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[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]

        H.R. 5695, CHEMICAL FACILITY ANTI-TERRORISM ACT OF 2006

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

                                HEARING

                               before the

                        SUBCOMMITTEE ON ECONOMIC
         SECURITY, INFRASTRUCTURE PROTECTION AND CYBERSECURITY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 29, 2006

                               __________

                           Serial No. 109-90

                               __________

       Printed for the use of the Committee on Homeland Security

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

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

                               __________

                      U.S. GOVERNMENT PRINTING OFFICE
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                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania            Edward J. Markey, Massachusetts
Christopher Shays, Connecticut       Norman D. Dicks, Washington
John Linder, Georgia                 Jane Harman, California
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Tom Davis, Virginia                  Nita M. Lowey, New York
Daniel E. Lungren, California        Eleanor Holmes Norton, District of 
Jim Gibbons, Nevada                  Columbia
Rob Simmons, Connecticut             Zoe Lofgren, California
Mike Rogers, Alabama                 Sheila Jackson-Lee, Texas
Stevan Pearce, New Mexico            Bill Pascrell, Jr., New Jersey
Katherine Harris, Florida            Donna M. Christensen, U.S. Virgin 
Bobby Jindal, Louisiana              Islands
Dave G. Reichert, Washington         Bob Etheridge, North Carolina
Michael T. McCaul, Texas             James R. Langevin, Rhode Island
Charlie Dent, Pennsylvania           Kendrick B. Meek, Florida
Ginny Brown-Waite, Florida

                                 ______

   Subcommittee on Economic Security, Infrastructure Protection, and 
                             Cybersecurity

                Daniel E. Lungren, California, Chairman

Don Young, Alaska                    Loretta Sanchez, California
Lamar S. Smith, Texas                Edward J. Markey, Massachusetts
John Linder, Georgia                 Norman D. Dicks, Washington
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Mike Rogers, Alabama                 Zoe Lofgren, California
Stevan Pearce, New Mexico            Sheila Jackson-Lee, Texas
Katherine Harris, Florida            Bill Pascrell, Jr., New Jersey
Bobby Jindal, Louisiana              James R. Langevin, Rhode Island
Peter T. King, New York (Ex          Bennie G. Thompson, Mississippi 
Officio)                             (Ex Officio)

                                  (II)

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable Daniel E. Lungren, a Representative in Congress 
  From the State of California, and Chairman, Subcommittee on 
  Economic Security, Infrastructure Protection, and Cybersecurity     1
The Honorable Loretta Sanchez, a Representative in Congress From 
  the State of California........................................     3
The Honorable Peter T. King, a Representativein Congress From the 
  State of New York, and Chairman, Committee on Homeland Security    16
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................    16
The Honorable Sheila Jackson-Lee, a Representative in Congress 
  From the State of Texas........................................    42
The Honorable Stevan Pearce, a Representative in Congress From 
  the State of New Mexico........................................    40

                               WITNESSES

National Petrochemical & Refiners Association:
  Prepared Statement.............................................     5
David Moore, Acutech Consulting Group, Chemetica, Inc.:
  Prepared Statement.............................................     8
Michael A.L. Balboni, New York State Senator and Chairman, NYS 
  Senate Standing Committee on Veterans, Homeland Security and 
  Military Affairs:
  Oral Statement.................................................    16
  Prepared Statement.............................................    18
Phillip J. Crowley, Senior Fellow and Director of National 
  Defense and Homeland Security, Center for American Progress:
  Oral Statement.................................................    21
  Prepared Statement.............................................    23
Scott Berger, Director, Center for Chemical Process Safety, 
  American Institute of Chemical Engineers:
  Oral Statement.................................................    25
  Prepared Statement.............................................    27
Martin J. Durbin, Managing Director, Federal Affairs, American 
  Chemistry Council:
  Oral Statement.................................................    32
  Prepared Statement.............................................    34

                             For the Record

A Letter from Representative Frank Pallone.......................     4

 
                     H.R. 5695, CHEMICAL FACILITY 
                       ANTI-TERRORISM ACT OF 2006

                              ----------                              

                        Thursday, June 29, 2006

             U.S. House of Representatives,
                    Committee on Homeland Security,
                         Subcommittee on Economic Security,
              Infrastructure Protection, and Cybersecurity,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 10:09 a.m., in 
Room 311, Cannon House Office Building, Hon. Dan Lungren 
[chairman of the subcommittee] presiding.
    Present: Representatives Lungren, Rogers, Pearce, King, ex 
officio; Sanchez, Jackson Lee, Langevin, Thompson, ex officio.
    Mr. Lungren. Welcome to this hearing of the Subcommittee on 
Economic Security, Infrastructure Protection, and Cybersecurity 
of the Committee on Homeland Security. Today, we are going to 
be considering H.R. 5695, the Chemical Facility Anti-Terrorism 
Act, which was introduced yesterday.
    By some accounts, chemical facilities across the Nation 
number close to 15,000. This industry employs some 5 million 
Americans. It is the largest exporting sector in the economy 
and the largest private investor in research and development.
    By one account, 96 percent of all manufactured goods 
directly involve the use of chemicals. Chemical facilities 
produce our medicine, they give us clean water, fertilize our 
farms, manufacture goods essential to our national defense and 
our modern way of life. As a result the chemical industry is 
critically important to our safety, our national defense and 
our economic vitality.
    It is our chemical dependence and the potential harm that a 
certain number of these chemicals pose to human life that makes 
these substances attractive as terrorist targets. In order to 
protect our citizens and ensure national and economic security, 
we need to secure America's chemical facilities against 
potential terrorist attacks. Any regulation of this industry 
must take into account the varying types of facilities such as 
agriculture, timber, paper products, food, mining, paints, 
pharmaceuticals and petrochemicals just to name a few.
    We must take into account the need for these types of 
chemicals and their importance to our daily lives. We must be 
able to secure the facilities without sacrificing their 
continued economic benefits. H.R. 5695, I believe, does that.
    This bill stresses the importance of security regulations 
based on risk, based on performance and based on flexibility. 
What do I mean by that? It means that the Secretary will be 
required to tier or rank each chemical facility based on the 
risk of the facility to a terrorist attack. Each tier then will 
be subject to performance-based security requirements. These 
requirements would set the bar of security expected to be met 
by the facility.
    The facility will then have the flexibility to choose the 
security measures necessary to meet their requirements. That 
may mean physical security, such as fences or barriers, guards 
or cameras. That may mean controlling access to the facility 
and screening employees. It would include cybersecurity 
measures such as securing computer networks, automated or 
communication systems, or hardening equipment. In most cases, 
it will likely mean a combination of these. This bill gives 
that flexibility to the owner-operator of the chemical 
facility, but in the end they must meet those performance 
security requirements and their plan must be approved by the 
Secretary.
    This is obviously a big change from the voluntary 
requirements now in place. All facilities will be evaluated for 
risk and be required to take appropriate steps to address their 
vulnerabilities. And while some chemical facilities have 
already done this, for the first time, the Secretary will have 
the authority to review and verify the vulnerability 
assessments and the facilities' security plans, require their 
implementation and enforce their compliance through 
administrative, civil or even criminal penalties. Facilities 
will be required to periodically review these plans, ensuring 
that they are up to date and protecting against the latest 
threats.
    Just a few weeks ago Secretary Chertoff stated the time has 
come to have a chemical security bill that gives the Department 
the tools to have intelligent regulation of the chemical 
industry, particularly with respect to these high hazard 
chemicals. I agree with the Secretary. We need to have 
intelligent regulation of the industry.
    This bill is a huge step towards securing our chemical 
facilities in an intelligent manner. With an industry as large 
and diverse and as essential as the chemical industry, we 
cannot afford inflexible or unreasonable requirements for all 
of our 15,000-plus chemical facilities.
    I also agree with the Secretary, the time has come for 
Congress to take action. While we have seen that some in the 
Appropriations Committees have thought that that was their job, 
we have not been silent. We have not been standing by. We 
recognize that much has been done to date to secure our 
chemical facilities, but that the patchwork implementation and 
the lack of authority to ensure compliance requires action by 
Congress.
    This will be the first time the Department has been given 
new regulatory authority over an industry, and we understand 
while that is essential, it is also essential that we do it 
correctly. However, after a year of oversight by this 
subcommittee, the urgency of securing our chemical facilities 
with a Federal standard is clear. I hope that this hearing will 
stimulate discussion on the importance of this issue and will 
help to inform and improve the bill now being considered.
    I would like to thank all of our witnesses for joining us 
today. We have a wide range of expertise on the panel. I look 
forward to hearing your testimony on the bill.
    Lastly, I would like to thank the ranking member of the 
subcommittee, Ms. Sanchez, and the ranking member of the full 
committee, Mr. Thompson, for all of their work on the bill. I 
would like to thank the staffs, both majority and minority, for 
their work on the bill.
    I am pleased to say, the bill is the product of months of 
bipartisan negotiations between members and staffs, and while 
we have had some disagreements during the course of those 
negotiations, by and large, we have found agreement, and by and 
large it has been done with a spirit of true bipartisanship.
    I would now like to recognize the ranking member, Ms. 
Sanchez, for any opening statements she may wish to make.
    Ms. Sanchez. Thank you, Mr. Chairman, and thank you to the 
witnesses for joining us today.
    I think it is an important issue to discuss the security of 
chemical facilities and specifically as it relates to this 
Chemical Facility Anti-Terrorism Act of 2006 that we are 
considering. Frankly, I think this legislation is long overdue. 
I think we need a baseline for chemical facilities, and I am 
pleased that Chairman Lungren, Ranking Member Thompson and I 
were able to work on this, quite frankly, in a very bipartisan 
way that I believe is the first critical step in ensuring the 
security of our Nation's chemical plants.
    The legislation creates a process for the Department of 
Homeland Security to identify which chemicals, at what 
quantities, are substances of concern. Facilities that possess 
substances of concern over the threshold quantity will be 
identified as significant chemical facilities, assigned to a 
risk-based tier and required to submit vulnerability 
assessments and security plans to the Department for review and 
approval. While the vulnerability assessments and security 
plans will be reviewed against security performance standards 
for all facilities, we provide sufficient flexibility so that 
each facility may use different methods for strengthening 
security or reducing the consequences of an attack according to 
its unique situation.
    For example, facilities could elect to use inherently safer 
technology to reduce the consequence of an attack, and the 
facility would be in a lower-risk tier; or the facility may 
choose to use existing technology and operate in a higher-risk 
tier. Sort of the same way you decide what type of premium you 
are going to pay on your insurance liability plans, for 
example.
    I am particularly pleased that the legislation contains 
whistleblower protection to ensure that chemical facility 
employees that report security violations to the Department do 
not face retaliation from their employers; and I am also 
pleased that the bill establishes a security baseline for 
chemical plants in all States that must be met, but it doesn't 
limit States' ability to meet and surpass the Federal 
regulations. And as you know, both the chairman and I come from 
California, and I think we have much deeper concern for 
regulation in that State.
    So I look forward to hearing the feedback from our 
witnesses and to discussing this issue.
    Mr. Chairman, with your indulgence, I would also like to 
submit three documents into the record this morning: a letter 
from Representative Frank Pallone, who, as you know, is on the 
Energy and Commerce Committee, commending the committee for 
holding this hearing; secondly, testimony from Greenpeace on 
the security benefits of using inherently safer technologies; 
and spreadsheets showing examples of committee members' 
districts, where companies changed to inherently safer 
technologies, and the benefit to the surrounding population 
because of those changes at those chemical plants.
    So if you will
    Mr. Lungren. Sure. Without objection, they should be 
entered into the record.
    Ms. Sanchez. Thank you, Mr. Chairman. I yield back.
    [The information follows:]

                             For the Record

                          House of Representatives,
                                      Washington, DC, June 29, 2006
Chairman Dan Lungren
Rankng Member Loretta Sanchez
Subcommittee On Economic Security, Infrastructure Protection, and 
Cybersecurity, Committee on Homeland Security,
House of Representatives, Washington, DC

Dear Chairman Lungren and Ranking Member Sanchez,
    I would like to commend you on your decision to hold a hearing on 
the important issue of chemical security. Nearly five years after the 
terrorist attacks of September 1th, 200 1, Congress still has yet to 
comprehensively address the vulnerabilities of chemical facilities, a 
significant oversight in our efforts to protect the homeland. We have 
waited far too long to take action.
    This is a particularly important issue for my home state of New 
Jersey. Our state's combination of being the most densely populated in 
the country as well as being home to a large number of chemical 
facilities and refineries means that our citizens face particular risks 
from a terrorist attack or other incident.
    That's why I believe it is critical to ensure that any federal 
legislation concerning chemical security does not preempt or otherwise 
interfere with the ability of New Jersey and other states to go beyond 
federal law. I am concerned that the draft legislation in front of the 
Subcommittee includes a provision stating that states shall not issue 
laws or regulations that would "frustrate" the federal law. It is not 
clear what "frustrate" even means, but I fear it could be used by 
industry to delay or block state efforts.
    I am also concerned that the legislation does not include any 
provisions addressing the use of inherently safer technology (IST). IST 
is a critical tool necessary to lower the overall risk posed by 
specific facilities. Under my proposed legislation, the Chemical 
Security Act (H.R. 2237) facilities would have to examine as part of 
their vulnerability assessments whether using IST would reduce the 
risk. My legislation does not include statutory requirements for 
specific changes, and it does acknowledge that certain technologies are 
economically unfeasible. It is instead a common-sense measure to make 
sure that facilities and the federal government examine whether 
reducing the amount or type of certain substances at a given facility 
would reduce the inherent risk.
    I hope that the Subcommittee closely examines both of these 
critical issues as it moves forward with its proposed legislation. 
Again, let me thank you for taking long-overdue action on a very 
serious part of our homeland security. I look forward to working with 
you in the future.
    Sincerely,
                                         Frank Pallone, Jr.
                                                 Member of Congress

    Mr. Lungren. Two interested parties requested the 
opportunity to submit testimony for the hearing record in 
addition to those noted by the gentlelady from California. That 
is the National Petrochemical & Refiners Association and Mr. 
David Moore, of AcuTech Consulting Group, Chemetica, Inc. I 
would ask unanimous consent that these two testimonies be 
entered into the record.
    Without objection, they shall be.
    [The statement of National Petrochemical & Refiners 
Association follows:]

Prepared Statement of the National Petrochemical & Refiners Association

Introduction
    NPRA, the National Petrochemical and Refiners Association, submits 
this statement for the record for the June 29, 2006, hearing on the 
Chemical Facility Anti-Terrorism Act of 2006. NPRA has more than 450 
member companies, including virtually all U.S. refiners and 
petrochemical manufacturers, their suppliers and vendors. Petrochemical 
companies use manufacturing processes similar to those in a refinery. 
Both industries' facilities would be covered by the facility security 
legislation being considered by the Committee. NPRA companies supply 
consumers with a wide variety of products used daily in their homes and 
businesses. These products include gasoline, diesel fuel, home heating 
oil, jet fuel, lubricants, and the chemicals that serve as building 
blocks for everything from plastics to clothing, medicine and 
computers.
    In this statement, NPRA outlines how the refining and petrochemical 
industries are performing the critical task of maintaining and 
strengthening the security of our national energy and petrochemical 
infrastructure. Although we do not advocate legislation on this 
subject, NPRA reviews our principles for new chemical security 
authority in federal legislation. It is our hope that the Subcommittee 
will look favorably upon these principles as it moves forward to 
consider chemical security legislation.

Refining and Petrochemical Facilities Continue to Implement Strong and 
Effective Security Measures
    Maintaining the security of our facilities has always been a 
priority at refineries and petrochemical plants. Refiners and 
petrochemical manufacturers are heavily engaged in maintaining and 
enhancing security - and were so before September 11. These industries 
have long operated globally, often in unstable regions overseas where 
security is an integral part of providing for the world's energy and 
petrochemical needs. When the tragic events of September 11, 2001, 
occurred, the nation realized immediately that additional steps had to 
be taken in order to protect our homeland. The refining and 
petrochemical industries did not wait for new government regulations 
before implementing additional and far-reaching facility security 
measures to address these new threats.
    What are some of the steps our industry has taken to strengthen 
security? Industry has developed and utilized a sophisticated, peer-
reviewed security vulnerability assessment (SVA) methodology to guide 
facilities as they identify security hazard threats and vulnerabilities 
and to identify appropriate security measures. The Department of 
Homeland Security (DHS) has endorsed this methodology and has used it 
to train its employees. With the information developed in the SVAs, 
industry has adopted facility security plans and implemented strong and 
effective security measures. (See the Attachment for a partial list of 
the types of security measures that have been implemented.)
    In addition to moving forward with enhanced security measures, 
industry has developed close working relationships with key federal 
agencies and state and local law enforcement offices to obtain and 
exchange information critical to maintaining infrastructure security. 
Industry works with about a dozen federal agencies including the FBI, 
the Department of Transportation, the Department of Energy, the 
Department of Defense, the CIA, the Government Accountability Office, 
and, of course, the Department of Homeland Security and its various 
components, including the U.S. Secret Service, the Transportation 
Security Agency, and the U.S. Coast Guard.
    Industry has held joint training exercises simulating terrorist 
attacks and developed educational programs involving federal and state 
government officials with security expertise. Industry has partnered 
with the DHS on many important security initiatives and programs, 
including development of the National Infrastructure Protection Plan 
(NIPP), sector specific plans (SSP), the Risk Assessment Methodology 
for Critical Asset Protection, or RAMCAP, the Homeland Security 
Information Network (HSIN), and Buffer Zone Protection Plans. Industry 
personnel from the largest companies to the smallest have shared best 
industry practices at NPRA meetings and conferences.
    In addition to these voluntary activities, a majority of the almost 
150 refineries and 200 petrochemical manufacturing facilities in the 
United States are subject to the jurisdiction of the U.S. Coast Guard, 
and are therefore regulated pursuant to the security requirements of 
the Maritime Transportation Security Act (MTSA). The Act requires that 
these facilities conduct security vulnerability assessments and submit 
facility security plans to the U.S. Coast Guard. These security plans 
were submitted by facilities in December 2003 and approved by the Coast 
Guard. NPRA members continue to work with the Coast Guard to meet the 
goals of the Act.
    With this strong evidence of our commitment to facility security as 
background, NPRA urges the Subcommittee to consider our principles for 
chemical security as it considers the Chemical Facility Anti-Terrorism 
Act of 2006.

NPRA's Principles for Chemical Security
    NPRA does not oppose reasonable chemical security regulation; 
however, the existing system is working well and care must be taken to 
"do no harm" to current efforts as new chemical security authority is 
fashioned for DHS. We have adopted the following principles that should 
be reflected in any chemical security bill.
    1. Security legislation should give credit for voluntary industry 
activities. Refiners and petrochemical manufacturers have conducted 
security vulnerability assessments and adopted facility security plans. 
Any new legislation should recognize and give credit to these companies 
for the security programs they have already implemented.
    2. Security legislation should require that DHS develop a risk-
based approach to regulating both chemicals and facilities. DHS should 
develop a list of chemicals of interest based on security risk as the 
qualifier for a chemical site to be regulated. The RAMCAP project will 
be one tool for DHS to use to assess security risk. DHS should also be 
given flexibility to set the appropriate chemical thresholds based on 
risk.
    3. Security legislation should provide for federal preemption of 
state and local chemical security laws and regulations. Many of the 
challenges that arose after the recent Gulf Coast hurricanes stemmed 
from the conflicting and often confusing expectations of different 
political jurisdictions. Refiners and petrochemical manufacturers 
cannot reasonably be expected to change their plans and operations to 
meet state or local requirements that are inconsistent with those of 
the federal regulatory scheme.
    4. Security legislation should reject any provisions that 
indirectly or directly involve "Inherently Safer Technologies" (IST). 
IST is not a security tool; it is a back-door approach to unnecessary 
environmental controls. In some instances, IST requirements could 
actually increase security risks. For example, reducing the volume of a 
hazardous chemical stored at a facility could reduce on-site risk, but 
it would increase truck, rail, or barge traffic to maintain supplies of 
needed raw materials. Overall risk would therefore increase.
    5. Security legislation should fully recognize existing U.S. Coast 
Guard jurisdiction over facility security under the MTSA. Any chemical 
facility legislation should explicitly state that facilities in 
compliance with MTSA are also deemed to be in compliance with any new 
DHS program. It should be incumbent upon DHS to coordinate with the 
U.S. Coast Guard and identify any new facility security requirements 
that may be deemed to apply to MTSA-regulated facilities. In addition, 
some facilities are only partially covered by MTSA. In these cases, we 
would suggest that those facilities be given the option of submitting 
security plans to the Coast Guard where logistically appropriate. 
Legislation or subsequent regulation should allow this type of "opt in" 
activity to occur.
    6. Security legislation should give sufficient protection to the 
security-related sensitive information required to be submitted to DHS. 
Government officials should not release sensitive security-related 
information to other government agencies whose mission has little to do 
with security. Even more problematic is the chance that this 
information would be released to outside interest groups. Access to 
sensitive information should be strictly limited to the owner or 
operator of a facility and to DHS.
    7. Security legislation should impose penalties fairly and 
recognize good-faith efforts to comply. In general, NPRA does not favor 
criminal penalties for parties required to comply with a sweeping new 
regulatory mandate in a short period of time. If Congress decides to 
include criminal penalties in chemical security legislation, those 
penalties should be assessed only for violations that occur both 
"willfully" and "knowingly." The word "knowingly" may mean simply 
acting with an awareness of one's actions, while the word "willfully" 
usually means acting with the knowledge that the action, or the 
inaction, is illegal.
    8. Security legislation should include reasonable restrictions on 
the filing of third party lawsuits. Permission for third party 
lawsuits, patterned after existing environmental statutes, could impede 
implementation of security measures due to lengthy and contentious 
litigation. These suits may well result in federal judges, rather than 
DHS, setting security standards.
    9. Security legislation should direct DHS to define criteria for 
background checks. An important part of any facility security plan is 
making sure that the workforce is trained, qualified, and dependable. 
If background checks of employees and contract employees are required, 
any new chemical security legislation should direct DHS to define 
specific criteria for denying workers access to a facility. Companies 
conducting background checks should also be authorized to access and 
utilize government resources and databases, as is done now for the 
financial sector.

Conclusion
    To conclude, refiners and petrochemical manufacturers take very 
seriously their responsibilities to maintain and strengthen security at 
their facilities. Our industry has complied with modernized, post 9-11 
federal security requirements. We have utilized expert engineers who 
understand our facilities better than anyone else to conduct 
vulnerability assessments and implement new measures to protect against 
new threats. We have called upon experts throughout all of industry, 
government agencies, and the security industry to share the best 
practices to protect our facilities. And perhaps most importantly, the 
industry has forged an outstanding working relationship with government 
security agencies to receive rapidly the critical information needed to 
fight terrorism. This working partnership has been very effective in 
encouraging the exchange of information to allow the industry to focus 
on the security threats that are both clear and relevant. This 
important work needs to continue. Any new chemical security authority 
should enhance and foster these critical activities, rather than 
discourage them.
    NPRA and its members look forward to working with the Subcommittee 
and the full Committee as they consider the Chemical Facility Anti-
Terrorism Act of 2006. We are always available to discuss our 
principles or answer any questions regarding the refining and 
petrochemical industries.

                              ATTACHMENT 1

Facility Security Measures Taken By Petroleum Refiners & Petrochemical 
                             Manufacturers

    NPRA, the National Petrochemical & Refiners Association, has more 
than 450 members, including virtually all U.S. refiners and 
petrochemical manufacturers. Our members supply consumers with a wide 
variety of products and services that are used daily in homes and 
businesses and contribute to the nation's quality of life and security. 
NPRA is proud of the accomplishments refiners and petrochemical 
manufacturers have achieved in maintaining and strengthening facility 
security.
    NPRA members report they have conducted comprehensive facility 
security vulnerability assessments and have identified and evaluated 
critical assets and infrastructure, such as dock facilities, high value 
production units, power stations, and other equipment which, if 
attacked by terrorists, could result in significant off-site 
consequences. Each individual facility is expected to determine what is 
most important for that particular facility. With this information, 
facilities have taken the following kinds of specific measures to 
enhance security:
    Formalized information sharing networks with area businesses and 
local, state, and federal law enforcement and homeland security (such 
as membership in the Energy Information Sharing and Analysis Center, or 
ISAC, the Oil & Natural Gas Sector Coordinating Council (ONG SCC), and 
the Homeland Security Information Network, or HSIN).
    Shared security response plans with local law enforcement and 
appropriate federal agencies.
    Conducted drills & exercises to test response plans.
    Hired security personnel, some of which are used around the clock, 
seven days per week.
    Conducted contractor background checks.
    Installed perimeter fencing, ditches, berms, and jersey barriers.
    Reconfigured roadways and installed speed devices to delay 
vehicular movement. Installed a variety of fence-line intrusion 
detection devices, to include security lighting and area cameras.
    Reconfigured sites, allowing critical assets to be set back from 
perimeters.
    Acquired enhanced security communication systems.
    Instituted perimeter patrols and surveillance, conducted by both 
company personnel and local law enforcement.
    Installed electronic intrusion detection on buildings (e.g., 
infrared, motion detectors, door and window sensors).
    Implemented card-access controls, with new technology access 
readers (e.g., biometrics, retina scan).
    Required remote parking for employees or contractors, and 
contractor/visitor vehicles marked with identification (signs/cones).
    Required ID badges to be displayed at all times, and instituted 
procedures for lost ID card and requiring parking decals.
    Adopted shipments/deliveries verification process (e.g., close 
examination of shipping papers, driver's identity).
    Identified restricted areas within facilities.
    Monitored railroad traffic to and through facility.
    Restricted visitors from driving within the facility.
    Prohibited any unannounced visitors.
    Rotated access gates on random basis.
    Conducted security officer training.
    Installed secure mail handling procedures.
    Reported suspicious activities (e.g., photo taking, vehicles parked 
unusually, aircraft over facility).
    Conducted vehicle searches (interior & exterior).
    Instituted sophisticated processes for collecting and evaluating 
intelligence/threat information.
    Protected computer infrastructure.
    [The statement of Mr. Moore follows:

   Prepared Statement of Mr. David Moore, Acutech Consulting Group, 
                            Chemetica, Inc.

Introduction
    Good morning, Mr. Chairman. My name is David Moore and I am the 
President and CEO of the AcuTech Consulting Group, a security and 
safety consulting firm based in Alexandria, Virginia. I have an 
extensive background in chemical safety and security with a specialty 
in the application and regulation of inherent safety for chemical plant 
security.
    I was the lead author of the American Institute of Chemical 
Engineers (AIChE) Center for Chemical Process Safety (CCPSr) 
"Guidelines for Managing and Analyzing the Security Vulnerabilities of 
Fixed Chemical Sites"1 and the American Petroleum Institute (API)/
National Petrochemical and Refiners Association (NPRA) Security 
Vulnerability Assessment Methodology2. These are the most highly used 
security vulnerability analysis guidelines in these industries.
    I completed a project in January, 2006, as the Sector Coordinator 
for the petroleum refining, chemical manufacturing, and liquefied 
natural gas sub sectors for the Department of Homeland Security (DHS) 
initiative to develop a common strategic vulnerability analysis process 
called `Risk Analysis and Management for Critical Asset Protection 
(RAMCAP). We currently have other efforts ongoing in support of 
industry and government to reduce homeland security risks in the 
chemical sector including ongoing consultation to DHS for the chemical 
comprehensive review program.
    My firm is actively involved in chemical process security 
consulting and training and in conducting Inherently Safer Technology 
(IST) studies for safety and security, some of which are done to 
address current regulations in effect in Contra Costa County, 
California, and the State of New Jersey. I have been consulting in 
chemical process safety since 1981 and formally in inherent safety 
regulation since 1999. Prior to that time there wasn't a regulation 
that required IST, but I was practicing the principles of inherent 
safety routinely. I was formerly a Senior Engineer with Mobil 
Corporation, who condoned the principles of inherent safety in every 
decision we made, and before that I was a Research Engineer with the 
National Fire Protection Association.
    In particular, I have assisted companies in understanding the 
concepts of inherent safety through our consulting and training 
assignments, and have conducted dedicated and integral inherent safety 
analyses on chemical facilities and other industrial facilities 
handling hazardous materials. I have published twelve papers on 
inherent safety, the regulation of inherent safety3, and inherent 
safety consideration in chemical security. I have made numerous 
presentations on the topic at professional conferences, training 
forums, and government venues.
    Because of our experience we were selected by the AIChE CCPSr to 
update their classic book on inherent safety4, which we are in process 
of at this time. For that I am working with the leading inherent safety 
specialists in the United States and internationally from industry and 
academia who serve as advisors to our team. I am a strong proponent of 
inherent safety, the ultimate goal being to see all companies applying 
inherently safer principles throughout the design and operating 
lifecycle of projects.

Inherent Safety Technology Background
    Inherent Safety is a well recognized process safety concept; a 
collection of basic strategies focused on process safety improvement 
through the reduction of hazards. "Hazard" is defined as a physical or 
chemical characteristic that has the potential for causing harm to 
people, the environment, or property.5 The IS concept is based on the 
belief that if one can eliminate or moderate the hazard, not only is 
the risk reduced, it may be possible to remove the risk altogether from 
consideration. Alternatively, an inherently safer system would make the 
hazard less likely to be realized and less intense if there is an 
accident.
    It is a not necessarily a change in `technology' that the term IS 
is referring to - it may involve less dramatic ideas than a change in 
technology such as a simplification of operating controls. I therefore 
refer to it as Inherent Safety (IS) to be inclusive of the full range 
of inherently safer strategies that were originally in mind. Technology 
may be mistaken to mean only process chemistry or the material used, 
rather than other aspects of IS.IS includes four basic strategies for 
safety engineers to apply for process safety and risk management of 
chemical manufacturing plants, namely:

         substitution,
         minimization,
         moderation, and,
         simplification.

    These four strategies could be independent ideas or they may relate 
to one another, depending on the case by case situation. There is no 
defined and agreed upon way to consider them in a formal analysis 
methodology. Engineers are encouraged to consider them to the extent 
possible, but given the innumerable situations where they may be 
applied there cannot be a rule on what is an adequate consideration of 
IS.In 1996 the AIChE CCPSr published the book "Inherently Safer 
Chemical Processes - A Concept Book", to clarify the concept and to 
help provide examples. Today it remains one of the leading 
practitioner's guides to understanding and applying inherent safety 
concepts. It is the leading reference mentioned in various regulatory 
actions and proposed actions.

Issues with Inherent Safety
    Inherent safety is a challenge for all parties--the owner, chemist, 
operator, design engineer, regulator, and the public. There are 
limitations of inherent safety and technical and business constraints 
to its usage. There are examples of where inherent safety has been very 
useful and where opportunities may exist, but since it is a concept the 
blanket requirement of inherent safety poses issues.

Barriers Identified For Implementing IS
    A workshop was held on the challenge of IS at the 17th Annual CCPS 
International Conference & Workshop on Risk, Reliability and Security 
in Jacksonville, Florida, on October 11, 2002, to address the concerns 
of implementing IS. Speakers from the USEPA, AIChE, Contra Costa 
County, and industry presented their experiences on the issue. In 
summary of that discussion, the audience agreed that there were 
barriers for effectively implementing IS, and issues and challenges for 
any regulation of IS. Some of the constraints were reported to be as 
follows:

Adoption and implementation of IS by industry:

    1. Existing facilities vs. new facilities
    One dilemma is that the majority of the applications for IS are 
with the existing industrial installed base whereas the feasibility of 
applying IS to the fullest diminishes as the facility is actually 
built. This leaves many companies where new processes (and particularly 
new technologies) are rarely implemented resulting in few occasions to 
practice the methods.
    "Although a process or plant can be modified to increase IS at any 
time in its life cycle, the potential for major improvements is 
greatest at the earliest stages of process development. At these early 
stages, the process engineer has maximum degrees of freedom in the 
plant and process specification. The engineer is free to consider basic 
process alternatives such as fundamental technology and chemistry and 
the location of the plant. Imperial Chemical Industries (ICI) describes 
six stages of hazard studies, including three during the process design 
phase and three during construction, startup and routine plant 
operation. The identification of inherently safer process alternatives 
is most effectively accomplished between the first and second process 
design hazard studies (Preston and Turney 1991). At this stage the 
conceptual plant design meets the general rule for an optimization 
process - that a true optimum can be found only if all of the 
parameters are allowed to vary simultaneously (Gygax 1988)." (CCPS, 
"Guidelines for Engineering Design for Process Safety, 1993)."

    2. Unproven Value
    Companies many be unclear on the value of IS or may be unable to 
easily prove that IS is cost-effective and worthwhile to employ, 
particularly for security. Methods to prove the value of IS and to 
quantitatively measure whether a given process is `as inherently safe 
as is practicable' are generally unavailable or unproven. Agreed upon 
and practical tools for systematically conducting IS reviews under 
repeatable methodologies are not available with the exception of 
checklists or adaptation of safety analysis methodologies. Case studies 
showing the economic benefit are not available for a wide array of 
industrial situations.

    3. Unclear vision of scope of IS
    One can take a broad or a narrow view of IS. The narrow viewpoint 
only credits major changes in the degree of hazard whereas the broad 
viewpoint of inherent safety finds any change by the application of IS 
principles to be an advantage. All of the proposed regulations are very 
vague in their definition of inherent safety and industry experts 
themselves have mixed opinions on this point. Is reducing some 
inventory IS or is it only IS if the material hazards was substituted, 
which is the IS strategy that seems to be of most interest for the 
regulatory proposals reviewed?

    4. Requires judgment and is potentially subjective
    It is precisely because IS is vague and involves considerable 
judgment that it is very difficult to define and implement to any 
degree of uniformity and objectivity. This is particularly true in the 
chemical sector where the diversity of chemical uses and processes and 
site specific situations prevents clear characterization of the 
industry and a one-sized-fits-all solution.
    IS can also be very subjective - how `safe or secure' is `safe or 
secure enough' is a decision of the analyst conducting the study. There 
are no clear and objective guidelines on how to make these decisions as 
it is considered both a concept to apply as one sees fit and as 
opportunities arise.
    The CCPSr book itself is indeed a concept book and it does not 
provide a clear delineation of what is inherently safer or how to judge 
whether an inherent safety analysis is comprehensive and complete 
enough. The reason for this is that the topic is so diverse that it is, 
in some cases, even ambiguous. There is an entire section of the book 
explaining the numerous conflicts and risk:risk tradeoff problems of 
IS. Also the state of the practice is not perfectly clear on how it 
should be defined, conducted, analyzed, assessed, or judged as 
adequately performed. The book doesn't solve the classical problems 
with IS of trying to objectively decide `what is inherently safer' and 
how to measure whether a process is safe enough. This sums the state of 
the practice with IS and is an underlying basis of the problems of 
attempting to regulate it and to apply it to security issues.
    In actual practice this has proven to be problematic because IS, at 
this stage in its development, is more of a conceptual methodology 
rather than a codified procedure with a well established and understood 
framework for evaluation and implementation. This is somewhat a 
function of the state of the art of our understanding of IS.

    5. Value and Perspective
    What is inherently safer to one person is not necessarily 
inherently safer to another--it is a matter of perspective. If one 
takes an insular view of what is inherently safer, it may not be the 
most inherently safe decision for society as a whole. For example, if a 
plant decides to lower its risk at a given fixed chemical plant site by 
reducing inventory or making an alternative product, this could simply 
either transfer the risk to more of the public through increased 
shipments of hazardous materials in the community or move the same 
operation to another location which may be more problematic.
    Companies may be unclear on the value of IS or may be unable to 
easily prove that IS is beneficial to employ. Methods to prove the 
value of IS and to quantitatively measure whether a given process is 
`as inherently safe as is practicable' are generally unavailable or 
unproven. Case studies showing the economic and other benefits are not 
available for a wide array of industrial situations.
    Depending on the goals, the perspective may be that it is safe or 
secure enough as it is. For example, the plant is designed to operate 
at a given capacity and has been optimized through careful engineering 
design to produce the product safely, efficiently, and cost-
effectively. Many IS-type considerations have already gone into the 
design or operating philosophy of the plant. When confronted with the 
need to conduct an IS study, they often find that there are few 
opportunities to improve on that design, short of a complete change of 
`technology', even if another technology exists that is inherently 
safer. If it does exist they find it troubling to consider changing the 
technology when the gains may be questionable for safety or security. 
As such the net change may be limited.

    6. Safety and Security Conflicts
    The need to introduce inherent safety as a strategy at all 
facilities subject to such a security regulation is questionable. In 
fact, what is inherently safer is not necessarily what is inherently 
more secure. This would result in a great deal of analysis to consider 
a single strategy has been applied, thereby causing a very large 
documentation problem and undoubtedly many technical and legal 
dilemmas. This is contrasted with a preferred approach of allowing 
industry to set security objectives to determine the relevant issues 
and vulnerabilities and make appropriate risk management decisions. It 
should be considered as a potential strategy rather than the first 
priority and allow the most effective homeland security strategies to 
be applied rather than force a particular one or a change in every 
technology.

Regulation of IS
    The constraints to the regulation of IS include many of the 
concerns above plus:

    Holistic security v. singular issues--The problem is not IS, but 
the expectation of the value of regulation of IS. It forces industry to 
focus on a few safety strategies to the possible detriment of the 
complete approach to risk management. There seems to be an overemphasis 
of inherent safety as a singular strategy for security assurances in 
many of the proposed regulations.
    Inherent safety has to be considered in light of other security 
risk management approaches where one is not necessarily preferable over 
another. That decision should be made on a case by case basis rather 
than blanket regulatory requirements. Most security experts would agree 
that it is about providing sufficient layers of security, combined with 
an understanding of the threat and risk-based approaches to limiting 
access to possible assets of interest to adversaries that is the 
desired homeland security approach.
    Both chemical process security and inherent safety are complex 
topics that are not easily mandated. To isolate inherent safety as a 
particularly necessary one is good practice but not necessarily good 
government regulation. IST is not the panacea. It is not a "thing" that 
can be measured. It is a process towards safe manufacturing. It is a 
system of interdependent values and not something that can be distilled 
into a legislative definition and then regulated. Security management 
itself isn't a singular strategy. Furthermore, IS cannot be regarded as 
the sole design or operating criteria as it must be integrated with 
other considerations. The real issue is risk, whether safety or 
security risks, that IS can be applied to.
    Criteria for making compliance decisions--An obstacle to clear cut 
regulation is the lack of consensus on appropriate IS metrics. Assuming 
that the regulation is performance-based, there must be metrics for 
consistent regulation. These criteria are very hard to define with a 
broad conceptual topic such as IS for the wide variety of chemical 
processes to be regulated. This dilemma was recently described by the 
Mary Kay O'Connor Process Safety Center - "Regulation to improve 
inherent safety faces several difficulties. There is not presently a 
way to measure inherent safety. Process plant complexity essentially 
prevents any prescriptive rules that would be widely applicable. It 
would seem that legislation could explicitly require facilities to 
evaluate inherently safer design options as part of their process 
hazard analysis. But inherent safety would be almost impossible to 
enforce beyond evaluation because there are unavoidable technical and 
economic issues." (Mannan, et.al, 20037)
    Need to consider risk rather than only hazard--There is little 
sense to the idea of imposing a requirement for `change for the sake of 
change', i.e., requiring that every hazardous situation be made 
inherently safer. Industry is interested in referencing a measure of 
acceptable risk which limits the need for additional risk reduction 
since beyond that level resources may be better spent on other matters.
     Unclear how to measure performance or compliance--Will regulations 
require only fundamental strategies to be employed, such as a site 
reports it reduced some materials onsite, or will it be based on 
vulnerability to the chemicals that remain? The factors and process to 
measure the effectiveness of IS regulations is not defined so it 
becomes very subjective. - Inherent safety regulations would have to 
show measurable benefit. If there was a reduction or increase in the 
number of incidents it could be incorrect to infer whether IS was the 
leading factor or whether other measures were involved. It is, 
therefore, difficult to measure the effectiveness of IS regulations.
    The USEPA representatives at the workshop reported that the EPA 
intends to include IS in their analysis of the effectiveness of the 
Risk Management Plan (RMP) regulation (USEPA, 1996)8 when they review 
the next submittals of registrations and hazard assessments. This is 
likely to be challenging given the state of implementation of IS and 
EPA's own admission on their expectation for inherent safety in the 
Risk Management Planning regulation. When EPA promulgated the RMP rule, 
some commenters asked EPA to require facilities to conduct "technology 
options analyses" to identify inherently safer approaches. EPA declined 
to do so, stating that "PHA teams regularly suggest viable, effective 
(and inherently safer) alternatives for risk reduction, which may 
include features such as inventory reduction, material substitution, 
and process control changes. These changes are made as opportunities 
arise, without regulation or adoption of completely new and unproven 
process technologies. EPA does not believe that a requirement that 
sources conduct searches or analyses of alternative processing 
technologies for new or existing processes will produce additional 
benefits beyond those accruing to the rule already. (FR, 19969)
    IS means different things to different audiences--One person's 
opinion of IS is not another person's necessarily, and as a result 
risks could be simply transferred to others.
    Macro v. Micro benefit--If IS regulations encourage individual 
plants to take the most inherently safe position to them, that is not 
necessarily the most inherently safe (or secure) position for the 
community they operate in thereby potentially increasing the societal 
risks. A common example is that of transportation risk, where the 
increased number of transits caused by lowering the onsite volume of a 
required feedstock increases the number of transits through the 
communities in the distribution chain. In addition, though, is the 
prospect that the total societal risk from a wide collection of 
inherently safer individual decisions leads to a redistribution of risk 
across the country - the analog of squeezing a balloon.
    Economic Security--Another example of this concern is the possible 
lack of appreciation of the economic security of the chemical 
infrastructure in legislative discussions on inherent safety. At a 
national, state or local level, the economic impacts of an attack or 
disruption of the chemical infrastructure should be a key concern. If 
the plant is disabled for any reason, such as a distribution chain 
disruption, the lack of inventory may make the plant inoperative for a 
longer period of time than if it had accumulated and secured supplies 
necessary to function. It is more likely that plants will face supply 
issues due to natural or manmade disasters than be attacked and so the 
macro view of homeland security is compromised at the expense of a 
local viewpoint. These goals need to be balanced from a risk 
perspective with other hazard reduction goals.

IS Regulatory Proposals and Complications
    Inherent Safety is a common phrase from the chemical industry and 
is being considered and debated as a chemical process security concept 
for inclusion in proposed chemical security regulations10. IS is being 
considered by legislators as the first security strategy industry 
should use for reducing terrorist risk in the chemical sector. The 
newly appreciated concerns for terrorism have naturally highlighted the 
issue of the potential for attack on facilities handling hazardous 
materials.The proposed series of Chemical Security Act bills generally 
state that there are significant opportunities to prevent theft from, 
and criminal attack on, chemical sources and reduce the harm that such 
acts would produce by reducing usage and storage of chemicals by 
changing production methods and processes; and employing inherently 
safer technologies in the manufacture, transport, and use of 
chemicals;These proposed regulations would have sweeping applicability 
and significant implications for design and operation of facilities 
handling hazardous materials. Many of the facilities mentioned to be 
included are from the USEPA Risk Management Planning regulated sources 
(40 CFR Part 68), which may not be either highly consequential or 
attractive to terrorists. Any new initiatives such as this have to be 
rational, measured, cost-effective, and fully justified.
    The anticipated regulatory benefit seems to be that IS can remove 
the hazard entirely or reduce hazards to de minimis levels to where 
there is no interest in causing the attack. It is often expressed to be 
a possible strategy for security risk management, and sometimes is 
mistaken as a relatively obvious and simple approach to execute or 
regulate. Other proven security measures are often seemingly weighed as 
less effective or reliable.
    These existing and proposed regulations typically end in a goal of 
IS consideration `to the extent practicable' and sometimes allow cost 
or feasibility as a basis for justifying a change is `practicable'. 
There is no standard measurement of what this means. While companies 
may believe they are moving toward inherently safer processes, they 
often find obstacles to the theoretically possible complete application 
of the four IS strategies.

Experience with IS Regulations
    In actual practice IS implementation has proven to be problematic. 
The reason is that IS, at this time, is more of a theoretic concept 
rather than a codified procedure with a well established and understood 
framework for evaluation and implementation. Furthermore, it cannot be 
regarded as the sole design criteria as it must be integrated with 
other considerations. IndustryToday there is only one example of an 
implemented IS regulatory requirement for process safety and that is 
part of the Contra Costa County, California, local Industrial Safety 
Ordinance (ISO) enacted in 1998 which effects only eight chemical 
sites. As for security, the only one that exists is in New Jersey where 
the Governor enacted a Prescriptive Order in November of 2005 which 
includes the need to consider IS for chemical security for certain 
sites in the state. Neither regulation goes so far as to require a 
change in technology due to the enormous challenges and liabilities 
associated with that move.

Contra Costa County, California, Industrial Safety Ordinance
    The Contra Costa County, California, Industrial Safety Ordinance 
(ISO) became effective January 15, 1999. The ordinance applies to eight 
oil refineries and chemical plants that were required to submit a Risk 
Management Plan to the U.S. EPA11 and are a program level 3 regulated 
stationary sources as defined by the California Accidental Release 
Prevention (CalARP) Program.
    Part of the ISO requirements is the need for the regulated 
stationary sources to consider inherently safer systems when evaluating 
the recommendations from process hazard analyses for existing processes 
and to consider inherently safer systems in the development and 
analysis of mitigation items resulting from a review of new processes 
and facilities. Contra Costa Health Services completed and issued a 
Contra Costa County Safety Program Guidance Document on January 15, 
20004. This document included a definition of inherent safety and some 
rules for implementation of the ordinance.
    Lessons Learned from the Contra Costa County, California, 
implementation of inherent safety requirements for their Industrial 
Safety Ordinance were presented in 2002 (Moore, 2002).
    Companies found IS to be difficult if not infeasible to accomplish, 
particularly for existing processes;
    There are different perspectives on what is reasonable and what is 
feasible when it comes to decisions on the need for implementing IS;
    The guidance provided to ensure that IS was being considered 
consistently and fully was not informative enough, so there was some 
confusion and an education gap;
    The public and regulators often mistrust industry if anything less 
than a total technology change is implemented despite that IS includes 
a wide variety of ideas to meet the four strategies of minimization, 
substitution, simplification and moderation;
    Application of IS at only the most purely inherent level (first 
principles) is often at odds with practical and cost effective risk 
reduction, especially for existing construction; Guidance/training is 
needed for a team to know how to apply IS effectively.

New Jersey Prescriptive Order
    On November 21st, 2005, the State of New Jersey became the first 
State to require chemical plant security measures to protect against 
terrorist attacks. Acting Governor Richard J. Codey set new 
requirements for the 140 facilities that must comply with the 
Prescriptive Order, 43 of which are subject to the state's Toxic 
Catastrophe Prevention Act (TCPA) program. As part of the new 
requirements, these 43 facilities must review the potential for 
adopting inherently safer technology (IST) as part of their assessment.
    This is very significant for three reasons - it sets precedent for 
State mandate of security of the chemical industry, it incorporates the 
need to evaluate IST more widely than any other regulation in the 
United States, and it forces industry to prove compliance to security 
`best practices' they developed.In 2003, the New Jersey Domestic 
Security Preparedness Task Force approved best security practices that 
were built upon the security code of the American Chemistry Council's 
responsible care program and the American Petroleum Institute's 
security guidelines, respectively. The best practices were developed by 
the Task Force and its Infrastructure Advisory Committee, which 
includes representatives of the state's chemical and petroleum 
industry. Many New Jersey-based facilities have voluntarily begun to 
implement these practices. The Prescriptive Order action clarifies that 
the best practices for chemical facilities are now mandatory.
    The 43 chemical facilities in the TCPA program must analyze and 
report the feasibility of:

         reducing the amount of material that potentially may be 
        released;
         substituting less hazardous materials;
         using materials in the least hazardous process conditions or 
        form; and,
         designing equipment and processes to minimize the potential 
        for equipment failure and human error.

    Best practices included provisions for the facilities to prepare an 
emergency incident prevention, preparedness and response plan and 
outline the status of implementing other security practices. The State 
standards also now require worker participation in the development of 
the security assessments and prevention and response plans at each 
facility.
    Under the new requirements, chemical facilities had 120 days to 
develop an assessment of facility vulnerabilities and hazards that 
might be exploited by potential terrorists. The assessments must 
include a critical review of:

         security systems and access to the facility grounds 
        (including the regular testing and maintenance of security 
        systems);
         existing or needed security measures outside the perimeter of 
        the facility that would reduce vulnerabilities to an attack on 
        the facility;
         storage and processing of potentially hazardous materials;
         employee and contractor background checks and other personnel 
        security measures; and,
         information and cyber security;

    The Prescriptive Order timing is critical as the nation struggles 
with how to more completely manage terrorism risks and to sort out the 
need for regulations for industries that are otherwise unregulated 
today. At this point the effectiveness of this rule is still in 
question. What is clear is the degree of change that most complex, 
existing plants will incur due to the identification of IS 
opportunities will be very limited based on personal experience.

Research on the Evaluation of Inherent Safety
    Some methods have been proposed to provide a benchmark for inherent 
safety. Most of these involve indices or fuzzy logic. While these are 
excellent developments in the right direction, they are not fully 
validated or comprehensive enough to assure that the aforementioned 
issues are satisfied.There is a need for metrics and rules for how to 
evaluate inherent safety before regulations can be effective. Without a 
fair and legitimate way to measure the total risk balance created by 
changes in the name of inherent safety it will be subjective and 
possibly unfair.
    Complex process systems, particularly with a long history of safe 
performance, cannot suddenly be dictated that a system is inherently 
safer without a great deal of individualized risk-risk tradeoff 
evaluation. Inherent safety is not fully understood, so regulating it 
and forcing change against typical engineering practices (with a strong 
empirical basis of success) is not recommended
    There have been many experts recognize that this may be creating 
many other problems by overly relying on one strategy vs. a holistic 
approach. Facilities should be given that flexibility all the while 
bounded by appropriate layers of safety to reduce risk to an acceptable 
level.

Recommendations
    Rather than attempt to regulate a vague and creative safety concept 
for chemical security, it should be left to industry and government to 
work together to consider the full spectrum of available security risk 
management strategies and to meet performance standards for security 
based on site specific needs. Inherent safety should not be seen as the 
most important strategy to implement. Risk should be the measure of 
security preparedness given consequence, vulnerability, and threat 
considerations.

References
    1. Center for Chemical Process Safety (CCPS) (1993). Guidelines for 
Engineering Design for Process Safety. New York: American Institute of 
Chemical Engineers.
    2. Hendershot, Dennis C., "Chemistry - The Key To Inherently Safer 
Manufacturing Processes", Presented Before the Division of 
Environmental Chemistry, American Chemical Society, Washington, D. C. 
August 21-25, 1994, Paper No. ENVR-135.
    3. Mansfield, D., Y. Malmen, and E. Suokas (1996). "The Development 
of an Integrated Toolkit for Inherent SHE." International Conference 
and Workshop on Process Safety Management and Inherently Safer 
Processes, October 8-11, 1996, Orlando, FL, 103-117. New York: American 
Institute of Chemical Engineers.
    4. Gentile, M. and M.S. Mannan, "Development of an Inherent Safety 
Index Using Fuzzy Logic,"Proceedings of the 4th Annual Mary Kay 
O'Connor Process Safety Center Symposium - Beyond Regulatory 
Compliance: Making Safety Second Nature, College Station, Texas, 
October 30-31, 2001, pp. 510-526.
    5. Mannan, M.S., "Challenges in Implementing Inherent Safety 
Principles in New and Existing Chemical Processes," White Paper, Mary 
Kay O'Connor Process Safety Center, College Station, Texas, August 
2002.
    6. Kletz, Trevor, "Green Intention, Red Result", IChemE, Symposium 
Series No. 147., 2000
    7. Environmental Protection Agency (EPA) (1996). "Accidental 
Release Prevention Requirements: Risk Management Programs Under Clean 
Air Act Section 112 (r) (7)." Federal Register 61, 120 (June 20), 
31668-730.
    8. 61 Fed. Reg. 31699 (June 20, 1996).
    9. Hendershot, Dennis C., "Putting Inherent SHE on the Map in the 
USA" , For presentation at the Conference on Inherent SHE: The Cost 
Effective Route to Improved Safety, Health and Environmental 
Performance London, 16-17 June 1997.
    10. Mannan, M.S., W.J. Rogers, M. Gentile, and T.M. OConnor, 
"Inherently Safer Design: Implementation Challenges Faced by New and 
Existing Facilities," Hydrocarbon Processing, vol. 82, no. 3, March 
2003, pp. 59-61.

    Mr. Lungren. Now I would like to recognize the chairman of 
the full committee, the gentleman from New York, Mr. King.
    Mr. King. Thank you, Chairman Lungren. At the outset let me 
commend you and Ranking Member Sanchez, and of course, the 
Ranking Member of the full committee, Mr. Thompson, for the 
truly bipartisan effort that has gone forth on this issue.
    The whole issue of chemical plant security is vital to our 
Nation. It is essential to our homeland security. I think it 
should be addressed.
    But it is also essential that the legitimate concerns of 
industry and the economic concerns that any legislation would 
have be fully taken into account until your legislation is 
done.
    I believe it is really a very well-balanced piece of 
legislation. I know, just from some consultations I have had 
with you, about the extent of talks and negotiations that have 
gone on; and I want to thank you for the tremendous intensity 
you have shown on this issue and, again, to reach across the 
aisle and to thank you Ms. Sanchez and Mr. Thompson for putting 
aside partisan differences on an issue that is absolutely 
essential to the security of our country.
    I look forward to the testimony today. I want to thank all 
of the witnesses for being here, and I understand from the 
chairman that I will have the privilege of introducing Senator 
Balboni from New York, who is here today, whom I have worked 
with for many years on many levels of government in New York, 
and who has really been a leader on the whole issue of chemical 
plant security.
    Thank you for the hearing; thank you and the ranking member 
for the legislation. And I yield back the balance of my time.
    Mr. Lungren. I thank the gentleman, the chairman; and I 
would now recognize the ranking minority member of the full 
committee, the gentleman from Mississippi, Mr. Thompson, for 
any statement he may have.
    Mr. Thompson. Thank you very much Mr. Chairman, Ranking 
Member, Chairman King. This is an excellent opportunity for us 
to start the process of standardizing chemical plant security 
in this country. It is long overdue, but as most of you have 
indicated, it has been an arduous task. But it has been a 
bipartisan effort to bring all the interested parties to the 
table to find a common solution. We have done that. It has been 
a wonderful process. I look forward to it.
    Mr. Lungren. Thank you very much, Mr. Thompson.
    Mr. Lungren. We are pleased to have a panel of 
distinguished witnesses before us today on this important 
topic; and let me remind the witnesses that their entire 
written statements will appear in the record.
    And now, for purposes of introducing our first panelist to 
testify, I would recognize the chairman of the full committee, 
Mr. King, and I just want to make mention of the fact that I 
hope you recognize that we are making sure that this is not a 
California-centric subcommittee, Ms. Sanchez and I, and we 
reach across the continent to have witnesses from all over.
    So, with that, the chairman is recognized.
    Mr. King. I thank the chairman. And for those of you who 
are not fully familiar with the context of the chairman's 
opening remarks, I believe he may have been referring to the 
appearance last week of Mayor Bloomberg and Commissioner Kelly 
and no witnesses at that hearing from the West Coast. But I 
know that Mr. Lungren and Ms. Sanchez are well equipped to 
represent California. And, of course, Ranking Member Thompson, 
he sort of fits into all camps, so he will support all of us; 
that is the uniqueness of our ranking member.
    Mr. Thompson. Thank you very much.
    Mr. King. I am really appreciative, Mr. Chairman, for 
giving me the opportunity to introduce Senator Michael Balboni. 
I have known Senator Balboni for more than 2 decades. He served 
8 years in the New York State Assembly. He is now serving his 
10th year in the New York State Senate and is chairman of the 
New York State Senate's Committee on Homeland Security. He, 
more than anyone in the State of New York, has been leading the 
effort on many, many issues involved in homeland security, 
including chemical plant security where he was able to pass 
landmark legislation in the New York State legislature which 
was signed by the governor and is really, in many ways, a model 
for the rest of the country.
    Senator Balboni is absolutely committed to this issue. Just 
recently he was appointed to the Homeland Security Advisory 
Council by Secretary Chertoff and acts as the Secretary's 
primary counsel and provides service and recommendations. He is 
down in Washington almost as much as he is in Albany or in 
Nassau County.
    This is an issue which compels him. He lost many 
constituents on September 11. Mike and I lost several close 
friends of ours, mutual close friends, so I know of his 
dedication to this issue.
    I look forward to his testimony. I thank him for taking the 
time from his busy efforts in Nassau County, where he wears 
many hats and serves in many capacities.
    With that, I am pleased to introduce the gentleman from New 
York, State Senator Michael Balboni.
    Mr. Lungren. The senator is recognized for 5 minutes for 
his statement.

 STATEMENT OF MICHAEL A.L. BALBONI, NEW YORK STATE SENATOR AND 
 CHAIRMAN, NYS SENATE STANDING COMMITTEE ON VETERANS, HOMELAND 
                 SECURITY AND MILITARY AFFAIRS

    Mr. Balboni. Thank you very much Chairman King, Chairman 
Lungren and Chairman Thompson. Thank you very much for having 
me today.
    This was an issue that, of course, the country grappled 
with in the days following 9/11. And in New York, what we 
watched as the towers burned were people scrambling to see what 
other kind of vulnerabilities we had. And so whether it was 
rural airports that could possibly be the launch site for an 
attack against New York City or whether it was the chemical 
industry and the specter of a Bhopal-like incident, we 
scrambled to find what type of things we could do to protect 
the infrastructure.
    In 2003, I became chairman of the Committee, for the first 
time in New York State, of Homeland Security. I dropped a bill 
that really, quite frankly, resembles your bill. It had 
penalties in it. It did a tiered approach. The bill went 
nowhere.
    I met with the chemical industry, and we sat down, we had a 
number of discussions, and the chemical industry said to me, 
You know what, we are working very hard because we don't want 
to have this happen at our facilities either, but if you come 
and regulate us on a State-by-State approach, it is going to be 
problematic for us.
    We had a great number of discussions and, eventually, we 
came to an agreement; and the agreement was that we would have 
a bill that would do a bunch of things: one, recognize that 
there needed to be some type of standard applied to the 
chemical industry, and the best way to do that would be to have 
a government regulatory body, like the State Homeland Security 
Office, come in and do onsite reviews after using a program 
similar to the RAMCAP program that you now that the Department 
now uses.
    It is a web-based instrument survey, and based upon the 
responses, then there would be a site review, and then the 
material that was developed as a result of a vulnerability 
study would then be responded to by the Department and the 
actual facility whether it was permanent security enhancements, 
whether it was background checks, whether it was a program for 
better communication with the local law enforcement and then 
these plans would be implemented.
    But the plans would be kept onsite, and that was one of the 
key sticking points of this whole discussion. The chemical 
industry said to us in New York, if you take these plans, we 
are very concerned that if you put them on the Web or if you 
put them in into a government facility, they will be open to 
freedom of information requests and, therefore, be put out into 
the mainstream; and if that happens, we are nervous about loss 
of market share, trade secrets and exploitation of our 
vulnerabilities by anyone who would do something wrong.
    And lastly they said, Don't put penalties in.
    So essentially what we have is a voluntary compliance 
measure. That is the bad news.
    But the good news is, the chemical industry really 
responded in New York State. We identified about 144 facilities 
that we felt, based upon a consequence-driven analysis, would, 
in fact, be the highest priority, similar to your approach in 
this legislation. And we have done actual ground surveys of 60 
of those, and we have had responses based upon our Web survey 
in, of that, almost 99 percent.
    What we have found is that many of the facilities have 
already taken steps to increase their security in recognition 
of the fact that if they have an event there, it not only will 
be of great consequence to the community, but frankly it would 
be a great consequence to them, themselves, and they know that 
they have a very good safety record.
    Your legislation has significant improvements, though, over 
what we have done. First off, you know here I am New York 
State; if it was my druthers, I would have you adopt my bill. I 
would have you do my law, and this would be the model for the 
Nation. But I also recognize that you can't have a patchwork of 
laws, and you need to have the consistency and the continuity. 
So that is the first benefit.
    The second benefit is that by taking kind of a step-back 
approach where you actually don't do the mandated safety 
enhancements and you let the industry decide what is best for 
themselves, you are going to promote the development of best 
practices; because the one thing I know from having worked with 
the Office of Homeland Security in our State, and looking at 
vulnerability studies is that every single facility is a 
different situation, and there is no one-size-fits-all. If you 
don't allow the industry to adopt their own best practices, 
then you will stifle innovation, and that will be a loss of 
balance.
    And you take a look at the fact that we did not, that is, 
the threat stream analysis, that is one of the key failings of 
our bill. In other words, you will take a look at what 
intelligence is out there, and you will see whether or not it 
specifically applies to a specter either to a State or to a 
specific facility, and then you will relate it to them. That is 
very, very crucial.
    Another thing that you do is that you have whistleblower 
protections, and though we have not found a lot of that 
information coming from the actual facilities, this is a 
recognition that sometimes your best eyes and ears are within 
the facility itself.
    And lastly, of course, is you put in the penalty 
provisions; and quite frankly, we could not get that 
accomplished. We would not have a bill a law in the State of 
New York if we had put in penalties like you have done. I had 
them in my original bill. We do not have them now.
    But let me share with you just very quickly that there are 
lessons learned, and one of the main failings right now of the 
system in New York is that there needs to be better 
coordination between the facility and local law enforcement. 
Dialing 911 in and of itself is not enough.
    With that, I thank you very much, Mr. Chairman, for the 
opportunity to speak before the committee.
    Mr. Lungren. Thank you very much, Senator Balboni. We 
appreciate your testimony and we look forward to asking 
questions of you.
    [The statement of Mr. Balboni follows:]

               Prepared Statement of Michael A.L. Balboni

    Good morning Chairman Lungren and members of the House Committee on 
Homeland Security's Subcommittee on Economic Security, Infrastructure 
Protection and Cybersecurity. I am honored to testify before this body 
and I am grateful and appreciative of the work that is being performed 
by the committee to strengthen security of chemical plants.
Identifying the Need for the Legislation:
    I came to this issue as a result of the events of September 11, 
2001 and the days that followed. I began contemplating what other 
events could possibly befall us in New York. I started to think of the 
events in Bhopal, India.
    In 1984, the accidental release of 40 tons of the pesticide methyl 
isocyanate from a Union Carbide plant located in the center of Bhopal 
had killed thousands of people outright, and injured hundreds of 
thousands, many of whom later died.
    A few years before the events of 9/11, I had sponsored New York's 
Anti-Weapons of Mass Destruction Act and shortly after 9/11 my bill 
outlawing chemical and biological weapons in New York State was signed 
into law.
    While researching, authoring and helping to enact these new laws, I 
became more and more aware of the numerous chemical plants in the state 
and began to worry about their vulnerabilities. I called a meeting with 
the major representatives of the chemical industry. They told me 
security regulations weren't necessary because their industry was 
already the most highly regulated in the nation.

Battle for the Bill:
    I realized, however, that although that industry was heavily 
regulated from an environmental perspective it was not from a security 
perspective. And the issue of security has many different aspects that 
could only be addressed from a vulnerability perspective.
    As I began to draft a bill to address this oversight, I realized 
that the first thing I needed to find out was where all the chemical 
plants were located. A part of the problem was that although lists of 
chemical plants had already been developed from the environmental 
perspective, these plants had not been analyzed from the security and 
threat perspective. An inventory of the chemicals and the amounts that 
were stored in the state was also needed. I recognized that our state 
needed better information regarding the condition of its critical 
infrastructure.
    I also came to the realization that I had to respond to certain 
constituencies, namely, chemical industry officials, who were worried 
about having their vulnerabilities and trade secrets revealed and being 
subjected to micromanagement and possible loss of market share should 
vulnerabilities be exposed. So I came to the conclusion that in order 
for chemical plant security to be enhanced, New York needed to develop 
a partnership with the industry because so much of security is 
vigilance and motivation. The chemical industry is an essential 
component of our economy and we had to develop protections without 
destroying the industry.
    I also realized that in order to avoid micromanagement and 
suspicion, the Legislature needed to be briefed on the state of the 
industry's security. I drafted a confidential briefing mechanism based 
on a similar system set up under my Electrical Plant Security Act of 
2003. I then went back to the plant owners to address their concerns 
and incorporated them into the new bill.
    Under my legislation, the New York State Office of Homeland 
Security (OHS) would establish a vulnerability survey and create 
suggestions for remediation where necessary. Chemical plant owners 
would report to OHS about their operations. None of the information 
would be stored with the government, but would rather be kept on-site 
at the plants, ensuring the information was not subject to the Freedom 
of Information Law.
    Needless to say, the bill met with great opposition, especially 
from the New York State Assembly, but eventually gained approval. The 
New York State Chemical Security Act of 2004, a first-of-its kind in 
the nation, was signed into law by Governor George Pataki on July 23, 
2004.

How the Law Was Implemented:
    Once the law was on the books, New York State OHS set out to 
achieve several goals in order to implement the law. Their objectives 
were to compile a list of hazardous and toxic substances and to 
assemble a list of chemical storage facilities that must comply with 
provisions of the law. In addition, the state OHS was to present a 
preliminary report to New York State Governor George E. Pataki and then 
a final report detailing the office's findings and recommendations.
    The list of hazardous and toxic substances was completed in January 
2005 and comprised of four groups of chemicals:

         Environmental Protection Agency's (EPA) Risk Management Plan 
        listed chemicals,
         The Bureau of Alcohol, Tobacco, Firearms and Explosives' 
        (ATF) published list of explosives,
         Acutely Toxic Chemicals listed in GNYCRR Part 597 (New York 
        State's hazardous substance list), and
         Chemical Weapons and precursors.

    Over 2,500 chemical storage facilities were identified in New York 
State.
    In completing their analysis, the New York State Office of Homeland 
Security recognized that not all chemical storage facilities present 
the same level of risk for the population and developed a "consequence 
driven analysis" to identify a facility as "high risk" utilizing 
several factors, including: population, economic value, strategic value 
and iconic value, with population being weighed the heaviest.
    New York initially identified 144 Risk Management Plan facilities 
using factors established under the Clean Air Act. Four risk-based 
tiers, separated by the size of the population that could be affected, 
were identified using those factors. New York OHS determined that 
placing chemical storage facilities into distinct tiers provides a 
reliable basis for analyzing security across a diverse industry. 
Similar standards set up in the proposed federal legislation should be 
equally beneficial.
    The 144 facilities were asked to participate in the web-based 
security survey, Risk Analysis and Management for Critical Assets 
Protection (RAMCAP), and a Site Security Review (SSR).

Lessons Learned:
    Here's what we learned when this new law was implemented in New 
York.
    State OHS found that the facilities that are required to comply 
with provisions of the Maritime Transportation Safety Act of 2002 had 
already developed site security plans based upon threat and 
vulnerability assessments.
    OHS also determined that security awareness training for workers 
helped to enhance the overall security posture of a facility.
    Analysis also revealed that there is a critical need to develop 
better communication between law enforcement and chemical plants. 
Dialing 911 is not enough. An active, on-going dialogue with local law 
enforcement was found to provide the mechanism for critical and timely 
information flow in both directions.
    Lastly, OHS found that security based exercises that involve on-
site and off-site parties improve deterrence and detection 
capabilities.
    On the downside, additional legislation is needed to put teeth into 
the New York law. One major shortcoming is our current inability to 
impose penalties for noncompliance.
    To date, 60 of the 144 originally identified high-risk facilities 
have completed the web-based security survey and OHS has completed on-
site visits to all 22 Tier 1 sites, the tier with the largest at-risk 
populations (over 50,000 people). Visits have also been completed to 
half of the Tier 2 sites and OHS is on track to realize a high level of 
participation to this voluntary compliance.
    All of this work was completed under the insightful leadership of 
the New York State Office of Homeland Security Director James McMahon 
and his staff. Without his diligence and professionalism, these goals 
could not have been realized in such a timely fashion. It is important 
to note that Director McMahon's ability to work in partnership with the 
chemical plant industry on these issues was paramount to his success.

The Federal Legislation:
    As I turn my attention now to the legislation proposed by Congress 
today, I'd like to focus on the many strengths of the bill. Among them 
is compliance.
    The bill provides uniformity and full compliance across the 
country. As with any form of security, chemical plant security among 
the fifty states is only as strong as its weakest link. Although New 
York has led the way in this regard, our state's progress is rendered 
meaningless if our neighboring states do nothing to assess and 
strengthen their own chemical facilities. The legislation proposed by 
Congress will ensure a critical baseline of standards and compliance 
nationwide.
    Another asset of the bill is a penalty structure that delivers a 
strong bite and should go a long way towards forcing compliance. As 
noted earlier, this is an area where the federal legislation reaches 
beyond the law in place in New York.
    The fact that the proposed federal legislation strictly prohibits 
public disclosure of protected information, including vulnerability 
assessments, security performance and other data is crucial to public 
safety and another asset of the bill. While the concept of information 
protection has its detractors, the harsh reality is that some 
information, if revealed, could be dangerous to the life and safety of 
the public.
    Additional strengths of the federal bill include sound 
vulnerability assessment and facility security plan standards, 
protocols, and procedures; third party auditor provisions; and 
exemptions for facilities that are already federally regulated, e.g. 
ports under the Maritime Transportation Safety Act of 2002, to avoid 
the confusion of duplicative regulations.
    Members of this committee should be commended for the work done so 
far to get this bill introduced. I believe, based upon my New York 
experience, that there are a few areas for where the bill can be 
strengthened.
    An area of great concern in the current bill is the exemption of 
transportation and incidental storage from review and analysis. A truly 
comprehensive strategy must include ways to best ensure safety of the 
supply chain from chemical storage facilities to their destinations.
    Even if the chemical plant facilities are secure, the railways that 
run in and out of them may not be. Data indicates that in New York 
State alone, more than 1.7 million shipments of hazardous materials 
were transported last year.
    Last Tuesday, I introduced legislation that would allow state OHS 
to conduct a review and analysis of security measures being utilized by 
the owners and operators of rail yards, similar to those put in place 
by New York's Chemical Security Act. The legislation, which gives the 
Director of OHS the authority to enforce compliance of security 
recommendations, had already been approved by the State Senate.
    To be honest with you, if I had my wish, you would adopt New York's 
approach or allow New York to continue its good work with our state's 
industry. But I recognize when it comes to security, the normal issues 
as they apply to preemption and states' rights don't necessarily apply. 
It is essential that we develop a national strategy for the securing of 
these crucial assets. Once again, we are only as strong as our weakest 
link and your bill strengthens the chain.
    In conclusion, New York State was the first to recognize and act on 
this vulnerability. We are happy to partner with the federal government 
to make this a priority nationwide.
    I look forward to continue working with the distinguished members 
of this committee. Thank you. I would be pleased to respond to any of 
your questions.

    Mr. Lungren. The Chair would now recognize Mr. P.J. 
Crowley, Senior Fellow and Director of National Defense and 
Homeland Security from the Center for American Progress to 
testify.

STATEMENT OF PHILLIP J. CROWLEY, SENIOR FELLOW AND DIRECTOR OF 
  NATIONAL DEFENSE AND HOMELAND SECURITY, CENTER FOR AMERICAN 
                            PROGRESS

    Mr. Crowley. Mr. Chairman, thank you very much. I am P.J. 
Crowley. I direct the homeland security program for the Center 
for American Progress.
    I am grateful for the opportunity to discuss the Chemical 
Security Anti-Terrorism Act. It establishes a needed regulatory 
framework for DHS to set national security standards for 
chemical facilities. However, it is unclear whether DHS must 
evaluate the transportation of substances of concern. The bill 
appears to exempt drinking water facilities even though a 
recent study we conducted suggests that these facilities offer 
the best opportunity to reduce terrorism risk to millions of 
Americans.
    Mr. Chairman, I have a copy of the survey report with me. I 
would ask that it be submitted into the record.
    Mr. Lungren. Without objection.
    [The information follows:]

    Copy retained in the committee file

    Mr. Crowley. Thank you, sir, very much.
    As attacks in London and Madrid and recent plots in Toronto 
and Miami demonstrate, we face an ongoing threat. Unless we 
take a comprehensive approach to chemical security, we will 
continue to provide terrorists with too many targets of 
opportunity.
    We cannot protect everything; we must set priorities, and 
chemical security is certainly one. This legislation can help, 
but to have the intended effect, risk assessments and security 
plans must take into account the entire system, not just its 
individual components.
    Many high-risk chemical facilities and freight rail lines 
that support them are in major urban centers. One line is 
adjacent to the Capitol, an intended target on 9/11. Why should 
we give al Qaeda another opportunity using a 90-ton HAZMAT 
railcar as a weapon?
    This is not an arbitrary judgment. But specific to the 
threat we face, the terrorists will attack where they can kill 
as many innocent civilians as possible and generate significant 
economic and political impact on our country. There is an 
urgent need for action because we are going to be attacked 
again.
    A risk-based strategy should include physical security and 
risk mitigation, but also risk elimination. Secretary Chertoff 
is wrong to suggest, as he did in March, that secure 
alternatives have little to do with security. In fact, the 
Association of American Railroads endorses this as a necessary 
option where secure alternative technologies processes or other 
steps are readily available. We have an obligation to remove 
these facilities and communities from the terrorism target 
list.
    The Center surveyed 1,800 facilities deregistered from the 
risk management planning program, a congressionally mandated 
initiative which began in 1990 to improve disaster assessments 
and mitigation. Among our key findings, 284 facilities in 47 
States switched to less hazardous practices, including the 
Photocircuits Corporation of Glen Cove, New York, Mr. Chairman. 
However, only 10 percent represented the highest-risk 
facilities in our country.
    Change can be accomplished economically; 87 percent spent 
less than $1 million, and roughly half reported spending less 
than $100,000 to convert. And alternatives readily exist in a 
range of applications including drinking water and waste water 
disinfection. However, approximately 3,000 of these plants 
still use chlorine gas. This bill should not exempt them from 
better security planning.
    There is a fairness issue. While many communities have 
eliminated threats to their people, they remain at risk because 
hazardous materials are still transported through these cities 
to other locations that have taken no action. We cannot afford 
a strategic double standard.
    The military, which I served in for 26 years, is constantly 
exploring how to invest in new technologies that make us 
stronger. Why would we not take the same approach and employ 
secure alternatives to improve homeland security? We need a 
comprehensive national strategy, not a series of disconnected 
local or regional actions.
    What should be done? DHS should be granted authority to 
promulgate security standards regarding the manufacture, use, 
physical security, storage, and transportation of acutely 
hazardous materials. Chemical facilities should do annual 
security risk assessments, including an evaluation of safer 
alternatives. Publicly traded companies should tell their 
shareholders how they are managing this security risk. DHS 
should embrace the concept of risk elimination and establish a 
center for excellence to promote solutions that reduce this 
vulnerability.
    The Federal Government should not preempt States from that 
establish stronger standards. The Federal Government, for 
example, established minimum education standards under No Child 
Left Behind. However, our States can still offer advanced 
placement courses. Federal action should strengthen security 
floors, not create ceilings.
    The Federal Government should offer incentives to promote 
change that includes targeted grants, loans, tax credits, and 
caps on liability for facilities that go beyond physical 
security and adopt secure alternatives. We must place greater 
emphasis on homeland security and narrow the potential for 
terrorists to successfully attack us here. Only through a 
comprehensive approach will we achieve the objectives of this 
legislation.
    Mr. Chairman, thank you very much.
    Mr. Lungren. Thank you very much for your testimony. And we 
do look forward to the question-answer period with you.
    [The statement of Mr. Crowley follows:]

                Prepared Statement of Phillip J. Crowley

    The Chemical Security Anti-Terrorism Act of 2006 establishes a 
needed, though limited regulatory framework for the Department of 
Homeland Security (DHS) to set strong national security standards for 
chemical facilities.
    However, while it covers the manufacture and use of acutely 
hazardous chemicals and processes, it is unclear whether DHS must 
evaluate the transportation of these materials as well. It appears to 
exempt drinking water facilities that, based on a recent survey the 
Center for American Progress conducted of chemical facilities 
nationwide, offer the clearest opportunity to reduce existing terrorism 
risk to millions of Americans.
    Unless we take a comprehensive approach to chemical security 
planning, we will continue to provide terrorists with too many targets 
of opportunity across the country.We are approaching the fifth 
anniversary of September 11. As attacks in London and Madrid and recent 
terror plots in Toronto and Miami dramatically demonstrate, we face an 
on-going threat of terrorism to our society and economy, specifically 
to critical infrastructure in major metropolitan areas where most of 
our citizens live, work and congregate. This also happens to be where 
many of our highest risk chemical facilities are located.
    Likewise, much of the transportation of hazardous material to and 
from chemical facilities occurs on freight rail lines that pass through 
urban centers. One such line is adjacent to the U.S. Capitol, a target 
that the 9/11 perpetrators intended to strike. Why should we give al 
Qaeda another opportunity using a 90-ton HAZMAT rail car as a weapon?
    Clearly, we cannot protect everything. We cannot reduce the 
terrorism risk to zero. The United States is a target-rich environment. 
But we have to set priorities, something the Department of Homeland 
Security has yet to effectively do. This legislation can help. Chemical 
security should be a critical infrastructure priority. But for the 
legislation to have its intended impact, risk assessments and security 
plans must take into account the manufacture, use, physical security, 
storage and transportation of substances that, if released due to a 
deliberate attack, can kill tens of thousands of Americans.
    This is not an arbitrary judgment. It is specific to the threat we 
face - that terrorists are most likely to attack where they can kill as 
many innocent civilians as possible and have the most significant 
economic and political impact on our country.
    There is a belief that markets can effectively handle terrorism 
risk, but the experience of the past five years challenges that 
assumption. We are not adapting fast enough. This is an urgent need for 
action because we are going to be attacked again. It is not a question 
of if, but only when and where.
    Too many facility operators do not believe that their plant is 
going to be attacked. The instinct is not to invest in greater security 
- markets frown on overhead - and perhaps gain a short-term competitive 
advantage. They also do not control what occurs beyond their fences. We 
need to take a system-wide approach and ensure that everyone is on a 
level playing field.A risk-based chemical security strategy should be 
integrated and multi-dimensional. It requires better physical security 
and risk mitigation. But they are not sufficient. We must also pursue 
risk elimination. Where more secure alternatives - whether 
technologies, processes or other steps - already exist, we have an 
obligation to remove as many chemical facilities and communities as 
possible from the terrorism target list.
    Some critics say that the promotion of secure alternatives is just 
redressing the environmental concept of inherently safer technology 
(IST) in homeland security clothing. The Secretary of Homeland 
Security, in remarks to the American Chemistry Council in March, said 
that IST has little to do with security. He is wrong. This is about 
security. Who says so? The Association of American Railroads has 
endorsed this as a necessary option. It cannot be done in every case, 
but should be part of a viable strategy.
    The Center for American Progress survey shows the potential of this 
approach. The survey involved a review of 1,800 facilities deregistered 
from the Risk Management Planning (RMP) program, a Congressionally-
mandated and EPA-managed initiative which began in 1990 to improve 
disaster assessments, mitigation and response. Among the key findings 
from our survey:

         284 facilities in 47 states have dramatically reduced the 
        danger of a chemical release into nearby communities by 
        switching to less acutely hazardous processes or chemicals or 
        moving to safer locations. This action reduces or eliminates a 
        clear terrorism threat to at least 38 million people. For 
        example, the Mill Creek Wastewater Treatment Plant in 
        Cincinnati, Ohio eliminated the danger of an off-site chlorine 
        gas release to an area encompassing 860,000 residents by 
        switching to liquid bleach for disinfection. Likewise, the 
        Water Pollution Control Facility in Wilmington, Delaware made a 
        similar change, eliminating the danger to 560,000 nearby 
        residents. The Photocircuits Corporation of Glen Cove, N.Y. 
        switched from chlorine gas to sodium chlorate in its 
        manufacturing process, eliminating a danger zone that 
        encompassed 21,000 people.
         Change can be accomplished economically. Of respondents that 
        provided cost estimates, 87 percent spent less than $1 million 
        and roughly half reported spending less than $100,000 to 
        convert.
         Our survey revealed that alternatives already exist in a 
        range of applications, particularly drinking water and 
        wastewater facilities. Change involved the adoption of common 
        technologies, not new innovation, such as liquid bleach or 
        ultraviolet radiation. Other examples include the use of 
        aqueous rather than anhydrous ammonia or solid rather than 
        anhydrous sulfur dioxide.
         The most common reasons cited for making changes included the 
        security and safety of employees and nearby communities, as 
        well as regulatory incentives and business opportunities. These 
        facilities also saw opportunities to cut a variety of costs, 
        requiring fewer physical security measures and hazardous 
        material safety devices, making these operations more efficient 
        and productive. This also took a significant burden off 
        surrounding communities in terms of disaster planning and 
        response.
    While the survey demonstrated that effective change can take place, 
it also revealed the limitations in a purely market-driven response. 
For example, of the 284 facilities that adopted some form of inherently 
safer practices, only 10 percent represented the highest risk 
facilities - those that put 100,000 or more people at potential risk. 
At this pace, it would take another 45 years to eliminate this 
vulnerability. We do not have that much time to act.
    There is also a fairness issue by relying on ad hoc local action 
rather than a national approach. Many communities where change is 
taking place are also vital transportation hubs - Wilmington, Delaware; 
Jacksonville, Florida; Indianapolis, Indiana; Baltimore, Maryland; 
Omaha, Nebraska; Cleveland and Cincinnati, Ohio; and Philadelphia, 
Pennsylvania. They have taken the initiative to eliminate threats to 
their people, but potentially remain at risk because hazardous 
materials are still transported through these cities to neighboring 
states and communities that have not taken similar action.
    With this in mind, what then is the proper role of government to 
help promote change within communities and the private sector? As a 
security analyst, what is most important is to accelerate the pace of 
change and measurably reduce the risk of catastrophic terrorism to our 
society and economy. We cannot afford a strategic double-standard. When 
it comes to our extraordinary military, we are constantly exploring how 
to invest in and employ new technologies that make us stronger. Why is 
it that we would not take the same approach to invest in and employ 
secure alternatives to make us safer here at home? I think our citizens 
and our first responders deserve the same consideration that we rightly 
give our men and women in the military.
    Voluntary actions should be encouraged, but we need a comprehensive 
national approach, not a series of disconnected local or regional 
actions. Government has the a responsibility to set strong safety and 
security standards, identify better alternatives, require needed 
security assessments and reporting, and create incentives for the 
private sector and cities and states to take action.
    To give one example of how this might work, consider the 
approximately 3,000 drinking water and wastewater treatment plants 
across the country that still use chlorine gas. DHS should identify the 
manufacture, transportation and use of chlorine gas for disinfection at 
high priority facilities in populated areas as posing an unacceptable 
risk to our society. But local officials and facility operators should 
determine how to best eliminate this risk, whether to convert to the 
use of liquid bleach, ultraviolet radiation or other process. Water 
treatment facilities represent an excellent starting point to implement 
a genuine risk-based approach to chemical security.
    This bill should not exempt these operations from better security 
planning.

What needs to be done?
         The Department of Homeland Security should be granted 
        authority to regulate chemical security and promulgate strong 
        national standards to improve chemical security, including the 
        manufacture, use, physical security, storage and transportation 
        of acutely hazardous materials. Particular emphasis should be 
        given to the proximity of these acutely hazardous materials to 
        major population centers across the United States that present 
        the highest risk if successfully attacked by terrorists.
         Chemical facilities should be required to do comprehensive 
        annual security risk assessments and report those findings to 
        DHS and EPA. These risk assessments should include a thorough 
        evaluation of less acutely hazardous alternatives. In the case 
        of publicly traded companies, an assessment of risk and summary 
        of actions taken should also be reported to shareholders.
         DHS should embrace risk elimination as an essential tool to 
        reduce the number of Americans who are at risk from a chemical 
        release due to a terrorist attack. DHS should establish a 
        Center of Excellence to promote technological solutions that 
        reduce our vulnerability to catastrophic terrorism.
         The federal government should not preempt states that want to 
        establish stronger security standards. The federal government 
        established learning standards under No Child Left Behind. It 
        did not tell any state not to offer advanced placement courses. 
        Federal action should promote security floors, not ceilings.
         The federal government should create a variety of incentives 
        to promote change. This might include a mix of targeted grants, 
        loans and tax credits. Rewards for facilities that meet or 
        exceed stronger national standards should also be explored, 
        including caps on liability for facilities that go beyond 
        physical security and adopt secure alternatives as well.

    The course that we have followed in the first five years of the war 
on terror cannot be sustained indefinitely. Over time, our national 
security strategy must place greater emphasis on homeland security. As 
good as our intelligence and police forces may be, they cannot be 
expected to anticipate and intercept every attack.We must narrow the 
potential for terrorists to successfully attack us here. The security 
of the United States should not be subject to the lowest common 
denominator. Business as usual is no longer an option. Only through a 
comprehensive approach to chemical security will we achieve the 
objectives of this legislation.

    Mr. Lungren. The Chair would now recognize Mr. Scott 
Berger, the Director of the Center for Chemical Process Safety 
from the American Institute of Chemical Engineers, to testify.

   STATEMENT OF SCOTT BERGER, DIRECTOR, CENTER FOR CHEMICAL 
    PROCESS SAFETY, AMERICAN INSTITUTE OF CHEMICAL ENGINEERS

    Mr. Berger. Chairmen King and Lungren, Ranking Members 
Sanchez and Thompson, and members of the subcommittee, thank 
you for the opportunity to discuss this important legislation. 
My name is Scott Berger. I am the Director of CCPS, the Center 
for Chemical Process Safety.
    CCPS was formed in 1985 by the American Institute of 
Chemical Engineers in response to the toxic gas release tragedy 
at Bhopal, India. CCPS advances process safety through 
research, collaboration, education and industry executive 
leadership.
    I was a member of the committee of CCPS to develop the 2002 
book, guidelines for analyzing and managing the security 
vulnerabilities at fixed chemical sites. I have a copy here if 
somebody would like to browse through it.
    This important guideline has been used by thousands of 
chemical manufacturing facilities. It serves as the basis for 
the New Jersey State Prescriptive Security Order. It is the 
foundation of the RAMCAP security method and also the 
foundation of voluntary security efforts of numerous trade 
associations.
    So we believe that safety and security are good business. 
Any kind of incident would interfere with efficient 
manufacturing, while good performance reduces loss and injury, 
increases productivity and improves a company's image. So while 
there may be some minor points of contention that we could find 
with this legislation, in general, we support the draft as 
written.
    Now, we have heard the testimony, and I think we will it 
has also been entered into the record that the draft bill is 
flawed because it does not require chemical sites to formally 
consider inherently safer technology options; and we 
respectfully disagree with this. In 1996, CCPS literally wrote 
the book on inherently safer chemical processes; and again I 
have a copy for those of you who would like to browse to do so.
    It is highly relevant that this particular book was 
published in our concept series of books, as opposed to the 
security book, which is a guideline. This is highly relevant.
    Inherently safer design is a philosophy for the design of 
any technology, including chemicals, but it is not a technology 
itself. Tools and techniques remain relatively primitive, and 
unless there have been important advances since 1996, and we 
are writing an updated edition to this book. This will also be 
a concept book; some future edition may attain guideline 
status, but we are not there yet.
    Inherently safer design is only one of many tools for 
safety and security. The objectives of chemical safety and 
security vulnerability management are safety and security, but 
not necessarily inherent safety and inherent security. It is 
possible to have a safe and secure facility with inherent 
hazards, and in fact, this is necessary in many cases.
    Looking outside the chemical industry, it is clear that air 
travel is neither inherently safe nor inherently secure and 
cannot be made so. But the benefits justify extensive safety 
and security activities to manage these known hazards. The 
activities are effective, and flying is the safest way to 
travel despite all of these inherent hazards. Similarly, 
chemical hazards can be managed in a highly effective way.
    Inherent safety only partially addresses security issues 
and will not reduce the need for traditional security measures. 
Proponents of including inherently safer technologies in 
legislation apparently think that security only pertains to 
toxic releases. However, a chemical facility must consider 
other security vulnerabilities: off-site fires and explosions, 
for example, theft and diversion, contamination, and damages to 
the company and national infrastructure. The facility will need 
all the traditional security measures at its disposal for its 
concerns, and use of inherently safer options will not address 
these additional issues nor will it offset the need for 
traditional security measures.
    The chemical industry is a very complex ecosystem. As any 
ecosystem, changes have cascading effects. We often see a 
change in technology that appears to be inherently safer 
locally will increase hazards elsewhere. Often these effects 
are not initially apparent.
    For example, CFC refrigerants were thought to be, 
initially, safer; and later we found that they had damaged the 
ozone layer, and we are now phasing them out. Similarly, 
inherently safer technologies may improve security locally and 
lessen security elsewhere. A site-focused inherently safer 
regulation cannot address this issue.
    Significant natural resources will be needed to implement 
inherently safer technologies. There are thousands of chemical 
technologies which are operated safely and securely using a 
blend of inherent engineered and management strategies. Is it 
appropriate to use our natural resources to replace these 
technologies with inherently safer ones if ones can be found, 
if the risk of existing technology can be managed? Similarly, 
why divert technical talent, creativity and financial resources 
from the creation of new products and technology which, in many 
cases, will render existing technologies obsolete?
    In summary, inherently safer technologies are one tool for 
safety and security, but they are not the only tool. The 
chemical industry is very complex; it involves thousands of 
unique technologies. Changes will take significant time and 
resources, and negative impacts may exist.
    Future invention and implementation of inherently safer 
technologies is best promoted by enhancing understanding of 
concepts. Inherently safer design should be a way of thinking 
and not a one-time activity to comply with the regulation, done 
once and then forgotten.
    Thank you for the opportunity to share our views with the 
committee.
    Mr. Lungren. Thank you very much, Mr. Berger. Again, we 
will look forward to the question-and-answer period with you as 
well.
    [The statement of Mr. Berger follows:]

                   Prepared Statement of Scott Berger

    The Center for Chemical Process Safety (CCPS) is sponsored by the 
American Institute of Chemical Engineers (AIChE), which represents 
Chemical Engineering Professionals in technical matters in the United 
States. CCPS is dedicated to eliminating major incidents in chemical, 
petroleum, and related facilities by:

         Advancing state of the art process safety technology and 
        management practices
         Serving as the premier resource for information on process 
        safety
         Fostering process safety in engineering and science education
         Promoting process safety as a key industry value
    CCPS was formed by AIChE in 1985 as the chemical engineering 
profession's response to the Bhopal, India chemical release tragedy. In 
the past 21 years, CCPS has defined the basic practices of process 
safety and supplemented this with a wide range of technologies, tools, 
guidelines, and informational texts and conferences. CCPS' output 
includes more than 70 Guideline books, more than 90 university 
lectures, and a monthly e-mail process safety lesson delivered to more 
than 600,000 plant personnel around the world in 17 languages. The CCPS 
book "Guidelines for Analyzing and Managing the Security 
Vulnerabilities of Fixed Chemical Sites" (2002) has been used by 
thousands of plants around the world to evaluate chemical facility 
security, and is the basis for New Jersey State security regulation and 
the voluntary security programs of numerous chemical and petroleum 
trade associations. Today, CCPS has more than 85 member companies in 
the US and around the world, and maintains an active program to 
continue advancing the practice of process safety.
    CCPS supports national legislation addressing the security of 
facilities that manufacture and use chemicals. The House Bill as it 
exists today addresses all the important points that CCPS believes are 
critical to chemical security. It has been suggested that the Bill 
should also address the use of Inherently Safer Technologies. As the 
organization that developed the most widely-used reference addressing 
Inherently Safer Design ("Inherently Safer Processes: A Lifecycle 
Approach", AIChE Press, New York, 1996), we wanted to take this 
opportunity to explain the fundamentals of Inherently Safer Design, the 
challenges and trade-offs, and the limitations relative to security.

What is inherently safer design?
    Inherently safer design is a concept related to the design and 
operation of chemical plants, and the philosophy is generally 
applicable to any technology. Inherently safer design is not a specific 
technology or set of tools and activities at this point in its 
development. It continues to evolve, and specific tools and techniques 
for application of inherently safer design are in early stages of 
development. The CCPS book, and other literature on inherently safer 
design (for example, by CCPS, Trevor Kletz, and others) describe a 
design philosophy and give examples of implementation, but do not 
describe a methodology. CCPS has begun a project to update its 1996 
book on inherently safer design, and one of the objectives for this 
second edition is to propose one or more specific methods for 
implementation. These methods will hopefully be confirmed and expanded 
upon with use, so that at some time in the future more robust methods 
will exist. Such methods do not exist now.
    What do we mean by inherently safer design? One dictionary 
definition of "inherent" which fits the concept very well is "existing 
in something as a permanent and inseparable element." This means that 
safety features are built into the process, not added on. Hazards are 
eliminated or significantly reduced rather than controlled and managed. 
The means by which the hazards are eliminated or reduced are so 
fundamental to the design of the process that they cannot be changed or 
defeated without changing the process. In many cases this will result 
in simpler and cheaper plants, because the extensive safety systems 
which may be required to control major hazards will introduce cost and 
complexity to a plant. The cost includes both the initial investment 
for safety equipment, as well as the ongoing operating cost for 
maintenance and operation of safety systems throughout the life of the 
plant.
    hemical process safety strategies can be grouped in four 
categories:

         Inherent - as described in the previous paragraphs (for 
        example, replacement of an oil based paint in a combustible 
        solvent with a latex paint in a water carrier)
         Passive - safety features which do not require action by any 
        device, they perform their intended function simply because 
        they exist (for example, a blast resistant concrete bunker for 
        an explosives plant)
         Active - safety shutdown systems to prevent accidents (for 
        example, a high pressure switch which shuts down a reactor) or 
        to mitigate the effects of accidents (for example, a sprinkler 
        system to extinguish a fire in a building). Active systems 
        require detection of a hazardous condition and some kind of 
        action to prevent or mitigate the accident.
         Procedural - Operating procedures, operator response to 
        alarms, emergency response procedures.

    In general, inherent and passive strategies are the most robust and 
reliable, but elements of all strategies will be required for a 
comprehensive process safety management program when all hazards of a 
process and plant are considered.
    Approaches to inherently safer design fall into these categories:

         Minimize--replace a hazardous material with a less hazardous 
        substance, or a hazardous chemistry with a less hazardous 
        chemistry
         Moderate--reduce the hazards of a process by handling 
        materials in a less hazardous form, or under less hazardous 
        conditions, for example at lower temperatures and pressures
         Simplify--eliminate unnecessary complexity to make plants 
        more "user friendly" and less prone to human error and 
        incorrect operation

    One important issue in the development of inherently safer chemical 
technologies is that the property of a material which makes it 
hazardous may be the same as the property which makes it useful. For 
example, gasoline is flammable, a well known hazard, but that 
flammability is also why gasoline is useful as a transportation fuel. 
Gasoline is a way to store a large amount of energy in a small quantity 
of material, so it is an efficient way of storing energy to operate a 
vehicle. As long as we use large amounts of gasoline for fuel, there 
will have to be large inventories of gasoline somewhere.

Inherently safer design and the chemical industry
    While some people have criticized the chemical industry for 
resisting inherently safer design, we believe that history shows quite 
the opposite. The concept of inherently safer design was first proposed 
by an industrial chemist (Trevor Kletz, of ICI in the UK), and it has 
been publicized and promoted by many technologists from petrochemical 
and chemical companies - ICI, Dow, Rohm and Haas, ExxonMobil, and many 
others. The companies that these people work for have strongly 
supported efforts to promote the concept of inherently safer chemical 
technologies.
    The members of CCPS enthusiastically supported the publication of 
the Inherently Safer Processes book in 1996. Several companies ordered 
large numbers of copies of the book for distribution to their chemists 
and chemical engineers. CCPS members have recognized a need to update 
this book after 10 years, and there is a current project to write a 
second edition of the book, with active participation by CCPS member 
companies.
    There has been some isolated academic activity on how to measure 
the inherent safety of a technology (and no consensus on how to do 
this), but we have seen little or no academic research on how to 
actually go about inventing inherently safer technology. All of the 
papers and publications that we have seen describing inherently safer 
technologies have either been written by people working for industry, 
or describe designs and technologies developed by industrial companies. 
And, we suspect that there are many more examples which have not been 
described. We believe that industry has strongly advocated inherently 
safer design, supporting the writing of CCPS books on the subject, 
teaching the concept to engineers (who most likely never heard of it 
during their college education), and incorporating it into internal 
process safety management programs. Nobody wants to spend time, money, 
and scarce technical resources managing hazards if there are viable 
alternatives that make this unnecessary.
Inherently safer design and security

    Safety and security are good business. Safety and security 
incidents threaten a community's willingness to allow a plant to 
operate in their neighborhood, while good performance in these areas 
results in an improved community image for the company and plant, 
reduced risk and actual losses, and increased productivity, as 
discussed in the CCPS publication, "Business Case for Process Safety," 
which has been recently revised and updated.
    A terrorist attack on a chemical plant that causes a toxic release 
can have the same kinds of potential consequences as accidental events 
resulting in loss of containment of a hazardous material or large 
amounts of energy from a plant. Clearly anything which reduces the 
amount of material, the hazard of the material, or the energy contained 
in the plant will also reduce the magnitude of this kind of potential 
security related event. The chemical industry recognizes this, and 
current security vulnerability analysis protocols require evaluation of 
the magnitude of consequences from a possible security related loss of 
containment, and encourage searching for feasible means of reducing 
these consequences. But inherently safer design is not a solution which 
will resolve all issues related to chemical plant security. It is one 
of the tools available to address concerns, and needs to be used in 
conjunction with other approaches, particularly when considering all 
potential security hazards.
    In fact, inherently safer design will rarely avoid the need for 
implementing conventional security measures. To understand this, one 
must consider the four main elements of concern for security 
vulnerability in the chemical industry:

         Off-site consequences from toxic release, a fire, or an 
        explosion
         Theft of material or diversion to other purposes, for example 
        the ammonium nitrate used in the first attempt to destroy the 
        World Trade Center in New York, or for the Oklahoma City 
        bombing
         Contamination of products, particularly those destined for 
        human consumption such as pharmaceuticals, food products, or 
        drinking water
         Degradation of infrastructure such as the loss of 
        communication ability from the second World Trade Center 
        attacks
    Inherently safer design of a process addresses the first bullet, 
but does not have any impact whatsoever on conventional security needs 
for the others. A company will still need to protect the site the same 
way, whether it uses inherently safer processes or not. Therefore, 
inherently safer design will not significantly reduce security 
requirements for a plant.
    The objectives of process safety management and security 
vulnerability management in a chemical plant are safety and security, 
not necessarily inherent safety and inherent security. It is possible 
to have a safe and secure facility for a facility with inherent 
hazards. In fact this is essential for a facility for which there is no 
technologically feasible alternative - for example, we cannot envision 
any way of eliminating large inventories of flammable transportation 
fuels in the foreseeable future.
    An example from another technology - one which many of us 
frequently use - may illustrate how the true objective of safety and 
security management is safety and security, not inherent safety and 
security. Airplanes have many major hazards associated with their 
operation, and we have seen airplanes used for terrorism. In fact, 
essentially the entire population of the United States, or even the 
world, is potentially vulnerable to this hazard.
    Airlines are in the business of transporting people and things from 
one place to another. They are not really in the business of flying 
airplanes - that is just the technology they have selected to 
accomplish their real business purpose. Inherently safer technologies 
which completely eliminate this hazard are available - high speed rail 
transport is well developed in Europe and Japan.
    But we do not require airline companies to adopt this technology, 
or even to consider it and justify why they do not adopt it. We 
recognize that the true objective is "safety" and "security" not 
"inherent safety" or "inherent security." The passive, active, and 
procedural risk management features of the air transport system have 
resulted in an enviable, if not perfect, safety record, and nearly all 
of us are willing to travel in an airplane or allow them to fly over 
our homes.
Some issues and challenges in implementation of inherently safer design

         The chemical industry is a vast interconnected ecology of 
        great complexity. There are dependencies throughout the system, 
        and any change will have cascading effects throughout the 
        chemical ecosystem. It is possible that making a change in 
        technology that appears to be inherently safer locally at some 
        point within this complex enterprise will actually increase 
        hazards elsewhere once the entire system reaches a new 
        equilibrium state. Such changes need to be carefully and 
        thoughtfully evaluated to fully understand all of their 
        implications.
         In many cases it will not be clear which of several potential 
        technologies is really inherently safer, and there may be 
        strong disagreements about this. Chemical processes and plants 
        have multiple hazards, and different technologies will have 
        different inherent safety characteristics with respect to each 
        of those multiple hazards. Some examples of chemical 
        substitutions which were thought to be safer when initially 
        made, but were later found to introduce new hazards include:
         Chlorofluorcarbon (CFC) refrigerants - low acute toxicity, 
        non-flammable, but later found to have long term environmental 
        impacts
         PCB transformer fluids - non-flammable, but later determine 
        to have serious toxicity and long term environmental impacts
         Who is to determine which alternative is inherently safer, 
        and how to make this determination? This decision requires 
        consideration of the relative importance of different hazards, 
        and there may not be agreement on this relative importance. 
        This is particularly a problem with requiring the 
        implementation of inherently safer technology - who determines 
        what that technology is? There are tens of thousands of 
        chemical products manufactured, most of them by unique and 
        specialized processes.
    The real experts on these technologies, and on the hazards 
associated with the technology, are the people who invent the processes 
and run the plants. In many cases they have spent entire careers 
understanding the chemistry, hazards, and processes. They are in the 
best position to understand the best choices, rather than a regulator 
or bureaucrat with, at best, a passing knowledge of the technology. 
But, these chemists and engineers must understand the concept of 
inherently safer design, and its potential benefits--we need to educate 
those who are in the best position to invent and promote inherently 
safer alternatives.
         Development of new chemical technology is not easy, 
        particularly if you want to fully understand all of the 
        potential implications of large scale implementation of that 
        technology. History is full of examples of changes that were 
        made with good intentions that gave rise to serious issues 
        which were not anticipated at the time of the change, such as 
        the use of CFCs and PCBs mentioned above. Co-author Hendershot 
        personally has published brief descriptions of an inherently 
        safer design for a reactor in which a large batch reactor was 
        replaced with a much smaller continuous reactor. This is easy 
        to describe in a few paragraphs, but actually this change 
        represents the results of several years of process research by 
        a team of several chemists and engineers, followed by another 
        year and millions of dollars to build the new plant, and get it 
        to operate reliably. And, the design only applies to that 
        particular product. Some of the knowledge might transfer to 
        similar products, but an extensive research effort would still 
        be required. Furthermore, Dennis Hendershot has also co-
        authored a paper which shows that the small reactor can be 
        considered to be less inherently safe from the viewpoint of 
        process dynamics - how the plant responds to changes in 
        external conditions - for example, loss of power to a material 
        feed pump. The point - these are not easy decisions and they 
        require an intimate knowledge of the process.
         Extrapolate the example in the preceding paragraph to 
        thousands of chemical technologies, which can be operated 
        safely and securely using an appropriate blend of inherent, 
        passive, active, and procedural strategies, and ask if this is 
        an appropriate use of our national resources. Perhaps money for 
        investment is a lesser concern - do we have enough engineers 
        and chemists to be able to do this in any reasonable time 
        frame? Do the inherently safer technologies for which they will 
        be searching even exist?
         The answer to the question "which technology is inherently 
        safer?" may not always the same--there is most likely not a 
        single "best technology" for all situations. Consider this non-
        chemical example. Falling down the steps is a serious hazard in 
        a house and causes many injuries. These injuries could be 
        avoided by mandating inherently safer houses - we could require 
        that all new houses be built with only one floor, and we could 
        even mandate replacement of all existing multi-story houses. 
        But would this be the best thing for everybody, even if we 
        determined that it was worth the cost? Many people in New 
        Orleans survived the flooding in the wake of Hurricane Katrina 
        by fleeing to the upper floors or attics of their houses. Some 
        were reportedly trapped there, but many were able to escape the 
        flood waters in this way.
    So, single story houses are inherently safer with respect to 
falling down the steps, but multi story houses may be inherently safer 
for flood prone regions. We need to recognize that decision makers must 
be able to account for local conditions and concerns in their decision 
process.
         Some technology choices which are inherently safer locally 
        may actually result in an increased hazard when considered more 
        globally. A plant can enhance the inherent safety of its 
        operation by replacing a large storage tank with a smaller one, 
        but the result might be that shipments of the material need to 
        be received by a large number of truck shipments instead of a 
        smaller number of rail car shipments. Has safety really been 
        enhanced, or has the risk been transferred from the plant site 
        to the transportation system, where it might even be larger?
         We have a fear that regulations requiring implementation of 
        inherently safer technology will make this a "one time and 
        done" decision. You get through the technology selection and 
        pick the inherently safer option, meet the regulation, and then 
        you don't have to think about it any more. We want engineers to 
        be thinking about opportunities for implementation of 
        inherently safer designs at all times in everything they do--it 
        should be a way of life for those designing and operating 
        chemical, and other, technologies. For example:
         Research chemists and engineers--inherently safer fundamental 
        chemistries
         Process development engineers--inherently safer processes 
        based on those chemistries
         Design engineers--inherently safer plant design using the 
        selected technology and process
         Detailed design engineers--inherently safer equipment 
        details--minimize the length and size of pipes, vessels, and 
        other equipment, make the plant design "user friendly"
         Plant operation engineers and operators--develop inherently 
        safer operating procedures, look for opportunities for 
        enhancing inherent safety in existing facilities
         Operators--look for inherently safer ways to do all of the 
        tasks involved in the day to day operation of a plantInherently 
        safer design and operation needs to be the way everybody 
        involved in chemical technology thinks, not just a one time 
        exercise to comply with a regulation.
         Inherently safer processes require innovation and creativity. 
        How do you legislate a requirement to be creative? Inherently 
        safer alternatives can not be invented by legislation.

What should we be doing to encourage inherently safer technology?
    Inherently safer design is primarily an environmental and process 
safety measure, and its potential benefits and concerns are better 
discussed in context of future environmental legislation, with full 
consideration of the concerns and issues discussed above. While 
consideration of inherently safer processes does have value in some 
areas of chemical plant security vulnerability - the concern about off 
site impact of releases of toxic materials - there are other approaches 
which can also effectively address these concerns, and industry needs 
to be able to utilize all of the tools in determining the appropriate 
security vulnerability strategy for a specific plant site. Some of the 
current proposals regarding inherently safer design in security 
regulations seem to drive plants to create significant paperwork to 
justify not using inherently safer approaches, and this does not 
improve security.
    We believe that future invention and implementation of inherently 
safer technologies, to address both safety and security concerns, is 
best promoted by enhancing awareness and understanding of the concepts 
by everybody associated with the chemical enterprise. They should be 
applying this design philosophy in everything they do, from basic 
research through process development, plant design, and plant 
operation. Also, business management and corporate executives need to 
be aware of the philosophy, and its potential benefits to their 
operations, so they will encourage their organization to look for 
opportunities where implementing inherently safer technology makes 
sense.
    We believe that the approach that the Environmental Protection 
Agency has taken to promote Green Chemistry provides a good example of 
how the Federal government can promote the adoption of inherently safer 
technology in industry. EPA has been active in promoting the principals 
of green chemistry, promoting incorporation of green chemistry into the 
education of chemists, and in sponsoring conferences and technical 
meetings on the subject. Each year a number of awards are given to 
researchers and to companies for outstanding examples of implementation 
of green chemistry. An effort like this for inherently safer design 
will increase its visibility for all chemical industry technologists, 
promote sharing of ideas and information, recognize important 
contributions, and encourage others to u y the principles of inherently 
safer design.
    Mr. Lungren. The Chair would now recognize Mr. Marty 
Durbin, the Director of Federal Affairs of the American 
Chemical Council, to testify.

   STATEMENT OF MARTIN J. DURBIN, MANAGING DIRECTOR, FEDERAL 
              AFFAIRS, AMERICAN CHEMISTRY COUNCIL

    Mr. Durbin. Thank you, Mr. Chairman. I am pleased to appear 
before this panel again on this important topic. I want to 
thank you for your leadership, along with the ranking members 
and other cosponsors of your bill, in introducing H.R. 5695.
    As you noted in your opening statement, the business of 
chemistry is an essential part of our economy and our daily 
lives. The ACC has consistently led the call for meaningful 
chemical security legislation, and we believe the Congress has 
an obligation to help protect this critical part of the 
Nation's crucial infrastructure. But time is running out for 
this Congress to act.
    Fortunately, your bill could represent a whole new ball 
game. This bipartisan bill is like getting a runner into 
scoring position in the bottom of the ninth in a tied game. The 
outcome is still uncertain. Now we all have a chance to win.
    Now, we have had only 24 hours to review the bill, and 
frankly, we are still reviewing it with our members, and they 
are clearly taking a look at it as well. But it clearly 
represents and presents a great opportunity to realize our goal 
of meaningful chemical security legislation this year.
    As I testified last year, there has been a paradigm shift 
since 9/11 in the way our members approach facility security. 
Without waiting for government direction, ACC quickly adopted 
the responsible security code which requires each member to 
complete a four-step process where they prioritize each 
facility by risk, assess the vulnerabilities, implement 
security enhancements and then verify the implementation of 
physical security measures by using third parties that are 
credible in the local community.
    Now, since implementing the code, I am proud to report that 
our member companies have invested nearly $3 billion in 
additional security enhancements, and the code has been widely 
praised and recognized. As an example, the Coast Guard approved 
the code as an alternative form of compliance with the Maritime 
Transportation Security Act, or MTSA.
    While ACC members account for nearly 85 percent of the 
Nation's chemical manufacturing, we do not represent the entire 
chemical sector. While I am confident others in the sector are 
indeed taking steps to increase security, the critical role of 
our products throughout the economy points out the need for us 
to have Federal legislation in order to ensure that the entire 
sector is protected.
    ACC has long argued that chemical security legislation must 
create risk-based, performance-oriented standards with DHS 
oversight. Establish uniform national standards for the entire 
sector, protect sensitive information, avoid redundancy and 
inconsistency; that is, the legislation should recognize and be 
consistent with successful efforts of MTSA that was passed 3 
years ago.
    And finally, to recognize responsible voluntary efforts, we 
believe Federal legislation should enable DHS to give ACC 
members credit for their substantial voluntary at-risk 
expenditures implementing the responsible care security code.
    As panel members know, there has been a great deal of 
discussion surrounding inherently safer technology and you have 
the panel members here to discuss that. Let me be clear: The 
business of chemistry has long embraced inherently safer 
approaches, but during the hearing last week on this same 
topic, again, the experts on the panel here that literally 
wrote the book on inherent safety at chemical facilities warned 
against mandating ISC. They called instead for performance-
oriented legislation that allows facilities flexibility to 
choose from an array of security measures. We would agree with 
that assessment.
    Now, again, we will need to fully review H.R. 5695 with our 
members, but we are pleased to say this committee's action in 
introducing the bill, in convening this hearing today, are very 
positive steps that will take us a long way toward enacting 
meaningful legislation still this year.
    Based on our initial review, we see three primary strengths 
in the bill: solidly focuses on promoting the security of the 
chemical sector and allows facilities the flexibility to select 
appropriate measures that will achieve clearly defined 
standards; provides an appropriate mechanism for recognizing 
significant investments that our members and others have made 
under the responsible care security code; and we believe it 
adopts a very workable and sensible approach for dealing with 
MTSA facilities that are regulated by the Coast Guard, avoiding 
duplicative regulation but allowing the Secretary to require 
additional security measures if needed.
    However, in our view, there are still some areas we would 
like that would require further discussion, including the need 
for a clearer statement on Federal preemption. In our view, 
chemical security, like nuclear or aviation security, is a 
national concern and our preference has been for legislation to 
emulate the strong Federal preemption language Congress 
introduced previously in the Hazardous Materials Transportation 
Act.
    Also, the new bill contains important information 
protection provisions. It doesn't appear to penalize those that 
would knowingly violate information security protocols. So we 
believe this should be addressed and look forward to security 
discussion.
    Of course, our biggest concern is the congressional 
calendar. We know time is tight, and it will take a concerted 
team effort from all of us to bring this bill to pass this 
year, and we look forward to working with you to make that a 
reality.
    Mr. Lungren. Thank you very much Mr. Durbin. I appreciate 
that.
    [The statement of Mr. Durbin follows:]

                 Prepared Statement of Martin J. Durbin

    Mr. Chairman, I am Marty Durbin, Managing Director of Federal 
Legislative Affairs with the American Chemistry Council ("ACC"). The 
American Chemistry Council represents the leading companies engaged in 
the business of chemistry. We thank you for calling today's hearing on 
a subject of great importance both to the chemistry sector I represent 
and the nation at large.
    In addition I want to thank you for your leadership in introducing 
the Chemical Facility Anti-Terrorism Act of 2006, along with the 
efforts for Ranking Subcommittee Member Loretta Sanchez, Committee 
Chairman Peter King and Ranking Member Bennie G. Thompson and other co-
sponsors.
    When it comes to chemical facilities and their communities, 
Congress - like law enforcement officers and emergency responders - has 
an obligation to "serve and protect" this crucial part of the nation's 
critical infrastructure. Today, nearly five full years after 9/11, this 
bill has the potential to achieve this goal.
    Today, I would like to address several points:
    The chemistry sector and the products we produce are essential for 
the physical, economic and competitive well-being of our nation.
         ACC member companies--without waiting for federal legislation 
        have already made an unprecedented commitment to security and 
        implemented the nation's most widely-recognized industry 
        security program: the Responsible Carer Security Code.
         Despite such efforts by our members, the chemistry sector 
        needs broader protection, which can only be provided by the 
        federal government.
         The legislation that promotes our sector's security must meet 
        key criteria.
    Finally, I would like to offer our initial views on your new 
chemical security bill.

Chemistry--Essential2 America
    Products supplied by the chemistry sector are essential to 
manufacturing, agriculture, energy, transportation, technology, 
communications, health, education, defense, and virtually every aspect 
of our lives. Basic industrial chemicals are the raw materials for 
thousands of other products including plastics, water treatment 
chemicals, detergents, pharmaceuticals and agricultural chemicals. 
Their applications include medicines and medical technologies that save 
our lives, computers that expand our horizons, foods we eat, water we 
drink, cars we drive, homes in which we live, and clothes we wear.
    Our $550 billion dollar industry employs almost 900,000 people 
across the country, and accounts for 10 percent of all US merchandise 
exports. In fact, more than 96% of all manufactured goods are directly 
touched by chemistry.
    Chemicals are essential for the life of the nation. Last year, we 
invested $14.3 billion in environmental health and safety programs. We 
generate nearly 1 out of every eight U.S. patents and invest more then 
$22 billion in R&D annually, more than any other industry.

The Chemistry Sector and ACC's Responsible Carer Security Code
    Since 9/11, there has been a paradigm shift in the way we approach 
chemical facility security. Security has always been a top priority for 
America's leading chemical producers, and soon after the terrorist 
attacks of September 11, 2001, members of the American Chemistry 
Council took the lead in securing their facilities. Without waiting for 
government direction, the ACC Board of Directors quickly adopted the 
Responsible Care Security Code, an aggressive plan to further enhance 
security of our facilities, our communities and our products.
    In my testimony before this committee last year, I spoke in some 
detail about ACC's Responsible Care Security Code. In summary, the 
Responsible Care Security Code is a mandatory program for all of our 
members. The Code requires each company to complete a four-step 
process:

         Prioritize every facility by risk;
         Assess vulnerabilities
         Implement security enhancements; and
         Verify the implementation of physical security measures, 
        using third parties that are credible with the local community, 
        such as first responders or law enforcement officials.
    Since implementing the Code, I'm glad to report that our member 
companies have invested nearly $3 billion in security enhancements. 
Additional statistics are available online at www.ResponsibleCare-
US.com.
    The Code has been widely praised and accepted. Under the Maritime 
Transportation Security Act, the US Coast Guard has approved the Code 
as an alternative form of MTSA compliance. And the Code has earned 
praise from government officials and security experts.
    In addition, ACC stepped up our outreach to and cooperation with 
the public sector in Washington and at the local and state levels, 
developing new ways to share information and work together. We helped 
created the Chemical Sector Coordinating Council, which facilitates 
effective coordination between DHS and chemistry businesses to protect 
this critical sector of the nation's infrastructure. This partnership 
proved very valuable to the nation during last year's Gulf hurricanes. 
It should also serve as a constructive basis on which to build a 
regulatory program.
    The benefits of this partnership continue. For example, over the 
last three years, ACC has co-hosted an annual Chemical Security Summit 
at which DHS and other government officials from Washington, the states 
and localities have shared best practice information with industry 
experts. This year's summit is underway right now in Baltimore, an 
example of how we can - and must - work together.

Why America Needs A National Chemical Security Law
    As I have stated in prior testimony, the chemical industry is part 
of the nation's critical infrastructure, an essential asset that needs 
to be protected. Because of our role in the nation's economy, defense 
and health, for instance, the chemical sector must be adequately 
protected.
    ACC members account for nearly 85 percent of the nation's chemical 
production, but we do not encompass the entire sector. In fact, most 
facilities within the sector do not produce chemicals, but rather use 
or store them. Though ACC's members have undertaken significant 
security enhancements under the Responsible Care Security Code, there 
are many nonmember facilities that neither ascribe to the Code nor are 
covered by federal or other security regulations. To protect them and 
the entire chemical sector, a uniform federal law is needed to set and 
enforce standards.

National Chemical Security Legislation and the Crucial Public-Private 
Partnership
    Speaking in Washington in March, DHS Secretary Michael Chertoff 
outlined how government and the private sector must work together to 
promote chemical security. Rather than dictate how security is to be 
achieved, the federal role should take advantage of the "strength of 
the industry - its adaptability, its initiative and its ingenuity - by 
laying out a series of performance standards," Secretary Chertoff said.
    Government should set and enforce clear performance standards 
across the entire chemical sector. Companies must meet those standards, 
and their compliance should be independently verified. The result will 
be enhanced security.
    ACC has consistently argued that national chemical security 
legislation must:

         Create risk-based/performance orientated standards with DHS 
        oversight
         Risk-based--The only sensible way to address the risks posed 
        by terrorist attacks on our homeland is to adopt a risk-based 
        system of prevention and preparedness. Different chemical 
        facilities pose different risks, based on their differing 
        vulnerabilities and consequences, and any regulatory system 
        must reflect those differences and require security measures 
        commensurate with those risks.
         Performance-oriented--Facilities need flexibility to select 
        among appropriate security measures that will effectively 
        address risks. Under Secretary Stephan noted that an overly 
        prescriptive system could, by its predictability, actually 
        assist terrorists in targeting their attacks.
         And, DHS must have the legal authority to police compliance 
        with its standards and to take enforcement action if necessary.
         Establish uniform national standards for the entire industry. 
        Only through the establishment of a set of uniform standards 
        will we be able to protect the entire chemical sector. Chemical 
        security, like nuclear or aviation security, is a national 
        concern. Congress should support federal preemption and 
        prohibit a patchwork of inconsistent state requirements that 
        may actually hamper security by misdirecting resources.
         Protect sensitive information. Information about the 
        vulnerabilities of facilities, and the measures they have taken 
        to reduce them, is literally a roadmap for terrorists. A law 
        that required such information to be created, but then 
        permitted it to be released publicly, would be a step in the 
        wrong direction to improve security.
         Avoid redundancy and inconsistency. Legislation should 
        recognize and be consistent with the highly successful efforts 
        of the Maritime Transportation Security Act (MTSA) passed three 
        years ago. Facilities already secured under MTSA should not be 
        subject to a separate layer of security regulation and 
        inevitably conflicting direction from two different regulatory 
        overseers.
         Recognize responsible voluntary efforts. Based upon their 
        substantial and verifiable efforts to date, ACC members 
        strongly believe that federal legislation should enable DHS to 
        give them credit for their substantial voluntary, at-risk 
        expenditures implementing the Responsible Carer Security Code. 
        We are not asking for anything less stringent than everybody 
        else, only that DHS be allowed to recognize our members' 
        significant actions, just as the Coast Guard has done.
    There has been a great deal of discussion surrounding inherently 
safer technology (IST) in regards to chemical security. The business of 
chemistry has long embraced inherently safer approaches.
    Last week the Senate Environment and Public Works Committee held a 
hearing regarding IST. During that hearing, leading experts who 
literally wrote the book on utilizing IST at chemical facilities warned 
Congress against mandating IST.
    Their testimony supports what I stated a few moments ago, we 
believe chemical security legislation should be performance oriented 
allowing facilities the flexibility to choose from an array of security 
measures. Legislation should not mandate specific security measures.

ACC Views on The Chemical Facility Anti-Terrorism Act of 2006
    Given the bill's introduction only yesterday, we have only been 
able to read it quickly and will, naturally, need time to carefully 
consider its provisions and discuss them with our membership. I am 
pleased to say, though, that the Committee's action in introducing the 
bill, and convening this hearing, are extremely positive steps that 
take us a long way toward the goal of a comprehensive, risk-based, 
performance-oriented, national chemical security program, and we 
commend you
    The bill seems solidly focused on promoting the security of the 
chemical infrastructure. The bill appears to allow chemical facilities 
the flexibility to select appropriate measures to achieve a clearly 
defined standard. There is also a very helpful statement that prevents 
vulnerability assessments or plans from being rejected for not 
including a specific security measure .
    The bill provides an appropriate mechanism for recognizing the 
massive investments that our members have made under the Responsible 
Care Security Code. It also adopts a very workable and sensible 
approach for dealing with MTSA facilities, avoiding duplicative 
regulation but allowing the Secretary to require additional security 
measures if needed, we presume, to meet applicable performance 
standards.
    The bill generally provides very solid information protections, 
clearly providing that sensitive security documents and information 
cannot be released. We note, however, that the bill does appear to 
contain any penalties even for government employees who knowingly 
violate protocols for protecting information. Such penalties have been 
a hallmark of other chemical security bills over the years and are 
needed to give the protections teeth.
    We also believe the bill could go further to address the important 
question of federal preemption. We think a much clearer and more 
appropriate standard would be the one established by Congress in the 
Hazardous Materials Transportation Act - where state requirements are 
preempted unless they are "substantively the same as" the federal 
program.
    Again, I expect that we will have further thoughts on this bill as 
we are able to review it more carefully. But overall, we commend you 
and your colleagues for crafting a good bill that can be the vehicle 
that gets us all to a Rose Garden ceremony this year.

Looking Ahead
    ACC is fully committed to winning passage of an effective chemical 
security bill this year. Our member companies have worked hard to 
obtain this goal, and we promise to continue working closely with this 
subcommittee, the full committee, the Congress and the administration 
to make this a reality.
    As our CEO, Jack N. Gerard said recently, "The 900,000 people who 
work in the chemical industry, the communities where they live and 
work, and the millions of Americans who rely on our products, deserve 
no less."
    Thank you and I will be pleased to answer questions.

    Mr. Lungren. I thank all the witnesses for your testimony, 
and at this time I would like to ask some questions and limit 
myself to 5 minutes before recognizing other members.
    We have this bipartisan approach, which has sustained us 
through the entire effort to come up with this bill; and I hope 
that we continue with that. There has been an area of 
controversy for those who look at this from all sides, and at 
least three of you mentioned that, and that is the issue of 
inherently safer technology, or inherently safer design or 
inherently safer processes, and whether we should somehow 
mandate that or give that regulatory mandate to DHS.
    And I would specifically like to ask this question, Mr. 
Crowley, Mr. Berger; I think we all want to get to the same 
place, but the two of you appear to have slightly different 
views on this. And let me try and put it in the manner of an 
example, and hopefully, it is a good example. If not, maybe the 
two of you could give me a better example.
    But if a water plant, for instance, changes from chlorine 
to bleach, this doesn't mean that the facility would no longer 
need security measures. I think we would all agree on that. 
What true benefit would be generated by the mandate, let's say, 
of a water plant moving from chlorine to bleach when wouldn't 
it still remain an attractive terrorist target, and wouldn't we 
still have other things that we would have to deal with? And 
could we make the judgment that by making that change, we 
necessarily increase the security profile just as a result of 
that?
    And I would ask that to Mr. Crowley and Mr. Berger.
    Mr. Crowley. I will start off and I will defer to Mr. 
Berger. I am an English major, not a chemical engineer.
    Mr. Lungren. That is okay. I am an English major, too, but 
I am also handicapped by being an attorney. So go right ahead.
    Mr. Crowley. I think what would be mandated here is that 
there is a process, and the process would require the chemical 
sector to acknowledge whatever alternative processes may exist. 
It would not necessarily mandate that the facility operator you 
know, choose between you know, the facility operator could 
choose between liquid bleach as one alternative or ultraviolet 
radiation as another, or if there is another disinfectant that 
comes along, do that. But it puts on the table, you know, the 
issue of safer alternatives where they clearly exist and are 
obviously being adopted by a wide range of facilities across 
the country.
    I think the key here is moving away from, you know, the 
gaseous compound, whether it is sulfur dioxide or ammonia or 
chlorine, to another form of the substance, if not another 
technology that eliminates the terrorism risk, you know because 
my understanding is that liquid bleach still poses, you know, 
challenges, but it is far more localized.
    And I think that while you are right, Mr. Chairman, there 
would still be security responsibilities, a facility may find 
when you put together a number of things that it is very cost 
effective because it probably would require fewer guards, it 
probably would require fewer a less arduous evacuation plan, 
the local community may require less in the way of protective 
equipment and gear.
    So when you put the whole ball of wax together, I think 
there -- it is an attractive opportunity. I think the last 
point again is again going back to the issue of the chlorine 
car, you know, unless you put safer alternatives on the table, 
you don't break up the lethal combination that exists right 
here at the Capitol, which is a HAZMAT car sitting next to the 
United States Capitol. That combination is inherently insecure; 
and the only way that you break that up, you know, is by 
requiring a process where people have to evaluate safer 
alternatives where they are practical.
    Mr. Lungren. Mr. Berger?
    Mr. Berger. Mr. Crowley makes some very good points.
    I think the thing that is certainly important to understand 
is that when it comes to the attractiveness of a particular 
target, there are a number of factors that make things 
attractive, and any one of those will make an attractive 
target. You can take away one of those attractiveness factors 
and the target remains equally attractive.
    So removing the let's say removing chlorine from a water 
treatment plant probably is a good thing for safety, but it is 
not going to impact the security, because a terrorist may still 
be interested in contaminating the drinking supply, cutting the 
power to eliminate water, for example, or just disabling the 
plant altogether. So I think in terms of attractiveness, that 
will not have the effect.
    I think the other thing to consider is that this is a 
system, and bleach has to be made someplace in a chemical 
plant. It is made from chlorine. So what you are doing is you 
are transferring the risk from one place to another place. And 
I think Mr. Crowley did make a very good point that this is a 
system evaluation that should be evaluated by the really by the 
Secretary of Homeland Security, basically looking at the whole 
system so that we are not transferring risk from one place to 
another, as opposed to actually reducing risk overall for the 
Nation.
    Mr. Lungren. A lot of questions I could ask, follow-up, but 
I am limited to 5 minutes, so I would like to recognize Ms. 
Sanchez for 5 minutes.
    Ms. Sanchez. Mr. Chairman, we have three votes on the 
floor. They just started. Two amendments and then two 
amendments and then the passage of the bill. So how do you want 
to work that?
    Mr. Lungren. Fifteen and
    Ms. Sanchez. Fifteen and 5. I would assume 5 and 5.
    Mr. Lungren. Why don't you go ahead with your questions? We 
will let Ms. Sanchez to have her 5 minutes of questions, and 
then we will break and come back.
    Ms. Sanchez. As soon as the votes are over?
    Mr. Lungren. Yes.
    Ms. Sanchez. Okay.
    Thank you again, gentlemen, for being before us to testify. 
I have a couple of questions well, maybe two or three. 
Hopefully, I will get through them.
    Senator first of all, what does your community expect from 
the Federal Government when it comes to securing chemical 
sites?
    Mr. Balboni. They expect that there will be regulations 
that will have a uniform standard. They expect I know this 
comes as a big surprise money. You know, that really is one of 
the major things that we are focused on right now in New York 
for a whole host of other issues. And they expect consistency 
and uniformity.
    You know, the unique thing about New York City is that as 
we look across the river and we see New Jersey, we realize that 
we can do everything we want to make everything safer, but yet 
you have got you know, no disparagement to New Jersey; it is a 
great place, but they have two miles of very, very vulnerable 
facilities. And so if they are not consistent, also, if they 
are not engaged, well then, our residents are not as safe as 
they could be.
    Ms. Sanchez. Do you also expect that the Federal Government 
will put teeth in and have some penalties or some form by which 
to enforce those standards that we put in?
    Mr. Balboni. Yes. You know, the issue of penalties, my 
original initial approach was for penalties. We could not get 
that through the legislature.
    I think, frankly, that is the job of the Federal Government 
to come in and work with the industry to see what is the best 
way to enforce the standards that are developed.
    Ms. Sanchez. Thank you.
    Mr Dubin, to what degree are you comfortable giving the 
Department of Homeland Security regulatory authority over the 
security of chemical facilities?
    Mr. Durbin. Ms. Sanchez, we have actually stated all along 
that we believe DHS should be given authority to you know, 
oversight, inspection and enforcement authority over chemical 
security. Again, we believe this is part of our national 
critical infrastructure, and that it we need to ensure that it 
is adequately protected. And while our member companies have 
taken great steps and made great actions in investments, we 
need to only by having uniform national standards that are, you 
know, enforced by the Department of Homeland Security can we 
ensure that the entire sector is adequately protected.
    Ms. Sanchez. In other words, some of your companies have 
stepped up to the plate, and others haven't; and they find that 
it is a cost consideration; they would prefer that we put in 
some sort of standard across the ways so they are not at a cost 
disadvantage.
    Would you say that is reasonable?
    Mr. Durbin. First of all, I would say all of our companies 
have stepped up to the plate and made the investments here. But 
I think that the reason now we have to have national uniform 
standards is, number one, we are part of critical part of the 
infrastructure. We need to make sure that we don't have a 
patchwork of standards out at the State level. And certainly we 
want to make sure that you know, that we believe we have 
actually we have got a roap map here for how to do security at 
chemical facilities.
    I think we have actually got a model, and that we should 
have the entire sector taking the same kinds of aggressive 
actions that our members have taken.
    Ms. Sanchez. Aside from cost considerations, what reasons 
do you think would discourage companies from using inherently 
safer technologies?
    Mr. Durbin. Again, I wouldn't say cost has anything from 
our standpoint, again, as I said, the chemistry sector, 
certainly ACC members, have embraced inherently safer 
approaches.
    As Mr. Berger mentioned in his testimony, it is good sense. 
It makes sense for our facilities to be operating as safely and 
securely as possible. No one has a greater interest in making 
sure that our communities, our products and our facilities are 
neither harmed nor misused.
    And again, the concept of inherently safer approaches is 
actually a requirement within for our member companies as part 
of the responsible care program and the security code.
    Ms. Sanchez. Mr. Berger, some businesses say that we are 
putting too many mandates, that we shouldn't be putting more 
regulations, that we are putting too much cost onto people.
    What is the sense of the engineers that sit inside of these 
companies? What would your membership say about having 
standards and really having enforcement of those standards?
    Mr. Berger. Generally, our organization does not take 
position on issues like that. But what we would say is, if 
there is going to be a regulation, it should be one that is 
technically sound and implementable and is cost effective. So I 
think that is that is the angle that we would take.
    Ms. Sanchez. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    Mr. Lungren. Thank you. With your indulgence, we will just 
have to recess until we finish these votes. I think we have a 
15 minute vote followed by two probably 5 minute votes, and 
then we will return and resume questioning.
    Thank you very much.
    [Recess.]
    Mr. Lungren. Mr. Pearce is recognized for 5 minutes.
    Mr. Pearce. Thank you, Mr. Chairman. Mr. Crowley, now you 
have my curiosity up. What materials are carried in that HAZMAT 
car, in the rail car that sits a block over here?
    Mr. Crowley. At the present time, there is a court 
injunction based on a case between D.C. and CSX, so at the 
present time, under a voluntary rerouting plan by CSX, there is 
no HAZMAT car. But CSX, on the one hand, has gone to court to 
assert its right at some point in the future.
    Mr. Pearce. When they let's say they assert their right 
favorably, what do they carry?
    Mr. Crowley. I believe they carry, among other things, 
ammonia, chlorine and sulfur dioxide.
    Mr. Pearce. Mr. Balboni, Senator, what how did you take 
care of overzealous regulators in your bill? In other words, 
that is constantly a problem that you give people just a little 
bit of access into an industry, and suddenly they are beginning 
to control it from outside.
    How did you manage that problem?
    Mr. Balboni. Well, what we did was, we basically said to 
the Office of Homeland Security in the State, you will work 
with the different sectors and facilities, use the Web-based 
instrument as the initial point of contact, review the returns; 
and then do a site review and develop the plan based upon what 
the unique facility requirements are and, frankly, develop a 
practical application of the security analysis.
    Let me share with you, Congressman, one situation in 
Brooklyn, New York. We had a food manufacturer that had a 500-
gallon tank of anhydrous ammonia, and that has a toxic 
chemistry if released. It was right near a school, an elevated
    Mr. Pearce. With all due respect Mr., Balboni, I am talking 
about the overzealous regulator that is worried about the box 
car that runs through his district, who decides he is going to 
reroute that. Is
    Mr. Balboni. I put a rail transport bill in.
    Mr. Pearce. I am talking about the overzealous regulator.
    Let's use your example of a drum of clear water then. Okay, 
something is not hazardous. We all remember OSHA from the 
1970s. They had the horses sitting out here, the OSHA-approved 
horse; and it has bumpers on both ends. It has kiddie legs, got 
these little legs jacked down to keep it from leaning over and 
other things to catch the emissions from the back and stuff 
like that.
    I mean, regulators go nuts sometimes, and I just asked, 
what did you do to stop the overzealous regulators.
    Mr. Balboni. We worked with the Department and we gave them 
pretty clear regulations as to what they were trying to do in 
terms of security enhancements.
    Mr. Pearce. Fair enough.
    Mr. Crowley, you have seen Mr. Berger's testimony that he 
says a lot of times the problem is transference; and in fact, I 
think if you look at the example used on page 2, you talk about 
the conversion from chlorine gas into bleach, to liquid bleach; 
and yet somewhere somebody has to use that chlorine gas, so you 
transfer the risk somewhere else, which is part of Mr. Berger's 
testimony. What about that?
    Mr. Crowley. Well, you will have chlorine gas sitting on a 
manufacturing site, but I believe that if you switch from 
chlorine bleach to liquid bleach, you go from having a 
potentially catastrophic terrorism event to a much more 
localized event and a situation where you can manage.
    So I don't think anyone at this point is saying that we are 
going to get out of the chlorine gas business.
    Mr. Pearce. You are saying there is no transference, the 
fact that the bleach is made somewhere else, you transfer the 
risk out to where the bleach is made?
    Mr. Crowley. The key is going from a very significant 
catastrophic terrorism risk to a lower level of risk that is 
more manageable. You don't eliminate the risk entirely; that is 
true.
    Mr. Pearce. What would you say about Mr. Berger's testimony 
where he describes that due to this, the IST process, 
inherently safer technology, some nuclear power plant was 
required to downgrade, put a smaller unit in; and it made it 
safer with respect to the one process, but with respect to the 
other process it became inherently less safe.
    Who would make those decisions? Who would actually at the 
end of the day make the decisions, what is inherently safe and 
what is not? And where is the transference occurring? Who would 
be on the point to make that decision?
    Mr. Crowley. I think one of the values that is in the bill 
in terms of the tiering scheme is that, on the one hand, DHS 
would say would assign, you know, this particular facility at a 
very high level of risk or a relatively lower level of risk. 
And at that point, working with the facility operator and, in 
my judgment, also taking into account the transportation aspect 
of operating that facility then it would be ultimately the 
facility operator that works to use whatever tools are 
available, including inherently safer processes, to be able to 
move from a high level of risk, which one would assume is very 
expensive, to a relatively low level of risk or off the charts 
entirely.
    Mr. Pearce. You would mandate or not mandate inherently 
safer technology?
    Mr. Crowley. I think you mandate a process that puts 
inherently safer technology on the table, as Mr. Berger said, 
as one tool in the arsenal.
    Mr. Pearce. And, Mr. Crowley, you won't then object to the 
flexibility? I am not sure if Mr. Berger or Mr. Durbin talked 
about the flexibility to choose between the processes. You 
wouldn't object to that?
    Mr. Crowley. Not at all. But a facility operator has to be, 
and I think one of the values of the New Jersey bill, for 
example, is that it does require the facility operator to 
consider whatever safer alternatives do exist.
    Mr. Pearce. Thank you very much, Mr. Chairman.
    Mr. Lungren. Gentleman's time has expired.
    Gentlelady from Texas, Ms. Jackson Lee, is recognized for 5 
minutes.
    Ms. Jackson Lee. I thank the distinguished Chair and the 
distinguished ranking woman.
    This is a hearing that hopefully will help us craft the 
best initiative when you have the clashes of an industry 
attempting to provide services such as an industry in my 
region, Texas, where I think a commonsense approach is 
necessary to ensure that transport and possession of these 
particular chemicals do not create a catastrophic event.
    I think after I noticed, Senator Balboni, you started out 
your testimony, as I would expect, by your recognition of some 
of these issues after 9/11, and your testimony is very 
instructive.
    But be reminded that in the Oklahoma incident, as well, 
chemicals for the first time were introduced to America for use 
other than fertilizing their yards. So I think this is a 
extremely important concept and one that needs great attention.
    I am going to ask and forgive me for being detained on the 
floor, but I want to hear your comments on this concept that is 
in between the Senate bill and the House bill; and if I could 
hear for myself it might have been in your testimony. But that 
is, of course, the issue of the Federal law preempting all 
versus their setting a minimum standard, which is the Federal 
standard, but if States wish to accelerate to a higher level of 
standards, based upon their own needs, that would be a 
responsible approach to take.
    Senator And if I could get an answer from all of the 
panelists, thank you very much.
    Mr. Balboni. Thank you, Congresswoman.
    The perspective from New York State was that the chemistry 
had already recognized many of the vulnerabilities and threats 
and had done a lot of work, in and of themselves on a voluntary 
basis. And what we are doing is, we are not reinventing the 
wheel, but rather building upon what they had done.
    Having said that, the Federal preemption aspect of this 
legislation, I believe is necessary as it relates to the 
penalty component. What I found, politically in New York State, 
we were not able to get the penalty provision in our law; and I 
think that that is really what you need to do for compliance. 
In addition to which, there are some strengths here in the bill 
that we are lacking, and that is very crucial as it relates to 
the whistle-blower protections, as it relates to letting the 
industries develop their innovation and best practices, and so 
you don't micromanage.
    Now, having said that, there is a provision in the bill 
that allows for waivers, if you have some different types of 
standards, I would like to see that the Department of Homeland 
Security take have a sensitivity that one size does not fit 
all, and there may be a certain situation which you need to 
have a different regulatory view of it. And we hope that the 
Department will work with us on that.
    Ms. Jackson Lee. You are saying then that you fall more 
towards the flexibility of a standard that is set under the 
House bill, and then try to
    Mr. Balboni. Exactly.
    Ms. Jackson Lee.--make it for more palatable for States and 
other entities?
    Mr. Balboni. Yes.
    Ms. Jackson Lee. Thank you.
    Mr. Crowley?
    Mr. Crowley. Again, Congresswoman, if you look at the New 
Jersey example and here in the Congress between the House and 
the Senate, there is obviously the concept of inherently safe 
technology and whether it should be a part of the process and 
something that DHS has the authority to put on the table as one 
solution, you know, among a range of options for securing our 
chemistry sector.
    If, in fact, Congress were to pass a bill that does not 
include that explicit, you know, feature, it would be hard for 
me to see why the State of New Jersey, for example, in its 
current approach would not be able to use as it currently does 
a voluntary effort, but it requires their industry within the 
State of New Jersey to at least consider IST as among the 
options in terms of securing their facilities.
    So I certainly think, as I said in my testimony, we should 
be talking about establishing strong security floors, but not 
necessarily creating ceilings.
    Ms. Jackson Lee. And so you also want requirement language, 
because I just noted that you said the State of New Jersey has 
voluntary collaboration, but you are saying--
    Mr. Crowley. The State of New Jersey, as I understand it, 
does not require a facility to act on the particular technology 
available, but must consider safer alternatives in its security 
planning.
    Ms. Jackson Lee. And you want at least the minimal floor 
with procedures in place?
    Mr. Crowley. I believe that for a chemical security 
strategy to be viable, IST, or whatever you call it, has to be 
something put on the table for all stakeholders to try to 
resolve.
    Ms. Jackson Lee. Thank you.
    Mr. Berger?
    Mr. Berger. We haven't evaluated this issue, so I don't 
have any comments. But I am sure Mr. Durbin does.
    Mr. Durbin. Congresswoman, I would say, first, that the 
conversation with the Senator before the hearing I am happy to 
say that, you know, ACC and our Members have a good working 
relationship with the State of New Jersey. We were able to 
support both of the existing State laws that are out there in 
New York and Maryland; I think they were responsible 
approaches.
    But having said that, ACC's clear preference is to have a 
national program, uniform national standards, and we think it 
is important and does provide a more comprehensive national 
security, homeland security, to have a clear Federal preemption 
in this area. I think that just as we regulate nuclear security 
and airline security at the Federal level, I believe that same 
type of approach should be taken with chemical security, given 
our presence in the economy, throughout the economy.
    Ms. Jackson Lee. But you want standards. You want 
standards, national standards, where you know where the 
parameters are
    Mr. Durbin. Yes, ma'am. Yes, ma'am.
    Ms. Jackson Lee.--in law?
    Mr. Durbin. Absolutely.
    Ms. Jackson Lee. Let me conclude, Mr. Chairman, by asking 
Mr. Berger if he would ultimately analyze the question and make 
sure that he comments.
    Because obviously we would be interested in your best guess 
on this, or if you have any other comments about any standards, 
set standards.
    Mr. Berger. From the perspective of a company that was 
trying to implement activities on a national level, it would 
seem to be easier to have one set of rules to live by.
    Ms. Jackson Lee. Thank you very much. Thank you.
    Mr. Lungren. Thank you. The gentlelady's time has expired.
    We will do a second round here, and I will start off with 
my 5 minutes.
    I would address it to I guess, Mr. Crowley, Mr. Berger, Mr. 
Durbin and that is this: We are talking about inherently safer 
technologies or processes or designs. Does anybody have any 
idea across the spectrum of the chemical industry how many of 
the chemicals listed on EPA's risk management plan list have 
scientifically proved alternatives that increase safety, reduce 
risk, and operate at least as effectively in terms of both cost 
and end product as the chemistry compound that is being 
replaced?
    Do we know?
    Mr. Berger. I don't have those figures offhand. I am sorry.
    Mr. Lungren. Is that available?
    Mr. Berger. I don't think it is.
    Mr. Lungren. I am trying to figure out what the universe is 
we are talking about, to the extent known now, because there is 
a presumption that at least I would think that when you talk 
about an inherently safer product or design or process that it 
would increase safety, reduce risk, and operate at least in a 
commercial setting, presumably it operates as effectively both 
in terms of cost and product as the chemical compound being 
replaced. Or at least we could make an analysis to show where 
they would differ.
    And I am just trying to figure out, is it going to be 
serendipitous? Is it going to be on a piece-by-piece basis, or 
has there been any attempt to try and analyze it that way.
    Mr. Berger. I think Mr. Crowley has done analysis on this 
and probably would like to comment, but I think maybe the way 
to look at this is not the list of chemicals, but the usage of 
them, and probably the top three are chlorine, ammonia and 
sulfur dioxide.
    And so it is I would say from an engineering perspective, 
it is possible that if we took a national strategic look at 
those materials, we might be able to come up with a sort of a 
comprehensive solution.
    I don't know if we can do that on a site-by-site basis, 
though.
    Mr. Lungren. Mr. Crowley?
    Mr. Crowley. I think if you reflect back to the example I 
used in my testimony regarding the HAZMAT car outside the 
Capitol here and the challenge that poses for the rail 
industry, for example, half of the toxic-by-inhalation 
substances that are on the rail are just as Mr. Berger said, 
ammonia, chlorine and sulfur dioxide.
    If you add to that hydrogen fluoride, you are up to 55 
percent; so just by getting industry to adopt the liquid 
version, or less hazardous version, but getting away from the 
gaseous version would go a long way towards taking your 
terrorism risk from catastrophic level down to something that 
is more manageable.
    Mr. Lungren. Mr. Durbin?
    Mr. Durbin. My concern would be that we are discussing this 
in a fairly simplistic way. As Mr. Berger, in his testimony, 
said, the whole idea of looking at inherently safer approaches, 
designs, technologies, it is a concept, it is a process.
    It is an ongoing process, and so while you may be able to 
find, as you are going through and, frankly, again from a 
company's perspective, they are always trying to find safer 
ways of making their products, moving their products, what have 
you. There isn't a book to go to or a database to go to to say, 
well, if I am using this, I can switch this out instead.
    The application is just as important, obviously.
    Mr. Lungren. That is what I am trying to get at in terms of 
writing legislation.
    It sounds like a wonderful concept. We would all like to 
move in that direction. It makes sense. But I don't want us to 
be writing legislation that seems to mandate the goal, but by 
the very means of the language we use and the way we articulate 
it and the restrictive nature in which we put it out there, we 
actually diminish the opportunity for the kind of ingenuity or 
creativity that might otherwise be there that would allow us to 
get to the performance that we want.
    And that is what I want to try and ferret out here. It is 
not an excuse to get away from those things that would get us 
to the goal in a reasonable fashion, but as quickly as possible 
in a reasonable fashion.
    It is not making the mistake of overregulating in such a 
way that it seems to be driving us there, but it actually 
inhibits it from doing that, if that makes some sense to you.
    Let me ask this very, very quickly. Mr. Crowley, you 
expressed and I know some other witnesses have expressed 
concerns about the exemption in the bill of the transportation 
of hazardous materials, so let me clarify at the very beginning 
any access points into and out of a chemical facility, whether 
they are by road or by rail, would be need to be secured under 
this bill.
    The issue you raise of vulnerabilities of chemicals 
traveling on our rails and highways is a complex and larger one 
outside the scope of the bill.
    So if that is a given that this bill is dealing 
specifically with the vulnerabilities of chemical facilities, 
is there agreement that in addressing the chemical facilities' 
security, this bill at least accomplishes that to some 
significant extent?
    Mr. Crowley.
    Mr. Crowley. I think potentially, yes, but the dilemma is 
if the vulnerability assessment ends at the fence line of the 
particular facility; and the vulnerability to society exists 
when a hazardous substance is being transported through an 
urban area. How do you get to a process where the entire system 
is considered?
    So the dilemma is that if you just have you know, the 
manufacturer and the user have separate security plans that 
don't intersect, you leave the rail industry, for example, in 
the middle, and they cannot fundamentally you know, as I said, 
the HAZMAT car next to the United States Capitol is inherently 
insecure. So it seems to me, as long as you have a process 
where all of the stakeholders are brought to the table and have 
to address the systemwide challenges of how they manufacture 
and operate, at that point, you are able to have a process 
where, you know, safer alternatives are a part of the mix.
    Mr. Lungren. I take your point.
    And I have got other things, but Ms. Sanchez has the time.
    Ms. Sanchez. I think that was very interesting. And if you 
have any follow-up, because I am very interested in the 
transportation, your comment on the transportation issue.
    Mr. Lungren. Just one thing, and this is what it brings to 
mind: If we so focus on a static analysis that we say, we are 
going to make this site so secure and this site so secure, but 
we know we have inherently hazardous materials involved in the 
process, we may just be transferring the concern from a static 
environment to a moving environment.
    And so I take your point that, therefore, we have to be 
sharp about this and somehow integrate all of this. But you 
have to understand that as we deal with bills in certain ways, 
we have to take certain segments, and we have to try to do the 
best job there; and then, hopefully, integration takes place on 
top, number one.
    Number two, I would just say, again it goes to the point 
that and everybody agrees we can't get rid of all risk and we 
can't promise our constituents we are going to get rid of all 
risk; we are going to try to manage risk to the best of our 
ability.
    And when you have chemicals, in some cases there are going 
to be some inherent hazards involved; and we have to recognize, 
acknowledge that and deal with it in a way that makes 
scientific sense, but also in a way that makes practical sense 
since, as I said at the opening of this, we are a chemically 
dependent society, meaning that chemicals are an essential part 
of the way we live, do business, live in our homes and so 
forth.
    Mr. Crowley. I positively agree, Mr. Chairman, and I think, 
from a DHS standpoint, if they are able to make a judgment that 
a HAZMAT car in the middle of an major city is an unacceptable 
terrorism risk, they have to be able to both ask a question of 
the other stakeholders, ``Have you looked at another 
alternative to doing this?'' So we get the HAZMAT car out of 
the center of the city.
    I also think that since DHS has successfully established 
and is using centers of excellence at universities around the 
country, getting them invested in that research and development 
effort, so that they can perhaps bring to the equation along 
with private sector, you know, solutions as we go along, so 
they are able to say, ``Have you looked at this chemical 
sector; have you looked at that?''
    But it is just a matter of DHS has to be empowered to have 
this kind of conversation as part of a chemical security 
strategy.
    Mr. Lungren. You have to realize we are also dealing with 
DHS, which is set up to deal with terrorism and the threat. We 
have EPA that deals with safety. And they intersect, but they 
are separate and we have to understand that.
    Ms. Sanchez. But I think, Mr. Chairman, that is one of the 
ideal pieces of our bill is the fact that there is incentive 
and flexibility, because each plant in each city, where that is 
located and what kind of chemicals are coming and leaving, 
makes the need for flexibility so important.
    And while we need regulation and we need and I think we do 
need to have some system of actual punishment for those who 
aren't really looking at this in a serious manner you know best 
practices I mean, I would hope that chemical people who are 
running chemical plants would be thinking about themselves and 
their own employees, first and foremost. Because, you know, 
most of them will be at ground zero if something might happen 
there, versus, you know, the surrounding population where you 
have to take into account where the wind is blowing and all 
these other factors.
    What do you all think is the greatest terrorist threat 
facing chemical plants today? And what should we, what should 
we do about it? How do we address it? And where would such a 
threat most likely take place?
    I mean, if you had to say that you were a terrorist, what 
would you be looking for? And then, wearing the other hat, what 
would you put in place today to try to stop or at least stop 
the significance of an attack?
    Mr. Durbin. I will be happy to take a first stab at that.
    Frankly, there is no real clean, easy way of saying what is 
the threat. We learned we learned almost 5 years ago that there 
are people out there that are willing to take things we use 
every day, and take them and use them against us.
    Ms. Sanchez. But the greatest
    Mr. Durbin. For the chemical sector, I think you are 
dealing with a sector that has a history and a culture of 
looking at itself, knowing that we are not only are we critical 
throughout the economy, but we know we deal with dangerous 
things, which is why we have a culture of safety. And, in fact, 
we are the safest manufacturing industry in the United States.
    Getting the information on what the threats are, that is 
something we have built in in our building a good relationship 
with the Department of Homeland Security and the other 
intelligence agencies, so that they are giving us the kinds of 
threat information we need, so that going back to look at our 
own vulnerability assessments has some meaning to it.
    And we can put the best security around a facility that we 
want, but if it isn't addressing what the threats are. It 
doesn't help us much.
    As far as what you could be doing, you are doing it. This 
bill, this approach, is what is now going to ensure that we 
have the entire chemistry chemical sector taking the same kinds 
of aggressive steps that, again, our members and others have 
taken to make sure that not only at our facilities, but the 
products themselves, the interdependency with the other 
critical infrastructures, are all taken into account; and we 
make sure that this sector is adequately protected.
    Ms. Sanchez. Anybody else?
    Mr. Berger. Your question reminds me of a story in World 
War II, how one of the ways that the U.S. and the allies 
disabled the German war effort was to target the factories that 
made ball bearings. And by doing that, they ground the 
industrial machinery of the country and the war machines to a 
halt.
    And so the thing that would keep me awake at night would be 
the facility, or group of facilities, that if taken out of 
service, even without any loss of life, would cripple the 
economy. And that could include, you know, a group of 
refineries or some other more esoteric look at the supply 
chain.
    You know, that type of thing could affect the entire 
country and the entire economy; and so I think that would be my 
main worry. And I guess if I were a terrorist, that is where I 
would be, that is where I would be looking.
    Mr. Balboni. The RAMCAP program has postulated threats that 
they consider and then they do their analysis, and out of 
those, the two that are the most threatening are the attack on 
a facility next to a large population area with a vehicle-borne 
improvised explosive device.
    But just as threatening is the theft of material from a 
site to be used in another situation, say, in a subway system.
    And those are two totally different threats, two totally 
different responses; and that is the reason why the flexibility 
contained in this bill is so important. It is not just about 
creating a fortress around a chemical facility. It is making 
sure that people don't get in there, and either from within or 
from a cyber attack are able to take material out of a facility 
and use it somewhere else.
    Mr. Crowley. Let me echo what the Senator just said, and if 
Mr. King were here, he probably would be pleased to hear this.
    From one standpoint, if you are looking at a catastrophic 
event involving a chemical release, in my judgment, terrorists 
are going to New Jersey with the intention of harming 
Manhattan.
    Picking up Mr. Berger's point, if you are looking at a way 
in which you can say, oh, use our dependence on oil to handicap 
the economy of the United States, you probably would go where 
Ms. Jackson Lee's district is, or you would go to California 
and try to harm the Ports of Long Beach and Los Angeles.
    Now, back to the question of inherently safer approaches, 
does that mean that as a society we are going to stop driving 
cars? No. So there you have to look at physical improvements, 
and this does a fairly good job of doing that.
    But back to the New Jersey point, if there is a way in 
which you can take as many of the New Jersey facilities off the 
terrorism target list by making them relatively more benign 
regarding a release that would cross the Hudson to New York, 
that should be either in a Federal statute or should be 
available to the States of New Jersey and New York to pursue as 
they choose.
    I think one last point would be, either way, I think the 
government has to make sure that it is providing incentives 
where the market goes only so far, so society's interest goes 
farther, so I wouldn't lose sight of the fact that this is 
controversial, that we need to make sure that a range of areas, 
including chemical security, that that is a grant program that 
incentivizes of the private sector; and municipalities that 
might operate waste water and water treatment facilities, to 
protect them, to get them over the hump, to nurture the changes 
necessary to make us safer.
    Ms. Sanchez. Mr. Chairman, just a last question if you will 
allow me; and I think I want to direct this to Mr. Durbin.
    Has the industry, since 9/11, changed the way it institutes 
security measures with respect to maybe an insider job, of 
taking something from a facility that can be used? Or do you 
think that you always had tight security with respect to 
employees, that it hasn't changed much since 9/11?
    Mr. Durbin. Well, I would say, obviously security concerns 
didn't start on 9/11, and certainly that is certainly an area 
where our member companies were very focused with regard to 
theft of material by employees or others.
    I think, again as I noted in my testimony, we just recently 
saw a paradigm shift in the way we look at security after 9/11. 
Was that heightened? Absolutely. Do we have guidance together? 
We have put together with our members as far as even trying to 
hire contractors and the steps that you need to go through to 
make sure that the people are going to be on your facility, 
whether they are your direct employers or your contractors, are 
you looking at them much more closely?
    So, yes, it was clearly a concern beforehand, but as with 
everything, you know, since 9/11, there is a heightened 
alertness; and we have been putting together tools and 
resources to help our members do even more in that area.
    Ms. Sanchez. Great. Thank you.
    And I might just add something to the record, Mr. Chairman. 
You know, this whole issue and we have been looking at it 
trucking at the ports, and I mentioned that our truckers are 
probably some of the worst paid people, you know, a lot of 
independent contractors, et cetera. And I know that we have got 
HAZMAT requirements if people want to transport that type of 
thing, but it is also another very vulnerable area, the 
trucking of these substances and the fact that at least the 
truckers in California aren't making a lot of money, and there 
is a maybe a very huge incentive for some of this to go badly 
for us.
    Mr. Lungren. I thank the gentlelady. We will continue our 
discussion of that.
    I want to thank the witnesses for their valuable testimony 
and all the members for their questions. This panel has been 
very, very helpful. I apologize for the delay we had, but we 
had a series of votes on the House floor and I thank you for 
your indulgence.
    Members of the committee may have some additional questions 
for you in writing. If they do, we would ask you to respond to 
them in writing. And the hearing record will be held open for 
10 days.
    Mr. Lungren. Without objection, the committee stands 
adjourned.
    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]

                                 
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