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 Regulations.gov 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.

Comments on Ammonium Nitrate ANPRM – 12-12-08

The comments are starting to come in at an accelerating rate. This last week we have had two commentors make submissions about the ammonium nitrate advanced notice of proposed rule making; twice as many as last week. The two comments were received from Michael B. Ag/Gro Fertilizer Inc Michael B. Comments Michael B. suggests that DHS include a small volume exception to these rules when they are written. He would also like to see licensed users under 27 CFR part 555 exempted from the registration requirements. Interestingly Michael B. actually read the ANPRM and attempted to provide answers to each of the questions that DHS posed to the regulated community. He suggests that DHS use both computer and manual processes for completing registration applications and suggests patterning the process on the similar process that ATF uses. His most interesting comment comes on the question of the potential usefulness of this process and it is worth quoting in its entirety. He writes: “It will make a lot of legislators feel better but unfortunately I don't think it will stop a determined terrorist from obtaining a large quantity of AN.” Ag/Gro Fertilizer Inc Comments For some reason DHS has assigned a different document number to each page of the Ag/Gro submission, page 1, page 2, and page 3. Ag/Gro has also submitted answers to each of the questions that DHS asked in the ANPRM. They suggest electronic submissions through the local agricultural extension office; noting that less than half of their customers have routine access to a computer. They suggest that the user certificates be a ‘tamper-proof card’ with a bar code and that each distributor receive a reader from DHS. Ag/Gro does not believe that an inspection program will be required for long, because the potential fines will drive most distributors out of the AN business. They suggest that the various State departments of Agriculture be given the responsibility for conducting the inspections. On the questions of fees, they note that Congress prohibited charging the farmers a fee and comment that placing a fee on distributors or manufacturers will cause most to exit the business. Ag/Gro estimates that there could be upwards of 50,000 AN fertilizer users that would have to register and be certified. This will be a time consuming process. They also note that DHS needs to give plenty of advance notice when the implement this rule to allow distributors to sell off their inventory before this rule take effect, otherwise they will likely be stuck with unsellable product. My Comments on Comments I am really concerned with the predictions of Ag/Gro about the effect of these proposed regulations on the future of anhydrous ammonia as a fertilizer. If their expectations are correct, this will have an effect entirely unexpected to the members of Congress that pushed the requirement for this rule through the legislative process. It might be an interesting graduate student project at a couple of land-grant colleges to interview farmers and distributors of ammonium nitrate to see if Ag/Gro’s opinion is any where near correct. I think that Ag/Gro’s comments about a bar code reader for verification are probably unnecessary. A photo ID card should suffice, especially since most of the buyers will be well known to the sellers.

Comments on Ammonium Nitrate ANPRM – 12-05-08

It has been almost a month since my last update on the comments for this ANPRM. Finally there is a, one, singular additional comment that has been filed on this proposed rule. Normally I would not report on a single comment, but this comment from Paul H. Fennewald brings up a couple of issues that are worth discussing. Mr. Fennewald notes that he has more than 20 years experience in government counter-terrorism and two years working in the US Army Explosive Ordinance Disposal (EOD). Terrorists Will Not Buy ANFO Mr. Fennewald notes that it is unlikely that terrorists would legitimately purchase ammonium nitrate fuel oil (ANFO) blends that can be used as an explosive. He says that terrorists “are criminals, and will utilize whatever means they can devise to create the carnage associated with a terrorist attack. If they cannot purchase the tools they need to ply their deadly trade, they will steal, improvise, or find some alternate means to accomplish their objectives”. Of course, we can point to a successful terrorist attack here in the United States where an ANFO explosive was used. The Oklahoma City bombing used ammonium nitrate that came from purchases from legitimate retailers. That attack could have been carried out with stolen ammonium nitrate, but that would have added additional complexity to the plan and made it easier to detect and prevent. There are alternative explosives that can be made, but for a large scale attack using a vehicle born improvised explosive, nothing will beat ANFO for ease of construction and safety of use. That combined with the widespread availability of ammonium nitrate, makes ANFO a nearly perfect terrorist weapon. If tightening up on ammonium nitrate sales makes potential terrorists switch to less widely available materials that are more hazardous to the bomb-maker, then that is a good thing. If terrorists have to use smaller bombs or we lose some bomb makers to clumsiness or stupidity, the world is a safer place. Bureaucratic Quagmire Mr. Fennewald calls this rule “just another ‘feel good’ bureaucratic quagmire that will do nothing other than add cost and frustration to an already overburdened end userof the material you are proposing to additionally regulate”. True, this proposed rule will cause some problems for legitimate users and sellers of ammonium nitrate. The purpose of this ANPRM is to help DHS make that rule as painless as possible. I think that there is a basic misunderstanding of how these rule making procedures work. DHS did not think up the idea for this regulation. They were directed by Congress {2008 Consolidated Appropriations Act, Subtitle J § 563 (PL 110-151)} to prepare this rule. Congress, in its collective wisdom, decided that uncontrolled ammonium nitrate was too much of a risk. They directed DHS to set up rules requiring the registration of sellers and buyers of ammonium nitrate and to make it illegal to transfer ammonium nitrate to an unregistered party. Now DHS has to write the rules that will implement those requirements in the least intrusive manner possible. That is why DHS provided almost two full pages (pages 64281-3) of areas that they would like the public to comment upon. Public comments that do not address any of these issues will do little to help DHS formulate regulations that intrude on commerce as little as possible. Comments that tell DHS that they should not be writing these regulations do no good; DHS is required to write the regulations and only Congress can rescind that requirement.