Thursday, May 29, 2008

Ethanol Producers as Chemical Facilities

I ran into an interesting article over on from the April 2008 issue of the magazine. It looks at how the CFATS program will/does affect ethanol producers. Written by a couple of lawyers (apparently environmental law), the review looks mainly at the legal side of the CFATS requirements rather than the security side. It is a pretty good three page review of the regulations, no mean feat.

Late for Top Screens?

What is interesting in the article is that it was printed three months after the initial Top Screens were required to be submitted. While it is always hard to tell when magazine articles are actually written, given the vagaries of the publishing process, it is clear that this was written well after January 21st. The last paragraph is the ‘tell’;

  • "For now, existing ethanol production facilities may already be storing quantities of anhydrous ammonia and other chemicals in quantities that trigger the Top-Screen process. Those facilities must submit Top-Screens as soon as possible. If they haven’t already, they must also prepare to explain to DHS why their submissions are late."

I noted in an earlier blog (see: "Ethanol Producers and CSAT") that I thought that many ethanol producers would fall under the CFATS Top Screen requirements because of their use of anhydrous ammonia. In the last paragraph of my blog I noted that;

  • "I think it would behoove DHS to check and see if all of the ethanol production facilities in the United States have completed a Top Screen. Any facility that failed to do so should be directed to complete a Top Screen. This would be an industry that should be very easy to check up on the compliance rate. There are a relatively small number of facilities (certainly a smaller number than say the food processing industry) and most of them are well known to the federal government since they are receiving federal subsidies."

I am sure that DHS would not start assessing large fines for late filing of Top Screens if the facility were to initiate the process without being contacted by DHS. This would be especially true with facilities, like ethanol producers, that might not normally be associated with traditional chemical companies. I even suspect that DHS would be slow to mandate significant fines if facilities responded promptly to a contact from DHS.

Gasoline as a Raw Material

There is another interesting complication to assessing the risk at an ethanol production facility. These facilities use gasoline as a raw material rather than as a fuel. They blend gasoline with the finished ethanol to ‘denature’ their product to make their product unusable as an alcoholic beverage.

Gasoline is not a COI listed in Appendix A, but many of the component chemicals are. These chemicals are not normally considered in Top Screen reporting since DHS has provisions for reporting ‘Fuels’, including gasoline. I do not think that that convention is appropriate to the situation found at ethanol production facilities since the gasoline is not being used as a fuel. In this situation it would appear that the normal blend rules should apply.

Probably the best way to handle this would be to post a notice in the Federal Register to the effect that facilities that use gasoline as a raw material are required to treat it as a flammable blend rather than as a fuel. This would require the reporting of the quantity of gasoline as the largest component COI.

Ethanol as a Fuel

Having argued to have gasoline considered as a chemical rather than a fuel, I find myself taking the opposite tact with the ethanol produced by these facilities. Ethanol should be treated as a fuel and thus exempt from the flammable blend rules. Unfortunately, none of the Top Screen fuel categories are appropriate.

This should probably be changed in any case. Most of the ethanol is shipped as denatured ethanol and blended into fuels ranging from E85 (85% Ethanol) to E10 at a wide variety of fuel blending facilities. Adding a ‘Fuel Ethanol’ reporting category will allow DHS to capture the volumes of this material found at other chemical facilities.

Ethanol Producers as Targets

Ethanol producers may be targets for a variety of different terrorists. Muslim Radicals may find the ethanol industry an economic threat to the ‘supremacy’ of the oil cartel. Environmental Radicals may find ethanol production facilities to be ‘damaging to the environment’. Any number of nationalist radical groups might blame ethanol producers for the high price of grain and food that leads to starvation in their home country. Any of these groups could find a doctrinal justification for attacking one of these facilities.

These facilities are frequently found on the outskirts of small cities and large agricultural towns. They are located adjacent to rail lines. Many facilities are being constructed near feedlots to make their byproduct ‘distiller’s grain’ easier to sell without drying. In short there could be a wide variety of collateral damage from a successful terrorist attack. This collateral damage would certainly attract national news attention.

The smaller police forces in these areas would not have the manpower or monetary resources to conduct the preemptive investigations that have done so much to disrupt potential terrorist attacks. This could make these facilities appear to be easier targets for successful terrorist attacks.

All in all I think that it is time that DHS brings these facilities into the CFATS process. An outreach program could be as simple as posting a requirement for ethanol production facilities to complete a Top Screen. A more effective program would include follow-up articles in magazines such as Ethanol Producer and presentations at industry conferences. What ever the method, DHS needs to reach out and touch this industry.

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