Monday, December 22, 2008

Comments on Ammonium Nitrate ANPRM – 12-19-08

The comments continue to accelerate at an ‘exponential rate’ (well they did double each of the last two weeks). This last week we have had four commentors make submissions about the ammonium nitrate advanced notice of proposed rule making; twice as many as last week. Those comments were received from: Institute of Makers of Explosives Cardinal Health Hinton Mills International Explosives Detection Dog Association Small Users Exception The valuable thing about the public comment process for proposed rules is that it provides a mechanism for identifying unintended consequences before they cause too many problems. This week comments posted by Cardinal Health and the IEDDA point out at least two classes of small volume users of ammonium nitrate that a reasonable person would never require undergo the user registration process being developed at the behest of Congress. Cardinal Health is a manufacturer, of among other things, therapeutic cold packs used to treat pain and swelling associated with ‘sprains, strains and broken bones’. They note that their sealed cold packs contain small amounts of ammonium nitrate and water that produce an endothermic reaction when mixed. Each cold pack contains less that 5 ounces of high-density ammonium nitrate with less than 0.2% combustible substances. It would seem reasonable that the ammonium nitrate leaving the Cardinal Health manufacturing facility would not be covered by the registration requirements of this rule. The other small volume user was identified by the submission of the IEDDA. Dog trainers that train explosive detection dogs use extremely small amounts of explosive grade ammonium nitrate to train their dogs to detect the material. They propose that they be allowed to buy their ammonium nitrate under their current ATF permits that they use to purchase small quantities of Division 1.1D explosives. Institute of Makers of Explosives Comments The IME has submitted a two part response to the ANPRM. Their responses to the questions posed in the NPRM were not posted to the web site when I downloaded submissions on Friday afternoon. I will review those responses in a subsequent blog. They submitted a separate document (reviewed here) to address some areas that they would like to see clarified about the interpretation of the authorizing legislation and four areas that they would like to see addressed in the regulations. Normally, such wholesale clarifications would not be necessary because there would be a legislative history to refer to divine the Congressional intent of the legislation. The authorizing legislation for this rule, however, was an add on to a last minute ‘comprehensive budget bill’ and it avoided the normal legislative process. So there is no Congressional testimony or record that would allow someone to determine the Congressional intent. There are four general areas of concern that IME addressed in their discussion, exemption for explosive purposes, reporting ammonium nitrate losses, transportation workers as agents and international harmonization. IME believes that the registration of those with an ATF permit for the manufacture, sale or use of an explosive form of ammonium nitrate should not be required to undergo the DHS registration procedures. They suggest that the ATF registration procedures are more thorough than those envisioned for the DHS registration program. IME believes that DHS must take extreme care when defining the ‘unexplained losses’ of AN that would have to be reported to DHS. They note that a large portion of AN transfers are bulk transfers. There are weighment issues other transfer issues that result in routine losses of AN in bulk transportation. IME does not want DHS to include transportation workers in the definition of ‘agents’ that must be registered under these regulations. They note that the ammonium nitrate industry has already had to deal with a near paralysis of AN deliveries when ATF tried to separately regulate transportation workers in 2003. IME suggests that current TSA security regulations should suffice for controlling AN in transit. IME would like to see the AN security regulations harmonized with the Canadian rules to ease the trade in this commodity between the two countries, even though they note that the Canadian program is ‘broader than that authorized’ for this rule. One of the things that IME would like to see ‘clarified’ is the definition of persons that would be required to be registered under the new regulations. They note that a standard legal definition (1 U.S.C. 1) of persons include “corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals”. This definition would provide some difficulties for the regulation because DHS is required to do a terrorist database search for all registrants. Furthermore, since most transfers would be between corporate entities not individuals, most transactions would be between ‘agents’ rather than ‘persons’. The statute requires disclosure of agent information at the point of sale, not the point of distribution. Since most corporate sales are not made face to face, an identification card to verify registration would not be very useful. Hinton Mills Comments Hinton Mills is a ‘small farm supply retail store’ that has sold ammonium nitrate for about 50 years. They typically sell 500 tons/year. They state that the “potential for monetary penalty for careless record keeping under the proposed regulations will cause us to no longer sell Ammonium nitrate”. My Comments on Comments The problems identified by these four submissions would normally have been expected to have been identified in the legislative process through hearings and staff research. The fact that the requirements for this legislation did not go through such a process makes it much more difficult for an agency like DHS to develop comprehensive regulations that do not have huge unintended consequences. It seems self-evident that, in the current environment, the government should control the sale and transfer of an explosive precursor that is so widely available. The devil is, of course, in the details. If the program is too restrictive, many will stop handling AN. In the agricultural field this will mean a change to more expensive fertilizers, the cost of which must be passed on to the food consumer. Exceptions need to be crafted for the small scale users of AN like Cardinal Health that do not jeopardize societal security. Procedures need to be developed to handle registration that are effective but do not put an unnecessary burden on small users. Definitions need to be developed that are inclusive yet workable. In short, DHS has its work cut out for it. Unfortunately, DHS has not received any where near enough comments from users, distributors, sellers or transporters of ammonium nitrate. Only 13 commentors have provided their input so far. With the December 29th deadline for comment submission quickly approaching DHS needs a lot of responses in a hurry. Unfortunately, with the time of the year it is not likely to receive many before the end of the comment period.

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