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CHEMICAL FACILITY 

ANTI-TERRORISM ACT OF 2008 

HEARING 

BEFORE THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

FEBRUARY 26, 2008 

Serial No. 110–95 

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 
COMMITTEE ON HOMELAND SECURITY 

BENNIE G. THOMPSON, Mississippi, Chairman 

LORETTA SANCHEZ, California 

EDWARD J. MARKEY, Massachusetts 

NORMAN D. DICKS, Washington 

JANE HARMAN, California 

PETER A. DEFAZIO, Oregon 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

HENRY CUELLAR, Texas 

CHRISTOPHER P. CARNEY, Pennsylvania 

YVETTE D. CLARKE, New York 

AL GREEN, Texas 

ED PERLMUTTER, Colorado 

BILL PASCRELL, JR., New Jersey 

PETER T. KING, New York 

LAMAR SMITH, Texas 

CHRISTOPHER SHAYS, Connecticut 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

MIKE ROGERS, Alabama 

DAVID G. REICHERT, Washington 

MICHAEL T. MCCAUL, Texas 

CHARLES W. DENT, Pennsylvania 

GINNY BROWN-WAITE, Florida 

GUS M. BILIRAKIS, Florida 

DAVID DAVIS, Tennessee 

PAUL C. BROUN, Georgia 

JESSICA HERRERA-FLANIGAN, Staff Director & General Counsel 

TODD GEE, Chief Counsel 

MICHAEL TWINCHEK, Chief Clerk 

ROBERT O’CONNOR, Minority Staff Director 

(II) 
(III) 

C O N T E N T S 

Page 

STATEMENTS

The Honorable Bennie G. Thompson, a Representative in Congress From 

the State of Mississippi, and Chairman, Committee on Homeland Security .. 1 

The Honorable Peter T. King, a Representative in Congress From the State 

of New York, and Ranking Member, Committee on Homeland Security ........ 2 

The Honorable Ginny Brown-Waite, a Representative in Congress From the 

State of Florida: 

Prepared Statement ............................................................................................. 3 

WITNESSES

Col. Robert B. Stephan, Assistant Secretary, Infrastructure Protection, Department of Homeland Security: 

Oral Statement ..................................................................................................... 4 

Prepared Statement ............................................................................................. 6 

Mr. Kevin L. Wattier, General Manager, Long Beach Water Department: 

Oral Statement ..................................................................................................... 11 

Prepared Statement ............................................................................................. 13 

Mr. David C. Pulham, Ph.D., Director of Compliance, Siegfried (USA), Inc.: 

Oral Statement ..................................................................................................... 15 

Prepared Statement ............................................................................................. 17 

FOR THE RECORD

National Propane Gas Association: 

Statement ............................................................................................................. 18 

Chemical Bill Coalition: 

Statement ............................................................................................................. 21 

Mr. Rick Hind, Legislative Director, Greenpeace Toxics Campaign, 

Greenpeace: 

Statement ............................................................................................................. 22 

Mr. Russell Melancon, President and CEO, Industrial Safety Training Council: 

Statement ............................................................................................................. 33 

(1) 

CHEMICAL FACILITY 

ANTI-TERRORISM ACT OF 2008 

Tuesday, February 26, 2008 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON HOMELAND SECURITY, Washington, DC. 

The committee met, pursuant to call, at 10:09 a.m., in Room 311, 

Cannon House Office Building, Hon. Bennie G. Thompson [Chairman of the committee] presiding. 

Present: Representatives Thompson, Sanchez, Markey, Jackson 

Lee, Etheridge, Cuellar, Carney, Pascrell, King, McCaul, Dent, 

Brown-Waite, Davis of Tennessee and Broun. 

Chairman THOMPSON. We would like to call the hearing to order. 

The committee meeting today will receive testimony on the 

Chemical Facility Anti-Terrorism Act of 2008. 

I now recognize myself for purposes of the opening statement. 

When I assumed the Chairmanship of this committee last January I highlighted the need to shield the Nation’s critical infrastructure from foreign and domestic terrorism as one of my eight goals 

in charting the course toward freedom from fear. That is why this 

committee has dedicated considerable resources toward drafting 

legislation to extend DHS’s authority over chemical plants beyond 

October, 2009, when it is slated to expire. 

Today, we are meeting to discuss a draft bill that this committee 

has been working on for the past several months, the Chemical Facility Anti-Terrorism Act of 2008. It is important to me that we 

have worked in an open and bipartisan manner to develop this legislation. 

I would especially like to acknowledge the fine work of the chairwoman of the Subcommittee on Transportation Security and Infrastructure Protection, Ms. Jackson Lee of Texas, for her efforts to 

move this process forward. 

I would also like to thank the Ranking Member of that subcommittee, Mr. Lungren of California, for his cooperation and leadership. 

In this Congress, the Transportation Security and Infrastructure 

Protection Subcommittee has held two hearings on the topic of 

chemical facilitated security, in July and December. At those hearings, the committee heard from Assistant Secretary Stephan, 

whose Infrastructure Protection Division is responsible for implementing the current Chemical Facility Anti-Terrorism Standards, 

or CFATS. 

Those hearings also allowed us to hear from a wide range of witnesses representing all sides of this issue. We have talked to large 
2 

chemical manufacturers who are regulated under CFATS; a representative from the State of New Jersey, which is also regulating 

security at chemical facilities—and they now have Mr. Pascrell on 

the committee, who handles the New Jersey end of that aspect. We 

welcome him here again, also—representatives from labor unions 

that represent chemical facility workers, and also academic and 

other experts. 

Today’s hearing will continue in that spirit. We will receive an 

update from Assistant Secretary Stephan and testimony from Dr. 

David Pulham from Siegfried, a small chemical manufacturer, as 

well as Mr. Kevin Wattier from the Long Beach Water Department. 

Dr. Pulham is here to help us understand the impact of the 

chemical security legislation on smaller facilities, as well as tell us 

how his facility is complying with the State of New Jersey’s chemical security requirements; and Mr. Wattier is here to give us the 

feedback from a water facility about the legislation, especially 

given that it would subject water facilities to the same chemical security framework as is in place for all other chemical facilities. 

It is worth noting that DHS considers water facilities to be at 

risk and therefore justifiably regulated along with other facilities 

that hold large volumes of toxic chemicals. 

In addition to other testimony, the committee has maintained an 

open dialog with the Department, environmental groups, labor representatives, large and small chemical manufacturers, fertilizer 

manufacturers, petroleum and propane manufacturers and distributors, as well as water facilities. 

I decided to use the vehicle of a Committee Print rather than an 

introduced bill because of the flexibility it offers us. This way, 

every time we hear a good idea on how to make the legislation better, we can incorporate it. 

I want to thank Ranking Member King and his staff for working 

in such a cooperative manner through the many iterations of the 

bill, and I am confident that we will have a legislative product we 

can all support. 

Securing our chemical facilities against an attack advances my 

commitment to making sure that our Government can provide the 

American people security, accountability and, most importantly, 

freedom from fear. I look forward to hearing from our witnesses, 

and I thank you for contributing to this process. 

The Chair now recognizes the Ranking Member of the full committee, the gentleman from New York, Mr. King, for an opening 

statement. 

Mr. KING. Thank you very much, Chairman Thompson. 

I want to, at the outset, join you in pointing out the bipartisan 

nature of the process so far and the process which I am sure will 

continue. Obviously, when we are talking about chemical plants, it 

certainly has the opportunity to become a very partisan or divisive 

issue. It is easy for either side to use scare tactics or to try to accuse the other of bad motives. That has not been the case here at 

all. 

I want to thank Chairwoman Sheila Jackson Lee for her efforts 

and also Ranking Member Dan Lungren, who is right now recovering from knee surgery, for their efforts at the subcommittee level. 
3 

I also want to commend the Department for the rapid progress 

they have made, I believe, in implementing the legislation that we 

adopted in the previous Congress. I think it is important to acknowledge that. 

Obviously, this is all a work in progress. It is a very new world 

that we live in, but it is important to give credit where credit is 

due, and I think the Democrat majority certainly deserves credit as 

this process is going forward. 

I believe the Congress and this committee overall observed 

progress from what went on in the past, but especially the Department also deserves credit for taking the legislation and moving forward with it. No one has prior authorship here. We should just 

continue to meet with various represents from the industry, from 

labor, from the overall Homeland Security community; and, of 

course, I look forward to the testimony of the Department today as 

to what they have done and what they expect to be doing as we 

go forward. 

I would note just one situation. The Committee Print does address background checks to a certain degree, but it does not address them to the extent that Ms. Brown-Waite did as far as 

screening individuals at high-risk facilities against the terrorist 

watch list and the immigration status database, and I hope that we 

give more close attention to that as this goes forward. 

But, again, the legislation we adopted was not the end. We 

should build on it, and we should also be careful not to disrupt 

what the Department is trying to do as it goes forward. 

So, with that, Mr. Chairman, I yield back the balance of my time 

and look forward to the testimony. 

Chairman THOMPSON. Thank you very much, Mr. King. 

Other Members of the committee are reminded that, under committee rules, opening statements may be submitted for the record. 

[The statement of Honorable Brown-Waite follows:] 

PREPARED STATEMENT OF HON. GINNY BROWN-WAITE

FEBRUARY 26, 2008 

Thank you Chairman Thompson and Ranking Member King for holding this hearing today. 

To begin, let me echo a point Ranking Member King has raised several times already before the full committee: this committee must begin work on a Department 

of Homeland Security authorization bill. Passing an authorization bill is a primary 

responsibility of this committee and we cannot overlook this duty. 

America’s chemical facilities are a critical part of America’s infrastructure. As we 

are all well aware, if terrorists were able to exploit weaknesses in this industry’s 

security measures, there would be far-ranging, disastrous consequences. 

While I applaud taking responsible steps to ensure the security of chemical plants 

and facilities, our guiding principle must be a focused effort not to undermine any 

progress already made to keep these facilities safe. 

My major concern with the language before us involves the issue of background 

checks. I was upset to see that while there are extensive criteria for conducting 

background checks on those with access to high-risk facilities outlined, there is no 

requirement to conduct these checks in the first place. 

It seems utterly backward to outline a detailed appeals and waivers process before 

actually requiring the background checks themselves. Accordingly, I offered an 

amendment in subcommittee markup to address this problem and require background checks against immigration status and the terrorist watchlist. 

Today, I look forward to examining this issue further, as the committee pursues 

meaningful ways to ensure the security of our chemical facilities. 

Thank you. 
4 

Chairman THOMPSON. I now welcome our panel of witnesses. 

Our first witness, Mr. Robert Stephan, is Assistant Secretary for 

Infrastructure Protection at the Department of Homeland Security, 

which is responsible for carrying out the Chemical Facility AntiTerrorism Standards. Our second witness is Mr. Kevin Wattier, 

General Manager of Long Beach Water Department; and our third 

witness is Mr. David Pulham, Director of Compliance with Siegfried, Incorporated. 

I welcome you here today and look forward to hearing your testimony. 

Without objection, the witnesses’ full statements will be inserted 

in the record. I now ask each witness to summarize his or her 

statement for 5 minutes, beginning with Mr. Stephan. 

STATEMENT OF ROBERT B. STEPHAN, ASSISTANT SECRETARY, 

INFRASTRUCTURE PROTECTION, DEPARTMENT OF HOMELAND SECURITY 

Mr. STEPHAN. Thank you Mr. Chairman, Ranking Member King 

and distinguished Members of this committee. It is a pleasure to 

appear before you today to address the Department’s efforts in securing the chemical sector through the implementation of our 

CFATS regulation. 

I would also like to echo the sentiment that I recently heard. 

Without the bipartisan cooperation on this issue that this committee and its subcommittees have achieved with the Department, 

we absolutely could not be achieving the progress that we have 

made today with respect to implementing this regulation, a very, 

very difficult task; and, sincerely, we do appreciate the continued 

leadership and support as we move through this effort. 

As you all know, the fiscal year 2007 appropriations act directed 

the Department to develop and implement a regulatory framework 

addressing the high level of security risk posed by certain chemical 

facilities across the country. Consequently, DHS published an Interim Final Rule, known as CFATS, on April 9, 2007. Section 550 

of the Act authorized the Department to require high-risk chemical 

facilities to complete vulnerability assessments, develop security 

plans and implement protective measures necessary to meet riskbased performance measures established by the Department. 

The following core principles guided the development of this regulatory structure and remain in place: 

No. 1, securing high-risk chemical facilities is an immense undertaking that involves a national effort, including all levels of government and the private sector in a security partisanship. 

No. 2, risk-based tiering of chemical facilities that represent a 

high level of risk will ensure that resources are appropriately deployed and the appropriate measures put in place to protect them. 

No. 3, reasonable, clear and equitable performance standards will 

lead to enhanced security across the partnership. 

Finally, recognition of the progress many companies have already 

made in improving facility security helps leverage achievements 

and past investments. 

In terms of progress, DHS published Appendix A to the CFATS 

Interim Final Rule in November of last year. Appendix A contains 
5 

a list of chemicals of interest and their screening threshold quantities. 

Possession of one or more of these chemicals of interest at or 

above the screening threshold triggers a requirement for the facility to complete and submit an on-line consequence assessment 

known as a Top-Screen. The data gathered to the Top-Screen tool 

then informs the Department’s determination of a facility’s level of 

risk and the potential need for the facility to comply with followon substantive requirements of the regulation. 

In formulating the appendix the Department included chemicals 

based on three principal risk vectors: release, hazards, theft and diversion hazards, and sabotage contamination hazards. The Department established again a screening threshold quantity for each 

chemical based on its potential to create significant adverse consequences in terms of public health and safety, human lives and injury. 

To implement the requirements under the regulation, the Department developed the Chemical Security Assessment Tool, or the 

CSAT, to identify potentially high-risk facilities and provide a 

methodology that the facilities can use to conduct their vulnerability assessments and develop site security plans that are more 

uniform across the country. Through the previously discussed TopScreen process the Department can identify which facilities do or 

do not have to or represent a significantly high risk and then move 

on in the process. Those facilities that are deemed high risk must 

complete a site vulnerability assessment for submission to the Department, and then that will in turn again inform the Department’s final determination of the risk-based tier in which the facility will be placed. 

Following the site vulnerability assessment, a regulated facility 

must develop a security plan that will be based upon 19 risk-based 

performance standards which are broad and designed to promote a 

great deal of flexibility in how a facility approaches meeting the 

standards applicable to it. 

Although all high-risk facilities must comply with the risk-based 

performance standards, the measures necessary to meet these 

standards will vary across the four risk tiers under the CFATS 

framework. 

Outreach and partnership efforts have been a very important 

part of an overall approach to this problem to date. Since the release of CFATS in April, the Department has made a concerted effort to inform our security partners of CFATS and its requirements 

and to engage them very productively. 

As of last week, approximately 28,000 facilities across the country have submitted a Top-Screen consequence assessment that is 

currently undergoing analysis. That analysis will be complete, I believe, by the end of next month. Approximately 7,800 facilities have 

requested and received a Top-Screen filing extension which will expire on approximately March 22 of this year. 

In addition, after the release of Appendix A, we granted TopScreen filing extensions to those owners and operators of chemicals 

of concern in the agricultural world that possess certain chemicals 

for agricultural use, mainly fertilizers and pesticides. This extension will allow the Department to engage agribusiness distributors 
6 

and end-users in a productive dialog to narrow the CFATS program 

focus onto truly high-risk operations in the food and agricultural 

world. DHS will then determine whether any modification of the 

Top-Screen requirements might be warranted, particularly the approach toward chemicals of interest, again in the chemical world. 

The Department has also been committed to fostering a solid 

working relationship with State and local officials or first responders in jurisdictions with high-risk facilities, and we have a initial 

cadre of 40 inspectors that we have deployed across the country to 

begin this process. 

In terms of our fiscal year 2008 requirements or deliverables, we 

are looking at reviewing submitted site vulnerability assessments 

for final tiering determinations, yielding final populations of a regulated community; developing the CSAT site security plans; reviewing the site security plans and beginning Tier 1 and Tier 2 inspections; enhancing the CSAT suite of applications in a CSAT 

version 2.0, and in developing a comprehensive case management 

system; and, finally, very much engaging the State and local partners in terms of pushing this down to the grassroots level across 

the country. 

In closing, on the subject of proposed new legislation, I believe 

that it is critical that any new legislation on chemical security 

should be carefully crafted to continue the forward momentum and 

the success of the CFATS program, continue the initiative and the 

partnership across the various stakeholder groups, prior and existing efforts by the Department, and, most importantly, the compliance activities already implemented or under way by the regulated 

community should be carried forward with any new legislative authority. 

The Department and industry have invested a significant 

amount of resources and time into information collection, consequence assessment and risk mitigation activities and those efforts should be validated by incorporation or continuation to the 

maximum extent possible in any new legislation. 

Again, ladies and gentlemen, we are interested in carrying the 

momentum forward, carrying the progress forward and bridging 

the current structure from one administration to the next. My personal goal is to hand over a 100-percent-squared-away operation to 

the next executive and congressional leadership team that will take 

office in January 2009. 

Sir, subject to your follow-on questions, I have now completed the 

initial part of my testimony. 

[The statement of Mr. Stephan follows:] 

PREPARED STATEMENT OF ROBERT B. STEPHAN

FEBRUARY 26, 2008 

Thank you, Chairman Thompson, Ranking Member King, and distinguished Members of the committee. It is a pleasure to appear before you today to address 

progress on the implementation of the Department’s authority over security at highrisk chemical facilities through the Chemical Facility Anti-Terrorism Standards 

(CFATS) program, as well as provide insight regarding a transition of the existing 

regulatory program to a permanent authorization. In terms of CFATS, there is significant activity to report on a recent regulatory deadline—the deadline for chemical 

facilities to submit to the Department a completed Top-Screen questionnaire. 
7 

CHEMICAL SECURITY REGULATIONS

The fiscal year 2007 Department of Homeland Security Appropriations Act directed the Department to develop and implement a regulatory framework to address 

the high level of security risk posed by certain chemical facilities. Consequently, the 

Department published an Interim Final Rule, known as the Chemical Facility AntiTerrorism Standards (CFATS) on April 9, 2007. Specifically, Section 550(a) of the 

Act authorizes the Department to require high-risk chemical facilities to complete 

Security Vulnerability Assessments (SVAs), develop Site Security Plans (SSPs), and 

implement protective measures necessary to meet risk-based performance standards 

established by the Department of Homeland Security. 

The following core principles guided the development of this regulatory structure: 

(1) Securing high-risk chemical facilities is an immense undertaking that involves a national effort, including all levels of government and the private sector.—Integrated and effective partnerships among all stakeholders—Federal, 

State, local, and private sector—are essential to securing our national critical 

infrastructures, including high-risk chemical facilities. Implementing this program means tackling a sophisticated and complex set of issues related to identifying and mitigating vulnerabilities and setting security goals. This requires a 

broad spectrum of input. By working closely with experts, such as New York 

and New Jersey State officials, members of industry, members of academia, and 

Federal Government partners, we leveraged vital knowledge and insight to improve the regulation. 

(2) Risk-based tiering will ensure that resources are appropriately deployed.— Not all facilities present the same level of risk, and the greatest level of scrutiny should be focused on those facilities that, if attacked, could endanger the 

greatest number of lives, have the greatest economic impact, or present other 

significant risks. 

(3) Reasonable, clear, and equitable performance standards will lead to enhanced security.—The interim final rule includes enforceable risk-based performance standards. Facilities have the flexibility to select among appropriate 

site-specific security measures that will effectively address risk, which leads to 

a Site Security Plan (SSP). The Department will analyze each facility’s SSP, 

and, if it satisfies the CFATS performance standards, approve. If an SSP does 

not meet the CFATS performance standards, DHS will disapprove the plan and 

work with the facility to revise and resubmit an acceptable plan. 

(4) Recognition of the progress many companies have already made in improving 

facility security leverages those advancements.—Many responsible companies 

have made significant capital investments in security since 9/11, and building 

on that progress in implementing the CFATS program will raise the overall security baseline of high-risk chemical facilities. 

APPENDIX A: CHEMICALS OF INTEREST LIST

The Appendix A final rule to the CFATS, published in the Federal Register on November 20, 2007, contains a list of chemicals and their Screening Threshold Quantities. Possession of one or more of these chemicals of interest at or above the applicable threshold quantity triggers a requirement for the facility to complete and submit an online consequence assessment known as a Top-Screen. The data gathered 

through the Top-Screen tool informs the Department’s determination of the facility’s 

level of risk and the potential need for the facility to comply with the substantive 

requirements of the CFATS. 

The Department published the Appendix A final rule after a notice and comment 

period. The final Appendix A lists 322 chemicals of interest, including common industrial chemicals such as chlorine, propane, and anhydrous ammonia, as well as 

specialty chemicals, such as arsine and phosphorus trichloride. The Department included chemicals based on the consequence associated with one or more of the following three security issues: 

(1) Release.—Toxic, flammable, or explosive chemicals that have the potential 

to create significant adverse consequences for human life if intentionally released or detonated; 

(2) Theft/Diversion.—Chemicals that have the potential, if stolen or diverted, 

to be used or converted into weapons; and 

(3) Sabotage/Contamination.—Chemicals that, if mixed with other readily 

available materials, have the potential to create significant adverse consequences for human life. 

The Department established a Screening Threshold Quantity for each chemical 

based on its potential to create significant adverse consequences for human life, 

given the above three listed security issues. 
8 

CHEMICAL SECURITY ASSESSMENT TOOL

Implementation and execution of the CFATS regulation requires the Department 

to identify which facilities it considers high-risk. The Department developed the 

Chemical Security Assessment Tool (CSAT) to identify potentially high-risk facilities 

and to provide methodologies facilities can use to conduct security vulnerability assessments (SVAs) and to develop site security plans (SSPs). CSAT is a suite of four 

tools: facility registration, an SVA tool, an SSP template, and the initial consequence-based screening tool called the Top-Screen. The Top-Screen builds on the 

voluntary assessment tool referred to as the Risk Analysis and Management for 

Critical Asset Protection (RAMCAP), which the Department developed with technical input from industry. Through the Top-Screen process, the Department can 

identify which facilities do or do not have a significant potential to be the source 

of negative consequences (that is, those that are or are not high-risk) and can then 

‘‘screen out’’ those facilities across the country that are not high-risk. 

The Department requires facilities that possess a chemical of interest at or above 

the listed Screening Threshold Quantity to complete the Top-Screen within 60 calendar days of the publication of Appendix A (or within 60 calendar days of coming 

into possession of a chemical of interest at or above the applicable Screening 

Threshold Quantity after publication of Appendix A). As Appendix A was published 

on November 20, 2007, the due date for initial Top-Screen submissions was January 

22, 2008. By that date, the Department had received 23,264 Top-Screen submissions 

from chemical facilities. 

If a facility is not screened out during the Top-Screen process, the Department 

will assign the facility to a preliminary risk-based tier. Those facilities must then 

complete the Security Vulnerability Assessments and submit them to the Department. Results from this SVA will inform the Department’s determination of a facility’s final tier assignment. This represents the very next phase of the CFATS process. 

All high-risk facilities fall into one of four risk-based tiers. These high-risk facilities will be required to develop Site Security Plans that address their identified 

vulnerabilities and address the performance standards and the security issues presented by the facility. The higher the risk-based tier, the more robust the security 

measures and the more frequent and rigorous the inspections will be. For example, 

Tier 1 facilities will have more rigorous requirements than Tier 4 facilities. Inspections will both validate the adequacy of a facility’s Site Security Plan and verify the 

implementation of the plan’s measures. 

RISK-BASED PERFORMANCE STANDARDS

CFATS promulgated 19 risk-based performance standards for compliance. The 

standards themselves are broad and designed to promote a great deal of flexibility 

in how a facility approaches meeting standards applicable to it. Although all highrisk facilities must comply with the risk-based performance standards, the measures 

necessary to meet these standards will vary for the different tiers. For example, a 

Tier 1 facility with a release hazard security issue would be required to satisfy the 

performance standards for perimeter control, personnel access, cyber security, intrusion detection, and all other standards applicable to that security issue at a level 

appropriate for Tier 1 facilities. 

How the facility chooses to meet the required performance standard in its Site Security Plan is at the facility’s discretion. In the example of the Tier 1 facility with 

a release hazard security issue, the ‘‘restrict area perimeter’’ performance standard 

at the Tier 1 level may involve, for example, the facility establishing a clearly defined perimeter that cannot be breached by a wheeled vehicle. To meet the performance standard, the facility is able to consider a vast number of security measures 

and might ultimately choose to install cable anchored in concrete block along with 

movable bollards at all active gates. As long as the specific measures are sufficient 

to address the performance standard, the Department would approve the plan. Or, 

the facility might choose to ‘‘landscape’’ its perimeter with large boulders, steep 

berms, streams, or other obstacles that would thwart a wheeled vehicle. Again, as 

long as the proposed measures are sufficient, the Department would approve this 

plan. 

PHASED APPROACH TO CFATS IMPLEMENTATION

The Department is using a phased approach for implementation of the CFATS 

regulation. In advance of the release of Appendix A, the Department began Phase 

1 of CFATS implementation at certain facilities that the Department believed, based 

on available information, are likely to be high-risk. Following initial outreach at the 
9 

corporate level, the Department sent letters to approximately 90 facilities, informing 

them of their selection for participation in Phase 1, and advising those facilities of 

the requirement to submit a Top-Screen. The facilities were to complete the TopScreen in advance of the release of Appendix A and receive technical assistance 

from Department inspectors. The Department, after receiving the majority of Phase 

1 Top-Screens, reviewed these submissions for risk determinations. Those Phase 1 

facilities determined to be high-risk will receive written notification from the Department informing them of the Department’s determination and instructing these 

facilities on their requirements to complete a Security Vulnerability Assessment 

(SVA) for departmental review. The Department will provide technical assistance to 

those Phase 1 high-risk facilities as they conduct the SVA process. 

In addition to the above, publication of the final Appendix A initiated Phase 2, 

the full implementation of the CFATS program. Phase 2 covers all facilities that 

possess chemicals of interest at or above the listed Screening Threshold Quantities 

listed in Appendix A. For Phase 2, most facilities have completed the Top-Screen, 

although a number of facilities received filing extensions. Those facilities subsequently determined to be high-risk will receive preliminary tiering decisions and 

will be instructed to complete SVAs. Upon receipt of a facility’s SVA, the Department will review it for purposes of final tiering determinations, and covered facilities will be required to develop SSPs. The Department will review those SSPs and 

conduct on-site facility inspections to ensure compliance with the submitted plan. 

OUTREACH AND PARTNERSHIP EFFORTS

Since the release of CFATS in April, the Department has made a concerted effort 

to publicize the rule and make sure that our security partners are aware of CFATS 

and its requirements. As part of a dedicated outreach program, the Department has 

presented at numerous security and chemical industry conferences, participated in 

a variety of other meetings of relevant security partners, issued several press releases regarding the regulations, published and distributed full copies of the regulations as well as various facts sheets summarizing critical aspects of the regulations, 

and developed and continually update a DHS.gov Chemical Security Web site. We 

believe these efforts are definitely having an impact. As of February 10, 2008: 

• 24,891 facilities have submitted a completed Top-Screen; 

• Approximately 7,800 facilities have requested and received a Top-Screen filing 

extension; and 

• Agricultural operations possessing COI for agricultural use have received a TopScreen filing extension. 

Partially stemming from the implementation issues surrounding the ammonium 

nitrate security-related provisions within the fiscal year 2008 Omnibus Appropriations Act, the Department granted an extension to a category of agricultural operations possessing COI for agricultural use. This extension will allow the Department 

to engage agri-business distributors and end users in dialog to narrow the CFATS 

program’s focus on the truly high-risk operations. DHS is currently gathering more 

information about these issues to determine whether any modification of the TopScreen requirements might be warranted. As a result of this research and dialog, 

DHS will review its approach toward COIs used in agricultural operations. 

Additionally, the Department intends to focus efforts on fostering solid working 

relationships with State and local officials and first responders in jurisdictions with 

high-risk facilities. To meet the risk-based performance elements under CFATS, facilities are likely to develop active, effective working relationships with local officials 

in the areas of delaying and responding to potential attacks and a clear understanding of roles and responsibilities during an elevated threat situation. 

In terms of staffing the chemical security program, the National Protection and 

Programs Directorate has launched an aggressive hiring effort in order to meet a 

wide variety of program requirements by the end of fiscal year 2008. In addition, 

the chemical security regulatory program has embarked on a course to fulfill in fiscal year 2008 the following deliverables: 

• Review submitted SVAs for final tiering determinations, yielding the population 

of facilities subject to the substantive security requirements of the CFATS regulatory program; 

• Develop the CSAT SSP template for use by regulated facilities, as well as review of Phase 1 facility SSPs and conduct inspections for those facilities; 

• Review SSPs, along with a select number of inspections for Tier 1 facilities; 

• Enhance the CSAT suite of applications, by developing requirements for CSAT 

version 2.0, which will: (1) Provide chemical facilities with the ability to conduct 

‘‘what if’’ analyses within the SVA based on risk assessments; (2) host a portal 

for a personnel surety capability; (3) maintain Top-Screen and SVA analytical 
10 

capabilities; and (4) host a case management system for tracking CSAT usage; 

and 

• Engage State and local officials and chemical facilities to plan, train, and exercise activities related to delay and response performance standards. 

In addition, as the committee is aware, the Department has recently submitted 

a fiscal year 2009 budget request that further details the chemical security regulatory program’s requirements for future years, including additional inspector personnel to upgrade outreach, plan approval, inspection, and audit capabilities; further outfit the program’s adjudications and appeals component; and further enhance 

CSAT by developing an economic modeling tool for the chemical sector, as well as 

accomplish other important program objectives. 

AMMONIUM NITRATE REGULATIONS

In addition to the previously legislated chemical security regulatory authority discussed above, in the fiscal year 2008 Omnibus Appropriations Act, Congress amended the Homeland Security Act of 2002 (6 U.S.C. 361 et seq.) by adding a Subtitle 

J, Secure Handling of Ammonium Nitrate (AN). Subtitle J authorizes the Department to regulate the sale and transfer of AN and requires that DHS develop a regulatory program that oversees or requires: (1) The registration of AN Facilities and 

AN Purchasers with DHS; (2) Point-of-Sale verification of AN purchasers; (3) recordkeeping requirements for AN sales transactions, with penalties for failing to maintain records appropriately; (4) theft or loss reporting requirements; (5) compliance 

inspections conducted by DHS; (6) guidance materials and informational posters for 

the benefit of both AN facilities and AN purchasers; (7) an appeals process. Subtitle 

J also provides DHS with the authority to levy civil penalties of up to $50,000 per 

violation of the subsequent regulation. 

One of the key principles of any subsequent DHS regulatory program resulting 

from Subtitle J will be to ensure that the AN-specific regulations are complementary to the CFATS regulations, especially as CFATS applies to AN facilities (that 

is, facilities that meet CFATS criteria for submitting Top Screens and high-risk facilities that must submit SVAs and SSPs). The goal is to ensure the secure handling 

of AN without unduly burdening buyers and sellers of AN. 

Prior to initiating the rulemaking process, Congress directed the National Protection Programs Directorate (NPPD) to develop a report that would discuss how the 

Department would implement and fund a program incorporating the above requirements within the current budget. DHS is currently in the process of developing that 

implementation report, which will estimate the magnitude of the costs that AN facility owners and operators, AN purchasers, and DHS may incur in the implementation of and compliance with the Act. The report is presently undergoing intra-Departmental review and will be presented to Congress in the near future. 

In addition to this new authority, the Department is currently engaged in a variety of efforts, both regulatory (e.g., CFATS and the U.S. Coast Guard’s Maritime 

Transportation Security Act program) and voluntary (e.g., National Infrastructure 

Protection Plan’s Chemical Sector efforts, Transportation Security Administration’s 

security action items), aimed at securing the chemical supply chain, including ammonium nitrate. 

As discussed above, the Department is currently analyzing the various regulatory 

approaches that could be used to accomplish the activities required by Subtitle J. 

Our intent is to harmonize the new security authorities for ammonium nitrate with 

existing chemical security supply chain authorities, including CFATS, MTSA, and 

the rail transportation security regulations. To that end, DHS is working to ensure 

that there are no duplicative or overlapping regulatory requirements, and is seeking 

to avoid unnecessarily burdening both the private sector and the Federal Government. 

NEW LEGISLATION

Any new legislation on chemical security should be carefully crafted to continue 

the forward momentum and success of the CFATS program. Prior and existing efforts by the Department, and most important, the compliance activities already implemented or underway by the regulated population, should be carried forward with 

the enactment of any new legislative authority. The Department and industry have 

invested a significant amount of resources and time into information collection and 

consequence assessment activities, and those efforts should be validated by incorporation or continuation to maximum extent in any new legislation. 
11 

CONCLUSION

The Department is collaborating extensively with the public, including members 

of the chemical sector and environmental groups, to actively work toward achieving 

our collective goals under the CFATS regulatory framework. In almost every case, 

industry has voluntarily done a tremendous amount to ensure the security and resiliency of its facilities and systems. As we implement the chemical facility security 

regulations, we will continue to work as partners with industry, States and localities 

to get the job done. 

We must focus our efforts on implementing a risk- and performance-based approach to regulation and, in parallel fashion, continue to pursue the voluntary programs that have already borne considerable fruit. In doing so, we look forward to 

collaborating with the committee to ensure that the chemical security regulatory effort is sufficiently defined in order to achieve success in reducing risk throughout 

the chemical sector. In addition to our Federal Government partners, success is dependent upon continued cooperation with our industry and State and local government partners as we move toward a more secure future. 

Thank you for holding this important hearing. I would be happy to respond to any 

questions you might have. 

Chairman THOMPSON. Thank you very much for your testimony. 

I now recognize Mr.—I hope I am pronouncing it right—Wattier 

to summarize his statement for 5 minutes. 

STATEMENT OF KEVIN L. WATTIER, GENERAL MANAGER, 

LONG BEACH WATER DEPARTMENT 

Mr. WATTIER. Chairman Thompson, Ranking Member King, distinguished Members of the committee, my name is Kevin Wattier; 

and I am the General Manager of the Long Beach Water Department, an urban retail water supply agency of the city of Long 

Beach, California. I am a licensed professional engineer and a certified Grade 5 Water Treatment Operator in the State of California. 

I have been General Manager of the Long Beach Water Department since July 2001; and over a decade of my career was spent 

with the Metropolitan Water District of Southern California, the 

largest supplier of drinking water in the country, where for part of 

that time I had the responsibility for managing the organization’s 

water treatment and distribution facilities throughout southern 

California. 

I would like to thank the committee for its consideration of chemical security oversight at our Nation’s water treatment facilities 

and for inviting me to be here this morning to share my experience 

and opinion on this important policy matter. 

My testimony before you this morning will focus specifically on 

Department of Homeland Security regulation of chemical security 

practices at water treatment plants and the handling and storage 

of gaseous chlorine at the Long Beach groundwater treatment 

plant. This testimony represents my professional opinion as a licensed professional engineer and water treatment operator, and it 

is based on the responsibility I have as a water official of the city 

of Long Beach. 

All water treatment plants throughout the country use some 

form of chorine for at least part of their disinfection process. The 

disinfection of drinking water with chlorine is widely regarded as 

one of the greatest public health achievements of the 20th century. 

While the use of gaseous chlorine is often the most cost-effective 

and efficient method of water disinfection, the risks associated with 

the handling, transport and storage of large amounts of gaseous 
12 

chlorine must be considered within the broader context of current 

security interests. 

I have closely reviewed the draft Chemical Facility Anti-Terrorism Act of 2008 before you today and strongly support the proposed Department of Homeland Security risk and performance 

based regulation of chemical security practices at U.S. water treatment facilities. While it is imperative that this new regulation in 

no way interferes with the existing Safe Drinking Water Act compliance at our Nation’s drinking water plants, the additional expertise which the Department of Homeland Security can provide to 

this critical element of our Nation’s infrastructure is greatly needed. Close coordination between the Department of Homeland Security, the U.S. Environmental Protection Agency and the associated 

State and local agencies will ensure that our drinking water treatment plants will continue to provide clean, reliable, affordable 

drinking water while safeguarding the neighborhoods surrounded 

these plants. 

I also believe that alternatives to the handling storage, transport 

and storage of gaseous chlorine at these facilities should be encouraged, considered and implemented where feasible, without impairing critical operations. Federal funding to encourage the consideration and implementation of alternative disinfection treatment 

methods on a voluntary basis will provide the necessary stimulus 

to enable certain agencies to move forward toward implementation 

of inherently safer technologies. 

The city of Long Beach gets its water from two primary sources. 

Half of our supply is treated imported water we purchase from the 

Metropolitan Water District of Southern California, and half is 

local groundwater treated at our groundwater treatment facility, 

which is one of the largest groundwater treatment plants in the 

country, if not the largest. This facility employs conventional filtration processes, which are typical of processes used in treatment of 

surface water. Our treatment operations currently use gaseous 

chlorine as the primary disinfectant. 

Our groundwater treatment plant is located in a densely populated urban area in California’s fifth largest city. The Los Angeles/ 

Long Beach area is the most populated metropolitan area in the 

country. Our facility is immediately adjacent to the city of Long 

Beach Emergency Operations Command Center; the Long Beach 

Airport, where it sits under the flight path of incoming commercial 

aircraft and across the street from the control tower; the north and 

southbound lanes one of the 405 freeway, one of the busiest freeways in the United States; the Long Beach Unified School District 

food distribution center; a professional business center; the Greater 

Long Beach Regional Red Cross headquarters, two medical buildings; and many other business and residential units. 

Like all other large water utilities throughout the country, we 

conducted a vulnerability assessment of our critical facilities following the terrorist attacks of September 11, 2001. While we have 

implemented significant security improvements to control site access, detect, deter and delay potential terrorist incidents and numerous other security enhancements, the consequences of an intentional attack by a highly motivated terrorist on our chlorine supplies merit further consideration. 
13 

It is clear to us in Long Beach that the most effective way to protect against such an intentional attack is to eliminate the target. 

We are in the process of doing just that. 

To eliminate this vulnerability, the Long Beach Water Department has integrated and since March 2004 has been conducting operations of a demonstration-scale 700-pound per day on-site chlorine generation system. On-site gaseous chlorine generation is a 

relatively new process, and I believe Long Beach may be among the 

first in the United States to begin integrating such a system into 

our water treatment operations. We are pleased with the results of 

our demonstration-scale project and have now begun to increase 

the capacity of the system to 2,000 pounds per day, which is Phase 

1 of an eventual 6,000-pound-per-day on-site generation system. 

The total capital cost of completely eliminating the handling and 

storage of gaseous chlorine and bringing on-site chlorine generation 

on-line at the Long Beach groundwater treatment plant is estimated to cost between $2 million and $3 million. 

While Long Beach is pursuing this particular alternative 

chlorination method, it is important for this committee to understand that there are numerous commercially available alternative 

disinfection technologies that exist that have been successfully implemented at various water and wastewater treatment operations 

across the United States. However, numerous local considerations 

and other critical site-specific factors must be considered on a strict 

case-by-case basis to determine feasibility of integrating any of 

these alternative technologies. In a few cases, it may be infeasible 

to integrate any of these alternative technologies into treatment operations. Any consideration of alternative technologies must include assurances that maintain reliability of water systems as well 

as the flexibility needed to enable water treatment operators to adhere to strict Federal and State water quality standards. 

I would propose that the committee amend its current draft to 

include an authorization of appropriations for voluntary integration 

of technologies that reduce or eliminate the risk posed by transport 

and storage of containerized gaseous chlorine. Federal participation 

in voluntary demonstration-scale projects of this type would have 

a profound impact on the United States water treatment industry. 

I want to thank the committee again for allowing me to give you 

my thoughts on these matters. My organization and I make ourselves available for any further discussion on these and any other 

matters related to the Chemical Facility Anti-Terrorism Act of 

2008 upon your request. 

I would be happy to answer any of your questions. Thank you. 

Chairman THOMPSON. Thank you very much. For the record, we 

have already incorporated that suggestion in the print. 

Mr. WATTIER. Thank you sir. 

[The statement of Mr. Wattier follows:] 

PREPARED STATEMENT OF KEVIN L. WATTIER

FEBRUARY 26, 2008 

Chairman Thompson, Ranking Member King, distinguished Members of the committee, my name is Kevin Wattier, and I am the General Manager of the Long 

Beach Water Department, an urban, retail water supply agency of the city of Long 

Beach, California. I am a licensed Professional Engineer and certified Grade 5 
14 

Water Treatment Operator in the State of California. I’ve been General Manager 

of the Long Beach Water Department since July 2001. Over a decade of my career 

was spent with the Metropolitan Water District of Southern California, the largest 

supplier of drinking water in the country, where for part of that time I had responsibility for managing the organization’s water treatment and distribution facilities 

throughout southern California. 

I would like to thank the committee for its consideration of chemical security oversight at our Nation’s water treatment facilities, and for inviting me to be here this 

morning to share my experience and opinion on this important policy matter. My 

testimony before you this morning will focus specifically on Department of Homeland Security regulation of chemical security practices at water treatment facilities 

and the handling and storage of gaseous chlorine at the Long Beach Groundwater 

Treatment Plant. This testimony represents my professional opinion as a licensed 

professional engineer and water treatment operator; and it is based on the responsibility I have as a water official for the city of Long Beach. 

All water treatment plants throughout the country use some form of chlorine for 

at least part of their disinfection process. The disinfection of drinking water with 

chlorine is widely regarded as one of the greatest public health achievements of the 

20th century. While the use of gaseous chlorine is often the most cost-effective and 

efficient method of water disinfection, the risks associated with the handling, transport and storage of large amounts of gaseous chlorine must be considered within the 

broader context of current national security interests. 

I have closely reviewed the draft ‘‘Chemical Facility Anti-Terrorism Act of 2008’’ 

before you today, and strongly support the proposed Department of Homeland Security risk- and performance-based regulation of chemical security practices at U.S. 

water treatment facilities. While it is imperative that this new regulation in no way 

interferes with the existing Safe Drinking Water Act compliance at our Nation’s 

drinking water treatment plants, the additional expertise which the Department of 

Homeland Security can provide to this critical element of our Nation’s infrastructure 

is greatly needed. Close coordination between the Department of Homeland Security, the USEPA, and the associated State and local agencies will ensure that our 

drinking water treatment plants will continue to provide clean, reliable, affordable 

drinking water while safeguarding the neighborhoods surrounding these plants. 

I also believe that alternatives to the handling, transport and storage of gaseous 

chlorine at these facilities should be encouraged, considered, and implemented 

where feasible, without impairing critical operations. Federal funding to encourage 

the consideration and implementation of alternative disinfection treatment methods, 

on a voluntary basis, would provide the necessary stimulus to enable certain agencies to move toward implementation of inherently safer alternatives. 

The city of Long Beach gets its water from two primary sources. Half of our supply is treated imported water we purchase from the Metropolitan Water District of 

Southern California, and half is local groundwater treated at our groundwater treatment facility, which is one of the largest groundwater treatment facilities in the 

United States, if not the largest. This facility employs conventional filtration processes, which are typical of processes used in the treatment of surface water. Our 

treatment operations currently utilize gaseous chlorine as the primary disinfect. 

Our Groundwater Treatment Plant is located in a densely populated, urban area 

in California’s fifth largest city. The Los Angeles/Long Beach area is the most populated metropolitan area in the country. Our facility is immediately adjacent to the 

city of Long Beach Emergency Operations Command Center, the Long Beach Airport (where it sits under the flight path of incoming commercial aircraft and across 

the street from the control tower), the north and southbound lanes of the 405 Freeway, one of the busiest freeways in the United States, the Long Beach Unified 

School District food distribution center, a professional business center, the Greater 

Long Beach Regional Red Cross Headquarters, two medical buildings and many 

other business and residential units. 

Like all other large water utilities throughout the country, we conducted a vulnerability assessment of our critical facilities following the terrorist attacks of September 11, 2001. While we have implemented significant security improvements to 

control site access, detect, deter and delay potential terrorist incidents, and numerous other security enhancements, the consequences of an intentional attack by a 

highly motivated terrorist on our chlorine supplies merit further consideration. 

It is clear to us in Long Beach that the most effective way to protect against such 

an intentional attack is to eliminate the target. We are in the process of doing just 

that. 

To eliminate this vulnerability, the Long Beach Water Department has integrated, and since March 2004, has been conducting operations of a demonstrationscale 700 lb/day on-site chlorine generation system. On-site gaseous chlorine genera-
15 

tion is a relatively new process and I believe Long Beach may be among the first 

in the United States to begin integrating such a system into its water treatment 

operations. We are pleased with the results of our demonstration-scale project and 

have now begun work to increase the capacity of the system to 2,000 lbs/day, which 

is Phase 1 of an eventual 6,000 lb/day on-site generation system. The total capital 

cost of completely eliminating the handling and storage of gaseous chlorine, and 

bringing on-site chlorine generation on-line at the Long Beach Groundwater Treatment Plant is estimated to cost between $2 million and $3 million. 

While Long Beach is pursuing this particular alternative chlorination method, it 

is important for this committee to understand that there are numerous commercially available alternative disinfection technologies that exist that have been successfully implemented at various water and wastewater treatment operations across 

the United States. However, numerous local considerations and other critical site 

specific factors must be considered, on a strict case-by-case basis, to determine feasibility of integrating any of these alternative technologies. In a few cases it may be 

infeasible to integrate any of these alternative technologies into treatment operations. Any consideration of alternative technologies must include assurances that 

maintain reliability of water systems, as well as the flexibility needed to enable 

water treatment operators to adhere to strict Federal and State water quality standards. 

I would propose the committee amend its current draft to include an authorization 

of appropriations for voluntary integration of technologies that reduce or eliminate 

the risk posed by transport and storage of containerized gaseous chlorine. Federal 

participation in voluntary demonstration-scale projects of this type would have a 

profound impact on the United States water treatment industry. 

I want to thank the committee again for allowing me to give you my thoughts 

on these matters. My organization and I make ourselves available for any further 

discussion on these and any other matter related to the ‘‘Chemical Facility Anti-Terrorism Act of 2008’’ upon your request. 

I would be happy to answer any of your questions. 

Chairman THOMPSON. Dr. Pulham. 

STATEMENT OF DAVID C. PULHAM, PH.D., DIRECTOR OF 

COMPLIANCE, SIEGFRIED (USA), INC. 

Mr. PULHAM. Good morning, Chairman Thompson, Ranking 

Member King and distinguished Members of the committee. My 

name is Dr. David Pulham, Director of Compliance at Siegfried 

(USA) in Pennsville, New Jersey. Prior to joining Siegfried, I spent 

27 years with the Food and Drug Administration as a National Expert Investigator. My responsibilities with FDA included inspecting 

pharmaceutical facilities around the world and assessing foreign 

regulatory agencies. As Director of Compliance at Siegfried, I am 

responsible for ensuring FDA, DEA, EPA, OSHA and DHS compliance. 

Thank you for this opportunity to share with you my company’s 

perspective on the Chemical Facility Anti-Terrorism Act of 2008, 

specifically with regard to inherently safer technology. My remarks 

will address generally the issue of inherently safer technology, reference our experience with the State of New Jersey security provisions and conclude with our recommendation on the bill going forward. 

Siegfried’s Pennsville, New Jersey, facility has been in existence 

for over 70 years and manufactures both exclusive and generic bulk 

pharmaceuticals with over 150 employees. Most of Siegfried’s products are controlled substances and are therefore highly regulated 

by the Drug Enforcement Administration. Due to Siegfried’s commitment to compliance in all areas, Siegfried takes great pride in 

the sterling compliance record it has developed with virtually all 

Federal and State agencies. 
16 

Siegfried is a member of the Synthetic Organic Chemical Manufacturers Association, SOCMA, which is the leading chemical industry organization representing the batch, custom and specialty 

chemical industry since 1921. As a member of SOCMA, Siegfried 

adheres to the principles of the ChemStewards program, which is 

an environmental, health, safety and security management system. 

This self-imposed program requires companies to develop systematic approaches to environmental and chemical risk management 

with independent, third-party verification. ChemStewards incorporates SOCMA security vulnerability assessment methodology, 

which is recognized by the Center for Chemical Process Safety and 

is accepted by the Department of Homeland Security for Tier 4 facilities under the Department’s Chemical Facility Anti-Terrorism 

Standards. SOCMA makes this methodology publicly available in 

its effort to serve as a leading industry resource for assessing security vulnerabilities at chemical facilities. 

New Jersey recently amended its Toxic Catastrophe Prevention 

Act to require existing facilities to complete an inherently safer 

technology review. Siegfried’s assessment of this process is that it 

was essentially a paperwork exercise to document in great detail 

steps and considerations that we take as a normal part of our process. Simply put, inherently safer technology is a concept that the 

chemical industry invented; and we consider it continuously as we 

design, modify and enhance our production processes. 

Securing our products is an ongoing responsibility. So is complying with the comprehensive system of existing State and Federal laws. These regulatory regimes require extensive process hazard analysis, risk management planning and public reporting on 

chemicals we handle on-site and, in some cases, prior to handling 

them on-site. We feel that these regulations, complemented by our 

own process-safety decisionmaking, provide a concrete and meaningful level of consequence reduction at all stages of the product 

lifecycle. 

Speaking specifically of existing Federal rules, Siegfried supports 

DHS’s existing Chemical Facility Anti-Terrorism Standards, which 

do not include any IST mandates. These rules require comprehensive vulnerability assessments and security plans, and those plans 

have to meet almost 20 rigorous security performance standards. 

We encourage the committee to support the current approach. 

Mr. Chairman, I have heard people say that since the industry 

already considers inherently safer technology in its decisionmaking 

process and since we are already bound by regulated regulatory regimes it should be easy for us to comply with a new layer of IST 

regulation. In fact, it is never a simple task to integrate a new set 

of rules imposed by a new regulatory entity with the numerous engineering and compliance programs we already have to manage. An 

IST mandate would complicate and in some cases could undermine 

existing practices or compliance. Mandating IST for companies like 

Siegfried that manufacture hundreds of batches of specialty 

batched products every year is a much greater exercise than what 

may appear on the surface. Having to debate which approach is inherently safer in any given case would slow down our ability to 

meet customer needs, and it could be dangerous if we are compelled to accept and go along with an approach that we personally 
17 

think may not be the lowest-risk approach. With all due respect, 

this issue is vastly more complicated than most people appreciate. 

Thank you for the opportunity to share with you Siegfried’s perspective on inherently safer technology and existing Federal security rules. I look forward to your questions. 

[The statement of Mr. Pulham follows:] 

PREPARED STATEMENT OF DAVID C. PULHAM

FEBRUARY 26, 2008 

Good morning Chairman Thompson, Ranking Member King, and distinguished 

Members of the committee. My name is Dr. David C. Pulham, Director of Compliance at Siegfried (USA), Inc. in Pennsville, New Jersey. I spent 27 years with the 

Food and Drug Administration as a National Expert Investigator. Part of this responsibility required inspecting pharmaceutical facilities around the world and 

qualifying foreign regulatory agencies. As Director of Compliance at Siegfried, my 

responsibilities include FDA, DEA, EPA, OSHA, and DHS compliance. 

Thank you for this opportunity to share with you my company’s perspective on 

the Chemical Facility Anti-Terrorism Act of 2008, specifically with regard to inherently safer technology. My remarks will speak generally to the issue of inherently 

safer technology, reference our experience with the State of New Jersey’s security 

provisions, and conclude with our recommendation on the bill going forward. 

Siegfried (USA)’s Pennsville, New Jersey, facility manufactures bulk pharmaceuticals and employs 150 personnel. Most of Siegfried’s products are controlled substances. Therefore, we are highly regulated by the Drug Enforcement Administration. Siegfried takes pride in its compliance record with all Federal and State government agencies. 

Siegfried (USA) is a member of the Synthetic Organic Chemical Manufacturers 

Association (SOCMA), which is the leading chemical industry association representing the batch, custom, and specialty chemical industry since 1921. As a member of SOCMA, Siegfried adheres to the principles of the ChemStewards® program, 

an environmental, health, safety, and security management system. This self-imposed program requires companies to develop systematic approaches to environmental and chemical risk management with independent, third-party verification. 

ChemStewards® incorporates SOCMA’s security vulnerability assessment methodology, which is recognized by the Center for Chemical Process Safety and is accepted 

by the Department of Homeland Security for Tier Four facilities under the Department’s Chemical Facility Anti-Terrorism Standards. SOCMA makes this methodology publicly available in its effort to serve as a leading industry resource for assessing security vulnerabilities at chemical facilities. 

New Jersey recently amended its Toxic Catastrophe Prevention Act (TCPA) rules 

to require existing facilities to complete an ‘‘Inherently Safer Technology Review.’’ 

Siegfried’s assessment of this process is that it is essentially a paperwork exercise 

to document, in great detail, steps and considerations that we take as a normal part 

of our process. Simply put, inherent safety is a concept that the chemical industry 

invented, and we consider it continuously as we design and modify our production 

processes. 

Securing our products is an ongoing responsibility. So is complying with the comprehensive system of existing State and Federal laws. These regulatory regimes require extensive process hazard analysis, risk management planning, and public reporting on chemicals we handle on-site and, in some cases, prior to handling them 

on-site. We feel that these regulations, complemented by our own process-safety decisionmaking, provide a concrete and meaningful level of consequence reduction at 

all stages in the product lifecycle. 

Speaking specifically of existing Federal rules, Siegfried supports DHS’s existing 

Chemical Facility Anti-Terrorism Standards, which do not include any IST mandates. These rules require comprehensive vulnerability assessments and security 

plans, and those plans have to meet almost 20 rigorous security performance standards. We encourage this committee to support the current approach. 

Mr. Chairman, I’ve heard people say that, since the industry already considers inherent safety in its decisionmaking process, and since we’re already bound by related regulatory regimes, it should be easy for us to simply comply with a new layer 

of IST regulation. In fact, it is never a simple task to integrate a new set of rules, 

imposed by a new regulatory entity, with the engineering and compliance programs 

we already have to manage. An IST mandate would complicate, and in some cases 

could undermine, existing practices or compliance. Mandating IST for companies 
18 

like Siegfried that manufacture hundreds of specialty batch products every year is 

a much greater exercise than what may appear on the surface. Having to debate 

which approach is inherently safer in a given case would slow down our ability to 

meet customer needs. And it could be dangerous, if we are compelled to accept, or 

go along with, an approach that we personally think may not be the lowest-risk approach. With all due respect, this issue is vastly more complicated than most people 

appreciate. 

Thank you for the opportunity to share with you Siegfried (USA)’s perspective on 

inherently safer technology and existing Federal security rules. I look forward to 

your questions. 

Chairman THOMPSON. I thank all the witnesses for their testimony. 

I remind each Member that he or she will have 5 minutes to 

question the panel. 

Before I start my questions, I would like to ask unanimous consent to submit four statements for the record. One is a statement 

from the National Propane Gas Association, one a statement from 

the Chemical Bill Coalition, one a statement from Greenpeace and 

finally a statement from the Industrial Safety Training Council. 

Without objection, the statements are inserted into the record. 

[The statements follow:] 

STATEMENT OF THE NATIONAL PROPANE GAS ASSOCIATION

FEBRUARY 26, 2008 

The National Propane Gas Association (NPGA) appreciates the opportunity to 

submit the following statement on the proposed Chemical Facility Anti-Terrorism 

Act of 2008. 

NPGA is the national trade association of the LP-Gas (principally propane) industry with a membership of about 3,600 companies, including 39 affiliated State and 

regional associations representing members in all 50 States. The single largest 

group of NPGA members are retail propane marketers whose total membership is 

approximately 3,000 companies, the vast majority of which are small businesses. 

These companies operate approximately 10,000 retail facilities that serve propane 

customers in every State and county in the United States. Customers use propane 

in residential and commercial installations, in agricultural applications, in industrial processing, and as a clean air alternative engine fuel for both over-the-road vehicles and nonroad engines such as those used in forklifts. 

The proposal has been released in draft in several different forms, the latest being 

dated February 19, 2008. In general, the bill would extend and revise the authority 

of the Department of Homeland Security (DHS) to administer the Chemical Facility 

Anti-Terrorism Standards (CFATS), which have been in their final form for less 

than 100 days. In fact, the initial round of determinations of facility risk performed 

through the Top Screen process have not been issued by DHS to our knowledge. 

Nevertheless, the bill proposes to make major changes to the legal environment in 

which the CFATS are written and administered. NPGA urges Congress to exercise 

extreme caution not to enact provisions that increase confusion in the private sector 

with no increase in security. 

THE PROPANE INDUSTRY IS HIGHLY REGULATED FOR BOTH SAFETY AND SECURITY

The propane industry is one of the most highly regulated industries in the United 

States. The industry’s commitment to the safety and security of industry personnel 

and customers is paramount, and leads us to support appropriate provisions at the 

Federal, State, and local levels. 

Since 1931, NPGA’s primary mission has been to increase the safety of propane 

use. Since September 11, 2001, NPGA’s scope of activities has broadened to include 

security considerations. Our efforts began with intensive outreach to industry members to facilitate their interaction with Federal officials representing agencies such 

as the Department of Transportation’s (DOT) FMCSA and RSPA (now known as 

PHMSA) and the Department of Defense. We distributed DOT’s Security Awareness 

Training CD–ROM to the industry and invited key policymakers to address our association meetings. In addition, the propane industry sits on the Oil and Natural 

Gas Sector Coordinating Council providing direct interaction with other industries 

and Federal security personnel. 
19 

The industry supports background checks of industry personnel, and performs detailed security plans required by the Department of Transportation. These security 

plans are broad in scope and address personnel security, the en route security of 

delivery trucks, and the security of the propane storage facilities themselves against 

unauthorized access. Perhaps the most important initiative, however, has been the 

modernization of the primary propane safety standard to include security measures. 

National Fire Protection Association (NFPA) Standard 58, LP-Gas Code, is updated 

triennially to make continual improvements in safety for the storage and handling 

of propane. This standard is adopted by reference or by transcription in all 50 

States and has included security-specific language since the 2004 edition. Section 

6.16.5 of NFPA 58 prescribes requirements for the security and protection against 

tampering for propane systems. It also requires the facility operator to provide security measures to minimize entry by unauthorized persons and, at a minimum, security awareness training. Other requirements cover industrial-type fencing, guard 

service, lighting and ignition source control. 

CONGRESS SHOULD NOT ENACT POLICIES THAT CONFLICT WITH CURRENT FEDERAL TAX

POLICIES ENCOURAGING PROPANE STORAGE

Federal tax policy, both directly and indirectly, has been encouraging increased 

storage capacity for propane for many years. Since 1992, Federal tax law has directly encouraged increasing the use and storage of alternative fuels, including propane. From 1992 until 2005, Section 179A of the U.S. Tax Code provided for a special deduction for certain clean fuel refueling property, including the storage of propane. In 2005, this deduction was succeeded by a new Federal tax credit (Section 

30C), again designed to increase the storage capacity for alternative fuels, including 

propane. 

Additionally, in 2005, Federal tax law added a credit for alternative fuels (Section 

6426) and alternative fuel vehicles (Section 30B). Again, these credits included propane as a recognized alternative fuel. These credits for propane fuel and propane 

vehicles encourage the increasing of propane storage capacity in a logically indirect 

way. Indeed, all three credits (fuel, vehicles, and storage) work together to advance 

each particular piece of the equation necessary to sustain propane vehicle technology. The more propane vehicles you have, the more propane fuel you need. The 

more propane fuel you need the more propane storage capacity is necessary to store 

that fuel. The more storage and fuel available the more likely manufacturers will 

want to produce propane vehicles. This all adds up to increased use of a clean burning alternative fuel that helps address today’s environmental concerns. Thus all 

these credits work to accentuate each other. 

Other aspects of Federal tax policy also encourage propane storage, also in an indirect manner. A high percentage of propane retailers are small- to mid-size businesses. As such they are highly sensitive to how tax law treats capital investments, 

such as storage. Thus dramatic increases in expensing (the amount that a business 

may deduct for capital investments immediately rather than depreciate over time) 

can often dictate whether a small business will proceed with a new capital investment. For years, the standard expensing figure has been in the range of $25,000. 

However, since 2002 that figure has been increased substantially to $125,000 and 

in the recently enacted Economic Stimulus Package that figure was increased to 

$250,000 for the year 2008 only. 

Moreover, businesses both big and small can benefit from ‘‘Bonus Depreciation’’ 

which has been enacted for various periods of time over the past 10 years, again 

most recently in the 2008 Economic Stimulus Package. The provision would allow 

business to write off 50 percent percent of the cost of depreciable property (capital 

expenditures) acquired in 2008. 

Both the expensing and depreciation provisions, in addition to the previously mentioned credits, serves as a clear indication to the propane industry that the Federal 

Government is strongly encouraging the overall increase of propane storage capacity. 

The Federal Government has consciously chosen to favor increased storage capacity for propane in general. While we have already mentioned the advantages as far 

as encouraging the use of alternative fuel vehicles, there is another important element related to propane use for heating and appliances. Propane used as heating 

fuel is largely centered in rural and agricultural areas throughout the country due 

primarily to its portable properties. In the winter when demand is at its peak, 

prices for propane, as with other fuels such as natural gas, can fluctuate greatly. 

Therefore, encouraging increased storage capacity for propane makes sense for the 

many consumers using propane, particularly in heating and agricultural applica-
20 

tions. Congress should not enact policies that will simultaneously encourage and 

discourage propane storage. 

CONCERNS WITH DIRECTION OF REAUTHORIZATION

NPGA has a number of concerns with the direction being taken by the committee 

in drafting the DHS reauthorization legislation. 

1. DHS Should Retain An Ability To Make Determinations Based Upon Risk (Section 

2102) 

NPGA is pleased that the most recent draft of the bill recognizes that DHS needs 

the authority and the flexibility to use judgment in deciding which facilities to regulate. Under the CFATS, DHS administers the Top Screen process so that it can 

make judgments about whether particular facilities need additional scrutiny and 

must therefore be placed in a risk-based tier. Eliminating this ability and forcing 

DHS to automatically place all facilities storing more than threshold quantities will 

swamp DHS in data, making it harder for them to target resources toward highrisk facilities. 

2. Inherently Safer Technology (IST) Policy Creates an Explicit Need To Consider 

Fuel Switching 

NPGA is very concerned that Congress is setting forth a mechanism by which facilities storing propane will be required to consider other technologies or energy 

sources in place of those currently listed by CFATS. 

Strictly from a customer perspective, the bill requires propane consumers to report on the possibility of substituting propane with another fuel, using a less hazardous fuel, using smaller quantities, or reducing propane storage. In doing so, the 

Government effectively tells propane customers to create their own ‘‘roadmap’’ for 

switching from propane to other fuels. With every new legislative or regulatory 

mandate, the incentive to switch from clean-burning propane to less environmentally friendly fuels such as diesel fuel or electricity ratchets up as customers 

seek to remain unregulated. Worse still, energy sources competing with propane remain largely unregulated from a homeland security perspective, when they are not 

inherently safer or more secure than propane. 

Propane is a common fuel used safely by millions of homes, farms, and businesses 

around the Nation. We are concerned that the ‘‘inherently safer technology’’ assessment required in Section 2110(b) will make propane marketers and customers either 

reduce their propane storage or switch from propane to other fuels not covered by 

the CFATS. Specifically, the IST requirement would require propane marketers and 

customers to assess, among other things, the following as it applies to their locations: (1) Process redesign; (2) Input substitution; (3) Use of less hazardous or benign substances; (4) Use of smaller quantities of substances of concern; and (5) Reduction or elimination of storage, transportation, handling, disposal, and discharge 

of substances of concern. 

All of these factors, but particularly Item 5, are troubling to propane retailers and 

customers. By requiring propane marketers to address reducing or eliminating propane storage, the Government is, in effect, asking marketers to choose between 

proven industry safety concerns and a supposedly more secure way of doing business. Considering the favorable tax treatment extended by Congress to propane discussed above, it is inappropriate at best for Congress to establish a national policy 

encouraging the reduction of propane storage. NPGA believes this is no choice at 

all. The safest portion of the propane distribution chain is stationary storage, the 

very aspect that Congress is suggesting could be ‘‘inherently safer’’ if it were reduced. 

Enacting a policy that encourages reductions in propane storage will have other 

negative impacts in the field. First, it will reduce safety by requiring retailers to 

make more deliveries of smaller quantities throughout the heating season. Not only 

will more trucks need to be on the road to serve the existing demand, but it will 

increase the number of transfer operations. Less on-site fuel storage will also lead 

to supply bottlenecks, particularly in the busy winter heating season, because fuel 

supplies will run out faster. Any disruption to the fuel delivery infrastructure, such 

as winter snow and ice storms that slow down or stop truck deliveries, could severely impact essential deliveries of heating and cooking fuel to rural America as 

well as jeopardize vital agricultural operations. Ironically, when fuel shortages (due 

to bad weather, or man-made supply chain problems) leave people without power 

and crops without proper care, Congress will be the first to call into question the 

propane storage and delivery system. 

In the name of safety, fairness, fuel neutrality, and consistency with existing tax 

preferences, NPGA strongly urges the committee to eliminate fuels, such as pro-
21 

pane, from inherently safer technology reporting requirements in the draft legislation. 

3. Weakening Preemption Will Weaken National Consistency of Regulation 

NPGA also strongly opposes the limits the legislation seeks to impose on Federal 

preemption in Section 2107. Allowing 50 individual States and tens of thousands of 

localities to write more stringent laws or regulations than currently exist at the 

Federal level will lead to a hodge-podge of State chemical facility security laws, all 

with differing procedures, compliance requirements and enforcement mandates. The 

propane industry is already highly regulated at the State and local level. In fact, 

providing States and localities the freedom to go their own way on security will jeopardize the entire system of propane safety regulations, since fire and building codes 

regulating propane are administered at the State level. Adding numerous new State 

chemical facility security laws will only create more red tape, and more confusion. 

Furthermore, propane companies and customers—most of them small businesses— 

will need to dedicate new financial and personnel resources to comply with all the 

overlapping security requirements. To avoid this, NPGA urges a strong statement 

from Congress in support of Federal preemption of State homeland security laws. 

4. There Is No Compelling Reason To Act Now 

Finally, NPGA is confused as to why there is a rush to seek such substantive 

changes to the DHS Chemical Facility Anti-Terrorism Standards (CFATS). We understand that the authority to administer the rules expires in October 2009, but 

they have only recently finished the CFATS Top-Screen process which determines 

which chemical facilities will be regulated and which will not (compliance letters to 

be sent soon). Nonetheless, the committee via this legislation seems determined to 

rewrite how DHS will administer chemical facility regulations before DHS has a 

chance to test the utility of current regulations. The new requirements in this legislation will only slow down the process of securing vital chemical facilities as DHS 

will be forced to go back through the regulatory process to address new congressional priorities. At most, Congress should enact a simple reauthorization without 

significant changes to the program. 

NPGA appreciates this opportunity to submit comments to the House Homeland 

Security Subcommittee on Transportation and Infrastructure Protection. Should you 

have questions or require further information, please contact us anytime. 

STATEMENT OF THE CHEMICAL BILL COALITION

FEBRUARY 26, 2008 

Member of Congress, we represent American agriculture, food processing, energy, 

forest products, chemistry, medicine, transportation, building materials and other 

businesses and local city services that make up our national infrastructure. Protecting our communities and complying with Federal security standards is a top priority to us. 

We are concerned that the ‘‘Chemical Facility Anti-Terrorism Security Act’’ would 

cause disruptions of new Federal security standards in the short term, and weaken 

infrastructure protection and economic stability in the long term. 

The Department of Homeland Security (DHS) began enforcement of landmark 

new chemical security standards last month. Companies in thousands of communities are just beginning to comply with these significant new requirements while 

continuing to provide essential products and services for our daily lives. Our industries and DHS are investing time, training and other resources to adapt to comprehensive security standards. However, this bill would detract from compliance efforts and, in some cases, impede progress that is underway. We believe that 

counter-productive, mid-stream adjustments to the current law would undermine security at facilities all around the country. 

Our primary concern is that the bill goes beyond requiring security protections 

based on risk by creating a mandate to change products and processes to a Government-selected ‘‘safest’’ technology. Congressional testimony has stated that this 

would possibly increase risk and weaken the businesses that it intends to protect. 

Such a standard is not measurable and would likely lead to confusion and prohibitive legal liability. The bill would also weaken protections for sensitive security information and create overlapping and conflicting security requirements. 

Making extensive changes now is also premature. The DHS security regulations 

being implemented are protecting thousands of facilities that provide the food, 

water, energy, pharmaceuticals and other chemical manufacturing that are essential 

for our national security and economic vitality. Rushing approval of this bill would 
22 

significantly disrupt the recently implemented chemical security standards and create economic uncertainty in many communities. We urge you to reconsider this approach. While we would support straightforward legislation to remove the sunset 

date and make the chemical security regulations permanent, we strongly urge Congress to refrain from overhauling the program at least until it has been given a fair 

chance to be implemented and evaluated. 

Thank you for your consideration of our views. 

Agricultural Retailers Association; American Farm Bureau Federation; American 

Forest & Paper Association; American Frozen Food Institute; American Petroleum 

Institute; Beer Institute; Calorie Control Council; Chemical Producers & Distributors Assn; Consumer Specialty Products Assn; Croplife America; Environmental 

Technology Council; Independent Liquid Terminals Assn; Institute of Makers of Explosives; Int’l Assn of Refrigerated Warehouses; International Food Additives Council; Midwest Food Processors Association; National Agricultural Aviation Assn; National Assn of Chemical Distributors; National Association of Manufacturers; National Assn of Truck Stop Operators; National Cotton Council of America; National 

Mining Association; National Oilseed Processors Assn; National Paint and Coatings 

Assn; Nat’l Petrochemical & Refiners Assn; Petroleum Equipment Suppliers Assn; 

Petroleum Marketers Assn of America; The Carpet and Rug Institute; The Fertilizer 

Institute; U.S. Chamber of Commerce; USA Rice Federation. 

STATEMENT OF RICK HIND, LEGISLATIVE DIRECTOR, GREENPEACE TOXICS CAMPAIGN, GREENPEACE

FEBRUARY 26, 2008 

CURRENT LAW AND DEPARTMENT OF HOMELAND SECURITY REGULATIONS (CFATS) ARE

INADEQUATE; PERMANENT LEGISLATION IS ESSENTIAL TO SECURITY

INHERENTLY SAFER TECHNOLOGIES CAN ELIMINATE CATASTROPHIC CONSEQUENCES OF

A TERRORIST ATTACK

‘‘We don’t want a chemical plant sitting somewhere in a place like Boston become 

a bomb because it is not properly secured,’’—Secretary Chertoff, February 7, 2008. 

‘‘You know, the threat is just staring us in the face. I mean, all you’d have to do 

is to have a major chemical facility in a major metropolitan area go up and there’d 

be hell to pay politically. People will say, ‘Well, didn’t we know that this existed?’ 

Of course, we knew.’’—Former Senator Warren Rudman (R–NH), November 2003. 

The September 11 terrorist attacks successfully used our own infrastructure 

against us with tragic results. They also demonstrated that tight perimeter security, 

such as in the case of the Pentagon, is incapable of preventing such attacks. Should 

a chemical plant be targeted, a truck bomb, a small plane, helicopter or a high powered rifle would easily render the industry’s current reliance on fence-line security 

totally useless. In fact, U.S. chemical facilities have been referred to as ‘‘pre-positioned’’ weapons of mass destruction (WMD). 

Reports during the summer of 2007 of renewed terrorist’s capacity to carry out 

attacks inside the United States are a sobering reminder of the nearly 6 years of 

neglect following the 9/11 attacks. The vulnerability of U.S. chemical plants to terrorism and serious accidents such as the 1984 disaster in Bhopal, India have been 

widely recognized. The potential magnitude of these risks surpasses the 9/11 attacks. Once released these chemicals and gases can remain dangerous for up to 14 

miles in an urban area (20 miles in a rural area) and put the lives of millions of 

people at risk. 

The nature of these risks meets any definition of a weapon of mass destruction. 

The manner in which people would be killed and injured is terrifying. Poison gases 

such as chlorine will literally melt the lungs of its victims causing them to drown 

in their own lung fluid (pulmonary edema). Survivors could be left with life-long disorders. 

Although we would all like to believe the threat of a terrorist attack is unlikely, 

U.S. intelligence officials now believe terrorist attacks are more likely today than 

before the United States invaded Iraq in 2003 (September 24, 2006, N.Y. Times). 

More recently on July 10, Department of Homeland Security (DHS) Secretary Michael Chertoff told the media that he had a ‘‘gut feeling’’ that ‘‘we are entering a 

period this summer of increased risk.’’ 

Following the 9/11 attacks it was reported that 9/11 ring leader, Mohamed Atta, 

visited a Tennessee chemical plant asking lots of questions (December 16, 2001, 

Washington Post). In the first 6 months of 2007 at least five successful terrorist at-
23 

tacks in Iraq used relatively small (150 to 250 pound) cylinders of chlorine gas to 

kill dozens of people. As a result the DHS began briefing local bomb squads and 

chemical plants across the country (April 24, 2007, USA Today). 

In February and April 2007 thefts of 150 pound cylinders of chlorine gas occurred 

in California prompting questions by members of this committee to the DHS about 

their response to these thefts, any other thefts and plans to eliminate these 

vulnerabilities by using inherently safer technologies. 

U.S. chemical facilities were not built or designed to defend against terrorist attacks. Predicting where an attack will take place is a fool’s errand. No one predicted 

that Timothy McVeigh would attack the Federal Building in Oklahoma City in 

1995, killing 168 innocent people. 

On June 25, 2007, DuPont Chairman Charles O. Holliday Jr. told the media that 

he worries most about a computer system failure or a security breach at one of the 

company’s chemical plants around the world. ‘‘I feel very comfortable that we’ve 

taken all the reasonable steps, but obviously if someone wants to fly an airplane 

into a plant, it’s very hard to guard against it,’’ said Holliday. 

The Nation’s most infamous example of this threat is the Kuehne Chemical Company in South Kearny, New Jersey. According to Kuehne’s own reports to the U.S. 

Environmental Protection Agency (EPA), their plant puts 12 million people in the 

Newark-New York City region at risk in the event of a catastrophic release of chlorine gas stored on-site. This is the largest single chemical plant risk in the Nation, 

but according to the DHS more than 3,000 other plants each put 1,000 or more people at risk. More than 100 U.S. plants each put a million or more people at risk, 

according to their reports to the EPA. 

What makes the Kuehne plant inherently dangerous is the use of large quantities 

of chlorine gas to produce relatively harmless liquid bleach (sodium hypochlorite). 

While Kuehne’s largest business is water disinfection, there are many safer alternatives to chlorine, including ultra-violet light, ozone and liquid bleach. A competitor of Kuehne, KIK Custom Products, wrote Representative Edward Markey (D– 

MA) a Member of the House Homeland Security Committee on July 26, 2006. In 

their letter KIK committed to converting to a safer technology that produces ‘‘high 

strength liquid bleach in one continuous operation thereby eliminating the need to 

ship or store chlorine’’ on-site and therefore eliminating the risks posed by large 

quantities of chlorine gas. KIK is the second largest producer of household bleach 

in North America. More details on their technology is at: http://www.k2pure. 

com/. 

What Happens When Perimeter Security Fails? 

Continuing negligence by industry or Government will not be judged kindly by 

posterity. Stephen Flynn, Senior Fellow in National Security Studies at the Council 

on Foreign Relations wrote in his book, America the Vulnerable, ‘‘The morning after 

the first terrorist strike on this sector, Americans will look around their neighborhoods and suddenly discover that potentially lethal chemicals are everywhere, and 

be aghast to learn that the U.S. Government has still not developed a plan to secure 

them. The subsequent political pressure to shut down the industry until some minimal new safeguards can be put in place—as we did with commercial aviation following the 9/11 attacks—will be overwhelming.’’ • In July, 2004, the Homeland Security Council estimated that an attack on a 

single chlorine facility could kill 17,500 people, severely injure an additional 

10,000 and result in 100,000 hospitalizations and 70,000 evacuations. • In January, 2004, the U.S. Naval Research Laboratory testified before the 

Washington, DC City Council warning that 100,000 people could be killed or injured in the first 30 minutes of a catastrophic release of a tank car of chlorine 

or similar chemical within blocks of Capitol Hill. They further estimated that 

people could ‘‘die at rate of 100 per second.’’ 

• In June, 2003 FBI specialist on weapons of mass destruction, Troy Morgan, in 

a speech at a chemical industry conference warned, ‘‘You’ve heard about sarin 

and other chemical weapons in the news. But it’s far easier to attack a rail car 

full of toxic industrial chemicals than it is to compromise the security of a military base and obtain these materials.’’ 

THE 2006 INTERIM CHEMICAL SECURITY LAW AND REGULATIONS ARE FATALLY FLAWED

The best that can be said for the new Department of Homeland Security (DHS) 

chemical security regulations, ‘‘Chemical Facilities Anti-Terrorism Standards’’ 

(CFATS) is that they represent an official recognition of the widespread vulnerability of U.S. chemical plants to terrorism. 

The new DHS rules are based on a 744-word ‘‘rider,’’ Sec. 550 of the Homeland 

Security Appropriations Act 2007. Sec. 550 authorizes ‘‘interim’’ regulations that 
24 

will expire on October 4, 2009. It was enacted with the expectation that Congress 

would expeditiously enact permanent, comprehensive legislation to ‘‘supersede’’ Sec. 

550’s regulations. 

The DHS rules finalized on November 20, 2007 fail to provide adequate protection 

for the Nation and communities living in the shadow of thousands of U.S. chemical 

plants. 

The Interim Chemical Security Law and DHS Rules (CFATS) 

• Prohibit the DHS from requiring any ‘‘particular security measure’’ including 

safer technologies that can reduce or eliminate the magnitude of an attack at 

virtually any chemical facility. 

To satisfy the chemical lobby, this was added to Sec. 550(a) to prevent the use 

of safer technologies as a security measure but it also undermines the effectiveness 

of the entire statute by undercutting the DHS to credibly require ANY ‘‘particular 

security measure.’’ • Fail to ensure priority protection of the 3,400 to 4,391 facilities each of which 

put 1,000 or more people at risk according to the DHS. 

Sec. 550 gives the Secretary of the DHS discretion to determine which facilities 

will be considered to ‘‘present high levels of security risk.’’ With regard to high priority facilities, the DHS rules call for a Top Screen process that considers the consequences of an attack but the Security Vulnerability Assessment also factor in 

‘‘threat assessments.’’ If the likelihood of an attack was considered small it could 

de-prioritize high-risk facilities. Over the last 4 years, the DHS has never identified 

more than a few hundred (360 to 272) facilities as the sites of greatest concern (putting 50,000 or more people at risk). Given resource constraints and other anti-regulatory tendencies, the DHS’s record has been to focus on chemical plant risks that 

are an order of magnitude higher than the loss of life following the 9/11 attacks. 

• Fail to protect approximately 3,000 U.S. water treatment plants as well as several other exempted categories.—Approximately 100 water treatment plants 

each put 100,000 or more people at risk. 

This exemption, also in Sec. 550(a), covers public water systems regulated by the 

Safe Drinking Water Act and the Federal Water Pollution Control Act, the Maritime 

Transportation Security Act of 2002, facilities owned or operated by the Department 

of Defense, Department of Energy or regulated by the Nuclear Regulatory Commission. In June 2007 Secretary Chertoff spoke to water facilities operators warning 

them that even though they are exempt under the interim law they are ‘‘on the hook 

because you’re going to have to do this yourselves because the consequences of ignoring risks... will be quite severe.’’ 

• DHS asserted the authority to prohibit States from establishing stronger security standards. 

Without any explicit statutory authority, the DHS asserted the authority to preempt State programs that ‘‘frustrate’’ their regulations. Although no State has yet 

been cited, this policy could have had a chilling effect on new programs and appears 

aimed at serving a chemical industry agenda to prevent States, such as New Jersey, 

from requiring safer more secure technologies. However, this provision was reversed 

in an amendment to Sec. 550 by Senator Frank Lautenberg (D–NJ) in the DHS omnibus spending bill in December 2007. However, the interim law expires in October 

2009 and permanent legislation must retain the right of States to set more protective standards than the Federal Government. 

• Fail to protect the public’s right-to-know by asserting authority to classify previously public information as secret, including information used in civil or criminal enforcement actions. 

Sec. 550(c) and resulting new DHS regulations over-reach by going beyond protecting common sense security plans and vulnerabilities into undermining enforcement and covering up governmental incompetence or corporate liability. 

• Assert the right to ‘‘displace’’ other Federal right-to-know statutes including, the 

Emergency Planning and Community Right to Know Act, Clean Air Act of 1990, 

Clean Water Act and CERCLA. 

This directly contradicts the savings clause in Sec. 550(f) which says, ‘‘Nothing in 

this section shall be construed to supersede, amend, alter, or affect any Federal law 

that regulates the manufacture, distribution in commerce, use, sale, other treatment, or disposal of chemical substances or mixtures.’’ 

• Fail to require meaningful involvement of plant employees in developing Security Vulnerability Assessments and Site Security Plans. 

The DHS responded to comments saying that ‘‘there is nothing in the rule that 

prohibits chemical facilities from involving employees in their security efforts.’’ 

While we should be thankful for that, such a policy fails to tap the expertise of a 

workforce that is formally trained in chemical hazard protection, accident preven-
25 

tion and emergency response. Employees are the first line of defense and the eyes, 

ears and noses of chemical facilities. The failure to formally involve employees in 

developing vulnerability assessments and security plans is foolish from both a security and scarce resource perspective. 

• Fail to include whistleblower protections that would enhance enforcement. 

The DHS rules promise to set up an anonymous tip line but ignores the long history of whistleblowers who have exposed waste, fraud and abuse. And in this case 

they could save thousands of lives. 

• Fail to enhance enforcement by allowing citizens to sue to enforce the law, 

while allowing companies liberal appeals procedures to challenge DHS orders 

and decisions. 

Sec. 550(d) prevents anyone but the DHS from suing a plant owner or operator 

to enforce any provision of this law. Once again, the law is balanced in favor of protecting the rights of recalcitrant facilities and/or violators and leaving innocent citizens facing overriding lethal risks with no legal recourse. 

• Prohibit the public from knowing which facilities are ‘‘high-risk’’ or ‘‘Top Tier’’ 

plants. 

Both DHS and corporate credibility will be in jeopardy if communities cannot determine if a local chemical plant that poses a threat is being dealt with or is in violation or is resisting orders by the DHS. Nor will communities have the peace of 

mind of knowing whether a plant has voluntarily converted to safer technologies 

and no longer poses a threat to their community. 

In their Federal Register Notice of rulemaking, the DHS said, ‘‘The Department 

will continue to work with Congress on chemical security matters.’’ However, neither the President nor the Secretary of Homeland Security has asked for additional 

authority from the 110th Congress to fill in the huge gaps in Sec. 550 or to correct 

provisions that will undermine its effectiveness and enforcement. Meanwhile the 

chemical industry argues for waiting a few years even though Sec. 550 regulations 

will expire on October 4, 2009. 

The failure of the Bush administration and DHS to ask Congress for broader permanent statutory authority to correct the deficiencies in the temporary law is irresponsible. 

Prioritize the Most Dangerous Chemicals 

The largest category of hazardous substances that can be transformed into chemical weapons of mass destruction (WMDs) are toxic-by-inhalation (TIH) gases. According to the U.S. EPA just four TIH gases account for 55 percent of all chemical 

processes that threaten communities Nation-wide. These are: 

• anhydrous ammonia—32.5 percent (8,343 processes); 

• chlorine—18.3 percent (4,682 processes); 

• sulfur dioxide—3 percent (768 processes); 

• hydrogen fluoride—1.2 percent (315 processes). 

Unfortunately, the DHS has set dangerously high threshold quantities for many 

of these substances such as: Anhydrous Ammonia: 10,000 lbs.; Chlorine: 500 to 

2,500 lbs. 

Given the successful terrorist attacks in Iraq using small quantities of chlorine 

(approximately 150 lbs.) and recent thefts in the United States, it would be prudent 

to establish lower threshold quantities for such ubiquitous hazardous substances. 

Lower thresholds won’t necessarily trigger more regulations, they simply give the 

DHS a more complete picture of where hazards are. Regulations should be driven 

by populations at risk. 

SAFER TECHNOLOGIES CAN ELIMINATE THE CONSEQUENCES OF AN ATTACK

While these chemical processes deserve high priority because of their prevalent 

use at thousands of facilities, especially at high threat facilities, there are widely 

available safer alternatives for each of them. For example, the Center for American 

Progress (CAP) conducted an analysis of EPA’s Risk Management Program data and 

identified 284 facilities that have converted since 1999. See full report at: http:// 

www.americanprogress.org/issues/2006/04/b681085lct2556757.html. 

Examples of conversions from these chemicals and continuing threats include: 

• More than 200 water treatment facilities (including Washington, DC) converted 

to safer alternatives such as ultraviolet light, eliminating the use of chlorine 

and sulfur dioxide gas. But over 100 water treatment plants still threaten more 

than 100,000 people. 

• Ninety-eight petroleum refineries use safer alternatives to hydrogen fluoride 

(HF). But 50 refineries still threaten millions of people with the use of HF. 
26 

• At least 36 electric power plants use safer alternatives to anhydrous ammonia 

gas such as dry urea. But 166 power plants still use anhydrous ammonia gas 

each threatening an average of 21,506 people. 

While the CAP analysis proves the technological feasibility of safer alternatives, 

CAP estimates that at this rate of conversion, without any new regulatory requirements, it will take 45 years to eliminate hazards that pose the highest risk to America’s hometowns. 

The CAP analysis shows that 87 percent of the converted facilities spent less than 

$1 million and half spent less than $100,000. Clearly these conversion costs pale in 

comparison to the cost of disaster response, relocating communities, defending 

against personal injury lawsuits or resolving environmental clean up liability or 

even conventional security costs. 

A 2006 GAO report (GAO–06–150), Homeland Security DHS Is Taking Steps to 

Enhance Security at Chemical Facilities, But Additional Authority Is Needed, concluded, ‘‘Implementing inherently safer technologies potentially could lessen the consequences of a terrorist attack by reducing the chemical risks present at facilities, 

thereby making facilities less attractive targets.’’ 

A Government Accountability Office report (GAO–05–165) identified chlorine gas 

and 90-ton chlorine rail cars as ‘‘among the top five terrorist-related wastewater system vulnerabilities.’’ Among the top three recommendations: ‘‘Replacing gaseous 

chemicals used in wastewater treatment with less hazardous alternatives.’’ In addition, the largest majority of experts gave replacing these chlorine facilities the highest priority for Federal funding. 

Examples of Safer Technologies at Water Facilities 

For example, the Blue Plains sewage treatment plant in Washington, DC halted 

its use of chlorine and switched to safer chemicals just 8 weeks after the 9/11 attacks due to fears of another attack. The plant had seven rail cars of chlorine on 

site following the 9/11 attacks. The conversion only cost approximately $0.50 per 

year for each water customer. In other words, by using safer technologies we can 

neutralize and eliminate targeting by terrorists and prevent catastrophic accidents 

as well at negligible costs. 

Switching to safer ‘‘drop-in’’ chemicals, such as relatively harmless sodium hypochlorite (liquid bleach) without a long-term plan can leave lingering risks in communities where the bleach is produced. While switching to bleach at a sewage plant 

clearly eliminates the immediate hazard at that facility, the bleach formulators who 

use and store large quantities of chlorine gas to make bleach still pose serious risks 

to workers and surrounding communities. In July 2006, KIK Custom Products, 

which operates 23 plants in the United States and Canada, announced plans to commercialize a new process that will eliminate the need to receive large shipments of 

chlorine gas. See details at: http://www.k2pure.com/. 

These bleach and water disinfectant formulators are well positioned to guide their 

customers toward other safer alternatives such as ozone and ultra-violet light (UV) 

which are widely available and do not pose catastrophic hazards. UV is superior to 

chlorine or chlorine bleach because it also kills deadly anthrax and the parasite 

cryptosporidium which chlorine does not. In 1993 more than 100 people were killed 

and 400,00 were made sick by cryptosporidium when it overwhelmed the chlorinetreated drinking water system of Milwaukee, Wisconsin. 

State Preemption 

As the DHS acknowledged in their proposed rule, ‘‘Sec. 550 was silent on preemption’’ of States’ authority to set stronger security standards. However, the DHS 

chose to assert Federal preemption without statutory authority in an apparent effort 

‘‘to preserve chemical facilities flexibility to choose security measures.’’ Fortunately, 

this provision was reversed in an amendment to Sec. 550 by Senator Frank Lautenberg (D–NJ) in the DHS omnibus spending bill in December 2007. However, the interim law expires in October 2009. Any permanent legislation must clearly retain 

the right of States to set more protective standards than the Federal Government. 

While few would argue that the Federal Government should not preempt States’ 

authority to establish minimum standards, it is self-defeating to bar States from setting stronger security standards by establishing a Federal limit or ceiling on security protections. 

The Federal Government should welcome every State pitching in to address the 

unique situation it faces. New Jersey was the first State to implement a chemical 

security program that requires an assessment of safer, more secure technologies. According to Governor Corzine, a federally mandated rollback of New Jersey’s protections ‘‘could have the effect of weakening chemical security and leaving New Jersey 
27 

and its neighbors—including New York City—more vulnerable to devastation from 

a terrorist attack on our chemical facilities.’’ 

The DHS appeared more concerned about protecting industry exposure to State 

tort liability when it asked: ‘‘How could State tort law impose liability for actions 

specifically approved under a Federal program?’’ Is DHS attempting to shield chemical facilities from State tort suits? How does this contribute to the safeguarding of 

communities from existing and preventable threats? 

Risk-Based Performance Standards & Safer Technologies 

A safer technology provision was contained in the 2006 House Homeland Security 

Committee passed bill, H.R. 5695. That bill required priority chemical facilities to 

utilize safer, more secure technologies, where feasible and cost effective to reduce 

or eliminate the magnitude of an attack on a chemical facility. By substituting inherently dangerous chemicals or processes with inherently safer technologies (IST) 

the risk of a catastrophic release at a chemical plant can be eliminated or dramatically reduced. IST is the best tool available to completely mitigate facility 

vulnerabilities and safeguard communities. 

The DHS has wide discretion to establish ‘‘risk-based performance standards.’’ 

The DHS could have chosen to establish performance standards that deter an attack 

or mitigate the consequence of an attack by safeguarding, reducing or eliminating 

the risk or desirability of the facility as a target. This could have been achieved by 

issuing guidance to suggest that counter measures include the use of safer, more 

secure technologies to meet the performance standard or opt out of the regulations 

entirely. 

In fact, the DHS mentioned in their Federal Register notice of proposed rulemaking, Annex B, page 78315, that a ‘‘security event may be larger than the typical 

EPA Risk Management Program (RMP) worst-case analysis.’’ In a 2001 U.S. Army 

Surgeon General study estimated that 900,000 to 2.4 million people could be killed 

or injured in a terrorist attack on a U.S. chemical plant in a densely populated area. 

According to the Environmental Protection Agency (EPA), 106 chemical plants 

threaten a million or more people. Chlorine gas is the most common industrial 

chemical hazard at the 100 highest-risk plants. According to the Chlorine Institute, 

a chlorine gas cloud can drift through a city and remain dangerous for at least 14 

miles and 20 to 25 miles in rural areas. 

These alternatives include a wide range of options such as process changes, chemical substitutions, smaller storage vessels or any other measures that will reduce 

or eliminate the inherent hazard posed by the facility’s storage, use or production 

of an ultra-hazardous substance. This range of options is far from requiring any 

‘‘particular security measure,’’ it is up to the plant operator to choose which safer 

technology, process, chemical or storage vessel reduces or eliminates these risks. 

Only about 13 percent of the universe of facilities in the EPA’s Risk Management 

Program (RMP) are members of the chemical manufacturers trade association, the 

American Chemistry Council. Whereas the overwhelming majority of RMP facilities 

are chemical users, including: petroleum refineries that use hydrogen fluoride; 

power plants that use anhydrous ammonia and water treatment plants that use 

chlorine and sulfur dioxide gas. All of these have safer alternatives already widely 

in use at hundreds of facilities. 

Benefits of Safer Technologies 

The use of safer technologies offers a more competitive and stable business plan 

with fewer regulations, potentially zero liability, sustainable profitability, better relationships with workers and neighboring communities and no threat of a catastrophic attack or accident. Specifically, the use of safer technologies will likely result in a facility no longer being subject to DHS’s CFATS regulations. 

Obviously, chemical facilities located on-site at nuclear power plants, water treatment works, iconic facilities such as Disney World, Camp David, etc. also need to 

be considered for priority protection. However, using safer technologies as a countermeasure at these facilities will lessen the lethality that an attack on them would 

pose. DHS will also be able to better utilize its limited resources ($25 million for 

fiscal year 2008) for more effective use of conventional security measures to defend 

against and respond to attacks on targets even where a chemical risk is removed. 

Given DHS’s finite resources and the late start the Nation has in addressing 

chemical security it is urgent that we use safer technologies to mitigate the consequence of an attack. By doing so we eliminate risks, safeguard communities and 

save scarce money and resources to protect targets that cannot be so neutralized 

(airports, U.S. Capitol, etc.). 

The Annex in the DHS proposed rule suggests that plant owners and operators 

should assume that ‘‘international terrorism’’ is possible at every facility. A better 
28 

assumption would be to recognize that every plant could be the target of someone 

no one anticipated. The bombing of the Federal Building in Oklahoma City in 1995 

was initially thought to be committed by ‘‘Middle Eastern terrorists.’’ It turned out 

to be the insane act of a U.S. Army-trained Gulf War veteran. How many more 

Americans have been trained in the art of war since then? Other incidents and 

threats ranging from Columbine, to international drug cartels and the spectacularly 

failed intelligence leading up to the 9/11 attacks, makes guessing where such an attack will come from nothing more than a fool’s errand. The only prudent thing to 

do is attempt to remove unnecessary vulnerabilities as soon as technically feasible. 

Even without terrorist attacks, we will save countless lives in accident prevention. 

Top Tier High-Risk Facilities 

According to a June 2005 Congressional Research Service report examining EPA’s 

RMP database, the EPA has identified 6,883 facilities that each put 1,000 or more 

nearby residents at risk and 553 of these put 100,000 or more people at risk. 

However, using a methodology that includes only 1⁄6th the area surrounding a 

plant, the Department of Homeland Security (DHS) has estimated at different times 

a range of 3,400 to 4,391 chemical facilities that each put 1,000 or more people at 

risk. Of these DHS identified 272 facilities that each put 50,000 or more people at 

risk. The DHS calculation looks at a 60 degree ‘‘kill zone’’ downwind from a facility. 

The EPA’s RMP program uses a methodology that creates a 360-degree ‘‘vulnerability zone’’ around a facility. Under the RMP, chemical plant owners and operators 

submit worst-case disaster scenarios using U.S. Census data to calculate the number of people living in each ‘‘vulnerability zone.’’ In Annex B of the DHS proposed 

rule on FR page 78315 warns, ‘‘the security event may be larger than the typical 

EPA RMP worst-case analysis.’’ 

At a minimum, any facility that endangers 1,000 or more people should be considered a ‘‘top tier’’ or ‘‘high-risk’’ facility. 

Alternative Security Plans (ASPs) 

The new DHS rule allows the high priority facilities in Tier 1 and 2 to use ASPs 

for their Site Security Plans. However, these same facilities cannot use ASPs for 

their Security Vulnerability Assessments. 

ASPs were written by and for oil and chemical industry trade associations. All of 

them avoid requiring safer technologies and do not represent the best way to safeguard communities at risk. Congress should not allow the DHS to substitute ASPs 

for Site Security Plans for high priority facilities. 

Consultation With Other Agencies 

As a new department with minimal resources, the DHS should routinely collaborate and consult with other more experienced Government agencies. In their January 2006 report (GAO–06–150) the Government Accountability Office concluded, ‘‘By 

tapping EPA’s expertise on chemical facilities and general facility safety issues, 

DHS can enhance its efforts to identify high-priority facilities and assess facility 

vulnerabilities as well as better target Government resources to those facilities posing the greatest risk.’’ 

Congress should require the DHS to consult with the EPA as the GAO recommended and develop guidance documents to rapidly identify high-risk facilities 

and promote the use of inherently safer technologies as a mitigation and countermeasure technique to reduce risks and safeguard communities. Similar consultation 

with the U.S. Chemical Safety and Hazard Investigation Board, which has enormous experience in diagnosing chemical accidents and recommending mitigation 

techniques, should be aggressively pursued. 

Buffer Zones 

According to the EPA (Belke, 2000), the high number of facilities that put residents at risk as far as 14 to 25 miles away from a release ‘‘is primarily due to the 

prevalent use of 90-ton rail tank cars for chlorine storage.’’ The Chlorine Institute 

pamphlet 74, ‘‘Estimating the Area Affected by a Chlorine Release’’ (1998), shows 

a plume can be hazardous up to 41.5 miles. 

The Bureau of Alcohol Tobacco, Firearms, and Explosives regulations (27 CFR 

555.218) prohibits the storage of a similar quantity of explosives within 2,010 feet 

of inhabited buildings. 

In 2006 the Netherlands and Akzo Nobel completed a $270 million program to relocate chlorine production facilities within Holland to a location that will eliminate 

the transport of chlorine by rail in the Netherlands. 

Given the large potential plume of toxic-by-inhalation substances and large quantities of some flammables such as propane, a much larger buffer zone is called for 

with regard to high risk TIH facilities. 
29 

Without the use of safer technologies to convert existing plants into safer functioning plants, relocating them to more remote areas should be a an option, especially if an owner/operator insists that there is no safer alternative. 

Short of relocation, the DHS should be required to issue guidance to mitigate 

these threats by using smaller storage vessels that would help reduce risks, deter 

and discourage potential attackers. In addition, the DHS should facilitate owner/operator collaboration with local government and emergency responders to conduct 

practice evacuation drills. If a plant cannot substantially reduce its risks, the owner/ 

operators and government agencies have an obligation to ensure that at-risk citizens 

can reasonably be evacuated. 

New facilities should be prohibited from locating in densely populated areas. 

Brief History of Federal Inaction 

While the DHS proposed rule issued December 28, 2006 contained a ‘‘Brief History of Federal Pre-Existing Chemical Security and Safety Programs,’’ it ignored the 

‘‘general duty clause’’ in Section 112r of the 1990 Clean Air Act which gives the 

President and the Environmental Protection Agency (EPA) broad authority to require chemical facilities to prevent catastrophic releases of poison chemicals. After 

drafting legislation, guidance and regulations in June 2002, the administration 

withdrew it’s proposals, in part, under pressure from the oil and chemical industry. 

On July 22, 2004 ‘‘The 9/11 Commission Report’’ identified four failures in preventing an attack by the U.S. Government the first of which was the failure of 

‘‘imagination.’’ A continuing lack of imagination today exposes millions of Americans 

to Bhopal magnitude risks largely because new laws or regulations have not yet 

been adopted to clarify the chemical industry’s obligation to prevent catastrophic releases at U.S. chemical plants. In June, 2002 a promising proposal drafted by the 

EPA could have completed the first phase of such a program by the middle of 2003 

but it was derailed by the White House in the fall of 2002. It was not unlike a bill 

(S. 1602) authored in 2001 by Senator Jon Corzine (D–NJ) and based on a bill introduced by Senator Frank Lautenberg (D–NJ) in 1999. 

The EPA’s 2002 proposal included ‘‘substituting less hazardous chemicals for extremely hazardous ones.’’ The conversion of Washington, DC’s main sewage treatment plant from chlorine to safer chemicals, just 8 weeks after 9/11, exemplifies the 

feasibility of such a strategy. At the time of the attacks they had 7 90-ton rail cars 

of chlorine stored on-site. 

Of the 15,000 facilities required to report their worst-case chemical disaster scenarios to the EPA’s RMP, 7,728 plants pose an ‘‘off-site consequence’’ (OSC) to more 

than 1,000 people. Approximately 100 facilities reported an OSC to the EPA putting 

1 million or more people at risk. Approximately 65 percent of these facilities’ ‘‘worstcase-scenarios’’ are chlorine disasters. Rather than address these risks through the 

new regulations suggested by the EPA, the DHS used a new methodology that 

downsized the priority list of chemical plants by 43 percent to 3,400 facilities that 

put 1,000 or more people at risk. 

EPA’s 2002 chemical security proposal was slated for a media ‘‘rollout’’ at the 

White House. According to draft documents, ‘‘higher priority chemical facilities 

should be able to complete a vulnerability assessment and address security 

vulnerabilities as described in the guidance in 12–18 months.’’ In other words many 

facilities could already have eliminated or reduced their hazards by early 2004. 

EPA’s 2002 documents included a question-and-answer sheet for EPA Administrator Whitman which said, ‘‘Using existing authority under the Clean Air Act, we 

believe that the guidance and regulation I have announced today are the quickest 

paths to improving chemical facility security . . . If we later find that there are 

legislative gaps, then we will consider seeking legislation.’’ 

Ultimately, the reversal by the Bush administration and the lobbying pressure by 

the industry (American Chemistry Council, American Petroleum Institute, etc.) paid 

off and chemical security legislation was excluded from the Homeland Security Act 

signed into law in November 2002. 

In March, 2003 a report by the General Accounting Office (GAO) concluded ‘‘EPA 

has not attempted to use these Clean Air Act provisions [because] EPA is concerned 

that such an interpretation would pose significant litigation risk’’. The GAO concluded that chemical facility security would be more effectively addressed by passage of specific legislation. 

In December 2003 President Bush further undermined EPA’s authority and 

issued a directive (Directive/HSPD–7) limiting EPA’s role on chemical security to 

‘‘drinking water and water treatment systems.’’ Under questionable legal authority, 

this directive attempts to shift responsibility for 15,000 chemical plants to the DHS, 

which at the time had no legislative authority, experience or inclination to regulate 

this industry. 
30 

In January 2005, former White House homeland security deputy, Richard 

Falkenrath told the Senate Homeland Security and Governmental Affairs Committee, ‘‘the Federal Government has made no material reduction in the inherent 

vulnerability of hazardous chemical targets inside the United States. Doing so 

should be the highest critical infrastructure protection priority for the Department 

of Homeland Security in the next 2 years.’’ 

In his book, ‘‘America the Vulnerable’’ Stephen Flynn, of the Council on Foreign 

Relations warned, ‘‘The chemical industry deserves urgent attention because the 

stakes are high, the opportunities for terrorists are rich, and no credible oversight 

process exists. It is the very ubiquity of the U.S. chemical industry that gives it potential to be a serious source of national alarm.’’ 

In 2006 an intensive industry lobbying campaign successfully killed comprehensive chemical security legislation (H.R. 5695 & S. 2145) that was voted out of the 

authorizing committees in the House and Senate in 2006. Instead, the industry 

worked closely with Republican leaders to draft a 740-word ‘‘rider’’ to the 2007 DHS 

Appropriations bill. The only major concession they made was to keep it an ‘‘interim’’ 3-year statute until Congress enacts permanent legislation. In 2007, the industry is urging Congress NOT to change this temporary statute. 

To better understand the lobbying resources the industry used to derail legislation 

in 2006 we surveyed the lobbying records of the relevant industries in the Office 

of the Secretary of the Senate at: http://sopr.senate.gov. 

Greenpeace identified 215 industry lobbyists that listed chemical security as part 

of their portfolio in 2006. Based on their lobby reports we estimate that industry 

lobbyists spent between $16.4 and $74.5 million (less than half of their total reported spending) to lobby on chemical plant security legislation in 2006. Lobby organizations identified included 13 trade associations such as the American Chemistry 

Council (ACC), American Petroleum Institute (API), U.S. Chamber of Commerce (including CEO Thomas Donahue), Edison Electric Institute (EEI), 30 member companies such as Dow Chemical, ExxonMobil and Halliburton and 13 lobby firms such 

as Akin & Gump and Holland & Knight. 

In comparison, the 2007 fiscal budget for chemical security at the DHS was only 

$10 million. DHS is asking for an increase of $15 million for a total of $25 million 

for their 2008 fiscal budget on chemical security. 

Our survey of lobbying records may have underestimated industry spending because we excluded lobbyists who did not specifically list chemical security legislation 

on their lobby reports. A notable example, the National Association of Manufacturers (NAM) was not included in the survey even though they registered to lobby on 

chemical security in 2005, signed on to industry letters in 2006, and formally commented on DHS proposed regulations in 2007. As a result, none of NAM’s 56 lobbyists and $15 million budget were not counted as part of this lobbying campaign. It 

is unclear whether this is a violation of the LDA or the result of a split within the 

NAM. 

Alternatively, member companies of the Association of American Railroads (AAR), 

such as CSX, BNSF & Norfolk Southern, are also members of NAM. Yet the AAR 

testified in support of the use of safer chemicals as a way to eliminate industry vulnerability and liability to potential terrorist attacks on rail cars carrying hazardous 

chemicals. 

Of the 215 chemical security lobbyists we identified, 90 directly represent the 

ACC (the trade association of major chemical manufacturers), or its member companies. However, the 2,000 chemical plants owned and run by ACC members account 

for only 13 percent of the 15,000 chemical facilities the EPA has identified as posing 

a risk to communities. Most of the rest are ‘‘users’’ of chemicals such as refineries, 

water treatment plants, power plants and paper mills. It is in these sectors where 

more than 200 plants have converted to safer chemicals or processes since 9/11. 

Our survey also identified chemical front groups and allies such as the Agricultural Retailers Association (ARA), led by Dow and other large firms and the Farm 

Bureau. Every lobbyist registered with the ARA as well as the Farm Bureau also 

reported lobbying on chemical security in 2006 even though most high-risk plants 

are not located in rural areas. 

Deadly Accidents 

The 1984 Union Carbide’s Bhopal, India plant had the worst industrial accident 

in history. Forty tons (half a rail car) of methylisocyanate (MIC) leaked into the 

community at midnight killing 8,000 people within days and claiming another 

12,000 lives since. 

In June, 2004, three people were killed in a train accident in a remote area southwest of San Antonio, Texas when a tank car carrying chlorine broke open in the 

25 mph crash, releasing a portion of the tank car contents. 
31 

On January 6, 2005 ten people were killed, 58 hospitalized and hundreds sought 

treatment in Graniteville, South Carolina when chlorine was released again when 

one train slammed into a parked train in the middle of the night. The cars involved 

were allegedly state-of-the-art construction. 

Both of these tragedies could have resulted in a much higher number of fatalities 

and injuries if they had occurred in densely populated areas. 

Comprehensive and Permanent Chemical Security Legislation Is Urgently Needed 

We have lost over 6 years since the 9/11 attacks. Legislation in name only will 

not protect communities. Programs limited to fence-line or perimeter security will 

not prevent an attack or eliminate the consequence of a successful attack. 

A key test of whether chemical facility security legislation will protect the millions 

of Americans still at risk is whether it contains minimum standards and truly protective provisions that: 

• Require all plants to assess the feasibility of safer more secure methods and 

technologies that can eliminate the consequences of an attack on a chemical 

plant. 

• Require ‘‘high-risk’’ facilities to use safer methods, technologies or chemicals. 

• Ensure that the 3,400 to 4,400 facilities that DHS identified as posing a risk 

to 1,000 or more people are included in the ‘‘high-risk tier.’’ 

• Includes protection of approximately 3,000 U.S. water treatment plants and 

other chemical facilities currently explicitly exempted by the temporary law. 

• Expedite deadlines by when DHS will require and approve Site Security Plans. 

• Require meaningful involvement of plant employees in developing Security 

Plans. 

• Include whistle-blower protections to enhance enforcement. 

• Provide basic information to the public on facility compliance or non-compliance 

of the law. 

• Ensure the right of all States to establish stronger security standards. 

• Enhance enforcement by allowing citizen suits. 

Q & A on Sec. 2110 ‘‘Methods to Reduce the Consequences of a Terrorist Attack’’ 

Are all facilities required to use or implement safer methods or technologies? 

No. Only facilities in the ‘‘high-risk’’ tier would be required to implement safer 

methods or technologies. Other facilities would merely be required to assess safer 

methods. 

What if it is not feasible or too costly to implement safer methods or technologies? 

No facility would be required to implement safer technologies if they are either 

infeasible or too costly or would result in greater risks. 

Will converting high-risk plants to safer methods or technologies financially burden chemical facilities? 

No. A survey by the Center for American Progress identified 284 facilities that 

switched to safer methods since 1999. They found that 87 percent spent less than 

$1 million, and one half reported spending less than $100,000. Thirty-four percent 

of survey participants expected to save money or improve profitability because safer 

methods reduce the need for barriers, secondary containment, security training, and 

liability concerns. The Washington, DC sewage treatment plant converted 90 days 

following the 9/11 attacks for less than $0.50 per water customer per year. 

Will this result in shifting risks rather than reducing them? 

No. Safer methods will not be required unless they ‘‘significantly reduce’’ the consequences of an attack. The DHS will also ensure that facilities use methods that 

significantly reduce risks at a plant and do not accept halfway steps that merely 

shift risks elsewhere. In fact, there are now hundreds of real-world examples of 

water treatment, electric power plants and petroleum refineries that have already 

switched without shifting risks. 

Will requiring high-risk facilities to use safer methods put the DHS in the business 

of micromanaging chemical facilities? 

No. Facilities are free to choose any of their own methods or opt out if they can 

show the DHS that there is no feasible, cost-effective or safer method for their facility (see list of examples below). 

Is it the role of government to require safer methods to be used in the private sector? 

The FAA has issued regulations on security and safety for decades. The feasibility 

and cost-effectiveness are routinely considered and balanced against security and 

safety needs. For example, after 9/11 detailed regulations to harden cockpit doors 

were sped into force for thousands of different jet liners and airplanes, and X-ray 

machines for all airline baggage were mandated at hundreds of airports. 
32 

Is this proposal more appropriate in environmental legislation than in a security 

bill? 

No. The June 2006 National Academy of Sciences study, commissioned by the 

DHS, endorsed the adoption of safer technologies as ‘‘the most desirable solution to 

preventing chemical releases’’ from terrorist attack. The Association of American 

Railroads in testimony before Congress said, ‘‘Railroads agree, and strongly support 

efforts aimed at finding and utilizing ‘inherently safer technologies’ as substitutes 

for hazardous materials, especially TIH.’’ 

Range of Examples of Safer Methods Included but not Limited to in Sec. 2110 

‘‘METHOD TO REDUCE THE CONSEQUENCES OF A TERRORIST ATTACK.— 

For purposes of this section, the term ‘method to reduce the consequences of a terrorist attack’ includes— 

(1) input substitution; 

(2) catalyst or carrier substitution; 

(3) process redesign (including reuse or recycling of a substance of concern); 

(4) product reformulation; 

(5) procedure simplification; 

(6) technology modification; 

(7) use of less hazardous substances or benign substances; 

(8) use of smaller quantities of substances of concern; 

(9) reduction of hazardous pressures or temperatures; 

(10) reduction of the possibility and potential consequences of equipment failure 

and human error; 

(11) improvement of inventory control and chemical use efficiency; and 

(12) reduction or elimination of the storage, transportation, handling, disposal, 

and discharge of substances of concern.’’ 

Additional Expert Opinions on Safer Technologies 

2006 GAO report (GAO–06–150), Homeland Security DHS Is Taking Steps to Enhance Security at Chemical Facilities, But Additional Authority Is Needed, concluded, ‘‘Implementing inherently safer technologies potentially could lessen the consequences of a terrorist attack by reducing the chemical risks present at facilities, 

thereby making facilities less attractive targets.’’ 

May 2006 report by the National Academy of Sciences, ‘‘Terrorism and the Chemical Infrastructure: Protecting People and Reducing Vulnerabilities,’’ recommended 

more research on new technologies but stated, ‘‘The most desirable solution to preventing chemical releases is to reduce or eliminate the hazard where possible, not 

to control it. This can be achieved by modifying processes where possible to minimize the amount of hazardous material used, lower the temperatures and pressures 

required, replace a hazardous substance with a less hazardous substitute, or minimize the complexity of a chemical process.’’ 

‘‘Railroads agree, and strongly support efforts aimed at finding and utilizing ‘inherently safer technologies’ as substitutes for hazardous materials, especially 

TIH.’’—Association of American Railroads (AAR) President, and CEO Edward R. 

Hamberger in testimony before the House Transportation and Infrastructure Committee’s Railroad Subcommittee. 

Retired Rohm and Haas engineer, Dennis Hendershot advised, ‘‘The first solution 

to a process safety problem should always be to get rid of the hazard, not control 

it.’’ 

Trever Kletz, formerly with Imperial Chemical Industries (ICI) said, ‘‘The very 

best way to prevent an explosion is to simply replace the material that explodes 

with one that does not or at least keep the stock down so low that it hardly matters 

if it all leaks out.’’ 

REFERENCES

Ackerman, Frank; Massey, Rachel. ‘‘The Economics of Phasing Out PVC’’. © 2003 

Global Development and Environmental Institute, Tufts University. 

Adams, Valerie, Chemical Warfare, Chemical Disarmament © 1990, Indiana University Press. Andress, Carol, ‘‘Eliminating Hometown Hazards: Cutting Chemical 

Risks at Wastewater Treatment Facilities,’’ Environmental Defense, 2003. 

Argonne National Laboratories, ‘‘A National Risk Assessment for Selected Hazardous Materials Transportation,’’ 2000 www.dis.anl.gov/ep/ca/eplcalhome.html. 

Belke, James, ‘‘Chemical Accident Risks in U.S. Industry—A Preliminary Analysis 

of Accident Risk Data From U.S. Hazardous Chemical Facilities,’’ U.S. Environmental Protection Agency, September 2000. 

Briggs, Rachel A., Basic Guide to Pesticides: Their Characteristics and Hazards. 

© 1992, Taylor and Francis, Washington DC. 
33 

Durnil, Gordon K. The Making of a Conservative Environmentalist. © 1995 Gordon 

K. Durnil. 

Geiser, Kenneth. Materials Matter: Toward a Sustainable Materials Policy. © 2001 

Massachusetts Institute of Technology. 

Grace, Robert. ‘‘Cargill Dow Launches PLA Plant’’. Plastics News. November 12, 

2001. p. 16. 

Flynn, Stephen. America the Vulnerable How Our Government Is Failing to Protect Us from Terrorism. © 2004 Harper Collins 

International Chemical Secretariat. Report 6:04: Cry Wolf—predicted costs by industry in the face of new regulations. © 2004 International Chemical Secretariat. 

International Joint Commission. ‘‘A Strategy for Virtual Elimination of Persistent 

Toxic Substances, Volume 1’’. © 1993, International Joint Commission. 

International Joint Commission. ‘‘A Strategy for Virtual Elimination of Persistent 

Toxic Substances, Volume 2’’. © 1993, International Joint Commission. 

International Joint Commission. ‘‘Sixth Biennial Report on Great Lakes Water 

Quality’’. © 1992 International Joint Commission. 

International Joint Commission. ‘‘Seventh Biennial Report on Great Lakes Water 

Quality’’. © 1994 International Joint Commission. 

Johnson, Jeff. ‘‘Simply Safer: ‘Inherently safer design’ promises safer plants 

through better chemistry and engineering.’’ Chemical and Engineering News, Vol. 

81, No. 5. February 3, 2003, pp. 23–26. 

Lewis, Sanford. The Safe Hometowns Guide: How to do a Community Reassessment of Chemical Site Safety and Security After September 11, 2001. © 2002 The 

Safe Hometowns Initiative. 

McDonough, William; Braungart, Michael. Cradle to Cradle: Remaking the Way 

We Make Things. © 2002 McDonough and Braungart. North Point Press. 

McGinn, Anne Platt. Worldwatch Paper 153: Why Poison Ourselves? A Precautionary Approach to Synthetic Chemicals. © 2000, Worldwatch Institute. 

National Research Council. Alternative Agriculture. © 1989 National Academy 

Press. 

Orum, Paul, ‘‘Preventing Toxic Terrorism How Some Chemical Facilities are Removing Danger to American Communities,’’ the Center for American Progress, April 

2006. 

Schierow, Linda-Jo, Congressional Research Service, ‘‘Chemical Facility Security’’ 

Updated March 24, 2006. 

Stringer, Ruth; Johnston, Paul. Chlorine and the Environment: An Overview of the 

Chlorine Industry. © 2001 Kluwer Academic Publishers. 

The 9/11 Commission Report. Final Report of the National Commission on Terrorist Attacks Upon the United States. © 2004 W.W. Norton & Company 

The Chlorine Institute, Inc. Pamphlet 74: Estimate the Area Affected by a Chlorine 

Release. © 1998 The Chlorine Institute, Inc. 

The Chlorine Institute, Inc. Pamphlet 66: Recommended Practices for Handling 

Chlorine Tank Cars. © January 2001 The Chlorine Institute, Inc. 

Thornton, Joe. Pandora’s Poison: Chlorine, Health, and a New Environmental 

Strategy. © 2000 Massachusetts Institute of Technology. 

U.S. General Accounting Office, ‘‘Rail Safety and Security Some Actions Already 

Taken to Enhance Rail Security, but Risk-based Plan Needed,’’ (GAO–03–435). 

U.S. Government Accountability Office, ‘‘Wastewater Facilities: Experts’ Views on 

How Federal Funds Should Be Spent to Improve Security,’’ (GAO–05–165), January 

2005. 

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to Enhance Security at Chemical Facilities, But Additional Authority Is Needed,’’ 

(GAO–06–150), January 2006. 

U.S. Naval Research Laboratory, testimony before the City Council of Washington, DC by Dr. Jay P. Boris, Chief Scientist and Director of the Laboratory for 

Computational Physics and Fluid Dynamics, October, 6, 2003. 

STATEMENT OF RUSSELL MELANCON, PRESIDENT AND CEO, INDUSTRIAL SAFETY

TRAINING COUNCIL

FEBRUARY 26, 2008 

I. INTRODUCTION

My name is Russell Melancon and I am the President and Chief Executive Officer 

of the Industrial Safety Training Council (ISTC). I want to thank you Mr. Chairman 

and Members of the committee for this opportunity to submit written testimony re-
34 

garding the proposed Chemical Facility Anti-Terrorism Act of 2008. This testimony 

supports the ISTC’s legislative recommendations to accomplish the following four 

goals: 

• Make explicit that a chemical facility that is also a regulated facility under the 

Maritime Transportation Security Act (MTSA) must comply with the Chemical 

Facility Anti-Terrorism Act of 2008 and/or related regulations for personnel surety purposes; 

• Provide legislative authority for public and private sector entities, which obtain 

a personnel surety Alternative Security Program (ASP) designation, to submit 

names to the Department of Homeland Security (DHS), or a designated agency 

such as the Transportation Security Administration (TSA), for processing 

against the Consolidated Terrorist Watch List; 

• Provide legislative authority for public and private sector entities, which obtain 

a personnel surety ASP designation, to submit fingerprints to the Criminal Justice Information Service (CJIS) at the Federal Bureau of Investigation (FBI) so 

as to supplement the ISTC’s existing identification verification process and also 

supplement the ISTC’s existing criminal history background check; and 

• Establish a method by which public and private sector entities, which obtain 

a personnel surety ASP designation, may submit names to the appropriate Federal agency in order to perform a range of immigration status checks. 

II. BACKGROUND

The ISCT is a 501(c)3 not-for-profit training and educational organization located 

in Southeast Texas. The ISTC and thirteen other safety councils, located throughout 

Texas, the Gulf Coast, and several other States, comprise the Safety Council Security Consortium (SCSC). Both the ISTC and the SCSC are key parts of the highly 

regulated chemical industry. Together, the ISTC and the SCSC operate an established, highly successful and comprehensive identification verification and background screening process for contractors and their employees as well as facility employees working at over 75 chemical and refining facilities. The ISTC also provides 

safety training and site-specific job safety orientations for facility workers. 

The ISTC/SCSC identification verification employs a layered identification process 

using several identifiers, including Social Security numbers, dates of birth, and a 

visual comparison of an individual against a photograph on a Government-issued 

identification document. The identity verification portion of the ISTC/SCSC process 

is completed in an average of 20 minutes. The ISTC/SCSC has conducted identification verification checks on more than 300,000 workers seeking admittance to chemical and refining facilities. 

The ISTC/SCSC has also conducted comprehensive criminal history background 

checks on almost 200,000 of these workers. When a participating chemical or refining facility hires a contractor or new employee, the facility sends the worker to the 

appropriate safety council for training and background screening. The ISTC/SCSC 

utilizes a nationally recognized consumer reporting agency (CRA) to conduct these 

background checks. This CRA is experienced in conducting name-based background 

screening and is fully compliant with all of the privacy and consumer protections 

in Federal and State Fair Credit Reporting Acts. 

The background check searches criminal history records on Federal, State, and 

local levels, including physical searches of court-based State and local criminal history records. All criminal history checks search felony and misdemeanor convictions 

(from the previous 7 years), pending arrests, outstanding warrants, and deferred adjudications. Additionally, the screening process includes a search of motor vehicle 

reports as well as a Patriot Act search against the Office of Foreign Assets Control 

(OFAC) lists, which contain the names of individuals who are ‘‘specially designated 

nationals,’’ and who are ‘‘blocked’’ from conducting business with U.S. persons for 

various reasons. 

The rejection rate for the baseline background screening process is 5 to 8 percent. 

The ISTC/SCSC screening program works rapidly to provide the results of a full 

screen in an average of 2 days time, allowing workers to begin jobs quickly. This 

is especially important due to the near reliance on transient workers at chemical 

and refining facilities. The ISTC/SCSC background screening process is both thorough and timely, but it is also cost-effective. The ISTC/SCSC is able to perform the 

identification verification and background screening process for an initial fee of 

about $55 per worker. 

The ISTC/SCSC process also provides, in addition to the rigorous baseline background screening, a customized series of additional services, which allow chemical 

and refining facilities and their contractors to obtain various types of background 

checks based upon the facility’s and/or the contractor’s specific security needs and 
35 

preferences in view of an individual’s expected duties and responsibilities at a facility. These additional checks can include: 

• Civil records of lawsuits filed by or against the applicant; 

• Educational verification; 

• Prior employer verification; 

• Military records checks; 

• Credit checks; 

• Professional licenses and registration checks; 

• Numerous other categories of background data including license verification and 

workers’ compensation reports; and 

• Background screens run by the previous employers of an applicant. 

Once the identification verification and background screen is complete, the ISTC/ 

SCSC process returns a graded or tiered report, which chemical and refinery facility 

owners and operators use to make a risk-based determination of whether the individual’s background is appropriate for a particular assignment. 

The ISTC/SCSC graded reports present an individual’s grade using a number 

scale: 

• An individual with a clear record, or no hits, would receive a grade of ‘‘00;’’ 

• An individual with hits for non-violent misdemeanors would receive a grade of 

‘‘01;’’ 

• An individual with hits for violent misdemeanors would receive a grade of ‘‘02;’’ 

• An individual with hits for lesser felonies would receive a grade of ‘‘03;’’ 

• An individuals with hits for 03 felonies, and 02 misdemeanors would receive a 

grade of ‘‘04;’’ 

• An individual with hits for more serious felonies would receive a grade of ‘‘05;’’ 

• An individual with hits for 05 felonies, and 02 misdemeanors would receive a 

grade of ‘‘06;’’ and 

• An individual that showed hits on the Patriot Act (OFAC) search would receive 

a grade of ‘‘07.’’ 

Most applicants have a clear record, or a record with only non-violent misdemeanors: 

• About 77 percent of the graded background screens return a grade of 00; 

• About 11 percent return a grade of 01; 

• About 4 percent return a grade of 02; 

• About 1 percent return a grade of 03; 

• Less than 1 percent return a grade of 04; 

• About 5 percent return a grade of 05; 

• About 1 percent return a grade of 06; and 

• Less than 1 percent return a grade of 07. 

Finally, the ISTC/SCSC background check process from the initial application to 

the graded report is privacy-protective and applicant-friendly. Because the ISTC/ 

SCSC background screening program represents an industry, non-governmental solution incorporating a national CRA, the process is fully compliant with State and 

Federal Fair Credit Reporting Act (FCRA) requirements, as well as all relevant 

State and Federal privacy protections. In compliance with State and Federal 

FCRAs: 

• Criminal history information older than 7 years is not reported. 

• Only open arrests and criminal convictions are reported. 

• Potential employers provide applicants with ‘‘pre-adverse action’’ notification if 

the report returns information that would preclude the applicant from receiving 

a job or being denied access to a chemical or refining facility site based on information in the screen results. This notice must be sent before the employer takes 

any adverse action. 

• The applicant has rights under the FCRA to dispute negative information and 

have inaccurate information corrected. 

• The employer must allow a ‘‘reasonable’’ time for the applicant to dispute negative information before taking an adverse action. 

III. LEGISLATIVE RECOMMENDATIONS

Section 550 of the Chemical Facility Act required DHS to promulgate regulations 

‘‘establishing risk-based performance standards for security of chemical facilities.’’ 

Pub. L. 109–295, sec. 550. Accordingly, on April 2, 2007, DHS expressly and appropriately adopted a regulatory approach in the DHS Chemical Facility Anti-Terrorism Standards (CFATS) regulations that increases the level of security as the 

level of risk increases. This risk-based, tiered approach to security reflects the fact 

that the working environment in chemical and refining facilities is unique to the 

chemical industry and presents unique challenges. 
36 

1On October 13, 2006, the President signed into law the Security and Accountability for Every 

Port Act (SAFE Port Act) amending the Maritime Transportation Security Act of 2002. These 

laws require DHS to develop a biometric credential to serve as a transportation security card 

allowing individuals to gain access to secure areas of a vessel or maritime facility. The TWIC 

process was developed to implement the SAFE Port Act. 

A private sector solution to personnel surety requirements is consistent with the 

‘‘alternative security program’’ (ASP) approach in the CFATS regulations. The ISTC/ 

SCSC recommends an ASP system that allows the chemical industry to use authorized third parties to help meet personnel surety requirements. The ISTC/SCSC process is a uniform and consistent credentialing system with high recognition value in 

the areas in which the ISTC/SCSC process operates. More than 75 chemical and refining facility owners and 2,240 contractor companies participate in the ISTC/SCSC 

process. As described earlier, the ISTC/SCSC process is comprehensive and proven 

to provide its chemical industry participants with an appropriately high level of security. The ISTC/SCSC technologies are already in place, and the system has been 

producing successful results for many years. Chemical and refining facilities should 

be permitted to continue using established personnel surety solutions under any 

new regulatory regime. 

However, in order for the ISTC/SCSC process and other private sector personnel 

surety alternatives to be approved by DHS as an ASP, the private sector must be 

able to demonstrate that the ASP can provide a level of security equal to or greater 

than that provided by a Government-based approach. Therefore, in order for the 

ASP system to have any meaningful effect, private sector entities require the same 

level of access to necessary security information as is provided under other Government-based personnel surety solutions. In order to preserve the highly effective personnel surety processes currently in place at chemical and refining facilities Nationwide, the ISTC recommends that the proposed Chemical Facility Anti-Terrorism Act 

include provisions that: 

• Make explicit that a chemical facility should be regulated as a chemical facility 

and not as a maritime facility for personnel surety purposes; 

• Allow private sector ASPs to submit names to DHS for processing against the 

Consolidated Terrorist Watch List; 

• Allow private sector ASPs to submit fingerprints to the FBI’s Criminal Justice 

Information Service (CJIS) database for identification verification and a criminal history background check; and 

• Establish a method by which private sector ASPs may submit names to the appropriate Federal agency in order to perform immigration status checks. 

A. Regulate Chemical Facilities as Chemical Facilities 

In compliance with the existing CFATS regulations, the ISTC/SCSC process provides a robust, nuanced, responsive, privacy-sensitive and inexpensive identification 

verification and background check that satisfies the risk-based performance standards set forth in CFATS. The chemical industry should be permitted to continue to 

use personnel surety processes and procedures developed to satisfy the industry’s 

unique security challenges. The ISTC/SCSC believes that applying outside solutions, 

such as the Transportation Worker Identification Credential (TWIC) program to 

ISTC/SCSC participating chemical and refining facilities would be inappropriate because TWIC lacks many characteristics of the existing ISTC/SCSC process.1

• The strength of the ISTC/SCSC process allows chemical and refinery owners 

and operators greater flexibility to decide whether an individual should be permitted any unescorted access within the facility or whether the individual 

should be restricted to employment in non-sensitive areas. TWIC merely provides a pass/fail clearance for a worker to access the entire facility without distinguishing which workers may enter more sensitive areas within the facility. 

Under TWIC, an individual who is denied a credential is also denied the possibility of any form of employment. 

• As stated under the DHS Chemical Regulations, DHS believes that the level of 

screening for employees should be commensurate with the level of access provided. The ISTC/SCSC screening process provides exactly this kind of nuanced 

approach. The TWIC enrollment program merely identifies whether an applicant is eligible or ineligible to receive a TWIC. Industry stakeholders have expressed concerns that certain disqualifying offenses may be too stringent under 

TWIC and could lead to employees unnecessarily losing their jobs regardless of 

the level of security risk which their particular employment may present. 

• As discussed earlier, the chemical industry’s heavy and necessary reliance on 

transient workers requires that these workers be credentialed quickly. According to the TWIC proposed rule, it could take 30 to 60 days for the TSA to per-
37 

form background checks, produce the TWIC cards, and issue these cards to employees. • Because of the transient nature of chemical industry employment, neither employees nor employers find it financially attractive to invest significant moneys 

on a credential that an employee may carry for only a few short months. In contrast to the ISTC/SCSC baseline check at a cost of $55, a new TWIC card must 

be purchased by the employee for $132. • The ISTC/SCSC process is in place right now and continues to process thousands of prospective workers each week. It is a proven process with many years 

of recorded success. TSA has made progress toward full implementation of the 

TWIC program, but only in the maritime sector and without a strict timeline 

for completion. TWIC is not ready for full-scale implementation in chemical and 

refining facilities across the country. 

Implementation of the TWIC process for personnel surety could well result in a 

personnel surety gap while facilities wait for the TWIC process to become fully operational. Distribution of access cards to employees through an incomplete TWIC process without adequate compliance with personnel surety requirements could allow 

persons who pose a terrorist threat to compromise a chemical or refining facility. 

Chemical facility security requires a risk-based and performance-based approach 

that is not met by the standards set for the maritime sector. 

B. The Consolidated Terrorist Watch List 

In order to ensure that private sector entities have a meaningful ability to provide 

the level of security necessary to qualify as an ASP under the proposed legislation, 

the ISTC/SCSC recommends that the proposed legislation permit ASPs to submit 

names for checking against all Federal watch lists and anti-terrorist databases. 

DHS already provides a process for TWIC vendors to submit names to the TSA to 

be checked against the Consolidated Terrorist Watch List. DHS should assure that 

the same comprehensive terrorist watch list check is conducted for applicants and 

employees of chemical facilities, contractor employees, and visitors requiring 

unescorted access to chemical facilities. 

The ISTC and the SCSC have already submitted a request to DHS to enhance 

the ISTC/SCSC’s ability to check for terrorist ties. DHS has indicated that it will, 

‘‘designate a secure portal or other method for the submission of application data 

for each employee or contractor.’’ The ISTC and the SCSC look forward to working 

with DHS to incorporate this step into the existing ISTC/SCSC process. The ISTC/ 

SCSC recommendation would authorize DHS to move forward with any plans to 

allow owners and operators and their designated third party agents to submit 

names to be checked against the combined terrorist watch lists. 

C. CJIS 

The ISTC is planning to implement a fingerprint-based, live-scan ‘‘gatekeeper’’ 

system into its existing process. Under this system, individuals who qualify for an 

ISTC credential would obtain an identification card that includes a digitized representation of their fingerprints. That card, prior to entrance into a secure portion 

of the chemical facility, would be processed through a live-scan system which compares the digitized print on the card with the live fingerprint of the person seeking 

admittance. 

To make the collection and use of worker biometric information more than just 

a tool for identification verification, the ISTC/SCSC supports inclusion of language 

in the proposed bill that would allow the ISTC and all ASPs providing personnel 

surety solutions the authority to submit to CJIS the fingerprints of workers and 

other individuals requiring unescorted access to chemical and refining facilities. The 

ISTC advocates that all approved ASPs have the ability to include a search of FBI 

criminal history records to supplement already robust identification verification and 

criminal history background check processes. 

D. Immigration Checks 

The ISTC/SCSC process has the ability to include a customized series of immigration checks that can supplement the baseline search. However, as additional Federal 

programs are developed to monitor various immigration records, such as immigration status and employment eligibility, the ISTC/SCSC endorses legislative language 

that would ensure that private sector ASPs may participate in these programs. 

IV. CONCLUSION

Today, the need to maintain high levels of security at chemical and refining facilities is self-evident. The ISTC/SCSC recommends that if a chemical or refining facility has identified a private sector solution that can meet the personnel surety needs 
38 

and legal requirements at a particular facility, that customized solution should be 

preserved as an ASP under any proposed chemical facility security legislation. 

Chemical facilities should be regulated by chemical laws and regulations that reflect 

the unique needs of the industry. Thus, private sector ASPs that provide personnel 

surety programs should be enabled with access to the information necessary to fully 

and comprehensively perform these security functions. 

The ISTC and the SCSC appreciate the opportunity to provide this written testimony, and we urge you to contact us if we can provide additional information concerning this vitally important matter. 

Chairman THOMPSON. Mr. Stephan, I want to talk a little bit 

about the current CFATS regulation, and I want to talk a little bit 

about an example. Since our Ranking Member is here from the 

New York area and Mr. Pascrell is here from New Jersey, I will 

be a little more specific. 

As I understand it, a plant that produces industrial chemicals 

like chlorine and is located 5 miles outside of New York City would 

be subject to chemical security regulations. Is that correct? 

Mr. STEPHAN. Sir, that would depend on the chemical of interest 

that was part of the Appendix A list of approximately 322 chemicals at or above a certain threshold quantity defined in that appendix. 

Chairman THOMPSON. All right. Now if that same plant was just 

outside of Manhattan but instead was a water treatment facility, 

would it have to implement chemical security safeguards? 

Mr. STEPHAN. Sir, the CFATS regulatory program by congressional exemption does not apply to any wastewater or water treatment—wastewater or water facilities across the country. 

Chairman THOMPSON. But I think you see where we are headed. 

That is a significant potential target of a facility such as that—— 

Mr. STEPHAN. Yes, sir. 

Chairman THOMPSON [continuing]. And I think we are just trying 

to establish that as part of the record. 

Mr. Wattier, do you have any opinion on that? 

Mr. WATTIER. Well, I think I stated in my statement, sir, that 

we think it is a significant—— 

Chairman THOMPSON. Speak directly into the mike. 

Mr. WATTIER. We think it is a significant issue, and that is why 

we are here today—at least I am here today—to suggest that the 

Homeland Security Department ought to have some authority over 

this matter to secure the chlorine. 

Chairman THOMPSON. Can you share with us how you think IST 

has benefited your facility? 

Mr. WATTIER. Well, in addition to obviously reducing the risk, 

which is our primary motivation, there would be a lot of other benefits of reducing the storage of chlorine on-site. There are a number 

of regulatory requirements that go along with the storage of gaseous chlorine that involve everything from worker training to there 

is obviously the public information aspect of this that would be 

much preferable if chlorine was not stored on-site. So there are a 

whole host of regulatory requirements that come in when you are 

handling gaseous chlorine that I think would be eliminated or 

streamlined by reducing or eliminating the amount of chlorine that 

you have on-site, the chlorine gas. 

Chairman THOMPSON. Thank you. 
39 

Dr. Pulham, are those facilities owned by Siegfried presently in 

compliance with all New Jersey laws? 

Mr. PULHAM. Yes, we are. 

Chairman THOMPSON. In pursuit of those compliance laws I 

would assume that you committed considerable capital resources 

and man hours toward meeting those requirements? 

Mr. PULHAM. We have, Mr. Chairman. But, in our business, 

pharmaceutical manufacturing, it is integrated with a process. So 

in developing a process and understanding its optimization IST is 

part of the process. It is not new to us. It is something that we 

have always done and have had to do to make our products safe 

not only for patients but also from exposure to employees. 

Chairman THOMPSON. So as a normal, everyday business practice 

you look for, obviously, the safest technology possible? 

Mr. PULHAM. Yes, sir. We look to optimize the processes. But, as 

I said in my comments, it is not that easy. Because we are regulated by FDA, we are regulated by DEA, our customers are also 

regulated by FDA. So for us to effect a change in a process can take 

from 2 to 3 years because of all the approvals that a change has 

to go through. But inherent in that review or the change in a process is, absolutely, safety and environmental concerns. It is all part 

of our daily development and optimization of chemical manufacturing. 

Chairman THOMPSON. Thank you. 

Mr. Stephan, we put in this proposed print a budget of about 

$325 million; and that basically takes into consideration moneys 

you are spending already. Have you had an opportunity to look at 

that number and do you have an opinion on it at this point? 

Mr. STEPHAN. Sir, I have not had an opportunity to view any of 

the possible pieces of legislation or had any number associated with 

them so far. 

As you know, we have put in a 2009 request for $63 million to 

cover current CFATS requirements in the current regulated community, which assumes around 5,000 facilities. If we would add, for 

example, water and wastewater treatment facilities, we could probably double or more the number of high-risk facilities that would 

enter the CFATS framework; and I am not certain whether or not 

that number includes new requirements dealing with Ammonium 

Nitrate point-of-sale registration and regulation. 

Chairman THOMPSON. As well as some red team exercises and 

some other things? 

Mr. STEPHAN. Yes, sir. 

Chairman THOMPSON. I yield 5 minutes to the Ranking Member. 

Mr. KING. Thank you, Mr. Chairman. 

Secretary Stephan, let me just follow up on a point the Chairman 

was making before. 

Let me also, at the outset, again commend you for the outstanding work I think you have done in your position. It is a 

thankless job. You are doing a terrific job at it, I believe, so I wanted to put that on the record. 

Just to be clear, following up with what the Chairman said, do 

you believe it is important to include water and wastewater treatment facilities in the legislation? 
40 

Mr. STEPHAN. Sir, I think the additional regulatory authority is 

a very complex issue. But I think, as the Chairman or Secretary 

Chertoff has stated numerous times, that we do believe we have a 

gap in terms of the water sector or the wastewater sector across 

certain facilities. Just let me give you an example what I mean by 

that. This is kind of the same situation we had with the chemical 

industry writ large prior to CFATS. 

Lots of people in the water and wastewater business have made 

important security investments and significant security investments since September 11. Others have not. For those that have 

made security investments, it is very difficult for me to measure 

the effectiveness of those investments against various or multiple 

terrorist threat vectors or hazards. So I do not have the knowledge 

of understanding that I do underneath the CFATS framework with 

respect to the water and wastewater world. 

But we do have elements of that community, major elements of 

that community that are taking this very seriously. They have 

probably one of the best information-sharing networks that we 

have across our sectors. They have probably the best education, 

training and awareness programs for their sector members at the 

facility level of all the 17 critical infrastructure sectors, some of the 

most committed leadership on the part of the other Federal agencies, like the EPA, DHS, the FBI, State and local associations and 

the water sector or private council sector members themselves. 

So, again, a complex situation, but we do believe there is a security gap inherent with the fact that these pieces do fall outside any 

established regulatory framework. It just makes them less-known 

quantities to us. 

Mr. KING. Dr. Pulham, if I could ask you at a very practical level, 

is there any conflict in complying with New Jersey’s inherently 

safer technology, regulations and DHS’s regulations? 

Mr. PULHAM. I don’t see a conflict. I just don’t quite understand 

the need, to be honest. As I said, this IST is so inherent in our 

business. We went through the assessment that the State of New 

Jersey required us to do, and it was about a week-long exercise 

with 10 to 15 of our people facilitated by a safety expert, and there 

were no recommendations. So the measures that we take just to 

run a pharmaceutical chemical business incorporates these provisions. 

Mr. KING. I guess the point I was trying to make from our perspective is, whether we like it or not or you like it or not, New Jersey is an activist—I am just wondering, is there anything the Department is doing interfering with that? Is there anything New 

Jersey is doing interfering with the Department and do you feel 

that both are in sync and can you work with both? Whether you 

want to or not, as a practical matter, can you do it and are you 

doing it? 

Mr. PULHAM. I think, practically, we could. 

Again, I am not so sure that I quite appreciate the need, but I 

think certainly that if it were a requirement we would do it, obviously. 

Mr. KING. On the issue of background checks, Secretary Stephan, 

have you had a chance to look at the Committee Print as to how 

far it goes, it doesn’t go? 
41 

Mr. STEPHAN. Sir, I believe there are a lot of parallels in a previous edition. I understand there is an edition of the Committee 

Print that came out last night or early this morning. I have not yet 

seen that document. But in previous editions I think there are 

some pretty close parallels between what you have in your proposed legislation and what we have currently inside the CFATS 

regulation. 

Mr. KING. I would like to yield to Ms. Brown-Waite, if she wants 

to follow-up on that issue, because she is very concerned with it. 

Ms. BROWN-WAITE. I thank the gentleman for yielding. 

We have got to be concerned that the draft that we have seen 

of the bill actually doesn’t have the specific language in there requiring background checks. It sets up the parameters for the background checks but doesn’t actually require the background checks. 

I think all Americans need to be concerned. How can we believe 

that these chemical facilities are really safe if we are not requiring 

background checks on those who are at the highest-risk facilities? 

I would appreciate your comment on that. 

Mr. STEPHAN. Yes, ma’am, we agree with you. 

I, again, have not seen the latest version of—as this is a very 

continuously-evolving draft piece of legislation. Trying to keep up 

with this has been a bit of a challenge. 

But inside the current CFATS regulation there is a mixture of 

things that have to be considered as part of the facility security 

plan. They include personal identification, verification and authentication, you are who you say you are; a background check against 

commercially available private sector databases to do a criminal 

records-type investigation; verification of validation of right to work 

or authorization to work under the I–9 process; and then a check 

against a system that would verify whether or not the individual 

of concern would have unrestricted, unfettered access to key elements or assets inside a facility’s perimeter against a possible terrorist nexus or terrorist ties. We feel all those four components are 

critical in terms of the personnel surety function of a security plan. 

Ms. BROWN-WAITE. And the criminal background checks? 

Mr. STEPHAN. Yes, ma’am, the criminal background checks using 

publicly or commercially available databases, that is a requirement 

in the current CFATS regulation. 

Mr. KING. Ms. Brown-Waite, I would like to reclaim my time. 

I would just like to say, Mr. Chairman, again, as this process 

goes forward, and speaking for Mr. Lungren, we look forward to 

working with you and Ms. Jackson Lee and also the Department 

to make sure we get it right; and all indications are that this is 

going forth the way both sides would like it to. 

With that I thank you, and I yield back. 

Chairman THOMPSON. Thank you. I can assure you we will take 

the background situation into consideration. 

If I am not mistaken, Dr. Pulham, for the record, background 

checks for all your employees at your company is mandatory? 

Mr. PULHAM. Yes, sir, for employees, contractors, anyone who 

comes on-site and customers. 

Chairman THOMPSON. Mr. Wattier. 

Mr. WATTIER. Preemployment background checks are required 

for all of our employees at the city of Long Beach, yes, sir. 
42 

Chairman THOMPSON. Thank you very much. 

I yield 5 minutes to the gentlelady from California, Ms. Sanchez. 

Ms. SANCHEZ. Thank you, Mr. Chairman, and thank you for holding such an important hearing; and thank you, gentlemen, for 

being before us. 

Assistant Secretary Stephan, in your testimony, you provided an 

overview of the consultation and outreach that the Department 

conducted as it began to implement the Chemical Facility Anti-Terrorism Standards as required by the fiscal year 2007 Homeland Security Appropriations Act; and you mentioned initial outreach at 

the corporate level, publicity of the role to security partners, presentations at chemical industry conferences and coordination with 

the State and local officials. I think that is all great. But my concern was did you mention any—you didn’t mention any direct outreach to labor, the people who actually work in your facilities and 

would be directly affected by any security threat and who would 

also in a sense be the first responders or be the direct attacks and 

would be the first ones at the incident and the first ones to have 

some type of response to that. 

So my question is, did the Department do any outreach, request 

any information, have anybody at the table that will be from, for 

example, labor unions during this initial and ongoing implementation of the CFATS? 

Mr. STEPHAN. Yes, ma’am. I think through two principal means. 

First, through the publication of this regulation in its advance notice form and the Appendix A draft piece. We did that through the 

Federal Register process and received a number of comments from 

labor unions, environmental groups and others that would have the 

concerns that you mention. 

We also, in concert with the leeway we have to conduct listening 

sessions, basically invited lots of folks with interest in this ongoing 

evolution of the regulation and the Appendix A piece to come and 

provide their comments to us. 

I would have to go back and check with my staff to verify that 

labor union representatives or environmental groups were indeed 

among those audiences. I don’t have personal knowledge of everybody that was in those listening sessions. But I think principally 

through the Federal Register process, as well as the listening sessions, we were able to gather sufficient comments from those types 

of organizations. 

Ms. SANCHEZ. So what you are saying is you basically left it up 

to labor unions to look through the Federal Register to figure out 

that they were going to be involved in the process. You didn’t really 

make an outreach to the workers’ groups to see if they—I mean, 

they have a direct—as I said, they have a direct effect to this and 

they are the first responders, in a sense. 

Mr. STEPHAN. A member of my staff advised me—that does have 

personal knowledge—that we did make two outreach efforts and 

conducted two listening sessions specifically with labor union 

groups and their representatives during the final rule development 

as well as the Appendix A piece. 

Ms. SANCHEZ. Great. I would like to get that information, for you 

to go back and to document for me how you did the outreach to the 
43 

workers who actually would be affected by the regulations and who 

would actually be affected by any incident that might happen. 

Mr. STEPHAN. Yes. 

Ms. SANCHEZ. I would also like to know what you are going to 

do in the future to keep these people in the process. 

Mr. STEPHAN. I guess we will go back and use the same process 

that we—any type of possible change or amendment to the documents, the regulation itself or the Appendix A, will go back to the 

Federal Register piece. We will mobilize the same system we used 

to convene these two sessions with those types of organizations and 

continue to make this as inclusive as possible as we go forward. 

Ms. SANCHEZ. I would suggest that instead of treating them as 

you would the normal public in just the Federal Register process, 

that because they are so heavily involved, because they are really 

the ones who might be involved in some type of attack, and because 

they are the ones who are the eyes and ears to what is happening, 

you might want to figure out some way in which you make sure 

that they are involved and helping in the process. I have always 

found that these groups have first-hand knowledge of things that 

might occur, just as I am sure one of the employers might—you 

know, when you are trying to figure out how to make a process better down on the plant floor you probably ask your employees because they are the ones who are doing the motions every single 

day. Am I not correct about that? 

Mr. PULHAM. Absolutely. 

Ms. SANCHEZ. So they might have some knowledge. 

Mr. STEPHAN. We will follow the two-track approach, the Federal 

Register notice, and we will convene the listening sessions with 

those types of groups represented as we have done to get to this 

point. 

Ms. SANCHEZ. Great. The Department’s current process classifies 

chemical facilities into four different tiers based on risk. In this 

process, what is the most important factor in determining whether 

a facility is high-risk? 

Mr. STEPHAN. I think at this point in time the most important 

factor is direct impact on human public health and safety, human 

lives and injuries that would be suffered in the event of a terrorist 

attack against that type of facility housing the chemical of interest 

above a certain threshold quantity. So public health and safety, 

human lives and injuries. 

Ms. SANCHEZ. I also have a question, and I am glad that Long 

Beach Water is here today. Obviously, right in my own backyard. 

I want to always let you know we really value the fact that you 

come out here and that you testify before our committee; and, of 

course, I think Californians do it better than New Yorkers. 

Mr. KING. I move to—— 

Ms. SANCHEZ. So we are only interested in the cutting ground 

with respect to what you are working on. 

My big question is, the project that is your on-site chlorine gas 

generation demonstration project, you say that the system will reduce the amount of chlorine gas being shipped to our Nation’s railways, which of course will reduce the risk, especially out the highway, if you will, and our people out there, how long will it take you 

to complete all the phases of this project? Your testimony said that 
44 

it costs between $2 million and $3 million to implement this new 

system. How are you going to recover that? How is it going to affect 

your costs? I am just trying to get a feel for how others upgrade 

to protect our citizenry and yet at the same time figure how we are 

going to afford it. 

Mr. WATTIER. Well, $2 million to $3 million—to put that in context, our total annual budget—annual operating and capital budget 

at the Long Beach Water Department is about $100 million. So a 

$2 million to $3 million one-time expenditure, while significant, is 

something that is certainly achievable within our financial capabilities. In fact, a number of utilities around the country of our size, 

even before 9/11, chose on their own to make some of these conversions. So there are a number of them that have already made this 

conversion within their own financial capability. 

There will also be additional increased, ongoing operations and 

maintenance costs associated with any conversion to any alternative technology, but those are also financial obligations that we 

think are well within our financial capability. So we will handle 

them within our local financial capability through our revenues 

that we get from our ratepayors. 

Ms. SANCHEZ. Remind me if your particular agency has to go 

through a regulatory process in order to decide what it is that you 

are charging your customers. 

Mr. WATTIER. Well, under California law, there are various processes we have to go to change our rates every year and have a formal public hearing process and all that. We think again this can 

be incorporated within that existing process. 

Ms. SANCHEZ. What advice would you offer to other water treatment facilities that are considering implementing this type of process? 

Mr. WATTIER. Well, again, I think there are several alternatives 

that should be considered. The one that we are pursuing is something that many people didn’t view as a proven technology a few 

years ago, nor did we. But we have tested it out, and we are now 

comfortable that this technology is now reliable to the extent that 

we are ready to move ahead. 

I would encourage my colleagues to talk to their other utilities 

who have made changes to review what has been done to see what 

has worked and what has not worked. The water associations have 

already done a lot of that good communication sharing among the 

utilities, and so I would just encourage people to look at what others have done and get some lessons learned and then find the thing 

that works for them. 

It will be a case-by-case, very site-specific analysis. Because in 

some cases space constraints might direct you in one direction 

versus another. In some cases, electrical capability might move you 

in one direction. But there are several alternatives. I would encourage my colleagues to consider the full gamut and then pick the one 

that works best for them. 

Ms. SANCHEZ [presiding]. Great. Thank you for your testimony 

today. 

I will now recognize for 5 minutes Mr. Broun. 

Mr. BROUN. Thank you, Madam Chairwoman. 
45 

I want to begin by saying that I am an original intent constitutionalist and I believe that the main function of the Federal Government should be the defense of our Nation, whether it is national 

defense or homeland security. I was very honored and pleased to 

be assigned to this committee, and I believe that the main purpose 

of this committee is to authorize the functions of DHS. I believe it 

to be relevant the committee must pass an authorization bill before 

the House considers a DHS appropriations bill later this spring, 

and so I encourage the Chairman and this committee to do exactly 

that. 

Now, having said that, Secretary Stephan, I have had an opportunity to sit down with those in the industry that have significant 

concerns about the effect that this Committee Print has on the implementation of the current regulations. I think it is important to 

secure our Nation’s high-risk chemical facilities. But, in doing so, 

it is important that new legislation does not disrupt the work that 

DHS is currently doing to secure these facilities. 

Do you believe that the industry’s concerns are valid and what 

impact would this Committee Print have on the implementation of 

the current regulations? If you would in your response I would like 

for you to address its impact on the Maritime Transportation Security Act regulated facilities. 

Mr. STEPHAN. We would have a concern that any potential regulation—again, not having seen the latest draft out of the committee—would involve a complex and very complicated rule-making 

process that would involve a considerable amount of time. So from 

several dimensions I come at you with this plea for assistance. 

Please do no harm in developing a new proposed piece of legislation 

to the current CFATS implementation. It is very important to sustain the momentum, sustain the important partnership relationships and keep this moving. Because we absolutely need to do this, 

especially in light of the fact at the end of this year we will be undergoing a transition of administration one to another and we need 

to keep the continuity and the flow moving. 

Also, people have begun to make very significant investments on 

the private sector side with respect to the current CFATS requirements; and if those change to a significant degree we now no longer 

offer continuity and consistency and stability in terms of our private sector partners that are absolutely trying to do the right 

thing. Again, taking this very seriously, there is no one I work with 

on a daily basis in the industry that is not taking this very seriously; and we want to do the right thing here. 

This also throws curve balls to our State and local government 

counterparts that have to take a very complex role in a partnership 

in the planning process and the implementation process itself. 

So, again, lots of people at stake here, lots of momentum, lots of 

continuity. 

Sir, what specific aspect of the MTSA rule would you like me to 

address? 

Mr. BROUN. Well, the industry leaders that came and visited 

with me about it were just concerned about the implementation; 

and their concern was that the current regulations are being complied with and they are just concerned about any new regulations 
46 

being put on top of the current ones, not only the cost but the implementation of such. So that is the reason I ask you. 

Mr. STEPHAN. Yes, sir. I think the same logic that I just articulated would apply in the case of the MTSA-regulated facilities and 

also for the committee’s awareness. We have a working group with 

the Coast Guard and actually TSA to make sure that we are harmonizing the various security-related authorities regarding hazardous materials, chemicals of interest, so on and so forth, between 

the three principal DHS components that have a dog in this fight— 

again, the Office of Infrastructure Protection, TSA and Coast 

Guard—to make sure that we are harmonizing and that there is 

not a seam or a gap between us that could be exploited by our adversaries. 

Mr. BROUN. Do we have any data or even a guesstimate about 

what these unfunded mandates are going to cost the industry and 

government across the Nation that ultimately the consumer is 

going to have to pay? 

Mr. STEPHAN. No, sir, I have not had time to conduct that analysis. In fact, I have diverted considerable resources from CFATS 

implementation to figuring out the new Ammonium Nitrate authority going down to the point-of-sale. 

So, again, I have a limited resource pool now; and you ladies and 

gentlemen should be aware of this. This is a year of program build 

for CFATS. We are building up personnel, we are building up capability, and we are building up a boots-on-the-ground partnership effort here this year. Any significantly impactful new legislation with 

additional requirements has the potential of pulling more resources 

off implementation of the current regulation into something else, 

and some of the provisions that I have seen in previous aspects of 

the legislation have appeared to me to be a very significant cost behind them or associated with them. 

Mr. BROUN. Thank you. I yield back. 

Ms. SANCHEZ. Thank you, Mr. Broun. 

I just want to also make a note. Staff tells me that this will not 

take place until October, 2009, is that correct? 

Mr. STEPHAN. In my understanding, the goal or the intent of the 

legislation is to do something about the inevitable sunset of the 

current CFATS authority October 1, 2009. 

Ms. SANCHEZ. Great. I just wanted to put that on the record. 

My good friend from North Carolina, Mr. Etheridge, for 5 minutes. 

Mr. ETHERIDGE. Thank you, Madam Chairwoman. 

Let me thank each of you for being here this morning. 

Dr. Pulham, I have heard from chemical facilities in North Carolina that there are some problems with the chemical terrorism vulnerability information that DHS is asking—that they are asking 

for under CFATS. My question to you, has DHS classification of 

CVI been a problem that keeps you and your colleagues from controlling your own information or knowing what you are able to do 

with it? Also, have you been precluded from sharing information 

with State and local authorities because the information has been 

classified CVI? 

Mr. PULHAM. As I said in my opening comments, Siegfried is a 

little different from many pharmaceutical manufacturers in that 
47 

the lion’s share of our product line is controlled substances. So, by 

nature, some of the information is not readily available just for security reasons. But we are very controlled by DEA, we are very 

controlled by FDA and also DEP. So all of our systems and all of 

our processes are very transparent to authorities. So in this way 

it has not been a problem for us at Siegfried. 

Mr. ETHERIDGE. Okay. Thank you. 

Assistant Secretary Stephan, let me follow that up with you. 

What is DHS doing to rationalize the classification regime of CVI 

so that companies can maintain control over their proprietary information, ensuring the proper running of their businesses, and appropriately communicate with local law enforcement about their security needs without risking the disclosure of classified information? 

Mr. STEPHAN. Sir, thank you for your question. 

First of all, CVI is a very important program. We are asking industry to give us information that is very comprehensive, very detailed. We have never had this granularity before in terms of vulnerability and security information, hence, the need to make sure 

1,000 percent protection of this type of information. 

But also we feel it very important—in fact, it is a requirement— 

to make sure that that information gets into the hands of those 

with a need to know, and those who have been properly certified 

and cleared to have access to that information, to include State and 

local officials, law enforcement, first responders, emergency managers—absolutely No. 1 goal of this program. 

But we have to do it in a controlled way so that we don’t in some 

way, shape or form inadvertently have this information end up in 

the hands of terrorist planners and operators. That is the No. 1 

goal, as well, of this program. 

We pushed the initial user guide, defining the CVI program 

guide, attempting to make it user-friendly. We have had some very 

overwhelming feedback in terms of certain aspects of that user’s 

guide. Because of that feedback, we have had from the private sector, State and local folks—in fact, we have got a working group set 

up specifically with State and local government partners to help us 

sign these issues out. 

Our Office of General Counsel is in the process of modifying that 

into a second user’s guide that I believe will answer the concerns 

of both industry that has to work with this new regime as well as 

the State and local officials they would have to work the regime. 

Mr. ETHERIDGE. All right. Let me follow that up with another 

one, because, as you know, there is a great deal of concern about 

the security—chemical security regulation as it relates to rural and 

small businesses, and really, rural and small water systems because there are a lot of them in this country. There are very few 

water systems the size of New York and San Diego and large systems; there are a lot of small ones. 

Could you please explain any efforts the Department is trying to 

take to mitigate these concerns and whether any subsequent legislation should include some specific exemptions for small systems 

where we will have a tough time complying or may not be able to 

comply with the major changes that would not have resources? 
48 

Mr. STEPHAN. Yes, sir. Currently, there are no water systems or 

wastewater systems that have fallen inside the regulatory authority of the CFATS regimes. So those are completely off the table in 

terms of this program, for me, in terms of some of the things that 

represent concern to small businesses, household farmers across 

the country. 

Through the appendix A process, we have attempted very clearly 

to articulate the fact that the intent of this authority is not to impact small businesses, small households, individual family farms 

across America that really don’t represent a significant public 

health and safety risk. So we have upped the threshold screening 

quantities where people would have to enter in the first part—— 

Mr. ETHERIDGE. What is that threshold? 

Mr. STEPHAN. Sir, it varies by chemical. For example, for ammonia nitrate, it is 2,000 pounds. But we have gone out because we 

have found that the 2,000-pound piece could, in fact, get us hypothetically down to the individual farmsteads across the country; so 

we have put a temporary hold on any regulatory compliance requirements to the top screen entry process for those folks until we 

go through this first wave of data that will take us down to the distributor level. 

Then we are going to push out a second questionnaire, an automated questionnaire, to the distributors to really help us zero in 

on where in the farming operations community—principally, pesticides or fertilizers—do we have people that do hold in store for 

significant amounts of time the quantities of these kinds of substances that we are concerned about. 

So I think we have done a lot, listening to the concerns, finding 

out more about the operational nature of the food and ag world and 

how CFATS is critically impacted. We have frozen those things 

where we need more time and more information, and we will deal 

with them during the summer time frame as we gather the analysis from this first round of data. 

Mr. ETHERIDGE. Thank you. I yield back. 

Ms. SANCHEZ. I thank the gentleman from North Carolina. Now 

we will have 5 minutes with Mr. Dent. 

Mr. DENT. Thank you. I guess my question will be to Dr. 

Pulham. 

This whole notion of inherently safer technologies, it seems to be 

a practice that was born out of industry; is that correct, sir? 

Mr. PULHAM. Yes, sir. 

Mr. DENT. I guess the question I have too is, I represent an area 

where we have a large company that actually designs and builds 

chemical plants and gas plants. One thing that I guess concerns 

me: It is always in my understanding that some of the most toxic 

and dangerous chemicals produced are often used in the manufacture of semiconductors. Is that an understanding that you have as 

well? 

Mr. PULHAM. It is. But that is not my area; mine is pharmaceuticals. 

Mr. DENT. It seems to me that this inherently safer technology 

is an engineering practice or a process. Is that a fair assessment? 
49 

Mr. PULHAM. Yes. It begins right from drug discovery and it goes 

all the way through development, scale-up, pilot and commercial 

manufacturing. 

Mr. DENT. If we, as a Congress, were to mandate inherently 

safer technology under certain circumstances for those high-risk facilities or, I guess, most hazardous of chemicals, do you believe that 

we would in some circumstances maybe be incenting those facilities 

to manufacture those particular chemicals offshore as opposed to in 

the United States? 

Mr. PULHAM. It certainly has happened in the pharmaceutical industry. When the regulations have become too strict or too onerous, 

companies have outsourced some of the supplies of—some of the, 

certainly, early raw materials to offshore manufacturers. So I 

wouldn’t be at all surprised if that were true also in this case. 

Mr. DENT. What is a typical wage you would pay to somebody 

working in a chemical plant or a gas plant? 

Mr. PULHAM. Fifty dollars an hour. 

Mr. DENT. Fifty dollars an hour. So I guess what you are suggesting is that we should be very careful in terms of how we proceed on this issue. I understand why. 

Mr. PULHAM. If I could just add, having worked for FDA for 27 

years, I have seen it many times where we take tough regulatory 

positions, try to impose a lot of GMP or other requirements on companies, and so the company will just provide that material from 

one of its other facilities in Europe or the Far East or the Mideast. 

So the thinking is that we are very strict in controlling these 

companies, when, in fact, we are losing control because they are 

now manufactured offshore, we have less control, less oversight of 

the facility and the quality of the product. 

Mr. DENT. Is inherently safer technology more of a—it seems to 

be more of a—is it more of a workplace safety process or procedure 

than it is a chemical plant security tool? 

Mr. PULHAM. No, sir. It is more of a process safety and more— 

to deal with the process and the product than it is with security. 

So—— 

Mr. DENT. Yes. I guess that is the point, I guess, I am trying to 

make. How will this affect the overall security of a plant as opposed to the actual safety of the work site, which of course is important, but is that the role of the homeland security community? 

Mr. PULHAM. Right. In my view, it has more to do with the safety 

of the product and the manufacturing process than it does with security of the site. So the way we optimize processes, the way we 

control the reactants and ingredients that go into the processes to 

obtain ultimate yield in a safe environment for the operators is of 

utmost concern with the IST aspect in my view, not necessarily in 

the security of the site. 

Mr. DENT. Understood. I guess my next question will be then, I 

guess, to Mr. Wattier. 

How will the implementation of this IST affect the operation of 

water treatment facilities? How will the burden of installing these 

technologies affect the water use rates of local taxpayers who ultimately, you know, have to pay for the implementation of these 

technologies? 
50 

Mr. WATTIER. Well, again, we estimated for our situation a $2 million to $3 million one-time cost which again—put that in the 

context of a $100 million budget, we would incorporate that into 

our long-term rate setting. Then the ongoing costs would certainly 

be less than 1 percent of our ongoing operations and maintenance 

costs, comparing—switching to an on-site generation technology as 

opposed to the current practice of buying chlorine. 

So I don’t see any significant ongoing impact on our rates in 

terms of the O&M costs. 

Mr. DENT. Thank you. 

Do you also feel the regulatory scheme for water purification facilities, currently in existence under the Safe Drinking Water Act 

and the Waste Water Treatment Act, is appropriate to ensure the 

physical security of our water treatment facilities? Are these facilities safe now? 

Mr. WATTIER. I believe that they can be made safer by assistance 

from the Department of Homeland Security. 

That was my testimony, sir. 

Mr. DENT. Okay. I will yield back my time. 

Ms. SANCHEZ. I thank the gentleman. 

Next on the list would be Mr. Pascrell for 5 minutes. 

Mr. PASCRELL. Thank you, Madam Chairwoman. 

I just wanted to make clear in my own mind, we are talking 

about the control and protection of particularly lethal chemicals 

and their mixtures. We have already determined that modern technology could bring us to the point of recommending different mixtures to prevent or minimize the amount of damage that could be 

done in an accidental or an intentional attack. 

Second, we are talking also about the security of the facility 

within which this process takes place, be it fencing, be it personnel, 

be it modern technology. I wanted to make that very clear because 

I am very disappointed when we talk about fear. 

See, we don’t want to establish fear in people. Yet, how about 

these questions, how much will it cost the consumer? You know, establish that fear in people so, oh, my God, it is going to cost that 

much. 

You said, Secretary Stephan, in your explanation of your chemicals of interest list, we are talking about chemicals that are toxic, 

that are flammable, explosive chemicals that have the potential to 

create significant adverse consequences, in your own words. 

Mr. STEPHAN. Yes, sir. Correct. 

Mr. PASCRELL. You talked about theft and aversion of these 

chemicals, that if they are stolen, they have the potential to go into 

the hands of the wrong people. 

Mr. STEPHAN. That is correct, sir. 

Mr. PASCRELL. And risk for sabotage if they are mixed with readily available materials have the potential to create significant adverse consequences for human life. 

Most of that is your own words, right, Mr. Secretary. 

Mr. STEPHAN. Yes, sir. 

Mr. PASCRELL. Now, Dr. Pulham, I am proud to say that the 

State of New Jersey is a standard-bearer nationally for chemical 

security and chemical security protections, and I believe the State 

should be applauded for that. In fact, New Jersey passed the Toxic 
51 

Catastrophic Prevention Act way back in 1986 when, I imagine, 

few people even believed chemical security was an issue. 

In April of last year the Department of Environmental Protection 

proposed amendments to the act to require all companies subject 

to the program to evaluate the potential of incorporating inherently 

safer technologies at the facilities. I think it is worth noting that 

in New Jersey, the inherently safer technology requirement under 

the chemical sector best practice standards, something like that, 

represents a practicality issue, practicability test. It is not mandatory that a covered facility implement this process, only that they 

evaluate it. 

So, Dr. Pulham, the Committee Print for the Chemical Facility 

Anti-Terrorism Act calls for the same kind of non-mandatory IST 

approach for the great majority of facilities like yours—like yours— 

which seem to be operating just jim-dandy. Yet in your testimony, 

you call for this committee to take a less rigorous approach to IST 

standards. You even referred to this as paperwork, this is basically 

paperwork. 

Why can’t it be implemented by the Federal Government if inherent safety is a concept that the chemical industry invented, as 

you said, and we consider it continuously as we design and modify 

our production processes? Can you tell this committee why you believe facilities like yours in New Jersey should not have to even 

evaluate ICT standards when they have not hindered your ability 

to operate profitably and efficiently in the State of New Jersey? 

I can’t wait to hear this answer. 

Mr. PULHAM. What I said was that we went through the requirements, we did an IST evaluation, we did an SVA assessment, we 

did all of those—— 

Mr. PASCRELL. You followed the law? 

Mr. PULHAM. We did all of those evaluations and found that 

there were no opportunities for improvement. They had no impact 

because the nature of our business required that we already had 

these implemented. That is what I meant. 

Mr. PASCRELL. You are still working in a profit and you are still 

working efficiently in the State of New Jersey underneath this ‘‘paperwork,’’ as you call it, standard? 

Is that what you are trying to tell us? 

Mr. PULHAM. I would say underneath the requirements for a 

pharmaceutical/chemical manufacturer which incorporates these, 

absent this requirement to go through the assessment. 

Mr. PASCRELL. So many of the facilities in New Jersey are already operating under the American Chemistry Council’s Responsible Care Program, as you well know. 

Are any of your facilities already operating under a security program such as the Responsible Care Program? Because it is basically a private program. Are any of yours? 

Mr. PULHAM. Yes. Yes. 

Mr. PASCRELL. Will the new CFATS regulations which we are 

talking about require those facilities to make significant security 

upgrades? 

Mr. PULHAM. Since the red line came out again last night, I don’t 

know all of the requirements. So that is hard for me to assess. 
52 

Mr. PASCRELL. How do you feel about the Committee Print’s provision enabling facilities to submit alternative security procedures 

that are produced for other regulatory purposes, in whole or in 

part, to meet the security assessment or the security plan improvement? How do you feel about that? 

Mr. PULHAM. The DEA mandates certain security, physical security requirements on us, so—we can’t deviate from those, so we 

have fences with razors, we have cameras all along the fence lines. 

We have card access not only to the facility, but to each building 

within the facility, restricted access. We have vaults that have certain construction requirements that we are mandated to have to 

store certain products in. So our physical security program is pretty well established by the requirements of the DEA. 

Mr. PASCRELL. Well, we would—can I just finish my statement 

I just started? 

Ms. SANCHEZ. Mr. Pascrell, you are 3 minutes over. 

Mr. PASCRELL. I know. Can I ask—I am not going to ask a question, but make a statement. 

Ms. SANCHEZ. Make a statement. Make it short. 

Mr. PASCRELL. Thank you, Madam Chairwoman. This is very important. We have to understand the urgency of this particular situation. 

Why was this committee a few years ago so concerned about, for 

instance, the 2-mile stretch on the Turnpike then? There was good 

reason. We just didn’t invent it. We didn’t wake up one morning 

and say, Oh, I wonder what is happening in the chemical industry 

over in New Jersey. 

We are talking about the whole country, first of all. There was 

a vulnerability. So for you to talk about paperwork to me is very 

demeaning when the State—I know the work that this State put 

in on trying to put the process together, and I would ask you, because of the urgency, to take a second look at this before coming 

out, guns blazing, because I am ready myself. 

Thank you, Madam Chairwoman. 

Ms. SANCHEZ. Dr. Pulham, before we go on, I just have a quick 

question with respect to the offshoring issue. Do you have any 

knowledge of any facilities that are leaving New Jersey because of 

New Jersey’s chemical security regulations regarding IST? 

Mr. PULHAM. Not specifically the chemical security regulations. 

Ms. SANCHEZ. Thank you, Doctor. 

Next we will have Mr. Davis of Tennessee for 5 minutes. 

Mr. Davis. 

Mr. DAVIS of Tennessee. Thank you, Madam Chairwoman. I 

would like to thank the panel as well. Thank you for being here 

today. Thank you for what you do in our economy and in our country. I would like to start with Secretary Stephan, if I may. 

The Committee Print includes the requirements that the Department in certain situations mandate inherently safer technologies 

that reduce the risk of terrorist attacks. Is there a good definition 

of what inherently safer technologies are? 

Mr. STEPHAN. Sir, I think the concept of inherently safer technologies means many things to many people. In some cases it may 

refer to a process, in some cases it may refer to the reduction of 

a chemical, in some cases it may refer to the elimination of a chem-
53 

ical on a particular facility’s premises. So I am not sure that I understand clearly a single definition of that term. 

Mr. DAVIS of Tennessee. It always concerns me when we are asking an organization or group or any entity to move forward when 

there is not a clear, concise definition. So I hope we can move forward on that. 

Does the Department have a methodology developed to assess 

the differing levels of risk for certain processes versus other processes? 

Mr. STEPHAN. Sir, our methodology is a security-based methodology. It deals with aspects of consequentiality in terms of public 

health and safety. 

The next phase, we will take a look at the impacts on national/ 

regional economy, national mission accomplishments, such as impacts on the national security establishment if certain things were 

to happen at a certain chemical facility. We do not have a methodology in place that would evaluate different processes or safety-related processes. 

I would suggest that perhaps the EPA that regulates the safety 

process world of the chemical industry might be a better place to 

go for that answer. 

Mr. DAVIS of Tennessee. Considering that the Department of 

Homeland Security issued the current regulations only 8 months 

ago, do you believe Congress should be acting now to codify and expand these regulations? Or should we wait and see if what we have 

already done is working well? 

Mr. STEPHAN. Sir, in my opinion, as the implementer of the existing, very complex set of rules and regulations that we have to push 

out the door, I have to maintain 100 percent focus on getting what 

we currently have in terms of authority and in terms in writing a 

rule that is very complex and reaches across the United States. I 

have got to dedicate everything I have to getting that out the door. 

Significant new changes beyond simply allowing the current 

CFATS authority to continue beyond October 1, 2009, would not be 

my preferred way to do business. 

I would also ask that the committee consider the concept of time 

in terms of lessons learned in the implementation of the existing 

program and how they might apply to future legislation for something that has only been around for a few months. We don’t have 

the lessons learned captured in granular detail; they just haven’t 

appeared, so that they would be useful to you in some future legislation effort that would involve a rulemaking. 

So I would say, give us some time to get this in place. Don’t 

allow the wind taken out of the sails and let us go full blown to 

getting this program up and running in transition to the incoming 

administration, as it should be. 

Mr. DAVIS of Tennessee. Thank you, Mr. Secretary. 

Dr. Pulham, you stated that being mandated to adopt IST could 

be dangerous. Could you explain that statement? 

Mr. PULHAM. Pardon me? 

Mr. DAVIS of Tennessee. You have stated that mandating IST 

could be dangerous. Can you explain that statement? 

Mr. PULHAM. Yes. What I mean is, if someone mandated us to 

use an alternate chemical, for example, or an alternate process, 
54 

and we had to do that even though our own assessment was that 

it was not the safest, that could be dangerous. You know, the developers, the innovators of a process and a product are really the experts in that process and the ramifications of it. So I am concerned 

there is a potential that if someone from the outside then takes a 

look at this process and mandates changes in it without knowing 

all of the related issues with it—so we have worked with the process for 10 years maybe bringing it to market, and we know all of 

the aspects of it, and if we are mandated from the outside to consider an alternate process or an alternate free agent, for example, 

that in our view is not as safe, that could be, in my view, dangerous. 

Mr. DAVIS of Tennessee. Do you have concerns that you would 

have people other than scientists making those mandates? 

Mr. PULHAM. People that maybe are not as experienced with the 

process as are our scientists. So we have quite a staff of Ph.D.’s in 

various disciplines that develop a process based on the literature 

and their experience with it at a laboratory scale, and then it is 

scaled up to commercialization. So if someone that hasn’t—doesn’t 

have that in-depth knowledge tries to modify it or mandate a modification to it, I think there is a potential it could be more dangerous, rather than less. 

Mr. DAVIS of Tennessee. Thank you. I yield back. 

Ms. SANCHEZ. The gentlewoman from Texas, Ms. Jackson Lee, 

for 5 minutes. 

Ms. JACKSON LEE. Let me thank the witnesses for their presentation and express how important this issue is to all of us. I hope 

that with the Committee Print we can find a constructive road map 

and legislative document that is going to put in place security for 

Americans. 

I want to go to the issue of the background checks, Mr. Stephan, 

and note my colleagues had mentioned that the background checks 

were not mandatory. Of course, in the Committee Print on page 8, 

we have a listing of the issues that should be addressed in doing 

background checks and suggesting that they should be done. 

Is a background check being mandatory something that the administration would support? 

Mr. STEPHAN. No. In terms of the current CFATS regulation, 

that is one of the criteria that would constitute part of the security 

plan in terms of the performance measure that we have against 

personnel surety, that a criminal background check using publicly 

available commercial databases is an important component of a security plan. 

Ms. JACKSON LEE. Is it now mandatory or as one of the elements 

of the security plan? 

Mr. STEPHAN. As you will recall, based on the authority we have, 

we don’t have the authority to make any single element mandatory 

inside the CFATS framework. But that is one of the recommendations we have inside the—— 

Ms. JACKSON LEE. Or if the legislation made it mandatory, you 

would have the authority. So I am asking you, in terms of Committee Print, would that make for a more secure setting to require 

that background checks be done? 
55 

Mr. STEPHAN. We support a requirement for a background check, 

as stated in the interim final role for the CFATS final regulation. 

Ms. JACKSON LEE. Would you go to the next level of making sure 

that there is an element in that? I am asking you, do you want to 

make that element mandatory? 

Mr. STEPHAN. I don’t want to make any statement in favor of or 

against a piece of proposed legislation I haven’t had a chance to 

look at. But generally, I am supportive of the concept of a background check, a criminal background check, as part of the personal 

surety element of a—— 

Ms. JACKSON LEE. So you would be open to the structure that 

presently exists, where it is an element; or you might be open, as 

well, to where it might be mandatory? 

Mr. STEPHAN. If the current CFATS authority allowed me to 

make that piece mandatory, I believe that would be a wise thing 

to do. 

Ms. JACKSON LEE. Okay. 

Let me also ask you that you have gotten a budget under the fiscal year 2008 budget, and it is my understanding that Congress 

has provided the CSCD a substantial boost from the President’s 

budget. 

My question is, do you now have enough funding for inspectors 

and for training? 

Mr. STEPHAN. In terms of—this program is being implemented in 

phases, and in terms of the program work activities and objectives, 

milestones, deliverables for fiscal year 2008, the answer is ‘‘yes.’’ 

We, of course, bleed over now into the 2009 request where the administration has requested $63 million; and I believe that is an 

adequate amount of money to realize our goals and objectives for 

the program in fiscal year 2009. 

Ms. JACKSON LEE. You believe that or you really are committed 

and dedicated to the fact that you have enough money? 

Mr. STEPHAN. There is not a 100 percent, certain thing anywhere 

in my life. Again, the budget assumes a regulated universe of 5,000 

facilities. Based upon our preliminary tiering analysis, that we are 

doing now, if that universe of regulated facilities exceeds 5,000, 

then of course we would have to go back within the administration 

and talk about that, and then of course come over here following 

a process to have a dialog with you. 

But if you assume 5,000 is the number of facilities that would 

fall in this framework, the budget numbers that you have seen 

from the administration are adequate to do the job. 

Ms. JACKSON LEE. Well, let me thank you for supporting the administration. I frankly believe they are not. 

Let me quickly raise this question, Dr. Pulham, to tell me—and 

I want to get it out to answer it before the bell goes off—to speak 

to the lack of difficulty in implementing the IST, which has been 

discussed before, which is contemplated in the Committee Print. 

The second question is: The value of creating chemical security 

excellence centers so that you involve the academic community in 

devising new technology as it relates to security in that arena? 

Mr. PULHAM. Yes, ma’am. 

As I said earlier, our industry is heavily regulated by DEA and 

FDA. So for us to make a change in a process is not an easy thing 
56 

and would take from 2 to 21⁄2 years to implement. Our customers 

have applications with FDA that have to be amended. We would 

have to change our process. They would have to reformulate the 

drug product, do studies, stability studies and efficacy studies; and 

all that would have to go through FDA approval. 

In addition, the DEA controls a quota that we are allowed to 

produce against. So it is very difficult for us to make a change in 

a process without severely interrupting the supply to our customers, or we are certainly taking a long time to affect the supply. 

From a security point of view, we have, as I mentioned earlier, 

many layers of security at our facility because of the nature of the 

compounds that we handle. So we have things from card access to 

cameras to guards at all the entrances and exits. So just because 

of the nature of our business, we are very heavily controlled by 

DEA and the types of security systems that we have to have in 

place. 

Ms. JACKSON LEE. You wouldn’t have any problem complying 

with the rules? 

Mr. PULHAM. Implementing a change would be difficult, so if we 

said we had to change the process, that would be difficult for us 

to do in a timely manner. 

Ms. JACKSON LEE. Madam Chairwoman—did you answer the 

question about the academic collaboration that institutions of higher learning on cutting-edge technology? 

Mr. PULHAM. Yes, ma’am. We have academic advisors so we have 

advisors at the university level to consult on chemistry and medicinal chemistry aspects of our business. So that would not be difficult. 

Ms. SANCHEZ. The gentlewoman’s time has expired. 

I will now call on Mr. McCaul for 5 minutes. 

Mr. MCCAUL. Thank you, Madam Chairwoman. 

Thank you to the witnesses for being here today. I had a couple 

of follow-ups from my colleague from Texas on some of the questioning—the background, background checks specifically; and I believe, Colonel Stephan, you said that would be a wise thing to do 

to make those mandatory. Is that correct? 

Mr. STEPHAN. Yes, sir, in terms of the criminal background 

checks that we currently have as a consideration inside the existing CFATS rule, yes. 

Mr. MCCAUL. I would have to agree with that opinion, as well. 

The current draft of the Committee Print will include provisions regarding these checks, and it requires the Secretary to provide an 

appeal and a waivers process to employees who undergo the background check. 

Could you tell me how the Department can meet that requirement and who would bear the cost of that? 

Mr. STEPHAN. Sir, again, not having seen the current Committee 

Print, I am not able to probably provide the level of detail that is 

required. But right now, inside the existing CFATS regulation, we 

have the industry consider using commercially or publicly available 

data bases through which to conduct a criminal background investigation. 

We also have a consideration for a check of terrorist nexus, or 

terrorist ties, in terms of people to have unescorted access to cer-
57 

tain preidentified critical areas of inside a facility where the most 

harm could be done if impacted by a terrorist attack. 

In practical terms, the only way to get to that problem 100 percent is to go through the terrorism screening database. That is an 

inherently governmental function, and we would have to—and of 

course, under the CFATS rule, are now working with our TSA partners in the screening coordination office inside the DHS headquarters to figure out how we would make that available through 

a secure, automated portal setup with the facilities that would be 

presenting us a list of people that run through that check process. 

Mr. MCCAUL. I think that would be—in implementing this, assuming this passes, I think that would be an excellent idea to have 

that nexus or the ability to check it with the terrorist list as well. 

Currently, that is not being done, right? 

Mr. STEPHAN. Currently, it is not. We are not at that phase of 

the regulation’s implementation at that point. But that is a thing 

that is looming on the horizon for about two phases from now. 

Mr. MCCAUL. Is the current background check that is implemented more along the lines of an NCIC, sort of FBI background 

check? 

Mr. STEPHAN. It is a background check that the facility would 

initialize or get under way through commercially or publicly accessible databases. Some facilities are working with the FBI; some are 

working with local law enforcement. There are a variety of ways 

that the individual facilities are tackling this issue. 

Mr. MCCAUL. Okay. Thank you. With respect to the administration’s budget request, $63 million, 

do I understand you correctly that that would be sufficient to carry 

out your duties? Or would you need additional resources? 

Mr. STEPHAN. Sir, based upon the universe of things that are 

known to me at this point in time, principally I am assuming, until 

I get my analysis completed here within the coming weeks, that I 

am looking at about 5,000 facilities across the country. All of our 

manpower and budget justifications to this point have been against 

that baseline. So I am happy if the baseline stays at $5,000 that 

the resources request that you have seen, as Members of Congress, 

are sufficient to do the job. If we go beyond our regulated universe 

of 5,000 facilities, then I am going to have to go and do another 

costing analysis and run that up my chain of command. 

Mr. MCCAUL. You will certainly let us know about that if that 

happens, right? 

Mr. STEPHAN. Sir, you will be among the first to know. 

Mr. MCCAUL. If a subcommittee amendment was added to the 

bill that addressed technical and academic requirements for the 

head of the Office of Chemical Security, how would this language 

compare with the Department’s current plans for leadership of this 

office? 

Mr. STEPHAN. Sir, I think in the previous versions of this proposed legislation that I have seen, it kind of puts lots of different 

technical, professional, managerial, leadership qualifications all 

into the—all into one person. I am not quite sure that that person 

exists, to be quite honest with you. It is an incredible amount of 

detail in terms of those specific technical, professional, leadership 

and managerial qualifications. 
58 

The concept the Department is pursuing is to achieve all of those 

various technical, professional, leadership and management qualifications through a leadership team of three individuals. One would 

be a senior-executive-level technical advisor; one would be a seniorexecutive-service-level deputy director; and one would be a seniorservice-executive-level principal director for the office. So a threeperson team at the senior-executive level, that between them they 

would have the mix of all of the things that I have seen in the way 

of personnel qualifications in, initially, the amendment of Ms. Jackson Lee and, finally, the most recent version of the—— 

Mr. MCCAUL. In your opinion, does that language give you 

enough flexibility to hire the right person for the job? 

Mr. STEPHAN. No, sir, I don’t believe that it does. In fact, I believe I will be on a possibly never-ending search for that particular 

individual, because there are so many embedded qualifications inside that one position. If that person does exist, they are probably 

making a lot more money somewhere in the public sector than I 

will ever be able to pay them. 

Mr. MCCAUL. That is very good to know. 

One last question, Madam Chairwoman. I would respectfully request this committee pass an authorization bill before the House 

considers the DHS appropriations bill. I think it is relevant to this 

committee. I think if we want to remain relevant, we need to do 

that. 

So I will yield back. 

Ms. SANCHEZ. I will remind Mr. McCaul that it has always been 

our intent every year to try to pass an authorizing committee, even 

though most of the time the Senate doesn’t get that bill out of conference with us. So we will probably try once again. I can’t speak 

for the Chairman himself, but I would imagine he would like to see 

that. 

I would like to give now 5 minutes—recognize Mr. Markey of 

Massachusetts for 5 minutes. 

Mr. MARKEY. Thank you, Madam Chairwoman, very much. 

Mr. Stephan, as you know, the legislation requires the highestrisk facilities to implement methods to reduce the consequences of 

a terrorist attack, such as substituting smaller shipments of less 

toxic chemicals for the ones that are being used. These methods 

would only be required when they are technically feasible, when 

they would not make it impossible for the company to continue to 

do its business, and when they would not result in the creation of 

a new, high-risk facility somewhere else. 

Does the Department support these provisions? 

Mr. STEPHAN. Sir, again, not having seen those provisions in 

terms of the most recent draft of the Committee Print, I think I 

would like to make a point that I am a security guy, and I am very 

comfortable talking about things in my area of core competency, 

which is security. 

When we start talking about process safety, reduction of chemicals, possible rippling effects across the national economy, I soon 

get out of my area of core expertise as well as out of the area of 

core expertise of the inspectors that we would have on the ground. 

I would feel very bad one day if I woke up, and because of a decision that we made, for example, to reduce a chemical, change a 
59 

process, eliminate a chemical and approve that as part of somebody’s chemical facility security plan three States over, we have 

now somehow inadvertently stopped the flow of safe drinking water 

into a very large—— 

Mr. MARKEY. No. 

I am saying, the legislation in the earlier drafts, as well, contains 

similar language. Would you support it if those concerns which you 

just mentioned were dealt with and were giving you the flexibility 

to deal with it? 

Mr. STEPHAN. Sir, again, I would like to not make myself, by virtue of this proposed legislation, into a safety or a process expert. 

I want to maintain my security core competency and make—— 

Mr. MARKEY. That is what we are trying to do. We are trying our 

best to reduce the need to have you do your job by obviously substituting less dangerous chemicals, so you have less to work on. 

As you know, there have been numerous attacks in Iraq using 

chlorine cylinders as weapons. According to press reports several 

weeks ago, undercover New York Police Department investigators 

secretly set up a fake water purification company last year to demonstrate how easily and anonymously terrorists could purchase 

toxic chlorine on the Internet for a deadly chemical strike against 

the city. 

Evidently, last June, undercover officials successfully purchased 

three 100-pound cylinders of chlorine using the Internet and were 

never once asked for an ID. They concluded that at the present 

time, few, if any, barriers stand in the way. That is the New York 

Police Department. 

Do you think the vendors of chlorine and other dangerous chemicals should be required to verify the identity and legitimacy of orders of these dangerous chemicals, since that sort of validation is 

already required for the sales of radioactive materials that could be 

used to make a dirty bomb? 

Mr. STEPHAN. Sir, let me answer that question by just reading 

you very briefly from the current regulation that addresses your 

question, I think, fairly clearly. 

Inside our performance-based standard No. 6 under the current 

CFATS regulation, Theft and Diversion, we have a know-your-customer provision. The facility has an active documented know-yourcustomer program that includes a policy refusing to sell chemicals 

of interest to those who do not meet pre-established customer qualification criteria such as a confirmation of identity, verification, 

and/or evaluation of on-site security, verification that shipping addresses are valid business locations, confirmation of financial status, establishment of normal business-to-business payment terms 

and methods, e.g., not allowing cash sales—— 

Mr. MARKEY. No. I can hear what the intent is. As a result of 

that existing regulation, are you coordinating now with the New 

York Police Department, given their investigation? 

Mr. STEPHAN. Sir, we coordinate on a lot of issues on a day-today basis with New York City. 

You have to understand where we are in terms of the phase of 

implementation of the CFATS reg. This will be a piece, part and 

parcel, of the security planning process—— 
60 

Mr. MARKEY. Do you know what went wrong in New York City, 

why they were able to purchase this chlorine online? 

Mr. STEPHAN. Sir, I am not sure what went wrong. What I can 

tell you is, when this regulation takes effect and we get to this 

phase of CFATS implementation, the chances for something like 

that happening diminish quite greatly. 

Mr. MARKEY. You are saying that this language in our bill would 

be complementary rather than contradictory to what your policy is? 

Mr. STEPHAN. I fully support the language that I just read to 

you, and if your language in any way, shape or form is close to this, 

we can take a look at it. 

But you should also know that that facility in question actually 

just completed a top-screen process, as do the other five companies 

under that corporate label; and they are involved now in the first 

phase of our regulatory process. 

Mr. MARKEY. One final question: Do you agree that DHS should 

be able to enforce security regulations at all dangerous chemical facilities, including water treatment facilities? 

Mr. STEPHAN. Sir, I believe that we ought to be able to enforce 

security regulations according to the authority that is provided to 

us by the U.S. Congress. Right now, we do not have the authority—— 

Mr. MARKEY. Would you object to us giving you that authority? 

Mr. STEPHAN. At this point in time, I am not able to give you 

a ‘‘yes’’ or ‘‘no’’ answer because the issue of regulating water and 

wastewater treatment facilities, for example, bears considerable dialog between Members of Congress and the Department. We would 

be happy to engage you in that dialog to make sure that the ramifications are fully including water and wastewater treatment facilities are fully understood by all parties involved. 

Mr. MARKEY. I understand that. But if we gave you that authority, you would be able to implement it, I assume? 

Mr. STEPHAN. Sir, if you give us the authority, I am going to implement whatever authority you give us that is signed off by the 

President of the United States, absolutely. 

Mr. MARKEY. Thank you very much, Madam Chairwoman. 

Ms. SANCHEZ. I thank the gentleman from Massachusetts. 

I now recognize Mr. Green of Texas for 5 minutes. 

Mr. GREEN. Thank you, Madam Chairwoman. 

Let’s start with the background checks. The appeal process is of 

some concern, and it is of some concern because we have had Members of Congress who have found themselves on watch lists and 

have had some difficulty extricating themselves. 

Can you tell me a little bit more about how this process would 

work, such that a person who really shouldn’t be in a position of 

possibly losing a job or of being put in a position where he is under 

suspicion, or she, can extricate himself or herself? 

Mr. STEPHAN. Sir, are you referring to an appeals process associated with the new proposed legislation? 

Mr. GREEN. Yes. 

Mr. STEPHAN. Sir, I am not familiar with that new proposed legislation, so I am not able to really answer that question. 

Mr. GREEN. Okay. You agree that there will be one based on the 

legislation? 
61 

Mr. STEPHAN. Sir, I believe that part and parcel of a background 

check requirement, an appeals process is in line with the principles 

of American democracy and government. We have a very—in terms 

of all the aspects of the current CFATS rule, we have a fairly extensive appeals process to find in the rule itself, the main body of 

the rule, for very technically complicated—many steps, a process 

that actually represents a very open, fair and honest petition process with multiple layers, or sequences, for someone to walk through 

if they feel that they have a grievance in terms of any aspect of 

CFATS. 

Now, again, the new proposal, I am not familiar with you-all’s 

provisions. 

Mr. GREEN. I understand that. Let me strike what I said about 

the new proposal and talk about what you have currently, so that 

I can get some indication of what you currently have, as to how you 

will handle future circumstances. 

With your current rules, have you had a circumstance where persons have been on your list of persons who are under suspicion, 

and they have had to hire lawyers to extricate themselves? 

Mr. STEPHAN. Sir, the answer to your question is ‘‘no’’ because 

we have not yet gotten to that phase of implementation of our program. That will occur probably 6 to 8 months from now. We are 

in the security plan development process, so we just haven’t come 

to that bridge yet in CFATS implementation. 

Mr. GREEN. When you come to that bridge, is this system one 

that anticipates that persons will have legal counsel? 

Mr. STEPHAN. I believe that the appeals process that is outlined 

in the regulation has that provision and other technically complex 

pieces. 

I would ask, sir, that your staff and perhaps my staff can get together. We can give you a full briefing in terms of where we are 

currently with CFATS. I am just not able to do that with you in 

great detail. 

Mr. GREEN. If it does anticipate legal counsel, does the person 

who is challenging a ruling have to hire the counsel himself or herself? 

Mr. STEPHAN. Sir, I don’t have that degree of familiarity with 

that piece of the process. So I would ask that we be able to come 

to you and give you a more technically detailed briefing or presentation on this. 

Mr. GREEN. With reference to the chemical security regulations, 

is it your opinion that water plants should not be regulated? 

Mr. STEPHAN. Sir, it is my opinion that the question of regulating 

water plants has a lot of nuances to it. They are currently, as you 

know, not inside our regulatory authority. 

There are certain aspects of the Bioterrorism Act of 2002 that 

give the EPA a bit of regulatory authority relative to security in 

that space. We don’t currently have it. 

I think we need to have a dialog with you all to understand the 

ramifications and the consequences of including, one way or another, water, wastewater plants into a regulatory framework. 

Mr. GREEN. Thank you, Madam Chair. 

Ms. SANCHEZ. I thank the gentleman from Texas. 
62 

Seeing no other Members, I thank the witnesses for their valuable testimony and the Members for their questions. The Members 

of the committee may have additional questions for the witnesses. 

We will ask you to respond quickly to those in writing. 

Ms. SANCHEZ. Hearing no further business, the committee stands 

adjourned. 

[Whereupon, at 11:56 a.m., the committee was adjourned.] 

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