[Senate Hearing 107-1051]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107-1051

      SEAPORT SECURITY, CARGO INSPECTION, AND HAZARDOUS MATERIALS 
                             TRANSPORTATION

=======================================================================

                             FIELD HEARING

                               before the

       SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 11, 2002

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation



89-679              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia 
BILL NELSON, Florida
               Kevin D. Kayes, Democratic Staff Director
                  Moses Boyd, Democratic Chief Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel

                              ----------                              

                SUBCOMMITTEE ON SURFACE TRANSPORTATION 
                          AND MERCHANT MARINE

                  JOHN B. BREAUX, Louisiana, Chairman
DANIEL K. INOUYE, Hawaii             GORDON SMITH, Oregon
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachussetts        TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
RON WYDEN, Oregon                    OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia                 SAM BROWNBACK, Kansas
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JEAN CARNAHAN, Missouri              JOHN ENSIGN, Nevada
JOHN EDWARDS, North Carolina


                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on January 11, 2002.................................     1
Statement of Senator Breaux......................................     1
Statement of Senator Hutchison...................................     4

                               Witnesses

Allen, Vice Admiral Thad W., Commander, Atlantic Area, U.S. Coast 
  Guard..........................................................     7
    Prepared statement...........................................     9
Edmonds, James T., Chairman, Port of Houston Authority Board of 
  Commissioners..................................................    16
    Prepared statement...........................................    17
Hinton, Jim, Corporate Manager of Community Safety and Health, 
  Merisol USA and Security Chairman of the East Harris County 
  Manufacturers Association......................................    23
    Prepared statement...........................................    25
Kice, Michael, Corporate Safety and Environmental Director, P&O 
  Ports North America, Inc.......................................    18
    Prepared statement...........................................    21
Lampson, Hon. Nick, U.S. Representative from Texas...............     5
Pipkin, Sam, Chairman, Channel Industries Mutual Aid (CIMA)......    26
    Prepared statement...........................................    28
Trotter, Robert, Director of Field Operations for East Texas, 
  U.S. Customs Service...........................................    12
    Prepared statement...........................................    14

                                Appendix

Duffy, George E., President and Chief Executive Officer, Navios 
  Ship 
  Agencies Inc...................................................    41

 
                  SEAPORT SECURITY, CARGO INSPECTION,
                 AND HAZARDOUS MATERIALS TRANSPORTATION

                              ----------                              


                        FRIDAY, JANUARY 11, 2002

                               U.S. Senate,
            Subcommittee on Surface Transportation 
                               and Merchant Marine,
        Committee on Commerce, Science, and Transportation,
                                                       Houston, TX.
    The Subcommittee met at 1:30 p.m., in Courtroom III, 
University of Houston Law Center, the Hon. John B. Breaux, 
Chairman of the Subcommittee, presiding.

           OPENING STATEMENT OF HON. JOHN B. BREAUX, 
                  U.S. SENATOR FROM LOUISIANA

    Senator Breaux. The Subcommittee on Surface Transportation 
and Merchant Marine will please come to order.
    Good afternoon to all of our guests and to our witnesses 
who will be appearing before our panel this afternoon. My name 
is Senator John Breaux, and I am from your neighboring State, 
over in Louisiana. I am very delighted to be able to be here in 
Houston this afternoon with my colleague in the U.S. Senate, 
Senator Kay Bailey Hutchison, who I serve with on the Senate 
Commerce Committee and this Subcommittee, and my good friend 
Congressman Nick Lampson, who is on the Transportation 
Committee over on the House side, which has jurisdiction over 
this subject matter over in the House of Representatives.
    I want to thank and express my appreciation to the 
University of Houston for allowing us to use their wonderful 
facility this afternoon to have this hearing. I would also like 
to express my appreciation and thanks to all of those who have 
helped make our Subcommittee's trip to Texas as easy and as 
pleasant as it has been so far, and particularly the 
commissioners and officials of the Port of Houston, who hosted 
us this morning on a visit throughout the port.
    We actually boarded a vessel and toured port facilities. I 
was not totally surprised to note that Port of Houston's vessel 
was larger than the Port of New Orleans' vessel; I sort of 
expected that. You have got to have a bigger boat than we have 
and you have a world-class port here in Houston.
    The Subcommittee has spent the last 3 days touring three of 
the major ports in this country to talk about port security. We 
were in Port Everglades in Florida the day before yesterday. We 
had a field hearing there and then moved our Subcommittee to 
New Orleans, where we toured the Port of New Orleans and met 
with local officials and Federal officials as well, to 
understand what their concerns and problems and priorities are 
in the area of port security.
    And today, we conclude our Subcommittee's 3-day trip here 
at the Port of Houston to hear about your concerns and what we 
as a Federal Government can do to help ensure greater security 
to the port systems of this great country.
    America is a different country since September 11 in terms 
of how we look at security and our concerns about security. In 
the past, much of the concerns about ports has been the 
question of drug smuggling, the question of crime at the ports. 
But today, there is also a third addition, and that is the 
dangers from potential threats from terrorists which, 
obviously, would look at the ports of this country as a 
potential target if they were inclined to pick one area in 
which they could inflict severe damage if they were so 
inclined.
    Like my port in New Orleans, your port in Houston is a 
multi-purpose port with a lot of hazardous materials that come 
in and exit that port everyday and lot of very volatile 
materials are imported and stored in your port facility and are 
surrounded by a very populated area--much like the Port of New 
Orleans is, as well. So I think that the fact that we are 
looking at this issue today is extremely important.
    We in the Congress have begun to address this issue. 
Incidentally, it was done before 9/11, when we introduced a 
bill that I had originally sponsored along with others on the 
Senate Commerce Committee, and have been joined by Senator 
Hutchison in her sponsorship. That really started us looking at 
port security from the standpoint of not terrorism, but, 
basically, looking at it from the question of what we do with 
criminal activity and drug smuggling. The bill obviously was 
expanded and changed and modified after 9/11 in order to 
address the question of terrorism.
    Just as a quick outline, I would like to say that the bill 
basically does a number of things, and we want to hear what you 
think about it. We are here not to tell you what to do but to, 
rather, listen to your ideas and thoughts and suggestions to 
try and incorporate those ideas into the legislation. We are in 
this together. It is not just the Federal Government. It is not 
just State Government or local government. It is not just the 
Coast Guard. It is all of us.
    One of the things we want to make sure of is that there is 
a comprehensive plan that allows all of us to work together and 
to have someone in charge; when everyone is in charge, more 
times than not, no one is in charge, so it is very important 
that we have a system that allows us to coordinate our activity 
in this very important area.
    The Port and Maritime Security Act, as I said, has already 
passed the U.S. Senate, but is not too late to change it. Nick 
and I were talking about his efforts in the House and how they 
are going to be working on it in his Committee. And things that 
we did not catch in the Senate can be added in the House--or 
changed or modified--and go to conference with the Senate.
    The legislation basically requires that the local port will 
have security committees established to do this coordination 
that I was speaking of to make sure that the ports are looking 
at how they are going to coordinate their activities. It 
mandates for the first time ever that all ports in this country 
have a comprehensive security plan. Some ports do not. Some 
ports have plans that deal with drug smuggling but not the 
question of security and access to the ports and who is in 
charge of the ports in terms of security.
    The bill would require not a plan coming out of Washington 
but, rather, a plan that is developed at the local level for 
the particular needs of that particular port; the needs of the 
Port of New Orleans may not fit the Port of Houston. So having 
the Coast Guard as the lead in trying to develop a 
comprehensive security plan for each port is part of our 
legislation. It requires ports to limit activity to sensitive 
areas within their ports.
    I happen to believe that we no longer can have free and 
unfettered access by anyone at any time and any place to enter 
into sensitive areas within a port. Times have changed, and I 
think the needs and requirements are going to be different.
    It requires that ships electronically send their cargo 
manifests to a port before they gain clearance to the port. We 
want to know what is on those ships, who is on those ships and 
what they are carrying before they gain access to our ports. We 
want to improve the reporting of crew members and passengers 
and imported cargo on those ships and want to have more 
information and better data in that regard.
    The bill creates a Sea Marshal program, which we worked 
with yesterday in New Orleans, boarding a ship with a Coast 
Guard Sea Marshal that accompanies River Pilots when they join 
the ship outside of the port. River Pilots are not law 
enforcement people; they are navigators and Captains of the 
ship that is under their command. But you need someone on that 
vessel when it enters a port's zone in order to ensure that 
what they say they are carrying they are and who they say they 
are, they in fact are those people. Sea Marshals can help 
provide that assurance.
    It also recognizes that ports have some economic problems 
trying to meet these new security requirements. The legislation 
has authorized $703 million of grants to local ports like the 
Port of Houston and like the Port of New Orleans to help the 
ports around the country with extra money that they are going 
to need in order to establish new security arrangements within 
their ports.
    In addition, it provides $3.3 billion in loans to seaports. 
They are Government-guaranteed loans which would allow the port 
to, maybe if they need to, borrow money at a better rate of 
return in order to, in fact, improve some of their security 
personnel requirements within the port.
    The final thing it does is to authorize additional spending 
for research and development of cargo inspection technology. 
Millions and millions of cargoes come into our ports every day, 
and very little of that is inspected. We need to do a better 
job.
    Less than 2 percent of the cargo that comes into the United 
States is actually inspected. We don't necessarily know what is 
in the millions and millions of containers that come into our 
ports every day, and we need to do a better job. That is 
expensive, that is tough and that is difficult.
    If we opened every container that came into the Port of 
Houston and physically inspected it, that would stop traffic in 
this port and almost destroy the viability of this port. If we 
want to know if there are better ways other than that to find 
out what is in it, I think the answer is yes. Admiral Allen and 
I were talking earlier about perhaps knowing more about what is 
put into the container before it gets to this country in order 
to better find out whether in fact it is being loaded properly 
at the port that it is originating from.
    So that is sort of a summary of what the legislation does. 
We want to hear from some of the folks that will be with us. I 
think that this morning's visit was very, very helpful, and I 
cannot thank my colleagues from Texas enough to express my 
appreciation in helping them and playing a leadership role. I 
know that Kay has done that in the Commerce Committee, where we 
serve together, in this area. And it has been a pleasure to 
work with her.
    I sort of jokingly said that I was happy to come over to 
Texas to see what she has been doing with all of the things 
that she has stolen from Louisiana and see how they are using 
it over here. But they are a very friendly rival. And it is a 
pleasure to join her and have her join us here in her State of 
Texas.
    So, Senator Hutchison, any comments? Let me get back my 
stuff.

            STATEMENT OF HON. KAY BAILEY HUTCHISON, 
                    U.S. SENATOR FROM TEXAS

    Senator Hutchison. I told Senator Breaux earlier that I 
knew he was coming over here to steal ideas to take back to New 
Orleans.
    Senator Breaux. I am trying to take the port back.
    [Laughter.]
    Senator Hutchison. Seriously, I do want to thank Senator 
Breaux. Senator Breaux is Chairman of the Surface 
Transportation and Merchant Marine Subcommittee of the Commerce 
Committee. I was the Chairman before he was and really loved 
that Subcommittee. Now I am the Ranking Member of the Aviation 
Subcommittee, and worked with Senator Breaux on the Aviation 
Security bill. But now, I think, we must start being proactive 
on transportation security rather than responding to crises.
    We are definitely in response mode on aviation, but I think 
we can do better in port, rail, and highway security if we will 
look ahead to see what our vulnerabilities are. That is exactly 
what the bill that I am co-sponsoring with Senator Breaux will 
do, and that is: Ask the ports from around the country to 
submit a plan. We will have in the bill the authorization for 
funding to help the ports implement the plans that they submit 
after they are approved.
    I think there are two good things that can happen from 
this. One is we will know what the local authorities need. 
Second, I think when we see all the different plans, it might 
help give us ideas for other areas where we can improve safety. 
I think this can be a learning tool for all of us to use, but 
the bottom line is we are trying to be proactive and close the 
loop-holes before someone harms us.
    I am very pleased that we are being hosted by the 
University of Houston Law School; this is one of our great law 
schools in the State. I am very pleased that they were able to 
accommodate us and make us part of their ongoing outreach 
effort.
    Let me say that I think it is important to look at the Port 
of Houston in a different way from many of our other ports. And 
that is--of course, we are the largest in foreign tonnage. 
Therefore, security is going to be paramount. Also, we have the 
largest fuel refining facility in the United States right in 
this area, and I think it becomes a national security issue to 
protect our energy supply.
    I am very concerned about the effect of any kind of 
disruption of our energy supply on our overall economy. 
Everyone knows that in order to win the war on terrorism, we 
must have a robust economy. Protecting our energy supply and 
our petrochemical plants as a part of that is another reason 
that we need to focus on security at the Port of Houston.
    I am very pleased in the tour of the port we had this 
morning. I have taken it before, as I am sure every self-
respecting Texas office-holder would have, but I am always 
amazed, because I always find something new, and I see how much 
our port has grown through the years. I think that what we saw 
today--just in observation, there are some things that we can 
do to improve port security here and I know will be part of the 
plan submitted by the Port of Houston.
    I would like to thank the Chairman for bringing the hearing 
here. I again want to thank the Port of Houston for hosting us 
this morning and for doing the great job that they always do. 
We are very pleased to have the Admiral from the Coast Guard, 
who is responsible for this area which is so very important to 
us, and the Customs office and all of those who are affected by 
port security. Thank you all for being here; we look forward to 
learning from you here today.
    Senator Breaux. Thank you, Senator Hutchison.
    And now, we will hear any comments that Congressman Nick 
Lampson might have.
    Nick, good to have you.

                STATEMENT OF HON. NICK LAMPSON, 
                 U.S. REPRESENTATIVE FROM TEXAS

    Representative Lampson. Thank you, Senator Breaux.
    First of all, I want to certainly thank Senator Breaux and 
Senator Hutchison for allowing me to participate in the Surface 
Transportation and Merchant Marine Subcommittee field hearing 
on seaport security here in Houston. I really commend both of 
you on your leadership and the work that you have done in the 
Senate in Washington for our Nation. And I am particularly 
pleased that you came to Houston, and let this be at least one 
of your three stops.
    The 9th Congressional District stretches from----
    Senator Hutchison. We saved the best for last.
    [Laughter.]
    Representative Lampson. Indeed. We will double-team you if 
necessary to get anything back that you try to take away from 
us. You know, there are a lot of people who say, ``Senator, 
there are more people in Port Arthur that are Cajun than there 
are of those in Lake Charles.''
    [Laughter.]
    Senator Breaux. That may be true, but they always come 
back.
    Representative Lampson. They like it so far.
    This district that I represent stretches from here in 
Houston over to the Galveston/Texas City area and up the 
coastline of the Texas/Louisiana border at Beaumont and Port 
Arthur. And there are six ports within the congressional 
district and a number of other ports in very close proximity to 
the congressional district.
    As a Member of the House Transportation and Infrastructure 
Committee, I can tell you that we are indeed working hard in 
Congress to ensure that our ports and our waterways are safe 
and secure, especially in light of the tragic events of 
September 11. And I know that this outstanding group of 
witnesses is working hard, also, and I look forward to hearing 
what they have to say today.
    On September 24, the House Transportation and 
Infrastructure Committee requested that the Secretary of 
Transportation establish a rapid-response team to develop ways 
to reduce the vulnerability of our seaports to terrorist 
attacks. And, specifically, the Committee leadership asked 
Secretary Mineta to provide suggestions for immediate action 
that may be necessary to improve seaport security.
    On December 6, in his testimony before the House 
Subcommittee on Coast Guard and Maritime Transportation, the 
Secretary spoke of the need to identify ports of national and 
strategic significance and perform full-scale vulnerability 
assessments. And I agree that this is an essential factor of 
our Nation's maritime security response to the new threats that 
we are facing.
    As you know, Southeast Texas houses a significant portion 
of our Nation's petrochemical industry. In the wake of 
September 11, leaders of the petrochemical industry and the 
maritime industry have been working with port personnel and 
law-enforcement agencies to institute higher security measures 
and to ensure the continued safety and security of our ports.
    One only needs to look at the example of Texas City--and 
that is right in the yard of which Kay Bailey Hutchison grew 
up--where more than 500 people died after two freighters 
containing ammonium-nitrate fertilizer exploded in 1947, to 
understand the deadly consequences of inaction.
    Both the Port of Beaumont and the Port of Texas City handle 
high volumes of hazardous materials from the petrochemical 
industry; in addition, the Port of Beaumont is home to a 
military traffic management and control facility that handles 
large volumes of military cargo. And the Port of Galveston 
operates as a hub for the cruise ship industry in Southeast 
Texas, and it is also at considerable risk to terrorist attacks 
given its high passenger volume.
    Well, some of the things that I hope from the gentlemen who 
are going to make their presentations today have to do with the 
resources specifically of the Coast Guard. And I understand 
that just in that area out of Sabine Pass, where there have 
been 110 or so Reservists, we are now down to about 10. Only 10 
or so remain.
    Whether or not the Coast Guard does indeed have adequate 
resources to continue to do patrol, boarding of ships and all 
the other duties that go to this both law-enforcement and 
military agency must be determined. Will the Coast Guard have 
the ability to continue to rely on local governments, which 
this bill speaks to, through its cooperation?
    ***[Recording cuts off briefly here; portion missed.]*** 
twice in the last month to escort a naval vessel going into the 
Port of Beaumont because they did not--because the Coast Guard 
did not have the adequate facilities available or the resources 
on the Gulf Coast in comparison to the East and West coasts of 
our country? All of that has to do with adequate funding and 
adequate planned cooperation, again, as this bill will speak 
to. And I look forward to hearing from you on those matters.
    Those words are just to underscore, I guess, the importance 
of maintaining vigilant oversight over our Nation's ports. The 
terrorist attacks on the 11th of September highlight the need 
to institute high levels of cooperation in security from the 
Federal to the local level, and it isn't an issue which can be 
addressed separately by law enforcement or by port personnel; 
it is indeed an issue which requires a great deal of 
cooperation from all parties involved.
    I applaud the Senators for their recognition of the 
importance of port security as a national security issue, and I 
look forward to working with them in improving, providing, and 
maintaining security at our Nation's ports. Thank you.
    Senator Breaux. Thank you very much, Congressman Lampson, 
for your participation and help.
    With that, we would like to welcome up the panel that will 
be presenting testimony, followed by questions from those of us 
up here. First would be Vice Admiral Thad Allen. Admiral Allen 
is the Admiral in charge of the Coast Guard for the entire Gulf 
of Mexico, as well as for the entire Atlantic coast of the 
United States. He is accompanied by Captain Kevin Cook, who is 
Captain of the Port here in the Port of Houston.
    Then we will have Mr. Robert Trotter, who is Director of 
Field Operations for East Texas for our Customs Service.
    I am using one of your pens.
    Mr. Jim Edmonds, today's Chairman of the Port of Houston--
of the Port Authority, thank you for your courtesies to us so 
far.
    Mr. Mike Kice, who is Vice President of P&O Ports here in 
Texas; Mr. Jim Hinton, East Harris County Manufacturers 
Association; and, also, Mr. Sam Pipkin, who is Chairman of 
Channel Industries Mutual Aid--CIMA--here in Houston. Thank 
you, gentlemen, all, for being with us.
    And we will start, I guess, with your statement, Admiral 
Allen.

 STATEMENT OF VICE ADMIRAL THAD W. ALLEN, COMMANDER, ATLANTIC 
                     AREA, U.S. COAST GUARD

    Vice Admiral Allen. Good afternoon, Mr. Chairman. I have a 
prepared statement for today's hearing, but, with your 
permission, I will submit that for the record and make a few 
quick comments. I realize I am the third Coast Guard witness in 
a row, and I would much rather engage in some other discussion 
and hit the points that you and the other panel members have 
asked about. And I think it is important that we have that 
dialog here today.
    Senator Breaux. Thank you. You are the highest ranking one, 
however.
    [Laughter.]
    Vice Admiral Allen. I would like to make just a couple of 
points and some acknowledgements if I could to kick off today's 
event. The first thing I would like to talk about is 
leadership--and you have stated that often in the past few 
weeks, Mr. Chairman--regarding port security and what we need 
to do in the ports post-9/11.
    Before 9/11, there was a lot of leadership in the ports, 
but it was more focused on individual activities and processes. 
We were looking at cruise ships. We were looking at port State 
control regimes. We were looking at environmental response. We 
were looking at certain facilities. And we were doing a good 
job. And those all came from various mandates, some stemming 
back to the Oil Pollution Act of 1990 or before.
    What happened on 9/11 was that we had a general quarters 
call; everybody had to come up on deck. We searched where we 
needed to. We closed the ports of New York. We closed 
Washington around the Potomac, Baltimore and their harbor and 
so forth.
    What is needed now is leadership. And I appreciate what the 
Committee has done, especially S. 1214, in putting forward a 
paradigm on how we can pull together what were previously 
disparate activities of the port and put them under a holistic 
approach. We have a good model to do that. The Oil Pollution 
Act of 1990 in its implementation has been a major success in 
reducing spills and increasing the environmental security of 
our ports.
    Many of the provisions in the proposed legislation mirror 
the process that we use to increase the environmental security 
of our ports. I think that is important to understand. And I 
appreciate the leadership of the Senate. And we look forward to 
working with the House as a final vote comes to fruition.
    I would also like to thank Secretary Mineta, the Secretary 
of Transportation, for his work in crafting the final Senate 
version of this bill.
    The transportation system in this country is very complex; 
it is multi-modal. Cargo flows not only impact ports; there are 
rails, surface and air, and we need to understand that from a 
multi-modal standpoint. The new Transportation Security 
Administration is being stood up, and I think there are a lot 
of opportunities to look at these across the modes, though we 
are going to be talking about ports today and the maritime 
security aspects of our transportation system.
    But I think we understand that containers--and we have 
talked about this--move through many different modes. And I 
think the Transportation Security Administration is poised to 
take a good look at that. And I look forward to Secretary 
Mineta's leadership in that regard.
    At a lower level, I think you can be happy here in the Port 
of Houston. Captain Kevin Cook was here on 9/11. He took some 
very fast, persuasive and decisive actions in the hours 
following the events. A lot of that had to do with his great 
relationships here in the port with all the stakeholders and 
their ability to come to a consensus on what needed to be done. 
And this involved increasing security at the facilities 
themselves and requiring more information from the vessels that 
were arriving.
    In fact, some of the actions that Captain Cook took here in 
the Port of Houston presaged the national events that were to 
take place several days later, including better information on 
arrivals of ships, cargo and personnel, that were associated 
with that.
    So I think the real issue right now is: Post-9/11, how do 
we take all the good things that were going on in the ports 
before then and take a holistic look at the ports as it relates 
to security? The Commandant and I both believe that the Coast 
Guard as the lead Federal Agency in the maritime environment 
has a key leadership role to play. As we did with the 
implementation of OPA 90, we think it is a responsibility that 
we can shoulder--working with our other modes in the Department 
of Transportation and the Transportation Security 
Administration.
    We are prepared to move forward with the provisions that 
are included in the Senate version of the bill. And we look 
forward to working with the House as we craft the complete 
piece of legislation. And I look forward to answering any 
questions that we had that were generated by the briefs this 
morning. A lot of the information is included in my statement, 
and I will not repeat it here.
    I would like to make a couple of acknowledgements because 
the great efforts of Captain Cook and Captain Thompson, the 
group commander from Galveston who is behind me, don't happen 
alone. And the great work in this port has to do with the great 
partnerships that exist in it.
    I would just like to acknowledge the port authorities in 
Texas City and Houston, the local industry leaders at Texas 
Waterway Operators, the Houston Marine Association, the 
HOGANSAC Port Security Committee, the Houston Police 
Department, which put aviation units in the area to help us, 
the Galveston County Sheriff 's Office and the Jefferson County 
Sheriff 's Office, who have actually put boats on the water to 
work with us.
    We appreciate that really good support from the National 
Oceanic and Atmospheric Administration, who diverted NMFS 
agents from the National Marine and Fisheries Service to put a 
boat on the water 6 hours a day to help us, the Texas General 
Land Office, the local FBI regional office, Customs/INS and the 
Houston Pilots and, also, the Galveston and Texas City Pilots.
    This is one team, one fight. This is something that no one 
agency can be successful at by themselves. And the final 
solutions to these problems are going to have to be crafted at 
the port level with all of the stakeholders being involved, but 
we certainly understand and recognize the Coast Guard's 
leadership role and are prepared to execute that.
    [The prepared statement of Vice Admiral Allen follows:]

     Prepared Statement of Vice Admiral Thad W. Allen, Commander, 
                    Atlantic Area, U.S. Coast Guard

    Good afternoon, Mr. Chairman and distinguished guests to this Field 
Hearing of the Subcommittee. As the Commander, Coast Guard Atlantic 
Area, I want to thank you for the opportunity to appear before you 
today to discuss port security and especially the maritime transport of 
hazardous materials.
    Protecting America from terrorist threats requires constant 
vigilance across every mode of transportation: air, land, and sea. The 
agencies within the Department of Transportation, including the U.S. 
Coast Guard Federal Aviation Administration, Federal Highway 
Administration, and the Maritime Administration (MARAD), touch all 
three modes of transportation and are cooperatively linked. This is 
especially true of the maritime mode. Ensuring robust port and maritime 
security is a national priority and an intermodal challenge, with 
impacts in America's heartland communities just as directly as the U.S. 
seaport cities where cargo and passenger vessels arrive and depart 
daily. The United States has more than 1,000 harbor channels, 25,000 
miles of inland, intracoastal and coastal waterways, serving 361 ports 
containing more than 3,700 passenger and cargo terminals. This maritime 
commerce infrastructure, known as the U.S. Marine Transportation 
System, or MTS, has long been a Department of Transportation priority. 
The U.S. MTS handles more than 2 billion tons of freight, 3 billion 
tons of oil, transports more than 134 million passengers by ferry, and 
entertains more than 7 million cruise ship passengers each year. The 
vast majority of the cargo handled by this system is immediately loaded 
onto or has just been unloaded from railcars and truckbeds, making the 
borders of the U.S. seaport network especially abstract and vulnerable, 
with strong, numerous and varied linkages direct to our Nation's rail 
and highway systems.
    With more than 100 petrochemical waterfront facilities, Houston is 
the second largest petrochemical complex in the world. Major 
corporations such as Exxon-Mobil, Shell, Saudi ARAMCO, Stolt Nielson, 
Odfjell Tankers, Sea River and Kirby Marine have national or 
international headquarters in Houston. Leading trade associations such 
as INTERTANKO and the Chemical Carriers Association also have a 
substantial presence here. Three important Federal Advisory Committees, 
the Houston-Galveston Navigational Safety Committee (HOGANSAC), the 
Chemical Transportation Advisory Committee and the National Offshore 
Safety Advisory Committee are key players in the Port as well.
    In terms of maritime traffic and cargo, the Port of Houston ranks 
first in the U.S. for its number of ship arrivals and total cargo 
tonnage. Houston handles over 50 percent of all containerized cargo 
arriving at Gulf of Mexico ports. Additionally, more than 50 percent of 
the gasoline used in the U.S. is refined in this area.
    With approximately 7600 deep draft ship arrivals each year, the 
Coast Guard maintains a very robust Port State Control program in the 
Houston-Galveston area. This national program was established to 
eliminate the operation of substandard foreign ships in U.S. waters 
because over 90 percent of U.S. cargo is carried by foreign-flagged 
ships. Since the Port of Houston accommodates such a large number of 
tankers carrying crude oil, refined products and chemical cargoes, the 
Port State Control program monitors the safe carriage of hazardous 
materials in bulk.
    As part of other coordinated efforts pre-September 11th, Marine 
Safety Office Houston-Galveston was inspecting a limited number of 
container, per week and conducted at least one Multi-Agency Strike 
Force Operation involving the U.S. Customs Service, Department of 
Agriculture's Animal and Plant Health Inspection Service (APHIS), and 
Houston Police Department. This level of activity is not atypical when 
compared to other ports handling high volumes of oil and hazardous 
materials in bulk.
    On September 11th, port centered activity and emphasis shifted from 
environmental protection and vessel/cargo safety to maritime security. 
The Captain of the Port Houston-Galveston required additional safety 
and security measures to be taken by ships transiting the zone and by 
waterfront facilities located within an established area. These 
measures included:
    (1) Expanding the existing regulatory requirement for submission of 
an Advance Notice of Arrival for vessels over 1600 gross tons to 
include crew information and the vessel's last three ports of call.
    (2) Ships carrying bulk liquefied hazadous gases were surrounded 
with a 500 yard moving safety zone excluding all watercraft less than 
fifty feet in length from approaching. The vessels were required to 
transit in daylight only, with a Coast Guard escort. Once moored, these 
ships were required to maintain roving security patrols oil deck and 
their receiving facilities were to provide continuously manned 
waterfront security.
    (3) Chemical and oil tankers were required to provide roving 
security patrols on deck while moored, and their receiving facilities 
were to provide continuously manned waterfront security. Additionally, 
chemical carriers were required to provide a cargo stowage plan before 
arrival and departure.
    (4) Barges carrying liquefied hazardous gas were required to notify 
the Captain of the Port 24 hours in advance of any movement, and to 
provide a cargo stowage plan. Facilities where barges were moored were 
to provide continuously manned waterfront security.
    (5) Before conducting cargo transfer operations, waterfront 
facilities were required to provide the Captain of the Port with 
written affirmation that: there was a current list of authorized 
personnel with facility access; positive control had been established 
at entrances; a security plan was in place to include daily perimeter, 
barrier and lighting checks; vehicles were prohibited from parking 
within 100 yards of moored vessels; and, continuously manned waterfront 
security was in place.
    (6) Further general security recommendations including a Port 
Physical Security Survey Checklist, were also provided by the Captain 
of the Port.
    Thanks to longstanding professional relationships between the Coast 
Guard, local officials and industry managers in the port, all of these 
measures were readily accepted and implemented.
    The Captain of the Port in Houston-Galveston assumed operational 
control and established coordinated activities of the MSO, MSU 
Galveston, Group Galveston, VTS Houston-Galveston, offshore Coast Guard 
cutters, patrol boats and Navy-provided 170, patrol craft. 
Additionally, a limited Sea Marshal program was tested. As a result of 
this harnessing of resources, from September 11 through December 18, 
2001, units under their direction conducted 820 car patrols, 675 boat 
patrols, 118 air patrols, and 141 boardings of High Interest Vessels. 
Additionally, 73 vessels were escorted in and out of the Port and sea 
marshals were assigned to 47 particularly important vessel movements. 
As part of an interagency cooperative effort, many other Federal and 
State agencies contributed to homeland security efforts in the region. 
The Houston Police Department conducted 354 air patrols of the harbor 
during this same period. The National Oceanic and Atmospheric 
Administration used their locally assigned boat to assist in harbor 
patrols. Texas Parks and Wildlife provided a part time boat for similar 
work in Galveston. Finally, the Texas General Land Office stepped in to 
handle responses to minor oil spills in the area, thus freeing Coast 
Guard pollution responders for port security assignments.
    To provide a heightened awareness of activities in the maritime 
domain, VTS Houston-Galveston established an electronic linkage of its 
port radar picture with the radar systems aboard the Coast Guard 
cutters and Navy patrol craft operating offshore. Thus, the operational 
commander had a better understanding of vessel positions and movements 
both in the port and its offshore approaches. This capability enhanced 
the Captain of the Port's ability to coordinate security boardings with 
a minimal disruption of normal traffic flow. I am optimistic about the 
results of this initiative and will continue to exploit other existing 
systems to help achieve a better understanding of vessel, cargo and 
crew movement in and out of ports throughout the Atlantic Area.
    In addition to the additional safety and security measures, the 
Captain of the Port began closer, more frequent contact with the local 
FBI, INS, U.S. Customs Service, and Houston Police Department to share 
intelligence and to coordinate response planning for a terrorist 
incident. A Port Security subcommittee has also been formed under 
HOGANSAC. This subcommittee has had three meetings involving key port 
stakeholders such as facility operators, shipping companies, steamship 
agents, other Federal agencies and local law enforcement in planning 
the way ahead for port security in the ports of Houston and Galveston.
    The Coast Guard has long recognized the importance of the Port of 
Houston and the surrounding Gulf Coast area. We have a solid record and 
sound programs to deal with the marine transport of hazardous 
materials, particularly with respect to safety and environmental 
protection. In the Port of Houston, much has been accomplished since 
September 11th to heighten port security to ensure the safe marine 
transport of hazardous materials, thanks to the efforts of the entire 
port community, the shipping industry, State and local governmental 
agencies, and other Federal agencies including the Coast Guard. Just as 
we worked in the past to ensure the safe marine transport of hazardous 
materials and the protection of the marine environment, I am confidant 
that we can continue to work together to improve homeland security. Our 
joint goal must be to develop and institutionalize viable maritime 
security arrangements as a cultural imperative, as has already been 
accomplished with marine safety and environmental protection.
    Mr. Chairman, for over 210 years, the Coast Guard has been tasked 
to protect our Nation. In 1787, Alexander Hamilton wrote in Federalist 
Paper Number 12, ``A few armed vessels, judiciously stationed at the 
entrances of our ports, might at a small expense, be made useful 
sentinels of our laws.'' We're proud to be a part of the continued 
national strategy to keep our homeland secure. Thank you for the 
opportunity to testify before you today. I will be happy to answer any 
questions you may have.

    Senator Breaux. Thank you very much, Admiral Allen.
    Next we will hear from Mr. Robert Trotter.

 STATEMENT OF ROBERT TROTTER, DIRECTOR OF FIELD OPERATIONS FOR 
                EAST TEXAS, U.S. CUSTOMS SERVICE

    Mr. Trotter. Thank you, Chairman Breaux, Senator Hutchison 
and Congressman Lampson. I also have a statement for the 
record. And, following the Admiral's suit, I would like to move 
quickly through my prepared comments and then would be glad to 
entertain some questions.
    My name is Robert Trotter; I am the Director of Field 
Operations for East Texas. I am responsible for oversight of 
the inspection of international passengers, conveyance and 
cargo arriving and departing through the seaports and airports 
in East Texas.
    I would like to take time, also, Senator, just to introduce 
three other Customs officials who came today to show you the 
kind of support that we have: One is Mr. Al Pena--Al is our 
special agent in charge of U.S. Customs' Office of 
Investigations, the agents that actually do the undercover work 
for us; Mr. John Babb, who you met and did a good job this 
morning on our cruise, and; Mr. Don Pearson. Don is in charge 
of our Air and Marine Division. And so this shows you kind of 
our look at how important this meeting is today--and your 
Subcommittee's look-see at the importance of the seaport 
activity.
    As you know, we participated in the Inter-agency Committee 
on Crime and Security in U.S. Seaports. And we do support that. 
The U.S. Customs Service takes support of that. We also are 
very appreciative of what we see in your proposals of Senate 
bill 1214.
    I would like to touch base on those, briefly, questions 
that you asked: Who is in charge of the port? What we do with 
containers, information management--because I think that is 
extremely critical--technology, and then end with staffing and 
just touch on that briefly. And then I will pass on to the next 
spokesman.
    As you know, the Customs Service originated with the First 
Continental Congress in 1789. So we have been around for 213 
years defending our borders, and we take our job very 
seriously. We have worked with people in this room, as well as 
people at the national and State level on these very same 
issues.
    September 11 came as a shock to us, as to everyone else. We 
closely formed ranks with the Coast Guard and with other 
Federal law enforcement agencies to step up to ensure that we 
provided the necessary security to the port. We provided people 
on airport security detail at the airport in Houston, as many 
Customs officers did.
    We provided seaport security. We are on what we call Alert 
Level 1 status, and we have been, which is our highest level of 
status, which means that we are putting all of the possible 
resources that we can get toward doing the best job possible to 
ensure not only the security of the airports and the seaports 
but, also, processing the cargo and the passengers that come to 
the port daily. That, as you know, is the other side of the 
equation.
    You spoke at lunch about the steel anti-dumping duties that 
may be imposed. The Customs Service, of course, is in charge of 
imports and exports into the United States, and that is a large 
job, as well as the security.
    What we have found and what we are fortunate to say is that 
the Coast Guard is in charge of the port, we look to the Coast 
Guard for their leadership as the security of the port, and we 
look to ourselves for the containers. And I wanted to mention 
that Commissioner Bonner has stated that he very much wants to 
look at containers, where they originate, the ports of origin, 
and what happens to that container from the very beginning to 
the very end. He is enlisting a program as we speak to involve 
the trade. As you all know, the trade is a very large part of 
this security effort, not only the carriers, but the importers 
and exporters.
    What we need, to do that job even better than we do it 
today, is better information. And you touched on that better 
manifest information. That is critical to us.
    As you know, we have a multi-layered approach of doing 
analytical work to look at the shipments that are coming into 
the United States. And the more information we have, the better 
we can utilize our automated technology to do the screening.
    And you mentioned 2 percent, and that is just about how 
many we examine in this port: Just about 2 percent. We do a 
little bit better with high-risk, but just about 2 percent is 
national. People look at that and say, ``Geez; Well, what about 
the other 98 percent?'' And that is a good question, and 
sometimes we do not have complete answers for the other 98 
percent.
    But we feel that with what we have now with staffing and 
the information that is provided to us and our automated 
capability we are doing a good job in screening high risk out, 
because, as you mentioned, we do not want to deter people from 
using the seaports in Houston, and we do not want to needlessly 
bother or add additional costs to people who use the Customs 
Service or export or import.
    How do we go about doing that? With the 7,313 vessels in 
the Port of Houston last year, how do we go about doing a 
better job? One thing I wanted to talk to you a little bit 
about is technology. You asked about technology. I am holding 
my hand here; for those of you who can see, this is a radiation 
detector. And what this does is warn our inspectors and today 
just about all of our inspectors have these on their belts. I 
have got one today.
    And this will read Radiation for the inspector if they come 
across a radiation leak in a piece of cargo or, actually on 
people. Sometimes people come through our airports and these 
things go off and our inspectors do not know why. But it is 
radio-isotopes that they have swallowed for medical purposes. 
And that is how sensitive these things are.
    So something this simple, like $1,500 a copy, that we can 
put on our inspectors and--ensures their safety. Plus the 
technology lets us know if there is radiation. And you think, 
Well, radiation is just in weapons of mass destruction. But 
that may not be.
    You talked about steel. A lot of steel that is scrap from 
the former Soviet Union contains radiation because they used it 
in certain projects. And we do not want that imported into the 
United States. So technology, like pagers, assist us--we not 
only use technology of this size. We use larger technology: X-
ray equipment, fixed X-rays and mobile X-rays. And they have 
really increased our efficiency. They permit us to process 
containers. We can normally de-van and examine a container--it 
takes about 4 hours, and that is working about full time on it.
    In our port, we can do about 30 of those a day, and we get 
about 1,100. With technology, we can expand that. And that 
really is where we see the best investment for us: Better 
information; better technology.
    And I also just want to address just very quickly the 
staffing issue. As you all know, we are like the other 
agencies. We have been placed in a difficult position with 
Alert Level 1 since 9/11, but we see some hope coming down the 
pike. We see what Congress has pulled together for us. We are 
working with the Administration and with Treasury to get more 
resources out to the field so they can be utilized to process 
cargo and passengers and legitimately focus on our enforcement 
efforts.
    One thing I just want to close in saying and that has been 
so interesting to us: We thought when we transitioned perhaps 
as--our main job is narcotics and currency. As we transitioned 
into anti-terrorism, we thought we might lose some of that edge 
that we had. But we have actually found--and our statistics are 
bearing this out--that we are doing better now in currency and 
narcotics than we were before. So that is a real good sign for 
us and a real good signal for the Nation.
    I would just like to leave that on a high note, sir. And we 
will be glad to answer any questions that come our way.
    [The prepared statement of Mr. Trotter follows:]

 Prepared Statement of Robert S. Trotter, Director of Field Operations 
                  for East Texas, U.S. Customs Service

    Chairman Breaux, Senator Hutchinson, thank you for your invitation 
to testify and for providing me the chance to appear before you today 
to discuss the efforts of the U.S. Customs Service to address seaport 
security and the challenges that exist at the East Texas seaports, 
including improvements that we are making in our cargo inspection 
system to better protect the American people and our Nation's critical 
infrastructure.
    My name is Robert Trotter. I am the Director, Field Operations for 
East Texas. I am responsible for oversight of the inspection and 
control of international passengers, conveyances and cargo arriving and 
departing through the seaports and airports in East Texas.
    As a major participant in the protection of our Nation's borders, 
Customs has taken a lead role in efforts to deny entry to the 
implements of terrorism into the United States through our seaports. 
The Customs Service enforces over 400 laws and regulations for more 
than 40 Federal agencies. Naturally, the seaports in East Texas are a 
major focus of our efforts. Our security and anti-terrorism efforts 
must be balanced against the need to assure the smooth flow of 
legitimate trade and travel.
    While Customs is able to inspect only a relatively small percentage 
of the massive volume of cargo entering the United States each day, we 
rely on a careful, multi-layered targeting approach to select goods for 
intensive examination. Our risk management strategy incorporates the 
use of intelligence and advance information from shippers, the 
deployment of sophisticated technologies, and the skill and expertise 
of Customs personnel to sift out suspicious goods from the vast ocean 
of legitimate trade before they enter the commerce of the United 
States.
    In addition, under the direction of Commissioner Robert Bonner, the 
agency is engaging the private sector in a new Customs-trade 
partnership to defend the entire length of the product supply chain 
from penetration by terrorists or the implements of terrorism. And we 
are undertaking new initiatives with our international partners in an 
ongoing effort to expand the perimeter of inspection away from the port 
of entry and toward the point of origin.
    The Customs Service also continues to build upon established 
cooperative relationships with the Immigration & Naturalization 
Service, the Border Patrol, and the Coast Guard. Using a collaborative 
approach, we are employing targeting and risk management techniques to 
select people, vehicles, vessels, aircraft, cargo and containers for 
increased inspection.
    During Fiscal Year 2001, 7,313 vessels entered the Port of Houston. 
Many examinations of their cargo were conducted utilizing the Vehicle 
and Cargo Inspection System known as VACIS.
    Since December 1, 2001, the Port of Houston has made 21 currency 
seizures totaling $493,453, most as a result of Operation Oasis in 
coordination with the Office of Investigations.
    In response to the terrorist attacks of September 11th, the U.S. 
Customs Service immediately implemented a Level One Alert for all 
personnel and ports of entry. This is our highest State of alert, 
calling for sustained, intensive anti-terrorist operations. We remain 
at Level One Alert today.
    We do not expect our changing priorities to have a negative impact 
on our traditional law enforcement mission such as drug seizures. To 
the contrary, we expect, and we have seen mounting evidence to the 
effect that heightened counter-terrorist measures by the Customs 
Service are strengthening our overall interdiction efforts.
    Customs plans the deployment of, Non-Intrusive Inspection (NII) 
technology such as mobile and relocatable x-ray and gamma ray systems 
that are capable of detecting anomalies in commercial cargo and 
conveyances. Most of this technology is scheduled for deployment to 
address the smuggling threat we face at high-risk air, sea and land 
border ports of entry. The Houston seaport currently utilizes 
stationary VACIS and mobile x-ray van technology and is deploying 
additional VACIS equipment for full container x-ray to address suspect 
shipments throughout the Houston area including outlying docks.
    Working with the U.S. Coast Guard, classroom training in hazardous 
materials recently was updated for Houston Customs officers. In 
addition, many Customs inspectors wear sensitive radiation detection 
devices that audibly alert them to the presence of radiation.
    The Houston Customs Port. Office took the initiative immediately 
following September 11, 2001, to demand advance vessel crew lists, 
since the identification of crewmembers that may be security risks is 
tantamount to good border security. The Customs Intelligence Collection 
and Analysis Team (ICAT) in Houston performs research to conduct 
enforcement queries against a variety of Federal law enforcement data 
bases. Members of a multi-disciplinary enforcement team interview 
potential matches and identify suspects. The obtainment of advance 
vessel crewmember lists has subsequently become the responsibility of 
the USCG at the National Vessel Movement Center.
    In addition, the Customs Port office has refocused its Subject 
Matter Experts (SME's) to identify new importers and any commodity that 
could be used as a Weapon of Mass Destruction. The Houston Customs Port 
Office is also actively working in partnership with the trade industry 
to obtain more accurate and complete vessel manifest data in areas such 
as consignee, shipper and commodity description.
    The vast volume of trade and traffic at the East Texas seaports has 
put immense pressure on our ability to enforce the Nation's laws while 
facilitating international trade, even before September 11th. After 
September 11th, our challenge has risen to a new level. Although we 
have taken many steps to address these challenges, such as the planned 
delivery of a mobile VACIS, we still face many challenges.
    We are working within Treasury and the Administration to address 
these challenges. For example, we are developing threat assessments and 
a longerterm perimeter security strategy for dealing with them to 
secure our homeland defenses, including the East Texas seaports. In 
considering such a long-term plan, several core areas will need to be 
addressed. We are developing and deploying Non-Intrusive Inspection 
(NII) technology to detect the implements of terrorism. We are also 
enhancing our Industry Partnership Programs to enable the trade, 
transportation, and business communities to assist us in securing the 
supply chain for commercial cargo and conveyances as envisioned by the 
Commissioner of Customs.
    I want to thank you, Mr. Chairman, for this opportunity to testify. 
The U.S. Customs Service will continue to make every effort possible, 
working with our fellow inspection agencies, within the Administration, 
with Congressional leaders, and the business community to address your 
concerns and those of the American people. I would be happy to answer 
any questions you might have.

    Senator Breaux. All right.
    Jim Edmonds.

           STATEMENT OF JAMES T. EDMONDS, CHAIRMAN, 
        PORT OF HOUSTON AUTHORITY BOARD OF COMMISSIONERS

    Mr. Edmonds. Thank you, Senator. I will follow their lead; 
I have 30-some-odd pages I wanted to read to you, and I will 
submit them.
    Senator Breaux. Thank you.
    Mr. Edmonds. Let me just say briefly that we are pleased 
that you are here.
    And thank you, Senator Hutchison, for arranging this to be 
in Houston; it is special to us that you would come to Houston.
    I am going to say a few things about the Port of Houston, 
some of which you have heard before, but bear with me, if you 
will. It is the eighth largest port in the world, and it is the 
largest port in the United States in foreign tonnage. And that 
is important from the standpoint that we realize what makes up 
this port.
    It is a very mixed-use port. And because it is the largest 
petrochemical complex in the United States and, arguably, in 
the world, it is a port that has certain vulnerabilities and a 
port that has certain requirements placed upon it for security. 
And so it is important to us that you are here today.
    If you look at the Port of Houston from the Port 
Authority's standpoint, we do about a 1.1 or 1.2 million 
containers a year. We believe that containerization is indeed 
the wave of the future. I have read numerous places that by 
2020, 90 percent of the world's cargo will be shipped in a 
container.
    I showed you a bit ago the map, and we saw Bay Port. And if 
we are permitted this summer and at build-out, Bay Port will be 
able to accommodate 2.5 million containers. We own 1,100 acres 
of land on Pelican Island in Galveston, and that will 
eventually be the third container port for the Port of Houston.
    There are 500--within a 500-mile radius of Houston, there 
are 30 million people. This slice of the United States is one 
of the fastest growing. And we are at the mouth of the market 
place. And as we continue to feed that market with product, 
more and more containers will come to this port. We already 
enjoy about 63 percent of the container market share in the 
gulf.
    What is happening in ports is very much what has happened 
in airports. If you look at Atlanta and Chicago and Dallas, you 
have collection points that redistribute goods or people.
    The same thing is happening in ports.
    There will eventually be five of what are called load-
center ports: The one in Seattle and Tacoma, one in LA and Long 
Beach, one in New York and New Jersey, something on the south 
Atlantic and one in the gulf. And we believe the one in the 
gulf will be the Port of Houston, and that will basically be a 
container port that redistributes containers throughout the 
central part of the United States. For that reason, security 
alone is extremely important to us.
    Your visit here is very timely. And I commend you and thank 
you for the leadership that you have shown this Senate and the 
bill that you have passed. We have looked at the bill, and it 
is an important bill that allows us to develop in more detail a 
security plan; we are a port that is conscientious of that, 
aware of it, and we have looked at that issue for many years. 
And we have redoubled our efforts since 9/11.
    The folks that are to my right and left are the key players 
in this, and the port is the sponsoring waterway, but the U.S. 
Coast Guard and the U.S. Customs and CIMA--these folks--have 
day-in-and-day-out responsibility.
    And it has been our observation that the U.S. Coast Guard 
and the U.S. Customs are under-manned, that they are under-
staffed, and they need more money in their budgets to provide 
what is happening in this world because, from now on, our lives 
are changed. And as we go forward to try to continue to move 
cargo to meet customer demand, we have to do that in a world of 
heightened security.
    So thank you, again, for the leadership you have shown. We 
look forward to working with you. We want to do everything we 
can to be supportive of you and to work with you to make sure 
that this is the safest port in the United States.
    [The prepared statement of Mr. Edmonds follows:]

           Prepared Statement of James T. Edmonds, Chairman, 
            Port of Houston Authority Board of Commissioners

    Good Afternoon. My name is James Edmonds and I am the Chairman of 
the Port of Houston Authority Board of Commissioners.
    As you know, four months ago today, the United States was the 
victim of a horrendous act of terrorism.
    Although the Port of Houston had strong security in place, we--like 
so many others--have since looked for ways to fine tune our policies 
and procedures.
    It is a testament to this port that since September 11th, our 
business has not slowed. To use a familiar term, we're moving full 
steam ahead. The events of this time, however, have been sobering and 
we have redoubled our efforts to provide a safe and secure business 
environment for our customers and our employees. I think what you will 
hear today will bear that out.
    The Coast Guard, the US Customs Service, the Houston Pilots, our 
private industry partners, state and local governments and everyone 
else involved in port security have created an atmosphere of 
cooperation that is unparalleled in my experience.
    The Port of Houston has not received any threats. Nevertheless, 
protecting this vital economic engine and even more importantly the 
thousands of people who work here or live near the Port is a 
responsibility we don't take lightly.
    The Port of Houston is home to the Nation's largest petrochemical 
complex, the Nation's number one port in foreign tonnage and second 
largest port in total tonnage. The Port of Houston ranks as the eighth 
largest port in the world with an annual economic impact of $7.7 
billion and is responsible for the employment of 205,000 people.
    This port, like others around the Nation, is an important financial 
center of commerce for not only Houston, but for the entire region.
    Yesterday marked the 101st anniversary of the Lucas gusher at 
Spindletop, which started the Texas Oil Boom. This area has grown from 
a sleepy trading village on a bayou to a major international city, the 
energy capital of the world and a hub of international commerce in 
those 101 years.
    This city and region were built on energy and to ensure its 
continuation, we must protect our employees, neighbors and investments. 
And the Federal Government role is vital in accomplishing this task.
    However, a balance must be struck between securing our port and 
allowing efficient movement of cargo. I believe the Senate took the 
first big steps toward that end last month.
    Thanks to the leadership of the Senators here today, the Port and 
Maritime Security Act of 2001 passed the Senate and will now be 
considered by the House. This act will provide $390 million in grants 
over 5 years to ports for security assessments and infrastructure.
    Additionally, I want to thank you for adding $93 million to the 
Homeland Security package to immediately fund security assessments and 
infrastructure. The Port of Houston Authority looks forward to working 
with the new Transportation Department's Transportation Security 
Administration to implement this new program.
    I believe the Senate has passed a good bill . . . one that will 
allow local flexibility--since no two ports are the same. It funds 
security assessments done by a local team and it provides funding for 
ports to improve security infrastructure.
    The Port of Houston Authority has sharpened security at the Port 
since September 11th, through additional police patrols, heightened 
security awareness, increased gate security, fence line patrols, and 
other measures.
    The best security measure though has been the increased cooperation 
between the Port Authority and all of our partners on the channel. The 
Houston Pilots, for instance, have become the eyes for port security. 
From their vantage point high in the wheelhouse of ships, they can spot 
suspicious activities and report those to the Coast Guard.
    The Channel Industries Mutual Aid group and the East Harris County 
Manufactures Association share security procedures and responses 
channel-wide with all of our partners.
    But there are specific things that we believe could be of great 
benefit to this task:
     Clear communications between the port, local government 
officials and policing units, the Coast Guard and the businesses along 
the Channel.
     Additional security measures at our port terminals. For 
example more security cameras (and the manpower to oversee them). And 
we would like to see the technology available utilized more, like 
additional x-ray machines for Customs.
     The Coast Guard needs more people. That's just a simple 
fact. They are stretched beyond what any agency should endure.
     To deal with hazardous materials, we need more vapor 
detection equipment.
    These, among other things, are all within our reach. Let's get them 
in action.
    I believe the Port of Houston is a safe port. However, we will 
always look for and embrace new and better ways of protection and 
prevention. This hearing is another step toward maintaining and 
increasing the safety of the port.
    I would like to thank you for the opportunity to speak today. 
Senator Hutchison, again thank you for thinking of us and bringing 
Senator Breaux to Houston. I appreciate both of you for your leadership 
on this issue and I offer my assistance to you as this Subcommittee 
continues its work on port security. Thank you.

    Senator Breaux. Thank you, Jim, very much.
    Mike Kice.

        STATEMENT OF MICHAEL KICE, CORPORATE SAFETY AND 
     ENVIRONMENTAL DIRECTOR, P&O PORTS NORTH AMERICA, INC.

    Mr. Kice. Thank you very much, Mr. Chairman and 
Subcommittee Members for allowing me to have this opportunity. 
My name is Mike Kice, and I am the Corporate Safety and 
Environmental Director for P&O Ports North America. I 
apologize, but our local manager and vice president thought 
this might be more appropriate for me because I am a little bit 
more knowledgeable on hazardous materials.
    If you think that I am confused about that, I am currently 
living, 13 years in New Orleans, 9 years in Houston and 4 years 
in Port Neches, so I do not know which side of the table I am 
on.
    We are--P&O Ports is a marine terminal operating and 
stevedoring company with current operations in 22 ports on the 
East Coast and Gulf Coast of the United States. Our operations 
include: large container terminals, container stevedoring, 
passenger ship terminal operations, ro-ro operations, discharge 
and loading of break bulk cargos of all natures--steel is a 
major commodity of that--handling of export dock-site frozen 
cargos in Gulfport, bagged goods in Lake Charles--many--all 
types of the full range of dry cargo.
    These operations vary overall from location to location. In 
New York, we perform port authority-type operations for the 
passenger ship terminal. The city of New York owns the 
terminal, and we actually perform all the lease requirements 
and do all the management of it. So we actually act kind of as 
a private industry but are doing port authority-type work.
    In Baltimore, we provide terminal management to the Port of 
Baltimore for their container terminals, and we do ro-ro 
stevedoring. In Norfolk, we are a pure tackle stevedore, where 
we just load and unload the ship. The port runs the operation 
there, terminal offsite.
    In New Orleans, we lease from the port both container and 
general cargo facilities. In Lake Charles, we handle the bagged 
goods. And we are--here in Houston, we are assigned freight 
handling at City Docks 25, 26, 27, 28 and 29, and we have empty 
container repair facilities, as well as stevedoring, at both 
the City Docks and at Barbour's Cut.
    Hazardous cargo is a segment of the goods which are 
transported through our facilities in containers, ISO tanks and 
in break bulk packaging. Hazardous cargo is currently the most 
regulated of our cargos that we handle. The Coast Guard, the 
DOT Research and Development, EPA, OSHA, Customs, ATF, the IMO 
international regulations and local regulations require 
different types of procedures and extensive documentation and 
assignments of responsibilities throughout the operation. To 
date, the overall system has worked very well in protecting the 
American public.
    With the recent events, security aspects for all cargo and, 
especially, hazardous cargo should be enhanced. By 
incorporating an additional, what I would like to call 
``security personnel awareness'' that gives us emphasis with 
each step of the cargo movement process, the overall goal of 
safety and security and the efficient handling of cargo is 
maintained.
    To me security awareness is a function of our employees' 
day-to-day process. We have incorporated security in part of 
our safety meetings, in our daily gang-way meetings that we 
have, and we are starting to incorporate that into our daily 
inspection systems. So we are incorporating it in with our 
entire operation, and, by this means, I think, we are 
increasing the overall awareness for the whole package.
    Training. We have increased training somewhat from an 
awareness standpoint, trying to show our supervisors and our 
longshoremen basically what to look for and, if they do see 
something, to report it up through the chain so we can take it 
to the appropriate authority that is needed.
    The physical aspects of security, such as property fencing, 
X-rays and other technological inspections, gate access, law 
enforcement and the improved information-sharing review is 
being well addressed in your legislation. I believe that if 
additional security monitoring is needed for hazardous general 
cargos, then a technological inspection of hazmat cargo and 
containers should be utilized. The option of additional opening 
of hazmat containers on a regular basis should be reviewed from 
a safety aspect.
    We could be if we--on the general basis of opening and 
closing every container of hazmat cargos, we could be exposing 
the inspectors, both governmental and private industry, to 
additional risks, which may have very little return. Opening a 
container of hazardous materials does not ensure that the cargo 
inside the actual package is the exact commodity--just by 
looking in the door. You would have to open it up, take it out, 
put it back in, do a re-blocking and re-bracing. And this can 
be extremely time-consuming and expensive and doesn't 
necessarily ensure what the cargo is, because you would have to 
do extensive testing, which is not real handy in the field, to 
do that, to ensure that.
    When--inspections of cargo need to be performed, I think, 
at both the load and discharge source, meaning at the port of 
origin and the port of--along those lines. The Coast Guard 
currently inspects containers for structural integrity and 
documentation. Customs Service does some inspections on their 
process. And many lines employ the National Cargo Bureau for 
random stowage issues. I believe that some aspects of security 
could be added to the existing functions as they are doing 
them, which would cover many of the points that are being 
addressed, and it does not have to reinvent the rule for that 
process.
    The documentation system. From P&O Ports, the following are 
approximate percentages of our overall containers that have 
labeled cargo transiting our terminals: In Newark, we run the 
PNCT. Approximately 4 percent of our containers there are 
labeled containers; in Baltimore, 2; in New Orleans, currently, 
it is about 7 percent, and, last year, it was 10. Those are the 
terminals we actually run. So that is about how much of our 
aspect of labeled cargo is.
    At each location, we preview the units at the entry from a 
safety aspect and make sure that documentation is per 
regulations. We have standard working procedures to ensure the 
safe handling of cargo and provide a higher awareness to these 
units.
    As additional costs arise with the enhanced ``New 
normalcy'' for security, our position has been outlined by 
NAWE, the National Association of Waterfront Employers, as far 
as cost is concerned. As to what has been done since--what have 
we done since 9/11? Well, we actually--the New York passenger 
ship terminal was taken away from us and was turned into an 
emergency response area for the city of New York. FEMA 
domiciled there. The city emergency response--the mayor 
actually started using our terminal manager's office. So we are 
now very involved with that.
    And with that aspect, the ships that had been going to New 
York actually moved over to Boston, Philadelphia, Baltimore and 
Norfolk areas, and we moved people--our trained supervision 
from New York down to the different areas to help them with 
that. And we moved our X-ray machines and our magnometers and 
things along those lines to assist with that operation. So we 
have been active in that site.
    On each local area, we have participated in any types of 
forums that we could go to. The captain of the port in--well, 
basically, in Newark, what they have--they formed a little 
committee with--inspecting all of the stakeholders. And we have 
participated at every one of their functions. With New Orleans, 
Captain Roshon has come down and actually gone through our 
terminal with us. We have done--we have tried to get our 
longshoreman and our supervisors better aware of what is going 
on. Here in Houston, they have done a very good job of 
participating with the port on the port security aspects of 
that site.
    We have had--within our own company, we have had individual 
meetings and discussions with our own people and tried to give 
them a little bit of advice of what they should be looking for 
as eyes and ears--just for the people working on it, what to 
look for and try to--if something is there, send it back up.
    We have actually had a--we have been involved with a bomb 
threat in Gulfport since 9/11. And that turned out to be very--
nothing there. And we had an anthrax issue here in the Port of 
Houston which turned out to be nothing. But our emergency 
action plans and our different procedures worked with the 
process. So they worked very well.
    I would make--if I could, I have one--a couple of 
suggestions. One of them is on MSDS. As the world is getting 
more into computerization and there is less paper work involved 
with the thing, the MS--Material Safety Data Sheet is a very 
important document that we are not having in our hands as much 
as we used to. There might be a way of having that positioned 
as a red address on the manifest or cargo documentation as it 
comes through all the procedures.
    So if something does happen, which has happened in the 
middle of the night, we would be able to have the ready access 
to that actual document. There is nothing like having the piece 
of paper in your hands in the middle of the night.
    Being a port with the--you have described the grants and 
loans. And as privatization is taken further along and as we do 
different operations, I am not exactly sure how the--if private 
industry will have any--be able to have participation in the 
grants and the loans system or not, especially for those areas 
where we do basically governmental functions, as in the 
passenger ship terminal where we do port authority-type things.
    And my other thing is that we have excellent emergency 
response plans, hazmat procedures and safety procedures. And as 
part of the security what we need to do is tweak those further 
and add onto them, not try to re-invent the entire wheel, but 
to add that segment to it and make it an overall better 
process. And I apologize for not having details of our 
operations, but I thank you very much for this opportunity.
    [The prepared statement by Mr. Kice follows:]

Prepared Statement of Michael Kice, Corporate Safety and Environmental 
                Director, P&O Ports North America, Inc.

    Mr. Chairman and Subcommittee Members, thank you for this 
opportunity for us to participate in these important hearings on Port 
Security.
    My name is Mike Kice, and I am the Corporate Safety and 
Environmental Director for P&O Ports, North America. P&O Ports is a 
marine terminal operating and stevedoring company with current 
operations in twenty-two (22) Port locations on the East and Gulf 
Coasts of the United States. Our operations include: large container 
terminal operations, container stevedoring, passenger ship terminal 
stevedoring, ro-ro operations, auto discharge and loading, break bulk 
cargo--terminal and stevedoring, export of dock-side frozen cargo, 
steel discharge to dock and barge, and bagged goods operations and the 
full range of dry cargo operations.
    These operations vary in overall involvement from location to 
location. In New York, we perform port authority-type functions to 
onboard stevedoring at the passenger ship terminal. In Baltimore, we 
provide marine terminal management to the Port of Baltimore for major 
container terminals as well as container/ro-ro stevedoring. In Norfolk, 
only pure tackle stevedoring is done. In New Orleans, we lease from the 
port both container and general cargo facilities. In Lake Charles, we 
handle bagged rice goods. In Houston, we are assigned the freight 
handling at City Docks 25, 26, 27, 28, and 29 and have empty container 
repair facilities, as well as stevedoring operations both at the City 
Docks and Barbours Cut Terminal.
    Hazardous cargo is a segment of the goods, which are transported 
through our facilities in containers, ISO tanks and in break bulk 
packaging. Hazardous cargo is currently the most regulated of our cargo 
handled. The Coast Guard, DOT Research and Development, EPA, OSHA, 
Customs, ATF, IMO (international) and most local governments have 
required forms of regulations and procedures with extensive 
documentation and assignment of responsibilities. To date, the overall 
system has worked very well in protecting the American public.
    With the recent events, security aspects for all cargo, and 
specifically hazardous cargo should be enhanced. By incorporating 
additional ``security personnel awareness'' emphasis with each step of 
the cargo movement process, the overall goal of safety, security and 
the efficient handling of cargo is maintained. To me ``security 
awareness'' is a function of our employee's clay to day operations, and 
should be included in our daily inspections of the work area, and as a 
subject of gang way and regular safety meetings. Training in what to 
look for, awareness of our general surroundings, participation in 
forums with the Coast Guard, Ports, etc., is essential. The physical 
aspects of security such as property fencing, x-rays, other 
technological inspections, gate access, law enforcement, etc., and the 
improved information sharing-review is being well addressed in your 
legislation.
    I believe that if additional security monitoring is needed for 
hazardous general cargo's then the technological inspection of hazmat 
cargo and containers should be utilized. The option of additional 
opening of hazmat containers on a regular basis should be reviewed from 
a safety aspect. We could be exposing inspectors (both governmental and 
private industry) to additional risks with very little return. Opening 
containers of hazardous material does not ensure the cargo inside the 
actual package is the exact commodity without extensive testing which, 
may not be practical in the field. When inspections are required they 
need to be performed at the load or discharge source. Opening the back 
door of a container reveals only those packages which are visible, and 
moving any cargo inside will require removal of blocking and bracing 
securing and then reloading and resecuring of the cargo, causing extra 
expense and extra safety exposure for limited returns. The Coast Guard 
currently inspects containers for structural integrity and 
documentation. Customs does some inspection of hazmat containers, and 
many lines employ the National Cargo Bureau for random stowage issues. 
I believe some aspect of security could be added to the existing 
functions, as well as enhancing the documentation system. For P&O Ports 
NA, the following are approximate percentages of overall containers 
that have labeled cargo transiting our terminals. Newark: 4 percent; 
Baltimore: 2 percent; New Orleans: currently 7 percent, last year 10 
percent.
    At each location, we preview the units at entry from a safety 
aspect and ensure that documentation is per regulations. We have 
standard working procedures to ensure the safe handling of the cargo 
and provide a higher awareness to those units.
    As additional costs arise, with the enhanced ``new normalcy'' for 
security, our position has been outlined by NAWE (National Association 
of Waterfront Employers)
    As to what we have done since 9-11, the New York Passenger Ship 
Terminal was taken back by the city to house facilities and personnel 
that had been domiciled in the World Trade Center, including FEMA and 
other government agencies. Vessels scheduled to enter the terminal were 
rerouted to alternate locations, mainly Boston, Philadelphia, 
Baltimore, & Norfolk. P&O Ports provided trained supervision and 
security equipment (x-ray and magnetometers) to those locations to 
assist operations. We have encouraged each port location to participate 
with the area security aspects and attend as many security meetings and 
educational forums as practical. In Houston, we meet frequently with 
Port security and operations staff to discuss and plan safety and 
security matters. We remain on a heightened sense of alert. In Newark, 
we have participated in the weekly port authority security forums, 
which included Coast Guard, Customs, Port Police, Waterfront 
Commission, and many others. We have had individual meetings and 
discussions with local Coast Guard Units and law enforcement, etc, and 
I think, more importantly, we have encouraged and promoted the 
``general awareness'' eyes & ears concept to our supervision and to 
much of our labor.
    I would like to thank you again for this opportunity to present 
comments and apologize for not having more exact numbers, but I hope 
these general aspect comments have been beneficial.

    Senator Breaux. Thank you, Mike.
    Jim Hinton.

         STATEMENT OF JIM HINTON, CORPORATE MANAGER OF 
         COMMUNITY SAFETY AND HEALTH, MERISOL USA AND 
          SECURITY CHAIRMAN OF THE EAST HARRIS COUNTY 
                   MANUFACTURERS ASSOCIATION

    Mr. Hinton. Thank you, Senators and Congressman Lampson. I 
am pleased to be here on behalf of the East Harris County 
Manufacturers Association. I chair their security committee, 
which is primarily made up of the corporate directors of the 
corporations. And most of those people are retired FBI agents 
and police chiefs. They are FBI agents that the current office 
here in Houston supplies us--the Coast Guard, the Harris County 
Sheriff 's Department, the DPS and a lot of other numerous 
people with extensive law-enforcement experience.
    While my comments will refer to the ship channel area, they 
will really hold true for most all of our complexes within the 
State of Texas. We have 125 companies that we represent in East 
Harris County Manufacturers. We employ about 30,000 people in 
this area, and, last year, we contributed about $4 billion to 
the Harris County economy. Statewide, the petrochemical and 
refining sites employ more than 100,000 Texans.
    And as you can see, we have a mammoth investment in people 
and in assets for which we are responsible. And we have a real 
commitment to our employees, our communities and our 
shareholders to operate in a safe and environmentally 
responsible manner such as never before.
    Today, we are examining security here. And in the 
petrochemical and refining industry, we see security as an 
integral part of our overall safety program. Our safety 
performance in our petrochemical industry is 4 times better 
than all the rest of the manufacturing companies that operate. 
In addition, our security operations played significant safety 
roles as integral parts of our emergency response operations by 
providing traffic control and liaison with law enforcement.
    The cornerstone of effective security is knowledge and 
intelligence about potential threats, and that allows that 
threat to be intercepted, and it allows the target of that 
threat to be properly prepared. In fact, it may be our only 
weapon against those threats. And I must say on behalf of the 
chemical industry here that the Federal Agencies, the State 
organizations, the local agencies and the Coast Guard did a 
great job and are continuing to do a good job of keeping us 
informed when we need to know information.
    On September 11, we wasted no time in moving to a level of 
high alert as the events unfurled. We began to revisit 
potential threat scenarios. We have done worst-case scenarios 
for years--and probable cause scenarios--but those changed when 
we had the 9/11 incidents. So we have looked at those types of 
incidents. Now we move rapidly to prepare for these new 
threats.
    We moved aggressively to establish better information-
sharing mechanisms with the Federal, State and the local 
officials. We immediately activated our emergency operations 
centers. We closed gates and buildings and temporarily locked 
down facilities, allowing no one to enter or exit. The number 
of security officers was increased. And in many cases, we have 
hired off-duty, uniformed sheriff 's deputies, constables, DPS 
officers and municipal officers to supplement our regular plant 
security.
    And I must say that I would agree with the statement made 
awhile ago, that the Coast Guard has done a wonderful job with 
the limited resources that they have, but they do need more 
people and more vessels to be able to help us control our 
waterside plants.
    We turned away mail and delivery vehicles. We issued calm-
but-firm warnings to employees to increase their awareness of 
any activities that might be out of the ordinary, and they 
responded. We remained in close contact with the local police 
departments, the Coast Guard and other Government Agencies. We 
monitored radio and television networks. And those of us who 
were so equipped monitored the police radio frequencies to 
determine what was happening.
    Those of us that have waterside property--and there are a 
lot of us--immediately followed the Coast Guard bulletins in 
addition to putting armed officers on our docks. Captain Cook 
put out an immediate order on September 12 that we would have 
those guards on our docks when we had vessels in there. And I 
must admonish that he did a great job in doing that.
    Portable lighting was installed to unlighted perimeter 
fencing. Emergency response plans were reviewed.
    Sometime after September 11, the plants have re-opened to 
essential operations only, but with the extensive vehicle 
searches--and those are going on today--and tightened employee 
and contractor identification procedures. We have increased our 
video monitoring, motion detection and lighting. We have 
instituted mail inspections. We have restricted deliveries and 
provided bio-terrorism response training to emergency plant 
responders.
    We have reviewed and revised our crisis management plans. 
We have adjusted traffic flows and erected concrete barriers at 
certain plant entrance points. Rail tank cars are being moved 
inside the fence-line if that is at all possible. We are 
requiring our carriers to perform background checks more 
extensively on their drivers.
    We are permitting cleaning crews to only work during 
regular business hours, and not at night. We have increased 
communications with the plant communities.
    We have added second drivers to some shipments of certain 
chemicals, thus requiring direct transit, so that they do not 
have overnight delays and sleep in rest areas or have to sit 
outside the parking lot somewhere sleeping. So we have added 
two drivers to a lot of hazardous materials trucks so that they 
keep rolling and they come right on into the plants or where 
ever they are going.
    We are reviewing distribution routes. And where possible, 
we have changed some of those.
    Please remember that in the spirit of good security, there 
are some things that we are doing right now that we certainly 
cannot put out in the public, but we do remain on high alert. 
While specific actions may vary from plant to plant, these 
examples are representative of the actions the petrochemical 
and refining industry is now taking:
    We have formed the East Harris County Manufacturers 
Security Committee. And that committee is looking at the best 
practices across the country in the area of security among the 
plants. I also serve on the American Chemistry Council's 
Security Committee, and we are working closely with them for 
our neighboring plants in other States. In this way, we are 
better able to communicate. We also are working with the Port 
Security Committee, and we serve on that committee.
    So we have a well-rounded communications effort among all 
of us in the ship channel area. These heightened security 
measures will continue indefinitely with periodic reviews and 
modifications with guidance from law enforcement and other 
organizations with which we regularly communicate.
    Security in the face of these threats is derived from 
planning and executing security strategies. Our industry has an 
advantage in this area because we have a long-standing 
expertise in risk management. We have spent many years 
instituting progressively more sophisticated safety and 
security programs.
    The petrochemical and refinery plants are critical 
components of our economy; what happens to our business affects 
almost every aspect of American life. It is in the best 
interest of our members and the American people that our 
facilities operate safely and securely so we can continue to 
provide the vital products that make our lives better, safer 
and healthier. And you can be assured that we will continue to 
do that. Thank you.
    [The prepared statement of Mr. Hinton follows:]

Prepared Statement of Jim Hinton, Corporate Manager of Community Safety 
   and Health, Merisol, USA and Security Chairman of the East Harris 
                    County Manufacturers Association

    I'm Jim Hinton and I am Corporate Manager of Community Safety and 
Health for Merisol USA. I am here today representing the East Harris 
County Manufacturers Association (EHCMA).
    I chair the security committee, which is made up of security 
professionals from the industry who are, in many cases, retired FBI 
agents; retired police chiefs; current FBI agents from the Houston 
office; the Coast Guard; Harris County Sheriffs Department and DPS; 
Harris County Office Of Emergency Management; and others--all of whom 
have numerous years of law enforcement or security experience.
    While many of my comments refer to the Houston Ship Channel 
industries, they are typical of petrochemical and refining plants and 
complexes in other parts of the state. The 120 companies that make up 
EHCMA: employ more than 30,000 people in the area; and last year 
contributed more than $4 billion to Harris County's economy through 
PAYROLLS, TAXES AND PURCHASES.
    Statewide, petrochemical and refining sites employ more than 
100,000 Texans and account for 27 percent of the value added by the 
entire Texas manufacturing sector. As you can see, we have a mammoth 
investment in people and assets for which we are responsible. Our 
commitment to our employees, our communities, and our shareholders to 
operate in a safe and environmentally responsible manner has never been 
greater. Today, we are examining security.
    In the petrochemical and refining industry, we see security as an 
integral part of our overall safety program. Our safety performance is 
4 times better than all the rest of the manufacturing industry in this 
country. In addition, security operations played significant safety 
roles as integral part of emergency response operations by providing 
traffic control and liaison with law enforcement. The cornerstone of 
effective security is knowledge and intelligence about potential 
threats that allow the threat to be intercepted and allows the target 
of that threat to be properly prepared. In fact, it may be our best 
weapon. I must say that the Federal agencies and the State and local 
agencies have done a good job keeping us informed.
    On September 11, we wasted no time in moving to a level of high 
alert as the events unfurled. We began to revisit potential threat 
scenarios. We have done worst case scenarios in our plants for a long 
time, but now our definitions of probable worst cause scenarios have 
changed, and we moved rapidly to prepare for these new threats. We 
moved aggressively to establish better information sharing mechanisms 
with Federal, state, and local officials.
     We immediately activated our emergency operations centers.
     We closed gates and buildings and temporarily locked down 
facilities, allowing no one to enter or exit.
     The number of security officers was increased. In many 
cases, off-duty-uniformed sheriff 's deputies, deputy constables, DPS 
officers and municiple police officers were hired to supplement regular 
plant security personnel.
     We turned away mail and delivery vehicles.
     We issued calm but firm warnings to employees to increase 
their awareness of any activities that might be out of the ordinary.
     We remained in close contact with our police and fire 
departments, the Coast Guard and other government agencies.
     And we monitored radio and television networks.
     Those that were so equipped monitored police and fire 
frequencies to stay abreast of local activities.
     Those with waterside property exposure immediately 
followed the Coast Guard bulletins in addition to putting armed 
officers on their docks.
     Portable lighting was installed to unlighted perimeter 
fencing.
     Emergency response plans were reviewed.
    Sometime after September 11 the plants have:
     Reopened to essential operations only, but with extensive 
vehicle inspections and tightened employee and contractor 
identification procedures.
     Increased video monitoring, motion detection and lighting.
     Instituted mail inspections and restricted deliveries.
     Provided bio-terrorism response training to plant 
emergency responders.
     Reviewed and revised crisis plans.
     Adjusted traffic flow and erected concrete barriers at 
certain plant entrance points.
     Rail tank cars are being moved inside the fence-line if 
possible.
     Requiring carriers to perform background checks on their 
drivers.
     Permitting cleaning crews to only work during business 
hours.
     Increased communications with plant communities.
     Adding second drivers to shipments of certain chemicals 
thus requiring direct transit so that overnight layovers are not 
required.
     Reviewing distribution routes and, where possible.
    Please remember that in the spirit of good security we cannot make 
public all the things we are doing in this regard.
    So what about today?
     We remain on high alert.
    While specific actions may vary from plant to plant, these examples 
are representative of the actions the petrochemical and refining 
industry is taking. We have formed the East Harris County Manufacturers 
Security Committee and this committee is looking at best practices in 
the area of security among the plants. I serve on the American 
Chemistry Councils Security Committee on the national level and also 
the newly formed Port Security Committee. In this way we are able to 
better coordinate security activities.
    These heightened security measures will continue indefinitely with 
periodic reviews AND modifications with guidance from law enforcement 
agencies and other organizations with which we're regularly 
communicating. Security in the face of these threats is derived from 
planning and executing security strategies. Our industry has an 
advantage in this area because of our longstanding expertise in risk 
management. We have spent many years instituting progressively more 
sophisticated safety and security programs. The Petrochemical & 
Refining Plants is a critical component of the economy. What happens to 
our business affects almost every aspect of American life. It is in the 
best interest of our members and the American people that our 
facilities operate safely and securely so that we can continue to 
produce vital products that make our lives better, safer, healthier, 
you can be assured that we will continue to do so. Thank you.
    I will be happy to answer any questions.

    Senator Breaux. Thank you, Mr. Hinton.
    Mr. Sam Pipkin.

              STATEMENT OF SAM PIPKIN, CHAIRMAN, 
              CHANNEL INDUSTRIES MUTUAL AID (CIMA)

    Mr. Pipkin. Senators, Congressman, thank you very much.
    I am Sam Pipkin; I am employed by ATOFINA Petrochemicals 
and am current Chairman of the Channel Industries Mutual Aid 
organization.
    And, like he said, our main objective is emergency 
preparedness and response. The organization shares fire-
fighting, rescue, hazardous material handling and emergency 
medical support between its member organizations in the Houston 
Ship Channel area.
    While CIMA itself does not deal with the maritime 
transportation of hazardous materials, some of our member 
companies do on a day-to-day basis. And it is because of this 
that our organization has the ability to provide the expertise 
to handle the situations which may arise either in the maritime 
situation or on the highway.
    CIMA's role since the September 11, 2001 terrorist attacks 
on the United States remains unchanged; we regularly review our 
security procedures as they relate to emergency response 
incidents, and the main thing is the security of our 
responders, the plants and the citizens of the community.
    It was--CIMA was formed in 1955, and we have maintained 
close working relationships with a lot of these gentlemen and 
organizations that are at the table before you today, with 
municipalities, Government Agencies, FBI, the Port of Houston, 
Harris County Office of Emergency Management and local LEPCs. 
We work real close with those groups.
    We have a--our communications are ongoing. Our contacts are 
updated yearly, as well as--24-hour access numbers are updated 
on a regular basis and shared.
    The success of CIMA is its pool of highly trained and 
skilled responders from the 100-plus industry member companies 
and area governments coupled with a well-maintained pool of 
some 200 pieces of specialized equipment--rescue, foam pumpers, 
ambulances and command vans--which are supported by and owned 
by the members of the organization. We also have a 
sophisticated radio system which covers some 500-square miles.
    Our CIMA responders continue to hone their skills through 
regularly scheduled classroom and simulated emergency training, 
drills, planning exercises and post-incident reviews. We try to 
participate with the Coast Guard, with the city of Houston and 
various agencies on this type of activity. Its charter of 
providing cooperative assistance and expertise in an emergency, 
natural or man-made, is unaffected by the events of September 
11. However, like so many others, CIMA goes about its business 
with a keener awareness of preparedness than before September 
11.
    CIMA is currently--we are currently working with the Texas 
Forest Service on the State Emergency Response Plan Annex F 
Appendix 5, which deals with multiple industrial emergency 
situations in one area of the State or spread out over the 
State at the same time.
    A concern that CIMA has is that as member companies 
downsize their organizations, we are also adversely affected 
because of the loss of trained personnel in particular skill 
areas which are necessary to maintain the organization at its 
current level. We are currently looking for funding to train 
more personnel in these specialized areas such as shipboard 
fire-fighting and heavy rescue and other hazmat areas, as well 
as to update and expand our current radio system to cover an 
even larger area.
    And we are also working with the State of Texas for 
providing an indemnification agreement among the State to where 
if this--if we have to go anywhere else in the State, it would 
cover us and take care of our personnel.
    So I am happy to be with this group. And we do work very 
closely with the Coast Guard and the port on these areas.
    Thank you.
    [The prepared statement of Mr. Pipkin follows:]

    Prepared Statement of Sam Pipkin, Chairman, Channel Industries 
                           Mutual Aid (CIMA)

    Channel Industries Mutual Aid (CIMA) is a mutual aid cooperative, 
which has as its main objective that of emergency preparedness and 
response. The organization shares fire fighting, rescue, hazardous 
material handling and emergency medical support between its member 
organizations in the refining and petrochemical industry and 
municipalities in the Houston Ship Channel area.
    While CIMA itself does not deal with the maritime transportation of 
hazardous materials some of our members do on a day-to-day basis. It is 
because of this that the organization has the ability to provide the 
expertise should an emergency develop with a hazardous cargo on either 
the waterways or roadways.
    CIMA's role since the September 11, 2001, terrorist attacks on the 
U.S. remains unchanged, although it regularly reviews security issues 
as they relate to emergency response incidents that could involve CIMA. 
The safety of emergency responders, plant personnel and the public is 
CIMA's highest priority.
    After the terrorist attack, due to its vast networking 
capabilities, CIMA did serve as a focal point for bringing together 
both the Security and emergency response personnel in the ship channel 
area. Since that time the East Harris County Manufacturers Association 
(EHCMA) has served as the coordinator for the security activities of 
area industry.
    Since it was formed in 1955, CIMA has maintained close working 
relationships with industry, municipalities and government agencies, 
including the FBI, U.S. Coast Guard, Port of Houston, Harris County 
Office of Emergency Management, Local Emergency Planning Committees 
(LEPCs) and local police and fire departments. CIMA is well connected 
with these and other organizations that could come into play in the 
event of a CIMA-caliber incident. Communications are open and ongoing--
contact lists and 24-hour access numbers are regularly updated and 
shared.
    The success of CIMA is its pool of highly trained and skilled 
responders from the 100-plus industry member companies and area 
governments coupled with a well-maintained pool of more than 200 pieces 
of specialized equipment, including rescue trucks, foam pumpers, 
ambulances, command vehicles which are contributed individually by the 
member organizations and a sophisticated radio system that can cover 
500 square miles.
    CIMA responders continue to hone their skills through regularly 
scheduled classroom and simulated emergency training, drills, planning 
exercises and post-incident reviews. Its charter of providing 
cooperative assistance and expertise in an emergency--natural or man-
made--is unaffected by the events of September 11. However, like so 
many others, CIMA goes about its business with a keener awareness of 
preparedness than before September 11.
    CIMA is currently working with the Texas Forest Service on the 
State Emergency Response plan Annex F Appendix 5 which deals with 
multiple industrial emergency situations in one area or state wide at 
the same time. Another concern that CIMA has is that as member 
companies downsize their organizations we are also adversely affected 
because of the loss of trained personnel in particular skill areas 
which are necessary to maintain the organization at its current level. 
We are currently looking for funding to train more personnel in 
specialized areas such as shipboard fire fighting and heavy rescue as 
well as to update and expand our current radio system to cover an even 
larger area. We are working with the state to provide indemnification 
for Mutual Aid organizations that are asked to assist in other areas of 
the state.
    More information about CIMA is available at www.cimatexas.org.

    Senator Breaux. Thank you very much, Mr. Pipkin.
    And I thank all members of the panel for their testimony 
and for being with us. You have been very helpful, and the 
ideas and information that you have provided are very, very 
important.
    Let me give you an example of the magnitude of what we are 
talking about in this port or the Port of New Orleans or a 
number of other ports when you are dealing with the products 
that you have here: Hazardous material, petroleum products, 
liquified natural gas, liquified propane-type of products that 
we have coming in here.
    One medium-sized dead-weight tanker, or a 100,000-ton or 
110,000-ton tanker, would carry as much of those materials in 
one ship as it would take a 70-mile-long train to carry the 
same amount, or a 90-mile-long convoy of trucks to carry the 
same amount of hazardous, potentially explosive materials--as 
one medium-sized tanker does coming into this port or the Port 
of New Orleans every day.
    As another example, a medium-sized container ship can carry 
as many as 2,500 or more containers in one just medium-sized 
container ship. And you are trying to be the largest container 
port in the gulf; New Orleans is also trying to do the same 
thing. I mean these containers are growing, and it is going to 
be a bigger business, but this gives you an example.
    One medium-sized container can carry up to 60,000 pounds, 
30 tons, of the material in one container. If you compare that 
60,000 pounds in one container--Tim McVey used 15,000 pounds of 
explosives to blow up the Federal courthouse in Oklahoma City. 
And one container can do as much as 60,000 pounds of 
explosives. If someone wanted to stick that in the container, 
instead of household goods, and that would be one container on 
one ship, and the ship may have 3,000 containers.
    So the magnitude of the potential that we are dealing with 
is absolutely incredible, and that is why all of this is so 
important. This is serious, serious stuff. Now I will ask 
Captain Cook because he is local to the port.
    Does the Port of Houston have in place a comprehensive 
security plan now?
    Captain Cook. We do not, Senator. We have the bits and 
pieces, like Admiral Allen was talking about, that were 
constituted together and worked--the port worked well together 
for a variety of things, but we do not have a comprehensive 
security plan right now.
    Senator Breaux. If this legislation were to become law 
tomorrow and the Coast Guard were to be put in charge of 
developing a comprehensive plan, what would have to be done, in 
your opinion?
    Captain Cook. Well, I think that the architecture that is 
actually laid out in your bill would build upon the success 
that we have had with the Oil Pollution Act of 1990 with the 
various area committees, the Coast Guard Federal on-scene 
coordinator, versus the Federal Maritime Security Coordinator. 
Those types of titles would be interchangeable. I think the way 
the port community looks to the Coast Guard for leadership as 
far as environmental safety and security would very naturally 
fit into that role. So----
    Senator Breaux. Any idea how long such a plan would take to 
put into place and develop?
    Captain Cook. I was stationed at another port when the Oil 
Pollution Act of 1990 became effective and we tried to 
implement it in 1992. And it was my experience in the Port of 
Norfolk that it took about 3 years before the real inter-
connectivity that was needed to move forward was in place. But 
right from the get-go, you know, the essential ingredients of 
meetings and discussing priorities were taking place.
    So I think it would be shorter because we have experience 
now, but I think we would probably be looking at a year before 
we would be looking at a real forward-moving group.
    Senator Breaux. One of the things that gives me as an 
outsider looking in a sense--although I am on the Committee 
that has to write the legislation but am still an outsider--is 
that the biggest threat is not so much the Captain of a ship 
coming in doing violence to the port, although that is a 
potential--you know, one tanker coming in with liquid propane 
gas headed for one of the facilities on the shore with the 
intent of doing violence would be very, very dangerous indeed.
    But I think that with the River Pilots and the sea marshals 
on the decks escorting those ships in, that risk is a lot less. 
The thing that gives me greater concern is a similar type of 
situation that happened with the USS Cole, a NATO vessel or a 
military vessel, at anchor in a port where a very small vessel 
pulls up alongside of it--a very small vessel--and blows a huge 
hole in the side of the ship, and killing American sailors.
    If that same incident occurred next to a 3,000-person 
passenger ship or, worse than that, a ship with hazardous 
material in it, the consequences would be catastrophic. 
Therefore I feel very strongly that controlling access to the 
port, knowing that you have to have access and entrance and 
exit is the nature of a port, but--the importance of knowing 
who is in the port at any one time is incredibly important.
    Now, I looked at the vessel traffic system in New Orleans. 
You have a vessel traffic system here, but it is not automated, 
and you--it is covered by radar, line of sight, observation, I 
guess, and what have you. It would seem to me that you would 
lose knowledge of where some of these vessels are at some time 
while they are in the Port of Houston. Right?
    Captain Cook. Well, Senator, we have both radar and 
television cameras. So especially in the riverine section of 
the ship channel that you were in today, we have nearly 100-
percent television coverage in that area. And like I--we had an 
earlier discussion about the communication aspect with the 
Pilots. That is--really our biggest ticket to visibility of the 
ship is our continual communication with the Pilots that are on 
board and the required check-points. And the communication that 
takes place allows us to know where it is, in addition to our 
electronic tracking through radar and TV cameras.
    Senator Breaux. But if a Pilot lost control of the bridge, 
he wouldn't be talking to you?
    Captain Cook. That is right, sir.
    Senator Breaux. I think it is important that we have a 
system that has the ability to look into an automated system 
that shows you the steer of the ship, the direction of the 
ship, where it is located when it is anchored, as well as 
coming into the port and out of the port. We have an 
international maritime organization agreement that is going to 
require transponders on ships coming into ports. The last phase 
of those transponders is not until the year 2007.
    And a transponder on board a vessel would allow a traffic 
safety system to see that vessel coming in every time it hits 
the Port of Houston and track it when it is anchored, as well 
as when it is moving. And it would be able to indicate on that 
system the cargo, the crew and just about everything you need 
to know about that ship. Every airplane that lands at Hobby or 
every airplane that lands at Intercontinental, regardless of 
its size--it could be a Cessna 150--has to have a transponder 
in it. And it is going to call on the airport.
    We have cars with GPS systems on them. For the life of me, 
I cannot understand why we cannot require that a ship loaded 
with hazardous material perhaps does not have a relatively 
simple transponder on it to let the port authorities know where 
it is at all times while it is moving and while it is sitting 
in port. Would that not be helpful?
    Captain Cook. Yes, sir. We look forward to the automated 
information system, whenever it is implemented. And we would 
look forward----
    Senator Breaux. Well, 2007 is too late, and we cannot wait 
that long. Let me ask about the--some other things I had. Let 
us see.
    On the port, Jim, do you have what you would consider to be 
limited access to the port whereby every person coming in is 
stopped and every truck is required to identify itself in some 
fashion?
    Mr. Edmonds. Yes, sir.
    Senator Breaux. How does that work?
    Mr. Edmonds. We have had gate security all along for port 
properties. Since 9/11, we have enhanced our security at the 
gates, we check cargos inbound and outbound, we have increased 
our patrols by about 35 or 40 percent, we have spent more time 
patrolling our fence-lines, and we have stationed people in our 
facilities around the clock. So we have done the best we can 
with the manpower we have. We have----
    Senator Breaux. Well, when a truck hits the gate at the 
Port of Houston----
    Mr. Edmonds. Yes, sir?
    Senator Breaux [continuing]. What ensures for your benefit 
or the port's benefit that that truck is supposed to be in the 
port?
    Mr. Edmonds. If it is a container, for example, the officer 
checks the bill of lading and walks around to the back of the 
container and actually visibly checks that bill of lading that 
is posted on the back of the container and verifies then the 
best he or she can that that is what is in that box.
    Senator Breaux. Mr. Hinton or maybe one of you gentlemen 
talked about how what is on the ships is obviously very 
important. And you get a cargo manifest. But an awful lot of 
the time, I mean, you will have an FAK destination, Freight of 
All Kind, general cargo.
    Mr. Edmonds. Yes, sir.
    Senator Breaux. I mean, that cannot be very helpful in 
letting you really know what is on that ship. If I wanted to do 
violence, I would just put ``Freight of all Kind'' on every 
document I would submit to you, and you would not really know 
what ``Freight of all Kind'' means, would you?
    Mr. Kice. If you are lucky enough to have serviced that 
steamship line before and you have had that experience, you 
might know some of it. But you have an exposure there for those 
new customers, new people, coming in that you have never 
serviced before. You might not have an historical base for it. 
So yes, you would have difficulty with that FAK.
    Senator Breaux. OK. One other point, and then I will turn 
to my colleagues. Some of the ports that we have seen have 
zones--security zones that are established around high-interest 
vessels and have an absolute prohibition of anybody coming up 
alongside that vessel while it is traversing through the port, 
while it is anchored at the port and what have you. We do not 
want little vessels coming up to a cargo ship just to look at 
how big the ship is, or worse, going up to a passenger cruise 
ship to try to see who is on the ship, because we do not know 
what they are doing there any more.
    And, you know, they may be harmless and just visitors, but 
they may be something else. So do we have----
    Admiral maybe you can tell me about it. But do we have--I 
saw an awful lot of big ships out there. And I am not saying 
you--we are any better in New Orleans, because I do not think 
we are. But some of them are pretty volatile ships. I did not 
see any little vessels around any of those ships saying, ``Stay 
away from this boat.''
    From the standpoint of the harbor police or the sheriff 's 
deputies or the Coast Guard, I did not see any single vessel 
monitoring access to those vessels that were in the port today. 
Is there?
    Vice Admiral Allen. I will take a shot and let Captain Cook 
follow up. The Coast Guard has the statutory authority to 
establish security zones around vessels and around facilities 
from anything that might become a threat to the port itself. 
Once those security zones are established, they can be 
enforced, and they carry criminal and civil penalties 
associated with them.
    The problem with any security zone that you establish is 
that it is only effective if you can enforce it, you know, if 
there is a cop on the beat, if you will, to step in and say, 
``Leave the zone or you are going to be arrested,'' or, ``You 
are subject to the seizure of your boat.'' So we do have the 
statutory authority to create those zones. The question is: Do 
you have the resources to enforce the zone. Just like with 
putting up a ``No trespassing'' sign, if there is no police 
officer there, it will be willfully violated.
    Now, they have security zones in the Port of Houston, and I 
will let Captain Cook address those. Some of those absolutely 
restrict small boats from coming around certain sensitive areas 
of the port and certain sensitive facilities, but it is not 100 
percent.
    I would make the comment, though, that it gets back to what 
we talked about earlier, and that is that all the stakeholders 
in the port bear some responsibility for throwing resources at 
this problem. And to the extent that their facilities are on 
the waterways and there are vessels calling, there is some 
inherent responsibility for organic protection in addition to 
what the Coast Guard can put out there in establishing security 
zones. And I would pass it to Captain Cook now.
    Senator Breaux. Well, let me ask that question after I hear 
about what we are doing here. But other than the Coast Guard, 
what other law-enforcement vessels do we have in the Port of 
Houston?
    Vice Admiral Allen. Well, in Houston, I think we have----
    Senator Breaux. No. I am asking----
    Vice Admiral Allen. Oh. I am sorry.
    Mr. Edmonds. We have no--the Port Authority has none. We 
have fire boats, but we have no law----
    Senator Breaux. You have no harbor police?
    Mr. Edmonds. No, sir.
    Senator Breaux. You have no sheriff 's deputies?
    Mr. Edmonds. Not on--we have sheriff 's deputies that have 
water capability, but they are not on a regular patrol basis.
    Senator Breaux. Captain.
    Captain Cook. Just a follow-on from the security zone 
question, sir. The riverine section in the highly 
industrialized section of the Houston Ship Channel is a 
security zone, as well as the Port of Texas City. And we 
picked--those very highly industrialized areas are prohibited--
through my authority as Captain of the Port, recreational 
vessels and fishing--recreational fishing vessels, also, from 
using those waterways.
    We have random patrols, where we try and target the--where 
we think the highest risk is in and around the LPG-handling 
facilities and some of the other petrochemical facilities, but 
we are not there 24 hours a day. We have gotten reports of 
pleasure boaters in these security zones. And we have an 
immediate-response boat ready to go 24 hours a day, and they 
have gone out and challenged the owners of the boat. And in 
almost every case, people just were not aware that that had 
become a security zone, despite our efforts to advertise it.
    But we have not solved the problem, Senator, of how to make 
this iron-clad. And we just depend on all of the different eyes 
and ears that are out on the channel looking for anomalies, 
knowing clearly that those areas are now off limits to pleasure 
boaters and small fisherman, and reporting that to us so we can 
take action.
    Senator Breaux. But you do not have the personnel now to do 
that?
    Captain Cook. We do not have enough personnel to be out 
there 24 hours a day, sir.
    Vice Admiral Allen. Mr. Chairman, in many instances right 
after 9/11, we surged and actually put a 7-by-24 presence in 
many ports around the country. And we got into a problem of 
sustainability. When it gets to the issue of all-hands-on-deck 
for general quarters, the longer you stay there, all of a 
sudden, you start to attrit your long-term capability. And we 
have had to back off from that.
    So within the resource base we have got, we are out there 
addressing the problem and are responding to insurgence of the 
security zones, but right now, we are not resourced for a 7-by-
24 presence.
    Senator Breaux. You cannot do it by yourself. Now, the 
purpose is to help, I mean, and every port has got the same 
type of concerns about, ``This is a new world we live in.'' And 
it has got to be looked at differently because the risk is 
substantial if we do not, you know, do everything we possibly 
can.
    And I think this legislation is aimed at helping. It is 
aimed at helping by providing financial resources and guidance, 
to allow ports to do things that they cannot afford to do now 
or did not think that they should be doing up until 9/11.
    So we are all in this together. I mean we do not know all 
the answers, certainly, in Washington. And we want to hear from 
you and hear where the holes might be in these security zones 
and then figure out what we can do to help you solve the 
problem. And we are all in it together, and we have got to 
solve the problems together.
    Senator Hutchison.
    Senator Hutchison. Well, thank you, Mr. Chairman. I would 
like to turn to an issue that I think is unique to the Port of 
Houston, and that is the hazardous materials and the chemical 
materials, that are unique here because of our chemical 
complex, and ask Mr. Pipkin if the volume of hazardous 
materials entering and exiting the Port of Houston has changed 
measurably and which way after September 11.
    Mr. Pipkin. I do not--I really cannot answer that question 
for you, Senator. I would have to, I guess, turn to Chairman 
Edmonds to see if he could answer that, because I am not sure 
about that answer.
    Mr. Edmonds. I can answer that, Senator. I know that from 
the Port Authority standpoint, our volumes are off about 7 or 8 
percent this year. And as was mentioned earlier, most of that 
is in steel.
    Senator Hutchison. Well, let me just ask Mr. Pipkin, and 
perhaps anyone else could jump in, as well.
    What do you think specifically needs to be done to improve 
security for hazardous cargo, as opposed to general cargo? What 
can we do specifically to put the added safeguards on that type 
of cargo so that everyone will feel more secure?
    Mr. Pipkin. From an emergency response standpoint, like Mr. 
Kice said, it is the MSDS sheets being available, because that 
is basically----
    Senator Hutchison. To know what is in there?
    Mr. Pipkin [continuing]. What my group deals with is 
emergency response, to know what is there and what is in the 
ship or what is in the container as it comes in and out.
    Senator Hutchison. What about tougher standards for 
identification of personnel, like the biometric technology that 
we are talking about using at airports? What about a higher 
standard for licensing for carriage of hazardous materials or 
security clearances? Is there anything like that, that could be 
added specifically for hazardous materials that is not being 
done now?
    Mr. Kice. I think the bill addresses many of those points 
with the heightened security-sensitive areas. And I would 
consider, you know, a hazardous material to be part of that 
concept because we already--as the terminal operators, we do 
that. This--and our longshoremen--the company longshoremen will 
do that.
    If we have a general container that comes in and it is a 
general cargo container but he sees a placard on the side, he 
is naturally just going to put a little bit more effort into 
it, be a little bit more aware of the entire thing.
    Senator Hutchison. But nothing specifically coming from 
your industry that would be suggestions that we should follow?
    Mr. Kice. I think the new technologies of X-rays and that 
type of thing would be really the advantageous way of doing 
that. And I do not want to be--but we do not want to open up 
every container--at least from private industry's side--
because, when you open up a container of hazardous materials, 
you are usually exposing more people to it. And you are 
exposing--the more you handle anything, the more chance you 
have got of--how can I say it without screwing it up.
    So we do not want to do that. I think the aspect of the 
higher technologies, the X-rays, the gamma machines, the 
sniffing-type things, the bomb detections--that type of aspect 
is really appropriate for this type of activity.
    And the other thing is: We currently do many, many 
different functions with hazardous materials. The Coast Guard 
and Customs--we are doing inspections for different aspects. 
Build in a higher degree of this safety, as we do in our normal 
course of business. That will--if nothing else, that would get 
the message out to the other people that we are watching it 
better, we are being more intensive, you know, and we are 
developing systems. And in addition to the higher technology, I 
think that would make significant improvements.
    Senator Hutchison. In the private sector, have you seen a 
slowing of ingress and egress after September 11 because of 
heightened security? Has that been a problem?
    Mr. Kice. Do you mean like coming into a terminal--in and 
out of a terminal?
    Senator Hutchison. Yes.
    Mr. Kice. Miami had at one point an hour delay just driving 
from the--over the bridge by people driving into the port. Yes, 
there has been some activity like that. It has been cleaned up. 
In Newark, we had a high degree of slowness coming up 
immediately thereafter. It is improving now; the people are 
more comfortable with the heightened awareness. And with that 
come the systems that are set up, and people are more tolerable 
and understanding what is going on, just the same as--like with 
the airports, I think.
    When I started flying at the end of September, it was long, 
long lines. The lines now are much shorter because we have 
learned how to do things better.
    Senator Hutchison. Mr. Edmonds, do you see that as 
particularly unique to the Houston Port?
    Mr. Edmonds. Before I try to answer that question, I was 
handed a note to answer your first question. There has been a 
small increase in hazmat cargo since 9/11, not a decrease.
    Senator Hutchison. OK.
    Mr. Edmonds. I think part of what has to be considered here 
is the comment the Chairman made earlier, that no two ports are 
the same, the comment that you are making here. I am proud that 
since 9/11, we have not had an interruption in service in the 
Port of Houston. All cargos have come, and they have gone. That 
is important to us because of the $7.76 billion we put into our 
local economy and the 205,000 jobs that we generate annually.
    So the balance has to be struck on how we make these ports 
safe and how we do the administrative and technological things 
to make sure that we have safe cargo and the ability to 
maintain that safety without interrupting the economic flow.
    At Barbour's Cut, the U.S. Customs does have a gamma-ray 
machine. It is somewhat of a tedious process, but it would be 
nice to have two or three more of them; it is a very thorough 
way to find out what is in those containers, you know. But that 
is a manpower and funding issue, again.
    Finding ways to have other kinds of technological 
capabilities, I think, is something we have to do. It is just 
like going in an airport now; it is a little slower process.
    Senator Hutchison. Well, one of the things that we are 
going to need to know before we finalize our Homeland Security 
Program is: What are we going to need in added machinery and in 
Coast Guard manpower?
    I was going to ask the Admiral if the Coast Guard is 
preparing a Homeland Security plan that would address the issue 
of added personnel. We were just talking about having to back 
off of your 24-hour capabilities, but added manpower would 
certainly bring back the optimum security standards.
    So, are you preparing such a plan?
    Vice Admiral Allen. Yes, ma'am. Let me comment on that, but 
let me first make a comment on queues because I think it is 
important as a follow-on.
    Since 9/11, we are issuing daily situation reports out of 
our district offices. And one of the things we are trying to 
track is how long we are holding up vessels to put either sea 
marshals or boarding teams on them, because there is a real 
impact on them.
    We closed the Port of New York on Tuesday, 9/11, and we re-
opened it on Thursday. At that point, there were 10 days left 
of heating oil in Albany, New York, and only a couple of days 
left of refined products up in the Northeast. So we know that 
when you increase security in a port, there is also an effect 
on the economic flows. So we are tracking that, and we are 
mindful of that and how we are managing business on a day-to-
day basis. So getting those queues down is very, very important 
to us.
    In looking at where we need to be in long-term plans for 
maritime security, the Commandant has used the term, and I have 
heard it repeated in the room here a couple of times today: 
What is the new normalcy? What is that new standard of care 
that we need in ports for port security?
    And a lot of it has to do with, do we go from being just a 
boat-house down in Galveston with a boat that can respond to 
SAR--what we call a B-zero boat that is just standing by ready 
to go--or do you want to increase that presence: the cop on the 
beat that is available to enforce the security zones and so 
forth? We are working with the Administration on a multi-year 
plan to do that.
    One of our problems is: If we are given resources today, it 
is very difficult to grow the Coast Guard fast because, the way 
we access officers and enlisted people, there is a limit to how 
quickly we can grow. That has been taken into account, and that 
has been factored. And we are working with the Administration 
right now.
    One of the most important things that happened for us was 
the relief that we got in the supplemental, the $209 million, 
that allowed us to sustain the reserved funding we had this 
year. We have looked forward to in the second half of the year 
being able to sustain that, also.
    But we are working on a multi-year plan that will be 
factored into the overall transportation strategy. We will 
include what the Transportation Security Administration is 
going to be involved with, too. And I might add that there is 
going to be a directed effort by them on containers.
    Senator Hutchison. Just a last follow-up question. I would 
assume that you are looking at technology. One of the great 
things about the Houston Port, it seems to me, is the limited 
access.
    I do not know if other ports are more complicated, but with 
just a few access points into a secure area, surely technology 
would save you from having to have as much manpower. It would 
at least be a manpower projector so that if you heard the bell 
go off of an unauthorized, unregistered ship, you could send 
someone out, but you would not have to have someone on patrol 
until you heard the sound.
    Vice Admiral Allen. You make an excellent point. The term 
we use is Maritime Domain Awareness; it is understanding what 
is out there. And when you get to the point where you are 
having to respond to an incursion to a security zone or you get 
into consequence management like we were in 9/11, you have 
already lost the game to some extent.
    My admiral's definition of consequence management is, ``The 
sum of all failures.'' You have got to get further out ahead of 
that curve, and if you have got to get to the point where you 
are embarking containers someplace in Europe and you are 
ensuring at that point that they are loaded correctly and you 
are creating some kind of a technologically-advanced electronic 
bond system that can verify the integrity of that container 
and, also, track it where it is going, that is how you are 
going to address the problem.
    Senator Hutchison. Well, that came up today when we were on 
our tour, as well. It should be fairly easy to know if a ship 
is telling you the truth when they tell you where their last 
port was if you have an embarkation information-gathering 
system or exchange of information or some way to verify. If a 
ship tells you their last port was Rotterdam but you don't 
verify it and it was really Somalia, then you would want to 
know that and be able to verify it, which should be fairly 
simple.
    Vice Admiral Allen. Those protocols and technology exist in 
the aviation world today, and there is no reason they cannot be 
transferred to the maritime sector.
    Senator Hutchison. Thank you.
    Thank you, Mr. Chairman.
    Senator Breaux. Thank you.
    Congressman Lampson.
    Representative Lampson. Mr. Chairman, I will take just a 
minute to cover a couple of relatively small points.
    Sam, you made the comment about the need for paper to 
understand what might be--and know quickly what might be on a 
ship.
    Mr. Pipkin. Yes.
    Representative Lampson. With the use of GPS and 
transponders and that kind of technology, would not that be 
even more readily available than having to print out a piece of 
paper from someplace? And you could get it from whatever 
facility you wanted to look at it.
    Mr. Pipkin. Exactly.
    Representative Lampson. And that capability already exists 
and is in place in some branches of the military. Would GPS--
and I guess Mr. Trotter is probably the one to ask.
    At what point might it be feasible for us to put GPS on 
every container?
    Mr. Trotter. Well, I think we are a lot closer to that than 
we used to be. A problem with GPS now, for example, Lo-jack 
vehicle tracking system--everybody understands what that is--
with cars, stolen cars. And if you have been to Miami, you know 
how many cars get stolen and get shipped through those ports. 
And that is a concern of ours. We are interested in stolen cars 
that are going out of the ports.
    But the problem is--when you get it into a big container 
yard and you literally have thousands or tens of thousands of 
containers, it is not nearly enough focused now so that you can 
go and say, ``It is in this container.'' You may know it is in 
a 300-yard radius--well, that may be OK for a cop who is 
chasing a car down the road. He may say, ``Well, yes, that is 
my car.'' But when you put it in the arena that we deal in, on 
vessels or in container yards, it has to be more narrowly 
defined.
    We are working on instances to do that. We have some 
undercover techniques that permit that to be done today, but it 
is very expensive. And it has not yet gained as wide 
applicability. But as things are now, the more technology is 
built and they get cheaper, I think we could reach that. And 
that certainly is one of the goals that Commissioner Bonner has 
talked about in his supply chain: Know what gets stuffed in 
that container in the foreign ports, and know what comes out at 
our end.
    Also, Congressman Lampson, I just would say that Secretary 
O'Neill--Treasury Secretary O'Neill has made it very clear to 
us that we need to be concerned about the trade of and the 
commerce of the United States. So I think you have heard that 
from everybody up here. That is definitely a concern of ours. 
We want to be thorough, but we want to move the commerce of the 
United States.
    Representative Lampson. Is NASA working on any of that 
technology?
    And would you, Mr. Chairman, comment on what NASA did do 
for the Port of Houston in trying to help you better control 
and keep access to ships coming into the port? Has NASA been--
--
    Senator Breaux. I do not know that.
    Mr. Kornegay, can you answer that question?
    Mr. Kornegay. Yes, sir, I can. We are working with NASA on 
the low-visibility capabilities.
    And NASA does have the technology you are talking about, 
Congressman, where they put an instrument on the ship--
actually, the Pilot puts it on board the ship. It is about a 
15-pound computer, and it tells him the exact position of the 
ship and the heading of the ship so that he knows where he is 
at all times. We also need the transponder information so that 
he can see the other ship coming from the other direction.
    Representative Lampson. Thank you. That has got to be 
developed more. And we have had a wonderful asset in NASA that 
is working on it.
    And one final point for the Coast Guard. Is there not a 
mandate to create a guideline for our ports to use in 
developing security procedures? Either the Department of 
Transportation or the Coast Guard has----
    Senator Breaux. This legislation will do that. I do not 
know if there is anything in existence now.
    Representative Lampson. I thought that there had been some 
requirement.
    Senator Breaux. I do not know.
    Representative Lampson. OK.
    Vice Admiral Allen. For some portions of activities in 
harbors, they are planning guidance and protocols that have 
been set up. What is interesting is that our captains of ports 
currently have the statutory authority to do this, but the 
statutory authority they have would allow them to create a 
solution in their own ports. The intent of the legislation and 
what you really need is a level playing field across all the 
ports in the country so you are doing it the same way instead 
of creating economic disincentives.
    Representative Lampson. Thank you, Mr. Chairman.
    Senator Breaux. Thank you, Nick.
    And, Kay Bailey, thank you for making our Subcommittee 
visit a very productive one. I think that what we have heard 
today has been helpful. I mean, again, I think that the focus 
of what we are trying to do in the Congress, the House and in 
the Senate, is to be partners with the ports. And every port is 
different, and every port has different requirements and 
different needs.
    I would imagine that while the comprehensive security plans 
that will be developed will have a great deal in common, there 
will also be a need to the port that it applies to, because 
they all are very different in terms of what you need. There 
are financial needs that you have that are not going to be able 
to be handled, I think, by the individual ports without some 
Federal involvement; our legislation does do that, and I think 
that is another important statement, as well.
    We have gotten some good ideas here, you know. And I think 
that you are indeed a great port here in the Port of Houston, 
and we want to continue that reputation and be helpful and be 
partners with you to the extent that we possibly can.
    With that, this will conclude the Subcommittee on 
Transportation's hearing.
    [Whereupon, at 3:20 p.m., the hearing was concluded.]

                            A P P E N D I X

 Prepared Statement of George E. Duffy, President and Chief Executive 
                   Officer, Navios Ship Agencies Inc.

    My name is George E. Duffy. I am President and Chief Executive 
Officer of Navios Ship Agencies Inc. We operate in multiple ports 
throughout the United States (East Coast, Gulf, West Coast, and the 
U.S. Great Lakes). Our company represents over 300 vessel owners, 
operators, and charterers located worldwide. We handle general cargo; 
steel; dry bulk cargo; oil and chemical vessels, and we also handle 
both imports and exports. We deal with all U.S. Government agencies 
that are involved in the shipping and movement of both imported and 
exported commodities.
    With the testimony yesterday, you have heard from the U.S. Coast 
Guard, U.S. Customs, U.S. Immigration, Border Patrol, as well as the 
F.B.I. and the Port of New Orleans on the need for increased security 
at our ports. I want to go into a little more detail because I feel the 
bill that you have helped author does not have sufficient funding to 
allow these agencies to properly perform their new mission.
    There must be one central coordinating agency. It is my 
recommendation that it should be the U.S. Coast Guard. The U.S. Coast 
Guard has already implemented the 96-hour Vessel Arrival Notification, 
and is feeding that information to U.S. Customs, U.S. Immigration, 
F.B.I., and other Federal agencies. This information must also be made 
available to the local ports' authority and other local agencies on a 
need-to-know basis. This will prevent duplicate reporting, and it will 
centralize and standardize the information required to be submitted.
    Even with the present 96-hour notification, many U.S. ports have 
established additional requirements. They have different restrictions 
on vessels and/or barge movements. This needs to be standardized so 
that we have one law, one informational reporting format, and that all 
ports subscribe to that program.
    Another area of concern is the communications issue. All of these 
agencies need to have communications (radio, telephone, and computers) 
that operate on the same program and frequencies. This system will not 
work if these agencies (Federal, state, and local) cannot talk to each 
other or access Ecom data. In the past, in the New Orleans area we 
found that emergency response units, Police, Fire Departments, EMT's 
and other local and Federal Government agencies during practice 
exercises could not communicate with each other. Jefferson Parish, St. 
Bernard Parish, and Orleans Parish were all on different radio 
frequencies. The U.S. Coast Guard operates on marine frequencies. Most 
of the local agencies including the Harbor Police do not have that 
availability. The Harbor Police of the Port of New Orleans have two (2) 
vessels, a fire rescue boat and a small harbor patrol boat, which have 
marine communications. But, the officers patrolling the harbor area do 
not have marine radio availability. Therefore, additional equipment 
must be purchased to give the agencies the tools that they need to help 
secure the port area.
    The U.S. Coast Guard, U.S. Customs, U.S. Department of Immigration, 
Border Patrol, and the U.S. Corps of Engineers have all been subjected 
to serious cutbacks over the past decade. Insufficient equipment, 
manpower shortages, and antiquated technology must be overcome rapidly. 
We feel that the funding of Senate Bill 1214 is way short of what is 
needed to bring these Federal agencies up to a ready position to 
prevent terrorist activities.
    The U.S. Coast Guard's sea-marshal program needs to be expanded. 
This can only be done by increased manning to the 8th Coast Guard 
District. This problem is not isolated to New Orleans; it is a national 
problem. You may have heard of the incident whereby the U.S. Border 
Patrol moved 200 agents from the Canadian boarder to the Mexican 
boarder to fill gaps in that area. This created additional burdens on 
the Northwestern states. To fill these gaps, the states had to employ 
the National Guard to protect this country. This is why this is so 
critical. I know it is very difficult for these agencies to be 
straightforward, but we all know and deal with them. They do an 
outstanding job with the minimal resources they have at hand.
    The U.S. Congress has mandated the Vessel Traffic System for the 
Port of New Orleans. This is not mandated for all U.S. ports. The 
transponder system has not reached the technology level required. I 
want to point out to you that the portable transponder weighs 18 
pounds. There is also a need for a laptop computer, which adds extra 
weight. This may be an interim solution for ocean-going vessels, but 
this, again, would be port specific. The transponder must be mandated 
for all vessels operating on our waterway system. This includes tugs, 
push boats, crew boats, supply boats, and commercial fishing boats. 
This is the only way this system will work effectively.
    We have seen numerous problems with transponder technology. It does 
not provide the information that was referenced yesterday (vessel name, 
cargo, etc). IMO standards must be supported so that this transponder 
will be universal and operating in all U.S. and foreign ports.
    I know that the offshore industry has taken a position that their 
vessels should not be required to have these transponders. The deep 
draft vessel interests disagree. If we do not know where these vessels 
are, it presents a serious threat to the ocean-going vessels, and does 
give us full VTS coverage (VTS is designed as an Aid to Navigation). 
Thence, the VTS system fails. An example of this would be that if 
someone loaded an offshore supply vessel (no transponder) in Venice and 
sailed into Southwest Pass and then steered itself into the side of a 
large tanker or chemical carrier. We would now have a major catastrophe 
with insurmountable damage to the U.S. economy with a potential 
complete closure of the Mississippi River. This would be similar to the 
incident with the USS Cole.
    This would be a very easy and simple scenario to look at, and 
without VTS, the offshore supply vessel would not have been 
identifiable. Without the required transponder, neither the Coast Guard 
nor the River Pilots would know where these vessels were located. We 
fully support a VTS system, but, once again, it has to be mandated to 
all shallow draft and deep draft vessels for VTS to be an aid in 
fighting terrorism.
    In reviewing Senate Bill 1214, we find that this bill contains new 
rules on documentation and requirements of the shipping agents, freight 
forwarders, brokers, owners, operators, and charterers of vessels. The 
language in the bill is directed mainly toward export rather than 
import. We feel the most serious terrorist threat that could come would 
be from imported cargo. Besides vessel hijacking potentials, we feel 
that containers will provide the most accessible form for smuggling 
terrorist materials. Expertise is needed from U.S. Customs, U.S. 
Customs Brokers and Freight Forwarders, and the maritime interests to 
ensure that proper documentation and present laws established by U.S. 
Customs are not amended to the point of being unworkable. The present 
system works well. One of the major problems has been the cutback of 
U.S. Customs' manpower related to marine vessel activity. The number of 
U.S. Customs' port inspectors has been greatly reduced over the past 
ten (10) years. The documentation required for the vessels (manifests, 
Bills of Lading, commercial invoices) flow to U.S. Customs in the entry 
in the cargo process of cargo. Moving up the timeframe for reporting 
may cause serious problems on short voyages. Documentation is made in 
the port of origin and then sent by courier to the U.S. port agents/
Customhouse brokers to initiate the cargo process with the present U.S. 
Coast Guard's 96-hour reporting cargo information is provided.
    All vessels carrying hazardous materials must have a hazardous 
cargo manifest. That is filed with U.S. Customs as well as with the 
U.S. Coast Guard. With respect to all documentation, there still leaves 
the potential of misrepresentation. This is where U.S. Customs and 
other intelligence agencies and maritime's experience will play a vital 
role. Well-established reputable and honest shippers and receivers of 
cargo can be impacted because of lack of security at foreign ports. 
Your emphasis on the ``superport'' program is where our first line of 
defense must be established. Cooperation with foreign government, their 
security forces and their port authority is absolutely essential in 
defeating the terrorist threat by vessels and/or containers or other 
cargo carrying equipment placed on board vessels. This is where we need 
to start immediately.
    Containers could be scanned in foreign ports prior to being loaded 
on a vessel to ensure that the content of that container is what is 
listed on its Bill of Lading, and then eventually on its manifest. In 
turn, U.S. Customs can do a secondary scanning at the first port of 
arrival with their new VACIS system. As you well stated yesterday, less 
than 3 percent of our inbound containers are inspected. U.S. Customs 
does not have sufficient VACIS units or manpower to accomplish these 
objectives.
    The maritime industry supports changes in the present laws for the 
security of this country. The problem arises when the changes are 
overly burdensome, and will not effectively produce the end results 
that you and Congress are striving for.
    U.S. Coast Guard and U.S. Immigration/Border Patrol are important 
parts of this security picture. Once again, they are under-funded, and 
do not have adequate manpower or equipment to comply with the mandates 
from this proposed law. We feel that the dollar value that you have 
assessed for these agencies falls drastically short of what will be 
needed to make them effective.
    In the hearing yesterday, you asked Admiral Casto and Captain of 
the Port, Stephen Rochon, about security areas around sensitive 
vessels. Their response was that they have not been imposed, and the 
main reason was that they do not have the equipment or manpower to 
enforce them. I agree with them, but I also wanted to alert you to some 
of the things that have been imposed by the terminals along the river 
regarding the required stores and spare parts for vessels. Prior to 
September 11th, we could deliver by truck across the facilities berth, 
spares and stores, which included food that are supplied by the local 
ship chandler in this area to the vessels. Numerous spare parts are 
flown in to be delivered to the vessel, and these come in all sizes. A 
number of facilities now are prohibiting the delivery across their 
docks. Therefore, the owners and vessel operators now must deliver by 
launch service to these vessels while berthed at the facilities. If 
restrictive zones are implemented, this must be taken into 
consideration. There is also the delivery of fuel (bunkers), diesel 
oil, and water by barge to these vessels while berthed at these 
facilities. These must also be considered prior to imposing restrictive 
zones.
    You spoke about closure of the Port of New Orleans for security 
purposes. The main port area is secure. The problem arises in other: 
areas where the river area is open for tourism and recreational 
activities. The Riverwalk, Moonwalk, Waldenburg Park, and paved levee 
systems along the river are all open to the public. These give an open 
access to the Mississippi River and the bridges that cross the river, 
the terminals and facilities, vessels, and barges. This provides a 
different problem to the local authority. Patrols along these unsecured 
areas need to be increased. This will help deter any attempt to strike 
a vessel from these unsecured areas.
    In summary, we support your efforts, and stand ready to assist you 
on any areas that you may want clarification. We must accomplish our 
mission to prevent terrorist activity through workable and practical 
law changes and finances to the agencies assigned this task.
  
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