No Longer Covered by CFATS

The other day a long time reader asked me what I thought about the claims by DHS that as many as 1300 facilities has essentially opted out of the CFATS program by removing listed DHS Chemicals of Interest (COI) from their facility inventories. This seems like one of those no-brainer questions with an obvious answer of "It’s a good thing". I learned a long time ago that obvious answers frequently hide unintended consequences. So let’s look at this in more detail.

The Requirement

Let’s start by looking at the CFATS requirement for what facilities are covered by the CFATS regulations. Initially it depends on whether or not facilities have (or have had within the last 60 days) more than a screening threshold quantity (STQ) of a listed COI on site. Those facilities have to submit a Top Screen which allows DHS to determine if the chemicals combined with the location and some other undisclosed factors place the facility at high-risk for being a terrorist target. High-risk facilities are then covered by CFATS (okay it’s a tad bit more complicated than that, but it will suffice for this discussion).

Essentially a chemical makes the COI list if it has the potential for a severe off-site consequence if it is released in quantity, or it may be used to make explosive devices or chemical weapons; concentrations of the COI in mixtures and solutions matter. The STQ is set by determining the amount necessary to be a ‘severe consequence’ or a large enough explosion or CW weapon release; details and politics alter cases.

Reduce or Eliminate the Risk

It would seem obvious that if a facility sufficiently reduced their risk of terrorist attack there would be no need for them to remain under the CFATS regulation. It would also seem clear that eliminating the use of a COI or reducing the inventory of a COI still used to below the STQ should by the definition of the CFATS rules removes the facility from the high-risk category.

What is less clear is that since the vast majority of facilities that filed a Top Screen were notified that they were not at high-risk even though they had one or more COI at or above the STQ, there is an amount of a COI that constitutes a high-risk quantity (HRQ) that is equal or greater than the STQ. One would assume that the HRQ would apply only to release type COI  (flammable, explosive, or toxic) and would vary depending on the relative location of local population concentrations and other potential terrorist targets.

Theoretically then a facility could reduce their inventory of their COI to below the HRQ for that chemical at that facility and the facility would no longer be at high-risk of a terrorist attack. Unless (or until) DHS is willing to share that theoretical HRQ with the facility there is no practical way of reducing the facility risk below the high-risk threshold beyond trial and error.

Practical Aspects of Risk Reduction

The most obvious way of eliminating a COI is to find a substitute chemical for your process that is not on the Appendix A list of chemicals. This is certainly what the folks at Greenpeace and any number of other environmental organizations are expecting to see if they achieve their goal of including an inherently safer technology (IST) mandate in the CFATS program. Eliminate the most dangerous chemicals and the terrorist threat goes away.

Unfortunately, there are a number of ways that a COI can be eliminated from inventory without materially affecting the risk profile of the facility. For example, I know of at least one chemical supplier that encouraged their customers to switch from 20% ammonium hydroxide to 19%; 20% is covered in CFATS, 19% is not. Does this decrease risk? Probably not since inventory levels will probably be increased because the underlying process still needs the same amount of active ingredient, ammonium hydroxide. BTW: the 20% concentration was picked because that was the standard industrial concentration; the next lower standard commercial concentration was significantly lower and safer.

Another way to effectively eliminate a COI is to reduce the maximum amount in inventory below the STQ. Amounts below that level are not reportable to ISCD on the Top Screen. If the manufacturing process still requires the same level of COI consumption (or production) this becomes a bothersome inventory management issue. With most of the release COI having STQ’s in the 10,000 lb range this would typically result in switching from bulk shipments to smaller packages with more shipments. This, in turn, leads to more handling requirements and increasing the risk of accidental releases; which much more common already than release due to terrorist attack.

Less ethical inventory games are also possible. A manufacturer may want to schedule a year’s worth of production of a product to get in a single week. The greater than STQ inventory quantity (say a rail car) of methyl isocyanate (MIC) arrives on site and is consumed within 7 days. A Top Screen is filed showing the maximum inventory and DHS starts to process the information. Then 60-days after the last MIC is consumed a new Top Screen is submitted shown 0 lbs of MIC. Sometime later the railcar load of MIC is ordered again and the submission cycle is repeated.

ISCD Management of Changing Inventory

Since the CFATS Chemical Security Assessment Tool (CSAT) does not yet have a tool specifically designed to handle the opting-out process (it’s coming in December 2011; hold your breath) ISCD doesn’t really have a way of handling these issues comprehensively. So apparently they just continue to process the new and revised Top Screens from these facilities.

So, ask me again what I think about the 1300 facilities that have disappeared from the CFATS program and I’ll ask a not so simple question in return. How many of them have legitimately reduced their risk of terrorist attack without transferring their risk somewhere else and how many of them have simply gamed the system to avoid the cost of having to install security measures to reduce their risk.

I’ll bet you even money that ISCD can’t legitimately answer my question.

IST Questions – Inventory Management

This is the third blog posting of a series looking at how DHS might construct an Inherently Safer Technology Assessment Tool (ISTAT) for the Chemical Security Assessment Tool if Congress were to include a requirement for conducting an IST assessment as part of their legislation to make the CFATS program permanent. The other postings in the series were:

An IST Tool for CSAT
Reader Email – 03-04-10 IST Rules

In the initial posting in this series we established that there would be three different types of IST methods that would be included in the required assessment. In this posting we will look at the ISTAC questions for Inventory Management Assessment. As I mentioned in the initial blog, DHS would provide the facility with a maximum inventory level that would allow for a one level reduction in Tier ranking (Tier Reduction Maximum Inventory – TRMI) and a maximum inventory that would allow for removal from the list of high-risk chemical facilities that are covered under CFATS (Non-Regulated Maximum Inventory – NRMI). Both inventory levels would be based upon data supplied during the facility’s Top Screen and SVA submissions.

Produced or Received 

The first questions will establish whether or not the Release-Toxic Chemical of Interest (RTCOI) is being received from an off-site location or if it is manufactured on-site. For materials that are being received from off-site there would be a number of questions that establish both the current shipment method (pipeline, railcar, truck, and less-than-truck load shipments) and the available alternatives.

Questions would address the changes in cost/UOM for the different shipment mode. There would also be a question for each mode about the maximum and minimum shipment sizes and their relationship to both the TRMI and NRMI. For materials that are being manufactured on-site the initial questions would identify if it is manufactured in a batch process, semi-batch process, or continuous.

For batch and semi-batch processes the minimum and maximum batch sizes would be established and the cost/UOM for each size batch. If the range between min and max included either (or both) the TRMI or NRMI, the cost/UOM of a batch size just below each level would be identified. For materials manufactured under a continuous process questions would address the current average amount produced between start-up and shut-down of the manufacturing process. The minimum amount that could be produced between start-up and shut-down would also be identified. The cost/UOM for both types of production runs would be identified. If that range between the min and current production runs included either the TRMI or NRMI, the cost/UOM for a production run before those limits would also be identified.

Raw Material or Product 

The next question will address the issue of if the RTCOI is used on-site to manufacture another material or if it is produced/stored on site for sale. This will be determined through asking two separate questions (because it could fall into both categories). For materials that are shipped directly to customers the questions will be used to identify the size of typical shipments to customers as well as the order patterns for those customers. Specific questions will address the need to have inventory on-hand versus the ability to manufacture for orders.

For RTCOI that are used to make other products there will be similar questions about that manufacturing process to those asked about the manufacture of RTCOI; batch vs continuous manufacture and size of production runs. Again, questions will be asked about the cost of modifying the size of the production process to reduce the amount of RTCOI below the TRMI and NRMI.

Dispersed Storage

One way of reducing the risk of a release of an RTCOI is to reduce the amount of material in any singe container and separating the containers to make it unlikely that a successful terrorist attack could successfully breach more than one container or storage tank. Using the area of highest quantity (AHQ) concept developed in the CSAT Top Screen, the questions will look at the costs associated with putting the RTCOI into multiple storage tanks that are smaller than the TRMI or NRMI for that facility while keeping the tanks more than 170 feet apart (this reduces the chance that a single VBIED can take out more than one tank).

These questions will address engineering estimates for the costs of these installations. As with any preliminary estimates they will include known costs (list cost of storage tanks) plus a standard engineering markup to cover installation costs. DHS would have to establish a standard method for determining that markup.