O ffic e o f Infrast r uctur e Protection Nationa l Protect i on a n d Program s Directorate U. S . D e partment o f Homela n d S e curi t y Washington , D C 2 0528



### CHEMICAL FACILITY ANTI

- TERRORISM STANDARDS

ADVANCE NOTICE OF PROPOSED RULEMAKING

LISTENING SESSION HELD IN CHICAGO, IL ON OCTOBER 2 , 2014

CONTENTS: Agenda Transcript

## Chemical Facility Anti

**- Terrorism Standards**  **Advance Notice of Proposed Rulemaking (CFATS ANPRM)** 

**October 2, 2014 Listening Session** 
Hosted by the Department of Homeland Security (DHS)

– 536 Federal Building, 101 West Congress Parkway, Chicago, IL 60605

**Agenda**

8:00 a .m. – 9 :00 a .m. Registration

9 :00 a .m. – 9: 2 0 a .m. Welcome, Introductions, and Overview Kate Finnerty , Facilitator

Keith Nix , Department of Homeland Security, Office of Infrastructure Protection David Schmidt , Department of Homeland Security, Office of Infrastructure Protection

9 : 2 0 a .m. – 9:30 a .m. Listening Session Format Kate Finnerty , Facilitator

9:30 a.m.

– 11:00 a .m. Public Listening Session Comments from Listening Session Participants

11:0 0 a .m. – 11:15 a .m. BREAK

11:15 a.m.

– 12:15 p .m. Public Listening S ession Comments from Listening Session Participants

12 : 15 p.m. – 12 : 45 p.m. Open Session ( as time permits )

12 :45 p.m.

– 1 :00 p.m. Closing Comments

1 :00 p.m. Adjournment

Persons may also submit written comments to U.S. Department of Homeland Security, National Protection and Programs Directorate, Office of Infrastructure Protection, Infrastructure Security Compliance Division, 245 Murray Lane, Mail Stop 0610, Arlington, VA 205 2 8

- 0610 or through the Federal eRulemaki ng Portal at http://www.regulations.gov

.

For more information on the CFATS ANPRM, please visit https://www.dhs.gov/ CFATS

- Rulemaking

.1



### UNITED STATES OF AMERICA

+ + + + +

DEPARTMENT OF HOMELAND SECURITY

+ + + + +
Regarding the matter of: Public Listening Session

THURSDAY

OCTOBER 2, 2014

+ + + + +

U.S. CITIZENSHIP AND IMMIGRATION SERVICES OFFICES 101 WEST CONGRESS PARKWAY 3RD FLOOR AUDITORIUM CHICAGO, ILLINOIS 60605

+ + + + +

The above

- entitled matter commenced pursuant to Notice before Kate Finnerty, facilitator.

PRESENT:

For the Depar tment of Homeland Security:

Keith Nix, Deputy Branch Chief Dave Schmidt, Chemical Facility Inspector Kate Finnerty, Facilitator Mary Blackmoor, Program Analyst Sabrina Smith, Section Chief Mitch Paine, Chemical Facility Inspector

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P R O C E E D I N G S 1



### (9:00 a.m.) 2


### MS. FINNERTY: Good morning, 3


### everybody, and welcome to the listening session 4


### for the Chemical Facility Anti

- Terrorism 5


### Standards, Advance Notice of Proposed 6


### Rulemaking, or CFATS ANPRM, that was issued by 7


### the U.S. Department of Homeland Security on 8


### August 18th, 2014. We're glad that you are 9


### able to join us this mor ning. 10


### This is the seventh listening 11



### session in a series that is held across the 12


### country, including six in person and two via 13


### webinar. My name is Kate Finnerty with 14


### Energetics Incorporated. DHS is leading the 15


### Advance Notice of Proposed Rulemaking effort 16



### a nd has asked me to be your moderator today. 17


### Before we get started I would like 18


### to make a couple of announcements. All 19



### stakeholders are welcome to submit comments on 20


### the CFATS ANPRM, besides commenting in person 21


### at a listening session. There are two other 22

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ways to submit written comments. They are both 1


### listed on the agenda that was handed out at 2


### registration and they are also listed in the 3


### Federal Register notice. They are the Federal 4



### e

- rulemaking portal at www.regulations.gov and 5


### there's also a physical mailing address should 6


### you not have internet access. 7



### The deadline to submit comments is 8


### October 17th, 2014, which is 60 calendar days 9


### after publication of the ANPRM in the Federal 10


### Register . All comments provided during this 11


### session today are being transcribed for 12



### note

- taking purposes. A transcript of each 13


### listening session will be posted on a docket in 14



### the Federal Register at a later date. As such, 15


### for those making public comments today, please 16


### use the available microphones. 17


### In case of an emergency, please exit 18



### out to you r left here, back past registration 19


### down into the atrium. The guards will show you 20


### out through the lobby. The restrooms are 21


### located, again, to your left here just past the 22

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elevators. The registration desk has an 1


### access key. 2


### As a courtesy to all those 3



### pa rticipating, please put your phones on silent 4


### today. Thank you. 5


### The purpose of today's session is to 6


### gather public comments, data, or views on how 7


### the current CFATS Regulation 6 CFR Part 27, 8


### issued in 2007, might be modified. Issuing the 9



### Advance Notice o f Proposed Rulemaking enables 10


### the Department to provide stakeholders with an 11


### opportunity to submit public comments and 12


### suggestions for identifying ways to make the 13


### program more effective in achieving its 14


### regulatory objectives. 15


### We are going to begin with op ening 16


### remarks this morning, which will include a 17



### brief overview on the status of the CFATS 18


### program. The remainder of the session is 19


### dedicated to hearing from you. 20



### At this time, I would like to 21


### introduce our first speaker, Mr. Kei th Nix, 22

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Deputy Branch Chief in the Field Operations 1


### Branch with the U.S. Department of Homeland 2


### Security, Infrastructure Security Compliance 3



### Division, or ISCD. Mr. Nix? 4


### MR. NIX: Thank you. Can you hear 5


### through this mic here or do I need to, okay. I 6



### als o feel it's low enough to turn the mic on. 7


### The CFATS is helping to reduce the 8



### number of chemical facilities that are 9


### considered high risk. The Homeland faces a 10


### persistent and evolving threat from terrorist 11


### groups themselves. Chemical facilities 12


### potential ly are attractive targets as a 13



### successful attack on some chemical facilities 14


### could potentially cause a significant number of 15


### deaths or injuries. Certain chemical 16


### facilities possess materials that could be 17



### stolen or diverted and used as or converted into 18



### w eapons and used offsite. 19


### In Section 550 of the Department of 20


### Homeland Security Appropriations Act of 2007, 21


### Congress authorized the Department to regulate 22

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security at high

- risk chemical facilities. 1


### Under Section 550, covered facilities must 2


### perform Security Vulnerability Assessments and 3


### implement Site Security Plans containing 4


### security measures that meet DHS defined 5



### Risk

- Based Performance Standards or RBPSs. 6


### The Department developed the Chemical Facility 7



### Anti

- Terrorism Standa rds, or CFATS, 6 CFR Part 8


### 27 to implement this authority. 9


### To determine if a facility is 10


### subject to CFATS, DHS looked at the unique 11


### circumstances faced by the facility starting 12


### with the quantity of the chemicals of interest 13



### the fac ilities possess. Potential regulation 14


### is not based on the facility type, meaning there 15


### are many different types of facilities that may 16


### be subject to CFATS, including chemical 17


### manufacturers, warehouse and distributors, 18



### chemical re

- packing operations, oil a nd gas 19


### operations, hospitals, semi

- conductor 20


### manufacturers, paint manufacturers, colleges 21


### and universities, and mining facilities. 22

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Congress did exempt several types 1


### of facilities from the regulation. Facilities 2


### that are regulated under the Maritime 3



### Transp ortation Security Act, or MTSA; 4


### facilities subject to regulations by the 5


### Nuclear Regulatory Commission, the NRC; 6


### facilities owned or operated by the Department 7


### of Defense or Energy; public water systems and 8


### water treatment works regulated under current 9



### Fed eral water quality laws administered by the 10


### U.S. Environmental Protection Agency. 11


### Since the program's inception more 12


### than 3,000 facilities have voluntarily removed 13


### or reduced the onsite quantities of chemicals 14


### of interest, or modi fied processes to the point 15


### that they are no longer considered high risk. 16


### These actions have helped reduce the number of 17


### high

- risk chemical facilities throughout the 18


### Nation and have correspondently made the Nation 19



### more secure. 20


### As of September, well, as of 21


### September 29th, 2014, CFATS covers 3,701 22

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facilities, of them 3,075 are final tiered, 626 1


### preliminary tiered facilities across all 50 2


### states. DHS has received, and in the process 3


### of reviewing an estimated 4,600 Site Security 4


### Plans and Alternative Security Programs. Of 5


### these, 2,185 Site Security Plans have been 6



### authorized and close to 1,200 have been 7


### approved, that's as of, I think, yesterday. 8


### The first Authorization Inspection 9


### was conducted during the summer of 2010 and as 10


### of September 29th, 2014, 1,576 A uthorization 11


### Inspections had been conducted. 12


### Strengthening the CFATS program

- 13


### the Infrastructure Security Compliance 14


### Division is working to continuously strengthen 15


### the program and improve implementation of 16



### CFATS. 17


### Although work re mains to be done, in 18


### the past year significant progress has been 19


### made. This includes improving the Site 20


### Security Plan review process and increasing the 21


### pace of Site Security Plan reviews and 22

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approvals, engagement with industry on their 1


### development of Alte rnative Security Program 2


### templates, working with experts to evaluate and 3


### validate or recommend ways to improve the CFATS 4



### risk

- tiering methodology, introducing 5



### game

- changing initiatives such as one

- day 6


### inspections with smaller inspection teams, 7



### corporate ap proach for companies with multiple 8


### facilities, and increase pre

- inspection 9



### coordination and outreach. 10


### Alternative Security Programs are 11


### one path to compliance. The Infrastructure 12


### Security Compliance Division is also exploring 13



### wit h industry the possibility of creating 14


### segment specific Alternative Security Programs 15


### that include options for best practices that 16


### may apply to certain types of facilities. We 17


### have met with various industry associations, 18



### such as the National Association o f Chemical 19


### Distributors on this topic and continue to look 20


### for new opportunities for engagement. 21


### The work industry has done with the 22

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Department to develop Alternative Security 1


### Programs templates is a prime example of how an 2


### agency implementing a regulatory program like 3


### CFATS can work with industry to develop the 4


### tools and answer regulatory needs while also 5


### accounting for industry realities and how 6


### industry associations can support the 7


### Department of Homeland Security's mission. 8



### Permanent authorization

- the 9


### Department supports a permanent authorization 10


### for CFATS, for the CFATS program and is 11


### committed to working with Congress and other 12


### security partners to establish a permanent 13


### authority for the CFATS program. 14


### DHS firmly believes per manent 15


### authorization will provide industry with the 16


### necessary stability to move forward in 17


### effectively implementing CFATS and will send a 18


### clear message to facilities that may be seeking 19


### to avoid their obligation to report dangerous 20



### chemicals

- that the CFA TS program is here to 21



### stay. 22

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HR 4007, the CFATS Authorization 1


### and Accountability Act of 2014, was passed in 2


### the U.S. House of Representatives on July 8th, 3


### 2014. The bill would permanently authorize 4


### the CFATS program and authorize appropriations 5



### for three f iscal years. 6



### The Senate Committee on Homeland 7


### Security and Governmental Affairs passed a 8


### Senate version of the bill, Protecting and 9


### Securing Chemical Facilities from Terrorist 10


### Attacks Act of 2014, on July 30th, 2014. 11


### We are grateful that Congress has 12



### recog nized the progress that the program has 13


### made and the importance of permanently 14


### authorizing this program. 15



### Executive Order

- in August 2013 16



### President Obama issued Executive Order 13650, 17


### Improving Chemical Facility Safety and 18



### Securi ty , to improve the safety and security of 19



### chemical facilities and reduce risk to workers, 20


### communities, and first responders. 21



### The tri

- chairs of the Chemical 22

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Facilities Safety and Security working group is 1


### the Department of Homeland Security, 2


### Department of L abor, and the EPA, was 3


### established by the Executive Order, submitted 4


### a status report to the President, A Actions to 5


### Improve Chemical Facility Safety and Security 6



### - A Shared Commitment, @ which was released on 7



### June 6th, 2014. 8


### Recognizing that information, 9



### ac tions, and experiences of stakeholders are 10


### essential to understanding, managing, and 11


### mitigating the risk of potential chemical 12


### facility hazards, the working group initiated 13



### a robust stakeholder outreach effort to assist 14


### them in identifying success and best practices. 15


### This opportunity included 16


### engagement across all levels of government with 17


### owners and operators, industry associations, 18


### labor organizations, and communities affected 19


### by chemical plant disasters. 20


### The status report highli ghts 21


### activities already undertaken to improve 22

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chemical facility safety and security and 1


### provide a plan for moving forward to continue 2


### the initial progress made across the five 3


### areas. The status report includes an 4


### aggressive action plan to further minimize risk 5


### and continue to change the national landscape 6


### of chemical facility safety and security. 7


### This action plan lays out 25 8


### priority actions in 5 areas that include: 9


### strengthening community planning and 10


### preparedness, enhancing federal operational 11


### coordination, improving data management, 12


### modernizing policies and regulations, and 13


### incorporating stakeholder feedback in 14


### developing best practices. 15


### This status report is a milestone, 16


### not an endpoint. The most important lesson 17



### learned f rom this event is that every 18


### stakeholder group in the chemical facility 19


### community has a role to ensuring safe and secure 20


### operations. 21


### Safety and security are a shared 22

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commitment. DHS and our inter

- agency 1


### colleagues are striving to improve safety and 2



### securi ty of chemical facilities with our 3


### partners on behalf of the American public. DHS 4


### and our partners are making progress on the 5



### action items. One of those items includes the 6


### issuing of an Advance Notice of Proposed 7


### Rulemaking for the CFATS program. 8



### As we work to mature CFATS, the 9


### CFATS regulatory program, DHS is initiating 10


### this rulemaking process to help identify how to 11


### make the CFATS program more effective in 12


### achieving its regulatory objectives. DHS 13



### believes that after se ven years of experience 14


### implementing the CFATS program, both the 15


### Department and the regulating community, have 16


### gained first

- hand insight into how a 17



### non

- prescriptive security regulation could be 18



### most effective. 19


### This ANPRM will provide an 20


### opportunity for the Department to hear and 21


### consider the views of the regulated industry 22

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and other interested members of the public on 1


### their recommendations for program 2


### modification. DHS invites interested persons 3



### to submit written documents, data, or views on 4



### how the curren t CFATS regulation, 6 CFR Part 27, 5


### might be improved. 6


### The public is encouraged to comment 7


### on all aspects of the program. This rulemaking 8


### covers all regulatory and guidance documents 9


### including Appendix A and the list of chemicals 10


### of interest covered by the program. 11


### DHS has highlighted several topics 12


### on which public comment would be particularly 13


### helpful, including general regulatory 14


### approach, treatment of non

- traditional 15



### chemical facilities, clarification of 16


### terminology, the Risk

- Ba sed Performance 17


### Standards, Appendix A, considerations for 18


### small business, and alignment with other 19


### regulatory programs. 20


### Written comment may be submitted 21


### online through the Federal e

- rulemaking portal 22

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at www.regulations.gov or by mail to the U.S. 1



### Department of Homeland Security, National 2


### Protection and Programs Directorate, Office of 3



### Infrastructure Protection, Infrastructure 4


### Security Compliance Division, 245 Murray Lane, 5


### Mail Stop 0610, Arlington, Virginia 6



### 20528

- 0610. Please note that any personal 7



### informati on included in submissions will be 8


### publicly viewable. 9


### Thank you for taking the time to be 10


### here today. We look forward to hearing your 11


### comments and suggestions on how DHS can mature 12


### the CFATS program. 13


### MS. FINNERTY: Thank you, Mr. Nix. 14


### We are also joined today by two DHS chemical 15


### facility inspectors, Mr. David Schmidt, who's 16


### here on our panel, and Mr. Mitch Paine. Thank 17


### you all for joining us. 18


### The remainder of the session today 19


### is set aside to hear from you, the stakeholders. 20



### Bu t before we hear from you, I'd like to outline 21


### the format and the ground rules for the session. 22

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This is a listening session with the 1


### purpose to hear a diverse set of opinions from 2


### across the broad spectrum of stakeholders who 3


### have an interest in improving and streamlining 4


### the CFATS rule. We hope to hear a range of 5


### suggestions and all viewpoints are welcome. 6


### As such, we are not seeking a discussion or 7


### consensus today on any of the topics. 8



### DHS is interested in comments on the 9


### topic s described in Part 4 of the ANPRM, as 10


### listed by Mr. Nix a few minutes ago. All 11


### presenters are asked to keep their comments 12


### directly related to the topics contained in the 13



### rule. 14


### In a few minutes I will open the 15


### floor for public comments. Individuals will 16


### have a maximum of five minutes to present to the 17


### panel, which does include any introduction to 18


### your remarks. Members of the panel may then 19


### ask clarifying questions. To help with 20


### timekeeping, I will show a yellow card when you 21


### have one minute remaining a nd a red card when 22

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your time is up. We do ask that you respect 1


### everyone's time today and stay within the 2


### designated time frames. 3


### If there are no questions on the 4


### process, let's go ahead and begin. I will now 5


### open the floor for public comments related to 6


### the CFATS Advance Notice of Proposed 7


### Rulemaking. Those interested in providing 8


### public comments today, if you would please make 9


### your way towards the microphone located in the 10



### middle of the room. 11


### MR. FANSHER: Hi, my name is John 12



### F ansher. I'm with MGO Supply Company. We're 13


### propane, liquid petroleum, and gas 14


### distributors. We handle primarily propane and 15


### butane. I hadn't really intended to get up and 16


### speak but since there's a handful of us I 17


### thought why not. 18


### Okay, really just a co uple of 19


### comments. And one is, you know, I operate 23 20


### of these facilities across the country. I have 21


### one that if I were to rate what I perceive to 22

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be the risk of these facilities, the one that 1


### turned out to be a high

- risk facility, I would 2



### rate it about n umber 20. So, it would be 3


### helpful, as an operator, to understand a little 4


### more of the criteria that puts you as a 5


### high

- risk facility. 6


### And, you know, better understand if 7


### I don't think that the judgment is correct, how 8


### I go about trying to have that re

- eva luated or 9


### just to make sure that there wasn't an error of 10



### some sort. 11


### I did, early on, have a consultant 12


### contact DHS and try to determine, you know, why 13


### this particular facility ended up a high risk. 14


### And, he kind of came back and said, well, 15


### there's a whole number of variety of reasons 16



### that it could have and it could be a combination 17


### of these. And so I never did really figure out 18


### why this particular facility tiers out the way 19



### it does. 20


### Beyond just trying to get my hands 21



### around that and figure out, you know, what, if 22

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### 20

anything, I can do to maybe get this dropped to 1


### a lower level, you know, we continue to build 2


### and acquire these facilities. And if I had 3


### some better understanding of how to avoid 4


### getting in a high risk, or what standard s, what 5


### it is you're looking for that makes you say, 6


### okay, it's not a risk, I can maybe build that 7


### or design that into the facilities that we, you 8


### know, that we build going forward. Or, if it 9


### has to do with logistics, you know, maybe we 10


### could stay away fr om certain types of pieces of 11


### property or land or whatever it is. 12


### But, not knowing the criteria and 13


### understanding exactly, you know, how that's 14


### determined, I can't be proactive in the 15


### process. Thank you. 16


### MS. FINNERTY: Thank you, sir. Do 17


### we have any comments or questions from the 18


### panel? 19



### MR. SCHMIDT: No. 20


### MS. FINNERTY: Thank you. Are any 21


### other members of the public here today that 22

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would like to submit public comments? I will 1


### keep the floor open for public comments until 2



### 12:45 p .m. and I will place all microphones on 3


### mute to reduce background noise. I will return 4


### to the podium should additional members of the 5


### public join us today and indicate that they 6


### would like to provide public comments. 7


### In the meantime, please feel free to 8



### m ove about the room and discuss these issues 9


### here today with your colleagues. Thank you. 10



### (Off the record.) 11


### MS. FINNERTY: Thank you for 12


### participating in today's listening session on 13


### the Chemical Facility Anti

- terrorism Standards 14



### A dvance Notice of Proposed Rulemaking. The 15


### open comment session is now closed. Please 16


### visit the docket to view the listening session 17



### notes and to submit additional comments. 18


### Please visit the chemical security 19


### website to view the remaining schedule of 20



### list ening sessions. We are now adjourned. 21


### (Whereupon at 12:46 p.m. the 22

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meeting was concluded.) 1

2

3

4

5

6

7

8

9

10

11

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