HR 901 Markup – Thompson Substitute Amendment

Today the House Homeland Security web site for tomorrow’s HR 901 markup hearing added a substitute amendment that the Committee will consider during their review of HR 901. This substitute will be offered by Rep. Thompson (D, MS) as an alternative to the amendment offered by Rep. Lungren (R, CA) that I discussed in my earlier blog.

This 95 page substitute is essentially Title I of HR 2868 as passed by the House during the 111th Congress. It is the ‘wish list’ for a comprehensive chemical security bill as viewed by environmental and labor activists. As I mentioned in the earlier blog, the support of some portion of these political elements will be required to pass chemical facility security legislation in the Senate.

Unfortunately, this proposal, as written, has no chance of being passed in the House or the Senate. The supporters of these proposals were stronger in the Senate in the last session and were unable to bring the House passed bill to the floor for debate, much less a vote. The Republican vote against this proposal in the Committee markup session will undoubtedly be unanimous and there is a good possibility that there well be some Democrats that vote against it as well.

The disturbing thing to me is that I know that Ranking Member Thompson is fully capable of counting the votes against this proposal. He knows that it has no chance of passing. With this in mind I can only conclude that one of two things has happened, either Thompson has decided that he wants no chemical security legislation to pass this session or he has decided that Chairman King is incapable of seeing that the current version of HR 901 (and HR 908) has no chance of being considered by the Senate, much less passing in that body.

In either case, the all-or-nothing stance that seems to be indicated by this alternative makes one conclude that another session of Congress is going to pass without any effective attempt to pass a real chemical security bill. Well, the chemical companies can continue to live with the uncertainty of the current year-to-year authorization process and the country can continue to hope that no terrorist organization recognizes and exploits the shortcomings of the current chemical security program.

Water Security and HR 2868

Bridget O’Grady over on the Security Notes blog at ASDWA.org has an interesting post about Sen. Lieberman wanting to see a floor amendment adding water facility coverage under CFATS to the HR 2868 debate if it comes up in the Lame Duck session. She doesn’t provide a source for his comments, but he did make similar comments during the last hearing his committee had on HR 2868.

He also noted in that hearing that he expected to see the IST provisions brought out as a possible floor amendment if/when HR 2868 came up for debate. If the IST provisions are added, I don’t see a cloture vote passing on the final bill. Without IST requirements, the inclusion of water facilities (water treatment and waste water treatment) might not be a killer amendment to the final consideration of HR 2868.

Any water amendment that wanted even a modicum of support (more likely the lack of vociferous opposition) from the water treatment industry would have to include provisions that would prohibit the Secretary from closing down non-complying water treatment facilities. Adding a water facility security grant program would quiet opposition to this even more. Making this just a chemical security issue with these two provisions might be passable in the Lame Duck session.

I have heard that DHS figures that such an elimination of the water facility exemption from CFATS would probably double the number of facilities covered under the program. I would expect that it would also significantly increase the number of Tier 1 and Tier 2 facilities. This would be a fairly large increase in the work load for chemical facility security inspectors, but that could be addressed in adding authorization for some more much needed inspectors in the amendment.

On the other hand the delay involved in the rule making process might mitigate that work load increase. It might also provide more time for more facilities to reconsider their decision to continue to use toxic inhalation chemicals instead of less hazardous alternatives and provide a positive inducement to make that change. That would further reduce the increased work load.

Lame Duck CFATS Legislation

We are going to be hearing a great deal of prognostication about what the effects will be from the split government we will be living through for the next two years. A Democratic President, a Republican House, and a closely divided Democratic Senate will make for some convoluted politics. Listening to the TV pundits last night and this morning, it seems that many people don’t see the Republican leadership working too effectively with Obama and Reed to get anything accomplished.

One thing is certain, the results will make it more important for Speaker Pelosi to try to get as much accomplished as possible during the upcoming lame duck session (currently scheduled to start on November 15th). It will be the last chance for any significant liberal agenda items for at least two years. Even Sen. Reed will have an easier time in November and December getting things passed than he will starting in January.

CFATS and the Lame Duck

On a couple of occasions I have opined that there won’t be any significant movement on CFATS legislation in the Lame Duck session beyond a straight extension in the DHS funding bill. Generally speaking I still think that that is likely, but there is, because of the split Congress, a chance for the Senate version of HR 2868 to pass.

The changed calculus is based upon the fact that apparently the voters were voting against the Democrats more than for the Republicans. If the Republicans in the House are not effective in working with Obama and Reed, it seems possible that they will be turned out in 2012 in much the same way as the Democrats were this year.

If the current Democratic leadership subscribes to this idea, they will be looking to come back in two years to resume work on their agenda. They would try to use the Lame Duck Session to make it easier to resume that work. That would include passing interim measures to prevent Republican action on the issues in the interregnum.

For CFATS the Democrats would not want Representatives King (R, NY) and Dent (R, PA) writing a permanent CFATS authorization legislation. To make that less likely, passing a three year extension as embodied in the Collins version of HR 2868 would make a great deal of sense. Even the voluntary IST and training provisions of the bill could make it easier to require the same type provisions in legislation two-years from now by showing that the provisions will not bankrupt chemical facilities.

Getting the bill through the current Senate should not be too difficult, if the Senate Homeland Security and Governmental Affairs Committee gets off the stick and files their report on the legislation. The big problem would be to prevent the floor discussion from adding so many of the House measures back into the bill that Sen. Collins could no longer support the measure. Without her support (and that of her fellow Senator from Maine) the cloture vote on the bill could not pass.

The big if in this idea is how much support such a measure would garner from Chairmen Thompson and Waxman. They both fought hard to get their version of HR 2868 to the floor over lots of opposition. If they take the view that they will have another chance in two years to get what they want in CFATS authorization, then they would probably support such a measure.

The two people that will decide if this idea moves forward are Senators Lieberman and Collins. If Sen. Collins thinks that an unencumbered permanent authorization of CFATS (which was in large measure her program) is probable in the next Congress, she would probably oppose bringing HR 2868 (even though it is her compromise version if the bill), to a floor vote in the Senate. Likewise, if she can’t convince Sen. Lieberman to control the IST amendments proposed on the floor, then she won’t support continuation of the HR 2868 process.

Watch to see if the Committee Report on HR 2868 is submitted in the first day or two of the Lame Duck Session. If it is filed, the Collins-Lieberman deal has probably been finalized.

Water System Lobbying

I ran into an interesting blog post at ISAQQA-WUC.Blogspot.com about efforts of member utilities of the American Water Works Association to oppose passage of legislation that could allow the imposition of changes in disinfectant chemicals on water treatment and waste water treatment facilities.

The AWWA has opposed bills like the House passed version of HR 2868 and the recently introduced S 3598. They are now calling for members to contact their Senators to ask them to support the version of HR 2868 ordered to be reported by the Senate Homeland Security Committee. This very long blog post provides an interesting and detailed discussion of how utilities, which have access to little money for lobbying efforts, can best conduct a campaign to influence their legislators. Anyone intending to conduct a low-cost campaign to influence legislation should review this blog post before they seriously start to plan their own campaign.

Chemical Security Situation 

Of more interest to readers of this blog is the background information on chemical security issues at water treatment facilities. There is a very good summary of the current requirements for security and the types of chemical security responses that many facilities have taken. Careful reading of this section of the blog shows why there really does need to be some sort of water treatment facility language in any comprehensive chemical security language that would extend current CFATS rules.

First the posting explains that current rules require these facilities to conduct a security vulnerability assessment (SVA) and emergency response planning (ERP). There is no standard for the SVA or ERP and there is no real requirement to establish and execute a security plan to protect the vulnerabilities identified. Finally there is no authority for state or federal regulators to review the SVA or ERP or allow them to require correction of deficiencies.

Like various chemical industry organizations the AWWA also likes to brag on the efforts that have been made at member facilities to protect chemicals like chlorine gas. The main difference here is that there is no mandatory security program that member facilities have to adhere to. All of the programs that the AWWA describes here are completely voluntary and this is reflected in the following statement made in the blog post: “Most [emphasis added] have restricted access and enacted other measures to secure critical assets, including chemical supplies.”

One last time I would like to point out that no outside agency has the authority to determine if the ‘restricted access’ and ‘other measures’ provides an adequate degree of security for the facilities that have taken such measures. And no government agency can require the facilities that have not take such measures to do so.

Remove CFATS Exemption 

If the AWWA really wants to preempt efforts in the Senate to require consideration, and a possible mandate to implement, disinfectant substitution they may want to consider finding some Senator to submit a proactive floor amendment to HR 2868 that would remove the current CFATS exemption for water treatment and waste water treatment facilities. If the AWWA were to craft such language to include provisions for denying the Secretary the authority to shut down water facilities and included a grant program for security measures at public treatment facilities, there would be little reason for water facilities to object to CFATS inclusion.

Facilities that have actually addressed security issues would get credit for those efforts in implementing CFATS SSP requirements. Only facilities that have done little to protect the public from the consequences of a potential terrorist attack would expect to have to take extensive actions to get up to CFATS standards.

The benefit to the AWWA and its members would be that they could then point at the CFATS coverage as a reasonable alternative to S 3598 and its included IST measures. While the activists that would like to see chlorine gas removed from all of these facilities would not accept that argument, it is likely that many Senators would accept the increased security provided by CFATS requirements as an adequate first step to protecting the adjacent communities.

Committee Approves Amended HR 2868

In an unusual display of bipartisanship the Senate Homeland Security and Governmental Affairs Committee approved an amended version of HR 2868 on a roll call vote of 13-0. As was expected Sen. Collins (R, ME) offered a substitute version of the bill that substantially modifies the intent and language of the legislation that substitute language was adopted by unanimous consent. According to Sen. Collins’ comments, her amendment would:

● 3 year re-authorization for the current CFATS program ● Voluntary exercise and training program ● Create in DHS a voluntary technical assistance program for methods to reduce consequences ● Create best practices clearing house

The actual language of the substitute will not be available until the Committee report is published. Chairman Lieberman (I, CT) noted that there would need to be significant modifications made to this version of the bill for it to get through passage on the Senate floor and subsequently through negotiations in Conference with the House.

Congressional Hearing Week of 7-26-10

This is going to be an interesting week for Congressional hearings for members of the chemical security community. There will be two Senate hearings that directly address chemical security issues and a House hearing that should be touching on at least some chemical transportation security issues. HR 2868 As I mentioned briefly in a posting on Friday, the Senate Homeland Security and Governmental Affairs Committee will be marking up HR 2868 at their Business Meeting on Wednesday, July 28th at 10:00 am EDT. Since there are a number of other items (not chemically related) on the agenda for that meeting I don’t expect that we will see a large number of amendments offered during the mark-up; certainly nothing like the three-day markup we saw in the House Homeland Security Committee last fall. The Senate committees typically conduct their negotiations and arguments before their hearings are held. I would expect that Chairman Lieberman will offer an amendment in the form of a substitute at the start of the hearing. Based on past history the details of that amendment will not be made public until the Committee Report is published. If Ranking Member Collins offers a substitute amendment that will probably be the main vote on the IST provisions of the legislation, but we won’t know for sure until the Report is published. An affirmative vote on the final version of HR 2868 does not mean that the measure will make it to the floor of the Senate. This Committee has a history of not actually submitting its Committee Reports and nothing further will happen until that report is filed. S 3598 The Senate Environment and Public Works Committee will be holding their first hearing on S 3598, the Water Facilities Security Act, on Wednesday afternoon at 2:30 pm. The listing in the Congressional Record doesn’t actually say that S 3598 will be addressed. It just notes that the hearing will “examine protecting America’s water treatment facilities”. The witness list on the Committee web site includes Director Dougherty of the EPA’s Office of Ground Water and Drinking Water, the person who would be responsible for implementing S 3598 if it passes. The public panel does not include anyone representing the management of water treatment facilities with the one corporate witness representing a company that provides hypochlorite production systems to treatment facilities. There will be a labor representative and an IST Activist on the panel. Don’t expect to hear any witness express opposition to an IST mandate at this hearing. Surface Transportation Security The House Homeland Security’s Subcommittee on Transportation Security and Infrastructure Protection will hold a hearing to examine TSA’s management of Surface Transportation Security Inspectors on Wednesday at 2:00 pm EDT. The disparity between air transportation security and surface transportation security will be addressed. With the Assistant IG on the witness list we can expect to see an IG report on the issue released at the hearing. Chemical transportation security is certainly part of the issue, but the two public witnesses listed on the Committee web Site represent transit interests not freight transportation. We’ll have to wait and see how much attention is addressed to chemical security issues.

Senate Panel to Markup HR 2868

The Senate Homeland Security and Governmental Affairs Committee announced today that the markup hearing scheduled for July 28th, 2010 will look at HR 2868, not S 2996 or S 3598. No further details are available at this time on the Committee web site.

Possible CFATS Mark-up Hearing

Today the Senate Homeland Security and Governmental Affairs web site added a listing for a Committee Business Meeting to their hearing schedule web page. That meeting is scheduled to convene on July 28th at 10:00 am. There is no agenda currently available for that meeting. With all of the recent speculation that the Committee would mark-up HR 2868, S 2996 or even S 3599 this month, it is possible that this meeting could address one or more of the three bills, though I would normally expect the Committee to only favorably report one of these three bills. Because of the close working relationship between Chairman Lieberman (I, CT) and Ranking Member Collins (R, ME), and their polar opposite approaches to IST mandates, I don’t really expect any of the current bills to be reported without significant modifications. Everyone also seems to forget that the putative reason that the Committee decided to take no action at their previous CFATS meeting was because the ISCD folks at DHS were in the process of drawing up their own version of a potentially comprehensive CFATS reauthorization bill. We could possibly see an approach that Lieberman and Collins could both support come out of DHS, since the professionals at ISCD don’t have a particular ax to grind in this fight. If that were to happen, I would expect to see that offered as an amendment in the nature of a substitute for one of the three bills. One could argue that the Collins’ bill would be the likely vessel for that substitute. If the bill were close enough in language and construction to HR 2868, amending that bill might make more legislative sense as it would take fewer votes (times voting not number of votes) to get it through Congress. Fewer scheduled votes means a better chance of passage in an election shortened session. I still don’t see a comprehensive CFATS bill happening this year, but really well crafted DHS language might offer enough for Democrats to support and Republicans to not actively oppose. Stranger things have happened, but don’t hold your breath, not in an election year.

Lame Duck Congress

There was an interesting opinion piece over on WSJ.com last week about apparent planning for legislative work in a lame duck Congress following a successful re-taking of the House by the Republicans this fall. Nothing in the article by John Fund mentions CFATS, but it leads one to think about what if? I’m not so sure that the Republican resurgence is any where near a done thing as the article implies, but most commentators at this point in the election cycle seem to accept that it is at least a possibility. At this point no one is seriously mentioning the possibility of a Republican majority in the Senate, but it seems nearly certain that it will be further from a super-majority for the Democrats than it currently is. So what does this mean for the CFATS reauthorization? First off, the House has done their job (from the Democrats point of view) in passing HR 2868. The only way that the potentially out-going majority in the House will have any way to deal with that will be in Conference if the Senate passes a different version of the bill. Not much chance of that happening. There is another CFATS bill currently in the hopper in the House, HR 5186; the companion bill to Sen. Collins’ S 2996. If Chairmen Thompson and Waxman become convinced that the Democrats will loose in November, there is a remote possibility that HR 5186 could be dealt with in their Committees, adding some of the HR 2868 provisions most dear to those two gentlemen. Those provisions could include labor participation in the security process, background check protections for employees, and whistleblower language. Properly worded those provisions could probably be supported by Rep Dent (R, PA) and the other Republicans on the Committees. I would also expect that a watered down inherently safer technology provision could be added to the bill. If the Democrats added a version of the IST wording being developed in DHS, I think that most of the Republicans would vote against the amendment, but some could vote for the bill. That IST provision would call for all high-risk facilities to evaluate alternative technologies and to report on that evaluation in their site security plan. I expect that a version of S 2996 like that could pass in the Senate Homeland Security and Governmental Affairs Committee. The question would then become how it would fare on the floor of the Senate. Without a clearly impending massive defeat in the House in November, I don’t think that a version of CFATS authorization without some form of IST mandate can make it to the floor of the Senate. In a lame-duck Congress that might just change. Democrats might be willing to agree to get what they can. I don’t think that Senators Lautenberg and Rockefeller would be willing to go along with the current five year term of S 2996. I think that they would accept a two or three year term with the expectation that they could regain control of the House in the next election and have another chance to modify CFATS. Five years would just put it too far off into the future. I am firmly convinced that HR 2868 is completely dead now. The Republicans only have to prevent a vote in the Senate, and that shouldn’t be too hard. In fact, an impending victory in the House will make it even easier for the Republican leadership to hold their caucus together in a firm voting block. And a lame duck Congress would have no chance of getting the votes in the Senate to push through HR 2868. There won’t be a floor vote on S 2996 or HR 5186 before the election. The Democrats certainly cannot afford to upset an important part of their base before the election. They will need every vote they can get in the close election and pissing off the IST supporters is a good way to get large numbers of them to stay home. They need those votes to have any chance of holding on.

Greenpeace Noise

The folks at Greenpeace are certainly not listening to my predictions that CFATS legislation is going to die this year. In fact they are doing everything they can do to disprove my assertion. The latest campaign can be found on a FaceBook page; they call it “Bring on the Noise”. This campaign calls on the Greenpeace supporters from Pennsylvania to call Sen. Specter’s (D, PA) Philadelphia office on July 6th to ask him to support the “Secure Chemical and Water Facilities Act”. The web site doesn’t have a specific script beyond giving ones name, city (in PA of course) and “your urge for him to support strong chemical security”. The lack of a script to read leads to some variation in the message. This actually makes it more effective since the staffers actually have to listen to what is being said. This looks like a locally produced program, but it could easily show up in other areas the way the Greenpeace organizers communicate. I am surprised that this isn’t more effectively tied into the earlier nationwide Greenpeace information programs. Depending on the knowledge level of the people making the calls, this can again make the campaign more effective. It can also lead to a complete flop if most of the callers demonstrate a lack of knowledge about the issue. It is almost impossible to get enough phone calls to change the mind of an elected figure that is firmly against something, but those who are sitting on the fence can be swayed with enough calls. In a close election like Sen. Specter is facing this year these programs can be slightly more successful and may be very helpful in changing grudging support to vocal support. I still think that Greenpeace is beating their collective heads against a procedural wall. The time is just too short for effective legislative action on a controversial program like this. I don’t see this bill, or its counter S 2996, getting to the Senate floor before the summer recess. When Congress returns in the fall, electioneering will stall all but the least controversial measures, especially in the Senate.

SOCMA News on CFATS

There are two interesting Tweets this evening from the SOCMA Fly-in event in Washington D.C.; the first about comments from Sen. Collins (R, ME) about CFATS legislation and the second about comments from Rep. Lungren (R, CA) about IST provisions in CFATS legislation. Of course, given the character limit in these communications, there is little additional detail provided. CFATS Mark-up Hearing While I have been saying for some time that I thought that CFATS legislation was essentially stalled in the Senate, Sen. Collins, the ranking member of the Senate Homeland Security and Governmental Affairs Committee apparently told the SOCMA gathering that there could be a CFATS markup hearing as early as next week. While a markup hearing is still a long way from getting a bill to the floor and through conference, it is still much more progress than has been made to date on stand alone CFATS legislation. Of course, the Senate Committee has a very poor track record of getting from a markup hearing to actually publishing a report on controversial legislation. For example S. 1649, the WMD bill co-sponsored by Lieberman and Collins was marked-up in November and the bill has still not been reported. The other unanswered question in the Tweet is which CFATS legislation will be marked up. There is the House passed HR 2868, the Collins introduced S 2996, and the yet to be seen DHS version. And of course Sen. Lautenberg (D, NJ) has been threatening to introduce CFATS legislation for over a year now. Though to be fair, a Lautenberg bill would not get marked up in the Homeland Security Committee next week. IST in CFATS The Lungren Tweet urges the SOCMA attendees to continue to apply pressure on Congress to keep IST out of CFATS. Rep Lungren’s opposition to IST is hardly news, but it is indicative of the continuing controversy surrounding this issue. This is probably the key issue that will hold up the ultimate passage of CFATS legislation this session. Lungren’s position does not take into account the current efforts in DHS-ISCD to consider administratively adding an IST reporting requirement to the current CSAT SSP tool. I’ve reported on this in the current issue of the Journal of HAZMAT Transportation (Vol 21:1, pg 12). Nor does it reflect the work being done by ISCD and the Center for Chemical Process Safety (CCSP) to address the issue of IST being a safety tool not a security tool; the two organizations are trying to define limited security related tools for evaluating IST proposals. Continue to Watch the Senate In any case, it sounds as if we may have some sort of movement on CFATS reauthorization in the coming weeks. I will certainly share any news that I hear.

Water Facility Security Lacking

Last week there was an interesting water facility security breach out in Oregon. According to news reports an intruder broke into a local water treatment facility and stole the computer that operated the automated water treatment equipment at the facility, including the valves that control the addition of chlorine to the water. The article reports that “the burglar gained access to the plant by driving around a fenced and gated area through an adjacent tree farm”. The local residents can rest assured that local officials are taking action to ‘harden’ both the water treatment and waste water treatment facilities against future intrusions; too little, too late. Now current water security rules require all facilities that serve over 3,500 customers (and I am making the perhaps unwarranted assumption that this facility meets that requirement) have completed security vulnerability assessments. Unfortunately there are no provisions to allow the EPA (the water facility security enforcement agency) to require that facilities take action to correct security shortcomings. In this case the only thing that happened with the break-in was the loss of about $1,000 worth of computer equipment and significant amounts of overtime pay to cover having someone on site executing manual control of the system. What if this had been something more than vandalism or theft? What if this had been a terrorist attack on the water system? Or an attack on the chlorine used at the water system? Can anyone believe that the security system would have had any better result? This is a perfect example of why I am concerned about the lack of water facility security regulations that really mean anything. Requiring that facilities ‘conduct an SVA’ is a toothless requirement if there is no check of the adequacy of that evaluation. And an SVA does not provide any security, it just identifies the security needs. It should lead to the development and execution of a security plan and there are no current requirement for that to be done. Legislation like HR 2868 needs to be passed to give DHS or EPA the authority to provide proper regulatory oversight of the security of water treatment and wastewater treatment facilities. Sooner or later terrorists are going to see stories like this one in the Oregon newspaper and realize exactly how vulnerable our water treatment facilities actually are.

Senate CFATS Hearing 03-03-10

Well, I finally got finished listening to the webcast of yesterday’s CFATS hearing before the Senate Homeland Security and Governmental Affairs Committee late last night. Too late to digest and write about it as I had promised. It was an interesting hearing with one clear result; it is going to be a while before we get a Senate vote on CFATS re-authorization. Apparently the Administration was correct in requesting another one-year extension in their DHS budget request. IST Debate As was expected, IST was a major focus of the questioning, but there was no indication that any Senator was firmly standing for an IST requirement in any legislation that will be considered by this Committee. Even Sen. Lieberman (I, CT), who is a known supporter of IST, did not seem to be nearly as committed to the mandate requirement as he was back during the 2006 discussions. Surprisingly, the most vigorous support for IST came from DHS Undersecretary Rand Beers. Sen. Collins (R, ME), a well known opponent of IST, pointed out that process safety professionals were unclear if there was a definitive enough definition of IST to allow it to be included in a legislative mandate. That this was expected could be seen in Dr. Sivin’s prepared testimony (representing the UAW). Dr. Sivin noted that HR 2868 did not include the term ‘Inherently Safer Technology’; instead it clearly defines the term ‘Methods to reduce the consequences of a terrorist attack’ (which is too long to even have a respectable acronym) which he suggested was a more appropriate term given the legislative intent.. All of the IST questions put to the second panel of labor and industry representatives were addressed to the two witnesses representing chemical industry interests. None of the questions were hard hitting though they all did seem to be directed at legitimate industry concerns. I was surprised that none of the Senators had any questions about the concerns raised by the single labor representative on the panel. Rand Beers did make clear in his testimony and answers to questions that while the Department and the Administration support an IST component for CFATS they have every intention to work with industry and other stakeholders to make any such program one that addresses the security needs and capabilities of the regulated industry. He pledged that DHS would follow the same type of process used in CFATS implementation would be used to develop implementing regulations for any IST program. HR 2868 Dead Going into this hearing one of the questions that remained to be answered about the CFATS reauthorization process in the Senate was which bill would this Committee mark-up and report to the Senate floor. The House has passed HR 2868 and Sen. Collins had introduced S 2996; two entirely different approaches to that reauthorization process. One joker still remained to be played in this game and that would be the promised introduction of a CFATS bill by Sen. Lautenberg (D, NJ). Secretary Beers’ testimony that the Department had a draft version of a new chemical security bill ready for consideration by the Administration threw all of the previous political calculations completely out the window. Sen. Lieberman’s comments seem to indicate a willingness on his part to allow the Department and the Administration to shoulder a major part of the responsibility for any controversy surrounding IST and a comprehensive chemical security bill by working on a Department drafted legislation rather than take up the House bill. Sen. Levin’s (D, MI) pointed question about whether or not the Administration backs HR 2868 and subsequent questions about conflicts between CFATS and HR 2868 seems to indicate a willingness to back the Chairman on this matter. While Rand Beers maintained that there was no ‘Administration position’ on HR 2868, he quickly suggested that the existence of a DHS draft legislative proposal could be cause to infer a lack of support. Republican opposition to HR 2868 is just as strong in the Senate as it was in the House. Sen. Voinovich’s (R, OH) rant against the water treatment and waste water portions of HR 2868 was as vitriolic as anything thing that I heard in the House debates. That it was directed at the EPA witness, whose agency had little to do with the development of that regulation, was quite unusual. It seems for all practical purposes that HR 2868 is dead on arrival at the door of the Senate Homeland Security Committee. This is sure to upset Chairman Thompson whose House Homeland Security Committee worked so hard at developing, refining and passing HR 2868 over a period of more than three years. It also raises potential issues of how well his Committee will work with DHS on other issues. The environmental and labor advocacy communities have got to be in a bit of a quandary right now. For the last two years they have been pushing for some form of the current House bill to be passed. For that to be pushed aside now by a liberal administration has got to be confusing. Still, I expect that they will not immediately raise too many objections since public indications are that there will be a relatively strong IST component in the proposed legislation. If that fails to come through, this will be yet another issue about which the liberal base will be disappointed in this President The Way Forward For now it looks like we are just going to have to wait for the Administration to review and massage the version of CFATS legislation that has been drafted by the good folks at NPPD. I hope this gets faster response from the political handlers than the ammonium nitrate regulation (which is approaching being two-years over due now). If it doesn’t happen before late spring then CFATS reauthorization will get killed by the inevitable political inaction attendant with a Congressional election year. We are going to have to wait until we see how this bill shakes out, and if the Lautenberg bill makes it to the discussion, to see how things are going to proceed with CFATS legislation. I doubt that there will be any movement on the Collins’ bill; at least until the DHS bill becomes public. It looks almost certain that the one year CFATS extension in the DHS budget request will be necessary to keep the program alive until this legislative wrangling is done.

Can S 2996 Pass in the Senate?

On Tuesday the Government Printing Office (GPO) finally had an official copy of S 2996 available via the Thomas.LOC.gov web site. Over the last week or so since I wrote about the introduction of this alternative to HR 2868, I have had a number of people ask me what I thought about this bill and I have invariably answered that I did not think that it had much chance of passage. But, after re-reading the posting about this bill over on Steve Roberts’ blog I have begun to re-think that stance. That posting noted that if S 2996 passed in the Senate there would have to be a conference committee to work out the differences between S 2996 and HR 2868. I wrote off this comment the first time I read it because I did not think that S 2996 had anywhere near the votes to pass, even though it is a ‘bipartisan’ bill. It just didn’t address enough of the issues important to the activists that form an essential part of the base of the Democratic Party. While I still don’t think that this bill can pass in its present form, I have begun to think about what changes could be made to the bill in the legislative process that could make it passable. The one assumption that I am going to make in this discussion is that this bill will essentially remain true to Sen. Collins’ (R, ME) well known objection to the chemical facility IST provisions in HR 2868. If we don’t keep that much of the current bill then we don’t even need to discuss this bill and we would just assume that the Senate would take up and pass HR 2868. Water Security Issues A passable bill will have to address the issue of the security of chlorine and anhydrous ammonia at water treatment and waste water treatment facilities. The 2008 report by the Center for American Progress points out that the large amounts of these chemicals stored at many water treatment and waste water treatment facilities would make these facilities prime terrorist targets. The failure of CFATS to address these security issues has been a major rallying cry for organizations like Greenpeace. If provisions similar to those found in Title II and Title III of HR 2868 were added to this bill, there would be some moderate Democrats that could support the legislation. It would give them some cover to respond to the activists while protecting them from active opposition from the chemical industry. The water treatment industry hasn’t been very happy with the IST provisions in HR 2868, but that haven’t been as adamant in their opposition as the chemical industry. This is mainly due to the provisions giving State control over the implementation requirements rather than the EPA. Technically, the IST provisions in Titles II and III would be the ones that would be most amenable to a reasonable assessment requirement. There are mature and well understood alternatives to the use of chlorine for disinfection. They are certainly not going to be useable at every facility, but the evaluation of their implementation does not require a lot of new science and or engineering work that might be required for the assessments at most high-risk chemical facilities. TIH Mitigation Organizations like Greenpeace are not going to be satisfied unless the legislation provides strong provisions giving the government authority to require changes to eliminate or at least drastically reduce the use of toxic inhalation hazard (TIH) at facilities any where near urban areas. Since we have already assumed for this discussion that an IST mandate cannot be added to this bill, some method of reducing the risk from those facilities will have to be included in the legislation to mute the complaints of the activists. I think that a provision giving the Secretary the authority to require significant mitigation measures for TIH releases might provide the necessary political cover on this issue. Requiring some sort of method to stop a toxic cloud from leaving the facility would be one potential provision. Now the activist will argue that there is no technology that could guarantee that there would be no off-site effects, but most moderate Democrats could probably accept a reasonable attempt to stop off-site consequences. Labor Issues There are a number of labor issues that will have to be addressed in any CFATS extension legislation if there is going to be any significant support by Democrats, particularly in the House. Whistleblower protections, including labor representatives in the security process, and redress procedures for the personnel surety process will have to be addressed. The chemical industry hasn’t been entirely happy with the provisions in HR 2868 for these areas, but they can apparently live with them. Including these provisions in S 2996 would go a long way to assuring union support for the legislation. Since labor unions are a major source of political support for the Democratic Party, these provisions will be necessary to gain enough support among moderate Democrats to gain passage of the legislation. Other Legislation Any definitive discussion about the possibility of passing chemical security legislation in the Senate is still a little premature. There is one more bill that we can expect to see before the Senate Homeland Security and Governmental Operations Committee takes up this issue. Sen. Lautenberg (D, NJ) has promised to introduce a bill that will probably be more to the liking of organizations like Greenpeace.

If that bill is moderate enough, it might be the bill that the Senate leadership decides to bring to the floor for a vote. If that bill contains too many provisions objectionable to the chemical industry, it is more likely that Sen. Lieberman (I, DE) would work with Sen. Collins to work out a compromise version of her bill. If those two could work out a compromise version of S 2996 then it would almost certainly pass in the Senate.

Fertilizer and IST

I ran across an article on HossierAgToday.com that pointed out a basic misunderstanding of the inherently safer technology (IST) requirements of HR 2868. The article quotes an unnamed spokeswoman of the Fertilizer Institute as saying that “forcing makers of anhydrous ammonia for fertilizer to switch products would drive up costs and hurt quality”.

First off, the provisions of HR 2868 would not require any manufacturer of any chemical listed in Appendix A to 6 CFR part 27 (DHS chemicals of interest - COI) to stop manufacturing those chemicals. Since those products are what the manufacturer sells, it would not be economically feasible to stop them from selling those products; it would put them out of business.

Manufacturers of certain COI (mostly TIH chemicals) might have to be concerned that some of their customers might be required to switch to less hazardous chemicals because of the IST provisions of HR 2868 if the legislation were adopted. This concern would not be felt by fertilizer manufacturers.

The end users (farmers) of these dangerous chemicals (anhydrous ammonia and perhaps ammonium nitrate) would not be Tier 1 or Tier 2 facilities if they were covered by CFATS (farmers are currently temporarily exempted from the Top Screen submission requirements of CFATS). Only Tier 1 and Tier 2 facilities could possibly be required by the Secretary to switch to safer chemicals. Thus anhydrous ammonia fertilizer end-point sales would not be affected by HR 2868 and the entire manufacture distribution system would be effectively exempted from the substitution requirements.

Where anhydrous ammonia is used to manufacture other fertilizers, it will be difficult to justify the switch to slightly less dangerous aqueous ammonia solutions simply on economic grounds. This would require the complete redesign of manufacturing processes and chemical handling equipment. It would significantly increase the number of hazardous materials shipments and the number of times that those chemicals would be handled. The capital costs for the switch and the increased operational costs would be hard to justify with the slim margins typically found on fertilizers used in large scale commercial farming.

It is always disheartening to see political discourse reduced exaggeration of the potential affects of legislation. There are a number of points of clear disagreement about many provisions of HR 2868. The discussion about whether or not to pass the bill should remain focused on those areas so that reasonable accommodations can be reached between the various affected groups. Resorting to exaggerated claims to garner wider support only poisons the political process.

IST Compliance

I am going to close out this series of blog ‘re-postings’ about IST with an original post looking at IST compliance issues. The earlier postings in the current series were:
Writing IST Legislation
IST Reader Comment - Scheduling
What Standard to Apply for IST - Limits
What Standard to Apply for IST – Cost Estimates
IST Reader Comments – Sources and Standards
IST Reader Comments – IST Incentives

 Last week I had an interesting telephone conversation with Jon Kalmuss-Katz, a reader from NYU. It was a lengthy discussion of the IST provisions of HR 2868. Jon asked an interesting question during that discussion; he asked my opinion about the probable effectiveness of the IST provisions in HR 2868. As with everything else associated with the entire IST debate, there is no simple answer to that question, but a discussion of the subject seems like an excellent way to close out this series of blogs.

IST Assessment 

I think that the requirement to for every high-risk facility to perform an IST assessment has the potential to be the most effective part of this legislation in getting high-risk chemical facilities to change chemicals and processes. The reason for this is that for many, probably most, of the 6,000+ covered facilities, this will be the first time that they have taken a systematic look at the chemical processes that they use with the view to possibly changing to a safer process.

Now many facilities will have already looked at alternative processes as part of their EPA and OSHA mandated process safety reviews. The facilities with chemical engineering or chemical R&D support are more likely to have looked at safer processes. The reason is actually fairly simple; handling dangerous chemicals is expensive. The government reporting requirements, the added safety equipment, and the liability issues all increase the costs of these processes. As part of the standard business cost-cutting program, most facilities with the technical capabilities to do so will look at alternative processes to reduce their manufacturing costs.

Unfortunately, a large number of chemical facilities will not have adequate technical resources in-house to conduct such a review. In the normal course of business they would just continue to use the same chemicals and processes that they have for years. The EPA and OSHA process safety reviews do not specifically require looking at alternative processes and are rarely checked in any case. So, there is no clear incentive to conduct such studies. If the IST provisions of HR 2868 are passed into law (very likely in some form) these facilities will be required to complete and document an IST assessment. They still won’t have the in-house resources to do this, but, because of the legal requirement, they will turn to outside engineering consultants to conduct and document the assessments.

Now, if these assessments turn up effective alternative processes that will save the companies money, most companies will implement the appropriate process changes. There is every economic incentive to do so and economic incentives drive most of the decision making in corporate America. The key here will be putting effective review procedures in place to ensure that the assessments are actually done.

The big problem with the OSHA and EPA process safety review requirements is that there is no effective governmental check of the adequacy of those reviews unless there is a significant accident at the site. To be fair to those two agencies, Congress has never provided funding or authority for such agency reviews and approvals of the safety studies.

Presumably, DHS would develop an IST Tool to be used as part of the current Chemical Security Assessment Tool (CSAT). Such a tool would have to provide for the submission of enough information that DHS would be able to evaluate the adequacy of the assessment as well as its substance.

Mandated Implementation

The current language of HR 2868 {§2111(b)(1)(A)} as passed in the House only allows the Director of the Office of Chemical Security to consider the information provided in the assessment in making the determination of whether to require the implementation of the inherently safer technology. Included in the Director’s determination is the requirement to ensure that the hazard to be avoided at the facility is not simply transferred to another location.

There is, however, an inherent problem with this that Jon identified in our conversation; how does DHS ensure that the hazard is not transferred to another location? HR 2868 requires that the conversion does not create a new Tier 1 or 2 covered facility {§2111(b)(1)(a)(i)(II)} or conversion of a Tier 3 or 4 facility to Tier 1 or 2 {§2111(b)(1)(a)(i)(III)}.

Take, for example, the case of a facility converting from the use of chlorine to hypochlorite. If the supplier were a Tier 3 or 4 facility, there would be no way of knowing if the new business provided by the converting facility would enough to change the producer to a Tier 1 or 2 facility until that facility reported the change in their chlorine inventory in a new Top Screen after the new business was in place. The new business could be simply off-setting lost business or it could be an increase in business that did not require an increase in on-site chlorine inventory at the hypochlorite manufacturer; in either case there would be no change in the manufacturer’s tier ranking.

Further complicating this determination is the issue of transportation hazard. Section 2111(b)(1)(a)(i)(IV) prohibits requiring implementation of an IST that transfers the risk to ‘transportation infrastructure’. If the hypochlorite producer needed an increase in the number of chlorine shipments to handle the new business, this could be considered such a risk transfer. Again, DHS would not be able to determine this until the producer reported the change in the number of shipments; something not currently required to be reported in Top Screens.

To make matters worse, it may not be possible to identify the potential manufacturing facility where the hypochlorite will be produced. If the implementing facility were sourcing their hypochlorite through a distributor, they would have no way of knowing, nor would DHS, which facility would be manufacturing the hypochlorite. Since hypochlorite is not a COI, the distributor might not even be a reporting facility; much less a CFATS covered facility. And the distributor might use multiple manufacturers or manufacturing locations to source their chemicals.

Assessment Evaluation 

The final issue that Jon and I discussed was the evaluation of the IST assessment conducted by the facility. Since the Director must rely on the facility’s assessment to make the implementation decision, it becomes a relatively simple matter for facilities to avoid implementation; write an assessment that finds it not feasible.

Ignoring for the moment the earlier discussion of why facilities would want to implement technically and financially feasible IST, this is one of the major concerns for advocates of mandating IST implementation. One could certainly describe a situation where an IST implementation was technically and financially feasible, but would be such a headache that the facility would want to avoid being required to implement the technique. This could be further aggravated by the implementation timeline required in the legislation.

The question then becomes, could the facility avoid mandated implementation by the way they wrote their assessment? An assessment could be completely fabricated that would show that the IST implementation was both technically and financially not feasible. Depending on how well the assessment was written, the fabrication might be completely undetectable. Fortunately, there would be few if any (in my opinion, others will certainly disagree) high-risk facilities that would take this clearly illegal route to avoiding a requirement to implement an IST technique. Short of such clearly illegal manipulation of the assessment, there are a number of ways that a facility can manipulate the assessment to avoid mandated implementation.

Cost estimates for implementation are based as much on technical opinion as fact. Every engineer takes available information and adds fudge factors to try to account for the inevitable unforeseen events that come into play in any process change. The earlier in the engineering process that the estimates are made the larger those fudge factors will be. Small changes in that factor can make significant difference in feasibility determination of the assessment.

Other factors that can be massaged during the assessment process include the source for price estimates. Facility engineering staffs know multiple suppliers for almost every service and equipment required for the implementation project. Choosing a higher cost supplier for the assessment quote can significantly increase the cost estimate for implementation. Since these supplier decisions are frequently location based, it would be very difficult for DHS to question such manipulations.

Another factor that could be subject to manipulation is the margin requirement for the products involved in the covered process. Every product in the market place has a required price margin over manufacturing costs. This margin is used in calculating the profitability of the product and thus figures into the calculation of financial feasibility of the IST implementation. Every business uses a different methodology for determining the margin requirements for their products and will frequently require different margins for different products. I have seen required margins as low as a penny a pound and as high as $1000.00 per pound at the same chemical facility.

The factors that affect that calculation vary widely but can include sales price, volume of production, age of the production facility, customer and market share. A small change in the required margin can have a major impact on the financial feasibility of the IST project. With all of these variables (and there are many more variable that can be taken into account when evaluating technical and financial feasibility) it strikes me that there should be no facility that could be forced to implement an IST that they did not fully endorse. Anyone should be able to document an assessment that finds a marginal project to be financially not feasible.

IST Reader Comments – IST Incentives

NOTE: This posting originally ran on 03-11-09. Changes are in [ ]. This is yet another in a series of re-postings of articles on Inherently Safer Technology and security at high-risk chemical facilities. The earlier postings in the current series were: Writing IST Legislation IST Reader Comment - Scheduling What Standard to Apply for IST - Limits What Standard to Apply for IST – Cost Estimates IST Reader Comments – Sources and Standards We do seem to be getting a lot of comments on IST (which is what I am trying to achieve). The latest reader comment comes from Luke Von Cfats (we won’t confuse him with Anonymous) and was posted to the first blog in the [original] series. Among other things he points out that the HR 5577 [as does HR 2868 in Title II and Title III] provisions on IST also included provisions for the Secretary to make funds available to “help defray the cost of implementing methods to reduce the consequences of a terrorist attack”. While that money was primarily intended for water treatment and waste water treatment facilities, the comment does serve to introduce a new topic; incentives for IST implementation. Grants As Luke Von Cfats noted in his comment, HR 5577 would have appropriated $100 M for IST grants in the first year that it was in effect (and an additional $75 M and $50 M in the second and third years), or almost 1/3rd of the total appropriations for supporting the chemical facility security regulations (§2116). This money would have certainly have allowed for significant changes in the calculations for financial feasibility. But according to § 2110(e) it is clear that a large portion of that money was intended to go to public water treatment facilities that operate on a tighter budget than most chemical facilities. Luke Von Cfats does not believe that this would have been either cost effective or very effective at reducing the risk at these high-risk chemical facilities. Now, if the IST provisions were targeted at just the facilities that were Tier 1 or 2 facilities because of release toxic COI, I believe that a case could be made for a positive cost-benefit ratio based on the potential reduction in casualties. Of course, if one does not accept the potential risk as being real, then there can be no benefit and the resulting ratio is negative for any expenditure. Would the $225 M be an adequate incentive to convert all of the facilities? There is currently no way of knowing. Until each facility is required to conduct a detailed cost analysis of the potential IST provisions for their facility, we cannot even get a semi-accurate guess as to how much money will be involved. Even with double that amount of money, however, I would not be surprised to find that there were a few facilities that could be economically converted to an IST process. [The larger facilities that one would expect to find in the affected tiers would be expected to have high conversion costs.] Tax Incentives A very common tool available to Congress to ‘encourage socially acceptable behavior’ is the provision of tax incentives. This is one of the reasons that the US Tax Code is so complex as to be unmanageable. In any case, a properly crafted tax incentive is as good as giving someone cash; more so because it is not taxable. There is one significant draw back; it would not apply to publicly owned treatment works since they are not-for-profit organizations. There are at least two different approaches that could be taken with ‘incentivizing’ IST implementation with tax credits for privately owned high-risk chemical facilities. The first way would be to provide a tax credit based on the amount of money spent on an approved IST project. The draw back to this method is that it would not provide any incentive for the degree of risk reduction. The second method would be to tie the tax credit to the number of people removed from an at-risk status by the IST implementation. This would provide for risk reduction but would not be linked to the amount of money spent. A blending of the two programs could be to determine a tax credit ‘rate’ to be based on the number of people removed from risk. Then that rate could be applied to the amount of money spent on the IST implementation. This way the tax credit could reflect both the amount of risk reduction and the money spent on that reduction. Unfortunately, this would be even more difficult to set up before the IST evaluations were completed. A blend of tax incentives and grants could address that situation. Facilities could use the tax credit in their calculation for financial feasibility. Then DHS could target the grants at facilities that still had to deal with economic infeasibility. Internalize Risk There is another technique that I have not seen proposed with regards to this issue. That would be to require that high-risk facilities assume a measure of fiscal responsibility for the risk to the surrounding community. The easiest way to do that would be to require all high-risk chemical facilities to buy terrorism insurance for their facility. The amount of coverage required would be determined by the number of people exposed to the risk of a potential successful attack on the facility. The benefits from the policy would be paid directly to the affected population in the event of an attack. This would have two additional benefits. First it would increase the costs of not implementing an IST program and directly increase the number of financially feasible projects. Second, it would add the insurance industry as an inspector of high-risk facility security implementation. Properly implemented security measures would also serve to reduce the premiums for that insurance. The one downside of this program would be that it is likely that there would be facilities that not only could still not afford to implement an IST program, but could not afford to remain in business at that location while paying the required insurance premiums. There are those that would argue that this would be a good thing as it would ultimately eliminate the risk at that location. On the other hand, especially in the current economic environment, politicians would have a hard time justifying anything that would close a facility and put more people on the unemployment roles. Combination Plans The most effective incentive program would probably combine elements of all three of these techniques. A properly crafted set of incentives would go a long way to getting industry buy-in for a mandatory IST provision in the CFATS re-authorization bill.

What Standard to Apply for IST – Cost Estimates

NOTE: This posting originally ran on 03-05-09. Changes are in [ ]. This is the third in a series of re-postings of articles on Inherently Safer Technology and security at high-risk chemical facilities. The earlier postings in the current series were: Writing IST Legislation IST Reader Comment - Scheduling What Standard to Apply for IST - Limits Gates A typical process introduction [at chemical manufacturing facilities] goes through a number of formal evaluations typically called gates. At each gate there has been more work done on developing the process and the cost estimates get more accurate. The first estimates are based on general ideas of the time, raw materials, and capital equipment required and always include a significant fudge factor that varies with the organization involved (I have heard factors as low as 20% and as high as 50%). As more information about the process is obtained those estimates are refined and the fudge factor is reduced. Even the final budgeted figure is an estimate and includes a contingency factor. The purpose of the gate process is to require periodic re-evaluation of a new process to ensure that an uneconomic project is killed as soon as possible to reduce the amount of money spent on such projects. If the IST process mandated in the new legislation does not take this process into account facilities are going to have to use a larger fudge factor on the evaluation upon which DHS will base its regulatory decision [which will kill even more IST implementations]. Chemical Process Refinement At each stage of chemical process development (I’ve described the process used at companies for which I worked in an earlier blog) new problems and solutions are identified. Process safety and quality issues require the addition of new controls and equipment that were not considered before those issues were identified. EH&S personnel learn more about the health and safety issues involved in the process. Potential chemical reactions with other on-site chemicals [are identified and] may require safety modifications of other on-site processes. I have seen a number of projects killed midway through the development process. We’ve discovered process upsets could lead to the uncontrollable evolution of heat and pressure that would endanger the process equipment; the added equipment to prevent those potential upsets doubled the cost of the project. Other projects could have led to chemical reactions in our waste water streams that would evolve toxic gasses; a complete new water treatment process killed that project. Another project was killed when the supplier of a raw material came in and briefed us on the handling requirements for that chemical; the added safety equipment costs were too high for that project. Escape Clause The earlier in the IST evaluation process that a facility is required to provide DHS with their evaluation data the more likely it is that unsuspected complications will negate those findings as the implementation process proceeds. It is unreasonable to expect that Congress will allow DHS to wait until the IST process is ready to go into full scale operation before they order the facility to implement the project. That would defeat the whole evaluation/implementation requirement. This means that there will have to be provisions for subsequent data submissions on IST evaluations requiring periodic re-evaluations of implementation orders. It might make more sense to require periodic updates of the IST data submission, in effect establishing a DHS gate process. This way DHS could track the progress of the implementation process and the evolution of the cost estimate. Process Research Frequently chemical process introductions are canceled because there is no clear way to proceed while keeping costs within reasonable bounds. In many cases industry is aware of research options that might lead to ways around the restrictions, but just cannot justify the time and money required to proceed with that research. This would seem like an excellent place for the government to step in and assist the development process with grants for process research. In some cases, where multiple facilities from a variety of companies reach the same roadblock, it may be appropriate to form a government and industry research consortium to conduct the necessary research. [These cost estimate issues are another reason that the IST process should be kept separate from the SSP submission process. The earlier in the process development program that DHS requires the assessment to be submitted, the more likely that the IST scheme will be classified as ‘not feasible’ or will be subsequently determined to cost too much. This needs to be carefully addressed in the legislation.]

What Standard to Apply for IST - Limits

NOTE: This posting originally ran on 03-04-09. Changes are in [ ]. This is the third in a series of re-postings of articles on Inherently Safer Technology and security at high-risk chemical facilities. The earlier postings in the current series were: Writing IST Legislation IST Reader Comment - Scheduling One of the big problems with a discussion about including mandatory inherently safer technology (IST) implementation rules in the CFATS re-authorization legislation [HR 2868] is determining what standard should be applied to require IST implementation. After a facility reviews potential IST and determines that there is a possible substitution, what level of practicality [‘feasibility’ in HR 2868] will allow DHS to require that facility to implement that IST program? Establish Boundary Conditions One way to do this is to set the extreme conditions that most people will be able to agree would allow a rather unambiguous DHS decision either for or against requiring implementation. Then we can discuss establishing some reasonable standard within those parameters. In establishing these boundary conditions I think that we could establish that there are two separate conditions that need to be taken into account; technical feasibility and financial feasibility. Again, for the sake of establishing the boundary conditions we should agree that any IST provision that is feasible for both standards should be required to be implemented and any that fails both should not be required. Again, the ground in the middle remains open for discussion. Technical Feasibility If an IST substitution has been made at another facility using the same equipment to manufacture the same product to be sold into the same market, clearly that substitution is technically feasible. If an IST substitution has been tried at multiple other facilities using the same equipment to manufacture the same product to be sold into the same market and has never been successful, that substitution may practically be declared to be not technically feasible. Variations in manufacturing equipment, product made and the market being sold into can have a significant impact on the technical feasibility of a process change. Replicating a commercial chemical process in different equipment can often be quite a challenge and it is often next to impossible to tell in advance what differences in equipment will be critical. Different products or even different grades of products can have subtle differences in the allowable variations from standard [these ‘standards’ can be set by the general market, specific customer requirements or government regulations]. A product with a part per thousand allowable variation in standard can withstand a lot more process changes than a product with a part per billion allowable variation in standard. Those allowable variations can vary with product and market. Financial Feasibility Establishing realistic boundary conditions for financial feasibility is a little more difficult. To properly analyze financial feasibility you have to be able to compare fixed and variable costs, capital and operational expenditures, as well as determine equipment lifetimes and projected production volumes. Then you have to establish what baseline you want to use for comparison. For this discussion we will assume that there are acceptable methods for computing the cost per unit volume for all of these variables. We will not want to use the current production method as the baseline for comparison; we will use the current production method plus the cost of alternative security measures as our baseline. If an IST alternative can be implemented at the same or lower unit volume cost than the baseline, we can assume that the alternative is financially feasible. Setting an arbitrary top side boundary is more difficult. For some products increasing the unit volume cost by 10% will make it un-sellable. For others doubling the unit volume cost will make no difference in marketability. We are going to have to rely on the facility management to determine what increase in unit volume cost is acceptable in the market place, always keeping in mind that they are already going to have to pass on the increased cost of facility security. Evaluate the Boundary Conditions At this point I am going to stop to see if anyone has any comments on the proposed boundary conditions. If we can get a broad consensus on these conditions, then we can start working in towards an acceptable standard to use for actual evaluations.

IST Reader Comment - Scheduling

NOTE: This posting originally ran on 02-25-09. Changes are in [ ]. This is the second in a series of re-postings of articles on Inherently Safer Technology and security at high-risk chemical facilities. The earlier posting in the series was: Writing IST Legislation Anonymous left a comment about my blog on a proposal for IST legislation. Those comments, in their entirety, are shown below:

“The trouble with putting IST security reviews on a slower timeline than conventional security assessments is that you have to know what you need to protect before you can decide how to protect it. Why spend $ millions on permanent security measures that are soon made obsolete through implementation of IST? IST reviews should take place first as a matter of efficiency.”

This is certainly a common argument for doing the IST review first [required as part of the Site Security Plan in HR 2868]. Unfortunately, it assumes three things: first that the IST review will result in a process/chemical change, second that there are no threats against the facility in the meantime and finally that developing the site security plan is costly. There are inherent problems with all three assumptions.Cost of Site Security Plans We’ll start with the last assumption, the high cost of site security plans. The development of a site security plan is separate from the implementation of that plan. When DHS roles-out their site security plan and gives a facility 90 days to complete that plan, they are not going to be requiring that all of the security measures are complete and in place [The SSP tool asks about existing, planned and proposed security measures]. They fully expect that a number of the measures outlined in the plan will take time and money to implement. What they will be looking for is a plan forward on these expensive, and time consuming capital projects. Secondly, the cost of implementing the security plan is an integral part of the IST evaluation. An IST implementation plan that costs $2 M may seem unreasonable and an unjustifiable business expense. If that implementation obviates the need for a $3 M security plan [along with associated annual upkeep/expenses], the plan becomes a lot more plausible [‘economically feasible’ under HR 2868]. Now Anonymous is certainly correct that it makes no economic sense for a facility to put into place a high-cost capital project to protect a chlorine storage tank that might be replaced by an IST project. The legislation could easily take this into account by allowing facilities to identify and defer implementation of security measures that are dedicated to the protection of the PIH assets at the facility while they continue to work on the other layers of protection required under CFATS. IST Implementation is Not Inevitable Just because there appears at first glance to be a process or chemical that can be readily substituted for a PIH COI does not mean that it is economically feasible to make the substitution. In fact there may be engineering reasons that would make the substitution impracticable.Many advocacy groups in their pro-IST arguments point to the use of chlorine gas in water treatment and waste water treatment as the most obvious case where a less hazardous chemical or process could be substituted for an admittedly dangerous PIH chemical. In his testimony before the House Subcommittee on Environment and Hazardous Materials, Brad Coffey, Water Treatment Manager, Metropolitan Water District of Southern California, provides an excellent description of the process that organization went through to do their IST analysis for ridding their multiple facilities of chlorine gas. As a result of their analysis many of their facilities did switch, but it was not practical [either economically or technically] to do so for their largest water treatment facility. Interestingly, Mr. Coffey noted that immediately after 9/11 they recognized that the security situation had significantly changed and they implemented security arrangements to protect their PIH targets. They even went to the extent of employing armed guards to protect their rail cars of chlorine gas. Facility Protection During Implementation Even when an IST review determines that a project is feasible and practical there is going to be a long period of time before it can be implemented. The Central Valley Wastewater Treatment Facility in Utah is a case in point. In a November, 2008 newspaper report the facility manager, Reed Fisher, noted that his facility had just completed a design for a UV system to replace their chlorine gas system. He expected to put the system out for bid this last January [January 2009] and have it in running in 2010. Assuming that it took six months to determine that the process was now doable and design the system (a conservative estimate if I ever made one) it would still be two years from the start to finish on this project. And the whole time there would be railcars of chlorine gas or chlorine gas storage tanks sitting there as a target. [And the chlorine storage would be at higher risk during construction because of the increased number of people entering and leaving the facility every day.] At high-risk facilities other than water treatment facilities, the time to implement an IST project could be even longer. Because of quality issues and customer requirements the time frame could be extended by years. In the specialty chemical business where I used to work it often took as long as a year to get approvals to substitute the same chemical from a cheaper supplier. It could take years to develop the new manufacturing processes, complete the requisite testing and gain customer approval for substituting a safer chemical. [This is even more of a problem in closely regulated facilities like pharmaceuticals.] Again, the whole time that the IST review and implementation process is running the facility is a high-risk chemical facility. Facilities with multiple COI, including one or more PIH COI, are likely to remain on the high-risk facility list after their IST project is approved and implemented. As high-risk facilities, they still need to be protected. Run IST Review and SVA/SSP in Parallel To properly protect the surrounding community, and that is what we are really talking about here, the SVA and SSP process needs to be completed while the IST review is taking place. The legislation should require that an IST review start when the facility with a PIH COI is give the preliminary designation of a Tier 1/2 high-risk facility. By the time the SSP submission is required the facility should have a preliminary idea of whether the IST has a chance of being implanted. The SSP tool should include a series of questions about the status of the IST project. If there is a substantial probability that the IST will go forward, then DHS should allow a deferment of some of the most expensive security measures pending final determination on the IST question. [Those would have to be clearly identified in the SSP submission.] If there is a low probability or a long lead time for implementing the IST, all security measures should be required to be implemented.