 
perform such an assessment will be substantial for a facility of this 
size.
    Specifically, the overwhelming majority of retail facilities do not 
store quantities of regulated products that would result in being 
placed in a tier level where they are considered a high-security risk 
to their community. As a result, the majority of agricultural retailers 
in California can not afford to maintain regulatory compliance or risk 
specialists at each facility. Under such a mandate, these retailers 
would have to hire consultants to assess whether the products they 
carry could be replaced by IST. Since retailers can not afford to 
maintain risk specialists, the perception of risk from products 
identified as products that should be assessed for IST, would likely 
drive retailers to alternative products that may be more costly and 
less efficacious than their original products at delivering essential 
plant nutrients. Replacement products would also place retailers in 
jeopardy of not qualifying for State environmental initiatives, such as 
the agricultural truck rule provisions of the California State Air 
Resources Board's Diesel Engine Replacement regulations. Finally, in a 
highly litigious State like California, the perception of risk would 
likely lead to high insurance rates for retailers. All of these 
examples translate into higher costs to retailers and as a consequence, 
their grower customers.
    We ask that you not misinterpret our position with regards to 
security. Our concern regarding the mandate to assess the use of ISTs 
and products does not mean that we do not take the protection of our 
products and the fertilizer supply chain seriously. We believe, 
however, that our facilities can be protected without implicitly or 
explicitly discouraging the use of our products in legislative text.
       maritime transportation security act regulated facilities
    As stated earlier, CALAMCO's port facility in Stockton, Calif., is 
regulated under the Maritime Transportation Security Act of 2002 (Pub. 
L. No. 107-295). Due to the regular shipment of bulk fertilizers by 
barge and vessel, many TFI members, including manufacturers, 
wholesalers, and retailers, have facilities regulated by the Coast 
Guard under MTSA. In addition, two fertilizer products are classified 
as Certain Dangerous Cargo (CDC), bringing under jurisdiction of MTSA 
many retail and wholesale warehouses on our Nation's inland water 
system.
    Due to the strong regulation by the Coast Guard, facilities 
regulated under MTSA were exempted, by statute, from CFATS-authorizing 
legislation. While we understand that the current draft legislation 
acknowledges and maintains the Coast Guard's important role with 
regards to security at MTSA facilities, we are discouraged that 
facilities, which have been successfully regulated, inspected, and 
secured, would have any additional requirements imposed by this 
legislation. TFI supports maintaining this exemption.
    If the Infrastructure Security Compliance Division, the agency 
within DHS which is responsible for the CFATS regulations, chooses to 
enter into a memorandum of understanding (MOU) to encourage information 
sharing with the Coast Guard, TFI would support these provisions. We 
cannot support, however, any additional requirements on MTSA facilities 
which have successfully complied with the Coast Guard's regulation over 
the past several years. We are further concerned that the requirements 
of Sec. 2111 would apply at Coast Guard-regulated facilities. As we 
have previously addressed, agricultural facilities at our Nation's port 
facilities have limited alternatives, other than increased shipments of 
fertilizer products or the elimination of products.
                        private right of action
    Section 2115 of the proposed legislation includes provisions 
allowing for private rights of action against regulated parties and 
against DHS to enforce compliance with applicable requirements. Such 
private rights of action provisions have proven extremely problematic 
in other statutory schemes and have fostered enormous amounts of 
litigation in other contexts. We first and foremost believe that these 
provisions are not only unnecessary but could prove detrimental to the 
task at hand--protecting our Nation's critical infrastructure.
    Agency desires to avoid citizen suits often result in agencies 
taking less cooperative and more adversarial approaches towards the 
regulated community in order to ensure compliance. The more adversarial 
and aggressive the agency action, the less likely a citizen plaintiff 
will view the action as adequate and file its own suit to enforce 
compliance.\2\ The agency thereby avoids the cost of litigation, but at 
the expense of essential cooperation with the regulated facility. Such 
aggressive actions are counterproductive, particularly in situations, 
such as counterterrorism, where cooperation between Government and 
private interests is critical.
---------------------------------------------------------------------------
    \2\ Matthew D. Zinn, ``Policing Environmental Regulatory 
Enforcement,'' 21 Stan. Envtl. L.J. 81 (2002).
---------------------------------------------------------------------------
    Additionally, citizen suits would be unnecessarily redundant with 
third-party common law claims. Furthermore, the broad discovery rights 
enjoyed by a plaintiff in a judicial action increases the likelihood of 
disclosure to the public of sensitive information, which could be used 
in terrorist activities. The legislation only provides that DHS shall 
take measures to prevent disclosure, but does not provide any 
mechanisms to prevent disclosure of sensitive information in the 
context of a judicial challenge where broad discovery would be 
necessary to bring and defend any claim. We also believe that potential 
personal liabilities associated with being named in citizen suits would 
provide a disincentive for chemical facility employees to take 
responsibility for implementing the requirements of CFATS.
    Finally, citizen suit provisions create incentives to litigate 
fiercely, but none to encourage citizen plaintiffs to pick their 
battles in an effort to achieve socially-optimal compliance and 
enforcement. Where citizen litigants are reimbursed for their 
litigation expenses and fees (as they would be under the legislation), 
they have little budgetary incentive to eschew enforcement. Citizen 
plaintiffs will also bring suit to attract members, increase their 
public profile or contributions. Citizen plaintiffs tend to be 
ideologically predisposed to aggressive enforcement, as they have no 
ongoing relationship with the facility (as the agency would) 
necessitating a cooperative relationship. Indeed, studies have 
indicated that citizen suits do not achieve optimal enforcement levels 
but instead result in excessive numbers of claims and excessive 
penalties.\3\
---------------------------------------------------------------------------
    \3\ See David R. Hodas, ``Enforcement of Environmental Law in 
Triangular Federal System,'' 54 Md. L. Rev. 1552 (1995); see also Barry 
Boyer & Erroll Meidinger, ``Privatizing Enforcement,'' 34 Buff. L. Rev. 
833 (1985); Ross MacFarlane & Lori Terry, ``Citizen Suits: Impacts on 
Permitting and Agency Enforcement,'' Nat. Resources & Env't J. (Spring 
1997).
---------------------------------------------------------------------------
                           federal preemption
    Sec. 2109 allows any State or political subdivision thereof to 
adopt or enforce any regulation that is more stringent than the Federal 
regulation. We are concerned that the legislation before this committee 
will encourage the creation of a patchwork of conflicting rules that 
stretch across Federal, State, and local lines. We believe that CFATS 
should preempt inconsistent State and local chemical security laws and 
rules by preempting State or local requirements only if there is an 
actual conflict between the two, or the State or local program 
``frustrates the purpose'' of the Federal program. Current State 
chemical facility security laws have not been found to conflict with 
Federal CFATS regulation. Therefore, changes to the existing conflict 
preemption standards should not be made.
                          miscellaneous issues
    Finally, I would like to quickly describe a few additional 
provisions which raise concern and I believe could easily be amended.
    Sec. 2103 discusses training for employees. While CALAMCO, due to 
its size, may provide each employee with a full knowledge of these 
aspects of the facility's security, we believe it is inappropriate to 
provide this level of detail to every individual who may work within 
the confines of our facility. The prescriptive nature of this provision 
would result in every contractor, including temporary contractors 
during manufacturing plant turn-around, interns, front desk staff, and 
other temporary employees, having an intimate knowledge of the 
potential consequences of a terrorist incident and the facility's 
ability to respond. While we recognize the need for employees at a 
facility to be aware of the certain vulnerabilities and the methods 
which may be used to mitigate an incident at a facility, we do not 
believe that all individuals have a need to know the information which 
is mandated in Sec. 2104. We encourage you to review and alter these 
provisions so that they are not only performance-based, but allow the 
owner or operator to determine which information is appropriate for 
distribution.
    Sec. 2105 mandates that a covered facility with one or more 
certified bargaining agents provide an employee representative, as 
defined in Sec. 2101, with a copy of any security vulnerability 
assessment or site security plan. We fundamentally believe that this 
information should only be provided to employees at the facility with a 
specific need to know. The definition of ``employee representative'' 
does not clarify whether or not this individual must be an employee of 
the facility. Furthermore, Sec. 2105 would require that the employee 
representative ensure that security vulnerability assessments and site 
security plans are properly handled; but it does not specify that an 
employee representative must keep any information received stored at 
the covered chemical facility. An owner or operator of a covered 
chemical facility, or an employee with security responsibilities at 
multiple facilities may have a need to transfer or transport sensitive 
security information, removing these documents from the facility should 
not be permitted by the employee representative.
                               conclusion
    We encourage the committee to take decisive action to extend the 
existing CFATS authority, which expires in September 2009, but we 
remain concerned about many of the provisions which are included in the 
draft legislation. We encourage you to maintain the existing 
regulations and allow DHS to complete the first phase of implementation 
before altering the existing program. We ultimately believe that DHS 
could effectively implement their regulation with 3-year extension.
    I would like to once again thank you for allowing me to provide my 
perspective on the impact of this legislation at CALAMCO and to the 
broader fertilizer industry supply chain. I look forward to answering 
any questions which you may have.

    Mr. Pascrell. Thank you for your testimony.
    Without objection, the witnesses' full statements will be 
inserted in the record. So now we are going to go to questions.
    I have a question for Mr. Baldauf. As a Member of the 
Homeland Security Committee, as well as a Member of the Ways 
and Means Committee, I believe strongly that we need to 
implement rigorous security standards without unduly impeding 
commerce. I think you believe in the same thing; I have heard 
you speak before.
    But it could be a difficult balance to maintain. The 
legislation we are considering today would implement a new, 
more stringent chemical security regime for the entire Nation. 
But we have often heard the refrain from the chemical industry 
that these standards would significantly restrict its ability 
to do business.
    Now, Mr. Baldauf, as I pointed out earlier in New Jersey, 
that that State has been implementing many of these chemical 
standards, security standards for years, including the 
assessment of inherently safer technologies, which we have 
heard mentioned a few times in the testimony of the gentlemen.
    The chemical industry has vigorously opposed this in the 
past. As I mentioned before, there is 800 chemical facilities 
in New Jersey, 45 of them have extraordinarily hazardous 
materials.
    So, Mr. Baldauf, quite simply, has the ability of the 
chemical industry in New Jersey to do business really been 
stunted? That is my first question. Has the sky fallen on the 
chemical industry in New Jersey since you implemented tougher 
chemical security standards, including IST?
    Then I have a follow-up question. When he is finished, 
gentlemen, jump in. We need to hear from everybody. This is not 
meant to be pedantic. Go ahead.
    Mr. Baldauf. Thank you.
    We actually heard the same concerns in 2005 and 2008. In 
2005 and 2008, we actually heard the same concerns before we 
enacted our standards and our IST rule.
    What experience has shown since 2005 is, no, it has not 
been overly burdensome for the chemical facility, the chemical 
sector to comply with our standards and complete the IST 
evaluations.
    The main reason, I believe, for that is that, on the IST 
evaluation side, there is a feasibility test. If it is not 
feasible to do the IST work, it is not going to be done. If it 
is feasible, then they can go forward. I think that is the key 
there. It is an evaluation we require, and you have to meet a 
feasibility test to go forward.
    Mr. Pascrell [continuing]. More efficient?
    Mr. Baldauf. I don't think there is any question. I don't 
think there is any question.
    Mr. Pascrell. Can you cite any specific cases that come to 
your mind?
    Mr. Baldauf. Well, I think if you look at the IST reports 
that we have reviewed over the years, they pay very close 
attention to the types of chemicals they bring in, the timing, 
the frequency, the amount, and they stage things so they aren't 
in a position to have more than what they need on-site at a 
given time. That helps their bottom line in the long run, also, 
in many times because it is just by demand when necessary.
    Mr. Pascrell. Would I be exaggerating if I said that the 
chemical industry in the State of New Jersey, which is one of 
the most robust in the entire Nation, have been extremely 
cooperative with these standards?
    Mr. Baldauf. I think we went through a very long process. 
Yes, I would like to say that it is a cooperative relationship 
we have had.
    Mr. Pascrell. Just one more brief question before I turn it 
over to the Ranking Member. Just give me a brief summation of 
this feasibility that you have talked about and referred to in 
your testimony. This is very critical, I think, to the entire 
discussion of whether we should have stronger standards or 
weaker standards or whatever.
    Mr. Baldauf. Okay. How it works is, it is up to the 
company, the facility, to explore the possible IST options that 
may be available to them. So they basically start with a clean 
slate, and they come up with, let's say for argument, 10 things 
that are possible.
    Then feasibility goes through, is it economically feasible? 
Is it technologically feasible? Do you have space for it? There 
are multiple things that we include in the rule.
    So, at the end of the day, if you come up with 10 things 
that are possible, you also come up with 10 reasons why they 
are or are not feasible, and you make that argument back to us, 
and we review it to make sure that we agree with the steps 
taken and their evaluation.
    Mr. Pascrell. Any--yes, Mr. Durbin?
    Mr. Durbin. If I could----
    Mr. Pascrell. Absolutely.
    Mr. Durbin [continuing]. Because I don't want to leave the 
impression here that the industry, at least speaking for ACC 
member companies, have been adversarial to what New Jersey has 
done or that we are on----
    Mr. Pascrell. No, your record has been pretty clear.
    Mr. Durbin. I think that, you know, for ACC members--and, 
again, a lot of other non-ACC members, as well--the idea of 
considering inherently safer approaches, again, it is required 
as part of our responsible care security code.
    As I think Mr. Baldauf in his written statement 
acknowledges, you know, the initial best practices in New 
Jersey were modeled on responsible care security code. I will 
say, I believe we have a very cooperative relationship between 
the industry and the State, and we have 70,000 employees in 
your State, as you said----
    Mr. Pascrell. How many is that?
    Mr. Durbin. Seventy thousand. So, you know, we take our 
responsibility seriously. I think that it really does, you 
know, show some--there are some models here on how to move 
forward.
    Mr. Pascrell. Thank you.
    Mr. Langerman, do you have any comment?
    Mr. Langerman. Well, as I said, the ACS position is that 
inherent safer technology is certainly part of the overall 
process for reducing the inherent risk associated with the 
unit, which overall improves both safety and security.
    It is a holistic approach that requires a relatively high 
level of expertise to design and implement and a relatively 
high level of expertise to review, if you will, at a State or a 
Federal regulatory agency.
    Mr. Pascrell. Mr. Langerman, do you know of any facility 
that would not be able to sustain operations as they exist 
right now if this legislation was passed, yes or no?
    Mr. Langerman. That is going to have to be answered on a--
literally a case-by-case basis. There are facilities that I 
have been involved with as a consultant in my professional 
career that would be hard-pressed economically to make changes.
    I certainly am aware of facilities that have chosen to move 
out of my home State, California, because of regulatory 
oversight.
    Mr. Pascrell. Okay, and that is the purpose of having 
feasibility.
    Mr. Jeppeson. Put your mic on, please. Thank you.
    Mr. Jeppeson. If you look at it from the perspective of our 
particular facility, as I mentioned earlier on, there does not 
appear to be--anhydrous ammonia. If we were regulated out of 
that business, i.e., we had to get rid of the anhydrous 
ammonia, we would basically be out of business.
    Mr. Pascrell. Anyone else?
    Thank you.
    Mr. Lungren. Thank you very much, Mr. Chairman.
    With all due respect, Mr. Chairman, it is easy for us to 
ask whether a bill could legislate something out of existence. 
Now in California as a result of Federal law, we have had 
implementation by a Federal judge to protect the Delta smelt. 
So we have turned off the water to central California. 
Currently, we have some communities with as high as 40 percent 
unemployment. Some of the greatest farmland in the world is now 
going dry because of the United States Federal Government, with 
the Congress passing laws that wouldn't put anybody out of 
business, and it is having dire consequences.
    But we cannot do anything, because a Federal judge has made 
a determination that the pumps have to go off and species Homo 
sapien is considered subservient to species that are included 
in the Delta smelt.
    So I am very, very concerned about the impact of Federal 
legislation that we just grandly say will have no impact 
whatsoever. It sounds like we have found the magic bullet. We 
have found the holy grail. It is called IST, inherently safer 
technology.
    Is that the answer to everything, Mr. Baldauf?
    Mr. Baldauf. No, I would say it certainly isn't. In my 
opinion, IST is a process, one of many processes, that would 
help ensure that everything is being evaluated to get the 
facilities to a point where they are as safe as possible. But 
certainly it is not the final answer.
    Mr. Lungren. New Jersey does not mandate it, does it?
    Mr. Baldauf. No, strictly evaluation.
    Mr. Lungren. Strictly evaluation.
    Mr. Baldauf. Yes.
    Mr. Lungren. Which is different than mandating it under the 
authority of the secretary of DHS.
    Mr. Durbin, what are your comments on IST?
    Mr. Durbin. Again, we believe that IST is an important tool 
to be used, as you have been developing your site security 
plan. It is a requirement under ACC's responsible care security 
code.
    Again, we, too, believe that it is not appropriate to 
mandate, that the decision is best left to the--you know, the 
process----
    Mr. Lungren. Why isn't it the silver bullet?
    Mr. Durbin. No, I didn't mean to say it was the silver 
bullet.
    Mr. Lungren. No, but why isn't it the silver bullet?
    Mr. Durbin. Why isn't it?
    Mr. Lungren. Yes.
    Mr. Durbin. Because it doesn't----
    Mr. Lungren. It sounds great, inherently safer technology. 
Who could be against inherently safer technology?
    Mr. Durbin. Well, it does sound great. Frankly, you know, 
if you can institute those types of changes in your process, it 
is good business. It is good business. You know, it makes 
things more efficient. It makes things safer, what have you. 
But----
    Mr. Lungren. You don't have confidence that we on the 
Federal level can mandate it in the circumstances that we think 
it ought to be mandated?
    Mr. Durbin. Our view is that those decisions are best left 
to the security and process safety experts.
    Mr. Lungren. Dr. Langerman.
    Mr. Langerman. First, let me thank you for defending the 
water. I live at the end of the water supply.
    Mr. Lungren. Well, you don't have to worry about getting 
wet.
    Mr. Langerman. No, in fact, we are in a stage two drought 
right now.
    You chose very good words in is--in your question, is IST a 
silver bullet? Absolutely not. I would urge the Members of this 
historic legislative body to look back to the history of the 
language, inherently safer technology. It traces back to a 
colleague, Trevor Kletz, in the United Kingdom, who invoked it 
as one of a large group of engineering processes which, taken 
as a whole, can build into a process unit safety and, in fact, 
security, as a part of the unit, not as a Band-Aid or an add-
on.
    Professor Kletz and all of my chemical and engineering 
colleagues who have worked on this and myself have recognized 
it is just one of the tools in a relatively rich tool box that 
we can bring to bear to make our units operate safer.
    The example that I gave in both my oral and my written 
testimony was chosen very carefully, because it points out a 
case in which all of our preliminary judgment said substitute, 
substitute, substitute. That seems to be what inherent safer 
technology focuses on, the language, where when we did the 
detailed, quantitative risk assessment, looked at the process 
in detail, and we did a consequence analysis, we got these 
amazing results, 7,900-pound release was possible when the 
alternative was implemented versus 538-pound release if the 
original were implemented, which, in fact, was the safer.
    Mr. Lungren. See, I remember when the Federal Government, 
the Congress mandated MTBE as the additive to gasoline. We made 
the determination here that it needed to be used. What did we 
find out? MTBE turned out to be a disaster for the environment, 
almost ruining places like Lake Tahoe and other areas where it 
was used as gasoline and an additive for marine vehicles.
    We are mandating corn-based ethanol at greater and greater 
levels here in the Federal Government, and it is my concern 
when we come up with an idea that came out of the industry, 
using inherently safer technology, as a process, and as one of 
the tools, then latching on to it and saying, ``My god, we have 
found it, the holy grail, and we are going to mandate it.''
    It will have a devastating impact, in my judgment, if we go 
overboard with it. I thank the gentlemen for your testimony.
    Mr. Pascrell. Does anyone else want to respond to what you 
have already heard?
    Mr. Jeppeson. If I may make a comment, sir? Talking about 
IST, let's just take, for instance, an example of it, if a 
farmer did have to switch from anhydrous ammonia to an 
alternative product.
    There are a number of costs involved in that to the farmer. 
We will take a 1,000-acre corn farm, since you, sir, mentioned 
corn in your comments there. Given the current nitrogen costs 
that are on the market, the results of that farmer would be an 
additional $15,000 of expenses. Those expenses would only be 
true if there were additional urea in the marketplace, in the 
supply chain in order to provide that farmer with a product 
that he needed.
    Currently, we are the largest supplier--the largest 
importer of nitrogen fertilizer in the world. We are the second 
largest importer of urea, according for about 17 percent of the 
total world production.
    Our estimate is that it would take an additional 7.6 
million tons of urea to replace the ammonia that would not be 
used in order to get similar production levels. So that is 
about 116 percent increase in imports from the latest fiscal 
year of 2007-2008.
    We think that that would probably drive the prices of urea 
sky high. That is assuming that there is enough urea there to 
take the place of what is needed. In order to get that 
additional urea, then obviously additional plants would have to 
be put in place.
    Mr. Pascrell. Mr. Jeppeson, I just want to make it clear 
that in this legislation, the one we are talking about today, 
not the Delta smelt, we are talking about a very specific 
legislation. You are bringing comparison of apples and oranges 
here.
    But in this particular legislation, nothing in this bill 
that I know of mandates any particular process. Nothing in the 
bill mandates any particular process.
    Anybody else have any comments?
    Mr. Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    I am on the Financial Services Committee. It used to be 
called the Banking Committee. I painfully remember hearings 
like this a couple years ago, as the ABA and others from the 
financial services industry argued that, if we try to do any 
tightening of regulations, that there would be unintended 
consequences, the world would essentially collapse, and the 
Washington Nationals would win games, all kinds of things 
would--were going to go wrong.
    [Laughter.]
    So, as a result, now that we have seen--we have walked to 
the precipice of a collapse of the world economy, and a part of 
the reason has been the failure to do, I think, congressional 
responsibility, in terms of regulations.
    I am wondering, if something tragic should happen, who do 
you think will get the blame because we refused to take action 
on this legislation? How many of you would volunteer to say, 
``Well, I stood up and asked them not to do anything''?
    Mr. Durbin. Mr. Cleaver, I would answer in a different way. 
I think we have stepped up and----
    Mr. Cleaver. No, no, no, no. I appreciate what you are 
saying, but before you say that, if you would answer my 
question. You said you would answer it another way. What I 
would like for you to do is not--I am not trying to be too 
mean--is to answer it the way I asked, which is whether or not 
who you--who do you think will receive the blame?
    Mr. Durbin. Likely we will.
    Mr. Cleaver. Well, that is not quite the way I see it, 
based on history. We would get beat up, as usual, and then we 
would hear all the things--lobbyists, they control everything, 
and people wouldn't make decisions. Am I wrong?
    Mr. Durbin. Well, again, if I could, I think this is a case 
where, you know, you had--and speaking for the American 
Chemistry Council, this was a group--I am a lobbyist, so I will 
go ahead and take the mantle there.
    I have come before this committee several times and other 
committees encouraging and supporting the passage of 
legislation to regulate chemical facilities for security. 
Thankfully, Congress did so in 2006. I am here today to say, we 
want to make that program permanent, that we want to continue 
to work with DHS.
    So I guess I would look at it a little differently. We are 
not starting from scratch. You know, we have an industry that 
has already invested $8 billion in security. We want to make 
sure the program that is in place, being implemented now is 
going to be even stronger.
    This is a responsibility we all have. Frankly, we are never 
going to be done. We are going to have to continue to work at 
this and improve our ability to make sure that we can meet the 
threats that are out there.
    So I do understand what you are saying, but I think that we 
are in a better position in that we do have a collaborative 
relationship here to actually address this concern.
    Mr. Cleaver. You know, Mr. Langerman, before you answer 
that question, let me--to follow up, the IST is sometimes 
dismissed as safety masquerading as security. I believe that if 
we are going to lower overall risk, which is usually defined as 
a product of threat times vulnerability times consequences, and 
that we should, Mr. Langerman, try to reduce each of these 
three, including consequences, if we are going to reduce 
overall risk. Do you agree with that?
    Mr. Langerman. Thank you, Representative. First, the 
American Chemical Society fully concurs with Mr. Durbin. He has 
just stated, so I am not going to repeat that.
    To address your follow-up question, if I may, inherent--the 
process, the engineering process that runs under the mantle of 
inherently safer technologies is aimed at reducing the built-in 
risk, the inherent risk of a unit. By doing that, it improves 
both safety and security.
    So in that sense, I do concur with your statement.
    Mr. Cleaver. My time is running out, and I have a lot more 
stuff. But I yield back, Mr. Chairman.
    Mr. Pascrell. Thank you.
    Mr. McCaul.
    Mr. McCaul. Thank you, Mr. Chairman.
    I ask that the Chair recognize Dr. Broun for 5 minutes, as 
he has a conflicting hearing, and then perhaps come back to me.
    Mr. Pascrell. The gentleman from Georgia is recognized.
    Mr. Broun. Well, thank you, Mr. McCaul, for your indulgence 
in this. I owe you one, sir. I say that for the record.
    Mr. Jeppeson, as a former farmer, I understand that 
inherently safer technology requirements would significantly 
increase the cost for the majority of small businesses, such as 
agricultural retailers, and specifically for hiring consultants 
to perform assessments, due to the costs of switching to more 
expensive uncovered products, increased insurance rates, et 
cetera.
    Would it be fair to say that some small businesses 
struggling with these increased compliance cost may be forced 
out of business?
    Mr. Jeppeson. I think, sir, that probably would be a good 
statement. I think what might also happen is that those smaller 
retailers could very possibly switch away from those products 
that are more dangerous, if you will, and also go to much less 
costly products, which may not serve the farmer quite as well.
    So I think there is a possibility that if they were--if 
these assessments were imposed upon them at fairly large 
expense, there is a possibility some of them may go under.
    Mr. Broun. I believe very firmly that a nation cannot feed 
itself, and cannot clothe itself, if it is not energy 
independent, so that it is not a secure nation. As we go to 
these other modalities of trying to grow our crops which are 
much costlier, I think it will drive our food costs up making 
us more dependent upon foreign food sources, which is not in 
our best security interests as a Nation.
    So I agree with Mr. Lungren. I am very concerned about the 
mandatory requirements that this legislation would cost. I 
understand Mr. Cleaver's questions, but we cannot be entirely 
risk-free.
    It is my understanding that the purpose of IST requirements 
is to increase facility safety by reducing the on-site volume 
of a covered chemical. But wouldn't reducing the on-site amount 
of a product result in increased truck, rail, and barge traffic 
to ensure continued and adequate supply?
    Therefore, wouldn't these IST requirements merely shift the 
risk to other, perhaps more vulnerable entities in the supply 
chain, resulting in increased Government regulation without any 
additional protection against terrorist activities, thus 
further increasing the cost to everybody in America?
    Mr. Jeppeson. I think that is a very true position on that, 
sir. Take, for instance, we have Product A, which is a 
dangerous product, and we decide to replace it with Product B, 
but we need three times as much of Product B as we did of 
Product A to serve the farmer, and we are putting three times 
as many trucks on the road, three times as many rail cars on 
the rails, and three times as many ships on the high seas. So, 
yes, we are definitely increasing the risk there.
    Mr. Broun. Then, also, increasing carbon emissions and 
other things that the folks concerned with so-called climate 
change or global warming are talking about.
    I thank the panel for coming, and I appreciate all of your 
testimonies.
    Mr. Chairman, I yield back the balance of my time.
    I thank Mr. McCaul for his indulgence.
    Mr. Pascrell. Thank you, the gentleman from Georgia.
    Just one quick point. In the direct language of the--I 
wasn't sure, but now I am sure. The substance, the secretary, 
the Department of Homeland Security--homeland security 
secretary can require implementation of a high risk, if it 
would significantly reduce the risk of death, injury, serious, 
adverse, et cetera, and is technically and economically 
feasible to be incorporated into the facility's operations, and 
would not significantly impair the ability of the facility to 
sustain operations at its current location. A high-risk 
facility that cannot comply with an implementation order is 
required to provide a written explanation to the secretary 
within 60 days of receipt.
    Oh, do you want to ask questions?
    Mr. McCaul. Yes, Mr. Chairman. Thank you.
    For clarification, Mr. Baldauf, in New Jersey, you have an 
IST review process that seems to be working fairly well, but it 
is not a mandatory process, correct?
    Mr. Baldauf. It is mandatory that you have to do the 
evaluation, but the results of your evaluation, you are not 
required to implement them. So, basically, at the end of the 
day, you have to put feasible alternatives on the table, but 
you aren't forced to implement any of them.
    Mr. McCaul. So the implementation is not mandated, is this 
what you are saying?
    Mr. Baldauf. Correct. Correct.
    Mr. McCaul. Okay. I just wanted clarification on that.
    Mr. Durbin, I know you were quoted today in the BNA Daily 
Environmental Report as saying that you would like to make the 
IST provision more manageable for facilities to deal with. 
There is a Texas A&M report that talks about the subjectivity 
involved with IST.
    First of all, explain your quote. Then, do you agree with 
the Texas A&M report, that this is a very subjective standard?
    Mr. Durbin. I haven't read the Texas report, but I do 
think--again, as I think I had maybe been quoted there, that 
IST does require subjective decisions there.
    But, no, my--the point of my quote this morning and, you 
know, consistent with my testimony here today, you know, we 
continue to believe that the provision is unnecessary, that the 
current regulations, you know, provide the encouragement, in 
fact, that is essentially going to require you, you know, to 
consider all different types of security enhancements, 
including methods to reduce consequences, and that there is a 
strong incentive to implement those, because you may end up 
putting yourself into a lower tier or perhaps coming--taking 
yourself out of the program.
    Having said that, you know, the provision that is in the 
bill that was introduced yesterday is essentially the same 
provision that was in the bill last year, which was approved by 
this committee. It is very similar to a provision that was in 
the bill in the previous Congress that was approved by this 
committee.
    So from a practical standpoint, if the committee is going 
to move forward with a provision that is going to give 
authority to DHS to mandate IST, we clearly would like to see 
changes to that provision to make sure that it is a more robust 
definition, that it entails risk, you know, not just 
consequence, that it has a more robust process involved, both 
for the determination by the agency and the facility's ability 
to appeal that process.
    Mr. Pascrell. Would the gentleman yield for one second?
    Mr. McCaul. I will yield to the Chair.
    Mr. Pascrell. Thank you. We have to make it clear, don't 
we, Mr. Durbin, that this legislation does not prescribe a 
specific methodology?
    Mr. Durbin. Correct, Mr. Chairman. As I said, it provides 
the authority to the secretary, to--correct.
    Mr. McCaul. The current arrangement seems to be a 
cooperative arrangement between industry and the Government. It 
actually seems to be working fairly well, according to your 
testimony.
    In fact, the current President and current administration 
seem to think so as well, but they have asked this Congress to 
delay for another year so they can work with the Congress on 
any further legislation. Is that correct?
    Mr. Durbin. That is my understanding, based on----
    Mr. McCaul. We heard that testimony from the previous 
panel. Mr. Chairman, I don't know why we are not listening to 
the President and the administration in this instance rather 
than forcing this legislation upon the Congress.
    I think this is one instance where I agree with the 
President and the administration. I think it is a more 
reasonable approach to work with the industry and with the 
Congress on delaying this by 1 year.
    Let me ask another question. With respect to civil 
liability, this bill opens up the industry to civil lawsuits 
and DHS to third-party lawsuits. Mr. Durbin, can you comment 
upon the impact that this could potentially have not only on 
your industry, but also on the information that should be 
protected?
    Mr. Durbin. Well, as I mentioned in my testimony, we do 
share the concerns that DHS expressed this morning, that--about 
the potential release of sensitive and classified information 
in judicial settings.
    I think, more broadly, and to your point and as others have 
noted this morning, as well, you know, success of a security 
regime here and a risk-based program really does require an 
atmosphere of trust and collaboration between the DHS and the 
regulated community here.
    As I said, we are--in no way want to be perceived of 
apologizing for either a facility or the agency if they are not 
complying with the regulations of the--you know, of the 
statute. However, we simply think that litigation is the wrong 
way to go about making sure that that occurs and succeeds.
    Mr. McCaul. By opening this up to litigation, would that in 
any way damage the level of cooperation and trust between the 
industry and the Government?
    Mr. Durbin. That is one of our fears, that it would end up 
undermining that trust that we think really has been built, 
both, frankly, at the State level and at the Federal level.
    Mr. McCaul. Mr. Jeppeson, a final question, if the Chair 
would indulge. I know the Farm Bureau has come out openly 
against this bill. Can you elaborate on the impact this would 
have on all the farmers in my district and elsewhere?
    Mr. Jeppeson. I think from our facility perspective to 
start with, one of the concerns that we really have is the 
sharing of information, as has been voiced by other members of 
the panel and homeland security people before.
    So if the bill goes through as written, then we are 
required to share facility security plans and facility security 
assessments with people that we don't feel should be privy to 
that type of information.
    As to the effect on the members of your district, sir, any 
changes in the costs from the manufacturer down to the 
distributors, such as--to the transporters down to the 
retailers is obviously going to have an impact on the farmer, 
the end user.
    So, to answer your question, it is going to have an impact 
if there is an additional cost on the front end of it.
    Mr. McCaul. They are having a pretty tough time right now, 
from what I gather. So I thank the Chair for indulging me.
    Mr. Pascrell. The gentleman from Texas needs to be aware I 
want to update him that the administration did have some 
question about the implementation, but was not knowledgeable at 
the time of the progress that we have made in negotiations with 
all the entities.
    So as far as the administration--and correct me if I am 
wrong, staff--the administration is perfectly happy with moving 
along if we have, you know, all our eggs in place.
    Mr. McCaul. If the gentleman will yield----
    Mr. Pascrell. Sure.
    Mr. McCaul. The testimonies we heard from the prior panel 
of representatives from the Department of Homeland Security, 
specifically stated that a 1-year extension would be in the 
best interest of the administration.
    Mr. Pascrell. Well, Congress opposes and the executive 
disposes. So that is where we are at this particular time----
    Mr. Souder. In all fairness, they have had only 2 days to 
look at it.
    I want to put on the record a couple of things for 
clarification, because I am comparing apples to apples. In the 
earlier example, the American banking industry was regulated, 
and that 60 percent wasn't the problem. It was the 40 percent 
that didn't have any regulations at all, the non-bank sector, 
and the banks that got into the non-bank sector.
    Here we have a regulated sector, and we more closely 
resemble the banking industry arguing over how regulated they 
should be, rather than whether they should be like the non-
banks that caused the financial sector problems.
    Second, Mr. Lungren almost convinced me maybe, because I 
like ethanol, that maybe the Government should make 
regulations, but I will try to hang loose here and not get into 
an ethanol debate.
    The third question I want to get into is this process about 
which I thought Mr. Langerman made a good point. Mr. Baldauf, 
if New Jersey recommends to a company that this is a process 
that could, in fact, save them money, those savings are 
presumably over the life of the process?
    Mr. Baldauf. Yes.
    Mr. Souder. Do you take into consideration whether that 
company has the cash to do it? Dr. Langerman made a very good 
point that sometimes things don't appear the way they actually 
are, whether it is the layout of the building, or whether it is 
the mix of the processes that are confidential.
    Unless we are going to set up a TARP program to fund IST, 
part of the challenge right now for more marginal companies is, 
a question of feasibility, whether they have the cash, since 
the long term is irrelevant. In the bill, the only thing it 
said is that the owner of the chemical is to ``continue in 
business''. The bill does not indicate whether money is lost, 
or if it gradually gets lost putting the owner in a risky 
position. This will simply say ``continue in business.''
    Mr. Pascrell. Would the gentleman let the witness answer 
the question? I want to refer you to Section 2111, which talks 
specifically about the costs and a technical liability. It is 
in the bill.
    Mr. Baldauf. In New Jersey's experience, we in no way, 
shape or form recommend IST options or force them on a company. 
It is possible, if we are aware that Company B does something 
in a different State, you should look into this, but we would 
not force it or recommend it.
    However, if it was on the company's list of recommendations 
and the company came to us and said, ``Feasibility this is 
going to put us out of business. We can't afford it''----
    Mr. Souder. I didn't say it necessarily put the company out 
of business. I said it would cash strap them further. I was in 
the retail franchise business. People would walk in and go, 
``Improve the lighting. It will increase your sales. Improve 
your radio advertising. It will increase your sales. Improve 
your distribution, or painting on the trucks. It will improve 
your sales.'' If you do them all, you will go out of business.
    The challenge here is, infeasibility. It is not whether 
they will go out of business, but rather what other tradeoffs 
do they have? Is this truly essential to its security? Or is it 
just a preference?
    What is the marginal potential gain versus the cost to the 
industry, not whether they will go out of business, but rather 
within the range of their activities and within the realm of 
competitive and international business, for example issues that 
Mr. Jeppeson raised in the tradeoffs of farmers' yield, by 
ending use of the product?
    Technically, this doesn't cover transportation, so just-in-
time inventory may be better for the company to reduce costs, 
however, we are putting more chemicals on the road more 
frequently without even the jurisdiction to cover that area.
    My specific question is, in terms of feasibility, do you 
look at questions of cash flow, management, timing, and 
implementation as opposed to just whether or not companies will 
go out of business?
    Mr. Baldauf. The answer is----
    Mr. Pascrell. Can I read that section of the bill, please, 
before you answer?
    Mr. Souder. Mr. Pascrell, can I ask my question?
    Mr. Pascrell. All right. You answer, and then I will read 
the bill to you.
    Mr. Souder. Then we can----
    Mr. Pascrell. It is obvious you didn't read it. Go ahead.
    Mr. Baldauf. The answer is----
    Mr. Souder. I asked him about----
    Mr. Baldauf [continuing]. Yes, we do look at all those 
areas when we are looking at the feasibility. From our 
experience, the facilities that have done IST at their site as 
a part of our review to our knowledge have not put themselves 
at a competitive disadvantage because of IST options they have 
implemented since our rules came in place.
    Mr. Souder. Is it true, that only 45 of the 157 chemical 
companies in New Jersey are evaluated? In other words, have you 
done a risk assessment, rather than doing this with every 
company?
    Mr. Baldauf. A risk assessment, an IST evaluation were the 
45 chemical ones that were done, where 42 additional TCPA sites 
are doing the IST evaluations now, so there will be a total of 
87 IST evaluations done in the State at sites.
    Mr. Souder. How did you determine which ones were assessed?
    Mr. Baldauf. They were the high risks. They were the ones 
in our toxic catastrophe prevention program, our State version 
of EPA's 112(r) program.
    Mr. Souder. So in the State of New Jersey, which is being 
held up as a model here, about half will eventually at some 
point be targeted, because you are doing a risk assessment. You 
don't make mandatory recommendations. You don't have the 
Department of Homeland Security making an arbitrary decision 
and then letting the company appeal with the Department of 
Homeland Security as the judge and jury.
    You try to limit mandates--as a State model. However, that 
really isn't what this bill is doing. Would you like to allow 
civil lawsuits in New Jersey? Do you think that would be 
helpful?
    Mr. Baldauf. The way----
    Mr. Souder. Would you like to be sued?
    Mr. Baldauf. The way TCPA is delegated from EPA, EPA has 
that citizen suit language in it. It tracks pretty close. I am 
not a lawyer, but it seems to track pretty close. TCPA, over 
the almost, well, 20-some years we have had it, we haven't had 
an instance where the citizen suit was--we got to that point.
    Mr. Pascrell. So, in other words, we have--time is up. We 
are going to go vote.
    But, in other words, Mr. Baldauf, there has not been a 
flood of litigation in the State of New Jersey. True or false?
    Mr. Baldauf. I can speak for the TCPA program, and that is 
true. There has not been.
    Mr. Souder. Mister----
    Mr. Pascrell. Thank you. The committee has received written 
testimony----
    Mr. Souder. Mr. Chairman, when you ask a question that 
contradicts some of my testimony, may I respond?
    Mr. Pascrell. Go right ahead.
    Mr. Souder. As I understand it, you said that you had 
delegated potential lawsuits coming off of EPA. There is not a 
statute that says they can sue you directly. It is a presumed 
right; is that correct?
    Mr. Baldauf. That is correct.
    Mr. Pascrell. There hasn't been. There hasn't been, period. 
We are talking about how many years, 20?
    Mr. Baldauf. 1986.
    Mr. Souder. He doesn't have a clause in the bill that says 
that--the attorneys would have to go through their EPA-
designated transferred authority.
    Mr. Pascrell. My friend from Indiana, are you finished? 
Thank you.
    The committee has received written testimony from 
Greenpeace. Without objection, it will be added to the hearing 
record.
    Hearing no objections, so ordered.
    [The information follows:]
   Prepared Statement of Rick Hind, Legislative Director, Greenpeace
                             June 16, 2009
      homeland security regulations (cfats) are wholly inadequate
           comprehensive legislation is essential to security
     inherently safer technologies will eliminate the catastrophic 
                       consequences of an attack
``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.''--Charles O. Holliday, Jr., Chief 
Executive Officer, DuPont, June, 2007.

``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.
    Following the 9/11 attacks it was reported that 9/11 ringleader, 
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. And 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 company in the very 
same business as Kuehne, K2pure Solutions, plans to build multiple 
facilities in the United States using a new just-in-time process for 
producing chlorine gas that will not only eliminate the need for any 
bulk shipments of chlorine gas but will also limit on-site storage of 
chlorine gas to approximately 50 pounds at any one time. More details 
on their technology are 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.
    The DHS reports that they now have approximately 6,000 facilities 
in one of the four risk tiers with 140 in risk tier 1 and 680 in tier 
2. This leaves approximately 5,000 in the lower two tiers with risk 
profiles that likely put 1,000 or more people at risk. Furthermore, 
Sec. 550 gives the Secretary of the DHS full discretion in determining 
which facilities will be considered to ``present high levels of 
security risk.'' Clearly more guidance is needed in prioritizing high-
risk facilities.
   Fail to protect approximately 2,600 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.'' Once again this gap needs to be closed with 
comprehensive legislation.
   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 overreach by going 
beyond protecting common-sense security plans and vulnerabilities into 
undermining enforcement and covering up governmental incompetence or 
corporate liability.
   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.
                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% (8,343 processes);
   chlorine--18.3% (4,682 processes);
   sulfur dioxide--3% (768 processes);
   hydrogen fluoride--1.2% (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 processes & technologies 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% 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 law suits 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.
    A new North American company, K2pure Solutions, have announced 
plans to build multiple facilities in California and other States using 
a new just-in-time process for producing chlorine gas that will not 
only eliminate the need for any bulk shipments of chlorine gas but will 
also limit on-site storage of chlorine gas to approximately 50 pounds 
at any one time. More details on their technology are at: http://
www.k2pure.com/.
    Bleach and water disinfectant formulators are also 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.
                                 ______
                                 
 Q&A on Methods to Reduce the Consequences in Sec. 2111 of the June 9, 
  2009 Homeland Security Committee Discussion Draft of ``The Chemical 
                 Facility Anti-Terrorism Act of 2009''
    Question. Does the bill require ALL chemical facilities to adopt 
``methods to reduce the consequences of a terrorist attack''?
    Answer. No, this requirement is conditional and only covers the 
highest-risk (Tiers 1 & 2) facilities selected by the Department of 
Homeland Security (DHS). As of May 2009, the DHS designated 
approximately 820 facilities in the two highest risk tiers.
    The conditions for implementing safer methods and technologies are:
   They must significantly reduce the risk of death or injury;
   They must not shift risks to other U.S. facilities;
   The must be technically feasible;
   They must not impair the plant's ability to do business at 
        that location.
    Question. Will wastewater facilities be regulated and therefore be 
required to implement safer methods or technologies?
    Answer. Yes, the bill does include wastewater facilities. Only 
those water facilities that are designated in the highest risk tiers by 
the DHS would be conditionally required to implement safer methods or 
technologies.
    Question. Will this requirement burden facilities with unacceptable 
costs?
    Answer. 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. And 34% of facilities expected ``cost 
savings or improved profitability.'' Washington, DC converted its 
sewage treatment plant within 90 days after the 9/11 attacks for less 
than $0.50 per water customer per year. The bill also authorizes 
funding for 3 years to defray the cost of implementing safer methods 
and technologies.
    Question. Will this requirement result in job losses?
    Answer. No, plants that invest in the safety and security of their 
infrastructure invest in American communities and eliminate or reduce 
their: liability, regulatory costs and improve workplace safety. Major 
trade unions, such as the United Steelworkers, United Auto Workers, 
International Chemical Workers/UFCW and Communication Workers of 
America support the bill.
    Question. Will the use of safer technologies shift risks locally or 
nationally?
    Answer. No, the bill specifically prohibits the shifting of these 
risks to other facilities in the United States.
    Question. Does the bill micro-manage chemical facilities by 
requiring them to adopt a specific safer technology?
    Answer. No, each high-risk facility is free to choose the most 
appropriate technology or process for their facility.
    Question. Should Government require safer design and technologies 
to be used in the private sector?
    Answer. Yes, the Federal Aviation Administration (FAA) has required 
airplane security and safety standards for decades. The feasibility and 
cost-effectiveness are balanced against security and safety needs. 
After 9/11 all commercial airliners were required to harden cockpit 
doors and X-ray machines for airline baggage were installed at hundreds 
of airports.
    Question. Is this requirement more appropriate for environmental 
legislation than security legislation?
    Answer. No, in 2006 the GAO (GAO-06-150), concluded that 
``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.'' And a June 2006 National Academy of Sciences study endorsed 
the adoption of safer technologies as ``the most desirable solution to 
preventing chemical releases'' from a terrorist attack.
    In a February 27, 2008 statement the Association of American 
Railroads said, ``It's time for the big chemical companies to do their 
part to help protect America. They should stop manufacturing dangerous 
chemicals when safer substitutes are available. And if they won't do 
it, Congress should do it for them in the Chemical Facility Anti-
Terrorism Act of 2008.''
    Question. Can different types of chemical facilities use safer 
methods to reduce the consequences of risks at more than 6,000 
regulated facilities?
    Answer. Yes, many types of facilities are among the 284 facilities 
that have already converted since 1999. Most facilities (89 percent ) 
are ``users'' of chemicals rather than chemical makers. These plants 
can often switch to safer methods even faster than chemical makers.
                                 ______
                                 
            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.''
                            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 roll-back 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.''
        risk-based performance standards and safer technologies
    A safer technology provision was contained in the 2006 and 2008 
House Homeland Security Committee passed bills, H.R. 5695 and H.R. 5577 
respectively. Those bills 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 safe guard communities.
    The DHS has had 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 rule making, 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.
    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 one-sixth 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'' down wind 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)
    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 13 Section 112(r) 
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 its 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 two 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 and 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 since 2001 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 238 industry lobbyists that listed chemical 
security as part of their portfolio in 2007. Based on their lobby 
reports we estimate that industry lobbyists spent approximately $12 
million to lobby on chemical plant security legislation in 2007. Lobby 
organizations identified included trade associations such as the 
American Chemistry Council (ACC), American Petroleum Institute (API), 
U.S. Chamber of Commerce and companies such as Dow Chemical, DuPont, 
ExxonMobil and Halliburton and lobby firms such as Bob Moss, Ogilvy and 
Holland & Knight.
    Alternatively, member companies of the Association of American 
Railroads (AAR), such as CSX, BNSF & Norfolk Southern, are members of 
trade associations lobbying with the chemical industry, yet the AAR 
issued a statement in February 2008 saying, ``It's time for the big 
chemical companies to do their part to help protect America. They 
should stop manufacturing dangerous chemicals when safer substitutes 
are available. And if they won't do it, Congress should do it for 
them.''
                            deadly accidents
    The 1984 Union Carbide's Bhopal, India plant had the worst 
industrial accident in history. Forty tons (half a rail car) of methyl 
isocyanate (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.
   Insure 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.
    NOTE: See April 14, 2009 blue-green coalition letter to U.S. House 
of Representatives from 52 organizations in Appendix A on page 18.
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    U.S. Naval Research Laboratory, testimony before the City Council 
of Washington, DC by Dr. Jay P. Boris, Chief Scientist and Director of 
the Laboratory for Computational Physics and Fluid Dynamics, October 6, 
2003.
                          Appendix A.--Letter*
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    * Submitted by: International Chemical Workers Union Council/UFCW; 
Sierra Club United Steelworkers (USW); International Brotherhood of 
Teamsters; United Automobile Aerospace and Agricultural Implement 
Workers of America (UAW); American Federation of State, County and 
Municipal Employees (AFSCME); Communications Workers of America (CWA); 
Physicians for Social Responsibility; OMB Watch; Greenpeace; NJ Work 
Environment Council; U.S. Public Interest Research Group; Environmental 
Health Fund; Advocates for Environmental Human Rights; American 
Association on Intellectual and Developmental Disabilities; Clean New 
York; Environment America; Clean Water Action; Connecticut Coalition 
for Environmental Justice; Empire State Consumer Project; Ecology 
Center Healthy Building Network; Environmental Health Strategy Center; 
Healthy Schools Network; Environmental Justice Action Group of WNY 
Kentucky Environmental Foundation; Citizens' Environmental Coalition; 
Michigan Environmental Council; Mossville Environmental Action Now; 
Service Employees International Union (SEIU); Natural Resources Council 
of Maine; Sciencecorps; Silicon Valley Toxics Coalition; US Campaign 
for Justice in Bhopal; Friends of the Earth Commonweal; Deep South 
Center for Environmental Justice; National Refinery Reform Campaign; 
National Bucket Brigade Coalition; Center for International 
Environmental Law; Environmental Working Group; Institute for 
Children's Environmental Health International; Association of Fire 
Fighters (IAFF); Detroiters Working for Environmental Justice; Green 
Harvest Technologies; Alliance@IBM; Environmental Defense Fund Maryland 
Pesticide Network; Beyond Pesticides; Strategic Counsel on Corporate 
Accountability; Natural Resources Defense Council; Maine People's 
Alliance.
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                                                    April 14, 2009.
    Dear Representative: U.S. chemical plants remain one of the sectors 
of America's infrastructure most vulnerable to terrorist attacks. The 
Department of Homeland Security (DHS) has identified approximately 
7,000 high-risk U.S. chemical facilities. However, unless Congress 
replaces a flawed temporary law with a comprehensive chemical security 
program, millions of Americans will remain at risk.
    The statute Congress passed in 2006 temporarily authorized 
``interim'' regulations that are wholly inadequate to protect 
communities. Furthermore these rules expire on October 4, 2009 leaving 
the 111th Congress only 6 months to enact truly protective legislation. 
Congress must pass comprehensive legislation before the temporary law 
expires.
    Among the fatal flaws in the ``interim'' statute:
   It prohibits the DHS from requiring the most ironclad 
        security measures. DHS cannot require any specific ``security 
        measure,'' including the use of safer and more secure chemical 
        processes that can eliminate catastrophic hazards posed by 
        poison gas, even when cost-effective alternatives are readily 
        available.
   It explicitly exempts thousands of chemical facilities, 
        including approximately 2,650 water treatment facilities, some 
        of which put major cities at risk.
   It fails to involve plant employees in the development of 
        vulnerability assessments and security plans or protect 
        employees from excessive background checks.
    In March 2008 the House Homeland Security Committee adopted the 
``Chemical Facility Anti-Terrorism Act of 2008'' (H.R. 5577) in a 
bipartisan vote. H.R. 5577 addresses many of the flaws in the interim 
law. However, the chemical manufacturers lobby opposed it and favors 
making the interim law permanent.
    The price of failure could be staggering. According to a 2008 
Congressional Research Service review of EPA data, 100 U.S. chemical 
plants each put 1 million or more people at risk. In 2004 the Homeland 
Security Council projected that an attack on a chemical facility would 
kill 17,500 people, seriously injure 10,000 more people and send an 
additional 100,000 people to the hospital.
    The good news is that most of these hazards are preventable. Since 
2001 more than 220 chemical facilities have switched to safer and more 
secure chemicals or processes which have eliminated risks to millions 
of people. Cost-effective safer technologies are used in a wide variety 
of facilities including water treatment plants, power plants, oil 
refineries, and other manufacturers. Many facilities, however, have yet 
to adopt safer technologies. More than 7 years after the 9/11 attacks 
we need chemical security standards that put all high-risk facilities 
on an even playing field.
    President Obama raised this issue in his campaign and was a leader 
on chemical security in the Senate. In a March 2006 floor statement, he 
said, `` . . . there are other ways to reduce risk that need to be part 
of the equation. Specifically, by employing safer technologies, we can 
reduce the attractiveness of chemical plants as a target . . . Each one 
of these methods reduces the danger that chemical plants pose to our 
communities and makes them less appealing targets for terrorists.''
    To that end, Congress should pass, and the President should sign, 
chemical security legislation that at a minimum:
    (1) Reduces the consequence of an attack through the use of safer 
        and more secure chemicals and processes;
    (2) Includes all categories of facilities such as water treatment 
        plants;
    (3) Involves plant employees in developing plant security programs 
        and gives employees protection from excessive background 
        checks;
    (4) Ensures equal enforcement for chemical facilities and 
        accountability for Government;
    (5) Allows States to set more protective security standards;
    (6) Requires collaboration between the DHS, EPA and other agencies 
        to avoid regulatory redundancy, inconsistency, or gaps in 
        supply chain security.
    In the face of potentially ruinous liability from a catastrophic 
chemical release, some business leaders agree. In February 2008, the 
Association of American Railroads said, ``It's time for the big 
chemical companies to do their part to help protect America. They 
should stop manufacturing dangerous chemicals when safer substitutes 
are available. And if they won't do it, Congress should do it for 
them.'' We look forward to working with you on this critical 
legislation.
            Sincerely,
Holly Hart, United Steelworkers (USW); Rick Hind, Greenpeace; Elizabeth 
Hitchcock, U.S. Public Interest Research Group; LaMont Byrd, 
International Brotherhood of Teamsters; Tracey Easthope, Ecology 
Center; John Morawetz, International Chemical Workers Union Council/
UFCW; Ed Hopkins, Sierra Club; Kristen Welker-Hood, ScD, MSN, RN; 
Physicians for Social Responsibility; Shawnee Hoover, Friends of the 
Earth; Rick Engler, New Jersey Work Environment Council; Charles 
Loveless, American Federation of State, County, and Municipal Employees 
(AFSCME); Brian Turnbaugh, OMB Watch; Daniel Rosenberg, National 
Resources Defense Council; Judith Robinson, Environmental Health Fund; 
Kathleen A. Curtis, Clean New York, a Project of Women's Voices for the 
Earth; Elizabeth Crowe, Kentucky Environmental Foundation; Monique 
Harden, Advocates for Environmental Human Rights; Edgar Mouton, Jr., 
Mossville Environmental Action Now, Inc.; Christy Leavitt, Environment 
America; Bill Borwegen, Service Employees International Union, CTW, CLC 
(SEIU); Lynn Thorp, Clean Water Action; Aquene Freechild, U.S. Campaign 
for Justice in Bhopal; Michael Belliveau, Environmental Health Strategy 
Center; Kathleen Burns, PhD, Sciencecorps; Judy Braiman, Empire State 
Consumer Project; Barbara Warren, Citizens' Environmental Coalition; 
Claire Barnett, Healthy Schools Network, Inc.; Richard Denison, 
Environmental Defense Fund; Matt Prindiville, Natural Resources Council 
of Maine; Lauren Ornelas, Silicon Valley Toxics Coalition; Bill Walsh, 
Healthy Building Network; Mark A. Mitchell, MD, Connecticut Coalition 
for Environmental Justice; Judith M. Anderson, Environmental Justice 
Action Group of WNY; Laura Abulafia, American Association on 
Intellectual and Developmental Disabilities; Denny Larson, National 
Refinery Reform Campaign & National Bucket Brigade Coalition; Daryl 
Ditz, Center for International Environmental Law; Sandra Schubert, JD, 
MA, Environmental Working Group; Elise Miller, M.Ed., Institute for 
Children's Environmental Health; Chris Kolb, President, Michigan 
Environmental Council; Barry Kasinitz, Director of Governmental 
Affairs, International Association of Fire Fighters; Dave LeGrande, 
Communications Workers of America (CWA); Alan Reuther, Legislative 
Director, International Union, United Automobile Aerospace and 
Agricultural Implement Workers of America (UAW); Sharyle Patton, 
Commonweal; Beverly H. Wright, PhD, Deep South Center for Environmental 
Justice, Inc.; Donele Wilkins, Detroiters Working for Environmental 
Justice; David Levine, Green Harvest Technologies; Rick White, 
Alliance@IBM; Ruth Berlin, LCSW-C, Maryland Pesticide Network; Jay 
Feldman, Beyond Pesticides; Sanford Lewis, Attorney, Strategic Counsel 
on Corporate Accountability; Ryan Tapping-Spitz, Maine People's 
Alliance.

    Mr. Pascrell. I thank all our witnesses for their very 
valuable testimony and the Members for all of their questions.
    I would remind our second panel of witnesses that the 
Members of this committee may have additional questions for 
you. We will ask you to respond expeditiously in writing to 
those questions.
    There being no further business, the committee stands 
adjourned. Thank you very much.
    [Whereupon, at 12:54 p.m., the committee was adjourned.]

                            A P P E N D I X

                              ----------                              

 Questions From Honorable Christopher P. Carney for Philip Reitinger, 
 Deputy Under Secretary, National Protection and Programs Directorate, 
     Department of Homeland Security and Sue Armstrong, Director, 
 Infrastructure Security Compliance Division, Office of Infrastructure 
              Protection, Department of Homeland Security
    Question 1. As I understand, under the present regulations and 
tiering structure, about 10% of underground natural gas reservoirs are 
subject to additional CFATS security requirements because of their 
excess amounts of methane (primary component in natural gas). TSA and 
PHMSA already recommend and monitor security practices at these 
underground storage sites. As you can imagine, this presently leads, 
and will to continue to lead, to a lot of redundant and conflicting 
security requirements for these underground gas reservoirs who must 
comply with TSA, PHMSA, and CFATS. Practically speaking, can you 
explain how implementation of the CFATS regulation of the natural gas 
is different from TSA's and PHMSA's security requirements of the 
facilities which store the natural gas? Especially, when the only way 
you can get to the natural gas stored 2,000 feet below surface is 
through the pipelines which are already governed by TSA and PHMSA?
    Question 2. Do you believe these underground storage reservoirs 
were a part of the intended purpose of CFATS, which is to ``enhance 
security and protect against acts of terrorism against chemical 
facilities''?
    Answer. The preliminary determination to include or not include a 
facility in the group of high-risk facilities is made based on 
information submitted to the Department by the facility itself using a 
data-collection instrument called a ``Top-Screen.'' Facilities that are 
preliminarily deemed high-risk based on Top-Screens are required to 
provide a more detailed assessment using an instrument called the 
Security Vulnerability Assessment (SVA) and, based on that more 
detailed information, may or may not be finally determined to be ``high 
risk.'' Only the final high-risk facilities are then required to comply 
with the more substantive requirements of CFATS (i.e., to submit Site 
Security Plans meeting the CFATS risk-based performance standards).
    Using this process, a small number of natural gas underground 
storage facilities have been deemed ``high risk'' and are thus 
regulated under CFATS. In general, there are two reasons why such a 
facility would remain inside the regulatory scope of CFATS after 
analysis of Top-Screen and SVA data:
   The facility has surface extraction points for methane (a 
        chemical of interest under CFATS) that are close enough to a 
        civilian population and/or critical infrastructure that 
        radiated heat from burning methane being released at the 
        extraction point would pose a clear danger; or
   The facility has other chemicals of interest onsite, not 
        stored underground, that pose a clear danger to the civilian 
        population or critical infrastructure or both.
    To date, we have not included any underground natural gas storage 
facility in the CFATS regulatory community for reasons of economic 
criticality, but we do intend to examine them for economic criticality 
in the near future and may determine that some underground natural gas 
storage facilities are high-risk based on their economic criticality.
    Under CFATS, underground natural gas storage facilities that are 
finally determined to be high-risk are required to include security 
measures in their Site Security Plans that address the 18 risk-based 
performance standards under CFATS, such as perimeter security, 
cybersecurity, and personnel security.
    Some degree of regulatory overlap may be unavoidable where Congress 
authorizes or directs more than one agency to regulate various aspects 
of a given industry or function--for example, the Department of 
Transportation regulates some aspects of chemicals in transit, as do 
the U.S. Coast Guard and TSA under their respective statutory 
authorities. Such overlapping programs do not necessarily present a 
significant concern, provided that the relevant agencies reasonably 
exercise their respective authorities in such a way as to avoid or 
minimize potentially inconsistent or duplicative requirements. In this 
case, the preamble to the CFATS final regulation expressly stated that 
DHS does not intend CFATS to impede the authorities of other Federal 
agencies and that DHS will work closely with other Federal agencies to 
ensure that regulated facilities can comply with applicable regulations 
while minimizing any duplication
    Moreover, with respect to regulation of underground natural gas 
facilities, there are legal and practical differences between CFATS and 
other agencies' regulatory authorities. CFATS is designed to require 
high-risk facilities to meet security performance standards. TSA, on 
the other hand, is responsible for the security and functionality of 
the Nation's transportation systems, not for fixed chemical 
facilities--although TSA does provide some security advice to pipeline 
operators. Pipeline and Hazardous Materials Safety Administration 
(PHMSA) supervises and regulates the safety and integrity of the 
National's pipeline infrastructure including certain storage facilities 
and tanks and while this can include surface piping at underground gas 
storage facilities, PHMSA does not currently regulate underground 
starage and has only a limited role in security. In providing authority 
to DHS to regulate the security practices of high-risk chemical 
facilities, Congress recognized the need for regulation of many 
different types of facilities possessing potentially dangerous 
chemicals. Congress was aware that some of those facilities are or 
could be regulated by other agencies and expressly exempted certain 
facilities from regulation under CFATS (e.g., facilities regulated by 
the U.S. Coast Guard under the Maritime Transportation Security Act, 
facilities regulated the Nuclear Regulatory Commission, facilities 
owned or operated by the Departments of Defense or Energy). Congress 
did not, however, exempt natural gas storage facilities regulated by 
TSA or PHMSA. DHS has concluded that certain natural gas storage 
facilities should be regulated under the CFATS program due to the 
potentially high-risk they pose from possession of methane or other 
chemicals of interest. Of course, DHS also recognizes the need to 
coordinate our activities with all of our components (NPPD, TSA) and 
other Federal agencies such as PHMSA in order to avoid any 
inconsistencies and to eliminate or minimize any potentially 
unnecessary or duplicative requirements.

                                 
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