```

[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

 
PREVENTING CHEMICAL TERRORISM: BUILDING A FOUNDATION OF SECURITY AT OUR 

                      NATION'S CHEMICAL FACILITIES

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

                                HEARING

                               before the

                     SUBCOMMITTEE ON CYBERSECURITY,

                       INFRASTRUCTURE PROTECTION,

                       AND SECURITY TECHNOLOGIES,

                                 of the

                     COMMITTEE ON HOMELAND SECURITY

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 11, 2011

                               __________

                            Serial No. 112-3

                               __________

       Printed for the use of the Committee on Homeland Security
                                     

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     

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

                               __________

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                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Daniel E. Lungren, California        Loretta Sanchez, California
Mike Rogers, Alabama                 Jane Harman, California
Michael T. McCaul, Texas             Sheila Jackson Lee, Texas
Gus M. Bilirakis, Florida            Henry Cuellar, Texas
Paul C. Broun, Georgia               Yvette D. Clarke, New York
Candice S. Miller, Michigan          Laura Richardson, California
Tim Walberg, Michigan                Donna M. Christensen, U.S. Virgin 
Chip Cravaack, Minnesota                 Islands
Joe Walsh, Illinois                  Danny K. Davis, Illinois
Patrick Meehan, Pennsylvania         Brian Higgins, New York
Ben Quayle, Arizona                  Jackie Speier, California
Scott Rigell, Virginia               Cedric L. Richmond, Louisiana
Billy Long, Missouri                 Hansen Clarke, Michigan
Jeff Duncan, South Carolina          William R. Keating, Massachusetts
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Mo Brooks, Alabama
            Michael J. Russell, Staff Director/Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director

                                 ------                                

SUBCOMMITTEE ON CYBERSECURITY, INFRASTRUCTURE PROTECTION, AND SECURITY 
                              TECHNOLOGIES

                Daniel E. Lungren, California, Chairman
Michael T. McCaul, Texas             Yvette D. Clarke, New York
Tim Walberg, Michigan, Vice Chair    Laura Richardson, California
Patrick Meehan, Pennsylvania         Cedric L. Richmond, Louisiana
Billy Long, Missouri                 William R. Keating, Massachusetts
Tom Marino, Pennsylvania             Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex              (Ex Officio)
    Officio)
                     Coley O'Brien, Staff Director
                    Alan Carroll, Subcommittee Clerk
             Dr. Chris Beck, Minority Subcommittee Director

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California, and Chairman, Subcommittee on 
  Cybersecurity, Infrastructure Protection, and Security 
  Technologies...................................................     1
The Honorable Yvette D. Clark, a Representative in Congress From 
  the State of New York, and Ranking Member, Subcommittee on 
  Cybersecurity, Infrastructure Protection, and Security 
  Technologies...................................................    14
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................    15
The Honorable Laura Richardson, a Representative in Congress From 
  the State of California:
  Prepared Statement.............................................    16

                               Witnesses

Mr. Rand Beers, Under Secretary, National Protection and Programs 
  Directorate, Department of Homeland Security:
  Oral Statement.................................................    17
  Prepared Statement.............................................    18
Mr. Timothy J. Scott, Chief Security Officer, The Dow Chemical 
  Company, Testifying on Behalf of The American Chemistry 
  Council:
  Oral Statement.................................................    34
  Prepared Statement.............................................    36
Dr. M. Sam Mannan, PhD, PE, CSP, Regents Professor and Director, 
  Mary Kay O'Connor Process Safety Center, Texas A&M University 
  System:
  Oral Statement.................................................    37
  Prepared Statement.............................................    39
Mr. George S. Hawkins, General Manager, District of Columbia 
  Water and Sewer Authority:
  Oral Statement.................................................    44
  Prepared Statement.............................................    46

                             For the Record

The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California, and Chairman, Subcommittee on 
  Cybersecurity, Infrastructure Protection, and Security 
  Technologies:
  Letter From the Society of Chemical Manufacturers and 
    Affiliates (SOCMA)...........................................     4
  Statement of the National Petrochemical & Refiners Association 
    (NPRA).......................................................    11

                                Appendix

Question From Ranking Member Yvette D. Clarke for Timonthy J. 
  Scott..........................................................    61

PREVENTING CHEMICAL TERRORISM: BUILDING A FOUNDATION OF SECURITY AT OUR 
                      NATION'S CHEMICAL FACILITIES

                              ----------                              

                       Friday, February 11, 2011

             U.S. House of Representatives,
                    Committee on Homeland Security,
 Subcommittee on Cybersecurity, Infrastructure Protection, 
                                 and Security Technologies,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:06 a.m., in 
Room 311, Cannon House Office Building, Hon. Daniel Lungren 
[Chairman of the subcommittee] presiding.
    Present: Representatives Lungren, Walberg, Meehan, Long, 
Marino, Clarke of New York, Thompson, Richardson, and Richmond.
    Also present: Representative Jackson Lee.
    Mr. Lungren [presiding]. Even though the time has come, we 
just completed a classified briefing over at the skiff, over at 
the visitor center. Ms. Clarke was over there, and she is on 
her way. I would like to wait a few minutes before we start.
    The Committee on Homeland Security Subcommittee on 
Cybersecurity, Infrastructure Protection, and Security 
Technologies will come to order. The subcommittee is meeting 
today to receive testimony from two panels. The first panel 
will include testimony from the Honorable Rand Beers, Under 
Secretary of the National Protection and Programs Directorate 
at the Department of Homeland Security.
    Panel two will consist of testimony from Mr. Timothy Scott, 
Chief Security Office of the Dow Chemical Company, Mr. Sam 
Mannan, a Regents Professor and Director of the Mary Kay 
O'Connor Process Safety Center, and Mr. George Hawkins, General 
Manager, District of Columbia Water and Sewer Authority.
    First, I would like to welcome our witnesses to our first 
subcommittee hearing under the new Republican majority. I would 
like to also thank the Ranking Member of the full committee Mr. 
Thompson and the Ranking Member of the subcommittee Ms. Clarke 
for the bipartisan working relationship we enjoyed in the 111th 
Congress in this subcommittee. We will continue to endeavor 
that we work in the same bipartisan spirit in the 112th 
Congress.
    I am very happy to welcome my new Republican colleagues to 
our subcommittee, Mr. Meehan and Mr. Marino. We hopefully will 
be joined later by Mr. Walberg and Mr. Long. We have a veteran 
of our subcommittee, Mr. McCaul as well.
    Our subcommittee will be examining many critical issues in 
this Congress from the physical and cyber threats to our 
critical infrastructure to radiologic and nuclear and 
biological threats to our cities. We intend to be aggressive in 
our oversight of the Department and its many security programs, 
especially those that provide more substantial security 
improvement for the amount of taxpayer dollars spent.
    What I mean by that is we are suffering from difficult 
budget times. No department and no office, no part of the 
Federal Government is going to be immune from that. We are 
going to have to look with an even more careful eye at the 
effectiveness of various programs. So it is going to be a 
matter of setting priorities. We hope that we will work with 
the Department to be able to set the correct ones.
    One of those critical issues within our jurisdiction is 
chemical security. In many ways, chemicals underpin our way of 
life in our 21st Century economy. They employ over 800,000 
workers. They produce 19 percent of the world's chemical 
products.
    Because of this critical economic role of the chemical 
industry and the danger of these chemicals for facility workers 
and surrounding populations due to the terrorist threat, 
securing chemical facilities is a top priority for our 
committee.
    My interest in this issue dates back to the time when I was 
Chairman of the predecessor subcommittee and introduced the 
Chemical Security Anti-Terrorism Act of 2006. At that time, the 
chemical industry was operating under a voluntary security 
regime, which left many security gaps because of the 
nonparticipating facilities.
    So in order to address those security gaps, I introduced my 
bill, which would have established a risk-based performance 
approach targeting high-risk chemical facilities. While the 
bill did not finally pass the entire House, it did provide the 
model used by the administration and House Appropriations to 
craft a comprised National risk-based security plan for all 
high-risk chemical facilities.
    That was Section 550 of the Homeland Security 
Appropriations Act of 2007. That was done in the closing weeks 
of the 109th Congress.
    The authority to regulate chemical facility security is 
historic and critically important. Dangerous chemicals listed 
in Appendix A as chemicals of interest, or COI, when stored or 
processed above threshold quantities pose serious threats to 
facility workers and neighboring populations. They are also 
attractive terrorist targets.
    So we need to bolster security of chemical facilities and 
the best way to do that is to allow the CFATS, that is the 
Chemical Facility Anti-Terrorism program, to be fully 
implemented before any significant program changes are enacted. 
In our judgment the best way to strengthen the foundation of 
security that CFATS is building at our Nation's chemical 
facilities is to provide a long-term extension of the CFATS 
authority.
    This will provide our chemical facility partners, and we 
have to be partners in this regard if we are going to be 
successful, those who are spending collectively millions of 
dollars implementing new security measures. We have to provide 
them with the assurance that the rules and requirements won't 
change from year to year as the CFATS program is being 
implemented.
    That is not to say we won't make changes as we find they 
are necessary, but rather we will not look at a complete 
overhaul of the regime. This will also provide the Department 
with a certainty that the Congress believes chemical security 
will be a priority for years to come as they continue to 
implement, evolve, and invest in the CFATS program.
    Another controversial issue that has emerged during 
chemical security debate centers on the understanding of 
inherently safe technology, sometimes called IST. I just want 
to make it clear, I don't support mandating a single solution 
security approach. IST, from the testimony we have had in the 
past, isn't something you can buy off the shelf or simply plug 
in.
    It is a concept; not a very well-understood concept at 
that. It is a very complex process or series of procedures that 
should not be mandated at least according to the testimony of 
the three non-governmental witnesses today. There is no--at 
least I have not been able to find a single definition of what 
IST is because it differs so greatly from chemical to chemical 
and from facility to facility.
    I do support, and I know the administration generally 
supports, risk-based security solutions including layered 
approaches as part of that that reduce identified 
vulnerabilities and would oppose mandating specific security 
measures.
    Requiring a specific type of security measure in many ways 
goes against the very principles of risk-informed performance-
based approaches. CFATS is building a strong chemical security 
foundation by enabling multiple risk-based solutions and 
flexibility for facilities to select the security approaches 
that best fit their unique security needs while still meeting 
the risk-based performance standards established by DHS.
    The original bipartisan Congressional goal of these 
regulations was to strike the proper balance between improving 
security at our high-risk chemical facilities while preserving 
the economic vitality of this critical sector.
    While CFATS we would all agree still has a long way to go, 
I believe that the CFATS authority enabling the regulatory 
structure and use today is providing our Nation the best 
opportunity to meet that Congressional goal.
    So in pursuit of that, I would like to thank our witnesses 
for appearing today. I would look forward to hearing your 
testimony. I would ask unanimous consent to insert into the 
record the testimony from Lawrence Sloan, President and CEO of 
the Society of Chemical Manufacturers and Affiliates and 
testimony from the National Petrochemical and Refiners 
Association. Without objection, that will occur.
    [The information follows:]
     Letter Submitted For the Record by Chairman Daniel E. Lungren
                                                 February 11, 2011.
The Honorable Dan Lungren,
Chairman, Subcommittee on Cybersecurity, Infrastructure Protection, and 
        Security Technologies, H2-176, Ford House Office Building, 
        Washington, DC 20515.
The Honorable Yvette Clarke,
Ranking Member, Subcommittee on Cybersecurity, Infrastructure 
        Protection, and Security Technologies, H2-117, Ford House 
        Office Building, Washington, DC 20515.
Re: Subcommittee Hearing on ``Preventing Chemical Terrorism: Building A 
Foundation of Security At Our Nation's Chemical Facilities''

    Dear Chairman Lungren and Ranking Member Thompson: On behalf of the 
members of the Society of Chemical Manufacturers and Affiliates 
(SOCMA), I would like to share with you our perspective on the subject 
of your hearing this week, the Chemical Facility Anti-Terrorism 
Standards (CFATS).
    Working in a bipartisan manner, Congress enacted a strong chemical 
security regulatory program in late 2006. It was the sustained effort 
over a 2-year period by the House Homeland Security Committee and the 
Senate Homeland Security and Government Affairs Committee that drove 
that legislation. Thanks to this leadership, the U.S. Department of 
Homeland Security (DHS) was finally able--6 years after 9/11--to 
initiate a regulatory program to assure the security of the Nation's 
vital chemical sector. DHS and regulated facilities are still deep in 
the middle of implementing these Chemical Facility Anti-Terrorism 
Standards (CFATS) in a focused, cooperative manner. On behalf of the 
most innovative component of the chemical sector, SOCMA appreciates the 
interest that the subcommittee is showing in the CFATS program by 
holding this hearing so early in the 112th Congress.
    SOCMA strongly supports DHS's current CFATS program. This demanding 
program is now requiring over almost 5,000 chemical facilities Nation-
wide to develop and deploy meaningful security enhancements. Equally 
important, it has led over 2,000 facilities to voluntarily take steps 
reduce their risk profile sufficiently that they no longer warrant 
regulation under the program. This performance-based regulation 
protects facilities against attack without impairing the industry's 
ability to remain innovative and maintains some of the Nation's 
highest-paid jobs in the manufacturing sector.
    While CFATS has had bumps in the road like any other regulatory 
program, it is working well and making the Nation safer for all 
Americans. Congress can best assure the program's success and continued 
forward momentum by passing a 3- to 5-year extension of the current 
authorization without making any other changes.
      i. socma and the current state of chemical facility security
A. SOCMA
    SOCMA is the leading trade association representing the batch, 
custom, and specialty chemical industry. SOCMA's nearly 300 member 
companies employ more than 100,000 workers across the country and 
produce some 50,000 products--valued at $60 billion annually--that make 
our standard of living possible. From pharmaceuticals to cosmetics, 
soaps to plastics, and all manner of industrial and construction 
products, SOCMA members make materials that save lives, make our food 
supply safe and abundant, and enable the manufacture of literally 
thousands of other products. Over 80% of SOCMA's active members are 
small businesses.
    ChemStewards is SOCMA's flagship environmental, health, safety, 
and security (EHS&S) continuous performance improvement program. It was 
created to meet the unique needs of the batch, custom, and specialty 
chemical industry, and reflects the industry's commitment to reducing 
the environmental footprint left by members' facilities. As a mandatory 
requirement for SOCMA members engaged in the manufacturing or handling 
of synthetic and organic chemicals, ChemStewards is helping 
participants reach for superior EHS&S performance.
B. SOCMA's Security Achievements To Date
    Maintaining the security of our facilities has always been a 
priority for SOCMA members, and was so before September 11. After the 
tragic events of 9/11, SOCMA members did not wait for new Government 
regulations before researching, investing in, and implementing 
additional and far-reaching facility security measures to address these 
new threats. Under the ChemStewards initiative, SOCMA members were 
required to conduct security vulnerability assessments (SVAs) and to 
implement security measures.
    SOCMA designed an SVA methodology specifically for batch, custom, 
and specialty chemical facilities that was approved by the Center for 
Chemical Process Safety (CCPS) as meeting its requirements for an 
effective methodology. SOCMA members have spent billions of dollars and 
have devoted countless man-hours to secure their facilities and 
operations. These investments will naturally continue for the 
foreseeable future.
    Many (though by no means all) SOCMA member company facilities are 
encompassed by the CFATS program. These facilities have completed their 
Site Security Plans (SSPs) and are being (or will soon be) inspected by 
DHS to verify the adequacy of those plans and their conformance to 
them. SOCMA is actively engaged with DHS to accelerate and continuously 
improve the implementation of the CFATS program, collaborating on new 
approaches to personnel surety and Alternative Security Programs.
    Many of our member companies' other facilities comply with the 
Coast Guard's facility security requirements under the Maritime 
Transportation Security Act (MTSA).
    Looking well beyond regulatory requirements, our members have also 
partnered with DHS on many important voluntary security initiatives and 
programs through the years, including the Risk Assessment Methodology 
for Critical Asset Protection (RAMCAP), the Buffer Zone Protection 
Plans, and the Homeland Security Information Network (HSIN). SOCMA is a 
founding member of the Chemical Sector Coordinating Council, which has 
served as a model for how critical infrastructure sectors should work 
together and with DHS.
    SOCMA also works jointly with DHS in organizing a free annual 
Chemical Sector Security Summit and Expo that brings together 
Government representatives, chemical security experts, and industry 
professionals to share knowledge and best practices.
    Through the Sector Council and other avenues, we and our members 
have developed close and open working relationships with DHS and other 
Federal agencies, and with State and local governments, to exchange 
information and coordinate roles in maintaining the security of our 
critical chemical facility infrastructure.
C. Preserving the Progress Under CFATS
    While we will leave a detailed progress report on the CFATS program 
to DHS, SOCMA wants to emphasize that we regard the program thus far as 
a success. Due to the outstanding cooperation of the chemical sector, 
there has been 100% compliance with the requirements to submit Top-
Screens, SVAs, and SSPs--DHS has not yet had to institute a single 
administrative penalty action to enforce compliance. And as noted 
earlier, over 2,000 facilities--over a quarter of the preliminarily 
tiered facilities--have changed processes or inventories in ways that 
have enabled them to screen out of the program. Thus, as predicted, 
CFATS is driving facilities to reduce inherent hazards, where in their 
expert judgment doing so is in fact safer, does not transfer risk to 
some other point in the supply chain, and makes economic sense.
    To fully gauge the effectiveness of the CFATS program, Congress 
should allow it to be fully implemented--for all tiered facilities to 
fully come into compliance. Completing the program's implementation 
from start to finish would provide DHS and chemical companies the 
ability to assess the overall efficacy of CFATS, identify its areas of 
strength and weakness, and subsequently make (or recommend to Congress) 
any necessary improvements.
    Conversely, the need for annual reauthorization of the program has 
created uncertainty for the chemical industry, which is making large 
financial investments in tools and technology in order to comply with 
the current CFATS standards. Without the assurance of a long-term 
authorization of chemical security regulations, companies run a risk of 
investing in costly activities today that might not satisfy regulatory 
standards tomorrow. With statutory authority for CFATS set to expire 
March 4 of this year, Congress must act now to ensure continuation of 
the current standards and reauthorize the underlying statute for 
another 3 to 5 years.
                  ii. lessons from the 111th congress
    In 2009, Senate Homeland Security and Government Affairs Committee 
Ranking Member Collins introduced S. 2996, the ``Continuing Chemical 
Facilities Antiterrorism Security Act of 2010,'' together with Senators 
Pryor, Voinovich, and Landrieu. This bill would have reauthorized the 
CFATS program until 2015, thus allowing DHS and facilities to remain 
focused on successfully implementing that program as quickly as 
possible. SOCMA strongly supported Senator Collins' legislation.
    The House took a very different approach than the Senate, passing a 
largely partisan bill (H.R. 2868) by a vote of 230-193 with no support 
from then-minority Republican members--not a single vote in favor. That 
bill included provisions that are fundamentally unwise and potentially 
counterproductive to our shared goal of preventing terrorist incidents 
at chemical facilities.
    H.R. 2868 was approved despite testimony from numerous witnesses 
who shared strong concerns regarding these provisions, particularly a 
requirement that facilities implement so-called ``inherently safer 
technology'' (IST) in their processes. This mandate would have shifted 
DHS's focus from securing our industry against terrorism to conducting 
engineering and chemistry assessments, while potentially phasing out 
legitimate products that improve our daily lives and enhance our 
safety. The House-approved bill would have jeopardized the progress 
that industry and DHS have made together thus far under CFATS.
    The Senate Homeland Security and Governmental Affairs Committee 
shared our industry's concern. During a markup of H.R. 2868, the bill's 
text was substituted with Ranking Member Susan Collins' chemical 
security legislation, S. 2996, which did not include the controversial 
IST provision. The committee approved the substituted language by 
unanimous consent, but the full Senate did not have the opportunity to 
vote on it by the end of the last Congress. In the end, Congress 
extended authorization for the current CFATS program via the continuing 
resolutions that have funded the Government for this fiscal year.
         iii. mandatory ist is an inherently risky proposition
    SOCMA vehemently believes that this Congress should enact 
legislation like that reported last year in the Senate, thus extending 
the CFATS program for 3 to 5 years. Congress should not devote any 
further time to discussing the discredited concept of mandatory IST. 
The balance of this statement explains in significant detail why 
mandatory IST would be so unwise.
    An IST mandate such as that contained in last year's House bill 
would have amended Section 2111 of the CFATS statute to require Tier 1 
and 2 facilities to implement ``methods to reduce the consequences of a 
terrorist attack''--i.e., IST--whenever DHS made specified findings 
about risk reduction and technical and economic feasibility. However 
common-sense such a mandate might appear on the surface, it is 
fundamentally a bad idea in the security context. Inherent safety is a 
superficially simple but truthfully very complex concept, and one that 
is inherently unsuited to regulation. Any IST mandate is bound to 
create situations that will actually increase or transfer overall 
risks. It would also wreak economic havoc on regulated facilities, 
notwithstanding the findings DHS would have to make. Makers of active 
pharmaceutical ingredients, common fuels, and other Federally-regulated 
substances would be most at risk of such economic damage.
     a. what inherent safety really is and why mandating it is not 
                           inherently better
    First and foremost, it is important to clarify a common 
misunderstanding about inherent safety. Quite simply, IST is a process-
related engineering concept, not a security one. It is premised on the 
belief that, if a particular chemical process hazard can be reduced, 
the overall risk associated with that process will also be reduced. In 
its simplicity, it is an elegant concept, but the reality is almost 
never that simple. A reduction in hazard will reduce overall risk if, 
and only if, that hazard is not displaced to another time or location, 
or result in the creation of some new hazard.
    Inherent safety is only successful if the sum total of all risks 
associated with a process life cycle is reduced. This is rarely a 
simple calculation, and to some extent it is an irreducibly subjective 
one (for example, a substitute chemical that may reduce explosion risks 
may also pose chronic health risks).
    The calculation becomes even more difficult when it is being done 
not solely for reasons of process safety (where accident probabilities 
can be estimated with some degree of confidence) but also for reasons 
of security (where the probability of terrorist attack is highly 
uncertain but certainly low). There is no agreed-upon methodology to 
measure whether one process is inherently safer than another process--
something DHS's Science & Technology Directorate is attempting to 
address--in a multi-million dollar, multi-year process that may or may 
not succeed. This is why the world's foremost experts in IST and 
chemical engineering consistently recommend against regulating inherent 
safety for security purposes.
    Here are several examples of how difficult it can be to reduce 
overall risk when attempting to reduce hazard:
            Eliminating the use of a hazardous catalyst
    A chemical company wants to eliminate the use of a hazardous 
catalyst, which is typically used in small amounts. The catalyst serves 
as a booster to start a chemical reaction to make a building block for 
a drug used to treat cancer. Catalysts tend to be hazardous by nature, 
which reduces the number of available alternatives. The only way the 
company can initiate the reaction without using a hazardous catalyst is 
to increase the temperature and pressure of the system. The overall 
risk of the new system, aggravated by increasing the temperature and 
pressure, may actually be greater than the risk associated with use of 
the catalyst, because catalysts are typically used in small amounts and 
the likelihood of an accident is remote.
            Reducing the amount of a chemical stored on-site
    A manufacturing plant is considering a reduction in the volume of a 
particular chemical stored on-site. The chemical is used to manufacture 
a critical nylon additive, which is sold to another company and used to 
make seat belts stronger. Because it is a critical component for nylon 
strength and seatbelt production cannot be disrupted, the production 
schedule cannot change. If the amount stored on-site is reduced, the 
only way to maintain the production schedule is to increase the number 
of shipments to the site. This leads to more deliveries (an increase in 
transportation risk) and more transfers of chemical from one container 
to another (an increase in transfer risk). Economic risks are also 
increased since there is now a greater chance that production could be 
disrupted by a late shipment.
            How location and individual circumstance affect risk 
                    perception
    It is difficult to describe a scenario in which moving a hazard 
does not result in a simple transfer of risk from one location to 
another. For example, location can highlight different risk 
perspectives, such as the use of chlorine, a hazardous gas that comes 
in various types of containers. A commonly used example compares the 
inherent safety of a rail car, which typically holds up to 90 tons, 
versus storage in one-ton cylinders. Residents near the facility would 
probably view the one-ton cylinder as inherently safer than a rail car.
    On the other hand, workers who have to connect and disconnect the 
cylinders 90 times, instead of just once for the rail car, would 
probably consider the rail car inherently safer.
B. IST's Impact on Pharmaceuticals and Microelectronics
    One of SOCMA's greatest concerns with IST is the real possibility 
that it will negatively restrict the production of active 
pharmaceutical ingredients (APIs), many of the key raw materials of 
which are included on DHS's Appendix A of covered chemicals. APIs are 
used in prescription and generic drugs, life-saving vaccines, and over-
the-counter medicines. They are thoroughly regulated by the FDA and 
must meet demanding quality and purity requirements. Substituting 
chemicals or processes used for the production of APIs would likely 
violate the conditions of their FDA approvals. Requiring IST could 
delay clinical trials while new replacement chemicals are identified or 
invented, and would force API manufacturers and their customer drug 
manufacturers to reapply for FDA approval of their products because of 
the significant change in the manufacturing. The lengthy 1- to 4-year 
approval timeline for a new or equivalent replacement chemical would be 
a high price to pay for American consumers, many of whom rely on ready 
access to pharmaceuticals. To meet continuing consumer demand, API 
production would likely shift to foreign countries, where the FDA is 
less able to monitor conformance to quality standards.
    Many SOCMA members' products are also vital to the manufacture of 
microelectronics. Below, we offer several examples, provided by SOCMA 
members, of how IST could cripple the pharmaceutical and 
microelectronics industries.
            Lifesaving Antibiotics: Company A
    Company A is a minority-owned small business regulated by DHS under 
CFATS. It produces an active pharmaceutical ingredient critical to 
specific antibiotics used in the treatment of a life-threatening 
bacterial infection. For this purpose, the company is also regulated by 
the FDA. Since the product's specifications are likely not to be 
attainable via any chemical substitution or altered process, if a 
``safer'' manufacturing process alternative was mandated, the company 
would likely be forced to discontinue production, lay off workers and 
increase our Nation's vulnerability to bacteriological threats. The 
impact of a mandatory alternative would thus be swift and direct.
            Common Pain Reliever: Company B
    Company B manufactures the active pharmaceutical ingredient 
Ibuprofen. Ibuprofen is a non-steroidal anti-inflammatory drug (NSAID) 
used to treat pain and relieves symptoms of arthritis such as 
inflammation, swelling, stiffness, and joint pain. It is one of the 
world's most successful and widely-used pain relievers, and is listed 
on the World Health Organization's model list of medicines.\1\ Changing 
the raw materials, and consequently the process, used to manufacture it 
presents a risk to public health and a substantial cost for re-
qualification from a technical, regulatory, and potentially clinical 
perspective.
---------------------------------------------------------------------------
    \1\ World Health Organization, WHO Model List of Essential 
Medicines (March 2005).
---------------------------------------------------------------------------
    Company B's 32-year old process to manufacture Ibuprofen bulk 
active is well characterized and controlled, and consistently makes a 
safe and efficacious product. The process-characteristic impurity 
profile, specified under the prevailing USP and European Pharmacopoeia 
compendia, is proven to have no impact to public health by its use by 
millions of people worldwide. The costs derived from IST, if it 
impaired production quantities or product quality, would ultimately be 
felt by consumers.
            Microelectronics: Company C
    Company C manufactures two Appendix A chemicals of interest 
targeted by industry critics. First, Company C uses small amounts of 
hydrochloric acid (HCl) in a very high purity, aqueous form (37%) to 
manufacture a product that represents almost half of the company's 
revenue worldwide ($30 million/yr). The product is used in the 
microelectronics industry to manufacture integrated circuits and LCD 
displays. If HCl were not available, Company C would be unable to make 
its largest product, resulting in at least a 50% reduction in 
workforce, which would equate to losing 60 jobs. If the company chose 
to continue the business, alternatives would have to be developed and 
implemented to continue manufacture of those products, which could 
easily require billions of dollars of research, development, and 
implementation, resources that small companies like Company C, which 
include many of SOCMA's members, do not have. Additionally, Company C 
uses HCl to protect the environment: Its use brings the pH of the 
company's wastewater into the range dictated by its wastewater permit.
    The company also uses small volume products using aqueous (49%) 
hydrofluoric acid (HF) that are sold into the microelectronics 
industry. Customers of Company C that need HF for their products 
require Company C to undergo specific certification standards as a 
product supplier. If Company C was forced to use a substitute, it would 
immediately be out of compliance with its customers' product standards, 
which (obviously) would negatively impact Company C's business. In some 
cases, the HF is being used as a safer alternative to replace 
hydroxylamine (HA), the use of which has been reduced due to the 
multiple explosions at HA manufacturing facilities. In some cases, 
anhydrous HF may be necessary as water may be incompatible with the 
manufacturing process. If manufacturers of microelectronics were denied 
a supply of HF, there would be a negative consequence to the domestic 
manufacturing of integrated circuits and LCD displays.
    The Energy & Commerce Committee's 2009 report on H.R. 2868 
attempted to assuage concerns like those just discussed, opining that, 
where mandated IST ``could result in a product that is less effective 
or less available to those who need it,'' or ``forced the company to 
seek new regulatory approvals (such as from the Food and Drug 
Administration) that could take years to obtain, that could mean that 
the covered facility could not continue its business'' and ``the 
Department must consider such unintended consequences.''\2\ 
Respectfully, SOCMA's concerns cannot be alleviated by such non-binding 
language. Not only would DHS not be required to follow it, but DHS 
would also be free to conclude that the amount of delay required to get 
an FDA approval, or the degree to which the effectiveness of a product 
would be diminished, would not mean that the facility could not 
continue its business. After all, a sufficiently large and flexible 
facility might well be able to stay in business even though it has lost 
an important product or market. But this subcommittee should not be 
encouraging the destruction of products and markets for questionable 
benefits in this economy (or any other).
---------------------------------------------------------------------------
    \2\ House Committee on Energy and Commerce, Report No. 111-205, pt. 
2, at 48 (Oct. 23, 2009).
---------------------------------------------------------------------------
C. IST's Impact on Jobs
    It goes without saying that process or product changes will have a 
negative impact on the jobs at facilities forced to make these changes. 
There are multiple pressures on SOCMA's members, not just whether there 
is a market that can afford to purchase what they produce or whether 
they can compete with the lower wages and resource costs in foreign 
countries. Chemical manufacturers are required to comply with many 
State, local, and Federal regulations. Regulatory requirements cost 
money, money that is used to hire workers, train them, to innovate, 
develop new products, and to provide health care to them. The chemical 
industry is one of the most regulated industries in the United States. 
Spending money to comply with new regulations necessarily causes 
companies to assess how they will pay for it. There isn't much 
available capital these days for manufacturers to take on new 
regulations aimed at their very livelihood, especially small 
manufacturers.
    Because they lack the economies of scale and resources of larger 
companies, small businesses will be the most vulnerable to the IST 
provisions of the House bill. The unintended consequences of this 
provision will not only affect chemical manufacturers, but also 
resonate throughout their value chain. Since the economic downturn, 
small businesses have been hit hard by the economic recession. 
Meanwhile, unemployment remains high at 9 percent despite recent job 
gains in the last 2 months. States in which chemical manufacturing is 
concentrated represent some of the hardest hit areas. For example, 
California's unemployment rate at the end of 2010 was 12.5%. Michigan--
where SOCMA has a number of manufacturing members, most of which are 
small companies but which pay competitive wages--is not far behind at 
11.7%. Missouri follows at 9.5%, New Jersey at 9.2%, and Texas at 
8.3%.\3\ SOCMA members from most of these States wrote to their 
Representatives last Congress asking you to support the current CFATS 
program and oppose mandatory IST requirements.
---------------------------------------------------------------------------
    \3\ U.S. Bureau of Labor Statistics, February 2011.
---------------------------------------------------------------------------
D. Experts Agree IST Should Not Be Mandated
    As these examples demonstrate, a ``simple'' reduction in hazard may 
not necessarily result in a reduction of overall risk, and a poorly 
constructed or incomplete analysis could result in a ``safer'' 
alternative producing more harm than good. That is why Government 
agencies and experts who really understand inherent safety have 
consistently opposed giving Government the power to mandate it. This 
includes:

   Neal Langerman, representing the American Chemical Society--
        the minority's own technical witness at the Homeland Security 
        Committee hearing in June of 2009.\4\
---------------------------------------------------------------------------
    \4\ See http://chsdemocrats.house.gov/SiteDocuments/20090616103505-
95857.pdf, p.7: 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.

   Sam Mannan, Director of the Mary Kay O'Connor Process Safety 
        Center at Texas A&M University, in testimony before the 
        Homeland Security Committee on December 12, 2007.\5\
---------------------------------------------------------------------------
    \5\ See http://chsdemocrats.house.gov/SiteDocuments/20071212094415-
39931.doc, Dr. Mannan's testimony, pp. 6-7: [I]n developing inherently 
safer technologies, there are significant technical challenges that 
require research and development efforts. These challenges make 
regulation of inherent safety very difficult . . . Instead of 
prescriptive requirements for inherently safer technology and 
approaches, facilities should be allowed the flexibility of achieving a 
manageable level of risk using a combination of safety and security 
options . . . Over the past 10-15 years, and more so after 9/11, 
consideration of Inherently Safer Technology (IST) options and 
approaches has effectively become part of industry standards, with the 
experts and persons with know-how assessing and implementing inherently 
safer options, without prescriptive regulations that carry risks (both 
as trumping other tools or potentially shifting risk). A better 
approach for applying IST in security is by allowing the companies to 
assess IST as part of their overall safety, security, and environmental 
operations and therefore, cannot be prescriptive.

   Dennis Hendershot, testifying on behalf of the Center for 
        Chemical Process Safety before the Senate Environment & Public 
        Works Committee on June 21, 2006.\6\
---------------------------------------------------------------------------
    \6\ See http://epw.senate.gov/109th/Hendershot_Testimony.pdf, at 4-
8, esp. 5-6: There are tens of thousands of chemical products 
manufactured, most of them by unique and specialized processes. The 
real experts on these technologies, and on the hazards associated with 
the technology, are the people who invent the processes and run the 
plants. In many cases they have spent entire careers understanding the 
chemistry, hazards, and processes. They are in the best position to 
understand the best choices, rather than a regulator or bureaucrat 
with, at best, a passing knowledge of the technology.

    It is likewise instructive that the State of New Jersey, whose 
chemical facility security program is regularly contrasted with the 
CFATS program, only requires consideration of IST--it does not require 
facilities to implement it. Congress should not require DHS to do what 
all these experts have concluded is unwise, and what it is unwilling to 
do directly when the public is picking up the tab.
E. Conditioning the IST Mandate Does Not Solve the Problem
    SOCMA is aware that last year's House bill would only have allowed 
DHS to impose mandatory on Tier 1 and 2 facilities when it could make 
various findings about feasibility, cost impacts and risk transfers. 
But that approach does not address our fundamental objection to the 
concept, which is that it would take IST decisions away from the 
process safety experts who know their own processes the best and would 
allow their judgments to be second-guessed by busy Government officials 
sitting miles away reviewing documents. While these officials may be 
sincerely trying to do their best, we simply do not trust that their 
judgments will be better than ours. We also fear the prospect of 
liability if a ``safer'' process or chemical that one of our member 
companies is compelled to use ends up causing an accident or some other 
harm. Will the Federal Government indemnify facilities in the cases 
where it overrules their judgments regarding inherent safety? And even 
if a facility ultimately succeeds in persuading DHS to allow it to 
retain its proposed approach, that process will inevitably have costs 
in time and resources.
    Preceding all these concerns, moreover, is an even more basic one: 
No one knows how to compare the ``inherent safety'' of two processes. 
Here is what the experts have told Congress:

   I do not believe that the science currently exists to 
        quantify inherent safety . . . The first challenge is simply to 
        measure the degree of inherent safety in a way that allows 
        comparisons of alternative designs . . . \7\
---------------------------------------------------------------------------
    \7\ Testimony of Sam Mannan, supra note 5, at 6.

   Inherently safer design is not a specific technology or set 
        of tools and activities at this point in its development . . . 
        Current books and other literature on inherently safer design . 
        . . describe a design philosophy and give examples of 
        implementation, but do not describe a methodology.\8\
---------------------------------------------------------------------------
    \8\ Testimony of Dennis Hendershot, supra note 6, at 1-2.

   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.\9\
---------------------------------------------------------------------------
    \9\ Testimony of Neal Langerman, supra note 4, at 6-7.

    The experts at the National Research Council concluded recently: 
``Inherently safer chemistry . . . offers the potential for improved 
safety at chemical facilities. While applications show promise and have 
found use within the chemical industry, these applications at present 
are still quite limited in scope.''\10\
---------------------------------------------------------------------------
    \10\ National Research Council, Board on Chemical Sciences & 
Technology, Terrorism and the Chemical Infrastructure: Protecting 
People and Reducing Vulnerabilities (2006), at 106.
---------------------------------------------------------------------------
    While it may be feasible to develop a technical consensus 
methodology for measuring and comparing inherent safety, none exists at 
present. Before Congress and the administration could even consider 
mandating IST implementation, they would need to know that 
methodologies exist to compare various alternatives from the standpoint 
of inherent safety. As discussed above, DHS has launched a major effort 
to develop a methodology for comparing the inherent safety of two or 
more processes. SOCMA members and staff have been participating in this 
effort and cautiously support it. It is too early to tell, however, how 
successful it will be. Congress should avoid legislating in this area 
while that process is still on-going.
                             iv. conclusion
    The many small and large chemical manufacturers that employ 
thousands of employees in key manufacturing States such as Michigan, 
Missouri, Texas, and New Jersey stand to lose greatly should an IST 
provision be included in any legislation that advances this Congress. 
It is a wonder why IST proponents still support such a provision when 
there is so much uncertainty about the concept and how DHS could apply 
it--and during a historic economic recession in which our Nation's 
unemployment rate still wavers around 9%. Mandating inherently safer 
technology as a security measure will inevitably create negative 
unintended consequences, and Congress should not require DHS to do so. 
Rather, SOCMA supports chemical site security standards that are risk-
based, realistic, and not subject to change in any given year.
    As the House takes up the issue of chemical security anew in the 
112th Congress, SOCMA asks that you act with the same bipartisanship 
that the House and Senate demonstrated in 2006 in the process that led 
to the creation of CFATS, and support legislation that would extend 
authorization of existing chemical facility security standards for 3 or 
more years.
    I appreciate this opportunity to submit for the record the 
Association's views on these important issues.
            Sincerely,
                                            Lawrence Sloan,
                                          President and CEO, SOCMA.
                                 ______
                                 
 Statement of the National Petrochemical & Refiners Association (NPRA)
                           February 11, 2011
    NPRA, the National Petrochemical & Refiners Association, 
appreciates the opportunity to submit this statement on ``Preventing 
Chemical Terrorism: Building a Foundation of Security at Our Nation's 
Chemical Facilities.'' America's refining and petrochemical companies 
play a pivotal role in ensuring and maintaining the security of 
America's energy and petrochemical infrastructure. Nothing is more 
important to our member companies than the safety and security of our 
facilities. We have worked extensively with the Department of Homeland 
Security--and have invested millions of dollars--toward strengthening 
facility security. NPRA strongly supports the current Chemical Facility 
Anti-Terrorism Standards (CFATS) and encourages Congress to make the 
current program permanent, which will allow both DHS and industry the 
time needed to fully implement the CFATS program.
    NPRA is a trade association representing high-tech American 
manufacturers of virtually the entire U.S. supply of gasoline, diesel, 
jet fuel, other fuels and home heating oil, as well as the 
petrochemicals used as building blocks for thousands of products vital 
to your daily life. NPRA members make modern life possible, meet the 
needs of our Nation and local communities, strengthen economic and 
National security, and provide jobs directly and indirectly for more 
than 2 million Americans.
    Maintaining a high level of security has always been, and remains, 
a top priority at America's refineries and petrochemical manufacturing 
plants. Operators of these facilities are fully engaged in the 
maintenance and enhancement of facility security. Many of our member 
companies have long operated globally, often in unstable regions 
overseas, where security is an integral part of providing for the 
world's energy and petrochemical needs.
    In the aftermath of the September 11 attacks, our member companies 
realized that additional and unconventional threats must be considered 
in order to protect our Nation critical energy manufacturing and 
distribution infrastructure. In full understanding of the potential and 
significance of these threats, we did not wait for the adoption of new 
Government mandates before implementing additional, far-reaching 
facility security measures. Instead, we immediately initiated measures 
to strengthen and enhance security, including: 100 percent ID 
verification and bag screening; comprehensive vehicle inspections; 
limitations on visitor access and tours; and, a reduction in plant 
access points to minimize risk. Furthermore, we have been active 
participants in the Chemical Sector Council and the Oil and Natural Gas 
Sector Council, as well as many other DHS-sponsored efforts.
    Since the creation of the current CFATS regulations, our member 
companies have submitted their Top Screens, Site Vulnerability 
Assessments (SVAs) and Site Security Plans (SSPs) in accordance with 
DHS time tables and are awaiting approval of those submissions. Many 
NPRA members' manufacturing plants have been subject to Pre-
Authorization Inspections (PAI) and await final tiering status. 
Throughout this process, we have developed productive and collaborative 
working relationships with DHS and other key Federal agencies, and have 
strengthened relationships with State and local law enforcement 
offices. These relationships ensure that all parties obtain and 
exchange information critical to the maintenance of infrastructure 
security, enabling all to respond rapidly to terrorist threats.
    We firmly believe that the current CFATS program has been 
successful, but needs to be made permanent without the addition of any 
extraneous provisions. CFATS must be allowed to be fully implemented by 
DHS before any amendments to the program are considered. As a result of 
the CFATS program, there has been a surge in security awareness across 
all industries and among industry employees. The operators and 
employees of our manufacturing plants and our distribution facilities 
are now even more keenly aware of vulnerabilities at each site, 
potential off-site consequences and methods to reduce risks at these 
sites. NPRA members also report that the current regulations have 
helped with better chemical inventory management. In fact, many of our 
member companies regularly conduct security awareness training and 
complete Site Vulnerability Assessments to enhance security at 
unregulated sites that do not fall under the CFATS program. We have an 
excellent working relationship with DHS and have repeatedly volunteered 
to help the Department through activities ranging from site tours to 
joint training activities and serving as technical experts. In order to 
fully gauge the success of the current version of CFATS, however, 
Congress should allow for the complete implementation of the current 
program. Only then should Congress and DHS determine whether or not 
significant changes to this highly innovative program are required.
    Specific focus on the existing CFATS program and related security 
activities indicates the following:

    1. America's refining and petrochemical manufacturing plants will 
        continue to maintain and improve security operations to protect 
        the vital network that provides a reliable supply of fuels and 
        other petroleum and petrochemical products that are required to 
        keep our Nation strong and our economy growing.

    2. Essential working relationships and information networks have 
        been established between Government security agencies and our 
        members' manufacturing facilities to exchange ``real-time'' 
        intelligence data on security issues. These relationships allow 
        for rapid response to terrorist threats. We believe that 
        unwarranted and potentially counter-productive revisions to 
        this successful program could significantly alter these 
        relationships, thus placing unnecessary obstacles in the way of 
        the Nation's over-arching goals regarding homeland security.

    3. We have partnered with the Department of Homeland Security on 
        many important security initiatives and programs, including the 
        Risk Assessment Methodology for Critical Asset Protection 
        (RAMCAP), the Homeland Security Information Network (HSIN), 
        Buffer Zone Protection Plans, SVAs, Site Security Plans (SSPs) 
        and Industry Sector Councils.

    When reviewing the current program, NPRA and our member companies 
strongly caution against the inclusion of any unrelated amendments, 
such as inherently safer technology (IST) or increased information-
sharing provisions. The following issues should be considered before 
any potential update of the current CFATS program.
                   inherently safer technology (ist)
    IST continues to be a misinterpreted concept to those outside the 
field of engineering. Proponents of IST as part of security legislation 
believe that the only way to ensure security at chemical facilities is 
by reducing the amount of hazardous substances used in chemical 
manufacturing and processing by way of ``simple'' chemical 
substitution. Application of IST, however, is bound by the laws of 
physics and nature; a simple reduction or switch in the use of 
hazardous chemicals is rarely possible within the context of a specific 
reaction or process. NPRA members' facilities are custom-built 
according to specifications that accommodate very specific chemical 
processes, and every facility in the country is different. It is 
usually not possible to simply ``substitute'' one chemical for another 
in the context of refining and petrochemical facilities. Furthermore, 
in terms of the reduction of certain substances, there is a serious 
risk of simply transferring risk to other points along the chemical 
supply chain--thereby not decreasing risk, but simply transferring it 
to other areas that may not be as secure as CFATS-covered chemical 
facilities.
    IST is a conceptual and often complex framework that covers 
procedures, equipment, protection and, when feasible, the use of less 
hazardous chemicals. IST is not just a safety program; it is a process 
safety program that involves understanding chemical engineering and the 
supply chain for petroleum-based, natural gas liquids-based and other 
organic chemicals derived from these basic feedstocks. Its premise is 
that if a particular hazard can be reduced, the overall risk associated 
with a chemical process will also be reduced. In its simplicity, it is 
an intuitive concept; however, reality is not always that simple.
    A reduction in hazard will reduce overall risk if, and only if, 
that hazard is not displaced to another time or location, or does not 
amplify another hazard. If the hazard is displaced, then the risk will 
simply be transferred, not reduced. We strongly oppose the inclusion of 
any IST provisions in chemical security legislation. IST and chemical 
engineering decisions should be left to individual sites and not 
mandated by the Federal Government.
    Another factor that makes the implementation of an IST regulatory 
program unrealistic is that there are no methods with which to measure 
whether one process is inherently safer than another. DHS would not be 
able to measure the effectiveness of its regulations, which runs 
counter to the Government Performance and Results Act.
                         sharing of information
    We also caution against broadening any of the information-sharing 
provisions in the CFATS program. Currently, security information such 
as Site Security Plans, Security Vulnerability Assessments and security 
infrastructure information is kept between DHS and those at the 
facility who can demonstrate a ``need to know.'' Allowing broad access 
to this information weakens the security of the site, increases the 
likelihood that this information will be leaked to the public and could 
lead to situations ranging from an increase in vulnerability to 
terrorist attacks at the site to internal threats such as theft and 
diversion. It should be strongly noted that security and intelligence 
information has traditionally been shared on a strict need to know 
basis and has not been made accessible to those who do not have a need 
to know. There is plenty of historical evidence to support and continue 
limited disclosure of sensitive security and business information. 
While all employees should have security awareness training, detailed 
site security information should be strictly limited to those specific 
individuals with a need to know.
                  background checks (personnel surety)
    Under CFATS, it is required that personnel with access to sensitive 
information or relevant operations be vetted against the National 
Terrorism Screening Database (NTSDB)--no matter if the person has 
already been vetted by other Government credentialing programs, such 
the Transportation Worker Identification Card (TWIC) program, the 
Hazardous Materials Endorsement (HME) or a host of others. Having to 
obtain and maintain multiple Government credentials is duplicative, 
burdensome, and costly for industry and DHS. NPRA recommends that DHS 
develop a new, universal Federal security credential for personnel with 
access to sensitive information or relevant operations that meet the 
requirements of CFATS RBPS No. 12--Personnel Surety. A possible first 
step toward this end would be the creation of a Chemical Industry 
Worker Identification Card (CIWIC) to replace all other Federal 
chemical security credentials. In the interim there should reciprocity 
of other Federal chemical security credentials.
                  maritime transportation security act
    Many of our member companies comply with the security requirements 
under the Maritime Transportation Security Act (MTSA), a program 
administered by the U.S. Coast Guard (USCG). The Coast Guard and NPRA 
members have worked together closely to achieve the security goals of 
MTSA.
    If CFATS and MTSA are harmonized, the work that sites have done to 
comply with MTSA must be recognized. Further, MTSA sites should not be 
subject to dual inspections and that the USCG should continue its role 
at traditional MTSA sites.
                               pipelines
    Any new CFATS legislation should exclude pipelines, as they are 
regulated by the Transportation Security Administration's Pipeline 
Security Division.
                          exercises and drills
    Red team drills are unnecessary for CFATS sites and may lead to 
unintended injuries and tension in surrounding communities. However, we 
do support security training drills with local law enforcement, 
emergency response personnel, and surrounding communities that would 
allow all parties to be better prepared for a terrorist event.
                               conclusion
    America's refiners and petrochemical manufacturers are committed to 
complying with CFATS. We do not oppose a reasonable review of the 
current program; however, the existing program is still developing and 
should be allowed to be fully implemented before it is significantly 
altered. The program should also be made permanent to provide 
regulatory certainty and a stable security framework for the future. We 
urge the committee to reject any attempts to significantly amend the 
current program--particularly with provisions that would undermine both 
security and economic development.
    NPRA appreciates the opportunity to submit this statement for the 
record and stands ready and willing to work with the committee and 
Congress towards the implementation of sound, responsible, effective 
chemical facility security policy.

    Mr. Lungren. The Chairman will now recognize the Ranking 
Minority Member of the subcommittee, the gentlelady from New 
York, Ms. Clarke, for any statement she may have.
    Ms. Clarke of New York. Thank you, Mr. Chairman, and let me 
welcome you, Mr. Beers. I would like to congratulate you first 
of all, Mr. Chairman, in the last Congress our places on this 
dais were reversed as Chairman and Ranking Member of the 
Emerging Threat Subcommittee.
    Our subcommittee has now been given the added 
responsibility of infrastructure protection. It is a topic that 
I know we both have interest and a shared concern.
    Even though our respective roles have been changed and the 
scope and membership of the subcommittee has changed as well, I 
know that one thing will not change is our effective working 
relationship and our shared commitment to put partisanship 
aside and to do our best to protect our country.
    The security of our Nation's chemical facilities is an 
important topic for this committee and this subcommittee, and I 
thank you for holding this hearing. I would also like to thank 
our witnesses for appearing before us today. I look forward to 
your testimony and our discussion here today.
    As most of you know, I am from New York. The city itself 
has industries of every kind, many of them chemical 
manufacturers and many of them use chemicals. Right across the 
Hudson River stands a collection of refinery, chemical 
facilities between Newark Airport and Port Elizabeth that has 
been referred to by terrorism experts as the most dangerous 2 
miles in America because a major release of toxic chemicals 
from any of these facilities could injure or kill tens or 
hundreds of thousands of people and possibly impact millions.
    So it is important to me not just as the Ranking Member of 
this subcommittee, but also in my duty to protect my 
constituents that we do our best to make these chemical 
facilities as secure as possible. The Chemical Facility Anti-
Terrorism Standards program, CFATS, has been successful to date 
even though its final implementation has not been complete.
    Even though CFATS is in its middle stages, we can already 
see its value. For just the first two phases, the initial tox 
screen phase where facilities report their chemicals of 
interest and the second, security vulnerability assessment 
phase, where vulnerabilities are identified, over 3,000 
facilities that were initially in the program have made changes 
that lowered their risk to the point that their participation 
in CFATS is no longer required.
    I am sure, Mr. Chairman, that you share my conviction that 
this program should be made permanent through a comprehensive 
authorization. I am also sure that you recognize that while 
several facilities subject to CFATS have lowered their risk by 
examining their holdings and making process changes, there is a 
large and important group of facilities, drinking water, 
wastewater, and facilities located at ports that have been 
exempted from CFATS and therefore have not had the incentive to 
lower their risk.
    I should note that one of our witnesses who will be on the 
second panel is from a wastewater facility that on its own 
initiative changed from dangerous to benign substances. We in 
this room today are all safer for it. I think that DC Water 
should be viewed as an example of two important points.
    No. 1, water facilities can represent as much of a hazard 
as other chemical facilities and No. 2, that inherently safer 
practices do work, are well understood and can significantly 
increase security by reducing consequences of release of 
chemicals.
    If a toxic gas is present in my district, I don't care if 
it comes from a chemical facility, a refinery, a water 
treatment facility or a chemical tank, or in the port, we still 
have the same consequences.
    Mr. Chairman, I look forward to working together with you 
to close this and other important security gaps while at the 
same time giving permanent status to the current CFATS 
authority that have worked well so far. I thank you for holding 
this hearing, and I yield back.
    Mr. Lungren. Thank you very much.
    Now it is my pleasure to recognize the Ranking Minority 
Member of the full committee, the gentleman from Mississippi, 
Mr. Thompson, for any statement that he might make.
    Mr. Thompson. Thank you very much, Mr. Chairman, and I too 
salute you in your maiden voyage as Chairman of this 
subcommittee.
    As you know, however, enhancing security of the chemical 
sector is a major interest of mine. Over the years you and I 
both have worked together effectively on this important 
homeland security issue. I was disappointed that last year when 
we finally were able to get the House to approve a 
comprehensive chemical security bill, you chose not to support 
it. But we are going to do better this time.
    I hope that we can recapture the bipartisan spirit that we 
had in the 109th, 110th, and most of the 111th Congress on the 
committee to bring an equally strong chemical security bill to 
the House floor.
    Today we are meeting to get a progress report from Under 
Secretary Beers on the Chemical Facility Anti-Terrorism 
Standards or CFATS program. DHS in the 4 years since it was 
given authority to regulate the chemical section for security, 
has not only moved forward expeditiously but thoughtfully with 
the CFATS regulations.
    As a result all over the country, the level of risk posed 
by chemical facilities to their surrounding communities has 
declined as more and more operators have chosen to reduce or 
even eliminate their holding of certain chemicals of interest.
    Operators have come to realize that simple changes to 
chemical holdings not only make security sense but business 
sense. The Department deserves credit for all it has done to 
promulgate and carry out the CFATS process. Equal credit, 
however, is due to the companies that make up the chemical 
sector for their positive response and willingness to work with 
DHS to make our country more secure.
    There have, of course, been a few missteps, but the 
Department and the sector have adapted quickly and made 
adjustments as necessary. As the CFATS process moves forward, 
there continues to be some statutory gaps that must be 
addressed.
    These gaps include the exemption of drinking water, 
wastewater in port facilities, the lack of strong whistleblower 
protection, and the absence of methods to reduce consequences 
of terrorist attacks in the risk-based program.
    The bill that passed the House last year closed all of 
these and would have given CFATS permanent status. I hope, Mr. 
Chairman, that we can use last year's bill as a starting point 
to continue discussion and ultimately reach a bipartisan 
solution.
    I know we have some jurisdictional obstacles to overcome on 
the House floor. Certainly the failure of the new House 
leadership to fix jurisdiction remains a problem, but the work 
goes on. I look forward to hearing from our witnesses. I thank 
all of you for contributing to this process. I yield back.
    Mr. Lungren. I thank the gentleman for his comments. I am 
sorry that it has been a bipartisan failure to grant this 
committee the jurisdiction that it should have. Hopefully we 
can get a bipartisan response to that some time and move in the 
right direction.
    I would just say at the outset that other Members of the 
committee are reminded that opening statements may be submitted 
for the record.
    [The statement of Hon. Richardson follows:]
            Prepared Statement of Honorable Laura Richardson
                           February 11, 2011
    I would like to thank Chairman Lungren and Ranking Member Clarke 
for holding this important hearing today on maintaining the security of 
our Nation's chemical facilities. I look forward to hearing the 
testimony of our distinguished panel of witnesses today as Congress 
continues to work on reauthorizing the Department of Homeland 
Security's authority to regulate chemical facilities.
    The Chemical Facility Anti-Terrorism Standards (CFATS) is an 
example where the Department of Homeland Security, Congress, and 
industry have come together to implement safety standards that have had 
a positive effect on improving our National security. While we may not 
always agree with every provision in these standards, I think we can 
all agree that CFATS have been a proven tool in helping to keep our 
facilities, workers, and communities safe.
    The chemical industry employs nearly a million Americans and 
accounts for nearly $600 billion of our Nation's GDP. More than 70,000 
industrial, consumer, and defense-related products from plastics to 
fiber optics are produced by the Nation's chemical facilities. The 
economic and strategic value of the chemical industry also makes it an 
attractive target to terrorists, especially given the destructive power 
of many of the chemicals housed in these facilities. When misused, 
these chemicals could have a devastating impact on the surrounding 
communities.
    The chemical industry is extremely important to my district. The 
37th Congressional District of California is home to the Port City of 
Long Beach. My district is also home to several major oil refineries, 
gas treatment facilities, and petro chemical facilities. The chemical 
facilities in my district employ nearly 2,600 employees in high-paying 
positions.
    In 1984, a poison gas leak at Union Carbide's Bhopal plant killed 
10,000 people within 72 hours and more than 25,000 people after the 
blast. This was just an accident! If a terrorist successfully carried 
out an attack on one of the chemical facilities in my district the 
death count would be significantly higher.
    Finally, it is my prerogative to make sure that not only the 
chemical facilities in my district are protected against a potential 
terrorist attack, but that all facilities across the country are secure 
against attacks.
    Again, I thank you Mr. Chairman, and Ranking Member Clarke for 
convening this very important hearing today. I look forward to working 
with you and my other colleagues on this subcommittee. I also look 
forward to hearing from our excellent panel of witnesses. I yield back 
the balance of my time.

    Mr. Lungren. Although Ms. Jackson Lee is not a Member of 
this committee, she has permission to sit in on it and without 
objection that will occur. However, Members of the subcommittee 
will be recognized before a Member of the committee who is not 
a Member of the subcommittee.
    We are pleased to have a distinguished witness before us 
today on this panel for this important topic. I would just 
remind him that your entire written statement will made a part 
of the record and you might summarize. We would you ask you to 
attempt to summarize that in 5 minutes and then be open to 
questions, although I am not one that will hammer you down 
after 5 minutes if you would just keep that in mind.
    It is our pleasure to have before us today as our opening 
witness, Under Secretary Rand Beers from the Department of 
Homeland Security. He is in charge of the National Protection 
and Programs Directorate and has a distinguished career, one 
that gives him a great opportunity to provide great leadership 
in his current position. One of the obligations they have is to 
try and implement the CFATS program.
    So I am waiting with an earnest heart to hear what you have 
to say about this program. Mr. Beers, thank you for appearing 
before us, and we are ready to receive your testimony.

 STATEMENT OF RAND BEERS, UNDER SECRETARY, NATIONAL PROTECTION 
   AND PROGRAMS DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY

    Mr. Beers. Thank you very much, Chairman Lungren, and I 
will definitely try to abide by the 5-minute rule. Thank you 
also Ranking Member Clarke, Ranking Committee Member Thompson 
and other distinguished Members of this subcommittee and 
Congresswoman Jackson Lee as well.
    It is a pleasure to appear before you all today to discuss 
the Department of Homeland Security's efforts to secure the 
high-risk chemical facilities. As you are aware, the 
Department's current authority under Section 550 of the fiscal 
year 2007 Homeland Security Appropriations Act as amended was 
set to expire in October 2010 but has temporarily been extended 
under the current continuing resolution.
    DHS is eager to work with this committee and the Congress 
and all levels of government and the private sector to achieve 
passage of legislation that permanently authorizes and 
appropriately matures the Chemical Facilities Anti-Terrorism 
Standards program.
    While the inspection process is still on-going, our 
analyses indicate that the program is delivering tangible 
results that make the Nation more secure.
    For example, since the program's inception, 1,246 
facilities completely removed their chemicals of interest and 
an additional 584 facilities no longer possess the quantity of 
chemicals of interest that meet the threshold requirements to 
be considered as high-risk facilities.
    CFATS currently covers 4,755 high-risk facilities Nation-
wide across all 50 States of which 4,094 facilities have 
received final high-risk determinations and due dates for the 
submission of a site security or an alternative security plan.
    This is a reflection of the significant work of 39,000 
facilities that submitted initial consequence screenings. More 
than 4,000 facilities have submitted their security plans, and 
in February 2010, the Department began conducting inspections 
of final tiered facilities starting with the highest risk or 
Tier 1 facilities. The Department has completed 175 
preauthorization hearings.
    An important point that I hope does not get lost in all 
these statistics is the open dialogue that DHS has established 
with industry through this program and the successful security 
gains that are implemented already as a result.
    We have also enjoyed a constructive dialogue with the 
Congress, including Members of this committee, and we are very 
much looking forward to your contemplation of new authorizing 
legislation of the CFATS program.
    The Department, as I said, supports permanent authorization 
and is committed to working with you on that to pass stand-
alone chemical security legislation that includes that 
permanent authorization this year.
    As you know, the administration believes in an 
authorization that should close security gaps that exist in the 
current statute, such as eliminating the exemption for water 
and wastewater facilities and prudently approaching mandatory 
consideration of inherently safer technology.
    I am looking forward to this dialogue. Thank you for having 
this important hearing. I would be happy to respond to any 
questions which you might have. Thank you.
    [The statement of Mr. Beers follows:]
                    Prepared Statement of Rand Beers
                           February 11, 2011
    Thank you, Chairman Lungren, Ranking Member Clarke, and 
distinguished Members of the subcommittee. It is a pleasure to appear 
before you today to discuss the Department of Homeland Security's (DHS) 
efforts to secure high-risk chemical facilities. As you are aware, the 
Department's current authority under Section 550 of the fiscal year 
2007 Department of Homeland Security Appropriations Act, as amended, 
was set to expire in October 2010, but has been temporarily extended 
under the current Continuing Resolution. DHS is eager to work with this 
committee, Congress, and all levels of government and the private 
sector to achieve passage of legislation that permanently authorizes 
and appropriately matures the Chemical Facility Anti-Terrorism 
Standards (CFATS) program. In the interest of facilitating that 
collaboration, my testimony focuses on the current program and the key 
principles that DHS would like to see guide the program's maturation.
                     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. Specifically, Section 550(a) of the Act 
authorized the Department to adopt rules requiring high-risk chemical 
facilities to complete Security Vulnerability Assessments (SVAs), 
develop Site Security Plans (SSPs), and implement protective measures 
necessary to meet risk-based performance standards established by the 
Department. Consequently, the Department published an Interim Final 
Rule, known as CFATS, on April 9, 2007. Section 550, however, expressly 
exempts from those rules certain facilities that are regulated under 
other Federal statutes, including those regulated by the United States 
Coast Guard pursuant to the Maritime Transportation Security Act 
(MTSA), drinking water and wastewater treatment facilities as defined 
by Section 1401 of the Safe Water Drinking Act and Section 212 of the 
Federal Water Pollution Control Act, and facilities owned or operated 
by the Departments of Defense and Energy, as well as certain facilities 
subject to regulation by the Nuclear Regulatory Commission (NRC).
    The following core principles guided the development of the CFATS 
regulatory structure:

    (1) Securing high-risk chemical facilities is a comprehensive 
        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, Tribal, and territorial government partners as well as 
        the private sector--is essential to securing our critical 
        infrastructure, 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, as the regulated facilities bridge 
        multiple industries and critical infrastructure sectors. By 
        working closely with experts, members of industry, academia, 
        and Federal Government partners, we leveraged vital knowledge 
        and insight to develop the regulation.

    (2) Risk-based tiering to guide resource allocations.--Not all 
        facilities present the same level of risk. The greatest level 
        of scrutiny should be focused on those facilities that present 
        the highest risk--those that, if attacked, would endanger the 
        greatest number of lives.

    (3) Reasonable, clear, and calibrated performance standards will 
        lead to enhanced security.--The current CFATS rule includes 
        enforceable risk-based performance standards. High-risk 
        facilities have the flexibility to develop appropriate site-
        specific security measures that will effectively address risk. 
        The Department will analyze each final 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 
        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 at high-risk 
        chemical facilities.

    On Nov. 20, 2007, the Department published Appendix A to CFATS, 
which 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 consequences 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 also established a Screening Threshold Quantity for 
each chemical of interest based on its potential to create significant 
adverse consequences to human life or health in one or more of these 
ways.
    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 
that 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 initially identifies and 
sorts facilities based on their associated risks.
    If a facility is initially identified during the Top-Screen process 
as potentially having a level of risk subject to regulation under 
CFATS, the Department assigns the facility to one of four preliminary 
risk-based tiers, with Tier 1 representing the highest level of 
potential risk. Those facilities must then complete SVAs and submit 
them to the Department, although facilities preliminarily designated as 
Tier 4 facilities also have the option of submitting an Alternative 
Security Program (ASP). Results from the SVA inform the Department's 
final determinations as to whether a facility is in fact high-risk and, 
if so, of the facility's final tier assignment. Each SVA is carefully 
reviewed for its description of how chemicals of interest are actually 
held at the site, how those chemicals are managed, and for physical, 
cyber, and chemical security risks.
    After completing its review of a facility's SVA, the Department 
makes a final determination as to whether the facility is considered 
high-risk and assigns the facility a final risk-based tier. Final high-
risk facilities are then required to develop an SSP or, if they so 
choose, an ASP that addresses its identified vulnerabilities and 
security issues. Only facilities that receive a final high-risk 
determination letter under CFATS will be required to complete and 
submit an SSP or, if the facility so chooses, an ASP. DHS' final 
determinations of which facilities are high-risk are based on each 
facility's individual consequentiality and vulnerability as determined 
by its Top-Screen, SVA, and any other available information. The higher 
the facility's 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 plan are being implemented.
                         implementation status
    To date, the Department has reviewed more than 39,000 Top-Screen 
consequence assessment questionnaires submitted by potentially high-
risk chemical facilities. Since June 2008, we have notified more than 
7,000 preliminarily tiered facilities that they have been initially 
designated as high-risk and are thus required to submit SVAs; we have 
nearly completed our review of the almost 6,200 SVAs that have been 
submitted. In May 2009, we began notifying facilities of their final 
high-risk determinations, risk-based tiering assignments, and the 
requirement to complete and submit an SSP or ASP.
    In May 2009, the Department issued 141 final tier determination 
letters to the highest risk (Tier 1) facilities, confirming their high-
risk status and initiating the 120-day time frame for submitting an 
SSP. After issuing this initial set of final tier determinations, the 
Department periodically issued notifications to additional facilities 
of their final high-risk status. To date, more than 4,000 additional 
facilities have received final high-risk determinations and tier 
assignments, and several hundred that were preliminarily tiered by DHS 
were informed that they are no longer considered high-risk.
    CFATS currently covers 4,755 high-risk facilities Nation-wide 
across all 50 States, of which 4,094 facilities have received final 
high-risk determinations and due dates for submission of an SSP or ASP. 
More than 4,000 facilities have submitted SSPs (or ASPs) to date, and 
the Department is in the process of reviewing these submissions. The 
Department continues to issue final tier notifications to facilities 
across all four risk tiers as additional final tier determinations are 
made by the Department.
    In February 2010, the Department began conducting inspections of 
final-tiered facilities, starting with the Tier 1-designated 
facilities, and has completed more than 175 pre-authorization 
inspections to date. The Department intends to use these initial 
inspections to help gain a comprehensive understanding of the 
processes, risks, vulnerabilities, response capabilities, security 
measures and practices, and any other factors that may be in place at a 
regulated facility that affect security risk in order to help 
facilities submit SSPs that can be approved under CFATS. After DHS 
issues a letter of authorization for a facility's SSP, DHS will conduct 
a comprehensive and detailed compliance inspection before making a 
final determination as to whether the facility has appropriately 
enacted their SSP. Facilities that have successfully implemented their 
approved SSPs and have passed an inspection will be considered in 
compliance with the required performance standards.
    A critical element of the Department's efforts to 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 high-risk facility's security strategy will be unique, as it 
depends on the facility's risk level, security issues, characteristics, 
and other factors. Therefore, the SSP tool collects information 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, cybersecurity, training, and 
response. The SSP tool is designed to take into account the complicated 
nature of chemical facility security and allows facilities to describe 
both facility-wide and asset-specific security measures. The Department 
understands that the private sector generally, and CFATS-affected 
industries in particular, are dynamic. The SSP tool allows facilities 
to involve their subject-matter experts from across the facility, 
company, and corporation, as appropriate, in completing the SSP and 
submitting 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. 
Through a review of the SSP, in conjunction with an on-site inspection, 
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.
    Along with the initial group of final Tier 1 notifications and the 
activation of the SSP tool in May 2009, DHS issued the Risk-Based 
Performance Standards Guidance document. The Department developed this 
guidance to assist high-risk chemical facilities subject to CFATS in 
determining appropriate protective measures and practices to satisfy 
the RBPS. It is designed to help facilities comply with CFATS by 
providing detailed descriptions of the 18 RBPS as well as examples of 
various security measures and practices that could enable facilities to 
achieve the appropriate level of performance for the RBPS at each tier 
level. The 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 
whichever security programs or processes they choose--whether or not in 
the Guidance--provided that they achieve the requisite level of 
performance under the CFATS RBPS. The Guidance will, however, help 
high-risk facilities gain a sense of what types and combination of 
security measures may satisfy the RBPS. The Department has also offered 
regular SSP training webinars to assist high-risk facilities with 
completing their SSPs.
    For additional context, I would like to provide you with an example 
of how some facilities may be approaching the development and 
submission of their SSPs: In the case of a Tier 1 facility with a 
release hazard security issue, the facility is required to restrict the 
area perimeter appropriately, which may include preventing breach by a 
wheeled vehicle. To meet this standard, the facility is able to 
consider numerous security measures, such as cable anchored in concrete 
block along with movable bollards at all active gates or perimeter 
landscaping (e.g., large boulders, steep berms, streams, or other 
obstacles) that would thwart vehicle entry. The Department will approve 
the security measure as long as it is determined by the Department to 
be sufficient to address the applicable performance standard. Under 
Section 550, the Department cannot mandate a specific security measure 
to approve the SSP.
    In June 2010, the Department issued its first Administrative Orders 
under CFATS to 18 chemical facilities for failure to submit an SSP. 
Throughout the remainder of the year, the Department issued an 
additional 47 Administrative Orders to chemical facilities that had 
failed to submit an SSP in a timely manner. Administrative Orders are 
the first step toward enforcement under CFATS. An Administrative Order 
does not impose a penalty or fine, but directs the facility to take 
specific action to comply with CFATS--in this case, to complete the SSP 
within 10 days of receipt. If the facility does not comply with the 
Administrative Order, however, the Department may issue an Order 
Assessing Civil Penalty of up to $25,000 each day the violation 
continues, or an Order to Cease Operations. All 65 facilities that 
received an Administrative Order ultimately completed their SSPs 
following receipt of the Administrative Order, or providing amplifying 
information to the Department, that satisfactorily explained why they 
had failed to meet the deadline for submitting their SSPs, and thus, no 
further enforcement action was necessary. As CFATS implementation 
progresses, the Department expects to continue to exercise its 
enforcement authority to ensure CFATS compliance.
                            outreach efforts
    Since the release of CFATS in April 2007, the Department has taken 
significant steps to publicize the rule and ensure that the regulated 
community and our security partners are aware of its requirements. As 
part of this outreach program, the Department has regularly updated 
impacted sectors through their Sector Coordinating Councils and the 
Government Coordinating Councils of industries most impacted by CFATS, 
including the Chemical, Oil and Natural Gas, and Food and Agriculture 
Sectors. We have also solicited feedback from our public and private 
sector partners and, where appropriate, have reflected that feedback in 
our implementation activities. As the program continues to mature, the 
Department participates in an average of 250 CFATS-specific outreach 
engagements annually, not including formal coordination activities with 
individual facilities such as pre-authorization inspections and 
Compliance Assistance Visits. 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 that receives between 40 and 80 calls daily; put in 
place a CFATS tip-line for anonymous chemical security reporting; and 
developed and regularly updated a highly regarded Chemical Security 
website (www.DHS.gov/chemicalsecurity). This month, the Department 
updated the CFATS website to include a more robust, searchable 
Knowledge Center, which further supports the regulated community. These 
efforts are having a positive impact: Again, more than 39,000 Top-
Screens have been submitted to the Department via CSAT.
    In addition, the Department continues to focus on fostering solid 
working relationships with State and local officials as well as first 
responders in jurisdictions with high-risk facilities. To meet the 
risk-based performance standards under CFATS, facilities need to 
cultivate and maintain effective working relationships--including a 
clear understanding of roles and responsibilities--with local officials 
who aid in preventing, mitigating, and responding to potential attacks. 
To facilitate these relationships, our inspectors have been actively 
working with facilities and officials in their areas of operation, and 
they have participated in more than 100 Local Emergency Planning 
Committee meetings to provide a better understanding of CFATS 
requirements. Last year, the Department, in collaboration with the 
State, local, Tribal, and territorial Government Coordinating Council, 
issued a tri-fold brochure which summarizes CFATS programs and 
processes for local emergency responders.
    In May 2010, the Department launched a web-based information-
sharing portal called ``CFATS-Share.'' This tool provides interested 
State Homeland Security Advisors, DHS Protective Security Advisors, and 
fusion centers access to detailed CFATS facility information as needed. 
In the future, DHS plans to make this tool available to other Federal 
security partners, such as the Federal Bureau of Investigation. The 
Department continues to improve the CFATS-Share web portal based on 
feedback from users.
    Additionally, the Department continues to actively collaborate 
across components within DHS and with other Federal agencies in the 
area of chemical security, including routine coordination between the 
Department's National Protection and Programs Directorate (NPPD) and 
the United States Coast Guard (USCG), the Transportation Security 
Administration, the Department of Justice's Federal Bureau of 
Investigation and Bureau of Alcohol, Tobacco, Firearms and Explosives, 
the NRC, and the Environmental Protection Agency (EPA). One primary 
example of this coordination includes the establishment of a joint 
NPPD/USCG CFATS-MTSA Working Group to evaluate and, where appropriate, 
implement methods to harmonize the CFATS and MTSA regulations. 
Similarly, the Department has been working closely with the EPA to 
begin evaluating how the CFATS approach could be used for water and 
wastewater treatment facilities, should the water and wastewater 
treatment facility exemption be removed by Congress in future versions 
of chemical facility security or water facility security regulations.
    The Department also launched an Agricultural Facility Survey in 
July 2010. The goal of the survey is to provide the Department with 
additional information on the potential risks related to agricultural 
Chemicals of Interest throughout the distribution chain--including 
manufacturers, distributors, retailers, commercial applicators, and 
end-users. The survey results will also help the Department determine 
the most appropriate approach for addressing the existing extension of 
the CFATS Top Screen due date for agricultural production facilities. 
The Department received completed surveys from nearly 1,200 CFATS 
facilities and is currently analyzing the results to determine the best 
approach to take regarding agricultural production facilities.
    Internally, we are continuing to build the Infrastructure Security 
Compliance Division that is responsible for implementing CFATS. We have 
hired, or are in the process of on-boarding, more than 178 people, and 
we are continuing to hire throughout this fiscal year to meet our 
staffing goal of 268 positions. These numbers include our field 
inspector cadre, where we have hired 95 of 103 field inspector 
positions and 14 of 14 field leadership positions.
               legislation to permanently authorize cfats
    We have enjoyed the constructive dialogue with Congress, including 
Members of this committee, as it contemplates new authorizing 
legislation. The Department recognizes the significant work that this 
committee and others, including the Senate Committee on Homeland 
Security and Governmental Affairs, the Senate Committee on Environment 
and Public Works and the House Committee on Energy and Commerce, have 
completed in reauthorizing the CFATS program to date and to address 
chemical facility security. We appreciate this effort and look forward 
to continuing the constructive engagement with Congress on these 
important matters.
    The Department supports a permanent authorization for the CFATS 
program. The Department is committed to working with Congress and other 
security partners to pass stand-alone chemical security legislation 
that includes permanent authority beginning in fiscal year 2011. The 
latest Continuing Resolution authorizes an extension of the statutory 
authority for CFATS, which otherwise would have sunset on Oct. 4, 2010.
    It is important to highlight that the administration has developed 
a set of guiding principles for the reauthorization of CFATS. These 
principles are the foundation for the Department's position on 
permanent CFATS reauthorization:

   The administration supports permanent authorization to 
        regulate security of high-risk chemical facilities through 
        risk-based performance standards.

   The Department should be given reasonable deadlines by 
        Congress to promulgate new rules to implement any new 
        legislative requirements. CFATS, as currently being 
        implemented, should remain in effect until or unless it is 
        supplemented by new regulations.

   The administration supports, where possible, using safer 
        technology, to enhance the security of the Nation's high-risk 
        chemical facilities. Similarly, we recognize that risk 
        management requires balancing threat, vulnerabilities, and 
        consequences with the costs and benefits of mitigating risk. In 
        this context, the administration has established the following 
        policy principles in regard to inherently safer technologies 
        (IST) at high-risk chemical facilities:

     The administration supports consistency of IST approaches 
            for facilities regardless of sector.

     The administration believes that all high-risk chemical 
            facilities, Tiers 1-4, should assess IST methods and report 
            the assessment in the facilities' SSPs.

     Further, the appropriate regulatory entity should have the 
            authority to require facilities posing the highest degree 
            of risk (Tiers 1 and 2) to implement IST method(s) if such 
            methods demonstrably enhance overall security, are 
            determined to be feasible, and, in the case of water sector 
            facilities, consider public health and environmental 
            requirements.

     For Tier 3 and 4 facilities, the appropriate regulatory 
            entity should review the IST assessment contained in the 
            SSP. The entity should be authorized to provide 
            recommendations on implementing IST, but it would not have 
            the authority to require facilities to implement the IST 
            methods.

     The administration believes that flexibility and staggered 
            implementation would be required in implementing this new 
            IST policy.

   The administration supports maintaining the Department's 
        current Chemical-terrorism Vulnerability Information regime for 
        protecting sensitive information relating to chemical facility 
        security. This regime is similar to, but distinct from, other 
        Controlled Unclassified Information protection regimes.

   The Department supports amending the current exemption for 
        drinking water and wastewater facilities to specify that the 
        Environmental Protection Agency (EPA) would have the lead on 
        regulating for security, with DHS supporting EPA to ensure 
        consistency across all sectors. This consistency could be 
        achieved, for example, by the use of CFATS compliance tools and 
        risk analysis with modifications as necessary to reflect the 
        uniqueness of the water sector and statutory requirements. As 
        DHS and EPA have stated before, we believe that there is a 
        critical gap in the U.S. chemical facility security regulatory 
        framework--namely, the exemption of drinking water and 
        wastewater treatment facilities from CFATS. We need to work 
        with Congress to close this gap to secure chemicals of interest 
        at these facilities and to protect the communities that they 
        serve; drinking water and wastewater treatment facilities that 
        meet CFATS thresholds for chemicals of interest should be 
        regulated. We do, however, 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 another facility under 
        CFATS would have significant public health and environmental 
        consequences when applied to a water facility.

   As you are aware, facilities regulated under MTSA authority 
        are statutorily exempted from CFATS and thus are not required 
        to submit Top-Screens to DHS. In order to help DHS develop a 
        more comprehensive picture of security issues at the Nation's 
        chemical facilities, and to help DHS evaluate whether any 
        regulatory gaps exist that may pose an unacceptable security 
        risk, the Department has begun the process, with close 
        cooperation between NPPD and USCG, for determining whether and 
        how to require MTSA-covered facilities that possess CFATS 
        chemicals of interest to complete and submit CFATS Top-Screens.

   With respect to the other current statutory exemptions, the 
        Department supports:

     Maintaining the exemptions for both Defense and Energy 
            Department facilities. Although the Department of Energy is 
            exempt from the current statute, DOE policy does require 
            chemical sabotage assessments utilizing the select agents 
            lists and the adoption of protection measure where 
            necessary; and

     Amending the exemption for facilities regulated under the 
            NRC to clarify the scope of the NRC exemption and to 
            specify that DHS and the NRC shall work together to make a 
            final determination on whether a facility or an area within 
            a facility is subject to NRC regulation and is thus exempt 
            from DHS regulation.

    Given the complexity of chemical facility regulation, 
implementation logistics, and resource implications, any requirements 
considered in prospective legislation should also be taken into account 
to avoid having the Department extensively revisit aspects of the 
program that are either currently in place or which will be implemented 
in the near future.
                               conclusion
    The Department is collaborating extensively with the public, 
including members of the chemical sector and other interested groups, 
to work toward our collective goals under the CFATS regulatory 
framework. In many cases, industry has voluntarily made tremendous 
progress to ensure the security and resiliency of its facilities and 
systems. As we implement CFATS, we will continue to work with industry, 
our Federal partners, States, and localities to get the job done.
    The administration recognizes that CFATS reauthorization requires 
further technical work. The Department is ready to engage in technical 
discussions with committee staff, affected stakeholders, and others to 
work out the remaining details. 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 resulted in considerable success. We look forward to 
collaborating with the committee, industry, and Government partners to 
ensure that the chemical facility security regulatory effort achieves 
success in reducing risk in the chemical sector.
    Thank you for holding this important hearing. I would be happy to 
respond to any questions you may have.

    Mr. Lungren. Well, thank you very much for your testimony. 
Maybe that will be a template for others who testify coming 
well within the 5 minutes. But I don't want to hold people too 
much to that because then I would have to hold myself to that.
    Thank you, Mr. Beers, for your testimony. We do know that 
your time is valuable, and we appreciate you being here today 
to discuss the state of NPPD and the ways to improve its 
effectiveness and efficiency in stopping the threats of 
terrorism against our chemical facilities. I will recognize 
myself for 5 minutes to ask questions.
    I happen to agree with you that we have made progress and 
that DHS is going in the right direction. However, I just have 
to ask this question: In your testimony you report that a 
little over 4,700 facilities are covered by CFATS but only 175 
preauthorization inspections have been completed, only four 
authorization inspections completed. I believe one you either 
know or one site security plan is formally approved or 
disapproved.
    So this is 4 years later. You have had the authority to 
regulate these facilities and hundreds of millions of 
taxpayers' dollars later, why is the pace so slow? Is it 
because of some inherent problem with the CFATS program as we 
set it up? Do we have to start all over again? Is it because 
you haven't had enough people? We haven't had enough resources?
    Is it some other reason because, you know, we are looking 
at effective and efficient Government, and if I go home and 
talk to my constituents and say hey, I am proud of the fact 
that I helped start this program 4 years ago with the initial 
thought in our legislation, and yet we only have one site or no 
sites that have actually fully been approved, they are going to 
say how is that efficient?
    How is that effective? What are you going to do about it? 
So I guess I would ask you: How is that efficient? How is that 
effective? What are you going to about it?
    Mr. Beers. Sir, that is an excellent question, and let me 
just answer by saying several points. The first point is yes, 
we started off with potentially 47,000 programs that might be 
within the program. We reduced it in the first instance to 
8,000. We have now reduced the number of affected facilities to 
a little over 4,000.
    In that process, we have determined that, No. 1, the number 
of facilities that need to be looked at is less. No. 2, the 
number of facilities that were in the initial cut to be looked 
at have made adjustments as I indicated in my oral testimony 
that have made them safer by no longer putting them in the 
position of being high-risk facilities.
    No. 3, as we have given final tier notices to the various 
facilities they have begun the process of their site selection 
plans. They have begun in parallel the movement in the 
direction of security measures.
    So actually getting to a final approved site security 
program does not mean that security hasn't improved over the 
process. We have to date nine facilities who have received 
letters of authorization, you are correct. We have had four 
subsequent site security visits. We have not approved a single 
plan yet, but I think it is absolutely fair to say that we have 
moved in the direction of making America safer.
    With respect to the program overall, I don't believe that 
all of the good work that has been done and all of the progress 
that has made and the approach to the completion of the site 
security plans in any way suggest that the program isn't 
working or that we ought to start over again.
    With respect to the issue of resources and people which you 
asked, I think this is still a growing program. We have in 
terms of chemical inspectors approximately 109 who are located 
in the field with some in headquarters. We still have a 40 
percent growth path with respect to those inspectors that we 
have to hire.
    So it's--it would be imprudent of me to tell you at this 
point that we need more people. We just to complete the hiring 
process, which we are doing in a deliberate fashion in order to 
ensure that when the people come on-board they will be ready 
and that there will infrastructure to support them.
    It is my expectation that with respect to the Tier 1 
facilities that we will be through with the inspection process 
by the end of this calendar year. Thank you, sir.
    Mr. Lungren. I appreciate that, and I hope that is true. 
You do recall that you testified before us a year ago, and when 
we asked when you would be completed with the process you told 
us in a year. Now I am hearing the same thing from you.
    Why should I believe it is going to be at the end of this 
year when you had thought we were going to do it at the end of 
last year? If you and I are both fortunate enough to be here 
next year, why should I expect I am not going to hear that 
again?
    Mr. Beers. A very fair question, sir. What we discovered in 
the process of the time between when I made that statement last 
year and the end of this calendar year was that the submissions 
on the part of the industry that made those submissions was 
inadequate with respect to the actual site security plan 
proposals that they put forward.
    As a result of that, we have gone back to them with 
requests for more information, with technical assistance as 
appropriate in order to build solid, respectable site security 
plans. That ended up occupying the course of this year.
    I think from the lessons learned during the course of this 
year that I think my projection of finishing the Tier 1 
facilities by the end of this year is in order. But I certainly 
respect your question and my statement last year.
    Mr. Lungren. Thank you very much. My time is up.
    I now recognize the gentlelady from New York, the Ranking 
Member of the subcommittee for 5 minutes of questions.
    Ms. Clarke of New York. Thank you very much, Mr. Chairman. 
Under Secretary Beers, it is my feeling and the feeling of many 
of my colleagues that CFATS has worked pretty well so far. But 
we agree with you that a large gap still exists in chemical 
security due to the exemption of drinking water, wastewater, 
and port facilities and that this gap must be closed. Please 
elaborate on the reasons why the administration believes this 
gap should be closed?
    Mr. Beers. Thank you, Congresswoman Clarke. Let me start on 
the port facilities first.
    Recognizing that the ports were exempted from this and 
recognizing that the Secretary of Homeland Security is both the 
Cabinet Secretary for the CFATS program and for port security 
with the Coast Guard, she has asked NPPD to work together with 
the Coast Guard without the requirement for legislation to 
bring about a harmonization of those two regimes to ensure that 
from a real perspective that that does not represent a gap. I 
think I can report that the working group that has this under 
way has made some important progress.
    With respect to water and wastewater, I think this was an 
area in which some number of the water and wastewater 
facilities are known to possess quantities of chemicals of 
interest that would put them in the high-risk category.
    They are prevalent in every community in this country. 
Those which we estimate to be roughly 6,000 that might be 
tiered into the four categories, represent a gap that we ought 
to find a solution for. So that is the basis for that proposal 
that the administration made during the last Congress. Thank 
you.
    Ms. Clarke of New York. With regards to drinking water, 
what are the concerns there? Why is it that the administration 
feels that the gap at the port facilities needs the type of 
remedies that you have already outlined?
    Mr. Beers. Well, in the case of the drinking water, as with 
the wastewater, it has to do with the treatment of that water 
and the use of chlorine as the basis. Chlorine is on our 
chemical of interest list. We know that there are facilities 
that have it in quantities that could be potentially dangerous.
    Likewise with the port facilities, there are a number of 
chemical facilities, refineries, and whatnot that exist in 
those port areas, that while the Coast Guard is clearly 
responsible for the safety and security of those areas, the 
actual requirements that are looked at, the actual issues that 
are looked at, I should say, are not exactly the same.
    We believe that the safety and security of those areas 
ought to be similarly treated as the facilities that do fall 
under the Chemical Facilities Anti-Terrorism Standards Act. 
Thank you.
    Ms. Clarke of New York. Is there an assurance that they 
don't get caught between CFATS and the MTSA requirement?
    Mr. Beers. That is the intention, to ensure that two 
different regimes are administered in roughly the same or in a 
harmonized fashion. This is an effort on our part to try to do 
the job that we believe in the spirit of the Congress asking us 
to do this. Thank you.
    Ms. Clarke of New York. Thank you. I yield back, Mr. 
Chairman.
    Mr. Lungren. Thank you very much. I will now recognize 
other Members of the committee for questions that they wish to 
ask. In accordance with our committee rules and practice I 
would plan to recognize Members who were present at the start 
of the hearing by the seniority on the subcommittee. Those 
coming in later will be recognized on the order of arrival on 
the floor.
    I recognize Mr. Meehan. I would just say that as the prime 
author of the SAFE Port Act, I appreciate the fact that you are 
trying to accommodate that authority along with CFATS and see 
if you can work that out. Whether we need specific legislation 
or not, we will be in conversation with you about.
    But we need to make sure that we are not duplicative in 
that effort, and the Coast Guard has done a very good job in 
implementing the SAFE Port Act with the ports of the country.
    Mr. Meehan is recognized for 5 minutes.
    Mr. Meehan. Thank you, Mr. Chairman. Thank you, Mr. Beers, 
for your testimony here today. Let me ask you a specific 
question. How much chlorine in terms of, you know, an actual 
amount represents a threat?
    Mr. Beers. Sir, I don't have that figure in front of me 
now, but I would be happy to get back to you with a specific 
amount that that represents in an explanation of how we came to 
the judgment of that amount.
    Mr. Meehan. I mean, would a vat of chlorine be a potential 
threat, a terroristic threat? Somebody could use a vat of 
chlorine, say, at a swimming pool?
    Mr. Beers. Sir, that is what I need to get back to you on. 
We are really here talking about drinking water and wastewater, 
and I don't believe a swimming pool could fall into that. But 
it has to do with the level, that is the amount, the actual 
amount of a chemical of interest that is held on site.
    Mr. Meehan. Right, that is the question I am trying to get 
to because that is the answer.
    Mr. Beers. I don't have the answer to that specific amount, 
but we can get you that information. In fact, we can give you 
that information with respect to all the chemicals that are in 
Appendix A.
    Mr. Meehan. I am an advocate of your interest in trying to 
reach beyond where we are going. I guess I am just watching 
this anew. We are 10 years after September 11. We are asking 
tough questions about the steps that we are taking. Are they 
really working? I notice that we are already apparently 
significantly behind in the form of doing the inspections that 
were discussed earlier at the chemical facilities.
    Now we are talking about trying to expand work into the 
wastewater facilities. I am thinking back, from days as a 
lifeguard, there are big vats of chlorine in every municipal 
pool and every private pool and other kinds of places. Do they 
pose a threat?
    Mr. Beers. As I said, sir, it is not my belief that what we 
are talking about is the level of chlorine that would be 
available at a swimming pool, as opposed to a drinking water or 
a wastewater facility, which are, as you well know, at least 
insofar as the ones that would fall under the screening, much 
larger facility.
    There are tens of thousands of water and wastewater 
facilities, yet our estimate of the number that would fall 
under the high-risk category is only 6,000. Now, that is also a 
large number, and I recognize that. But it is not every vat of 
chlorine in every location in the country that is going to fall 
under that.
    Mr. Meehan. I share the frustration of trying to make sure 
that we can balance assuring the safety of the homeland with 
what is practical with respect to trying to secure or oversee. 
I think about the implications of this to so many of our 
municipal water authorities that are already struggling under 
tremendous pressure just to be able to keep antiquated systems 
running.
    To what extent are these kinds of new regulations or 
attempts to do further regulation going to deter what limited 
capacity they have just to keep their places operating from, 
you know, from diverting dollars for this, when they are 
already struggling just to do the job that they need to do?
    Mr. Beers. Sir, that is absolutely part of the 
consideration that we bring to bear in conceiving and 
publishing and implementing regulations that Congress might 
choose to provide to the administration. The water and 
wastewater facilities would be worked on jointly between the 
Environmental Protection Administration and the Department of 
Homeland Security.
    The administration's proposal is to take the experience and 
the relationships which EPA has with those facilities and marry 
it, so to speak, with the experience that we have in working to 
define regulations that make sense, that are smart, that impose 
little or no cost on facilities to try to make the 
implementation not be an onerous fiscal requirement for these 
administrations.
    Because you are certainly right with respect to 
municipalities and the rigid budget environment that they, as 
we in the Federal Government, are already under. This is not 
something that would happen overnight. This is not something 
that would come down like a ton of bricks.
    I think you will find that our relationship with the 
chemical and related industries has been a partnership in 
implementing these regulations. If we are given authority for 
water and wastewater, we would proceed no differently.
    Mr. Lungren. The gentleman's time is expired.
    The Ranking Member of the Full Committee, the gentleman 
from Mississippi, Mr. Thompson, is recognized for 5 minutes.
    Mr. Thompson. Thank you very much, Mr. Chairman. Mr. Beers, 
first state for the record, could you kind of talk very briefly 
about the tiering system under CFATS to kind of give new 
Members of the committee a, you know, who we are talking about 
and who we are trying to address the most?
    Mr. Beers. Yes, sir. So we have four tiers in the high-risk 
facilities. In terms of those tiers with respect to the 
facilities that are in each of them we have 218 facilities in 
Tier 1, currently, and we have three pending final tiering. We 
have 535 in Tier 2, with 38 pending final tiering. We have 
1,126 in Tier 3, with 146 pending final tiering. We have 2,215 
in Tier 4, with 474 pending final tiering.
    Tier 1 is the highest tier, the highest risk level. Tier 4 
is the lowest risk level. If Members would like, we would be 
happy to provide as information the criteria that distinguish 
each of those tiers, one from the other.
    Mr. Thompson. Mr. Chairman, I think that would be helpful 
for the new Members if I would go to New Jersey, for instance, 
some of those facilities are right along the interstate. So 
part of what we are trying to do is to secure some of those 
facilities.
    Some of them the committee visited, and we became very 
concerned that we have to do something. Some of them, it is 
just a mere fence that is the difference between those 
facilities and a potential terrorist threat.
    But also in this, I understand that we had about 3,000 
companies to voluntarily go through a process of getting off 
the list by just looking at how they do things and coming into 
compliance. Can you share that with the committee, also?
    Mr. Beers. That is correct. I think when the initial 
regulations were put out, approximately 8,000 facilities 
submitted tox screen reports believing that they fell within 
that. Of the 3,000 that fell out, some of those were the result 
of an inadequate or incorrect understanding, I should say, of 
what fell in and what fell out.
    But among those I think it is also important to know that 
over 1,000, 1,246, completely removed their chemicals of 
interest and therefore were no longer within the screening. In 
584 of those facilities reduced their holdings to the level 
that they were no longer within.
    So as I have said, this program has increased security, 
even if we haven't gotten to final approval of a specific 
security plans because, this has happened. But also it is also 
true that companies are not waiting for approval of their final 
security plans to begin some of the implementation of the 
measures that are included in their security plans.
    Mr. Thompson. I yield back.
    Mr. Lungren. The gentleman yields back.
    The gentleman from Missouri, Mr. Long, is recognized for 5 
minutes.
    Mr. Long. Thank you, Mr. Chairman, and thank you, Under 
Secretary Beers, for being here today and for your testimony. 
We are talking about water and wastewater. As far as high-water 
marks, if I was to ask you the top three high-water marks, the 
top three things in your mind that have been achieved since the 
implementation of CFATS, what would I put on my report card?
    Mr. Beers. I think the first thing that you would say is 
that we have a pretty clear picture of where the security 
challenges are located in this country. I think that that is an 
important piece of information, both to those of us who are 
concerned about security, but also to the citizens who live in 
those communities.
    I think the second thing that I would say and strongly 
believe in is that we have gone about the implementation of 
this program in true partnership with the chemical industry, 
and we meet with them on a regular basis. As I have said here, 
and to some Members outside of the committee hearing room, I 
think you would hear the same thing from the chemical 
industries.
    The third thing I would say is going from zero to where we 
are today, that I think we have built the infrastructure within 
the Federal Government to be a true partner to the chemical 
industry in moving forward in this regard.
    Without detracting from the Member's time, please, I would 
like to answer Congressman Meehan's question. It is 5,000 
pounds--500 pounds of chlorine for theft and diversion, and 
2,500 pounds that might be subject to release and that should 
not include any swimming pool in the country, sir.
    Mr. Long. So on the top three achievement list we have 
identified the challenges. Is that kind of No. 1?
    Mr. Beers. We defined the problem.
    Mr. Long. Defined the problem.
    Mr. Beers. We defined the problem. We have created a 
working relationship with the chemical industry. We have built 
the infrastructure to be a real partner to the industry in 
terms of implementing this regulation. We are not doing this 
willy-nilly. We are doing it in full consultation.
    Mr. Long. So we are ready to start seeing results?
    Mr. Beers. We have been seeing the results, but we have got 
a ways still to go, sir.
    Mr. Long. Let me ask, I have heard you a couple times, your 
opening statement and later referred to that the chemicals were 
removed from the facilities if that is correct? My question 
would be were these chemicals they didn't need? Where did they 
go?
    I know you said some were reduced to a level where they are 
no longer a threat. But I am kind of trying to sort out where 
chemicals that they needed in their function have--we tell 
them, ``These are going to be a threat. You need to take these 
out.'' What do they do?
    Mr. Beers. Well, let us just talk for a minute about the 
reduction part of this. The amount of chemicals that might be 
stored at a particular installation for use in the past was 
because they thought that that was the size of inventory that 
made the most sense.
    That said, you can also set up a supply chain from the 
production facility that allows you to have a delivery schedule 
that still allows you to have an operating chemical----
    Mr. Long. Right. Well, those haven't been removed. They 
have just adjusted the quantity they kept on the side.
    Mr. Beers. They just adjusted the quantity.
    Mr. Long. Right, but the ones that have been removed are 
what I am kind of curious about.
    Mr. Beers. I think that what that represents is that they 
came to believe that they did not need that particular chemical 
for whatever it was that that chemical was used for. In some 
cases, that may well have been with a substitute of another 
chemical that was not a chemical of interest, but was 
satisfactory to doing whatever it was that that particular 
chemical had been doing. So it is a substitute.
    Mr. Long. Okay. So let me ask you another question, here. 
To what extent does DHS and other agencies share information 
about security at these facilities?
    Mr. Beers. We do share information. The point, to go back 
to Congresswoman Long's question--Congresswoman Clarke's 
question, excuse me--was that we are very much working with the 
Coast Guard to share information and best practices about what 
we have been doing in this area, as well as them sharing how 
they have managed their security and safety operations. So that 
is very much the case.
    Mr. Long. What barriers, if any, do you think impede the 
ability to share information between Federal agencies about the 
security?
    Mr. Beers. I am not aware of any barriers, sir.
    Mr. Long. Really? Good, okay. Thank you for your testimony. 
I yield back.
    Mr. Lungren. The gentleman's time is expired.
    The gentlelady from California, Ms. Richardson, is 
recognized for 5 minutes.
    Ms. Richardson. Thank you, Mr. Chairman, I just have two 
questions. Under Secretary Beers, last year you were designated 
the Department's lead for counterterrorism issues. To my 
knowledge, you are the first person to be specifically named in 
this capacity in the Department's history. Could you give us a 
brief overview of what responsibilities and authorities are 
associated with your role?
    Mr. Beers. Thank you, Congresswoman. The title or the 
position to which I have been put into is the Coordinator for 
Counterterrorism. This is not a line responsibility. I do not 
have the authority to order pieces and parts of the Department 
to do A or B.
    My job is to make sure that people in the Department are 
adequately sharing information, are talking with one another, 
are building programs that key off of one another.
    I think the best example of that is something that we call 
Silent Partner, which is an air security program, which brings 
about the cooperation of the Transportation Security 
Administration and the Customs and Border Protection Office 
where they each took authorities that they had individually and 
put them together in a working program that identifies people 
of interest who represent threats and who are traveling from 
overseas to the United States.
    Keeping them off those planes or requiring that they have 
additional security screening before they get on planes coming 
to the United States, coordination, not authority to order 
anything to be done. We have begun working. I think it is a 
useful information sharing device that helps the Secretary do a 
better job.
    Ms. Richardson. Thank you. My second question is to my 
understanding, the Department of Homeland Security only screens 
against a terrorist watch list. A person who is not on the 
terrorist watch list, but prohibited from purchasing a gun, for 
example under the National Instant Criminal Background Check 
System, could be possibly cleared by DHS.
    No. 1, could you clarify for me if that is true? Second of 
all, do you think that this is a security risk that may need to 
be addressed during the reauthorization? Do you think that 
there should be a coordination among the various background 
databases maintained by the Federal Government?
    Mr. Beers. Congresswoman, thank you very much for that 
question.
    Ms. Richardson. Yes. Thank you.
    Mr. Beers. The answer at the beginning of the question is 
no. We only check the terrorist database. That is by counsel's 
review of the drafting of the existing legislation. So someone 
who was only within the National criminal database would be 
permitted to come on to a facility.
    If Congress so chooses, to alter that to allow criminal 
background checks, as are allowed for the Transportation 
Workers Identification Card, we would be pleased to receive 
that additional authority. Thank you.
    Ms. Richardson. Thank you, sir. I yield back.
    Mr. Lungren. Thank you very much. Now the gentlelady from 
Texas is recognized, not a Member of the subcommittee, but a 
Member of the full committee. I recognize her for 5 minutes.
    Ms. Jackson Lee. Chairman Lungren, let me add my 
appreciation for the courtesies extended by you and to Ranking 
Member Clarke. Thank you very much, and as well, Chairman, let 
me congratulate you for your new leadership on this committee. 
To the Under Secretary, we have had the opportunity to engage 
before. So I am delighted to see you.
    I live in the land of chemical plants, if you will. Many of 
you may have heard of the Enterprise Products accident that 
occurred just about 48 hours ago in that area surrounding 
Houston. As I understand the media has reported, one possibly 
lost. That may be an accident that had nothing to do with 
issues of cybersecurity, but it does show the volatility of the 
region and the area.
    I believe that we live in a atmosphere of ``Hackers 
International,'' some who do it for the thrill, and some who do 
it to do us harm. So I believe the urgency of this committee's 
work cannot be underestimated.
    My question, is the issue of urgency on behalf of the 
Federal Government? The tools that you may need? I just saw one 
tool expressed, but we have been trying to work on the 
authority--or we gave the authority to DHS to regulate chemical 
security since 2006. In 2010, there were a minimum of 113 
facilities in the Houston area that merited some level of 
security in the CFATS.
    These inspection delays allow facilities to operate with 
less than optimal safety and security. So my question is on the 
sense of urgency, how much or how fast or how much faster can 
we go? Is there a sense of the negative impact that the cyber 
security violations of a bad intent may happen so much so that 
we can ramp up these inspections or that we can ask publicly 
now, today, for more tools to allow us to act on that sense of 
urgency? Mr. Secretary.
    Mr. Beers. Thank you for the question, Congresswoman. Let 
me assure you that the people who are working in this area, 
chemical security generally and the cyber sub-element thereof, 
are absolutely committed to the urgency of improving America's 
security.
    Ms. Jackson Lee. Can you go to what you need to increase 
these inspections or to act upon that sense of urgency?
    Mr. Beers. What we have done over the course of the last 
year, is come to a better appreciation and understanding of how 
to accelerate our ability to complete the inspection process 
and approve improved site security plans.
    With respect to the cyber part of this, let me assure you 
that any cyber breach that occurs today in any of these 
chemical facilities or any other facility around the United 
States, if it is reported to US-CERT, the Computer Emergency 
Readiness Team, which is also part of NPPD, that organization 
will speedily provide a definition of what the problem looks 
like, a patch to cover that problem in a form of remediation 
that prevents that problem from occurring again.
    But I also have to tell you we don't have all of the 
choices that hackers or nation-states might use to intrude into 
our cyberspace, neither we nor the rest of the U.S. Government. 
So some of it we can stop before it ever gets there as a 
firewall in your personal computer. Others of it, we have to 
see it in order to prevent it.
    But if we see it, and this is important, if the chemical 
facilities report it to us, then we can help them fix it. More 
importantly, we can prevent it from occurring more broadly than 
the individual facility that was affected by it.
    That is why the reporting process on cyber intrusions is so 
critically important to dealing with these problems. Hackers 
invent new ideas every day. If we don't see it and know about 
it, we can't fix it. Thank you.
    Ms. Jackson Lee. Thank you. Mr. Chairman, thank you, and I 
just want to welcome Mr. Sam Mannan, who comes from my neck of 
the woods and Director of the Mary Kay O'Connor--from Texas--
Safety Center from Texas A&M University. Let me thank you, Mr. 
Chairman, I yield back.
    Mr. Lungren. Thank you, Ms. Jackson Lee, and that will 
conclude our first panel.
    Thank you very much, Mr. Under Secretary, for test--excuse 
me--for testifying. In our second panel, we have three 
distinguished witnesses. I think it will take just a moment to 
get them to the table and set it up. Then we will proceed with 
the second panel.
    Once again, thank you very much, Mr. Secretary.
    Mr. Beers. Thank you the whole committee for the 
opportunity to testify. I stand ready to come back, either 
privately or publicly to any of you at any time.
    Mr. Lungren. You can be assured we will take you up on that 
invitation.
    Mr. Beers. I wouldn't have made it if I didn't mean it.
    [Laughter.]
    Mr. Lungren. We are pleased to have three distinguished 
witnesses before us today on this important topic. Before I 
introduce them, let me remind the witnesses that their entire 
witness statements will appear in the record. We would ask that 
you might summarize within approximately 5 minutes.
    We have, on our panel, Mr. Timothy Scott, Chief Security 
Office for the Dow Chemical Company, testifying on behalf of 
the American Chemistry Council. Welcome, Mr. Scott.
    We have Dr. Sam Mannan, Regents Professor and Director of 
the Mary Kay O'Connor Process Safety Center at Texas A&M 
University. Thank you, Doctor, for being here.
    We have Mr. George S. Hawkins, General Manager of the 
District of Columbia Water and Sewer Authority, and we thank 
you for being here, as well.
    We will start with Mr. Scott. We would ask all three of you 
for your testimony in the order that I introduced you. Then 
after that we will proceed with our questions, each Member 
receiving a 5-minute period of time.
    So Mr. Scott, thank you for being here, and we welcome your 
testimony.

STATEMENT OF TIMOTHY J. SCOTT, CHIEF SECURITY OFFICER, THE DOW 
    CHEMICAL COMPANY, TESTIFYING ON BEHALF OF THE AMERICAN 
                       CHEMISTRY COUNCIL

    Mr. Scott. Thank you. Chairman Lungren, Ranking Member 
Clarke and Ranking Member of the Full Committee Thompson, my 
name is Timothy Scott. I am the Chief Security Officer for the 
Dow Chemical Company. Dow is a member of the American Chemistry 
Council, and I am speaking today on behalf of Dow and the ACC.
    I have three points for consideration in your effort to 
secure the Nation's chemical facilities. First, the chemical 
industry has taken aggressive action to improve our security 
posture voluntarily before DHS and CFATS and now with the on-
going implementation of the standards.
    Second, CFATS is in fact achieving its objectives to reduce 
the number of high-risk sites and lower the risk profile of the 
remaining high-risk sites. Third, we have gained momentum, and 
we need to maintain that momentum to complete the task at hand 
without further delays.
    President Obama issued an Executive Order laying out 
regulatory principles that promote economic growth, innovation, 
competitiveness and job creation. They also call for 
regulations that promote predictability and use the best, most 
innovative, and least burdensome tools for achieving regulatory 
ends.
    We couldn't agree more that we need a strong, sound, 
efficient regulation that will improve security but not hinder 
the ability of American companies to complete and create jobs.
    Chemistry is the source of new technologies that would help 
create jobs in the future, drive economic growth and achieve 
the goals articulated by the President. The chemical industry 
employs nearly 800,000 people indirectly in high-paying, high-
skilled jobs.
    Safety and security are a top priority for Dow and the 
members of ACC. We have demonstrated this commitment throughout 
our history. We have implemented innovative process 
technologies in the design and construction of new facilities, 
by far the most efficient and logical time to achieve the 
maximum value in process safety improvements.
    We have initiated voluntary programs for communities and 
local responders including training and information sharing. We 
have improved security measures at our sites and throughout the 
distribution chain.
    Our focus on security is clear and evident. Before DHS and 
CFATS, ACC members voluntarily adopted the Responsible Care 
Security Code, a comprehensive security program addressing 
physical, supply chain, and cybersecurity and requiring ACC 
members to perform an extensive assessment of their security 
risks.
    Implementation of the code and the regular independent 
review are mandatory for membership in the ACC. The strength of 
the code is proven in its designation as a qualified 
antiterrorism technology under the Safety Act.
    Dow along with ACC has been proactive in calling for a 
National regulatory program to consistently address security 
across the chemical sector. We strongly support a bipartisan 
legislation that gave DHS authority to regulate chemical 
security and create CFATS.
    CFATS takes a well-designed risk-based approach, sets a 
high bar to performance standards and holds high-risk 
facilities accountable for meeting those standards. The program 
is predicated on the idea that performance standards are the 
regulatory tool of choice for ensuring security and its 
standards can be met by the facility selecting from a variety 
of layered security measures that best suit that specific 
facility.
    This is clearly in line with the goal of the administration 
to establish the best, most innovative, and least burdensome 
tools for achieving regulatory ends. This drives facilities to 
consider all potential risk reduction options including 
potential process safety improvements when developing a site 
security plan.
    After DHS approval, the result is a security plan uniquely 
and appropriately designed by the site to address the specific 
risk issues of that site. The bottom line is that the 
performance standards are met.
    CFATS is yielding measurable results. DHS is screening 
chemical facilities across the country, identifying those 
deemed as high-risk. Many sites have already taken action and 
DHS reports the number of high-risk facilities has already been 
significantly reduced.
    It is important that we don't lose this momentum. Dow and 
ACC support the permanent reauthorization of CFATS. We believe 
it is a success and meets the regulatory principles outlined by 
the President.
    We have a solid foundation to address chemical security 
while providing industry the flexibility needed to remain 
competitive and a vital contributor to the Nation's economy.
    We believe changes to CFATS that require implementation or 
enhance scrutiny of any single-risk reduction option such as 
the mandatory consideration or implementation of inherently 
safer technology are unnecessary and would be overly burdensome 
to industry and to DHS.
    Dow and ACC do not support mandatory consideration or 
mandatory implementation of IST or any other single-risk 
reduction tool. Dow, along with the members of the ACC, are 
committed to continuing our aggressive risk-based approach to 
safeguarding America's chemical facilities. We look forward to 
working with DHS and this committee. Thank you.
    [The statement of Mr. Scott follows:]
                 Prepared Statement of Timothy J. Scott
                           February 11, 2011
    Chairman Lungren, Ranking Member Clarke and Members of the 
committee, I'm Timothy Scott, Chief Security Officer for the Dow 
Chemical Company. Dow is a member of the American Chemistry Council, 
and I'm speaking today on behalf of Dow and our industry association.
    I would like to make three key points in my statement today that I 
think will demonstrate that we have a strong foundation in place to 
build from when it comes to securing the Nation's chemical facilities:
    First--The chemical industry is critical to our National economy as 
well as the quality of life of our people. We recognize the historical 
and current risks to our industry and have taken aggressive action to 
improve our security posture--voluntarily well before the creation of 
DHS and the Chemical Facility Anti-Terrorism Standards (CFATS) and 
continuing now with the on-going implementation of CFATS.
    Second--The implementation of CFATS to date is demonstrably 
achieving its objectives to reduce the number of high-risk sites and 
lower the risk profile of remaining high-risk sites.
    And third--and most important--we need to continue on this 
successful path, maintain the momentum we've achieved and complete the 
task at hand without further delays or calls for change that would 
result in slowing the progress being made on chemical facility security 
by both DHS and the chemical industry.
    Last month, President Obama issued an Executive Order which lays 
out a set of regulatory principles. These principles call for a system 
that promotes ``economic growth, innovation, competiveness and job 
creation.'' They also call for regulations that promote predictability, 
and use the ``best, most innovative and least burdensome tools for 
achieving regulatory ends.''
    We couldn't agree more that we need strong, sound, efficient 
regulations that will not hinder the ability of American companies to 
compete and create jobs.
    This is particularly important for an industry like ours. Chemistry 
is the source of many of the new technologies that will help create 
jobs in the future, drive economic growth and achieve the goals 
articulated by the President during his State of the Union including 
clean energy; improved infrastructure; efficient transportation 
options; medical advancements that bring down the cost of health care; 
and even a strong defense.
    And the Business of Chemistry employs nearly 800,000 people 
directly in high-paying, high-skill jobs. These are the kind of jobs 
that not only put food on the table, but boost consumer spending, send 
kids to college, allow families to own homes, and save for retirement.
    Because of our critical role in the economy and our responsibility 
to our employees, communities, and shareholders--safety and security 
continues to be a top priority for Dow and the members of ACC. And, we 
have actively demonstrated the commitment to security. Throughout our 
history, the chemical industry has implemented innovative processes and 
technologies to enhance safety. Starting from the design and 
construction phase of new facilities--by far the most efficient and 
logical time to achieve the maximum value and process safety 
improvements--to measures that are implemented throughout the 
distribution chain, our focus on security is clear and evident.
    In 2001, ACC members voluntarily adopted an aggressive security 
program--already in draft form before 9/11--that became the Responsible 
Carer Security Code (RCSC). The Security Code is a comprehensive 
security program that addresses both physical and cybersecurity 
vulnerabilities, and requires ACC members to perform an extensive 
assessment of its security risks. Implementation of the Code and 
regular independent review is mandatory for membership in the ACC. In 
fact, the strength of the Code has been recognized by DHS and is 
designated as a qualified anti-terrorism technology under the Safety 
Act.
    Recognizing the important role of Government to address the risk of 
and thwart terrorism, Dow, along with ACC, has been proactive in our 
support for a National regulatory program to address security across 
the chemical sector. We strongly supported the bi-partisan legislation 
that gave DHS the authority to regulate chemical security and create 
the Chemical Facility Anti-Terrorism Standards (CFATS).
    CFATS is by far the most robust, comprehensive, and demanding 
chemical security regulatory program to date. It takes a well-designed 
risk-based approach, sets a high bar through performance-based 
standards, and holds high-risk facilities accountable for meeting those 
standards.
    The accountability within the program drives facilities to consider 
all potential risk-reduction options, including potential process 
safety improvements, when developing a site security plan. Just as 
important, it leaves the decision of how to meet the standards to the 
site's discretion and subject to DHS approval of the site security 
plan. The result is a security plan approved by DHS that is uniquely 
and appropriately designed by the site to address the specific risk 
issues of each individual facility and meet the performance standards 
of DHS.
    While still in the initial implementation stages, these tough 
regulations are yielding measurable results to manage or in some cases 
eliminate security risks. DHS has screened chemical facilities across 
the country and identified all of the facilities it deems are a ``high-
risk'' for a potential terrorist attack. These facilities have been 
notified of their regulatory obligations and many have already taken 
action. For example, DHS reports the number of ``high-risk'' facilities 
has already been reduced by more than 2,000.
    It's important that we don't lose this momentum. Dow and ACC 
support the permanent reauthorization of CFATS because we believe it is 
a successful program that meets the regulatory principles outlined by 
the President. The program has laid a solid foundation to address 
security at chemical facilities while at the same time providing 
industry the flexibility it needs to remain competitive and provide the 
innovative products that are vital to the Nation's economy.
    We believe any changes to the program that would require 
implementation or even enhanced scrutiny of any single risk-reduction 
option that is available to industry, such as the mandatory 
consideration or implementation of inherently safer technology (or 
``IST''), are unnecessary. The program is predicated on the idea that 
performance standards are the regulatory tool of choice for ensuring 
security, as they can be met by the facility selecting from a variety 
of layered security measures that best suit that specific facility. 
Allowing for the imposition of a single type of risk-mitigation measure 
would only serve to undermine the success of the program to date and 
flies in the face of the goal of the administration to establish the 
``best, most innovative, and least burdensome tools for achieving 
regulatory ends.'' Such a change at this critical juncture would add an 
unacceptable degree of uncertainty to a program that is maturing, and 
place an unjustifiably large burden on chemical facilities and DHS. 
Accordingly, Dow and ACC do not support mandatory consideration or 
mandatory implementation of IST or any other single risk reduction 
tool.
    As I have outlined in my testimony, Dow along with the members of 
the ACC are committed to continuing an aggressive approach in 
safeguarding America's chemical facilities. It is in this spirit that 
we look forward to working alongside DHS and this committee. Thank you 
for this opportunity and I am happy to answer any questions at the 
appropriate time.

    Mr. Lungren. Thank you very much.
    Five minutes, Dr. Mannan.

 STATEMENT OF M. SAM MANNAN, PH D, PE, CSP, REGENTS PROFESSOR 
 AND DIRECTOR, MARY KAY O'CONNOR PROCESS SAFETY CENTER, TEXAS 
                     A&M UNIVERSITY SYSTEM

    Mr. Mannan. Thank you, Chairman Lungren, Ranking Member 
Clarke, Ranking Member of the subcommittee, Mr. Thompson, 
Congresswoman Sheila Jackson Lee, thank you for recognizing me 
earlier and other distinguished Members of this subcommittee. 
My name is Samuel Mannan, and I am the director for the Mary 
Kay O'Connor Process Safety Center, a holder of the T. Michael 
O'Connor Chair I in chemical engineering and Regents Professor 
at Texas A&M University.
    The center seeks to develop safer processes, equipment, 
procedures, and management strategies that will minimize losses 
in the process industry. The opinions presented during this 
hearing represent my personal position on these issues.
    Chemical security and protection of the chemical 
infrastructure is of extreme importance to our Nation. I am 
pleased that the U.S. Congress is continuing to pay attention 
to issues related to chemical facility antiterrorism.
    Hazardous materials can be grouped into three tiers of 
vulnerability categories. The first category includes 
stationary facilities that are members of major industry 
associations. Even though these facilities have large 
inventories of hazardous materials and are quite visible, they 
are the best pr,epared against attacks because of voluntary 
programs that have been developed and implemented.
    The second tier of vulnerability category includes smaller 
and medium-size facilities that manufacture or use chemicals 
but may or may not be members of any industry associations. 
These facilities are less visible but are also in general less 
prepared and more widely distributed.
    Finally, the third category of vulnerability includes all 
hazardous materials that are in transit throughout the United 
States. In addition to being present almost anywhere in the 
United States at any given time, this category represents high 
visibility and the highest vulnerability.
    I will limit the rest of my oral testimony to some key 
issues with regard to inherent safety. It must be understood 
that determination of inherent safety options is a complex 
process and not an off-the-shelf technology.
    In some cases, a seemingly clear choice with regard to 
inherent safety may create some unintended consequences. Issues 
such as risk migration, risk transfer, and/or risk accumulation 
should be evaluated whenever an inherent safety option is 
considered.
    With regard to chemical facility antiterrorism standards, I 
have the following specific comments. No. 1, the U.S. Congress 
must give the Department of Homeland Security permanent and 
continued authority to regulate chemical security in the United 
States.
    No. 2, the use of a risk-based approach and risk tiering in 
evaluating the vulnerability of any facility is a good 
approach.
    No. 3, the Department of Homeland Security does not 
currently have appropriate and adequate expertise to implement 
and enforce inherent safety.
    No. 4, despite a significant amount of work in the area of 
inherent safety design and technology, it still remains a very 
complex task to determine on a case-to-case basis what is an 
inherent safety technology or approach. In many cases, a 
seemingly inherent safety approach may result in unintended 
consequences, risk transfer, and/or risk accumulation.
    No. 5, I strongly believe that science should precede 
regulations. I do not believe that science currently exists to 
quantify inherent safety.
    No. 6, the current risk tiering of stationary sources 
inherently encourages the use of IST. For example, a facility 
that is in Tier 1 would consider all IST options if they move 
the facility to Tier 3 or Tier 4.
    So it could be argued that consideration of IST options is 
already part of the market-driven, incentive-based approach 
within the current CFATS legislation.
    In fact, I would suggest that if facilities under the 
current CFATS legislation use IST approaches to change their 
tier designation, they should be required to prove that overall 
risk has been reduced, that unintended consequences have not 
been created, that risk transfer and a risk accumulation has 
not occurred, and that actions taken or proposed have not just 
simply resulted in the departure of industry from one area to 
another.
    In summary, I applaud the U.S. Congress for providing 
leadership in this important area of chemical security. 
Inherently safer technology is an objective that should 
continually be pursued but must always be based on sound 
science as well as sound risk assessment and management 
strategies.
    Mandating the evaluation and/or implementation of inherent 
safety options must be based on good science. Before such steps 
can be taken, important issues must be resolved such as 
generally accepted understanding of the definition of 
inherently safer technology, methods for quantification of 
inherent safety, and methods for evaluation of inherent safety 
options.
    I do not believe that the current know-how and science 
exists to adequately define and quantify any of these issues. 
Thank you for inviting me to present my opinions, and I will be 
happy to answer any questions.
    [The statement of Mr. Mannan follows:]
                       Statement of M. Sam Mannan
                           February 11, 2011
                              introduction
    My name is M. Sam Mannan and I hold a BS, MS, and PhD in chemical 
engineering. I am a registered professional engineer in the States of 
Louisiana and Texas and I am a certified safety professional. I am a 
Fellow of the American Institute of Chemical Engineers and a member of 
the American Society of Safety Engineers, the International Institute 
of Ammonia Refrigeration, and the National Fire Protection Association. 
I am Director of the Mary Kay O'Connor Process Safety Center, holder of 
the T. Michael O'Connor Chair I in Chemical Engineering, and Regents 
Professor of Chemical Engineering at Texas A&M University. The Center 
seeks to develop safer processes, equipment, procedures, and management 
strategies that will minimize losses in the process industry. My area 
of expertise within the chemical engineering discipline is process 
safety. I teach process safety engineering both at the undergraduate 
and graduate level. I also teach continuing education courses on 
process safety and other specialty process safety courses in the United 
States and overseas. My research and practice is primarily in the area 
of process safety and related subjects. The opinions presented in this 
document represent my personal position on these issues. These opinions 
are based on my education, experience, research, and training.
    Chemical security and protection of the chemical infrastructure is 
of extreme importance to our Nation, and I am pleased that the U.S. 
Congress is continuing to pay attention to issues relating to Chemical 
Facility Anti-Terrorism. I have provided testimony previously on this 
subject to the U.S. House of Representatives Subcommittee on 
Transportation Security and Infrastructure Protection of the Committee 
on Homeland Security, on December 12, 2007 and the U.S. Senate Homeland 
Security and Governmental Affairs Committee on March 3, 2010. Since 
then, I have continued to study various issues related to inherent 
safety and the implementation of inherent safety. While we have gained 
additional insight about inherent safety issues, my opinions remain 
much the same as then.
                               background
    Hazardous materials can be grouped into three tiers of 
vulnerability categories. The first category includes the stationary 
facilities that are members of major industry associations. Even though 
these facilities have large inventories of hazardous materials and are 
quite visible, they are the best prepared against attack because of 
voluntary programs that have been developed and implemented. The second 
tier of vulnerability category includes smaller and medium-sized 
facilities that manufacture or use chemicals but may or may not be 
members of any industry associations. These facilities are less 
visible, but are also, in general, less prepared and more widely 
distributed. Finally, the third category of vulnerability includes all 
hazardous materials that are in transit (by whatever means) throughout 
the United States. In addition to being present almost anywhere in the 
United States at any given time, this category also represents high 
visibility and the highest vulnerability. It could also be argued that 
this category is the least prepared to deal with intentionally caused 
catastrophic scenarios.
    Some pertinent subjects of interest with regard to attacks on the 
chemical infrastructure are: Active protection measures; passive 
protection measures; vulnerability analyses, response, and recovery 
plans; and long-term needs and priorities. Active protection measures 
include increased security, limited access to facilities, and 
background checks. Examples of passive protection measures include 
development of exclusion areas and process and engineering measures.
    Vulnerability analysis, response, and recovery plans are needed not 
only to help devise the prevention and protection plans, but also to 
develop the response and recovery plans. In this respect, it must be 
mentioned that most of the large, multi-national facilities that are 
members of major industry associations have voluntarily conducted some 
form of vulnerability analysis. What is not clear is whether these 
analyses have been used to integrate planning for response and recovery 
efforts in coordination with local agencies and the public. One very 
stark lesson from the 
9/11 events is that the ``first'' first-responders are usually members 
of the public. Additionally, area- and region-specific vulnerability 
analysis and assessment of infrastructure availability for response and 
recovery have not been conducted. Finally, a National vulnerability 
analysis and assessment of infrastructure availability for response and 
recovery is a critical need.
    Whether natural or man-made, disasters will continue to happen. 
However, as we have seen with the 9/11 events, Hurricanes Katrina and 
Rita, and chemical incidents such as the Bhopal disaster, planning and 
response is crucial in being able to reduce the consequences and to 
recover from the disaster more rapidly. In this regard, it is essential 
to conduct vulnerability analysis, response, and recovery planning at 
the following three levels:

   Plant-specific vulnerability analysis and assessment of 
        infrastructure availability and preparedness for response and 
        recovery is needed. As mentioned earlier, most of the large 
        multi-national facilities that belong to prominent industry 
        associations have voluntarily conducted some form of 
        vulnerability analysis. What is not clear is whether these 
        analyses have been used to integrate planning for response and 
        recovery efforts in coordination with local agencies and the 
        public.

   Area- and region-specific vulnerability analysis and 
        assessment of infrastructure availability for response and 
        recovery should be conducted. Each area- and region-specific 
        analysis should include an assessment and planning for 
        evacuation and shelters.

   National vulnerability analysis and assessment of 
        infrastructure availability for response and recovery is 
        critically needed. In doing this National analysis, impact on 
        international issues and criteria should also be considered.

    Inherent safety options can be considered; however, it must be 
understood that determination of inherent safety options is a ``complex 
process'' and not an ``off-the-shelf technology". We must be aware of 
the differences in implementing inherent safety options for existing 
plants, as compared to new plants. Also, in some cases, a seemingly 
clear choice with regard to inherent safety may create some undesired 
and unintended consequences. Issues such as risk migration, reduction 
of overall risk, and practical risk reduction should be evaluated 
whenever an inherent safety option is considered. Such an approach 
should be based upon the triple-pronged philosophy: Evaluation and 
assessment, prevention and planning, and response and recovery. 
Planning and preparedness is required for all three areas. Only through 
a comprehensive, uniform, and risk-based approach can we protect the 
people and communities of our Nation as well as protect our Nation's 
critical chemical infrastructure.
                     long-term goals and priorities
    Long-term goals and priorities to prevent and/or reduce the 
consequences of intentional catastrophic scenarios require clear 
thinking and hard work. While no one would argue that making hazardous 
materials less attractive as a target should be a goal that all 
stakeholders should accept, differences arise in how we realize that 
goal.
    Another long-term goal is to develop technology and know-how with 
regard to resilient engineered systems and terrorism-resistant plants. 
In this respect, research and technological advances are needed in many 
areas, such as bio-chemical detection, sensors, and self-healing 
materials. Protection of the chemical infrastructure, like many other 
challenges, requires the commitment and effort of all stakeholders.
    I feel very strongly that science should precede regulations and 
standards. With regard to science and technology investments, many 
initiatives have been proposed and are being implemented. However, some 
important additional initiatives that should also be considered are 
given below:

    1. The fact is that the chemical infrastructure and all components 
        including the individual sites, supply, and delivery systems 
        were never built with terrorism in mind. Research must be 
        conducted to determine how we might have designed and built the 
        chemical plants and the infrastructure had we considered these 
        threats. The ultimate goal for such research would be two-
        pronged. First, determine options for what can be feasibly 
        implemented for existing plants. Second, if necessary, 
        prescribe new standards and procedures for new plants.

    2. Research investments should be made on advanced transportation 
        risk assessment methods. Before transportation of any hazardous 
        materials, a transportation risk assessment should be conducted 
        using available information and methodology, as well as time-
        specific data that may be available.

    3. Additional science and technology investments that should be 
        considered are:

     Development of incident databases and lessons learned. 
            This knowledge base could then be used to improve planning, 
            response capability, and infrastructure changes. Recent 
            experience in this regard is the improvement in planning 
            and response for the Hurricane Rita from lessons learned 
            from the Hurricane Katrina.

     Research should be conducted on decision-making, 
            particularly under stress, and how management systems can 
            be improved.

     Research on inherent safety options and technologies. This 
            type of research should be combined with systems life-cycle 
            analysis and review of practical risk reduction. In other 
            words, implementation of inherent safety options should not 
            be allowed to create other unintended consequences, risk 
            migration, or risk accumulation. While transportation is 
            outside the scope of the Chemical Facility Antiterrorism 
            Standards (CFATS), it must be included in vulnerability 
            assessments to avoid transfer of facility risks to 
            transportation risks.

     Basic and fundamental research is also needed on design of 
            resilient engineered systems. For example, if the collapse 
            of the World Trade Center towers could have been extended 
            by any amount of time, additional lives could likely have 
            been saved.

     Basic and fundamental research is also needed on resilient 
            and fail-safe control systems.

     Long-term research is also needed in the area of self-
            healing materials and biomimetics.

specific comments relevant to ``preventing chemical terrorism: building 
     a foundation of security at our nation's chemical facilities''
    With regard to the Chemical Facility Antiterrorism Standards, I 
have the following specific comments:

    1. The U.S. Congress must give the Department of Homeland Security 
        permanent and continuing authority to regulate chemical 
        security in the United States. While many facilities are 
        voluntarily taking appropriate measures, I am concerned that 
        many are not. A regulation that creates a minimum and level 
        playing field is very important.

    2. The use of a risk-based approach and risk-tiering in evaluating 
        the vulnerability of any facility is a good approach.

    3. The Department of Homeland Security does not currently have 
        appropriate and adequate expertise to implement and enforce 
        inherent safety.

    4. With regard to mandated consideration and/or implementation of 
        inherent safety in chemical facility antiterrorism regulations, 
        I have the following comments:

    a. Despite a significant amount of work in the area of inherent 
            safety design and technology, it still remains a very 
            complex task to determine on a case-to-case basis what is 
            an inherently safer technology or approach. In many cases, 
            a seemingly inherent safety approach may result in 
            unintended consequences, risk transfer, and/or risk 
            accumulation.

    b. Based on current know-how and science, there does not exist any 
            widely accepted scientific process by which to require (by 
            legislation or regulation) a mandatory assessment of 
            ``inherently safer technology,'' at a chemical facility. As 
            a result, there are dangers associated with mandating a 
            specific assessment model or requiring an overly burdensome 
            assessment regime.

    c. There are many methods available to the industry for potentially 
            reducing risk and vulnerability. Vulnerability assessments 
            should consider the feasibility of all methods for 
            improving security to determine the method to achieve the 
            optimum balance of cost effectiveness and vulnerability 
            reduction.

    d. As I stated earlier, science should precede regulations. I do 
            not believe that the science currently exists to quantify 
            inherent safety. Regulations or any actions taken as a 
            result of regulations should not create unintended and 
            unwanted consequences. An example in this context is the 
            substitution of hydrogen fluoride (HF) with sulfuric acid 
            (H2SO4) for refinery alkylation 
            processes. While it is true that HF is more toxic than 
            H2SO4, the amount of 
            H2SO4 needed to do the same amount of 
            processing is 100-140 times or more than HF. Thus changing 
            from HF to H2SO4 would require large 
            storage facilities and more transportation. In fact, 
            changing from HF to H2SO4 may provide 
            more opportunities for a terrorist attack. On the other 
            hand, a well-managed plant with a smaller amount of HF and 
            appropriate safety protective systems may represent a lower 
            overall risk.

    e. An example of risk transfer as well as risk accumulation is the 
            replacement of chlorine with sodium hypochlorite for water 
            treatment processes. The sodium hypochlorite itself is 
            manufactured from chlorine and thus the risk is transferred 
            somewhere else. In fact, if all water treatment is 
            converted to sodium hypochlorite processes, it would lead 
            to risk accumulation where a mega-plant would have to be 
            constructed somewhere with large quantities of chlorine 
            representing a high-value target. Thus, while conversion to 
            sodium hypochlorite may be advisable in some cases, but not 
            in all cases. The determination should be made on a case-
            by-case basis depending on case-specific information and 
            life-cycle risk analysis.

    f. In the case of conversion from chlorine to sodium hypochlorite, 
            there could also be unintended consequences. Sodium 
            hypochlorite is known to be unstable and can decompose into 
            chlorates which subsequently convert to perchlorates. 
            Depending on the duration and conditions of storage of 
            sodium hypochlorite, the formation of perchlorates can 
            occur. This presents an obstacle when this alternative is 
            introduced as an inherently safer technology than that of 
            chlorine since perchlorates are toxic and have been noted 
            to induce thyroid problems from extended exposure. 
            Moreover, perchlorates have been found in more than 90% of 
            sodium hypochlorite samples, and its concentration is 
            believed to increase with age. Contamination of drinking 
            water during its treatment is the most likely way of 
            entering the human body. However, it has also been found 
            that plants can absorb perchlorates without adverse effects 
            to themselves. The perchlorates are then stored may be 
            passed along in the food chain.\1\
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    \1\ http://www.watertechonline.com/news.asp?N_ID=70952.
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        A study performed by Orica (an Australian company) found that 
            the number of incidents involving chlorine gas formed by 
            the inadvertent mixing of acid with sodium hypochlorite was 
            larger than those directly from chlorine gas alone.\2\ This 
            fact, along with the hazardous properties of the chlorates 
            formed by improper storage of sodium hypochlorite shows 
            that this option cannot be readily listed as an inherently 
            safer alternative for chlorine and that its risks cannot be 
            overlooked.
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    \2\ http://www.wioa.org.au/conference_papers/04/paper2.htm.

    g. When inherent safety options are considered, we must understand 
            and account for the challenges and difficulties in 
            implementing inherently safer technology and options. The 
            first challenge is simply to measure the degree of inherent 
            safety in a way that allows comparisons of alternative 
            designs, which may or may not increase safety or may simply 
            redistribute the risk. The second is that because inherent 
            safety is an intrinsic feature of the design, it is best 
            implemented early in the design of a process plant, while 
            the United States has a huge base of installed process 
            plants and little new construction. Finally, in developing 
            inherently safer technologies, there are significant 
            technical challenges that require research and development 
            efforts. These challenges make regulation of inherent 
            safety very difficult. We believe that a coordinated long-
            term research and development effort involving government, 
            industry, and academia is essential to develop and 
            implement inherently safer technologies. A similar 
            collaborative approach has shown success in related areas 
            such as green chemistry, energy conservation, and 
---------------------------------------------------------------------------
            sustainable development.

    h. Instead of prescriptive requirements for inherently safer 
            technology and approaches, facilities should be allowed the 
            flexibility of achieving a manageable level of risk using a 
            combination of safety and security options. For example, 
            nuclear facilities have very high-hazard materials, but 
            they protect their site and the public with a combination 
            of multiple layers of security and safety protective 
            features. All methods of reducing vulnerability should be 
            considered on a case-by-case basis, and the implementation 
            of any one particular method should not take or appear to 
            take precedence over the others.

    i. Over the past 15-20 years, and more so after 9/11, consideration 
            of Inherently Safer Technology (IST) options and approaches 
            has effectively become part of industry standards, with the 
            experts and persons with know-how assessing and 
            implementing inherently safer options, without prescriptive 
            regulations that carry risks (both as trumping other tools 
            or potentially shifting risk). A better approach for 
            applying IST in security is by allowing the companies to 
            assess IST as part of their overall safety, security, and 
            environmental operations and therefore, cannot be 
            prescriptive. In fact, it seems that the current risk 
            tiering of stationary sources inherently encourages the use 
            of IST. For example, a facility that is in Tier 1 would 
            consider all IST options if they could move the facility to 
            Tier 3 or Tier 4. So, it could be argued that consideration 
            of IST options is part of the market-driven incentive-based 
            approach within the current CFATS legislation. In fact, 
            when facilities use IST approaches to change their tier 
            designation, they should be required to prove that:

         Overall risk has been reduced;

         That unintended consequences have not been created;

         That risk transfer and/or risk accumulation has not 
            occurred;

         That the actions taken or proposed have not just 
            simply resulted in the departure of industry from one area 
            to another.
    5. Cost-benefit analysis of inherent safety options is another very 
        important and pertinent issue that should be a significant part 
        of any decision-making process.

    6. Currently there does not exist a generally accepted 
        understanding on the definition of ``inherently safer 
        technology.'' Given that background, if regulations require all 
        plants to be ``inherently safe,'' there might be a tendency to 
        broaden the definition of ``inherently safe,'' so that almost 
        everything fits the definition.

    7. Before adopting any regulatory framework requiring the 
        evaluation and/or implementation of inherently safer 
        technology, significant research questions must be answered to 
        reach a universally accepted definition of ``inherently safer 
        technology.'' Research in critical areas such as system 
        reliability and resilience must also provide information to 
        help develop appropriate guidance for facilities, both new and 
        old, regarding methods to assess the costs, benefits, and 
        potential risks of process changes at their facilities and 
        throughout the supply chain and market.
                                summary
    I applaud the U.S. Congress for providing leadership in this 
important area of chemical security. It is clear that many companies 
are taking reasonable and responsible steps in chemical security, 
including the consideration of inherent safety options. Inherently 
safer technology is an objective that should continually be pursued, 
but must always be based upon sound science as well as sound risk 
assessment and management principles. Mandating the evaluation and/or 
implementation of inherent safety options must be based on good 
science. Before such steps can be taken, important issues must be 
resolved such as a generally accepted understanding on the definition 
of ``inherently safer technology,'' methods for quantification of 
inherent safety, and methods for evaluation of inherent safety options. 
I do not believe that current know-how and science exists to adequately 
define and quantify any of these issues.
    Requirements for inherently safer technology should be based upon 
good science aimed at making the industry secure, avoid over-
regulation, and create a level playing field. U.S. facilities could be 
at a competitive disadvantage if required to implement unproven 
technologies simply to meet a regulator's position that such technology 
is more inherently safe.
    I am encouraged by the leadership of Congress and by continued 
efforts to seek expertise and opinion from all stakeholders.

    Mr. Lungren. Thank you very much, Doctor.
    Now we are pleased to hear from Mr. George Hawkins.

 STATEMENT OF GEORGE S. HAWKINS, GENERAL MANAGER, DISTRICT OF 
               COLUMBIA WATER AND SEWER AUTHORITY

    Mr. Hawkins. Good morning, Chairman Lungren, Ranking Member 
Clarke, and Ranking Committee Member Thompson. My name is 
George Hawkins. I am the general manager of DC Water, your 
water and wastewater authority here for Washington, DC.
    By way of a brief background, DC Water provides drinking 
water services to every enterprise in the District of Columbia 
and several in northern Virginia including the National airport 
and the Pentagon.
    Once that water is used and we get it back from you to 
cleanse it prior to putting it into the Potomac River, we treat 
wastewater from Montgomery County, Prince George's County, 
Fairfax, Loudon, and Arlington.
    It is the only enterprise in the United States that crosses 
two State boundaries and the District of Columbia, and we 
operate in the largest advanced wastewater treatment plant in 
the world which you are welcome to come visit. I guarantee you 
will be fascinated and be astonished at the set level of 
technology that we employ to clean water before it is put into 
our rivers.
    I am here today to tell the story of the change that we 
made at this facility which is at the very southern tip of 
Washington, DC. It is the last facility you see on 295 before 
you cross into Maryland and then go across the bridge to 
Virginia, 162 acres treating over 300 million gallons of 
wastewater every single day.
    Before 9/11 we were using gaseous chlorine and sodium 
dioxide to treat wastewater both in the odor reduction process 
up-front and then prior to effluent going to the Potomac. These 
chemicals are inherently dangerous on both ends, both gaseous 
chlorine and sulfur dioxide, I am sorry, are both dangerous, 
quite dangerous, were brought in on 90-ton rail cars.
    These rail cars went through CSX lines. There is one 
actually not far here from the capital you can----
    Mr. Lungren. Could you just refrain for a moment? I would 
ask those people in the back to please put whatever 
demonstration it is that they have down. That is a violation of 
the rules of the House during procedures. So if you would 
please do that, I would appreciate it. If you don't, you will 
be asked to be removed. You will be removed.
    Mr. Hawkins.
    Mr. Hawkins. Yes. Prior to 9/11, we had six----
    Mr. Lungren. If it happens again they will be removed.
    Mr. Hawkins [continuing]. Rail cars on our facility, two of 
which were 90-ton rail cars, two with gaseous chlorine, two 
with sulfur dioxide and two that were being unloaded. After 
that event, DC WASA, as it was called at the time, initiated 
its own process to remove these chemicals because of the 
threat.
    I must say it has been a decision that has received more 
support from every foot soldier up to the board and our 
customers of almost any decision we have made at the authority.
    Within 20 days of 9/11, we had a plan for how to remove 
these chemicals from the plant. Within 60 days, we had spent 
$600,000 to actually temporarily figure out a solution to 
remove gaseous chlorine and sulfur dioxide. In 2 years, we had 
fully and permanently made the transformation to using sodium 
hydrochloride and liquid sodium bisulfite. That was at the cost 
of $16.4 million.
    We had members of our security team, our facilities team, 
process management, engineering, the entire organization, 
round-the-clock training, so that within a short period of time 
we had eliminated this threat from our facility.
    But those tanker cars that had to get to our facility had 
to go through Naval Research Center, had to go through Boeing 
Airport space and this city in order to deliver those chemicals 
to our site. So it was an excellent decision.
    Of note, we were planning to make this change prior to 9/
11. It was already in our planning process. But the threat, and 
staff has said they could see the smoke from the Pentagon from 
our facility, elevated the importance and from the top to the 
bottom of the organization we implemented this step.
    As an operating cost, it is more expensive to make this 
change. Prior to this change, gaseous chlorine and the 
chemicals we were using cost us about $800,000 a year. 
Currently, the alternative chemicals which are much safer cost 
slightly more than $2 million a year. So it is not only the 
capital cost that were necessary but an on-going operating 
increase.
    We presented this information to our customers and have 
received wholesale support for this change given the security 
and safety it offers everyone we serve.
    We have been asked about whether and how we would regulate 
or change anything that has been done. All I can say for what 
we have done for our facilities, one of the best decisions we 
have made, we would make it again, and we regularly advise our 
compatriots about why and how we did the decision.
    I don't feel qualified to know whether the decision we made 
is applicable to every facility of every size and every 
location across the country. Whether there are other 
circumstances that may differ is unclear to us. For us, it was 
a clear decision.
    Secondly, how we should be regulated? We are carefully 
regulated by OSHA and by U.S. EPA. We have done vulnerability 
assessments. We are doing a second vulnerability assessment 
now. So we consider ourselves to be carefully and faithfully 
regulated currently. We will continue to do so. We will satisfy 
all regulations that are imposed upon us but believe we are 
following safe practices to date.
    We are glad to serve you both generally and specifically 
and are glad to answer questions. Thank you.
    [The statement of Mr. Hawkins follows:]
                Prepared Statement of George S. Hawkins
    Good afternoon Chairman Lungren, Ranking Member Clarke and Members 
of the Subcommittee on Cybersecurity, Infrastructure Protection, and 
Security Technologies. My name is George Hawkins and I am the General 
Manager of the District of Columbia Water and Sewer Authority--also 
known simply as DC Water. I'd like to thank you for inviting me to 
testify today on the circumstances surrounding the decision to have the 
Blue Plains Wastewater Treatment Facility voluntarily switch from using 
a chlorine in the treatment of wastewater to a potentially safer 
alternative.
                              introduction
    First, by way of background, DC Water purchases treated drinking 
water at wholesale from our Federal partner, the Washington Aqueduct, 
which disinfects our drinking water supply and is a unit of the U.S. 
Army Corps of Engineers. We then deliver this water through our pumping 
stations and pipes to our retail customers in the District of 
Columbia--including this very building. We also operate the world's 
largest advanced wastewater treatment plant, at Blue Plains, for the 
benefit of our customers in the District and several suburban 
jurisdictions. We serve more than 2 million customers in the 
metropolitan Washington, DC, area. The disinfection of wastewater 
provides critical public health protection. Disinfection destroys 
bacteria and viruses, helping to protect ecosystems and prevent 
waterborne disease. The most commonly used disinfectant for both 
drinking water and wastewater treatment is chlorine. Its effectiveness 
against a wide spectrum of disease-causing organisms, its relatively 
low cost, and high reliability contribute to its popularity. Chlorine 
can be applied to water directly as a gas, or through the use of 
chlorinating chemicals. A number of alternative disinfectants, such as 
chlorine dioxide, chloramines, ozone, and ultraviolet radiation, are 
also used to varying degrees. Each disinfection technology has unique 
benefits, limitations, and costs. Individual water system operators 
must weigh these trade-offs and choose disinfection methods based on 
local water quality conditions, climate, physical limitation of plant 
location, cost, compliance with the Clean Water Act (CWA) and the needs 
and resources of the communities they serve. Based on this wide variety 
of factors, use of alternative chemicals may not be possible for all 
wastewater utilities.
    My colleagues throughout the water sector are currently examining 
this issue very closely, not only to protect the populations they serve 
but also to protect their most critical asset--their workforce. In 
2009, the National Association of Clean Water Agencies (NACWA) 
conducted an informal survey of its membership which shows that clean 
water agencies are using other treatment technologies when local 
factors enable them to do so. In fact, 66% of survey respondents 
indicated they no longer use gaseous chlorine in their disinfection 
process. Of the 33% that continue to utilize gaseous chlorine, 20% 
planned to switch to another disinfectant within a 1- to 2-year time 
frame. Keeping in mind that NACWA members account for about 80% of the 
treated sewerage stream in the United States you can see utilities 
switching to other treatments when possible. Given this information we 
do not believe a Federal mandate is necessary, rather we believe that 
decisions regarding treatment technologies should reside within the 
local community.
                              blue plains
    The Blue Plains Wastewater Treatment Facility sits on the Potomac 
River in southwest Washington, DC. Like most facilities before 9/11, 
Blue Plains used chlorine gas and other hazardous compounds in its 
treatment process. In fact, when the plane hit the Pentagon on 9/11, 
Blue Plains had six 90-ton railcars on site storing dangerous chemicals 
just 4 miles away from the Capitol. Three were filled with chlorine 
gas, one was filled with sulfur dioxide, and two railcars were being 
unloaded; each filled with chlorine gas and sulfur dioxide.
    Not only were these chemicals a threat when in storage on the site, 
but they also created a hazard in transit as they were hauled by rail 
through downtown District of Columbia on their way to Blue Plains. To 
get a sense of the exposure they represented, consider that in January 
2005, when a freight train pulling three tankers full of liquidized 
chlorine and one tanker of sodium hydroxide slammed into a parked train 
in Graniteville, South Carolina, it released 11,500 gallons of chlorine 
gas. Nine people died and at least 529 were injured. That was without 
any malicious intent and in a rural location.
    Chlorine gas was infamous during trench warfare in World War I. It 
irritates the eyes, nose, and skin in small amounts, but in 
concentrated form, the yellowish green gas causes the lungs to fill 
with liquid, drowning the victims to death.
    Prior to 9/11, personnel at Blue Plains were concerned over the 
hazardous nature of the disinfecting chemicals and the potential for 
accidental release. A Capital Project was introduced into the 10-year 
Capital Planning Cycle to replace chlorine and sulfur dioxide gases 
with safer liquid chemicals such as sodium hypochlorite (bleach) and 
sodium bisulfite. Liquid bleach is much safer than chlorine gas, being 
6 percent stronger than household bleach and easy to contain if 
spilled. After 9/11, facility personnel at Blue Plains were concerned 
over the prospect of terrorism. We evaluated our situation and decided 
it would make more sense for our location in the Nation's capital to 
fast-track the switch over to liquid chemicals that are much safer. The 
solution was to switch to using sodium hypochlorite for the purpose of 
disinfection and to the use of liquid sodium bisulfite for de-
chlorination of residual chlorine in the waters being discharged to the 
river. A Process Safety Management (PSM) Committee was formed, 
including safety, engineering, facilities and maintenance personnel to 
ensure that chlorination and dechlorination systems were safe as 
possible until they were finally decommissioned. We completed this 
conversion in two phases. In the first phase, a temporary liquid 
disinfection/dechlorination system was designed, installed, and made 
operational within 60 days of 9/11 allowing removal of the chemical 
rail cars from site. We simultaneously fast-tracked the Capital Project 
for the installation of the permanent liquid disinfection/
dechlorination system.
                                 costs
    As discussed, we first built a temporary facility and purchased 
additional storage tanks for the liquid bleach and bisulfite, as well 
as pumps and piping to deliver the chemicals to the wastewater in the 
right dose and at the correct locations while we pursued construction 
of the more capital-intensive permanent conversion. By October 2003, we 
had finished the permanent conversion to our plant. The process of 
converting the old plant was costly; it required adding more storage 
tanks, pumps, piping, and instrumentation than had been needed before. 
We also had to build additional storage facilities for the liquid 
bleach and sodium bisulfate--used for dechlorination. The total cost 
was $16.4 million, including the installation of the temporary 
facilities.
    Operating costs are also now higher as well. The driving factor is 
that liquid bleach is much more expensive than chlorine gas. The annual 
cost of purchasing chemicals has increased from approximately $800,000 
annually for gas chlorine to over $2 million annual average for sodium 
hypochlorite.
    In our case, the switch effectively removed the threat of harmful 
exposure for 1.7 million people living near the Blue Plains plant. 
There is no longer any risk to the public since the conversion. Second, 
the switch from chlorine gas also simplified the plant's operations in 
several ways. For example, because liquid bleach is much safer to 
handle, the switch has limited the amount of training that employees 
need and reduced accidents. Last, the threat of a terrorist attack has 
diminished. At one time we routinely stored five or six tankers on 
site. Had a catastrophic leak occurred, this could have caused many 
fatalities and injuries within a 10-mile radius.
                               regulation
    Since the enactment of the Public Health Protection and 
Bioterrorism Preparedness and Response Act of 2002, the Environmental 
Protection Agency has regulated the physical security of the Nation's 
drinking water systems through Section 1433 of the Safe Drinking Water 
Act (SDWA). Under this law, drinking water systems serving more than 
3,300 people were required to prepare vulnerability assessments 
detailing risks related to possible terrorist attacks, and emergency 
response plans outlining procedures for responding for such an attack. 
EPA has reported that virtually all covered drinking water systems are 
in compliance with these requirements, and in 2006 Congress exempted 
the water sector from additional physical security regulation through 
the Department of Homeland Security's Chemical Facilities Anti-
Terrorism Standards (CFATS).
    Given the importance of coordinating drinking water security rules 
with the public health requirements of SDWA, most drinking water 
systems believe that their exemption from CFATS is appropriate, and 
that EPA should continue oversight of any new or revised drinking water 
security program. Similarly, any Federal security regulations imposed 
on the wastewater and water sector should come through a comparable EPA 
program rather than CFATS. A regulatory approach that were to divide 
drinking water and wastewater security among different Federal agencies 
could lead to confusing and contradictory standards--especially for 
utilities that provide both drinking water and wastewater service to a 
community.
    The Obama administration has gone on record in support of ensuring 
water and wastewater systems are regulated by the Environmental 
Protection Agency and not the Department of Homeland Security, 
testifying in 2009, ``EPA should be the lead agency for chemical 
security for both drinking water and wastewater systems.'' Chairman 
Lungren, Members of the subcommittee, this concludes my prepared 
remarks. Thank you again for the opportunity to testify, and I look 
forward to answering any questions you may have.

    Mr. Lungren. Thank you very much. I want to thank this 
panel as well as our previous panelists for staying within the 
times. That is unusual. Hopefully that is a good sign for the 
rest of this Congress. We will go to a round of questions, 5 
minutes apiece. I will start.
    First of all, Mr. Scott, representing both your company and 
the association, your testimony indicates that you believe that 
the CFATS program is working well.
    Mr. Beers stressed the fact that there is a cooperative 
spirit that has been implemented between the regulatory 
authority and the industry. Some might say from the outside 
that looks like it is too cozy or why should that occur? What 
would you say in response to that?
    Mr. Scott. Well, I think we have had a very good working 
relationship or working partnership with DHS since the 
beginning. We had a lot of experience in the chemical industry 
prior to the birth of DHS.
    We had the Responsible Care Code for Security already in 
place. Many of the companies already had security upgrades in 
place. We really had a focus on how to do security around the 
chemical facilities in the United States and for Dow what we 
are implementing on a global basis.
    So when DHS came into being, there was already a lot of 
work in progress or already completed. They recognized that. 
They also recognized that it takes a good working relationship, 
working with business, with the National infrastructure to make 
significant progress in what they were doing.
    So working in concert, and it has obviously been a working 
relationship, we have been able to develop a very strong and 
very positive relationship that has made a lot of progress. I 
think a lot of the progress that they have made has been 
because of this relationship.
    Mr. Lungren. Some looking in from the outside would say 
that sounds good but boy, look at the results. There are only--
they haven't had a single one where they have had a final 
approval with the site inspection. They have only got a few 
which they are sort of almost there. If this is the way 
Government works, it takes too long, costs too much, we don't 
get the results, maybe we should start over? What would you say 
to that?
    Mr. Scott. We definitely should not start over. I mean, we 
have made a lot of progress. A lot of the progress was made, 
again, as you heard. There are some companies that have already 
done a lot of things that moved them out of the tier, the high-
risk tier level.
    There are a lot of companies, and I can speak for Dow 
specifically. We have put security upgrades in place at all of 
our sites across the United States. Actually around the world 
we implement the same standards around the world that we have 
here in the United States. Regardless of whether we have an 
MTSA site or a CFATS-regulated site, we put the same upgrades 
in place.
    So a lot of that partnership has been driven and a lot of 
the progress has been driven by the industry side. We are 
moving very fast on the industry side. We wish DHS could move a 
little bit faster. I think permanence and consistency by 
reauthorizing the CFATS would be the way to go.
    Mr. Lungren. Let me ask a question directed both to you and 
to Dr. Mannan, and that is, you mentioned that one of the 
successes has been a number of companies have moved from one 
tier to the other or out completely and possibly that is the 
result of changing to different chemicals.
    Even though I have some strong reservations about mandating 
IST, some might say looking at that, well, you know, you said 
that some have reduced their exposure, some have gotten out of 
this by moving to other chemicals. Isn't that what IST is? Why 
shouldn't the Government mandate IST? I would ask both of you 
if you could respond to that question.
    Mr. Scott. I will go first. We are not in support of 
mandating any single risk-reduction tool. We look at the whole 
package. I think that gives the site the flexibility to put the 
right tool in place to reduce the risk at that particular site.
    I think mandating any one specific tool takes the focus off 
of the rest of the tools. That is what we have seen over the 
last few years. If we focus in one area, you lose focus in 
another area.
    So we look at the whole. We take a holistic approach 
towards security, looking at all the tools that are available 
to us including process safety controls or improvements. When 
we do our SVAs we go out with a security person and a process 
safety person and look at the whole picture.
    We look at the whole picture from including site security, 
transportation security, and cybersecurity so that we don't 
shift risk from one to the other. So taking that holistic 
approach is the way we need to look at things. That is why we 
don't support the mandating of any one single tool.
    Mr. Mannan. Yes, Mr. Chairman, that is a very good 
question. I would start with saying that when you mandate 
things, you know for sure what is the right thing to do. For 
example, if a worker is climbing up a stairway onto the top of 
a 30-meter tank, then you know that the hazard is he is going 
to fall off. We know what the cure for that is. Provide him 
scaffolding.
    The problem with IST is that we don't know on a case-to-
case basis what is the solution. Even for the same chemical 
under different circumstances as even our other witness, Mr. 
Hawkins, has said, it could be a different solution.
    So I think mandating that would be, in my opinion, a wrong 
approach to take at this time. I would rather that the market-
based, incentive-based approaches work.
    The other issue is that when you mandate it, you force the 
Department of Homeland Security to be able to enforce it and 
develop some compliance program. I firmly believe that 
currently the Department does not have the qualitative or 
quantitative expertise to be able to deal with enforcing and 
complying with inherent safety.
    Mr. Lungren. Thank you very much. My time is up.
    I would now recognize Ms. Clarke for 5 minutes.
    Ms. Clarke of New York. Thank you, Mr. Chairman. Mr. 
Hawkins, both of us in this hearing room right now are much 
safer from chemical terrorism or accidental chemical release 
due to the actions of DC Water in removing gaseous chlorine 
from the Blue Plains facility.
    In your testimony, you discussed that decision and 
indicated that this change would be considered prior to 9/11 
but that that event gave an extra push to that decision.
    You also noted that a high percentage, 66 percent, in a 
recent sector survey, indicated that they had switched from 
chlorine gas to other methods and that more indicated they plan 
to do so. Do you believe that safety and security are driving 
those decisions?
    Mr. Hawkins. I do.
    Ms. Clarke of New York. Well, let me ask my next question 
then. I am glad you were so emphatic about it. You caught me 
off guard.
    Dr. Mannan, I have my next question for you. In your 
testimony, you conclude by stating that you are concerned that 
inherently safer technologies are not defined and as such 
cannot be pursued until the definitions of them is agreed to 
and that then you don't think that a definition is possible.
    Do you understand the definition of process safety review 
as it is common industry practice carried out by any reputable 
business in this sector? Would you agree that requiring a 
process safety review is feasible?
    How about if we promoted methods such as those outlined in 
Mr. Scott's previous testimony, reduce inventory, reduce 
pressures, lower temperature, making use in process without 
storage and use alternates where process allows? Are those 
well-defined and understood and can you pursue those to enhance 
security?
    Mr. Mannan. Madam Ranking Member, you ask a very difficult 
question.
    Ms. Clarke of New York. Yes.
    Mr. Mannan. But the premise of the process safety reviews 
which are mandated now under OSHA's process safety management 
law and the risk management program of EPA, those are 
reasonably well understood, what you have to do and what you 
don't have to do.
    The problem with inherent safety is that while the concepts 
are reasonably well-understood, get rid of the chemical, reduce 
the quantity, reduce the pressure, reduce the temperature, when 
you go into the implementation phase that is when you get into 
a problem.
    For example, if you are going to eliminate the chemical, 
the question is: Where does the chemical go? So I will give you 
an example which I hope I can explain properly.
    Ms. Clarke of New York. Yes.
    Mr. Mannan. If you think of risk as a balloon, and the 
balloon has a certain size, and if you push the balloon from 
one side, and it pops out on the other side, then really it 
does not reduce the risk or the size of the balloon.
    I would like to see inherent safety defined or quantified 
to a certain extent where you are able to see the full size of 
the balloon and so that you don't displace risk from one area 
to another area, maybe an economically disadvantaged area, 
maybe to another country, or to a place where risk or security 
could not be managed properly.
    Ms. Clarke of New York. Well, I just think by virtue of 
your response, you would be going to put that framework in 
place. It seemed to me in your testimony that there was this, I 
guess, ambivalence to try to create that framework. Do you 
think establishing that framework is possible?
    Mr. Mannan. Yes. I think ultimately we need to get to a 
point where we are able to establish that framework. How long 
that is going to take, I am not sure. But until we get there, I 
am opposed to having legislation in place which would be 
difficult to implement. I will be very short but I will give 
you an example.
    Ms. Clarke of New York. Yes.
    Mr. Mannan. Let us say prior to the time when the 
temperature scale was invented, we still referred to 
temperature but in a relative basis. For example, we said warm, 
warmer, hot, hotter, cold, colder, so on and so forth.
    The problem with that scale was that what was warm to 
somebody may not be warm to somebody else. So there was this 
very subjective evaluation of the measurement of temperature.
    I think with regard to inherent safety we are pale right 
now. Hopefully when Lord Kelvin will come along, who invented 
the temperature scale, and we will have an inherent safety 
scale. Thereby then we will be able to easily implement it.
    Ms. Clarke of New York. We are hoping you are him, Dr. 
Mannan. Thank you, and I yield back, Mr. Chairman.
    Mr. Lungren. I recognize for 5 minutes, Mr. Meehan.
    Mr. Meehan. Well, thank you, Mr. Chairman and thank you 
each for your presentations here today. I am coming back to 
this issue of inherently safer technology because to me it 
seems like it is a moving standard.
    On one hand we are looking at industry. We are looking for 
innovation and other kinds of things. If you have an existing 
chemical compound or utilization of things, does that require 
you to report then on, you know, this is what we have at our 
facility?
    Then as your business model changes do you have to report 
back again on if you use new chemicals and different 
combinations or you have a new business line that opens up? How 
are you affected by these mandated rules in the form of just 
the daily operation of your businesses, or businesses or 
industry, Dr. Mannan, speaking for the industries?
    Mr. Mannan. Well, first of all I don't speak for the 
industry. As I said, my opinions here are my personal opinions. 
But with regard to your question there are a couple of things. 
First of all, right now as we speak, in addition to the current 
CFATS legislation, which is the law of the land, we also have 
risk management program standard under EPA.
    Under EPA standards, RMP standards, every facility that is 
covered by the RMP standard whenever their inventory of 
chemicals changes or even under certain conditions the quantity 
of chemicals they have on-site changes, they have to file a new 
report to EPA. So under that rule there is some kind of 
regulation or enforcement going on.
    With regard to inherent safety, as I said, I still don't 
think that we are where we can legislate regulated, okay? But I 
would think a prudent business practice in this, my colleague 
here, Mr. Tim Scott could probably better be able to answer, 
but a prudent business operator who is aware of the kind of 
business risk as well as manufacturing risk that they are 
undertaking every time their inventory or business model 
changes they would evaluate what kind of risk they are 
undertaking.
    Mr. Meehan. Thank you. Mr. Scott, do you have thoughts on 
that in general, the question that I asked?
    Mr. Scott. I will ride in on that and yes, process safety 
and especially in the development of new facilities is the best 
time to implement safer technologies or new technologies that 
you have in place. In new construction we regularly go through 
that.
    We also go through process safety reviews on a regular 
basis or the processes that we have in place. When we do our 
site security and vulnerability assessments, and then we 
started those in 2002 on a global basis, we had process safety 
in mind as well.
    We conducted those vulnerability assessments with a 
security person and a process safety person to look at it from 
both perspectives. We made minor tweaks at those points in 
time, but again, safer technology is best implemented on a new 
facility, a new construction process.
    Once you are regulated under CFATS, if you do have process 
changes that would impact the chemicals of interest, yes, you 
need to report that back to DHS and have an inspection or 
possibly have an inspection of that facility to see if 
additional increases in security are necessary.
    Mr. Meehan. What is going to happen when you identify as we 
move forward and create not only new technologies but new 
infrastructure that the business would put together for their, 
you know, their operations?
    What happens with our existing sort of graying 
infrastructure? I have petroleum refining facilities in my 
district that are struggling just to keep the operation working 
today with aging materials. Are we by virtue of putting more 
regulations on them with regard to meeting these homeland 
standards effectively perhaps putting them out of business?
    Mr. Scott. There is a significant cost to upgrading 
security across the business. I mean we have, Dow in 
particular, we spent a quarter of a billion dollars on security 
upgrades since we started this process.
    Mr. Meehan. How much did you spend?
    Mr. Scott. A quarter of a billion dollars, $250 million 
dollars since 2002. Now, that is on a global basis, but most of 
that money is being spent in the United States where the 
industry is being regulated relative to security. But again, we 
implement our security upgrades on a global basis. So what we 
do in Texas is the same thing we do in Germany is the same 
thing we do in India, wherever we have sites.
    So we have spent a significant amount of money to in 
advance of CFATS, actually, to get into preparation. We started 
those in 2002, and if you go to our sites now you are going to 
see significant physical security upgrades in place.
    We have also worked on the risk-based performance standards 
to match up our personnel surety programs and those sorts of 
things here in the United States. So there is a significant 
cost to doing this.
    Again, on process safety changes they are best implemented 
on new facilities. So the old facilities may be able to make 
some minor changes, but making significant changes in processes 
of established facilities is overly burdensome.
    Mr. Lungren. The gentleman's time has expired.
    I now recognize the Ranking Member of the Full Committee, 
Mr. Thompson, for 5 minutes.
    Mr. Thompson. Thank you very much, Mr. Chairman. Mr. Scott, 
I appreciate your testimony and you have been before us in the 
past. I think the point that you make is very important, that 
Dow as a matter of doing business looks at certain aspects of 
security and determined that it is pretty much in the company's 
best interests to do certain things. By doing that your good 
business is secure and safe.
    While that has a cost associated with it, I think it is the 
risk of not doing it which you can't really put a finger on 
that we are trying to do with this legislation. So it is not 
coming in and saying you must do this, but it is working in a 
partnership that this legislation was put forward.
    It is in that spirit that we continue to promote it. But if 
you have an aging plant that is at risk from a security 
standpoint, would you not agree that once those vulnerabilities 
are identified they have to be addressed?
    Mr. Scott. The vulnerabilities identified in the 
inspections need to be addressed for your site security plan to 
be approved.
    Mr. Thompson. Absolutely.
    Mr. Scott. So you look at every option that is available to 
that site to meet those standards. Everything is on the table 
including process safety improvements. It is already in CFATS 
that that is one of the tools that you look at.
    Mr. Thompson. Yes. From time to time your testimony also 
was that you can build in those things with a new facility, 
obviously, which I think we all agree. But we don't have all 
new facilities.
    Mr. Scott. Right.
    Mr. Thompson. Therefore we have to have a regimen 
established so that we can secure those facilities. I do 
understand the investment, but we are trying to make sure that 
the public at large is not harmed because of facilities not 
meeting minimum standards. So I thank you for that.
    Dr.--is it Mannan?
    Mr. Mannan. Yes, sir.
    Mr. Thompson. Dr. Mannan, you have testified before this 
committee that we should not do this until we define inherently 
safer technology and some other things. Is that what you are 
saying?
    Mr. Mannan. Yes, sir.
    Mr. Thompson. Tell me again why.
    Mr. Mannan. I can give you several examples, but just to be 
brief, one of the first things is that if you were to mandate 
IST considerations without a clear definition of IST, without 
clear ways of determining IST options, there is a possibility 
that unintended consequences could occur. There is also a 
possibility that some facilities could end up transferring risk 
where we don't want it transferred. All----
    Mr. Thompson. Transferring risk where?
    Mr. Mannan. For example, when a facility goes from one 
chemical to another chemical or stops using that chemical, the 
chemical that they go to may be a derivative of the first 
chemical. That first chemical may now be manufactured elsewhere 
where now you have a risk transfer where they may not have the 
same kind of chemical security.
    Mr. Thompson. But would they not be required to demonstrate 
and prove that what they are going to reduces the 
vulnerability?
    Mr. Mannan. The facility from which the risk has been 
transferred or the one that it----
    Mr. Thompson. The one that you are in fact inspecting.
    Mr. Mannan. If they are required to prove that risk in only 
their facility has been reduced then it is an easy thing. But 
if they are required to prove that the overall risk going back 
to my balloon example, that the overall risk has been reduced 
then that is another issue.
    Mr. Thompson. Well, but I don't want you to say if I move 
it somewhere else then we have to go there. I think we have to 
inspect that facility and so I am a little concerned.
    But will you also just--I know you represent a prestigious 
university, but would you just stipulate for the record that 
there is no financial interest on the chemical side of your 
institution that would cause you not to present information to 
this committee that is not correct?
    Mr. Mannan. No, sir, there is not financial interest either 
on my side or I am sure from the university that would prevent 
me from representing testimony that is not correct.
    Mr. Thompson. So do you receive any money from any chemical 
companies to operate what you do?
    Mr. Mannan. We receive money from a lot of different 
organizations, including money from chemical companies.
    Mr. Thompson. That is----
    Mr. Mannan. Our main contributors are people who have been 
hurt by incidents in the chemical industry.
    Mr. Thompson. Mr. Chairman, I will just for the record like 
to follow up this with a written communication to Dr. Mannan 
based on what he just said.
    Mr. Lungren. Yes. I hope, Doctor, you will include the fact 
that I believe you get some funding from DHS directorate if I 
am not mistaken. The gentleman's time has expired.
    Mr. Long is recognized for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman, and thank you to the 
witnesses for taking your time out today and being here. When 
we talk about CFATS, when we talk about IST, a majority of the 
time we are talking about external threats, external risks, but 
I would like to start with you, Mr. Scott, if I may?
    What do you do on internal threats, sabotage, what type of 
steps do you take in that regard and is that of concern to you?
    Mr. Scott. The insider threat has always been--it is a 
concern in all industry. As part of our SVA the vulnerability 
assessments, we have looked at internal threats in areas as 
well, prior to CFATS being implemented.
    One of the things that we do on our Dow internal 
vulnerability assessments is we go to the facilities inside our 
plants that are in question, that happen to produce a higher 
risk to our site or to the community, and we talk to the 
operators of those plants in the control rooms. We get their 
opinion on how an insider threat could be involved in creating 
some kind of an internal or an off-site impact.
    So insider threats have always been part of our Responsible 
Care Codes for Security audits and also our Dow internal 
vulnerability assessments. When you go to CFATS, when you add 
CFATS on top of that insider threat, the theft scenario, the 
theft and diversion scenario is also included in CFATS.
    Mr. Long. Okay, but I would think that that would be with 
all the external, CFATS, and IST and everything that we are 
trying to do, I would think--I would hope that that would be 
job one because that would be an awful easy way to harm a lot 
of people. I will go to--thank you.
    I will go to Mr. Hawkins with the same question. What do 
you do as far as internal threats in your organization?
    Mr. Hawkins. We have installations throughout the city. We 
have both internal and external safety and threat reviews. 
Internally we have a significant police force that we operate 
within our facilities.
    We do checks on our employees, all of whom we think are 
wonderful members of what we call Team Blue. We do safety and 
security walkthroughs on our facility on a regular basis to 
assess what potential threats there would be.
    I would want to say to the answer to a number of the 
questions here, there is no question--there may be no more 
regulated facility for health and safety broader than just 
security than Blue Plains because of the discharge to the 
Potomac, the largest point source to the Chesapeake Bay, the 
most-studied water body in the world.
    We are very used to regularly updating our plant to the 
tune of your money. You are our rate payers of hundreds of 
millions of dollars. We have had a $4 billion 10-year capital 
program where we are updating existing facilities. You rarely 
build new treatment facilities. You are constantly updating 
existing treatment facilities.
    We comply and will comply with every regulation that we are 
asked to comply with. Security is one of our highest 
priorities. But make no mistake. We always do what is obligated 
to us. So you have a regulation or a law, we will comply with 
it. We always do the emergency so when there is a break out on 
Constitution Avenue we will fix that break.
    The system itself, the pipes that you have out on the 
street that you live in are perilously old. The apparatus 
leading to the plants, which are pretty secure, pretty well 
protected, are perilously old. So there is a risk of shifting 
whenever new obligations are put on us, which we will comply 
with. We consider job public health and safety as job one.
    What tends to be overlooked is the system that is out in 
the cities which are getting older and older and older. We have 
had over 500 water main breaks in this city since December 1, 
not to mention the ones you have seen out in the suburbs. So we 
comply. We do have internal security. But there is the risk of 
where you have money being spent based on where regulations are 
written to the cost of that you don't always expend in other 
areas.
    Mr. Long. The technology and the process that you use to 
disinfect and treat the water, do you find that applicable to a 
chemical manufacturing plant?
    Mr. Hawkins. I am not qualified to answer that question. 
For what we use it for, it is applicable in the wastewater 
treatment system. We disinfect. The chemicals that we use now, 
which are much safer and while they cost more to buy, the 
training and safety precautions that we must spend money on are 
less because they are less dangerous on our facilities.
    Our employees are much more pleased to be working with less 
dangerous chemicals is applicable in other wastewater treatment 
facilities. So yes, it certainly applies in the wastewater 
industry. I just don't know the applicability to other 
industries.
    Mr. Long. Okay. Again, thank you all for your testimony 
here today, and I yield back, Mr. Chairman.
    Mr. Lungren. Thank you.
    The gentlelady from California, Ms. Richardson, is 
recognized for 5 minutes.
    Ms. Richardson. Yes. Thank you, Mr. Chairman. First of all, 
if I step on wrong grounds feel free to help me here because I 
am a new back on the committee. I actually wanted to entertain 
in a colloquy with you if I might?
    It is my understanding you were the author of 2006, this 
legislation, and I was just curious since we have a DC Water 
person here, what was your thought back then, you know, looking 
back, why we didn't include water facilities, wastewater 
facilities, and port facilities especially, since I happen to 
know your history of having those in Long Beach, where we have 
all of those?
    I am just a little curious why you didn't include those and 
would you be open of you informing? We didn't get this 
information until Wednesday evening so this is really my 
opportunity to now having read it to chat with you about it 
so----
    Mr. Lungren. Well, you know, I will be happy to discuss 
that with you. It was both a jurisdictional question and a 
question of whether or not we could have compatibility of the 
various agencies involved. Also it had to do with how we could 
get our bill to the floor without going to other committees.
    Ms. Richardson. Are you open to the changing that as we 
move forward?
    Mr. Lungren. I am extremely opposed to including inherently 
safer technologies to mandate, but I am agnostic on the water 
issue.
    Ms. Richardson. Thank you, sir. Reclaiming my time, Mr. 
Scott, I asked the question of Mr. Beers what was his thought 
about the fact that Homeland Security only screens against 
terrorist watch list. However, a person who is not on the 
terrorist watch list but prohibited from purchasing a gun under 
the National Instant Criminal Background Check System would be 
cleared by DHS.
    What are your thoughts now as things are kind of changing 
in this environment? What would you think about your facilities 
in terms of if we were to look at some further legislation or 
would you be open to leading that within the council, the 
Chemical Council?
    Mr. Scott. Most of the industry or most of the companies in 
ACC and certainly Dow has--we have done background checks 
historically, criminal background checks historically on all 
Dow employees and any contract employees that are working on 
our sites.
    We also had several sites that are covered by MTSA, and 
they use the TWIC card. Having a TWIC does not automatically 
authorize you entry into a Dow site. You still have to have our 
Dow background check, but working in harmony those two 
processes work.
    So we have been discussing the personnel surety issue with 
the Department of Homeland Security, and they are looking at or 
considering a card, either the TWIC program or a card like the 
TWIC program on recognizing other similar cards, which many of 
the companies are already operating under those similar 
Federally issued cards. If we could harmonize those programs 
both the industry and DHS would benefit from that.
    Ms. Richardson. Thank you, sir. Then my next question, when 
we brought forward the legislation last year I had worked on an 
amendment called the whistleblower protection, and it just gave 
a little more protection for those who might be observing 
things. I just came from a committee, for example. It was Coast 
Guard and water where we were dealing with the oil spill.
    Some might say that now witnesses are testifying to the 
fact that they did in fact see some problems. What is your 
position on the whistleblower protections and do you guys as a 
council support them?
    Mr. Scott. I would have to see the details of them before I 
could say I would support it or not support it, but in Dow----
    Ms. Richardson. Well, two----
    Mr. Scott. In Dow, for example, we have anonymous tip 
lines. We have awareness programs in place for all of our 
employees and give them the numbers to call if they do see 
anything that is suspicious.
    We use the DHS numbers that they can call if they do see 
anything suspicious. We have an 800 number anonymous line that 
they can call in and report anything at all, ethics violations 
or anything suspicious that is happening in the company either 
from a security perspective or an operational perspective.
    Ms. Richardson. Okay.
    Mr. Scott. We have a lot of those same things in place.
    Ms. Richardson. To your credit, sir, though, Dow I think 
might have some different standards than what might be applied 
across the country. What I would like to do because my time is 
now running out, is supply you with that information, and then 
if you could provide your thoughts on not only your perspective 
but on behalf of the council as well? It would be helpful to 
me.
    Mr. Scott. Will do.
    Ms. Richardson. And move forward. Thank you, sir. Thank 
you, Mr. Chairman, for----
    Mr. Lungren. Thank you.
    Ms. Richardson [continuing]. Interacting with me on that.
    Mr. Lungren. Mr. Walberg, welcome to the subcommittee, and 
you are recognized for 5 minutes.
    Mr. Walberg. Thank you, Mr. Chairman. Mr. Scott, good to 
see someone here that has some base in Michigan, that is still 
left.
    Mr. Scott. We have a pretty big base in Michigan.
    Mr. Walberg. I know that.
    [Laughter.]
    Mr. Walberg. We thank you for that base, and we want to 
make sure it continues and has ability to hire more and 
unrestricted by unnecessary regulation but restricted by 
regulation that works for all of us.
    Some have cited the New Jersey chemical facility law as a 
model for IST consideration. I am concerned, however, that the 
New Jersey model is not necessarily appropriate model for 
Federal Government regulations in that it creates undue focus 
on IST versus other less costly and more easily implemented 
security measures that may allow facilities to meet the 
performance standards. What are your views on that position?
    Mr. Scott. Dow has a very small footprint in New Jersey, 
but in talking with other folks that have a larger presence 
there they have stated exactly that. The focus on mandatory IST 
has taken the focus pretty much away from other upgrades that 
could be in place to meet performance standards.
    I have heard the stories of most of the audits or most of 
the inspection the time is spent in going through paperwork and 
background and concepts on IST, spending a lot of time trying 
to understand what and why the industry does it the way it does 
it with very little output at the end that makes significant 
improvement compared to the time and the effort that is spent 
and the time and effort that is taken away from the other 
options.
    Mr. Walberg. Thank you. To follow that up, do you agree 
with Dr. Mannan that the science is just not there to be able 
to define, quantify, and evaluate IST and generate accepted and 
applicable forms?
    Mr. Scott. It is a very complex subject, and every time we 
have a discussion about it with DHS it obviously is very 
complex. So I think we are not at the point where we can 
mandate that particular topic or that particular tool or any 
other particular tool. But I think it is part of the process 
now that is available to industry to use to meet the standards. 
So I don't think we should mandate any particular tool, 
especially IST.
    Mr. Walberg. Okay. Thank you. Dr. Mannan, I appreciate your 
real-world illustrations using balloons and other things. That 
makes it simpler for a guy like me to understand cause and 
consequences. What types of experts in what kind of disciplines 
would DHS need to adequately review IST assessments and make 
decisions on how facilities should implement their processes?
    Mr. Mannan. As you can see, someone who has spent a career 
in chemical engineering for a vast number of years, more than I 
care to remember, and someone who has been working in IST for 
the last 10, 15 years, where now I sincerely am struggling with 
some of these issues. But to get there first of all I think we 
have to develop the science. I cannot emphasize that more 
enough.
    Then the types of people you would need at DHS in general 
chemical engineers, mechanical engineers, who understand 
processes, No. 1, who understand risk and how to calculate risk 
and then are able to factor that in with operational issues and 
all the other issues that fall out of making such complex 
decisions.
    So I don't know if I have given you the job specifications 
of a person like that, but that is where I would start with.
    Mr. Walberg. Well, does that type of expertise reside 
within DHS?
    Mr. Mannan. Currently it is not. As I said in my oral and 
written testimony, there is not either adequate or appropriate 
expertise as far as that is concerned, the inherent safety 
part. I think DHS has the capability to do the current CFATS 
regulation and compliance.
    They may not have the appropriate number of staff to do it, 
but they have the type of people that they need to do it. But 
the type of people you need to do inherent safety compliance, I 
believe, they absolutely don't have.
    Mr. Walberg. Okay. Thank you very much. I yield back.
    Mr. Lungren. Okay. Mr. Walberg, I would just say this goes 
to the question of whether we should impose performance 
standards versus a mandated technological fix. Particularly in 
an area where we have had testimony before of those who came up 
with the concept of IST telling us that it is not an off-the-
shelf or completed product.
    It is a process. It is a method of analysis that should be 
alongside the others. That is why I keep coming back to how do 
you mandate that? Does that lead us in the right direction? So 
I thank you for your questions. Your time is expired.
    All time is expired. We thank our witnesses for coming 
before us. We really do appreciate it. I think you have added 
valuable testimony both in terms of what you have said orally 
and in your written testimony.
    Members of the committee may have some additional questions 
for you. If we do we would ask you to respond to these in 
writing. This hearing record will be held open for 10 days. 
Without objection, the subcommittee stands adjourned.
    [Whereupon, at 12:05 p.m., the subcommittee was adjourned.]

                            A P P E N D I X

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   Question From Ranking Member Yvette D. Clarke for Timothy J. Scott
    Question. To the best of your knowledge, have any facilities been 
adversely affected economically, including loss of revenue, reduced 
workforce, or even facility shutdown or relocation, due to CFATS 
compliance?
    Answer. CFATS implementation is just now getting started with the 
first round of inspections to begin later this year or in 2012. Sites 
will have another year to complete implementation or develop plans for 
implementation of any necessary security upgrades. It's too early to 
tell if there will be any adverse economic impact on the industry, but 
that's also the reason to let the current process continue to 
completion without additional changes, requirements, or delays. I can 
say that Dow has voluntarily upgraded security on a global basis since 
2001 and has spent hundreds of millions of dollars during a period of 
difficult economic times for the chemical industry. Dow has been 
proactive in support of risk-based legislation that would create 
certainty in the regulations and our upgrades have been implemented to 
meet predicted Government expectations. Additional changes to the 
requirements at this point would add little value and detract from 
voluntary efforts already in place.

                                 
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