[Senate Hearing 109-1044]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 109-1044
 
  INHERENTLY SAFER TECHNOLOGY IN THE CONTEXT OF CHEMICAL SITE SECURITY

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

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 21, 2006

                               __________

  Printed for the use of the Committee on Environment and Public Works


Available via the World Wide Web: http://access.gpo.gov/congress.senate

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                               __________

?

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED NINTH CONGRESS
                             SECOND SESSION

                  JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia             JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri        MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio            JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island         BARBARA BOXER, California
LISA MURKOWSKI, Alaska               THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota             HILLARY RODHAM CLINTON, New York
JIM DeMINT, South Carolina           FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia              BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
                Andrew Wheeler, Majority Staff Director
                 Ken Connolly, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JUNE 21, 2006
                           OPENING STATEMENTS

Bond, Hon. Christopher S., U.S. Senator from the State of 
  Missouri.......................................................     5
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     4
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     8
Obama, Hon. Barack, U.S.  Senator from the State of Illinois.....    12
Voinovich, Hon. George V., U.S.  Senator from the State of Ohio..     9

                               WITNESSES

Biden, Hon. Joseph, U.S. Senator from the State of Delaware......    14
    Prepared statement...........................................    33
Cott, Charlie, vice president, Plant Foods and Transportation, 
  MFA Inc........................................................    24
    Prepared statement...........................................    71
    Response to an additional question from Senator Jeffords.....    75
    Responses to additional questions from:
        Senator Inhofe...........................................    75
        Senator Voinovich........................................    75
Crowley, Philip J., senior fellow and director of National 
  Defense and Homeland Security, Center for American Progress....    19
    Prepared statement...........................................    43
    Response to an additional question from Senator Jeffords.....    47
    Responses to additional questions from:
        Senator Boxer............................................    51
        Senator Inhofe...........................................    46
        Senator Voinovich........................................    48
Hendershot, Dennis C., staff consultant, Center for Chemical 
  Process Safety, American Institute of Chemical Engineers.......    18
    Prepared statement...........................................    34
    Responses to additional questions from:
        Senator Inhofe...........................................    38
        Senator Jeffords.........................................    40
        Senator Obama............................................    43
        Senator Voinovich........................................    41
Jackson, Lisa P., Commissioner, New Jersey Department of 
  Environmental Protection.......................................    23
    Prepared statement...........................................    65
    Response to an additional question from Senator Inhofe.......    68
    Response to an additional question from Senator Jeffords.....    68
    Responses to additional questions from:
        Senator Boxer............................................    71
        Senator Voinovich........................................    68
Moore, David A., PE, CSP, president and CEO, AcuTech Consulting 
  Group, Chemetica, Inc..........................................    21
    Prepared statement...........................................    53
    Responses to additional questions from:
        Senator Inhofe...........................................    62
        Senator Obama............................................    65
        Senator Voinovich........................................    63

                          ADDITIONAL MATERIAL

    Letters:
        Dryvit Systems, Inc.....................................110-111
        Rust-Oleum Corporation................................... 95-96
    Reports:
        American Chemistry Council...............................   193
        Center for American Progress............................151-192
        Texas Engineering Experiment Station; Texas A&M 
          University System College Station, Texas............... 77-83
    Statements:
        Greenpeace..............................................136-150
        National Association of Chemical Distributors............ 84-94
        Synthetic Organic Chemical Manufacturers Association.....97-109
        United States Government Accountability Office..........112-135


  INHERENTLY SAFER TECHNOLOGY IN THE CONTEXT OF CHEMICAL SITE SECURITY

                              ----------                              


                        WEDNESDAY, JUNE 21, 2006

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
628, Dirksen Senate Office Building, Hon. James M. Inhofe 
(chairman of the committee) presiding.
    Present: Senators Inhofe, Bond, Voinovich, Chafee, Thune, 
Jeffords, Carper, Lautenberg, and Obama.
    Senator Inhofe. Consistent with our policy of starting on 
time, we will start on time, and Senator Jeffords is here on 
time.
    [Laughter.]

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. Good morning. Today the committee will be 
examining a concept called Inherently Safer Technology and its 
relation, if any, to making chemical sites more secure against 
terrorist attacks. Last week the Homeland Security and 
Government Affairs Committee held a markup on S. 2145, a bill 
to require heightened security at our Nation's chemical sites. 
During that markup, the subject of IST was hotly debated. An 
amendment to require IST was wisely voted down by a bipartisan 
vote of 11 to 5. Despite this defeat, I am certain this 
environmental concept will continue to be debated in the 
context of security, thus our hearing today remains important.
    IST is essentially the idea of giving the Federal 
Government authority to mandate that a private company change 
its manufacturing process or the chemicals that they use. We 
will hear today from witnesses about how IST applies in the 
real world, what it can do and what it cannot do.
    In the wake of 9/11, there was a realization that chemical 
facilities, which are critical to our Nation's economy, could 
be targets for terrorism. Since then, the Bush Administration 
has made a determined effort to protect our Nation's critical 
infrastructure against terrorists who aim to harm us. Congress, 
too, has acted by enacting into law the Marine Transportation 
Security Act, the Bioterrorism Act, and a comprehensive nuclear 
security package that was passed out of this committee.
    Congress also created the Department of Homeland Security 
vesting it with power and authority to protect the Nation's 
infrastructure. DHS has worked diligently and quickly to 
address the Nation's security issues. In the chemical sector, 
they have deployed teams of counter-terrorism specialists to 
each identified high-risk chemical facility to work with 
management, local first responders and law enforcement, States 
and other Federal agencies to assess and address the security 
needs. DHS has also created several tools to help all chemical 
facilities, regardless of whether they represent high-risk 
locations. This all means that chemical facilities are more 
protected and we are all indeed safer than we were 5 years ago.
    This committee has twice tried to move legislation to 
require certain chemical plans to upgrade their security 
against terrorist acts, a move strongly supported by the 
Administration and DHS. Each time, we have been sidetracked by 
the insistence of some that any such legislation must include 
allowing DHS to mandate IST. This is an idea that is not 
supported by DHS, the Nation's premier security experts.
    The idea of IST predates 9/11. This is very important. We 
talk about IST and relationship with the security bill. IST was 
an effort by several environmentalist groups to put in their 
demands and dictates to business and industry long before 9/11 
occurred. Then now they have taken advantage of the fact that 
9/11 is there and we are taking security measures, they are 
trying to put this on. So this is what we are dealing with.
    DHS Security Chertoff said, and this is a quote, ``We have 
to be careful not to move from what is a security-based focus--
into one that tries to broaden into achieving environmental 
ends that are unrelated to security.'' IST is not a ``thing'' 
that can be readily identified in legislation and then measured 
and regulated. It is a philosophy of safe manufacturing that 
translates into a complicated, interrelated set of site and 
community-specific decisions made by engineers and safety 
experts. We will hear from these very engineers today.
    What the security experts at DHS have said that they 
support and need from Congress is a law requires facilities to 
achieve a level of security. They want a performance standard 
set by DHS that allows for industry to decide how to reach it.
    Over the past 5 years, industry has also taken great 
strides to protect their facilities and they did this 
voluntarily, in absence of a mandate to do so. For example, the 
Center of American Progress, who is testifying today, recently 
noted that 284 facilities in 47 States examined their processes 
and made what the report characterized as IST-like changes. 
This proves my point; though I doubt that is what you had in 
mind. These companies did not operate under a Federal 
regulation when they made the changes. They made a business 
case decision.
    You know, it is kind of the idea that these companies, as 
some would say, they want to have insecurity, they want to have 
the threat that faces them. They don't want that. That would 
cost them money. That would cost lives, that would destroy 
their property.
    Consequently, they are concerned about it, and I think that 
if you want to pursue the IST thing, that is fine, go ahead and 
do it. But do it on some other bill. Don't do it in conjunction 
with security, because it has nothing to do with security.
    Senator Jeffords.
    [The prepared statement of Senator Inhofe follows:]

            Statement of Hon. James M. Inhofe, U.S. Senator 
                       from the State of Oklahoma

    Good morning. Today, the Committee will be examining a concept 
called Inherently Safer technology and its relation, if any, to making 
chemical sites more secure against terrorist acts. Last week, the 
Homeland Security and Government Affairs Committee held a markup on S. 
2145 a bill to require heightened security at our Nation's chemical 
sites. During that markup, the subject of IST was hotly debated. An 
amendment to require IST was wisely voted down by a bipartisan vote of 
11-5. Despite this defeat, I am certain this environmental concept will 
continue to be debated in the context of security, thus our hearing 
today remains important.
    IST is essentially the idea of giving the Federal Government 
authority to mandate that a private company change its manufacturing 
process or the chemicals that they use. We will hear today from 
witnesses about how IST applies in the real world. What it can do and 
what it cannot.
    In the wake of 9-11, there was a realization that chemical 
facilities, which are critical to our Nation's economy, could be 
targets for terrorism. Since then, the Bush Administration has made a 
determined effort to protect our Nation's critical infrastructure 
against terrorists who aim to harm us. Congress, too, has acted by 
enacting into law the Marine Transportation Security Act, the 
Bioterrorism Act, and a comprehensive nuclear security package that was 
passed out of this committee. Congress also created the Department of 
Homeland Security vesting it with power and authority to protect the 
Nation's infrastructure. DHS has worked diligently and quickly to 
address the Nation's security issues. In the chemical sector, they have 
deployed teams of counter terrorism specialists to each identified 
high-risk chemical facility to work with management, local first 
responders and law enforcement, states and other Federal agencies to 
assess and address the security needs. DHS has also created several 
tools to help ALL chemical facilities regardless of whether they 
represent high-risk locations. This all means that chemical facilities 
are more protected and we are all indeed safer than we were 5 years 
ago.
    This committee has twice tried to move legislation to require 
certain chemical plants to upgrade their security against terrorist 
acts--a move strongly supported by the Administration and DHS. Each 
time, we have been sidetracked by the insistence of some that any such 
legislation must include allowing DHS to mandate IST. This is an idea 
that is not supported by DHS, the Nation's premier security experts.
    The idea of IST predates 9/11 and has never been about security. 
IST is an environmental concept that dates back more than a decade when 
the extremist environmental community, Greenpeace and others, were 
seeking bans on chlorine--the chemical that is used to purify our 
Nation's water. It was only after 9/11 that they decided to play upon 
the fears of the Nation and repackage IST as a panacea to all of our 
security problems.
    Of course I do not view Greenpeace as any sort of authority on 
security issues--I prefer to stick to the real security experts. And 
the real security experts at DHS have been crystal clear that they do 
not support IST requirements. DHS Secretary Chertoff has said: ``We 
have to be careful not to move from what is a security-based focus into 
one that tries to broaden into achieving environmental ends that are 
unrelated to security.''
    IST is not a ``thing'' that can be readily defined in legislation 
and then measured and regulated. It is a philosophy of safe 
manufacturing that translates into a complicated, interrelated set of 
site and community-specific decisions made by engineers and safety 
experts. We will hear from these very engineers today.
    What the security experts at DHS have said that they support and 
need from Congress is a law that requires facilities to achieve a level 
of security. They want a performance standard set by DHS that allows 
for industry to decide how to reach it.
    Over the past 5 years, industry has also taken great strides to 
protect their facilities and they did this voluntarily, in absence of a 
mandate to do so. For example, the Center of American Progress, who is 
testifying today, recently noted that 284 facilities in 47 states 
examined their processes and made what the report characterized as 
IST--like changes. This proves my point; though I doubt that is what 
you had in mind. These companies did not operate under a Federal 
regulation when they made the changes. They did a business case study 
of their operations and made their decisions weighing various factors. 
Despite what some interest groups would have us believe, chemical 
companies do not want an attack on their assets anymore than we do. 
They do not need the Federal Government coming in and telling them 
specifically how to manufacture products. Government's role is to 
direct them to make their facilities secure and help them by providing 
the guidance and tools to do it but not stifle innovation and economic 
opportunity by dictating to them how to it.
    I look forward to hearing from our witnesses.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. Thank you, Mr. Chairman.
    Homeland security experts have referred to chemical plants 
as ``pre-positioned weapons of mass destruction.'' Yet nearly 5 
years since the September 11th attacks, the Bush Administration 
has done almost nothing to address this glaring vulnerability.
    I am pleased that the Senate Homeland Security Committee 
unanimously adopted legislation last week to address the 
widespread risks posed by chemical facilities. Over 15,000 
chemical facilities nationwide store sufficient quantities of 
hazardous chemicals to likely cause death or injury to the 
surrounding communities if released.
    The chemical industry's own data indicates that it in a 
worst case release, toxic chemicals could threaten more than 1 
million people at over 100 facilities across the Nation. More 
guards in higher fences are not enough to protect our 
communities from the dangers posed by chemical facilities. 
Rather, owners and operators of chemical plants need to take 
practical steps to reduce the inherent hazards posed by their 
facilities.
    For example, swimming pool service companies have made 
their neighborhoods safer by switching from chlorine gas to 
bleach or chlorine tablets. Unfortunately, thousands of 
communities remain vulnerable because facilities in their towns 
have not chosen to implement such measures. For example, nearly 
3,000 drinking water and wastewater treatment plants still use 
chlorine gas instead of liquid bleach or ultraviolet light.
    Should implementation of inherently safer technology be 
mandatory for all chemical facilities? No. That has never been 
my position. Rather, when I chaired this committee in 2002, we 
unanimously adopted legislation that would have required 
consideration of the implementation of inherently safer 
technologies ``when practicable.''
    Senator Inhofe's bill that passed out of committee during 
the last Congress also would have required implementation of 
alternative approaches ``when practicable'' in the judgment of 
the owner and operator. Likewise, Senator Lieberman's proposal 
last week would require implementation of inherently safer 
technology only when it would significantly reduce the risk of 
serious injuries and was practicable.
    Some have suggested that inherently safer technologies 
merely shift the risk from one location to another. However, 
such technologies will be elevated on a case by case basis and 
implemented only if they would make the community safer.
    Let me also mention two other elements that are critical 
for effective chemical security legislation. First, to ensure 
public accountability, citizens and local officials must be 
allowed to determine if a facility in their community is in 
compliance and to challenge the Department of Homeland Security 
actions or inactions if necessary. Second, Congress should 
preserve the right of States to implement more stringent laws 
as needed to protect their citizens.
    In conclusion, legislation addressed to the risks posed by 
chemical facilities is long overdue. I am looking forward to 
the hearing and will work to ensure that the Congress enacts a 
strong chemical security law.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Jeffords follows:]

 Statement of James M. Jeffords, U.S. Senator from the State of Vermont

    Homeland Security experts refer to chemical plants as ``pre-
positioned weapons of mass destruction.'' Yet nearly five years since 
the September 11 attacks, the Bush administration has done almost 
nothing to address this glaring vulnerability.
    I am pleased that the Senate Homeland Security Committee 
unanimously adopted legislation last week to address the widespread 
risks posed by chemical facilities.
    Over 15,000 chemical facilities nation-wide store sufficient 
quantities of hazardous chemicals to likely cause death or injury to 
the surrounding communities if released. The chemical industry's own 
data indicates that, in a worst case release, toxic chemicals could 
threaten more than one million people at over 100 facilities across the 
nation. More guards and higher fences are not enough to protect our 
communities from the dangers posed by chemical facilities.
    Rather, owners and operators of chemical plants need to take 
practical steps to reduce the inherent hazards posed by their 
facilities. For example, swimming pool service companies have made 
their neighborhoods safer by switching from chlorine gas to bleach or 
chlorine tablets.
    Unfortunately, thousands of communities remain vulnerable because 
facilities in their towns have not chosen to implement such measures. 
For example, nearly 3,000 drinking water and waste water treatment 
plants still use chlorine gas instead of liquid bleach or ultraviolet 
light.
    Should implementation of inherently safer technology be mandatory 
for all chemical facilities? No. That has never been my position. 
Rather, when I chaired this Committee in 2002, we unanimously adopted 
legislation that would have required consideration and implementation 
of inherently safer technologies ``where practicable.''
    Senator Inhofe's bill that passed out of the Committee during the 
last Congress also would have required implementation of alternative 
approaches where ``practicable in the judgment of the owner and 
operator.''
    Likewise, Senator Lieberman's proposal last week would require 
implementation of inherently safer technology only when it would 
significantly reduce the risks of serious injuries and was practical.
    Some have suggested that inherently safer technologies merely shift 
the risk from one location to another. However, such technologies will 
be evaluated on a case by case basis and implemented only if they would 
make the community safer.
    Let me also mention two other elements that are critical for 
effective chemical security legislation.
    First, to ensure public accountability, citizens and local 
officials must be allowed to determine if a facility in their community 
is in compliance and to challenge Department of Homeland Security 
actions--or inactions--if necessary.
    Second, Congress should preserve the right of states to implement 
more stringent laws as needed to protect their citizens.
    In conclusion, legislation to address the risks posed by chemical 
facilities is long overdue.
    I look forward to this hearing and will work to ensure that 
Congress enacts a strong chemical security law.

    Senator Inhofe. Thank you, Senator Jeffords.
    Senator Bond.

  OPENING STATEMENT OF HON. CHRISTOPHER S. BOND, U.S. SENATOR 
                   FROM THE STATE OF MISSOURI

    Senator Bond. Thank you very much, Mr. Chairman, for 
holding this hearing of the Environment Committee on Inherently 
Safer Technologies.
    Attempting to change internal manufacturing processes to 
use and produce products that are less of a risk to the 
environment is a longstanding goal of environmental 
stakeholders. It is only natural that the Environment Committee 
reviews this latest reincarnation of its environmental issue. 
Proposals mandating so-called inherently safer technologies, in 
order to avoid risks to the environment, are not new. Bills 
have been around Congress, including those championed by our 
colleague from New Jersey, for a long time.
    After the tragic events of 9/11, environmental stakeholders 
saw an opportunity to dust off their old IST bills. Indeed, 
earlier versions of legislation with IST mandates consisted of 
nothing more than these old environmental bills with the 
addition of the words ``homeland security'' sprinkled here and 
there. Well, it was a bad idea then, and it is a bad idea now. 
Not only is it bad policy, but it is most likely an impossible 
policy to implement in any successful way.
    If I didn't make myself clear, I will go on and explain a 
little bit.
    [Laughter.]
    Senator Bond. Advocates throw out casual examples as if 
there are only one or two simple examples that cover 
everything. It is just like getting rid of chlorine in water 
treatment plants, they say. It is simple and no big deal.
    However, it is a big deal, if not an overwhelmingly 
impossible deal. Our modern life depends on hundreds of 
thousands of industrial processes to produce products we need 
for safety, health and prosperous lives. Medicines that save 
lives, fertilizers that help feed nations, even simple things 
such as laundry baskets and Tupperware don't just grow on 
trees. They are made with complex industrial processes, using 
chemicals that are sometimes dangerous or hazardous.
    Manufacturing processes differ not only from sector to 
sector and product to product, but from plant to plant. How do 
we imagine the Government and the legal system would know how 
to operate these industrial plants better than plant managers 
themselves? Some proposals would include a review of 
alternatives using inherently safer technologies. Can you 
imagine that a Government bureaucrat would have the expertise 
to review these operations?
    How could someone in Washington be able to review a report 
and say that product A made on line B in plant C in the middle 
American town of D should have been made a different way? Even 
if they could, how could they conduct thousands of those 
complex reviews and make thousands of those decisions across 
this massive economy? Even if they could do that, how could 
they know that the alternatives they might recommend as 
inherently safer technologies were affordable, or would not 
cause plant closures, lost jobs? Would they even care?
    Other bills impose a general duty to employ inherently 
safer technologies. Is this something we want to leave up to 
attorneys to argue over and sue over? How many countless 
billions of dollars would be spent to avoid a legal liability, 
even if the risk of danger is remote? How many vital products 
would disappear from the market over liability fears, even if 
producers are fully complying with the numerous health safety 
and security regulations already on the books?
    Yes, we must examine IST calls in the context of 
regulations that are already on the books, already generating 
reports, already informing responders and already forcing 
security changes. Operators responsible for safety are already 
taking action. Local Governments charged with response are 
taking action. Organizations representing industries, Federal 
agencies, congressional committees are all taking action. In 
addition, the Government Affairs Homeland Security has just 
rejected IST mandates as untenable.
    I am delighted, Mr. Chairman, that the committee will hear 
testimony on just how impossible an idea this is from a fellow 
Missourian. Charlie Cott was born and raised on a grain and 
livestock farm in Saline County, MO, where my grandparents grew 
up. Charlie is now with the Missouri Farmers Association, the 
regional farm cooperative, supply cooperative that represents 
45,000 farmers in Missouri and surrounding States.
    Charlie is here today representing the Agricultural 
Retailers Association. He is the face of our farmers who bring 
food to the market, food we find in our grocery stores, in our 
pantries and on our dinner plate. He has first-hand insight 
into how broadly and how deeply a fundamental and comprehensive 
mandate, such as IST, would affect all our daily lives.
    You don't have to take my word for it, and you probably 
won't. But I ask you to listen to the people who are actually 
engaged in this field and make your judgment based on what they 
have to say. I thank Mr. Cott for joining us, and I thank my 
colleagues for their indulgence.
    [The prepared statement of Senator Bond follows:]

          Statement of Hon. Christopher S. Bond, U.S. Senator 
                       from the State of Missouri

    Mr. Chairman, thank you for holding this hearing today in the 
Environment Committee on Inherently Safer Technologies. Attempting to 
change internal manufacturing processes to use and produce products 
that are less of a risk to the environment is a longstanding goal of 
environmental stakeholders. It is only natural that the Environment 
Committee review this latest reincarnation of this environmental issue.
    Proposals mandating so-called inherently safer technologies (IST) 
in order to avoid risk to the environment are not new. Bills have been 
around for many Congresses, including those championed by our colleague 
from New Jersey.
    After the tragic events of 9/11, environmental stakeholders saw an 
opportunity to dust off their IST bills. Indeed, earlier versions of 
legislation with IST mandates consisted of nothing more than those old 
environmental bills with the addition of the words ``homeland 
security'' sprinkled here and there.
    It was a bad idea then and it is a bad idea now. Not only is it bad 
policy, but it is most likely an impossible policy to implement in any 
successful way.
    Advocates throw out casual examples as if there one or two simple 
examples that cover everything. ``It's just like getting rid of 
chlorine at water treatment plants,'' they say. ``It's simple and no 
big deal.'' However, it is a big deal, if not an overwhelmingly 
impossible deal.
    Our modern life depends upon hundreds of thousands of industrial 
processes to produce the products we need for safe, healthy and 
prosperous lives. Medicines that save lives, fertilizers that help feed 
nations, even simple things such as laundry baskets and Tupperware 
don't just grow on trees. They are made with complex industrial 
processes using chemicals that are sometimes dangerous or hazardous.
    Manufacturing processes differ not only from sector to sector or 
product to product, but from plant to plant. How do we imagine that the 
government or legal system would know how to operate these industrial 
plants better than the plant managers themselves?
    Some proposals would include a review of alternatives using 
inherently safer technologies. How could we ever imagine that a 
government bureaucrat would have the expertise to review these 
operations. How could someone far away in Washington be able to review 
a report and say that product A made on line B in plant C in middle 
America town D should have been made a different way?
    And even if they could, how would they conduct thousands of those 
complex reviews and make thousands of those decisions across our 
massive economy? And even if they could do that, how would they know 
that alternatives they might recommend as inherently safer technologies 
were affordable, or would not cause plant closures or lost jobs? Would 
they even care?
    Other bills impose a general duty to employ inherently safer 
technologies. Is this something we want to leave up to attorneys to 
argue over, or sue over? How many countless billions would be forced to 
be spent to avoid such a legal liability, even if the risk of danger is 
remote? How many vital products would disappear from the market over 
liability fears? Even if producers are fully complying with the 
numerous health, safety, and security regulations already on the books?
    Yes, we must examine IST calls in the context of regulations that 
are already on the books, already generating reports, already informing 
responders, and already forcing security changes.
    Operators responsible for safety are already taking action.
    Local governments charged with response are already taking action. 
Organizations representing industries are already taking action. 
Federal agencies are already taking action. Congressional committees 
are already taking action. Indeed, the Senate Committee charged with 
Homeland Security just rejected IST mandates as untenable.
    I am delighted that the Committee will hear testimony on just how 
impossible this idea is from a fellow Missourian. Charlie Cotts was 
born and raised on a grain and livestock farm in Saline County, 
Missouri. Charlie is now with the Missouri Farmers Association,
    a regional farm and supply cooperative representing 45,000 farmers 
in Missouri and surrounding states.
    Charlie is here today representing the Agricultural Retailers 
Association. Charlie is the face of our farmers who bring food to the 
market - food we find in our grocery stores, in our pantries, and on 
our dinner plate. He has first-hand insight into how broadly and how 
deeply a fundamental and comprehensive mandate such as IST would effect 
all of our daily lives.
    I thank him for joining us here today and I thank my colleagues for 
their indulgence.

    Senator Inhofe. Thank you, Senator Bond.
    Senator Lautenberg.

  OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR 
                  FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks very much, Mr. Chairman, for 
calling this hearing to show how impossible the task would be 
to have IST in place. I really appreciate this opportunity. 
Thank you, Senator Bond.
    I have been involved with this issue for many years. I 
introduced the first chemical security bill in 1999. Since the 
terrorist attacks of 9/11/2001, I believe that it is even more 
important to improve security measures at facilities that 
manufacture or use dangerous chemicals.
    Now, my State of New Jersey is particularly vulnerable. We 
have our own IST standard, and because of the number of 
chemical manufacturing and transporting facilities, 
warehousing, et cetera, we have a great deal of concern about 
the safest way to deal with chemical safety and security. I 
think IST is a common sense approach, and I have been pleased 
to work with my colleague, Senator Obama, on the issue. We 
introduced a bill that requires IST for facilities storing 
large amounts of chemicals where practicable. The last 
qualifier is important: where practicable. I listened to our 
colleague, and listened to how the IST idea strikes, carries 
his attention. It is nice that we have a disbeliever here.
    The question is, can it work? How can we bureaucrats, and I 
am only a junior bureaucrat, because I am only here a couple of 
years now, the fact is that how can we bureaucrats describe 
something to management? I think we did it with pesticides. I 
see Senator Biden here. I think we did it with pesticides, 
right? They were using pesticides and killing darned near 
everything in sight, not only animals, but humans as well.
    We insisted, we bureaucrats insisted that the industry 
change its materials. They did it, and you know what? There is 
more wildlife in the skies, more birds have come back, people 
live healthier now, everybody is going to something called 
organic I guess organic is an IST, right, inherently safer 
technology? It works.
    When we think about how difficult it is to enforce 
compliance, just think of IRS. How many of those returns are 
not examined, but violate the law in terms of necessity to 
file, necessity to be accurate? But we don't throw our hands up 
and say, oh, it is too hard to monitor this. We just go ahead 
and we do what we have to.
    Now, even the chemical industry recognizes that IST can 
reduce risks. Again, remember the S is safety, that IST can 
reduce risks, and some facilities are voluntarily examining 
whether it will work for them. I am glad that these individual 
facilities are taking these voluntary steps. That is good 
corporate citizenship.
    That doesn't mean that we can trust the entire industry to 
take prudent safety precautions. As public servants, our most 
important duty is the protection of the public. No physical 
security system at a chemical plant is foolproof. The best way 
to guarantee the safety of workers and nearby residents is to 
use safer materials and processes wherever we can in our 
chemical facilities.
    The National Research Council conducted a study of this 
issue for the Department of Homeland Security. Their study 
concluded, ``The most desirable solution to preventing chemical 
releases is to reduce or eliminate the hazard where possible, 
not to control them.'' This is a strong recommendation for 
inherently safer technology. I think to ignore that 
recommendation is at our peril.
    Now, I look forward to hearing from today's witnesses. I 
especially want to welcome the Commissioner of New Jersey's 
Department of Environmental Protection, Lisa Jackson. She works 
for another long-time champion of strong chemical security 
measures, Governor John Corzine, whom you all know well. We 
thank you, Ms. Jackson, for traveling here today to testify on 
an issue that is of such critical importance to our State, and 
frankly, I believe to States across this country.
    I thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Lautenberg.
    Senator Voinovich.

  OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR 
                     FROM THE STATE OF OHIO

    Senator Voinovich. Thank you, Mr. Chairman, for holding 
this hearing today. The chemical industry is a critical 
component of our Nation's economic infrastructure. Securing it 
is of the utmost importance.
    I compliment your attention to this matter over the years. 
Your commitment to the issue helped to lay the groundwork for 
the legislation that passed out of the Homeland Security and 
Governmental Affairs Committee last week. I look forward to 
working with you and all the other interested people to improve 
the legislation on the Senate floor and ensure that our 
Nation's chemical sector is secure from the threat of terrorist 
attacks.
    The chemical industry contributes to our high quality of 
life, whether it is enhanced crop production, improved water 
chlorinization, effective household cleaners or advanced life-
saving medications. However, these benefits do not come without 
risk. Where there is risk, we must assess that risk and take 
the appropriate action.
    I think we also have to weigh the threat versus the cost in 
securing our homeland. I think we should acknowledge that we 
already have the Marine Transportation Safety Act that is 
regulating many of these facilities in the most vulnerable 
places.
    We have to also recognize that the industry, through 
something called responsible care, is also doing everything 
that they can to secure their facilities. There is sometimes a 
tendency on the part of Members of Congress to not recognize 
the fact that if I own a chemical facility, I am going to do 
everything I can to protect the people who work in that 
facility, I am going to do everything I can to protect the 
investment in the facility, and I do care about my neighbors in 
the area where my facility is located.
    The concept of inherently safer technology originated in an 
environmental protection and occupational safety context. 
Safety and environmental concerns are already regulated by the 
Occupational Safety and Health Administration and by the 
Environmental Protection Agency through their risk management 
program. It should be noted that while the EPA encourages 
consideration of IST it mandates neither analysis nor 
implementation of IST in its risk management program.
    I must ask if the EPA does not see fit to even mandate the 
analysis or consideration of IST, then why should the 
Department of Homeland Security?
    While the concept of IST may be appropriate in the context 
of worker safety and environmental protection, it is both 
unprecedented and ill-conceived as a security measure. The 
definition of security is broadly understood to include such 
measures as employee background, identification checks, the 
limitation and prevention of access to controls, perimeter 
protection, the installation of intrusion detector sensors and 
other measures to prevent, protect against or deter a terrorist 
incident. In short, security enhancements are primarily made 
outside the fence.
    Furthermore, there is no precedent for including IST in a 
Federal security regulatory regime. The term is inconsistent 
with security precedent set by the Bioterrorism Act, the 
Maritime Transportation Act and the Atomic Energy Act, which 
regulates our 103 nuclear facilities in this country. These 
laws focus on enhancing physical security measures, not 
mandating private sector industrial process change.
    The law most similar to the chemical facility security 
legislation that the Senate will be considering is MTSA, and 
MTSA requires security commensurate with risk, not the 
reduction or elimination of that risk. IST is largely defined 
as ``the relocation, hardening of the storage or containment 
modification processing, substitution or reduction of 
substances of concern.'' I feel strongly the Federal Government 
should not direct industry practice or procedure; rather, it 
should be left to process safety experts.
    The Homeland Security and Governmental Affairs Committee 
agrees with this position. An amendment that would have 
mandated IST for hundreds of chemical facilities was defeated 
on a bipartisan vote of 11 to 5. Additionally, I offered an 
amendment to ensure that no site security plan could be denied 
by DHS for the absence of a particular security measure. 
Therefore, no site security plan could be denied by DHS based 
solely on the absence of IST. That is in the law that passed 
out of the Homeland Security and Governmental Affairs 
Committee. That amendment was adopted by voice vote.
    Mr. Chairman, I would like to remind my colleagues that the 
U.S. chemical industry is already experiencing economic 
hardship as a result of rising natural gas costs, which I 
believe this Congress is partly responsible for because of our 
unrealistic environmental policies. According to the American 
Chemistry Council, the U.S. chemical industry went from posting 
trade surpluses in excess of $20 billion in 1995 to becoming a 
net importer of chemicals with a $9 billion deficit in 2005. I 
want to tell you something, a lot of those jobs were lost in my 
State of Ohio.
    So I am interested in hearing what the witnesses have to 
say about this. I do not believe IST belongs in this chemical 
security legislation.
    [The prepared statement of Senator Voinovich follows:]

 Statement of Hon. George V. Voinovich, U.S. Senator from the State of 
                                  Ohio

    Mr. Chairman, thank you for holding this hearing today on 
Inherently Safer Technology and chemical security. The chemical 
industry is a critical component of our Nation's economic 
infrastructure, and securing it is of the utmost importance. I 
complement your attention to this matter over the years. Your 
commitment to the issue helped to lay the groundwork for the 
legislation that passed out of the Homeland Security and Governmental 
Affairs Committee last week. I look forward to working with you and all 
of our interested colleagues to improve the legislation on the Senate 
floor, and ensure that our nation's chemical sector is secure from the 
threat of terrorist attacks.
    The chemical industry contributes to our high quality of life, 
whether it is enhanced crop production, improved water chlorination, 
effective household cleaners or advanced life-saving medications. 
However, these benefits do not come without risk. Where there is risk, 
we must assess that risk and take the appropriate action.
    The concept of ``inherently safer technology'' originated in 
environmental protection and occupational safety contexts. Safety and 
environmental concerns are already regulated by the Occupational Safety 
and Health Administration and by the Environmental Protection Agency 
through the Risk Management Program. It should be noted that while the 
EPA encourages consideration of IST, it mandates neither analyses nor 
implementation of IST in its Risk Management Program. I must ask, if 
the EPA does not see fit to even mandate the analyses or consideration 
of IST, then why should the Department of Homeland Security?
    While the concept of IST may be appropriate in the context of 
worker safety and environmental protection, is both unprecedented and 
ill-conceived as security measure. The definition of security is 
broadly understood to include such measures as employee background and 
identification checks; the limitation and prevention of access to 
controls; perimeter protection; the installation and of intrusion 
detection sensors; and other measures to prevent, protect against, or 
deter a terrorist incident. In short, security enhancements are 
primarily made outside the fence.
    Furthermore, there is no precedent for including IST in a Federal 
security regulatory regime. The term is inconsistent with security 
precedent set by the BioTerrorsim Act, the Maritime Transportation 
Security Act (MTSA), and the Atomic Energy Act. These laws focus on 
enhancing physical security measures, not mandating private sector 
industrial process change. The law most similar to the chemical 
facility security legislation that the Senate will be considering is 
MTSA, and MTSA requires security commensurate with risk -- not the 
reduction or elimination of that risk.
    IST is largely defined as ``the relocation, hardening of the 
storage or containment, modification, processing, substitution, or 
reduction of substances of concern.'' I feel strongly that the Federal 
Government should not direct industry practice or procedure; rather, 
that should be left to process safety experts.
    The Homeland Security and Governmental Affairs Committee agrees 
with this position. An amendment that would have mandated IST for 
hundreds of chemical facilities was defeated on a bipartisan 11-5 vote. 
Additionally, I offered an amendment to ensure that no site security 
plan could be denied by DHS for the absence of a particular security 
measure. Therefore, no site security plan could be denied by DHS based 
solely on the absence of IST. My amendment was adopted by the Committee 
by voice vote.
    Mr. Chairman, I would remind my colleagues that the U.S. chemical 
industry is already experiencing economic hardship as a result of 
rising natural gas costs. According to the American Chemistry Council, 
U.S. chemical industry went from posting trade surpluses in excess of 
$20 billion in 1995 to becoming a net importer of chemicals, with a $9 
billion deficit in 2005.
    With more than 100,000 American jobs displaced, the industry can 
ill afford additional regulation that could add enormous costs and 
further diminish its competitiveness while adding little additional 
security value. IST is adequately regulated by the appropriate 
entities: EPA and OSHA. Efforts to push further IST or process change 
requirements in name of security should be rejected.
    Mr. Chairman, I ask unanimous consent that this information paper 
from the ACC be included in the record.
    Thank you, Mr. Chairman.

    Senator Inhofe. Thank you, Senator Voinovich.
    Senator Obama.

 OPENING STATEMENT OF HON. BARACK OBAMA, U.S. SENATOR FROM THE 
                       STATE OF ILLINOIS

    Senator Obama. Thank you very much, Mr. Chairman. I am 
looking forward to hearing from the witnesses.
    Just to pick up on something that Senator Voinovich said, 
Illinois has one of the biggest chemical industries in the 
country. We have 900,000 people working directly in chemical 
facilities around the country, but 53,000 of them are in 
Illinois. So I have a great interest in seeing a strong and 
vibrant chemical industry.
    My hope was that we could not prejudge these issues. The 
reason that we were having a hearing, hopefully, was to learn 
something new, as opposed to simply dig in on our previous 
positions. I do wish that we could have held this sooner, 
before this committee passed what I believe is an insufficient 
wastewater security bill, and before the Senate Homeland 
Security Committee passed chemical plant security legislation 
that did not include strong IST provisions.
    I think that IST is an integral part of chemical plant 
security. I welcome a thorough debate of this issue, because I 
think that a lot of misleading arguments have been made about 
what IST is and isn't, and it is important to clear up some of 
these misconceptions.
    For instance, we have heard that IST is in the early stages 
of development, even though it has been used in the chemical 
industry itself for nearly 30 years. Saying IST is in its 
infancy is a little like saying the personal computer is in its 
infancy.
    We have heard that IST is an environmental issue--that has 
been repeated already in some of the statements--not a security 
one despite the fact that the Departments of Justice and 
Homeland Security, and even though the American Chemical 
Council itself have embraced IST as part of chemical plant 
security in the past. Most recently, a National Academy of 
Sciences study commissioned by DHS endorsed the adoption of IST 
as ``the most desirable solution to preventing chemical release 
from terrorist attack.'' Time and again, experts have agreed 
that IST is the most effective approach to eliminating 
terrorist threats to chemical facilities.
    We have heard that IST is too expensive, but that does not 
have to be the case. A recent survey of nearly 300 facilities 
that switched to safer technologies since 1999 found that 87 
percent spent less than $1 million and one half reported 
spending less than $100,000 in applying IST. Thirty-four 
percent of survey participants actually expected to save money 
or improve profitability in part because IST reduces the need 
for barriers, secondary containment, security training and 
liability concerns.
    We have heard that IST merely shifts risks, rather than 
eliminates them. I understand that some of the witnesses today 
will base their arguments on the theoretical example of a 
facility that reduces its inventory of a dangerous chemical, 
but then has to make more frequent shipments, which in turn 
places more chemicals in the transportation system.
    In fact, there are hundreds of real-world examples of 
wastewater facilities switching from chlorine gas to liquid 
bleach, or manufacturing plants using lower temperatures or 
simplified processes to reduce risks. If anything, the 
theoretical examples cited by these witnesses only highlights 
the need for DHS to play a role in the IST decision, making the 
process to ensure that individual facilities are not making 
short-sighted decisions, that merely shift risks elsewhere.
    There is one thing that we can all agree on: any chemical 
plant security legislation should be comprehensive and 
rational. It should balance the need to keep us safe with the 
need to continue producing chemical products that are essential 
to our economy. I believe that the IST approach needs to be a 
part, not the whole, but a part of rational, comprehensive 
security legislation. Without it, we are leaving a huge gap in 
our ability to manage the risks that these facilities 
represent.
    Mr. Chairman, I just think that it is important before we 
move on to emphasize the risks. There are 111 facilities in 
this country where chemical release could threaten more than 1 
million people under the worst case scenarios. There are more 
than 750 additional facilities where such a release could 
threaten more than 100,000 people. These are not speculative. 
And every security expert that you talk to will tell you that 
in fact there are enormous potential risks.
    I am glad that the chemical industry has taken some of the 
steps that it has done on its own. The question is whether or 
not we can provide some additional measures that would improve 
safety without being an onerous burden on industry. That is 
what I am going to be interested in hearing today.
    Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Obama.
    Well, it has been the custom of this committee to allow any 
Senator who wants to be heard to testify before this committee. 
We have a request from the senior Senator from Delaware, 
Senator Biden. If you would take the bench and give us your 
testimony, we would appreciate it.

STATEMENT OF HON. JOSEPH BIDEN, U.S. SENATOR FROM THE STATE OF 
                            DELAWARE

    Senator Biden. Thank you very much. Thank you, Mr. 
Chairman.
    It reminds me of the good old days in the Judiciary 
Committee, we used to debate abortion. It is nice to be at a 
committee where it is so unified.
    Maybe what I should do is direct my comments--I don't know 
which half of this outfit to direct it to. Folks, I would like 
to ask that my prepared statement be entered into the record in 
whole, if I may.
    Senator Inhofe. Without objection, so ordered.
    Senator Biden. Mr. Chairman, I just want to begin by 
pointing out that I come from what used to be called the 
chemical capital of the world, that was our logo. I am not 
representing any environmental group, I am not a subversive. 
The way sometimes we talk about this, it began as an 
environmental, this idea began with environmentalist, is a 
little bit like it came out of Mein Kampf or some subversive 
doctrine.
    The only generic point I will make at the outset here is 
that initially, the reason why EPA didn't have these types of 
rules or suggestions that we are talking about that has taken 
on the acronym we are all referencing is because the chemical 
plants in my State were safe for the workers, as long as they 
didn't blow up. It wasn't that they were going to spontaneously 
blow up, the chlorine wasn't all of a sudden going to implode, 
or that the plant and the dangerous chemical there. So there 
was no need for, I say to my friend from Ohio, for 
environmental legislation relating to a facility that, absent 
some act of God and/or some terrorist act, could cause great 
damage.
    So I would argue we are comparing apples and oranges when 
we say that, look, if you don't need this for the safety of the 
employees, why then do we need this for the safety of the 
community? They are fundamentally different questions. EPA 
looks at what is likely to occur if things are run as they are 
supposed to run, and to overstate it, it makes regulations 
related to those circumstances. It does not calculate if Osama 
bin Ladin and his boys climb across the fence in New Castle, 
Delaware and blow up a chemical plant that happens to be a 
chlorine plant.
    So there are two different issues in my point. The issue of 
inherently safer technologies, in my view, is in fact 
critically important to homeland security. I commend you all 
here on this committee for focusing on the issue. I hope that 
what I am about to say will add some content to the debate, 
because if we do this right, I think we can advance the ball to 
enhance the safety of millions of people.
    I live in an area where there are 10 million people. 
Everybody looks at Delaware as a little, tiny State. We are a 
little, tiny State. We live in the Delaware Valley. Ten million 
people. We have more oil refineries and chemical plants in our 
general area than you do in any other place, including Houston 
or--add them all up. There are 10 million people in this area. 
So we are concerned about this issue.
    I believe that we have a greater obligation to protect our 
hometowns and to protect against what has now become 
unfortunately not a reasonable but a, if not predictable, a 
probable threat. Anybody thinks that terrorists have gone out 
of business and are not going to be hanging around, and if you 
are sitting out there, a terrorist, you say, OK, where do I get 
my biggest bang for the buck--no pun intended? Where do you do 
that?
    Well, I will tell you what, I would just take a 90 ton 
chlorine gas tanker, I would put some plastique underneath it, 
go, by the way, to any of the yards, you will see there are no 
cameras, there is no police, there is not much switching, not a 
hard thing to do. I would wait until it hit a populated area. I 
asked the Naval Research Center, what would happen if one of 
these tankers blew up in a populated area? They said, 100,000 
people would die or be severely injured, 100,000 folks.
    We had a little amendment that said, to make the point, 
this is not just about inherently safer technologies. It is 
about inconvenience. I introduced an amendment that a number of 
States wanted to allow cities and States to force these very 
dangerous commodities to be able to go around cities, and it 
got voted down. Why? Because it will cost more money to take it 
around. It would cost more money. It would cost more money.
    I found that kind of amazing. If we simply require 
facilities that store and utilize large amounts of chlorine or 
other dangerous chemicals, to transition inherently safer 
technology wherever feasible, we could in fact completely or 
permanently eliminate known threats to our communities. This 
would allow us to focus our scarce resources on border security 
and other critical infrastructure.
    By the way, the Marine Maritime Act, which I voted for, I 
took last recess and I went to, I started off in Charleston and 
went down the ports of Miami, then I went to New Orleans, then 
I went to California, then I went to Seattle to talk to these 
guys. They don't think this is secure. Talk to the people who 
have in fact had to implement the Act. We talk about this Act 
like it has done something. It has done something. But my, oh, 
my, you ought to go talk to the port directors in these ports 
as I did. Don't take my word for it, check it out.
    So there is a whole lot of focus we need on greater 
resources on places which present threats which cost a lot more 
money to protect than if we in fact just were to make some of 
these changes. For example, in my little old State of Delaware, 
we had the Wilmington water pollution control facility, and it 
transitioned from gaseous chlorine to chlorine bleach. That 
decision eliminated a threat to 560,000 people, according to 
the security people. It cost $160,000 in capital investment.
    Because the facility permanently eliminated the risk, it is 
no longer required to spend, I didn't even calculate the 
number, they don't need guards, they don't need fences, and 
they don't need security around the facility now. So I don't 
know what the net cost is, but it is less than $160,000. Not 
only should we be supporting this type of decision, we should 
require it wherever it is practicable. That is the important 
word this legislation says.
    In my view, it is unacceptable that only 5 years after the 
attacks of September 11th, we haven't made a decision to reduce 
the dangers posed by these gaseous chemicals at chemical 
facilities and water treatment plants. It is not like this is 
some kind of burdensome requirement that will kill industry. It 
has been pointed out, hundreds of facilities have made this 
decision without Government intervention. These facilities seem 
to be operating just fine. In addition, every proposal that I 
have seen provides for a transition only if it is practicable 
and it would allow a facility, not the Government, to determine 
what the alternative process should be.
    As always, another overriding concern for Government and 
for industry is the cost associated with the transition. 
According to the Department of Homeland Security, there are 300 
chemical facilities that put over 50,000 citizens in danger. As 
a result, a report by the Center for American Progress, found 
87 percent of these facilities reported that it would cost no 
less than $1 million, and one half of these--as my friend from 
Illinois--I am trying to get through this quickly--from 
Illinois pointed out, $100,000 was the cost to transfer these 
technologies.
    If we were to provide $1 million, a top-end estimate, for 
every chemical facility to transfer to safer technologies, we 
could eliminate the risk for $300 million. To eliminate the 
threat posed by roughly 100 water treatment facilities that 
threaten over 100,000 individuals each, it would cost $125 
million. This doesn't even require that. Thus, an investment of 
less than half a billion dollars would eliminate the threat to 
nearly 60 million people.
    In contrast, we didn't have any problem with the $35 
billion profits this year for the oil industry, and God bless 
them, I am glad they are making profits. We didn't have a 
problem giving an energy bill a $2 billion incentive. A $2 
billion incentive. My dad used to say, and my friend Tom Carper 
knew him before he passed away, he used to say, hey, champ, if 
everything is equally important to you, nothing is important to 
you. If you don't prioritize, it doesn't matter.
    Tell me that spending $2 million to encourage the oil 
industry and gas industry is a higher priority than spending 
$125 million to take every single water treatment facility in 
America and make it--even if we paid it all, just outright, 
just outright. Wow. I don't quite get that.
    Because the transition to safer technologies will result in 
savings by reduction of guns, guards, gates and bureaucratic 
expense, it seems to me that costs would even be lower. Quite 
frankly, gentlemen, in my view, this is a good use of Federal 
resources. If industry officials will work with us, I think we 
could devise a system where we could help fund capital 
investment with facilities returning the savings that result in 
out years. In the process, we protect millions of Americans and 
reduce the strain on local law enforcement and first 
responders.
    In conclusion, Mr. Chairman, and I really do appreciate 
your giving me the time, I know at least on my committees, when 
I chaired Judiciary for 17 years and Foreign Relations, if a 
colleague says they want to testify, and you go, oh, God, why 
does he have to come and testify, we have enough to do? So I 
understand that, having been chairman longer than any one of 
you up there combined. I get it.
    But let me conclude with this. The 9/11 Commission issued a 
report on their own nickel on December 15th of last year, 2005. 
It is just an interesting little sidelight, and I will get out 
of your hair. It says, part 1, homeland security emergency 
preparedness and response, it gives a recommendation and a 
grade. It is a category. Critical infrastructure risk and 
vulnerabilities assessment. Let me just read what it says and I 
will depart.
    ``A draft national infrastructure protection plan, November 
2005, spells out a methodology and a process for critical 
infrastructure assessments.'' Continuing to quote: ``No risk 
and vulnerability assessments actually made. No national 
priorities established. No recommendations on the allocation of 
scarce resources. All key decisions at least a year away.''
    Continuing to quote: ``It's time we stopped talking about 
setting priorities and actually set some.'' Folks, take the 
worst case scenario in the cost of water treatment plants, you 
are talking $125 million. A hundred and twenty-five million 
bucks it seems to me is a higher priority here than it is for 
50 things we could name, but I know resources are scarce and 
your time is scarce and you have real experts behind me here.
    So unless you have questions for me, I will get out of your 
hair. I am happy to answer questions, or attempt to.
    Senator Inhofe. No questions. Thank you very much, Senator 
Biden.
    Senator Biden. Thank you very much.
    Senator Inhofe. We would like to ask the second panel to 
come forward. Dennis Hendershot, with the American Institute of 
Chemical Engineers, Center for Chemical Process Safety; Philip 
Crowley, Director, National Defense and Homeland Security, 
Center for American Progress; David A. Moore, President and CEO 
of AcuTech Consulting Group; Lisa Jackson, Commissioner, New 
Jersey Department of Environmental Protection; Charlie Cott, 
Vice President of Plant Foods and Transportation, Missouri 
Farmers Association.
    Also I would like to say at this time, we would like to 
note that some groups, including the Synthetic Organic Chemical 
Manufacturers Association and the National Association of 
Chemical Distributors were not invited to speak, but have 
submitted comments on our topic. Without objection, we will 
include their testimony in the record.
    [The referenced testimony can be found on pages 97-109 and 
84-94.]
    Senator Inhofe. We will start over here, Mr. Hendershot, 
with you and work across. We would like to encourage you not to 
exceed 5 minutes in your opening statement. Your entire 
statement will be made a part of the record.
    Mr. Hendershot.

STATEMENT OF DENNIS C. HENDERSHOT, STAFF CONSULTANT, CENTER FOR 
    CHEMICAL PROCESS SAFETY, AMERICAN INSTITUTE OF CHEMICAL 
                           ENGINEERS

    Mr. Hendershot. Thank you, Chairman Inhofe, Ranking Member 
Jeffords and members of the Environment and Public Works 
Committee. Thank you for the opportunity to discuss this 
important topic.
    My name is Dennis Hendershot, and I represent the Center 
for Chemical Process Safety, which was formed in 1985 by the 
American Institute of Chemical Engineers in response to the 
toxic gas release tragedy in Bhopal, India. CCPS advances 
chemical process safety through research, collaboration, 
education and promotion of process safety as a key industry 
value.
    I was a member of the committee which wrote the 1996 book, 
``Inherently Safer Chemical Processes: A Life Cycle Approach,'' 
and I wrote major sections of that book. Safety and security 
are good business. Incidents interfere with efficient 
manufacturing and good performance reduces risk and actual 
losses, increases productivity and improves community image for 
the company.
    Inherently safer design is one tool for safety and 
security. It is a philosophy for the design and operation of 
any technology, including chemical processing. As a design 
philosophy, it cannot be effectively mandated by regulation. 
Inherently safer design continues to evolve and specific tools 
and techniques are in early stages of development. CCPS, which 
wrote the book on inherently safer design, believes that there 
have been major advances in the area since 1996 and we are 
working currently on an updated edition. This will certainly 
not be the final version.
    But inherently safer design is only one of many tools for 
chemical process safety and security. The objectives of process 
safety and security vulnerability management are safety and 
security, not necessarily inherent safety, and inherent 
security. It is possible to have a safe and secure facility 
with inherent hazards. In fact, this is essential for a 
facility where there are no technologically feasible 
alternatives.
    Also, the economic and societal benefits of the technology 
may be sufficient to justify safety and security management of 
a technology with inherent hazards. Air travel is neither 
inherently safe nor inherently secure, and cannot be made so. 
The benefits justify extensive safety and security activities 
to manage the well-known hazards. These activities are highly 
effective and flying is the safest way to travel, despite the 
inherent hazards.
    Similarly, chemical hazards can be managed in a highly 
effective manner. Inherently safer processes only partially 
address security issues and will not reduce the need for 
traditional security measures. A chemical plant must consider 
all security issues: toxic material releases, fires and 
explosions, theft and diversion of material, contamination, 
damage to the plant. It is highly unlikely that any technology 
can eliminate all hazards and a plant will need traditional 
security measures for any remaining hazards.
    The chemical industry is a complex, interconnected ecology, 
really. There are dependencies throughout the system, and any 
change will have cascading effects. It is possible that a 
change in technology that appears to be inherently safer 
locally will increase hazards somewhere else. Such changes need 
to be evaluated by people who understand the system to 
anticipate all of the implications.
    In many cases, it may not be clear which technology option 
is inherently safer, and there may be disagreements. Chemical 
processes have multiple hazards. Different technologies will 
have different inherent safety characteristics with respect to 
each of those multiple hazards. For example, CFC refrigerants 
were thought to be inherently safer when first developed, and 
in fact they are, with regard to fire and acute toxicity 
hazards. But later information revealed environmental impacts 
which have resulted in the phase-out of many of these 
materials.
    Inherently safer designs cannot be invented by legislation. 
There are thousands of chemical technologies, and these can be 
operated safely and security, using an appropriate blend of 
inherent engineered and management strategies. Is it an 
appropriate use of our national resources to replace these 
technologies with inherently safer technologies if they in fact 
exist, if the risks of the existing technology can be managed? 
Resources devoted to replacement of existing technology, 
including technical talent and creativity, as well as financial 
resources, will be diverted from creation of new products and 
new technology. Society will lose the benefits of those new 
technologies, which in some cases may render existing 
technology obsolete.
    In summary, inherently safer processes are one tool for 
safety and security. They are not the only tool, and we must 
recognize that other approaches can be highly effective. 
Significant efforts on traditional security measures will still 
be required.
    The chemical industry is complex, and includes thousands of 
technologies. Most are unique, and changes will take 
significant time and resources. We believe that a requirement 
for inherently safer technology is not a cost-effective 
component of security legislation. Future invention and 
implementation of inherently safer technologies to address both 
safety and security concerns is best promoted by enhancing 
understanding of the concepts in the industry. Inherently safer 
design should be a way of thinking, not a one time activity to 
comply with a regulation, done once and then forgotten.
    Thank you for the opportunity.
    Senator Inhofe. Thank you, Mr. Hendershot.
    Mr. Crowley.

 STATEMENT OF PHILIP J. CROWLEY, SENIOR FELLOW AND DIRECTOR OF 
  NATIONAL DEFENSE AND HOMELAND SECURITY, CENTER FOR AMERICAN 
                            PROGRESS

    Mr. Crowley. Mr. Chairman, thank you very much. I am P.J. 
Crowley, I direct the Homeland Security Program at the Center 
for American Progress. We are grateful for all the endorsements 
of our recent report here in your opening comments.
    I should salute Paul Orum, who was the lead author of the 
report and is here in attendance today as well.
    In our national chemical facility survey, the data 
demonstrate that inherently safer practices can reduce 
terrorism risks to millions of Americans. It also reveals that 
change is not occurring fast enough and that an appropriate 
role for Government in this area is to try to accelerate that 
pace of change before we are attacked again.
    I view this issue from a security standpoint based on my 
experience over three decades as an Air Force officer, a member 
of the staff of the National Security Council. I was working 
for the insurance industry on September 11th, four blocks from 
the World Trade Center. So I understand how terrorism risk 
affects the private sector.
    Almost 5 years after 9/11, the global jihadi movement is 
evolving. The Bush Administration's rhetoric, that we are 
fighting terrorists in Baghdad so we do not have to confront 
them here, is at odds with the reality of successful attacks in 
Madrid, London, and the plot recently discovered in Canada. The 
next attack, and we should be clear that there will be other 
attacks, is likely to involve self-starters, people inspired by 
Al Qaeda, but acting alone. Because as many of you have said, 
we cannot protect everything, our priority must be reducing the 
vulnerability of catastrophic terrorism.
    This is not an arbitrary judgment, but is specific to the 
threat we face: that terrorists will attack where they can kill 
as many innocent civilians as possible and have the most 
significant economic and political impact on our country. As a 
result, we must take measures to protect our critical 
infrastructure and chemical facilities must be made more 
secure.
    A risk-based chemical security strategy should include a 
number of items: better physical security and mitigation, but 
it must also emphasize risk elimination. The Secretary of 
Homeland Security is wrong to suggest, as he did in March, that 
inherently safer technology has little to do with security. 
Where more secure technologies are readily available, we have 
an obligation to remove these facilities and these communities 
from the terrorism target list.
    In our report, we surveyed 1,800 facilities, de-registered 
from Risk Management Planning Program. Among our key findings, 
and Mr. Chairman, as you mentioned, 284 facilities have 
switched to less hazardous practices, reducing the terrorism 
threat to 38 million people. However, only 10 percent of those 
facilities represent the highest risk facilities in our 
Country.
    Senator Obama mentioned that our report shows that this is 
cost-effective. In a range of areas, particularly drinking 
water and wastewater treatment, alternatives involve common 
technologies, not new innovations. There is a fairness issue. 
While many cities across the country, Ohio and other places, 
have eliminated threats to their people, they remain at risk, 
for example, because hazardous materials are still transported 
through those cities to other locations that have not taken 
this initiative.
    I see a strategic double standard here. For example, the 
military, with support from Congress, is constantly exploring 
how to invest in new technologies that make us stronger around 
the world. Why would we not take the same approach to employ 
new technologies to make us more secure here at home?
    We need a comprehensive national approach, not a series of 
disconnected local or regional actions. In my view, what needs 
to be done, the Department of Homeland Security should be 
granted authority to regulate chemical security. DHS should 
promulgate strong national standards regarding the 
manufacturer, use and in particular, the transportation of 
hazardous materials around the country.
    DHS, in conjunction with EPA, should establish a center of 
excellence, they have done this in a number of priority areas, 
and promote the development and broad adoption of inherently 
safer technologies where practicable. Chemical facilities 
should be required to do comprehensive annual security risk 
assessments, which should include an evaluation of safer 
alternatives. These findings should be reported to DHS, the 
EPA, and in my view, to shareholders of publicly traded 
companies.
    Finally, the Government should create incentives to 
encourage change, such as targeted grants, loans, and tax 
credits. To Senator Voinovich's point, I see that there should 
be caps on liability for facilities that adopt safer approaches 
if a terrorist attack does occur.
    Our national security strategy must place greater emphasis 
on protecting the homeland. Since we cannot expect our security 
forces to intercept every attack, we must narrow the potential 
for terrorists to successfully exploit our critical 
infrastructure. Business as usual, in my view, is no longer an 
option.
    Mr. Chairman, thank you very much.
    Senator Inhofe. Thank you, Mr. Crowley.
    Mr. Moore.

   STATEMENT OF DAVID A. MOORE, PE, CSP, PRESIDENT AND CEO, 
           ACUTECH CONSULTING GROUP, CHEMETICA, INC.

    Mr. Moore. Good morning, Mr. Chairman and Senators, ladies 
and gentlemen. My name is David Moore. I am the president of a 
consulting group specializing in chemical process security and 
safety called the AcuTech Consulting Group. We are based here 
in Alexandria, VA.
    I come to you with a practical background of over 25 years 
working in industry, first in Mobil Corporation and then as a 
private consultant, assisting companies in managing risk, and 
in particular, risks that we have identified could be solved or 
not solved through inherently safer technology.
    In addition, I was selected by the American Institute of 
Chemical Engineers to prepare the chemical industry's leading 
guidelines on how to conduct a vulnerability assessment, which 
mentioned IST but also mentioned other options for reducing 
risk. Lately, I have been hired by the American Institute of 
Chemical Engineers, as well, for the IST book project update 
that Mr. Hendershot mentioned. So I am deeply involved in 
inherently safer studies, having conducted them in California, 
where there is a regulation in Contra Costa County for safety 
purposes, as well as recently the prescriptive order in the 
State of New Jersey for homeland security there. I am also 
deeply committed to homeland security and safety and public 
protection.
    As a process safety professional, I have seen and witnessed 
many examples of inherent safety being applied and analyzed and 
studied for years. In fact, inherent safety is a philosophy 
which is ingrained in chemical security and safety 
professionals in everything they do. So in other words, there 
has already been a great deal of inherent safety considerations 
in the infrastructure that is presently built.
    The problem seems to be an over-emphasis, in my mind, on 
the expectation of the value of inherent safety for regulation. 
There are several problems that I think regulation has caused 
in the States and examples that I have worked with, as well as 
anticipating a national regulatory framework involving inherent 
safety for the chemical sector. The first is that it is a vague 
concept that is not a singular technology, as it applies, nor 
is there a single best practice that solves all problems. In 
fact, there is a great deal of judgment that is required. That 
means that it can be rather subjective. And subjectively 
evaluated, which ultimately would be the challenge that any 
regulators would have to face as to judge how safe or how 
secure a process is, and the fairness to that, particularly at 
a societal risk level.
    If inherent safety is forced onto industry as a mandate, I 
am expecting a great deal of questions and problems on the 
interpretation of it, technical judgments that would have to be 
made about various specific situations, the fairness of it to 
everyone involved, including society, and governmental 
liabilities that may develop, should Government interfere and 
force particular inherent safety technologies, at least in 
their mind.
    So obviously an obstacle to clear-cut regulation is that we 
don't have, even as an industry, today in a voluntary sense, a 
very clear picture of inherent safety. Although it seems 
obvious, actually the book that Mr. Hendershot described has 
various strategies for inherent safety. The regulations that we 
have seen introduce more than just substitution of a 
technology. They look at minimization, substitution, 
simplification of processes and so forth.
    If the regulation in future was to be performance based, 
you could only imagine that clear metrics would have to be 
available in order for this to be clearly evaluated and for 
decisions to be made. Value is a key problem. What is 
inherently safer to you, to the people right near the plant, is 
not necessarily what is inherently safer to the community, or 
to the community that is producing larger capacities of 
products miles away. Perhaps it could lead to redistribution of 
risks as it could with transportation, for example.
    In fact, inherently safer is not even necessarily 
inherently more secure. I could imagine a great deal of effort 
invested in inherent safety in the interest of eliminating a 
technology, while the plant is not necessarily as secure as it 
may be. So my suggestion is to leave this to a voluntary 
process, and to encourage the voluntary understanding of 
inherent safety and make inherent safety far more clear for the 
future for the benefit of safety and security.
    Thank you.
    Senator Inhofe. Thank you, Mr. Moore.
    Ms. Jackson.

    STATEMENT OF LISA P. JACKSON, COMMISSIONER, NEW JERSEY 
             DEPARTMENT OF ENVIRONMENTAL PROTECTION

    Ms. Jackson. Thank you, Mr. Chairman. Good morning to you 
and members of the committee.
    I am Lisa Jackson, I currently serve as the Commissioner 
for Environmental Protection in the State of New Jersey. A 
member of my staff is here, our inherently safer technology 
expert, Mr. Paul Komosinski. As we said on the train down this 
morning, I am a chemical engineer by training, as is he, I am 
an environmentalist by practice in my everyday work. So I come 
here today on behalf of Governor Corzine and the people of the 
State of New Jersey to tell this committee how important this 
issue is for us, the issue of security, especially, our 
chemical standards and our inherently safer technology 
standards, which we have now in place and which we are 
implementing are vitally important to Governor Corzine, vitally 
important to the people of New Jersey.
    I would also like to say that our director of homeland 
security in New Jersey, Richard Canas, supports as well the 
idea of inherently safer technology as a vital part of homeland 
security for our State.
    You mentioned, Mr. Chairman, that it is the implementation 
of inherently safer technology that is of concern. I heard it 
in most of the speakers this morning, and it is understandable 
and right that implementation would be a concern. So I thought 
I would speak just a few minutes this morning about what is 
happening in the State of New Jersey.
    Our inherently safer technology program is a part of a 
proscriptive order that was issued to the facilities in our 
State that handle extraordinarily hazardous substances. So we 
have faith in the idea of inherently safer technology for new 
facilities as part of our Toxic Catastrophe Prevention Act. It 
is legislated for them in regulation as well.
    But via an order, an executive order, essentially, from a 
domestic security task force for other facilities in our State, 
those facilities were required to do several things, one of 
which is a security vulnerability assessment. But that 
vulnerability assessment came along with a requirement to 
evaluate. I want to stress that it is an evaluation of 
inherently safer technology that we are requiring from certain 
of the facilities in our State, 157 facilities to be exact.
    Those evaluations were scheduled to be done by March 21st 
of this year, pursuant to an order that was issued in November 
of 2005. We are now in the process, as regulators, as public 
officials, as public servants, of evaluating compliance with 
those orders. We expect that we will see all facilities and 
evaluate them by July and have already seen 100.
    Compliance right now is excellent. And that includes the 
inherently safer technology part of the standard. I do agree 
with what I have heard this morning from some people that the 
chemical industry, the regulated industry as I see it from my 
perspective, from my chair, understands the importance of these 
standards and in fact has already, in our visits, embraced 
them, have for years. We are not mandating something, but we 
are putting the Government's stamp of approval and more 
important, urgency at this time, on ensuring that all 
facilities that handle extraordinarily hazardous substances 
meet the requirement to ask and evaluate inherently safer 
technology, to ask the right questions.
    In our business, it is the asking of the questions right 
now that are so important. There are experts in the field and 
in Government who can help ask those questions. As Mr. Moore 
said, he certainly has been involved, not only in my State, but 
elsewhere in the country in helping responsible companies to 
meet their mandates or their voluntary choices, their choice to 
implement inherently safer technology at this point.
    We go from here to looking at what we will do if and when 
we find companies who don't choose to meet the mandates of our 
proscriptive order. As I said, that includes more than 
inherently safer technology. To date, that has not been the 
issue of greatest concern for us.
    I would like to sum up by saying that we see inherently 
safer technology as common sense, easy to implement, something 
that so far is a part of a regulatory and legislative program 
that makes perfect sense from a security and an environmental 
perspective. We would request that this committee maintain our 
ability to have more restrictive standards than those at the 
Federal level and would strenuously oppose any preemption in 
the area of homeland security.
    Thank you.
    Senator Inhofe. Thank you, Ms. Jackson.
    Mr. Cott.

  STATEMENT OF CHARLIE COTT, VICE PRESIDENT, PLANT FOODS AND 
                    TRANSPORTATION, MFA INC.

    Mr. Cott. Thank you, Mr. Chairman, and members of this 
committee. Thank you for inviting me to testify today on behalf 
of the Agricultural Retailers Association, the ARA, concerning 
the issue of inherently safer technology and chemical site 
security.
    I am Charlie Cott, vice president of Plant Foods and 
Transportation for MFA Incorporated, a regional farm supply 
cooperative headquartered and operating out of Columbia, MO. 
MFA was established in 1914 and has retail facilities in 
Missouri, Iowa, Kansas, Oklahoma and Arkansas. The goods and 
service provided by retail dealers include seed, crop 
protection chemicals, fertilizer, crop scouting, soil testing, 
custom application of pesticides and fertilizers, and 
development of comprehensive nutrient management plans and 
state-of-the-art IPM programs.
    ARA represents a significant majority of America's 
agricultural retailers and distributors in Washington, DC.
    From some views being expressed in Congress, the general 
public might think that products that have been designated as 
hazardous material, hazmat, have very little regulations 
governing their safe use, storage and handling. However, that 
could not be further from the truth. Even before the terrorist 
attacks on September 11, 2001, agriculture retailers have been 
one of the most heavily regulated industry segments in the 
country. We are also taking steps to improve onsite security 
and close any existing security gaps.
    There are countless Federal, State and local laws and 
regulations currently related to the safe handling, 
transportation and storage of agricultural crop inputs. For 
example, many ag retail facilities that handle and store a 
threshold amount of listed substances, such as anhydrous 
ammonia, are required to comply with the EPA's risk management 
program, RMPs. Because of the existing regulations that are 
working, ARA does not believe the Federal Government should be 
getting into the business of mandating inherently safer 
technology or alternative approaches for chemical processing, 
which is extremely complex and which differs from company to 
company.
    We do strongly oppose efforts by uninformed anti-chemical 
activist groups that are attempting to tie the new IST mandates 
to chemical facility security legislation. We agree with the 
views expressed by DHS Secretary Chertoff and Senate Homeland 
Security Committee chairperson Susan Collins that DHS should 
stay focused on security and not move into broader 
environmental issues.
    We are pleased that the Homeland Security Committee last 
week soundly defeated an amendment to the Chemical Facility 
Anti-Terrorism Act, S. 2145, designated to impose an inherently 
safer technology mandate on the industry, which would create 
new liabilities and financial burdens on many ARA members. It 
would be extremely difficult for a retailer or farmer to go 
through a costly analysis and demonstrate to DHS why certain 
crop input products should or should not be used. We believe 
that the Government agencies, such as the EPA, has already made 
determinations on product safety when they approve pesticide 
registrations.
    The EPA already requires extensive product testing on 
agricultural pesticides and MFA, like most retailers, also 
conduct our own field trials to ensure pest management 
efficiency. An IST mandate imposed on U.S. agriculture could 
jeopardize the availability of lower cost sources of plant 
nutrient products or certain agricultural pesticides used by 
farmers and ranchers.
    If MFA was forced to recommend less effective pest 
management products or plant nutrient products to our farmer 
customers, the net result would be lower yields, less quality, 
less farm revenue and potentially market shifts to foreign 
countries. Our Nation is making a strong effort to become more 
energy independent and less dependent on foreign sources of 
energy. ARA is a member of the 25 by 25 Ag Energy Working 
Group, whose goal is for farms, ranches, forests and other 
working lands to provide 25 percent of the United States' 
energy needs from renewable resources by 2025.
    Corn is a major component in the manufacture of ethanol, a 
clean-burning, renewable, domestically produced fuel, and is 
Missouri's second largest crop in production, producing nearly 
300 million bushels of corn annually. An IST mandate could 
force the use of less efficient fertilizer for corn crops, 
which in turn would directly impact crop yields. One bushel of 
corn yields about 2.8 gallons of ethanol. A reduction of one 
bushel per acre in corn production would reduce Missouri net 
farm income by $5 million, as well as less corn available to 
produce ethanol, which in turn would hinder the Nation's effort 
to become more energy independent.
    America's agricultural industry is already faced with 
numerous regulations which add to the daily cost of doing 
business. We are also faced with high fuel, fertilizer and 
transportation costs. Ninety-six percent of the world's 
consumers reside outside the United States. With the current 
state of domestic and international agricultural markets, now 
is not the time for Congress to place additional burdens and 
costs on farmers and ranchers by limiting their product 
choices, increasing their input costs, lowering their crop 
yields and opening them up to frivolous lawsuits.
    An IST mandate imposed on chemical facilities in the name 
of security could drive many in agriculture out of business and 
increase our dependence on foreign sources of food and fiber, 
similar to what we now face with foreign oil.
    Thank you for your consideration today.
    Senator Inhofe. Thank you very much, Mr. Cott.
    We are going to be having a series of votes coming up, it 
would be the desire of the Chair to take our questioning right 
up to the end of the first vote and that would have to conclude 
the meeting, because we will have a series of votes. So we will 
try to keep, and I will ask my colleagues to try to keep our 
times to the 5 minutes that we have allotted for questions.
    I have to observe that, as I was listening to the testimony 
here, that I see similarities between this and what the 
President has been trying to do with Clear Skies. The President 
had the most ambitious reduction in pollutants, 70 percent 
reduction in the period of time, no Democrat or Republican 
administration before has done this. That is in pollutants, 
SOx, NOx and mercury. Yet it has been 
held hostage, because you won't include CO2, which 
is not a pollutant.
    I see the same thing happening here. We are losing 
opportunities to have good security measures and chemical 
security in saying, well, we can't do it unless we include IST. 
So this is something that I see that bothers me a little bit.
    Let me ask you, Mr. Hendershot, to clarify something. 
Because I have a feeling it is going to be said again, and I 
have heard it many times, that you were an integral part of the 
committee that authored the National Research Council report. 
Many people use this report to justify a Federal policy 
mandating chemical facilities, that they use IST.
    I would just ask you to answer the question, did the 
National Research Council recommend that IST should be mandated 
by the Federal Government?
    Mr. Hendershot. No. The report and the committee's charter 
was to provide DHS with guidance in making research development 
and technology assessments.
    Senator Inhofe. It was my understanding also, and I think 
we are going to hear over and over again a misinterpretation of 
that National Research Council report.
    Now, in your testimony you state that specific tools and 
techniques for application of inherently safer design are in 
the early stages of development. I have here a paper from Texas 
A&M, which I at this point would enter into the record without 
objection, that calls IST subjective and states, and I am 
quoting from it now, ``a systematic methodology to measure 
inherent safety does not exist.'' Let me repeat that, I am 
quoting now: ``a systematic methodology to measure inherent 
safety does not exist.''
    [The referenced report can be found on pages 77-83 .]
    Senator Inhofe. I would say, don't you think it would be 
kind of rash and premature to impose some kind of a one size 
fits all definition if we don't have the tools we need?
    Mr. Hendershot. Yes, I believe it would be premature. There 
is no method for measuring the inherent safety of the process. 
Actually, I believe the one size fits all will never really be 
appropriate. Facility operators must be able to consider local 
factors in making these choices.
    Senator Inhofe. Another problem that I have is, any time 
that we mandate something or suggests something and we have not 
a well defined definition, this bothers me, because it can be 
interpreted by anyone to mean any other thing. There has been a 
lot of discussion about the ``mandatory'' consideration of IST, 
saying that, well, we are just going to mandate that you 
consider IST. Now, if you decide not to do it, then that is 
fine.
    But I would suggest to you, Mr. Moore, in your testimony, 
you talked about the problems of a value judgment when the 
regulator and the facility differ over what is safe and 
practicable. Would this not be a problem, then, for the 
consideration approach?
    Mr. Moore. Yes. First, as I mentioned in my testimony, 
there is no particular metric, as was just confirmed by Mr. 
Hendershot, and Texas A&M, I am familiar with that study and 
agree to that. In addition, since we are unclear on exactly 
what is inherent safety, it further confuses the issue. So 
simply considering it means that we are working in a fuzzy set.
    Senator Inhofe. That bothers me. Ms. Jackson, what do you 
think about that, about a lack of definition? Or do you not see 
it that way?
    Ms. Jackson. I think, as I stated, that there is a need to 
evaluate. Certainly there needs to be a test. The test that we 
use in our State is a practicability test. We heard a lot about 
that this morning. Practicality is also in our regulations and 
our legislation. So we have an ability to look at costs. Those 
evaluations, I think, encourage and inspire a lot of technology 
transfer, which is vital to any industrial operation continuing 
to grow and work well.
    So I think the role of many of our regulators is to 
encourage people to do the evaluation and then to share the 
information they have.
    Senator Inhofe. Mr. Cott, from your perspective, since you 
would be perhaps one that would have to be required to comply 
with something, do you consider that to be ambiguous? Are you 
concerned?
    Mr. Cott. Yes, sir. The ambiguity of a broad, sweeping 
document that is mandated like that would be difficult for us 
to deal with from a retailer's standpoint. The challenge we see 
is, in our business it is not so much the chemical process, but 
the result of using certain products in a fashion that is 
environmentally and economically sound for the customer.
    Senator Inhofe. Yes. I thank you.
    Senator Jeffords.
    Senator Jeffords. Mr. Chairman, I ask that the report by 
the Center for American Progress and testimony submitted by the 
General Accountability Office be entered into the record.
    Senator Inhofe. Without objection.
    [The referenced report and testimony can be found on pages 
151-192 and 112-135.]
    Senator Jeffords. Thank you, Mr. Chair.
    Ms. Jackson, we heard testimony today that inherently safer 
alternatives are just an engineering concept that cannot be 
applied in the regulatory context. Yet I understand that 45 
facilities in New Jersey recently completed inherently safer 
technology analyses. Based on your Agency's initial review, is 
it feasible to require chemical facilities to consider safer 
alternatives?
    Ms. Jackson. Thank you, Senator. Absolutely, it is, 
Senator. It is being done. The result of our evaluation is, it 
is being done, it had been done in the past. The costs are not 
astronomical. We have not had people coming forward and saying 
that they could not meet the requirement to do these 
evaluations. In fact, they have already done them when we check 
on them. These are facilities that are quite well regulated in 
many other areas, so they know that they handle extremely 
hazardous substances. They know they operate in the most 
densely populated State in the country and I think they take 
that responsibility seriously, as do we.
    Senator Jeffords. Mr. Crowley, some of the panelists have 
described inherently safer technologies as a concept rather 
than a practical tool. Yet the report issued by your group 
highlights hundreds of examples of facilities that have already 
implemented inherently safer technologies. Could you please 
describe some of the inherently safer alternatives that have 
already been implemented, making millions of Americans safer?
    Mr. Crowley. Thank you, Senator. Three quick points, that 
in many cases, it is not significantly changing an existing 
process, it is changing the form of a chemical used within that 
process. Drinking water, wastewater treatment plants are a 
great example where in the majority of facilities highlighted 
in our report show that just by switching from chlorine gas, 
which if released, as Senator Biden said, has the ability to 
harm or kill 100,000 people in a relatively short period of 
time, switching to liquid bleach or to ultraviolet radiation in 
essence removes a terrorism threat.
    I think also you can look at gaseous ammonia, switching to 
a liquid form, and sulfur dioxide as three examples of where 
you are not fundamentally changing a process, you are changing 
the form within a process.
    Senator Jeffords. Mr. Cott, the Oklahoma City bombing and 
the recent arrests in Canada have reminded us about the 
potential impact of fertilizer as a weapon in the hands of 
terrorists. Does the Agricultural Retailers Association agree 
that fertilizer retailers that store thousands of pounds of 
potentially explosive ammonia nitrate are an attractive target 
for terrorists?
    Mr. Cott. Well, I don't know if they are an attractive 
target. We are regulated with the product at this point to the 
point where we have to account for every pound that gets 
delivered and every pound that gets sold, or in most cases, we 
are already doing that. I don't think that I would consider the 
retail system for agriculture to be a particular target in 
that.
    But there is a very high level of awareness, and we are, 
like I indicated, already documenting most of the transactions 
moving product in and out of any of our retail facilities.
    Senator Jeffords. Mr. Moore, nearly 5 years after the 
September 11th attacks, almost 3,000 drinking water and 
wastewater treatment plants still use chlorine gas instead of 
liquid bleach or ultraviolet light. Why do you believe that 
voluntary measures are sufficient to address the risks posed by 
these facilities?
    Mr. Moore. Because they have other options, Senator, 
besides IST, is my answer without knowing all the specifics. 
Each site has to be evaluated individually, and I would say 
that they probably did address this. They are familiar no doubt 
with inherent safety and to the extent that it was feasible to 
them, perhaps they did entertain that option.
    Senator Jeffords. Thank you, Mr. Chairman.
    Senator Inhofe. Thank you, Senator Jeffords.
    Senator Voinovich.
    Senator Voinovich. Ms. Jackson, I am really interested in 
what you are doing in New Jersey. When did your law go into 
effect?
    Ms. Jackson. Our proscriptive order went into effect in 
November of last year. Our TCPA law is, the program goes back 
to in response to Bhopal. So I don't have the year, but I think 
it was the late 1980's.
    Senator Voinovich. The order went out in November, and 
according to what I have here, the 45 facilities that have been 
required under the Act to conduct a review of the practicality 
and potential for adopting IST. From what you said to me, or 
what you said, it seems to me that these people are aware of 
the risks that they pose to the communities, and have tried to 
substitute chemicals. The reason I am asking the question is, 
they are also regulated under the EPA, and they are also 
regulated under OSHA. The OSHA regulations are made to protect 
their employees and the EPA in terms of their missions.
    I guess the point is, how many of these facilities do you 
think you are going to have to go in and mandate them to change 
their processes or the materials that they use in the 
manufacture of whatever it is they are manufacturing?
    Ms. Jackson. Thank you, Senator. It is certainly my hope 
that it will be none of them. The information that we collect 
is confidential for the facility, because it includes process 
information. In fact, we leave it all at the facility when we 
visit, so that they don't have concerns about important 
information of theirs being given outside of the Government.
    To date, I am happy to say that we haven't found any 
significant instances of compliance. The Domestic Security 
Preparedness Act in New Jersey gives the task force and the 
Governor sweeping powers to take action. That would have to be 
based on a belief that the sum total of all the requirements in 
that order, of which inherently safer technology is one very 
important piece, led to a situation where the safety of our 
citizens was at risk. I know Governor Corzine would act then, 
immediately.
    Senator Voinovich. So in other words, are some of the 
facilities, are the 45 covered by MTSA, too?
    Ms. Jackson. I am sorry, covered by what, Senator?
    Senator Voinovich. By the Maritime Transportation Safety 
Act?
    Ms. Jackson. I would assume they are, but I don't know the 
answer off the top of my head.
    Senator Voinovich. Mr. Chairman, one of the things that I 
don't know when we are going to get this law passed, but from 
what I can tell here, we may not do anything this year. I think 
the New Jersey situation is one we should really look at, to 
see just how this is actually working out. So often, we 
legislate here and have no idea what it really means.
    So I would be real interested in keeping track of how this 
is going in your State.
    Second of all, and this is a subject that came up in the 
other committee that I am a member of, an issue of preemption. 
There is a lot of feeling that States should not be preempted. 
We have talked about alternatives, either one, silence, that is 
that we make no mention at all of preemption, and then let the 
Department of Homeland Security work it out with the respective 
jurisdictions, like for instance, the State of New Jersey. Or 
the alternative may be just grandfathering in States like yours 
that have things in place already.
    Do you have any opinion on that?
    Ms. Jackson. Well, certainly I would like to see Federal 
legislation that mirrors what we do in New Jersey. But in the 
absence of that, I think it is very important, as you said, 
Senator, to allow States to learn as they go. I think this is 
very much an evolving field. As old as it is, people's 
knowledge and fear of it I think will be addressed as we move 
forward and demonstrate that these things can be done.
    I also want to mention that our work was done cooperatively 
in our State with the New Jersey Chemistry Council. The best 
practices standards that we developed for the chemical industry 
and the oil industry were based on a cooperative process. They 
are now mandatory, but there was cooperation in the actual 
technical development of those standards. While I know we will 
have to go further, I think that is very important for us to 
remember as well.
    So I would like to see us keep the flexibility for States 
to move beyond it and not be limited if they weren't 
grandfathered before.
    Senator Voinovich. Thank you. I would like to ask this of 
all our witnesses. To your knowledge, has IST ever been defined 
as a security measure in any Federal law? In the EPA, when they 
did their risk management plan, they concluded that inherently 
safer processes is a developing concept and is not ready for 
general application. IST frequently displaces risk rather than 
reducing it. Even if a few examples of workable alternative 
approaches do exist, there is not a rational basis for imposing 
an additional industry-wide regulatory burden. Last but not 
least, the concept is normally considered when designing new 
processes, a time when changes can be implemented cost 
effectively.
    So I guess the question is, has it been defined in any 
Federal law as a safety measure, IST?
    Mr. Hendershot. Not to my knowledge.
    Mr. Crowley. I don't know.
    Mr. Moore. No, sir.
    Ms. Jackson. I don't know, sir.
    Mr. Cott. No, sir.
    Senator Voinovich. Thank you. Has my time expired, Mr. 
Chairman?
    Senator Inhofe. Yes, your time has expired.
    I think probably a better way to ask the question is, has 
it been defined at all.
    Senator Lautenberg.
    Senator Lautenberg. Thank you very much, Mr. Chairman.
    Ms. Jackson, welcome again. I did mention that you would be 
here, and I was pleased that you are here to testify. I think 
our State of New Jersey kind of exemplifies what ought to be 
done. But we have done it on our own. We have established 
standards. Frankly, I don't think that jumping into a national 
standard would be a wise idea, unless it absolutely, well, 
grandfathering was suggested, I am an expert at that, anyway.
    [Laughter.]
    Senator Lautenberg. But the fact is, also, New Jersey was 
the first State to sign the Bill of Rights. So we are up there, 
we have longevity, man, have we got longevity. So 
grandfathering would be a step, a positive step. Frankly, I 
think that it ought to be the State's right. If its standards 
are going to be stricter than a Federal law, then I think we 
should be allowed to do it.
    Very frankly, I am confused at times because people who are 
devout advocates of States rights here suddenly have a 
different view. So I just want to be sure that our situation is 
understood.
    Have any of New Jersey's chemical security requirements 
caused any facilities to shut down or move out of State that 
you are aware of?
    Ms. Jackson. No, not at all, Senator.
    Senator Lautenberg. No. As the Commissioner of the New 
Jersey, Department of Environmental Protection Security is also 
a part of your portfolio, is that right?
    Ms. Jackson. Yes, sir, I serve as the Governor's 
representative for chemical facilities, wastewater, water, on 
the task force, the Domestic Security Task Force, 
biotechnology, pharmaceutical.
    Senator Lautenberg. So do you think that IST is only 
therefore an environmental issue and not a security issue?
    Ms. Jackson. Thank you, Senator. I don't see how you can 
separate them at all. I don't see why we would want to, 
frankly.
    Senator Lautenberg. I agree. Do you think that the 
motivation behind the chemical industry's push for State 
preemption in Congress might, well, that is kind of a loaded 
question. You don't have to answer that. I know what the answer 
is.
    Senator Inhofe. Well, I don't know the answer.
    Senator Lautenberg. I would say, and I am sorry that our 
distinguished colleague from Ohio had to leave. Before we had a 
discussion there, I had a chance to challenge some of his views 
that the chemical industry is suffering because we have turned 
from a net exporter to a net importer. There is some small 
difference. But the growth of the industry has been terrific. 
It has grown with the GDP, of the country. If there are fewer 
people working, we don't know whether that is technology-caused 
or otherwise.
    But the fact is that the volume of the business is far 
greater than it was. The one question that comes to my mind is 
whether or not chemical products may have brought, do they 
include employee protections in those facilities, or are they 
environmentally sound conditions in which they operate? For a 
long time, we have now discussed whether or not companies, 
countries that export to us ought to be compelled to observe 
our environmental conditions. It is never, it is there in part, 
but not fully.
    We know that many countries are far less environmentally 
conscious than we are. So you can't, I don't think you can 
judge the success of the industry simply based on whether or 
not there is more tonnage one way or the other, because 
whatever they do to damage the environment gets to be our 
concern one way or the other. Whatever they do to damage the 
health and well-being of their employees is also inconsistent 
with the way America views its leadership in the world.
    One of the things that was said, and I have to challenge, 
and that is, no one who owns or runs a chemical business wants 
to injure the health of their employees. I would concede that, 
but I would also remind everybody that asbestos, which was 
prominently manufactured in my home town of Patterson, NJ, and 
where a fellow that I went to high school with died 
prematurely, because they worked part-time in the asbestos 
factory, those owners knew what was going on. When the records 
were examined, it was detected inside the industry way before 
the public was aware of the dangers. We have example after 
example of unsafe products being used.
    So I don't think we ought to rely on just the judgment of 
the employer. I think we ought to do what we can and I know our 
chairman very well, I have great respect, although we have 
great differences. We don't do things in small shots here. The 
fact is that no one wants to see employees' health damaged, and 
employees ought to be involved when they are considering a 
standard for operations within the industry.
    So Mr. Chairman, thanks very much. I have questions that I 
will submit for the record.
    Senator Inhofe. Thank you, Senator. Yes, we both know quite 
a bit about grandfathering.
    I have two letters from some Oklahoma companies, one 
Rustoleum, one Dryvit, that I would like to submit for the 
record at this point.
    [The referenced letters can be found on pages 95-96 and 
110-111.]
    Senator Inhofe. I was reminded by Senator Thune that he has 
a statement to submit.
    Senator Inhofe. Also, I am sure there will be several 
members who will be submitting questions for the record. I want 
to thank all five of you for coming today and for your 
patience. I do apologize for the fact that we have votes that 
are starting right now, so we will have to draw this to a 
close.
    Thank you very much for your input.
    Senator Jeffords. Mr. Chairman, we do have some questions 
to add.
    Senator Inhofe. Yes, they will all be included.
    [The information to be submitted follows:]
    [Whereupon, at 11:07 a.m., the committee was adjourned.]
    [Additional statements submitted for the record follow:]

            Statement of Hon. Joseph R. Biden, U.S. Senator 
                       from the State of Deleware

    Mr. Chairman, Ranking Member Jeffords, and committee members, thank 
you for extending me the courtesy of making a statement this morning. 
The issue of inherently safer technologies is, in my view, critically 
important to our Nation's homeland security efforts. I commend all of 
you here in the Environment and Public Works Committee for focusing on 
this critical issue, and I hope that I can add to the debate and that 
we can advance the ball to enhance the safety for millions of Americans 
that are threatened by toxic chemicals.
    Mr. Chairman I believe that we have no greater obligation than the 
protection of our home towns. In fact, I believe that this should be 
our number one priority here in Congress. Without security, little else 
we do here matters, and if we establish the right priorities, we can 
protect the homeland while preserving all that makes our nation great.
    We all know the dangers posed by gaseous, toxic chemicals. These 
chemicals, such as chlorine, were used as weapons in World War II and 
security experts have told us that they pose a threat that is 
comparable in scope only to nuclear and biological weapons. Today, 
these chemicals are in common usage in facilities throughout the nation 
and are being transported in 90-ton rail tankers over unprotected rails 
in communities throughout the Nation.
    If we simply required facilities that store or utilize large 
amounts of chlorine and other dangerous chemicals to transition to 
inherently safer technologies whenever it's feasible, we could 
completely and permanently eliminate known threats in our communities. 
This would allow us to focus our scarce resources on border security 
and other critical infrastructure targets as well as allow our Federal, 
State, and local law enforcement and first responders to focus on other 
vulnerabilities.
    I realize that the focus on this hearing is on chemical facilities 
in general, but I want to highlight a decision made by officials in my 
home town. Last year, the Wilmington Water Pollution Control facility 
transitioned from gaseous chlorine to chlorine bleach. This decision 
eliminated the threat to 560,000 citizens in the community--my 
constituents, family members, and I might point out. It cost the 
Wilmington facility $160,000 in capital investment--and because the 
facility permanently eliminated the risk, it no longer has to protect 
the facility with guards, and gates. It also eliminated bureaucratic 
expenses because it no longer has to file a risk management plan with 
the Environmental Protection Agency.
    Not only should we be supporting this type of decision, we should 
require it whenever it is practical. In my view, it is unacceptable 
that nearly five years after the attacks of September 11th, we haven't 
made the decision to reduce the dangers posed by these gaseous 
chemicals at chemical facilities and water treatment plants.
    It is not like this is some over burdensome requirement that will 
kill industry. As has been pointed out, hundreds of facilities have 
made this decision without Government intervention. These facilities 
seem to be operating fine. In addition, every proposal that I have seen 
provides for a transition only if it is practicable and would allow the 
facility not the Government to determine what alternative processes 
should be used.
    As always, another overriding concern for the Government and for 
industry is the costs associated with the transition. According to the 
Department of Homeland Security there are 300 chemical facilities that 
put over 50,000 citizens in danger. A recent report by the Center for 
American Progress found that 87 percent of facilities reported costs of 
less than $1 million and one-half of these spent less than $100,000 to 
transition to safer technologies.
    If we were to provide $1 million--a top end estimate for every 
chemical facility to transition to safer technologies we could 
eliminate this risk for only $300 million. To eliminate the threat 
posed by the roughly the 100 water treatment facilities that threaten 
over 100,000 individuals it would cost $125 million. Thus, an 
investment of less than 1/2 billion dollars would eliminate the threat 
to nearly 60 million Americans. In contrast, last year we gave $2 
billion in tax incentives to oil companies that posted record 
shattering profits. A few months ago, executives from these companies 
testified under oath at a Judiciary Committee hearing that they do not 
need these incentives. In my view, we are not focusing on the right 
priorities.
    And, because the transition to safer technologies will result in 
savings by the reduction of guns, guards, gates, and bureaucratic 
expense, we can require--as the water facility protection bill that 
Senator Jeffords, Boxer and I have introduced would--facilities to 
return some of those savings to the Federal Government to help other 
facilities transition to safer technologies. This, in my view, is a 
good use of Federal resources, and if industry officials would work 
with us, I think that we could devise a system where we help fund 
capital investments with facilities returning the savings that result 
in the out-years. In the process, we protect millions of Americans and 
reduce a strain on local law enforcement and first responders.
    In conclusion, I would like to remind everyone of the 9-11 
Commission report card issued last December. It found that with respect 
to our Nation's critical infrastructure the following: ``no risk and 
vulnerability assessments actually made; no national priorities 
established; no recommendations made on allocations of scarce 
resources. All key decisions are at least a year away. It is time that 
we stop talking about priorities and actually set some.'' I believe 
that requiring chemical facilities to transition to safer technologies 
whenever it is practical should be a priority that we establish. Doing 
this would completely and permanently eliminate the threat to millions 
of Americans.

    Statement of Dennis C. Hendershot, Staff Consultant, Center for 
   Chemical Process Safety, American Institute of Chemical Engineers

    The Center for Chemical Process Safety (CCPS) is sponsored by the 
American Institute of Chemical Engineers (AIChE), which represents the 
Chemical Engineering Professionals in technical matters in the United 
States. CCPS is dedicated to eliminating major incidents in chemical, 
petroleum, and related facilities by:

     Advancing state of the art process safety technology and 
management practices
     Serving as the premier resource for information on process 
safety
     Fostering process safety in engineering and science 
education
     Promoting process safety as a key industry value

    CCPS was formed by AIChE in 1985 as the chemical engineering 
profession's response to the Bhopal, India chemical release tragedy. In 
the past 21 years, CCPS has defined the basic practices of process 
safety and supplemented this with a wide range of technologies, tools, 
guidelines, and informational texts and conferences. CCPS' output 
includes more than 70 guideline books, more than 90 university 
lectures, and a monthly e-mail process safety lesson delivered to more 
than 600,000 plant personnel around the world in 16 languages. The CCPS 
book ``Guidelines for Analyzing and Managing the Security 
Vulnerabilities of Fixed Chemical Sites'' (2002) has been used by 
thousands of plants around the world to evaluate chemical facility 
security. Today, CCPS has more than 80 member companies in the US and 
around the world, with an active program to continue to advancing the 
practices of process safety.

                    WHAT IS INHERENTLY SAFER DESIGN?

    Inherently safer design is a philosophy for the design and 
operation of chemical plants, and the philosophy is actually generally 
applicable to any technology. Inherently safer design is not a specific 
technology or set of tools and activities at this point in its 
development. It continues to evolve, and specific tools and techniques 
for application of inherently safer design are in early stages of 
development. Current books and other literature on inherently safer 
design (for example, by the Center for Chemical Process Safety, Trevor 
Kletz, and others) describe a design philosophy and give examples of 
implementation, but do not describe a methodology. The Center for 
Chemical Process Safety has begun a project to update its 1996 book on 
inherently safer design, and one of the objectives for this second 
edition is to propose one or more specific methods for implementation.
    What do we mean by inherently safer design? One dictionary 
definition of ``inherent'' which fits the concept very well is 
``existing in something as a permanent and inseparable element.'' This 
means that safety features are built into the process, not added on. 
Hazards are eliminated or significantly reduced rather than controlled 
and managed. The means by which the hazards are eliminated or reduced 
are so fundamental to the design of the process that they cannot be 
changed or defeated without changing the process. In many cases this 
will result in simpler and cheaper plants, because the extensive safety 
systems which may be required to control major hazards will introduce 
cost and complexity to a plant. The cost includes both the initial 
investment for safety equipment, and also the ongoing operating cost 
for maintenance and operation of safety systems through the life of the 
plant.
    Chemical process safety strategies can be grouped in four 
categories:

     Inherent--as described in the previous paragraphs (for 
example, replacement of an oil based paint in a combustible solvent 
with a latex paint in a water carrier)
     Passive--safety features which do not require action by 
any device, they perform their intended function simply because they 
exist (for example, a blast resistant concrete bunker for an explosives 
plant)
     Active--safety shutdown systems to prevent accidents (for 
example, a high pressure switch which shuts down a reactor) or to 
mitigate the effects of accidents (for example, a sprinkler system to 
extinguish a fire in a building). Active systems require detection of a 
hazardous condition and some kind of action to prevent or mitigate the 
accident.
     Procedural--Operating procedures, operator response to 
alarms, emergency response procedures

    In general, inherent and passive strategies are the most robust and 
reliable, but elements of all strategies will be required for a 
comprehensive process safety management program when all hazards of a 
process and plant are considered.
    Approaches to inherently safer design fall into these categories:

     Minimize--significantly reduce the quantity of hazardous 
material or energy in the system, or eliminate the hazard entirely if 
possible
     Substitute--replace a hazardous material with a less 
hazardous substance, or a hazardous chemistry with a less hazardous 
chemistry
     Moderate--reduce the hazards of a process by handling 
materials in a less hazardous form, or under less hazardous conditions, 
for example at lower temperatures and pressures
     Simplify--eliminate unnecessary complexity to make plants 
more ``user friendly'' and less prone to human error and incorrect 
operation

    One important issue in the development of inherently safer chemical 
technologies is that the property of a material which makes it 
hazardous may be the same as the property which makes it useful. For 
example, gasoline is flammable, a well known hazard, but that 
flammability is also why gasoline is useful as a transportation fuel. 
Gasoline is a way to store a large amount of energy in a small quantity 
of material, so it is an efficient way of storing energy to operate a 
vehicle. As long as we use large amounts of gasoline for fuel, there 
will have to be large inventories of gasoline somewhere.

           INHERENTLY SAFER DESIGN AND THE CHEMICAL INDUSTRY

    While some people have criticized the chemical industry for 
resisting inherently safer design, we believe that history shows quite 
the opposite. The concept of inherently safer design was first proposed 
by an industrial chemist (Trevor Kletz, of ICI in the UK), and it has 
been publicized and promoted by many technologists from petrochemical 
and chemical companies--ICI, Dow, Rohm and Haas, ExxonMobil, and many 
others. The companies that these people work for have strongly 
supported efforts to promote the concept of inherently safer chemical 
technologies.
    Center for Chemical Process Safety (CCPS) sponsors supported the 
publication of the CCPS book ``Inherently Safer Chemical Processes: A 
Life Cycle Approach'' in 1996, and several companies ordered large 
numbers of copies of the book for distribution to their chemists and 
chemical engineers. CCPS sponsors have recognized a need to update this 
book after 10 years, and there is a current project to write a second 
edition of the book, with active participation by many CCPS sponsor 
companies.
    There has been some isolated academic activity on how to measure 
the inherent safety of a technology (and no consensus on how to do 
this), but we have seen little or no academic research on how to 
actually go about inventing inherently safer technology. All of the 
papers and publications that we have seen describing inherently safer 
technologies have either been written by people working for industry, 
or describe designs and technologies developed by industrial companies. 
And, we suspect that there are many more examples which have not been 
described because most industry engineers are too busy running plants, 
and managing process safety in those plants, to go all of the effort 
required to publish and share the information. We believe that industry 
has strongly advocated inherently safer design, supporting the writing 
of CCPS books on the subject, teaching the concept to their engineers 
(who most likely never heard of it during their college education), and 
incorporating it into internal process safety management programs. 
Nobody wants to spend time, money, and scarce technical resources 
managing hazards if there are viable alternatives which make this 
unnecessary.

                  INHERENTLY SAFER DESIGN AND SECURITY

    Safety and security are good business. Safety and security 
incidents threaten the license to operate for a plant. Good performance 
in these areas results in an improved community image for the company 
and plant, reduced risk and actual losses, and increased productivity, 
as discussed in the CCPS publication ``Business Case for Process 
Safety,'' which has been recently revised and updated.
    A terrorist attack on a chemical plant that causes a toxic release 
can have the same kinds of potential consequences as accidental events 
resulting in loss of containment of a hazardous material or large 
amounts of energy from a plant. Clearly anything which reduces the 
amount of material, the hazard of the material, or the energy contained 
in the plant will also reduce the magnitude of this kind of potential 
security related event. The chemical industry recognizes this, and 
current security vulnerability analysis protocols require evaluation of 
the magnitude of consequences from a possible security related loss of 
containment, and encourage searching for feasible means of reducing 
these consequences. But inherently safer design is not a solution which 
will resolve all issues related to chemical plant security. It is one 
of the tools available to address concerns, and needs to be used in 
conjunction with other approaches, particularly when considering all 
potential security hazards.
    In fact, inherently safer design will rarely avoid the need for 
implementing conventional security measures. To understand this, one 
must consider the four main elements of concern for security 
vulnerability in the chemical industry:

     Off-site consequences from toxic release, a fire, or an 
explosion
     Theft of material or diversion to other purposes, for 
example the ammonium nitrate used in the first attempt to destroy the 
World Trade Center in New York, or for the Oklahoma City bombing
     Contamination of products, particularly those destined for 
human consumption such as pharmaceuticals, food products, or drinking 
water
     Degradation of infrastructure such as the loss of 
communication ability from the second World Trade Center attacks

    Inherently safer design of a process addresses the first bullet, 
but does not have any impact whatsoever on conventional security needs 
for the others. A company will still need to protect the site the same 
way, whether it uses inherently safer processes or not. Therefore, 
inherently safer design will not significantly reduce security 
requirements for a plant.
    The objectives of process safety management and security 
vulnerability management in a chemical plant are safety and security, 
not necessarily inherent safety and inherent security. It is possible 
to have a safe and secure facility for a facility with inherent 
hazards. In fact this is essential for a facility for which there is no 
technologically feasible alternative--for example, we cannot envision 
any way of eliminating large inventories of flammable transportation 
fuels in the foreseeable future.
    An example from another technology--one which much of us frequently 
use--may be useful in understanding that the true objective of safety 
and security management is safety and security, not inherent safety and 
security. Airlines are in the business of transporting people and 
things from one place to another. They are not really in the business 
of flying airplanes--that is just the technology they have selected to 
accomplish their real business purpose. Airplanes have many major 
hazards associated with their operation. One of them tragically 
demonstrated on 9-11 is that they can crash into buildings or people on 
the ground, either accidentally or from terrorist activity. In fact, 
essentially the entire population of the United States, or even the 
world, is potentially vulnerable to this hazard. Inherently safer 
technologies which completely eliminate this hazard are available--high 
speed rail transport is well developed in Europe and Japan. But we do 
not require airline companies to adopt this technology, or even to 
consider it and justify why they do not adopt it. We recognize that the 
true objective is ``safety'' and ``security'' not ``inherent safety'' 
or ``inherent security.'' The passive, active, and procedural risk 
management features of the air transport system have resulted in an 
enviable, if not perfect, safety record, and nearly all of us are 
willing to travel in an airplane or allow them to fly over our houses.
some issues and challenges in implementation of inherently safer design

     The chemical industry is a vast interconnected ecology of 
great complexity. There are dependencies throughout the system, and any 
change will have cascading effects throughout the chemical ecosystem. 
It is possible that making a change in technology that appears to be 
inherently safer locally at some point within this complex enterprise 
will actually increase hazards elsewhere once the entire system reaches 
a new equilibrium state. Such changes need to be carefully and 
thoughtfully evaluated to fully understand all of their implications.
     In many cases it will not be clear which of several 
potential technologies is really inherently safer, and there may be 
strong disagreements about this. Chemical processes and plants have 
multiple hazards, and different technologies will have different 
inherent safety characteristics with respect to each of those multiple 
hazards. Some examples of chemical substitutions which were thought to 
be safer when initially made, but were later found to introduce new 
hazards include:

         Chlorofluorcarbon (CFC) refrigerants--low acute 
        toxicity, non-flammable, but later found to have long term 
        environmental impacts
         PCB transformer fluids--non-flammable, but later 
        determine to have serious toxicity and long term environmental 
        impacts
     Who is to determine which alternative is inherently safer, 
and how are they make this determination? This decision requires 
consideration of the relative importance of different hazards, and 
there may not be agreement on this relative importance. This is 
particularly a problem with requiring the implementation of inherently 
safer technology--who determines what that technology is? There are 
tens of thousands of chemical products manufactured, most of them by 
unique and specialized processes. The real experts on these 
technologies, and on the hazards associated with the technology, are 
the people who invent the processes and run the plants. In many cases 
they have spent entire careers understanding the
    chemistry, hazards, and processes. They are in the best position to 
understand the best choices, rather than a regulator or bureaucrat 
with, at best, a passing knowledge of the technology. But, these 
chemists and engineers must understand the concept of inherently safer 
design, and its potential benefits--we need to educate those who are in 
the best position to invent and promote inherently safer alternatives.
     Development of new chemical technology is not easy, 
particularly if you want to fully understand all of the potential 
implications of large scale implementation of that technology. History 
is full of examples of changes that were made with good intentions that 
gave rise to serious issues which were not anticipated at the time of 
the change, such as the use of CFCs and PCBs mentioned above. Dennis 
Hendershot personally has published brief descriptions of an inherently 
safer design for a reactor in which a large batch reactor was replaced 
with a much smaller continuous reactor. This is easy to describe in a 
few paragraphs, but actually this change represents the results of 
several years of process research by a team of several chemists and 
engineers, followed by another year and millions of dollars to build 
the new plant, and get it to operate reliably. And, the design only 
applies to that particular product. Some of the knowledge might 
transfer to similar products, but an extensive research effort would 
still be required. Furthermore, Dennis Hendershot has also co-authored 
a paper which shows that the small reactor can be considered to be less 
inherently safe from the viewpoint of process dynamics--how the plant 
responds to changes in external conditions--for example, loss of power 
to a material feed pump. The point--these are not easy decisions and 
they require an intimate knowledge of the process.
     Extrapolate the example in the preceding paragraph to 
thousands of chemical technologies, which can be operated safely and 
securely using an appropriate blend of inherent, passive, active, and 
procedural strategies, and ask if this is an appropriate use of our 
national resources. Perhaps money for investment is a lesser concern--
do we have enough engineers and chemists to be able to do this in any 
reasonable time frame? Do the inherently safer technologies for which 
they will be searching even exist?
     The answer to the question ``which technology is 
inherently safer?'' may not always the same--there is most likely not a 
single ``best technology'' for all situations. Consider this non-
chemical example. Falling down the steps is a serious hazard in a house 
and causes many injuries. These injuries could be avoided by mandating 
inherently safer houses--we could require that all new houses be built 
with only one floor, and we could even mandate replacement of all 
existing multi-story houses. But would this be the best thing for 
everybody, even if we determined that it was worth the cost? Many 
people in New Orleans survived the flooding in the wake of Hurricane 
Katrina by fleeing to the upper floors or attics of their houses. Some 
were reportedly trapped there, but many were able to escape the flood 
waters in this way. So, single story houses are inherently safer with 
respect to falling down the steps, but multi story houses may be 
inherently safer for flood prone regions. We need to recognize that 
decision makers must be able to account for local conditions and 
concerns in their decision process.
     Some technology choices which are inherently safer locally 
may actually result in an increased hazard when considered more 
globally. A plant can enhance the inherent safety of its operation by 
replacing a large storage tank with a smaller one, but the result might 
be that shipments of the material need to be received by a large number 
of truck shipments instead of a smaller number of rail car shipments. 
Has safety really been enhanced, or has the risk been transferred from 
the plant site to the transportation system, where it might even be 
larger?
     We have a fear that regulations requiring implementation 
of inherently safer technology will make this a ``one time and done'' 
decision. You get through the technology selection and pick the 
inherently safer option, meet the regulation, and then you don't have 
to think about it any more. We want engineers to be thinking about 
opportunities for implementation of inherently safer designs at all 
times in everything they do--it should be a way of life for those 
designing and operating chemical, and other, technologies. For example:

         Research chemists and engineers--inherently safer 
        fundamental chemistries
         Process development engineers--inherently safer 
        processes based on those chemistries
         Design engineers--inherently safer plant design using 
        the selected technology and process
         Detailed design engineers--inherently safer equipment 
        details--minimize the length and size of pipes, vessels, and 
        other equipment, make the plant design ``user friendly''
         Plant operation engineers and operators--develop 
        inherently safer operating procedures, look for opportunities 
        for enhancing inherent safety in existing facilities
         Operators--look for inherently safer ways to do all of 
        the tasks involved in the day to day operation of a plant 
        Inherently safer design and operation needs to be the way 
        everybody involved in chemical technology thinks, not just a 
        one time exercise to comply with a regulation.
         Inherently safer processes require innovation and 
        creativity. How do you legislate a requirement to be creative? 
        Inherently safer alternatives can not be invented by 
        legislation.

   WHAT SHOULD WE BE DOING TO ENCOURAGE INHERENTLY SAFER TECHNOLOGY?

    Inherently safer design is primarily an environmental and process 
safety measure, and its potential benefits and concerns are better 
discussed in context of future environmental legislation, with full 
consideration of the concerns and issues discussed above. While 
consideration of inherently safer processes does have value in some 
areas of chemical plant security vulnerability--the concern about off 
site impact of releases of toxic materials--there are other approaches 
which can also effectively address these concerns, and industry needs 
to be able to utilize all of the tools in determining the appropriate 
security vulnerability strategy for a specific plant site. Some of the 
current proposals regarding inherently safer design in security 
regulations seem to drive plants to create significant paperwork to 
justify not using inherently safer approaches, and this does not 
improve security.
    We believe that future invention and implementation of inherently 
safer technologies, to address both safety and security concerns, is 
best promoted by enhancing awareness and understanding of the concepts 
by everybody associated with the chemical enterprise. They should be 
applying this design philosophy in everything they do, from basic 
research through process development, plant design, and plant 
operation. Also, business management and corporate executives need to 
be aware of the philosophy, and its potential benefits to their 
operations, so they will encourage their organization to look for 
opportunities where implementing inherently safer technology makes 
sense.
    We believe that the approach that the Environmental Protection 
Agency has taken to promote Green Chemistry provides a good example of 
how the Federal Government can promote the adoption of inherently safer 
technology in industry. EPA has been active in promoting the principals 
of green chemistry, promoting incorporation of green chemistry into the 
education of chemists, and in sponsoring conferences and technical 
meetings on the subject. Each year a number of awards are given to 
researchers and to companies for outstanding examples of implementation 
of green chemistry. An effort like this for inherently safer design 
will increase its visibility for all chemical industry technologists, 
promote sharing of ideas and information, recognize important 
contributions, and encourage others to understand and apply the 
inherently safer design principles.
                                 ______
                                 
       Responses by Dennis C. Hendershot to Additional Questions 
                          from Senator Inhofe

    Question 1. At the hearing, I entered into the record a copy of a 
letter from a company in OK called Dryvit. The letter expresses the 
belief that
    ``Every chemical process is unique. . . .Companies need to retain 
the direct authority to assess options and decide what is best for 
their business.'' I'm concerned about substituting the judgment of a 
Federal bureaucrat for the chemical plant engineer. In your experience, 
who is best suited to fully understand and make decisions about the 
complex nature of chemical processes?
    Response. The people most qualified to make decisions about the 
optimal chemical process are the local experts working for the facility 
operating the process, who have the most extensive expertise on all of 
the many factors which impact on the decision. This is not just a 
``business'' issue--these local experts are most familiar with local 
conditions and concerns which can impact a decision--they live in the 
community and understand specific local factors.

    Question 2. Mr. Crowley argues that facilities that use chlorine 
for example, should be forced to switch to other alternatives, with 
stiff penalties for not complying. The city of Phoenix conducted a 
study on switching from chlorine to sodium hypochlorite, or liquid 
bleach. Because of the extreme temperatures in Phoenix, the city found 
that shipping the product in on a regular basis would not work because 
of the amount of product the City would need. Further, storing it 
onsite was also problematic because the city would need some means of 
cooling the sodium hypochlorite which loses potency in the heat and 
over time. Switching to liquid bleach is just not an option for the 
city. Under Mr. Crowley's proposal, Phoenix would be in violation of 
the law and will have to jeopardize the health of its citizens in order 
to comply. Isn't this why individual facilities are best equipped to 
make decisions about IST and security?
    Response. This is a good example of the point in Question 1--local 
experts understand how local conditions impact the decision. As I 
stated at the hearing--I do not believe that there is a ``one size fits 
all'' for most chemical technologies.

    Question 3. I also entered into the record a letter from Rust-
Oleum, a manufacturer and employer in OK. This letter expresses concern 
about the effect of IST and the potential for quality consequence on 
downstream users of chemicals. Based on your experience in the chemical 
industry, can you elaborate on how IST affects the entire chemical 
supply chain?
    Response. One could probably get an advanced degree in economics by 
studying this question in some detail. Some examples of these impacts 
include:
     Downstream Product impacts. The properties of many 
chemical products are significantly impacted by the manufacturing 
process and chemistry. This defines the spectrum of by-products and 
contaminants in the final product (nothing can ever be 100 percent 
pure). These contaminants and by-products are the result of chemical 
side reactions, impurities and contaminants in the raw materials, and 
other process characteristics. If a manufacturer changes the process or 
chemistry for making a product, it will also unavoidably change the 
composition of the final product, and perhaps other special 
characteristics of the product (length of polymer chains, branching of 
polymer chains, etc.). These changes may impact the performance of the 
product to consumers, industrial customers who use it to make other 
materials, and consumers of the products of those industrial customers. 
Sometimes these changes could even result in safety hazards--minor 
contaminants can catalyze chemical reactions which could cause reaction 
hazards or generate hazardous products. A chemical manufacturer must 
understand, as a part of its management of change process, what the 
impact of changes in a raw material will be. They may require extensive 
testing of ``new'' raw material to confirm that their product made with 
the new raw material can be manufactured safely and that its 
performance is not adversely impacted. This can cascade throughout the 
supply chain. This impact of manufacturing process on product 
characteristics is well known for products where there is potential 
direct human consumption--intentional for pharmaceuticals and food 
products, and potential for agricultural chemicals. The regulatory 
process for such materials includes consideration at an appropriate 
level for the manufacturing process, and it can be difficult to change 
a manufacturing process without extensive product testing and 
regulatory involvement. Finally, customers may reject the ``inherently 
safer'' product for quality or performance reasons. For example, many 
people do not believe that water based paints work as effectively for 
exterior applications, and prefer to use oil based paints.
     Large scale economic impacts. Changing the usage pattern 
for a major industrial chemical may have significant impacts on 
markets. Assume that Raw Material X is used as the feedstock for a 
major chemical Product P. A major manufacturer of Product P changes its 
manufacturing process to use Raw Material Y as a feedstock instead, 
perhaps because of improved technology or perhaps because somebody 
decides that the alternative process is inherently safer. If Product P 
is a large volume product, the process for manufacturing it may 
significantly impact the markets for Raw Materials X and Y. Following 
the laws of supply and demand, the price for Raw Material X, which will 
be in oversupply, will drop, and the price for Raw Material Y, which 
may be in shortage, will increase. Manufacturers, possibly overseas 
suppliers, using the old process (Raw Material X) may now find 
themselves with a cost advantage over those using the new process, even 
if it appeared that the new process would have neutral or favorable 
economics based on costs before the change. Chemical companies have to 
deal with issues like this all the time, have expertise in chemical 
markets, and are able to predict these kinds of economic impacts and 
take them into account when making decisions. But it is highly unlikely 
that regulators will have the expertise or resources to properly 
consider these impacts.

    Question 4. In his statement Senator Biden cited the Wilmington 
Water Pollution Control Facility that was able to switch to sodium 
hypochlorite for $160,000. However, I have heard of numerous cities 
that spent far more than that including DC which spent nearly
    $13 million, a system in Pennsylvania spent $2 million; a third 
system in California spent $5 million to switch so indeed the cost to 
change technologies is significant.
    Response. Your examples illustrate that it is not possible to 
extrapolate the experience of one facility in making a conversion to 
all facilities. The specific local characteristics of any plant will 
impact the economics of making a change, and cost range can be very 
broad. Your example is in reference to a single, very simple 
technology--I would expect an even wider range for a very complex, 
multi-step chemical technology. Changing the chemical process may 
require the complete replacement of a plant if the chemistry is very 
different--you might not be able to salvage anything but the steel 
structure of the plant and some storage tanks. Even some changes that 
appear simple at first glance may become complex. Dilution is an 
inherently safer design approach. So, is it necessarily simple to take 
a process which uses a hazardous material at 100 percent concentration 
and change it to a process that uses the same material at 25 percent 
concentration in water? Assuming the chemistry still works, perhaps 
this means that the reactor will have to be 3 or 4 times larger to hold 
all of the water which is now present. This will mean modifying a lot 
of piping because the reactor is a different shape and size. Or, 
perhaps the larger reactor will not fit in the building, or the 
building structural steel is not strong enough to support the larger 
and heavier reactor. So, you have to build a new building. You are now 
well along the road to completely replacing the plant. All decisions 
relative to that plant are now on the table. Perhaps the new plant 
should instead be located somewhere else, perhaps overseas. Perhaps the 
business does not have reinvestment economics--it makes money but does 
not earn sufficient return to justify investment of new capital, so the 
company decides to get out of the business entirely. In this example, 
another plant with a larger building or stronger structural steel might 
find this change relatively easy and cheap.

    Question 5. Senator Biden goes on to comment that Wilmington no 
longer needs to spend money on other security enhancements ``they don't 
need guards, they don't need fences, they don't need security around 
the facility now.'' Mr. Hendershot, you stated in your testimony that 
IST, if even feasible in a particular instance, will in fact not 
decrease the need for traditional means of security. Can you elaborate? 
Do you agree with those who say the costs to switch technologies are 
minimal and that essentially the only security risk at a facility is 
the chemicals it stores?
    Response. I would assume that the Wilmington water treatment 
facility still has guards, fences, and security to protect the 
integrity of the water supply. Contamination and interruption of public 
water supplies is certainly a real concern with regard to potential 
terrorist attacks. Similarly, chemical facilities will always need 
guards, fences, and other security features. Plants must protect their 
equipment and infrastructure, they must protect products from 
contamination, and they must prevent theft and diversion of material 
for other purposes.
                                 ______
                                 
      Response by Dennis C. Hendershot to an Additional Question 
                         from Senator Jeffords

    Question. Mr. Hendershot, you were a member of the National 
Research Council team that recently stated that ``the most desirable 
solution to preventing chemical releases is to reduce or eliminate the 
hazard where possible, not to control it.'' Do you agree with this 
statement?
    Response. I certainly cannot disagree with that statement since I 
signed off on the NRC report, and have made the statement myself many 
times. However, a chemical plant, like any other technology, must meet 
multiple objectives, and the optimum design must represent the best 
overall combination of characteristics to maximize the overall 
satisfaction with respect to all of the requirements. In most cases, 
that overall best option will not represent the ``best'' approach for 
any single objective, but rather the ``best'' option for ALL of the 
objectives taken together. This is the essence of all engineering--to 
understand the multiple requirements, understand how well various 
design options satisfy those requirements, and to be able to select the 
best overall design. If the only objective of a chemical plant was to 
``prevent chemical releases'' you would simply never build any chemical 
plants--there would never be any chemical releases from them. But then 
we would forgo all of the benefits associated with the plants--useful 
products, jobs, etc. I know how to build inherently safer automobiles--
limit the engine size so no car could go more than about 5 mph. It 
would be very safe, but not very useful because I would have ignored 
all of the other requirements that automobile customers expect to have 
satisfied.
                                 ______
                                 
       Responses by Dennis C. Hendershot to Additional Questions 
                         from Senator Voinovich

    Question 1. Across the entire chemical manufacturing industry in 
the United States, how many of the chemicals listed on EPA's Risk 
Management Plan list have scientifically proven alternatives that 
increase safety, reduce risk, and operate at least as effectively, in 
terms of both cost and end product, as the chemical compound that is 
being replaced?
    Response. It is not possible to provide a general answer to this 
question without extensive research. Most of the chemicals on the EPA 
RMP list are major, large volume industrial chemicals and they are used 
in many different applications. In my 35-year industrial career, I have 
probably seen 50 or so different uses of ammonia, for example. In some 
cases, there were alternatives--although the alternatives were not as 
``good'' or they would have been selected to begin with. Chlorine is 
used for water disinfection, and this is probably the largest single 
use, but it is also used in thousands of chemical processes to make a 
wide range of products from plastics to pharmaceuticals. It would 
require a major study to understand the potential to replace chlorine 
in all of these applications, and to understand the economic 
consequences of such a change. In general, if a process existed that 
met the criteria of the Senator's question, and if investment and 
economics were not factors, chemical facilities would already be using 
it.

    Question 2. Who or what body should determine what IST is? Should 
it be defined by Government, industry, or academia? If Government does 
define it, which agency should be responsible for that?
    Response. I believe that the experts in a particular technology are 
best qualified to make judgments about the inherent safety 
characteristics of their process. They have the most knowledge of the 
process, and the multiple impacts of any change on safety and the 
environment throughout the chemical supply chain. It should not be 
defined by Government or academia. Who is better qualified to 
understand the safety of a chemical process--a group of engineers and 
operating personnel who have worked with the process for many years, or 
a Government regulator who, at best, spends a few weeks or months 
studying a process and likely no time at all actually operating the 
technology? I believe that the ``hands on'' operating experts are 
clearly best qualified.
    I do not believe that there is any existing Government agency 
qualified to define inherently safer technology for the chemical 
industry. I am not sure this will ever be possible. I have worked for 
36 years in the chemical industry, and, as a result of that, I am 
qualified to make inherently safer technology judgments for a limited 
number of technologies, those in which I have extensive experience. I 
am not qualified to make these judgments for most of the industry 
because I am not an expert in those technologies. I can offer ideas and 
suggestions for consideration by experts, but I am not qualified to 
make the decisions.

    Question 3. To your knowledge has IST ever been defined as a 
security measure in federal law?
    Response. To my knowledge IST has never been defined as a security 
measure in Federal law.

    Question 4. The EPA has concluded that:

     ``Inherently safer processes'' is a developing concept and 
is not ready for general application;
     IST frequently displaces risk rather than reducing it
     Even if a few examples of workable alternative approaches 
do exist, there is not a rational basis for imposing an additional 
industry-wide regulatory burden; and
     The concept is normally considered when designing new 
processes, a time when changes can be implemented cost effectively.
    Do you agree with the above assessments? In that context, do you 
believe that IST a concept that is ready for broad implementation as a 
regulatory requirement?
    Response. Yes, I agree with the EPA statements. I do not believe 
that IST is ready for broad regulatory requirements. The philosophy of 
inherently safer design should be broadly taught to chemical engineers 
and chemists (and all other technologists--the philosophy applies to 
any technology, and is not something that only applies to the chemical 
industry). Because it is not possible to measure IST, or to objectively 
quantify it, it will be extremely difficult to regulate. I believe that 
a regulation could even be counter-productive, making inherent safety 
something that is done once to meet a regulation and then forgotten.

    Question 5. Mr. Hendershot, I would argue that the reason that we 
are securing chemical facilities is to protect the processes and 
products that are produced there. For instance, there are some 
facilities that are so critical to the economic vitality or the 
national security of this nation, that any interruption in processing 
could be detrimental to the national economy and security. If it is the 
process and the product that we want to protect, why should Government 
mandate changing the process?
    Response. For some products, the Government actually makes it 
difficult to change the process. For example, where the Government is 
the customer, product specifications may include specification of the 
manufacturing process, making changes very difficult, and any changes 
may have to be negotiated with the Government customer. For 
pharmaceuticals and products which may be consumed by people, process 
changes may be heavily regulated. In this case, even if you are able to 
use a completely inherently safe process (and, if you consider all 
hazards, I do not believe there is such a thing), you still need to 
secure the facility because the product or service produced is 
important.

    Question 6. Mr. Hendershot, according to your testimony, ``there 
has been some isolated academic activity on how to measure the inherent 
safety of a technology (and no consensus on how to do this), but we 
have seen little or no academic research on how to actually go about 
inventing IST.'' If this is the case, how would the Government mandate 
IST and measure compliance with IST?
    Response. I do not believe there is currently an effective means 
for measuring IST, or for confirming compliance with any regulation. 
Any system for measuring IST will necessarily have to include 
somebody's judgment about the relative importance of different kinds of 
hazards. Which is the inherently safer refrigerant--CFCs, ammonia, or 
light hydrocarbons?
     CFCs--not acutely toxic, not flammable, long term 
environmental damage
     Ammonia--flammable, acutely toxic
     Light hydrocarbons--not acutely toxic, highly flammable
    Any system to measure IST will have to be able to resolve issues 
like this, and, in fact, there is no ``right'' answer. The answer 
depends on the relative importance which is placed on the different 
hazards, and, even today, many people do not agree on the relative 
importance of different hazards associated with different materials for 
use as refrigerants. Anybody who attempts to measure inherent safety 
considering all potential hazards must incorporate this value judgment 
into the measuring system, and there must be some way to ensure that 
value judgments truly reflect the national sense of values.

    Question 7. Mr. Hendershot, in your testimony you note that 
hazardous or abrasive chemicals are often the most useful. Gasoline is 
a good example of this. The very value of many chemical products is 
found in the complex processes that produce them, such as milk bottles, 
nylon seat belts, or military jet fuel. Are there currently alternative 
chemicals that can be used to make many of these specialty products 
without sacrificing quality or cost-effectiveness?
    Response. I do not believe that it is possible to answer this 
question without significant investigation and research. There are tens 
of thousands of chemical products in commerce. I am sure that there are 
alternatives for most of them--the economy seems to get by when there 
are supply disruptions such as those caused by the Gulf coast storms in 
2005. But these alternatives may not be inherently safer, and most 
likely would result in some sacrifice in quality or cost effectiveness. 
Over time the market will drive all users to the most cost effective 
technology, and this will change as technology evolves and improves.
    I am not aware of any study which has ever been done to understand 
the answer to this question. I would say that it is not a good idea to 
make such a potentially far reaching change in the technology of the 
chemical industry in the United States without conducting a thorough 
study to understand the economic impacts.
                                 ______
                                 
       Respnoses by Dennis C. Hendershot to Additional Questions 
                           from Senator Obama

    Question 1. Department of Homeland Security officials told EPW 
staffers in preparation for this hearing that if left to their own 
devices, individual facilities might make IST decisions that decrease 
risk at one plant, but increase risk system-wide. What are your 
thoughts on that assertion, and of DHS's potentially helpful role in 
coordinating IST at the most dangerous facilities?
    Response. I believe that this is a possible outcome. Those making 
the decision for a single plant may not understand the system wide 
impacts, because they may not even have access to the information 
required to understand those impacts. These impacts may occur in other 
companies, in other industries, and in other parts of the company. DHS 
potentially can help an individual plant to understand these broader 
impacts.
    This question leads me to think about an interesting conflict that 
a plant might have. Even if the plant understands that a change would 
increase risk to society as a whole, even though it would decrease the 
risk to that specific plant, why would they want to accept that 
additional risk locally even if the result is reduced overall risk to 
society as a whole? For example, if society thinks that it is better 
for a large inventory of hazardous material to be stored at Consumer 
Plant A, rather than Supplier Plant B, how do we convince Consumer 
Plant A that this is a good idea and make it attractive for Consumer 
Plant A to do this? DHS may have an important role here, with an 
opportunity to work with the parties involved and work out a solution, 
and perhaps back up the solution with financial or other incentives.

    Question 2. In March of this year, Secretary Chertoff said he was 
open to the idea of requiring high-risk facilities to consider safer 
approaches. This is a position the industry opposes. What is your view 
on requiring high-risk facilities to consider IST?
    Response. Of course we encourage every engineer to consider 
inherently safer approaches in the process of invention, development, 
and design, but I believe that it would be very difficult to write and 
enforce a meaningful regulation to require facilities to ``consider'' 
safer approaches. If you are a regulated facility, how do you know 
whether or not you have demonstrated ``consideration'' of safer 
approaches in a way that the regulator will accept? What does 
appropriate documentation of ``consideration'' consist of? Who is to 
evaluate the ``sincerity'' of the consideration? In the end I do not 
believe such a regulation will be effective in driving any change. For 
those regulated facilities that believe in the concept of inherently 
safer design--its value and effectiveness--they do not need a 
regulation and will be applying inherently safer design principles 
already. For those that do not believe in the concept, they will 
generate paperwork that shows that shows that they have considered 
inherent safety, perhaps demonstrate some relatively small 
improvements, and continue to operate the same way they did in the 
past. I suspect that any good lawyer would have no trouble ``proving'' 
compliance with such a vague and ill defined regulation. If the 
objective is real change in the chemical industry, we have two 
laboratories right now--Contra Costa County, CA, and the state of New 
Jersey. Perhaps we should wait a few years, then go back to these 
places and see what real impact the regulations have had--not just 
``how difficult it was to comply with the rules?'', but rather, did the 
rules actually result in any real reduction of hazards?
    Many of the leading chemical companies strongly encourage engineers 
and chemists to think about inherently safer, and look for 
opportunities to incorporate inherent safety features into plants. We 
need to encourage engineers and chemists at all companies to encourage 
this kind of thinking, but regulation is not an effective way to 
accomplish this. Inherently safer design is a creative activity, done 
in the mind of engineers and chemists who believe in the value of the 
philosophy, and not easily measured or regulated. In other areas the 
Government has developed policies and programs to encourage creative 
thinking--for example for pollution prevention (the Pollution 
Prevention Act of 1990, http://www.epa.gov/opptintr/p2home/p2policy/
act1990.htm) and for ``Green Chemistry''. A useful approach might be 
statement of a policy, followed by creation of mechanisms to educate 
and provide incentives.
                               __________
Statement on Philip J. Crowley, Senior Fellow and Director of National 
      Defense and Homeland Security, Center for American Programs

    Good morning. I am P.J. Crowley. I direct the homeland security 
program at the Center for American Progress. I am grateful for the 
opportunity to discuss with you the challenge of chemical security and 
the opportunity--and indeed the security imperative--to employ 
inherently safer technology, materials and processes to make our 
society and economy less vulnerable to terrorism.
    I will also briefly discuss the findings of a recent survey the 
Center for American Progress conducted of a wide range of chemical 
facilities across the country. The findings suggest both good news and 
bad news. The good news is that many facilities have successfully and 
economically switched to less acutely hazardous chemicals and 
processes. The survey data demonstrate that inherently safer 
technologies should be viewed as a viable and necessary component of 
chemical security. It reduces and in many cases eliminates terrorism 
risk to millions of Americans. It does not need to be studied. It needs 
to be embraced by the Department of Homeland Security and pursued as 
part of our national security strategy to protect the homeland. It 
should be specifically incorporated into legislation being considered 
by the Congress, because the bad news from our survey is that, while 
change is occurring, it is not happening fast enough.
    At the outset, I should mention that I view this issue from a 
security vantage point, based on my experience over three decades as an 
Air Force officer, staff member of the National Security Council and 
national security analyst at the Center for the past two and a half 
years. I was working for the insurance industry in New York on 
September 11, four blocks from the World Trade Center. I understand the 
nature of terrorism risk and how it affects the private sector. From 
that experience, I do not view national security and economic 
productivity as competing priorities. We must do both.
    We are approaching the fifth anniversary of 9-11. We can all be 
grateful that through the combined efforts of our military, our 
intelligence services and police, we have not been attacked again. In 
many respects, we are safer, but we are not safe. The threat to the 
United States is growing more dangerous and less predictable. There is 
equal risk that we as a country are losing our sense of urgency and 
becoming complacent. We need to use this intervening period before we 
are attacked again to make our society and economy as secure as they 
can be.
    The Bush administration's rhetoric--that we are fighting terrorists 
in Baghdad so we do not have to confront them in my native Boston or 
Cleveland--is at odds with the reality that can be seen from successful 
attacks in Madrid and London and the plot that was recently foiled in 
Canada, employing common, yet critical infrastructure against us.
    The global jihadi movement is evolving. The next attack--and we 
should be clear that there will be other attacks--is more likely to be 
perpetrated by individuals who are ``self-starters''--inspired by al 
Qaeda, linked to the movement through the Internet, but acting on their 
own. These people are likely to be newly radicalized and will be 
extremely difficult to detect. They may well already be here in the 
United States. The people of Oklahoma understand all too well that 
terrorism involves both domestic and international threats.
    We also recognize that we cannot protect everything. The United 
States is a target-rich environment. We have to set priorities, 
something the Department of Homeland Security has yet to effectively 
do. The emphasis should be to protect infrastructure that, if attacked, 
represents the greatest risk to human life or would generate the most 
significant economic loss to the United States. Chemical and petro-
chemical facilities fit both of these criteria, particularly those in 
or near major metropolitan areas. The emphasis must be on preventing or 
reducing our vulnerability to catastrophic terrorism. This is not an 
arbitrary judgment. It is specific to the threat we face--that 
terrorists are most likely to attack where they can kill as many 
innocent civilians as possible and have the most significant economic 
and political impact on our country.
    The Department of Homeland Security says it is pursuing a risk-
based strategy. In that context, both DHS and the Congress are 
appropriately focused on security at chemical facilities across the 
country. But it was disappointing to hear Secretary of Homeland 
Security Chertoff, in comments in March to the American Chemistry 
Council, suggest that inherently safer technology is an environmental 
interest that has little to do with security.\1\ He is wrong.
---------------------------------------------------------------------------
    \1\. Secretary of Homeland Security Michael Chertoff, Remarks at 
the American Chemistry Council National Chemical Security Forum, 
Washington, DC, March 21, 2006, available at http://www.dhs.gov/
dhspublic/display?content=5494.
---------------------------------------------------------------------------
    A risk-based chemical security strategy should be integrated and 
multi-dimensional. It requires better physical security, an area of 
particular emphasis with the Maritime Transportation Security Act 
(MTSA) and voluntary standards promoted by the American Chemistry 
Council. But physical security by itself is not enough. In some cases, 
it requires risk mitigation, which might involve changes in on-site 
storage and manufacture or facility relocation and consolidation. This 
too is not sufficient alone. We must also pursue risk elimination. 
Where safer and more secure technologies already exist and are readily 
available, we have an obligation to address these known vulnerabilities 
and in essence take as many chemical facilities and communities as 
possible off the terrorism target list. As a National Academy of 
Sciences report highlighted earlier this year, ``The most desirable 
solution to preventing chemical releases is to reduce or eliminate the 
hazard where possible, not to control it.''\2\ This is the potential 
value of inherently safer technologies and manufacturing processes.
---------------------------------------------------------------------------
    \2\ National Academy of Sciences, Board on Chemical Sciences and 
Technology (BCST) ,``Terrorism and the Chemical Infrastructure: 
Protecting People and Reducing Vulnerabilities (2006)'', available at 
http://darwin.nap.edu/books/0309097215/html/9.html.
---------------------------------------------------------------------------
    The Center for American Progress, with assistance from the National 
Association of State PIRGs and National Environmental Trust, conducted 
a survey of a wide range of facilities--1,800 in all--that deregistered 
from the Risk Management Planning (RMP) program. Among the key 
findings:
    284 facilities in 47 states have dramatically reduced the danger of 
a chemical release into nearby communities by switching to less acutely 
hazardous processes or chemicals or moving to safer locations. This 
action reduces or eliminates a clear terrorism threat to at least 38 
million people. For example, the Mill Creek Wastewater Treatment Plant 
in Cincinnati, Ohio eliminated the danger of an off-site chlorine gas 
release to an area encompassing 860,000 residents by switching to 
liquid bleach for disinfection. Likewise, the Water Pollution Control 
Facility in Wilmington, Delaware made a similar change, eliminating the 
danger to 560,000 nearby residents.
    Change can be accomplished economically. Of respondents that 
provided cost estimates, 87 percent spent less than $1 million and 
roughly half reported spending less than $100,000 to switch to safer 
alternatives.
    Our survey revealed that alternatives already exist in a range of 
applications: drinking water, wastewater, manufacturing, electric power 
production, hazardous waste management, and agriculture and oil 
refineries. In virtually all cases, change involved the adoption of 
common technologies, not new innovation: for water treatment, a shift 
from the use of chlorine gas to liquid bleach or ultraviolet radiation; 
in manufacturing, the use of liquid rather than gaseous ammonia; for 
electrical utilities, the use of aqueous rather than anhydrous ammonia 
or solid rather than anhydrous sulfur dioxide. These and other changes 
do not need to be studied. They are already in use and need to be more 
widely adopted.
    The most common reasons cited for making changes included the 
security and safety of employees and nearby communities, as well as 
regulatory incentives and business opportunities. These facilities also 
saw opportunities to cut a variety of costs, requiring fewer physical 
security measures and hazardous material safety devices, making these 
operations more efficient and productive. This also took a significant 
burden off surrounding communities in terms of disaster planning and 
response.
    While our survey results demonstrated that effective change can 
take place, it also revealed limitations in a purely market-driven 
response. For example, of the 284 facilities that adopted some form of 
inherently safer practices, only 10 percent represented the highest 
risk facilities--those that put 100,000 or more people at potential 
risk. At this pace, it would take another 45 years to eliminate this 
substantial risk to the American people. We do not have that much time 
to act.
    There is also a fairness issue by relying on ad hoc local action 
rather than a national approach. Chemical security involves the 
transportation of hazardous materials, not just their manufacture and 
use. Many communities where change is taking place are also vital 
transportation hubs Wilmington, DE; Jacksonville, FL; Indianapolis, IN; 
Baltimore, MD; Omaha, NE; Cleveland and Cincinnati, OH; and 
Philadelphia, PA. They have taken the initiative to eliminate threats 
to their people, but potentially remain at risk because hazardous 
materials are still transported through these cities to neighboring 
states and communities that have not taken similar action.
    With this in mind, what then is the proper role of Government to 
help promote change within communities and the private sector? As a 
security analyst, what is most important is to accelerate the pace of 
change and measurably reduce the risk of catastrophic terrorism to our 
society and economy. When it comes to our extraordinary military, we 
are constantly exploring how to invest in and employ new technologies 
that make us stronger. Why is it that we would not take the same 
approach to invest in and employ new technologies to make us more 
secure here at home? I think our citizens and our first responders 
deserve the same consideration that we rightly give our men and women 
in the military.
    Voluntary actions should be encouraged, but the experience of the 
past 5 years shows that voluntary actions alone are not adequate to 
fully address this vulnerability. Government has the a responsibility 
to set strong safety and security standards, identify better 
alternatives, require needed security assessments and reporting, and 
create incentives for the private sector and cities and states to take 
action. We need a comprehensive national approach, not a series of 
disconnected local or regional actions.
    To give one example of how this might work, consider the 
approximately 3,000 drinking water and wastewater treatment plants 
across the country that still use chlorine gas. DHS should identify the 
manufacture, transportation and use of chlorine gas for disinfection as 
posing an unacceptable risk to our society, when inherently safer 
alternatives clearly exist. But local officials and facility operators 
should determine how to best eliminate this risk, whether to convert to 
the use of liquid bleach, ultraviolet radiation or other process. Water 
treatment facilities represent an excellent starting point to implement 
a genuine risk-based approach to chemical security.
    What needs to be done?
    The Department of Homeland Security should be granted authority to 
regulate chemical security and move high-hazard facilities to 
inherently safer technologies where practicable.
    With that authority, DHS should promulgate strong national 
standards to improve chemical security, including the manufacture, 
transportation and use of acutely hazardous materials. Particular 
emphasis should be given to the proximity of these acutely hazardous 
materials to major population centers across the United States that 
present the highest risk if successfully attacked by terrorists.
    Chemical facilities should be required to do comprehensive annual 
security risk assessments and report those findings to DHS and EPA. 
These risk assessments should include a thorough evaluation of less 
acutely hazardous alternatives. In the case of publicly traded 
companies, an assessment of risk and summary of actions taken should 
also be reported to shareholders.
    DHS, in conjunction with EPA, should embrace the adoption of 
inherently safer technology and processes as a key component of a risk-
based national security strategy to protect the homeland. DHS should 
establish a Center of Excellence to promote the adoption of inherently 
safer technologies more broadly.
    The Federal Government should create a variety of incentives to 
promote change. This might include a mix of targeted grants, loans and 
tax credits. Rewards for facilities that meet or exceed stronger 
national standards should also be explored, including caps on liability 
if a terrorist attack does occur. Aggressive DHS enforcement would also 
involve sticks for those entities that do not meet stronger security 
standards.
    The course that we have followed in the first five years of the war 
on terror cannot be sustained indefinitely. There will always be a need 
to aggressively but judiciously employ military force to intercept 
terrorists before they can strike the United States. But as we have 
seen over the past couple of years, offensive action by itself is not 
enough. Over time, our national security strategy must place greater 
emphasis on homeland security. But again, as good as our intelligence 
and police forces may be, they cannot be expected to anticipate and 
intercept every attack.
    We must adapt our society to this new security environment. We must 
reduce our vulnerability to terrorism and narrow the potential for 
terrorists to successfully attack us here. We cannot create a risk-free 
environment, but that should not be used an excuse for inaction. The 
security of the United States should not be subject to the lowest 
common private sector denominator. Business as usual is no longer 
acceptable.
                                 ______
                                 
       Response by Philip J. Crowley to an Additional Questions 
                          from Senator Inhofe

    Question. You have written about your concerns over the Nation's 
rail and transit security. However, one of the primary concerns in 
mandating IST, for example, is reduction of on-site inventories of 
chemicals. This would shift the security burden to rail and transit 
systems. How do you reconcile your support for IST which reduces 
inventories and requires more frequent shipments with your concerns 
about rail and transit security?
    Respones. Senator Inhofe, you are absolutely correct to link the 
security of chemical facilities and security of our rail system, 
particularly the flow of hazardous materials through the center of many 
large and vital cities. We really do have to think of them together, 
which is why the matter of chemical security does not end at the 
chemical facility fence line. Even if one could envision perfect 
security at a chemical manufacturing facility, for example, hazardous 
materials must be transported from the manufacturing facility to the 
user. This route will typically involve transit through one or more 
major cities. That combination--a hazardous material in a middle of an 
urban and economic center--creates a terrorism target of opportunity.
    As you have pointed out, IST, or more accurately inherent risk 
reduction, is not one thing. It is a concept that offers a range of 
potential solutions to security challenges. It might include inventory 
reduction or separation, hardened storage, just-in-time manufacturing 
or materials substitution. Ideally, the Government would not be 
proscribing a specific solution, but it would mandate a process by 
which the Department of Homeland Security, Environmental Protection 
Agency, State agencies, industry groups and facility operators would 
collectively evaluate options that, if undertaken, would mitigate or 
eliminate the threat of terrorism.
    So, in the scenario you highlight, the optimal solution would not 
be reducing the quantities of chlorine gas at a particular location--
necessitating more frequent shipments of reduced quantities--but 
shifting from chlorine gas, which can be exploited by terrorists, to 
liquid bleach, which cannot. But in other cases where substitutes are 
not readily available, we cannot dismiss options that reduce our 
vulnerability to terrorism, even if they do not reduce the risk to 
zero.
                                 ______
                                 
        Responses by Philip J. Crowley to Additional Questions 
                         from Senator Jeffords

    Question 1. Why is physical security at a chemical facility not 
enough to protect against terrorist attacks?
    Response. Physical security at the point of manufacture or use is 
important. Many facility operators are improving physical security, 
including fences, lighting, video cameras, guards and access controls. 
One of the reasons this is a homeland security issue is that, while a 
number of facility operators are taking concrete steps to improve 
security, too many are not.
    However, physical plant security only addresses part of the 
security challenge. Security plans that Congress may require as part of 
chemical security legislation must take the transportation of 
applicable hazardous substances into account. It does not matter how 
secure the bank vault is if the Brinks truck never makes it to the 
bank--or if the bank's computer system is vulnerable to a hacker.
    Terrorists watch what we do and consciously exploit 
vulnerabilities. Despite our best efforts, certain activities can be 
safe, but not secure. For example, a HAZMAT car on a rail siding may be 
considered safe. But if that HAZMAT car has graffiti on it, it is not 
secure because someone somewhere had unauthorized access to that car. 
If they can write on it, they can place an explosive device next to it. 
A HAZMAT car in the middle of Montana may well be safe and secure. A 
HAZMAT car in the middle of Washington, DC may be safe, but it is not 
secure because it presents an inviting target to a terrorist 
organization that attacked once and is determined to try again.

    Question 2. As you know, members of Congress have debated for years 
whether all chemical facilities should consider and implement, where 
practicable, inherently safer alternatives to make their communities 
safer. One compromise approach to move passed this impasse would be to 
tailor the requirement to evaluate safer alternatives to the risk posed 
by the facility, so that facilities that DHS believes pose the highest 
risk would be required to undertake a more rigorous evaluation than 
facilities that pose less risk. Would you support such a compromise?
    Response. Yes. Such an approach has two dimensions that I believe 
are important.
    First, I support the concept of tiering where we devote increasing 
attention to security where the threat and consequence of an attack are 
most significant. We do not necessarily have to protect everything in 
society to the same standard. When looking at critical infrastructure, 
increased risk can be based on what a facility does, where it is or the 
value that our society places on it. This will vary among economic and 
industrial sectors or even within sectors. The emphasis must be 
preventing catastrophic terrorism. As the potential for catastrophic 
terrorism rises, security standards need to increase, including the 
need to evaluate more secure alternatives.
    Second, I do not think that Government needs to mandate a specific 
solution to a security challenge. I agree with those who say that 
facility operators are in the best position to make decisions on how to 
change. But there needs to be a mandatory process where facility 
operators are informed about security risks and required to evaluate 
options that can reduce or hopefully eliminate those risks. So, to use 
the example of a wastewater treatment facility, it is an appropriate 
role for the Government to identify chlorine gas as a substance that 
poses an unacceptably high security risk, particularly if the facility 
is situated near a major population center or if the chlorine gas is 
transported through an urban center to that facility. The facility 
operator can determine whether a switch to liquid bleach, ultraviolet 
radiation or some other process is the most appropriate solution to the 
security challenge. What is important is that there is a process that 
encourages risk mitigation or elimination and mandates serious 
consideration of secure alternatives where they exist. As part of this 
process, there should also be Government incentives, such as tax 
credits, matching loans or grants, to accelerate the pace of change.

    Question 3. There was not much discussion during the hearing on the 
security risks faced during transportation of chemicals. Yet I have 
heard horror stories about the potential consequences if a rail car 
full of chlorine gas were to explode near the US Capitol or near a 
major city. What is the risk of a terrorist attack during the 
transportation of chemicals and how does this influence our discussions 
of chemical facility security?
    Response. We must continue to focus on the actual terrorist threat 
we face. The 9/11 perpetrators intended to attack the Capitol, Why 
should we give them another opportunity using a 90-ton HAZMAT car?
    The U.S. Capitol is a great example of why chemical security needs 
to incorporate both physical security and transportation. I have no 
doubt that the CSX Corporation can safely operate on the freight rail 
line that flows through the heart of Washington, DC and in the 
immediate vicinity of the Capitol and other key Government structures, 
including the Pentagon. However, putting a 90-ton HAZMAT car next to 
the Capitol can never be made completely secure. Safety and security 
are fundamentally different concepts.
    In recent weeks, whether these plots were mature or not, or 
feasible or not, those who identify with al Qaeda's radical ideology 
are focused on destructive acts in the heart of major cities--Toronto, 
Chicago, New York and so forth. Regardless of where the chemical 
facilities are actually located, our major freight rail lines pass 
through the heart of our urban and economic centers, creating targets 
of opportunity. If a HAZMAT car filled with chlorine gas ruptured due 
to an attack, it could potentially kill 100,000 people in 30 minutes. 
Rerouting may be an option in some cases, such as Washington, DC, but 
the best option is to get the hazardous material off these freight rail 
lines. The rail industry cannot do that; only the chemical industry and 
its customers can.
    In fact, on June 13th Edward R. Hamberger, the CEO of the 
Association of American Railroads, told the House Transportation and 
Infrastructure Committee the ``Railroads agree, and strongly support 
efforts aimed at finding and utilizing `inherently safer technologies' 
as substitutes for hazardous materials, especially TIH.''
                                 ______
                                 
        Responses by Philip J. Crowley to Additional Questions 
                         from Senator Voinovich

    Question 1. Across the entire chemical manufacturing industry in 
the U.S., how many of the chemicals listed on EPA's Risk Management 
Plan list have scientifically proven alternatives that increase safety 
reduce risk, and operate at least as effectively, in terms of both cost 
and end product, as the chemical compound that is being replaced?
    Response. The member companies of the American Chemistry Council, 
the trade association of the chemical manufacturers only represent 
about 11 percent of the 14,000 facilities under the EPA's Risk 
Management Program (RMP). The large majority of chemical facilities 
that pose a threat to local communities are chemical users, not makers. 
Both chemical makers and users can convert to safer technologies. Our 
analysis of RMP data showed that chemical users are switching to safer 
technologies more quickly. However, chemical manufacturers are also 
innovating. Major manufacturers such as BASF, Dupont and Cargill are 
investing in vegetable based (PLA) plastics instead of chlorine based 
vinyl.
    For the most part, the process change that would make us more 
secure involves not the hazardous substance, but its form. We could 
make significant progress if we start with just three toxic-by-
inhalation (TIH) gases--anhydrous ammonia, chlorine and sulfur dioxide. 
According to the EPA, these account for more than 50 percent of all 
categories of chemical processes that threaten communities nationwide. 
A shift to aqueous ammonia, liquid bleach or ultraviolet light and 
solid sulfer dioxide or liquid sodium bisulfite (depending on the 
process) or other less hazardous forms would be significant.
    Are there up front costs to such process changes? Yes, but as our 
report Preventing Toxic Terrorism shows, the costs are manageable--87 
percent of respondents reporting $1 million or less, the majority of 
those $100,000 or less. Additional savings were realized through the 
avoidance of a range of costs, including specialized protective gear, 
evacuation and response planning and training and compliance 
inspections.

    Question 2. Who or what body should determine what IST is? Should 
it be defined by Government, industry, or academia? If Government does 
define it, which agency should be responsible for that? To you 
knowledge has IST ever been defined as a security measure in Federal 
law?
    Response. The EPA routinely gives credit to facilities for hazard 
reduction techniques. That is why many facilities have been allowed to 
de-register under the EPA RMP program. Our survey of RMP data focused 
on the hundreds of facilities that have de-registered since 1999.
    The adoption of secure alternatives would involve a process led by 
the Department of Homeland Security (DHS), with the participation of 
EPA, state and local authorities, industry and academia. The first step 
would be to identify substances (and forms of those substances, 
particularly gaseous forms) that have the potential if exploited by 
terrorists to kill or harm thousands of people. DHS would establish a 
Center of Excellence (as it has with other homeland security 
priorities) that would identify existing alternatives or promote 
research to develop viable and cost-effective alternatives where none 
currently exist. Even if IST initially evolved as an environmental 
rather than security concept, risk elimination, not just risk 
management or control, must be part of a viable chemical security 
strategy.

    Question 3. The EPA has concluded that ``inherently safer 
processes'' is a developing concept and is not ready for general 
application; IST frequently displaces risk rather than reducing it; 
even if a few examples of workable alternative approaches do exist, 
there is not a rational basis for imposing an additional industry-wide 
regulator burden; and the concept is normally considered when designing 
new processes, a time when changes can be implemented cost effectively. 
Do you agree with the above assessments? In that context, do you 
believe that IST is a concept that is ready for broad implementation as 
a regulatory requirement?
    Response. Over the years the EPA has had many opinions on this 
subject. In February of 2000 the EPA issued a security alert to the 
industry advising them that one of the ways they could reduce security 
hazards was through design changes at facilities. The EPA was reminding 
these facilities of their general duty under the Clean Air Act (Section 
112r) to prevent a catastrophic release of regulated chemicals. In June 
of 2002 the EPA drafted guidance and regulations calling for hazard 
reduction through various techniques including the substitution 
hazardous substances. All of these actions are efforts by the EPA to 
advance inherently safer technologies, processes and plant designs to 
minimize the impact of a terrorist attack on a chemical facility.
    Given the threat to our critical infrastructure, we need a 
comprehensive chemical security strategy. Such a strategy must 
incorporate the manufacture, use, physical security, storage and 
transportation of acutely hazardous materials. Risk elimination through 
the adoption of secure alternatives or inherently safer processes, 
whatever term one wants to use, should be an essential tool to reduce 
our vulnerability to terrorism.
    IST is a concept, but it is a concept that belongs in our approach 
to chemical security.
    Given the clear danger, and the mixed market-based response within 
the chemical sector, it is appropriate to grant the Department of 
Homeland Security regulatory authority. Obviously many within the 
chemical sector favor industry-wide security regulation to level an 
uneven playing field.
    Promoting IST does not mean dictating one-size-fits-all solutions 
to every facility and every chemical. But regulation should establish a 
security framework where the adoption of inherently safer or more 
secure alternatives is a leading option. Facility operators, as is the 
case in New Jersey, should be required to evaluate alternatives and 
report those judgments to federal and state authorities. I do not 
believe that this places an arduous burden on the private sector. But 
if it does, then the Federal Government should not only regulate, but 
also provide incentives that help the private sector adapt more rapidly 
to this new security environment we face.

    Question 4. Mr. Crowley, in the study Preventing Toxic Terrorism, 
how many of the 284 facilities referenced were actual chemical 
manufacturing facilities? How many of those chemical manufacturing 
facilities actually substituted or modified the chemical process? How 
many others relocated their facilities or modified the transport of the 
various chemicals? Given the small number of facilities that actually 
changed their processes, how can this study be viewed as a sweeping 
endorsement of IST for chemical manufacturing facilities?
    Response. The vast majority of facilities cited in Preventing Toxic 
Terrorism involved chemical users rather than manufacturers, such as 
the drinking water and/or wastewater treatment facilities in Cleveland, 
Columbus and Cincinnati, Ohio that all switched from chlorine gas to 
liquid bleach disinfection, making millions of Ohioans more secure as a 
result. The Helena Chemical Company of Coldwater, OH switched from the 
use of anhydrous ammonia gas to alternative forms of fertilizers. 
Anhydrous ammonia is also a key ingredient used in illegal 
methamphetamine labs. Such a change improves both security and law 
enforcement.
    Preventing Toxic Terrorism, using a sample of facilities from the 
Risk Management Program, proves the viability of the concept. Just like 
clinical studies, we can use a test sample to validate a concept for 
wider adoption. This is no different. What our report really showed was 
that market-based solutions are not viable absent a more aggressive 
federal role. An electric power producer uses anhydrous ammonia in air 
pollution control devices. The manufacturer sells it to them. The 
railroad is required to transport it--probably through a major city. At 
no time under the current system are the three of them required to 
jointly consider more secure alternatives. The federal Government needs 
to change this dynamic

    Question 5. Mr. Crowley, I understand that the majority of the 
changes that occurred were the substitution of hypochlorite (otherwise 
known as bleach) for chlorine or other similar substitutes at water 
treatment facilities. Though the water treatment facilities will have 
less chlorine on site wouldn't the bleach manufacturers have increased 
amounts of chlorine on site, in order to keep up with the increased 
demand for bleach? Isn't this simply displacing risk to both the rail 
lines and the bleach manufacturing facilities? Have you considered the 
entire chemical industry supply chain in your analysis?
    Response. Senator Voinovich, viewing chemical security in the 
context of the entire chemical industry supply chain is exactly how we 
should evaluate this issue. We must take a system-wide approach that 
looks at manufacturers, transporters and users collectively, not 
individually.
    Security involves the management of risk. It will never be zero, 
particularly when we are talking about the presence of chemicals such 
as chlorine that our society does rely on every day. In the process of 
managing risk to reduce the threat of terrorism, there may be some 
displacement of risk as you say, but that displacement can mean a broad 
lowering of risk. For example, here in Washington, DC, CSX's current 
rerouting of HAZMAT cars away from the U.S. Capitol shifts that risk to 
a rail line that flows through, for example, Hagerstown, MD. That al 
Qaeda wishes to attack Washington, DC again is self-evident. It is 
unclear that an attack on Hagerstown, MD would achieve the same impact 
that their attack on 9/11 did. From a national security standpoint, 
this rerouting reduces the probability of an attack and is a prudent 
course of action.
    A second legitimate security goal is to reduce the number of 
targets. Since there are at least two proven and reasonably economical 
alternatives to chlorine gas at water and wastewater treatment 
facilities, encouraging the shift to hypochlorite or better still 
ultraviolet radiation takes these facilities off al Qaeda's target 
list. The storage and transportation of liquid bleach does not remove 
all risk--there could still be environmental damage--but it eliminates 
the risk of catastrophic terrorism associated with the transportation 
and use of this hazardous substance (in its more dangerous form, gas).
    The risk would still remain at the point of manufacture, but this 
is where the physical security measures come into play--better fencing, 
lighting, guards, access controls and other potential inherently safer 
processes, such as hardened storage, small storage quantities, just-in-
time manufacture and so forth. By taking such a system-wide approach, 
looking at the entire process to include the manufacture, 
transportation and use--and incorporating more secure alternatives 
where they apply--we are able to significantly reduce the potential for 
terrorists to attack the United States using deadly chemicals such as 
chlorine as a weapon.

    Question 6. Mr. Crowley, in your conclusions, you note that where 
safer alternative chemicals and processes are available, each chemical 
facility should make the appropriate modifications. You have also 
called for legislation that includes the use of IST. I am not aware of 
a list of currently approved IST substitutes for the chemicals found on 
the Risk Management Program (RMP) list. Could you please list the 
approved alternative technologies? Is this list approved by EPA? DHS? 
Academia?
    Response. ``The EPA's process of de-registering facilities that 
eliminate or reduce chemicals below RMP reporting thresholds recognizes 
the advantages of significantly reducing or eliminating the number of 
people at risk from a chemical release. Based on our survey of these 
facilities, those who switched to safer technologies since the 9/11 
attacks, 45 percent told us they switched for security reasons.
    As was stressed at the hearing, IST is an umbrella term to include 
many things--the substitution of one chemical compound for another 
safer alternative; a shift from one form of a chemical that can spread, 
endangering many, to another form that does not spread, endangering 
only a few; or changes in a manufacturing process, producing a chemical 
as it is required; the manner or volume of storage; or the location of 
the facility. For example, a facility is removed from the RMP program 
if it closes. This is not an action being advocated. If facilities 
adapt, they are less likely to be attacked. They are thus more likely 
to prosper. These are not competing priorities.
    There are a range of proven and available alternatives to chemicals 
and processes that, if promoted and adopted, will make us less 
vulnerable to terrorism. I am not aware of an approved EPA list, but 
the application of the IST concept to homeland security would result in 
an overlapping, but not identical list. The central RMP criteria, such 
as volume of a substance in a particular location and the number of 
people in the surrounding area who are potentially threatened, are 
certainly valid in the security context as well.
    For each segment of the chemical sector, I would expect a list of 
approved alternatives to be developed by DHS, working with the EPA, 
academia, chemical manufacturers, transporters, users, industry groups, 
environmental groups and other stakeholders.
                                 ______
                                 
        Responses by Phillip J. Crowley to Additional Questions 
                           from Senator Boxer

    Question 1. A document published in 2000, titled, ``Chemical 
accident risks in U.S. Industry--A preliminary analysis of accident 
risk data from U.S. hazardous chemical facilities'' demonstrates that 
four extremely hazardous chemicals (Anhydrous Ammonia, Chlorine, Sulfur 
Dioxide and Hydrogen Fluoride) account for 55 percent of the processes 
that threaten communities across the country. Please describe the 
processes that use these chemicals in wastewater and drinking water 
plants, refineries, and power plants.
    Response. Chlorine gas continues to be widely used for disinfection 
at drinking and wastewater facilities. Anhydrous sulfur dioxide is used 
to remove chlorine after treating wastewater, as well as treat other 
industrial wastes. The same chemicals are used in electric power 
plants, anhydrous sulfur dioxide in air pollution control equipment and 
chlorine gas to prevent fouling of cooling towers. Anhydrous ammonia 
gas is used for fertilizer. Refineries employ hydrofluoric acid in the 
production of gasoline.

    Question 2. Please describe the number of known substitutes for 
these chemicals when used in wastewater and drinking water plants, 
refineries, and power plants.
    Response. The recent survey conducted by the Center for American 
Progress, Preventing Toxic Terrorism, provided several examples of 
common technologies that are viable and cost effective alternatives. 
Sodium hypochlorite (or liquid bleach) and calcium hypochlorite can be 
substituted for chlorine gas at drinking water and wastewater treatment 
facilities. Ultraviolet radiation provides additional advantages. 
Thousands of water utilities already use liquid bleach or ultraviolet 
light. Dozens of power plants already use aqueous ammonia rather than 
anhydrous ammonia in pollution control equipment; a few use even safer 
solid urea. The electric grid will always be a potential terrorism 
target, but use of a safer solid form of sulfur dioxide eliminates off-
site risks at power plants if one is attacked. Liquid or granular 
fertilizers not only pose less risk than anhydrous ammonia, but 
eliminate a substance used in illegal methamphetamine labs as well. 
Some two-thirds of the Nation's refineries already use safer 
alternatives to hydrofluoric acid, primarily sulfuric acid. Newer solid 
acid catalysts are in the demonstration phase at refineries in Europe. 
Using sulfuric acid does not remove all hazards, but eliminates the 
potential for catastrophic terrorism.

    Question 3. Please describe the number of communities and people 
that would have reduced or eliminated levels of risk as a result of the 
facilities described above using these substitutes.
    Response. The Center for American Progress survey documented that 
284 facilities in 47 States have adopted inherently safer practices, 
the vast majority involving these substitutes. As a result, at least 38 
million people are at a lower level of risk of catastrophic terrorism. 
That is the good news. Of these facilities, only ten percent represent 
the highest risk facilities, those that put 100,000 or more people at 
risk. At this pace, it would take another 45 years to eliminate this 
vulnerability. The threat is much more urgent than that.
    As of 2004, some 3.5 million Americans lived in danger of serious 
injury or death from 225 power plants that use extremely hazardous 
substances. Just two-dozen power plants account for two thirds of the 
people in danger. (Source: Unnecessary Dangers, Working Group on 
Community Right-to-Know, 2004.)
    As of 2003, some 19 million Americans lived in danger of serious 
injury or death from extremely hazardous substances used at 
approximately 1,300 wastewater treatment facilities. Just 45 of these 
facilities each endangered any of more than 100,000 people. (Source: 
Eliminating Hometown Hazards, Environmental Defense, 2003.)
    As of 2005, some 17 million Americans lived in danger of serious 
injury or death from extremely hazardous substances used at 50 
refineries in 20 different States. (Source: Needless Risk, U.S. PIRG 
Education Fund, 2005.)
    These power plants, wastewater facilities, and refineries could all 
but eliminate these hazards by using more secure chemicals or 
processes.

    Question 4. Upgrading business infrastructure and modernizing 
management processes is commonplace in business. Particularly viewed 
against the backdrop of terrorist threats and community safety 
concerns, reducing a facility's risks by substituting dangerous 
chemicals or processes for safer alternative would appear to be a cost 
of doing business. Please provide me with a description of whether you 
believe that the costs of using alternative chemicals or processes can 
be amortized over times. Any case studies that you would have would be 
greatly appreciated.
    Response. The Center for American Progress survey clearly 
demonstrated that chemical facilities can economically change to more 
secure alternatives. Of the 284 facilities documented in the Preventing 
Toxic Terrorism report, 195 reported cost data. Of those, 95 (49 
percent) reported changes cost less than $100,000. Most of these were 
drinking water and wastewater treatment facilities. Another 75 (38 
percent) reported costs between $100,000 and $1 million. Twenty 
facilities (10 percent) reported costs as high as $10 million. The 
remainder was higher than that. Facilities reporting higher costs in 
many cases incorporated alternative technologies and processes as part 
of major facility upgrades.
    A previous study conducted at four facilities in Europe identified 
more than two-dozen opportunities to reduce chemical hazards, the 
majority with a payback period of less than two years. (Source: ``The 
Feasibility of Encouraging Inherently Safer Production in Industrial 
Firms,'' by Gerard I.J.M. Zwetsloot and Nicholas Askounes Ashford, 
2001.)

    Question 5. Please provide me with a description of the types of 
costs to communities and individuals that cannot be amortized as a 
result of an uncontrolled release from a facility regulated by section 
112 (r) of the Clean Air Act.
    Response. The impacts of 1984 Union Carbide disaster in Bhopal, 
India are still being felt today. According to a June 2006 National 
Academy of Sciences report, 3,000 to 7,000 people were killed 
immediately with 20,000 cumulative deaths and 200,000 to 500,000 
injuries as a result of the release of methyl isocyanate (MIC) gas. A 
similar U.S. plant in Victoria, Texas changed its processes so as to 
use up methyl isocyanate as soon as it is produced, all but eliminating 
potential for an off-site release.
    A July 2004 Homeland Security Council report estimated that an 
attack on a chlorine facility in the United States could result in 
17,500 fatalities, 10,000 severe injuries and 100,000 hospitalizations. 
They predicted, ``An overall national economic downturn is possible in 
the wake of the attack due to a loss of consumer confidence.''
    The presence of acutely hazardous chemicals place significant 
burdens on citizens and Governments in surrounding communities. Those 
communities need to have specialized response capabilities. Local 
police may be burdened with additional duties monitoring high hazard 
facilities or frequent theft of anhydrous ammonia. Contingency plans 
need to be developed and publicized to local citizens. They in turn 
need to have their own personal plans in case an evacuation is 
required. All safety measures are subject to regulation, certification 
and compliance inspections. Many of these costs would be reduced or 
avoided entirely if facilities switched to more secure alternatives.
    Facilities may not have insurance adequate to compensate the large 
number of people who could be harmed in a worst-case release. Indeed, 
the Association of American Railroads (AAR) recently called the current 
environment for rail transportation of extremely hazardous substances 
``untenable,'' stating that ``The insurance industry is unwilling to 
insure railroads against the multi-billion-dollar risks associated with 
highly-hazardous shipments.''

    Question 6. Please provide me with a description of the types of 
costs to businesses that could result from an uncontrolled release from 
a facility regulated by section 112 (r) of the Clean Air Act.
    Response. Given the on-going threat of terrorism to our society, 
the greatest potential cost to a acutely hazardous chemical 
manufacturer, user or transporter is the potential liability. For 
example, the release of chlorine gas from a HAZMAT car if ruptured 
because of a terrorist incident in the middle of Washington, DC could 
kill or harm 100,000 people within 30 minutes. Any business associated 
with such an attack risks bankruptcy, since such high-risk insurance is 
subject to limits and co-payments. Shareholders of publicly traded 
companies that confront such risk and liability deserve to know how the 
company assesses the terrorism threat and a summary of actions taken to 
reduce the risk. Such a market-based approach would serve as a strong 
catalyst for change.
Statement of David A. Moore, PE, CSP President & CEO AcuTech Consulting 

                          Group Chemetica, Inc

                              INTRODUCTION

    Good morning, Mr. Chairman. My name is David Moore and I am the 
President and CEO of the AcuTech Consulting Group, a security and 
safety consulting firm based in Alexandria, VA. I have an extensive 
background in chemical safety and security with a specialty in the 
application and regulation of inherent safety for chemical plant 
security.
    I was the lead author of the American Institute of Chemical 
Engineers (AIChE) Center for Chemical Process Safety (CCPS') 
``Guidelines for Managing and Analyzing the Security Vulnerabilities of 
Fixed Chemical Sites''\1\ and the American Petroleum Institute (API)/
National Petrochemical and Refiners Association (NPRA) Security 
Vulnerability Assessment Methodology\2\. These are the most highly used 
security vulnerability analysis guidelines in these industries.
---------------------------------------------------------------------------
    \1\ Guidelines for Managing and Analyzing the Security 
Vulnerabilities of Fixed Chemical Sites, American Institute of Chemical 
Engineers, August 2002
    \2\ ``Security Vulnerability Assessment for the Petroleum and 
Petrochemical Industries'', American Petroleum Institute, August, 2004.
---------------------------------------------------------------------------
    I completed a project in January, 2006, as the Sector Coordinator 
for the petroleum refining, chemical manufacturing, and liquefied 
natural gas sub sectors for the Department of Homeland Security (DHS) 
initiative to develop a common strategic vulnerability analysis process 
called `Risk Analysis and Management for Critical Asset Protection 
(RAMCAP)'. We currently have other efforts ongoing in support of 
industry and Government to reduce homeland security risks in the 
chemical sector including ongoing consultation to DHS for the chemical 
comprehensive review program.
    My firm is actively involved in chemical process security 
consulting and training and in conducting Inherently Safer Technology 
(IST) studies for safety and security, some of which are done to 
address current regulations in effect in Contra Costa County, CA, and 
the State of New Jersey. I have been consulting in chemical process 
safety since 1981 and formally in inherent safety regulation since 
1999. Prior to that time there wasn't a regulation that required IST, 
but I was practicing the principles of inherent safety routinely. I was 
formerly a Senior Engineer with Mobil Corporation, who condoned the 
principles of inherent safety in every decision we made, and before 
that I was a Research Engineer with the National Fire Protection 
Association.
    In particular, I have assisted companies in understanding the 
concepts of inherent safety through our consulting and training 
assignments, and have conducted dedicated and integral inherent safety 
analyses on chemical facilities and other industrial facilities 
handling hazardous materials. I have published twelve papers on 
inherent safety, the regulation of inherent safety\3\, and inherent 
safety consideration in chemical security. I have made numerous 
presentations on the topic at professional conferences, training 
forums, and Government venues.
---------------------------------------------------------------------------
    \3\ Moore, David A., ``Experiences in the Regulation of Inherent 
Safety'', Mary Kay O'Connor Process Safety Center, Texas A&M University 
System, 2002 Annual Symposium, Beyond Regulatory Compliance, Making 
Safety Second Nature, October 29-30, 2002, College Station, Texas.
---------------------------------------------------------------------------
    Because of our experience we were selected by the AIChE 
CCPS' to update their classic book on inherent safety\4\, 
which we are in process of at this time. For that I am working with the 
leading inherent safety specialists in the United States and 
internationally from industry and academia who serve as advisors to our 
team. I am a strong proponent of inherent safety, the ultimate goal 
being to see all companies applying inherently safer principles 
throughout the design and operating lifecycle of projects.
---------------------------------------------------------------------------
    \4\ Bollinger, R. E., D. G. Clark, A. M. Dowell, R. M. Ewbank, D. 
C. Hendershot, W. K. Lutz, S. I. Meszaros, D. E. Park, and E. D. Wixom 
(1996). Inherently Safer Chemical Processes: A Life Cycle Approach, ed. 
D. A. Crowl. New York: American Institute of Chemical Engineers.
---------------------------------------------------------------------------
                 INHERENT SAFETY TECHNOLOGY BACKGROUND

    Inherent Safety (IS) is emerging as a key process risk management 
issue. Process safety professionals have embraced the concepts 
voluntarily for years and it is an established method for addressing 
process risks. Any chemical company could point to inherent safety 
considerations they have implemented, whether for a regulation or not. 
This is because it is a general philosophy rather than a science, and 
it is imbedded in the thought process of chemical and safety engineers 
as they design and operate safe plants. They could also speak to many 
other process risk management techniques that are effective at risk 
reduction, including passive, active, and procedural layers of 
protection. They tend to employ a mixture of these strategies for 
optimal risk reduction as is appropriate.
    Inherent Safety is a well recognized process safety concept; a 
collection of basic strategies focused on process safety improvement 
through the reduction of hazards. ``Hazard'' is defined as a physical 
or chemical characteristic that has the potential for causing harm to 
people, the environment, or property.\5\ The IS concept is based on the 
belief that if one can eliminate or moderate the hazard, not only is 
the risk reduced, it may be possible to remove the risk altogether from 
consideration. Alternatively, an inherently safer system would make the 
hazard less likely to be realized and less intense if there is an 
accident.
---------------------------------------------------------------------------
    \5\ Center for Chemical Process Safety, Inherently Safer Chemical 
Processes: A Life Cycle Approach, Center for Chemical Process Safety, 
AIChE, 1996. Collins Bill, Chemical Security Act of 2005,
---------------------------------------------------------------------------
    It is a not necessarily a change in `technology' that the term IS 
is referring to--it may involve less dramatic ideas than a change in 
technology such as a simplification of operating controls. I therefore 
refer to it as Inherent Safety (IS) to be inclusive of the full range 
of inherently safer strategies that were originally in mind. Technology 
may be mistaken to mean only process chemistry or the material used, 
rather than other aspects of IS.
    IS includes four basic strategies for safety engineers to apply for 
process safety and risk management of chemical manufacturing plants, 
namely substitution, minimization, moderation, and simplification. 
These four strategies could be independent ideas or they may relate to 
one another, depending on the case by case situation. There is no 
defined and agreed upon way to consider them in a formal analysis 
methodology. Engineers are encouraged to consider them to the extent 
possible, but given the innumerable situations where they may be 
applied there cannot be a rule on what is an adequate consideration of 
IS.
    In 1996 the AIChE CCPS' published the book ``Inherently 
Safer Chemical Processes--A Concept Book'', to clarify the concept and 
to help provide examples. Today it remains one of the leading 
practitioner's guides to understanding and applying inherent safety 
concepts. It is the leading reference mentioned in various regulatory 
actions and proposed actions.

                      ISSUES WITH INHERENT SAFETY

    Inherent safety is a challenge for all parties--the owner, chemist, 
operator, design engineer, regulator, and the public. There are 
limitations of inherent safety and technical and business constraints 
to its usage. There are examples of where inherent safety has been very 
useful and where opportunities may exist, but since it is a concept the 
blanket requirement of inherent safety poses issues.
Undocumented considerations
    IS is not new but regulation of IS is new. Most of industry is 
already practicing it but not formally documenting how they use 
inherent safety as a strategy for risk management. Engineers tend to 
make orderly, inherently safer decisions by practice for the most part. 
This has been expected of industry as a matter of principle, and there 
is evidence it is being practiced but without a degree of measurement 
of their actions or the benefits. One of the suspected reasons for this 
is the lack of formal and agreed IS analysis approaches, and the other 
is that these requirements simply haven't existed until recently to 
document the considerations.
Requires judgment and is potentially subjective
    It is precisely because IS is vague and involves considerable 
judgment that it is very difficult to define and implement to any 
degree of uniformity and objectivity. This is particularly true in the 
chemical sector where the diversity of chemical uses and processes and 
site specific situations prevents clear characterization of the 
industry and a one-sized-fits-all solution.
    IS can also be very subjective--how `safe or secure' is `safe or 
secure enough' is a decision of the analyst conducting the study. There 
are no clear and objective guidelines on how to make these decisions as 
it is considered both a concept to apply as one sees fit and as 
opportunities arise.
    The CCPS' book itself is indeed a concept book and it 
does not provide a clear delineation of what is inherently safer or how 
to judge whether an inherent safety analysis is comprehensive and 
complete enough. The reason for this is that the topic is so diverse 
that it is, in some cases, even ambiguous. There is an entire section 
of the book explaining the numerous conflicts and risk: risk tradeoff 
problems of IS. Also the state of the practice is not perfectly clear 
on how it should be defined, conducted, analyzed, assessed, or judged 
as adequately performed. The book doesn't solve the classical problems 
with IS of trying to objectively decide `what is inherently safer' and 
how to measure whether a process is safe enough. This sums the state of 
the practice with IS and is an underlying basis of the problems of 
attempting to regulate it and to apply it to security issues.
    In actual practice this has proven to be problematic because IS, at 
this stage in its development, is more of a conceptual methodology 
rather than a codified procedure with a well established and understood 
framework for evaluation and implementation. This is somewhat a 
function of the state of the art of our understanding of IS.
Value and Perspective
    What is inherently safer to one person is not necessarily 
inherently safer to another--it is a matter of perspective. If one 
takes an insular view of what is inherently safer, it may not be the 
most inherently safe decision for society as a whole. For example, if a 
plant decides to lower its risk at a given fixed chemical plant site by 
reducing inventory or making an alternative product, this could simply 
either transfer the risk to more of the public through increased 
shipments of hazardous materials in the community or move the same 
operation to another location which may be more problematic.
    Companies may be unclear on the value of IS or may be unable to 
easily prove that IS is beneficial to employ. Methods to prove the 
value of IS and to quantitatively measure whether a given process is 
`as inherently safe as is practicable' are generally unavailable or 
unproven. Case studies showing the economic and other benefits are not 
available for a wide array of industrial situations.
    Depending on the goals, the perspective may be that it is safe or 
secure enough as it is. For example, the plant is designed to operate 
at a given capacity and has been optimized through careful engineering 
design to produce the product safely, efficiently, and cost-
effectively. Many IS-type considerations have already gone into the 
design or operating philosophy of the plant. When confronted with the 
need to conduct an IS study, they often find that there are few 
opportunities to improve on that design, short of a complete change of 
`technology', even if another technology exists that is inherently 
safer. If it does exist they find it troubling to consider changing the 
technology when the gains may be questionable for safety or security. 
As such the net change may be limited.
Safety and Security Conflicts
    The need to introduce inherent safety as a strategy at all 
facilities subject to such a security regulation is questionable. This 
would result in a great deal of analysis to consider a single strategy 
has been applied, thereby causing a very large documentation problem 
and undoubtedly many technical and legal dilemmas. This is contrasted 
with a preferred approach of allowing industry to set security 
objectives to determine the relevant issues and vulnerabilities and 
make appropriate risk management decisions. It should be considered as 
a potential strategy rather than the first priority and allow the most 
effective homeland security strategies to be applied rather than force 
a particular one or a change in every technology.
    In fact, what is inherently safer is not necessarily what is 
inherently more secure. For example:

     Moderation--a process that successfully applied an 
inherently safer technology may have changed a catalyst to end with a 
`moderated' process--one that is operated at a lower pressure and 
temperature. This is commendable for safety, but may have little to do 
with security. The process may be disabled just the same, which is an 
issue of economic security, or it may release a flammable or toxic 
cloud which is just as significant.
     Minimization--In another case an owner may have reduced 
the inventory of a feedstock in a tank to reduce the consequences of an 
attack. The feedstock is a toxic substance, so this appears sensible, 
but the material is also a `dual purpose' chemical that could be used 
to make an improvised chemical weapon. In that case simply reducing the 
volume may not matter for the threat of theft of the materials--in fact 
smaller quantities may be more man-portable thereby accommodating 
theft. The plant may need for frequent deliveries of the material, 
which also increases the chance of theft.
     Simplification--An owner may invest considerable sums of 
capital to improve the simplicity of the control system, thereby 
lessening the chance of human error as a cause of an accident. This may 
result in a control system that is easier to compromise.
     Substitution--A petroleum refiner may substitute hydrogen 
fluoride catalyst with sulfuric acid for alkylation (along with 
substantial process changes). While the individual offsite impacts may 
be reduced from storage the opportunities for disruption of the 
transportation chain are increased due to the additional deliveries of 
acid that are required. Besides the number of additional volumes of 
materials transited throughout the community, the site has increased 
vulnerability each time a vehicle has to enter the perimeter. Generally 
speaking security professionals try to find ways to reduce penetrations 
through a secured perimeter.

               IS REGULATORY PROPOSALS AND COMPLICATIONS

    Inherent Safety is a common phrase from the chemical industry and 
is being considered and debated as a chemical process security concept 
for inclusion in proposed chemical security regulations\6\. IS is being 
considered by legislators as the first security strategy industry 
should use for reducing terrorist risk in the chemical sector. The 
newly appreciated concerns for terrorism have naturally highlighted the 
issue of the potential for attack on facilities handling hazardous 
materials. Out of this concern first sprung a potentially far-reaching 
proposed act titled the Chemical Security Act of 2001, S.1602. The Act 
was introduced on 10/31/2001 by Senators Corzine (D; NJ), Jeffords (D; 
VT), Boxer (D; CA), and Clinton (D; NY). Since then there have been 
several other proposals.
---------------------------------------------------------------------------
    \6\ Collins Bill, Chemical Security Act of 2005.
---------------------------------------------------------------------------
    The proposed series of Chemical Security Act bills generally state 
that there are significant opportunities to prevent theft from, and 
criminal attack on, chemical sources and reduce the harm that such acts 
would produce by reducing usage and storage of chemicals by changing 
production methods and processes; and employing inherently safer 
technologies in the manufacture, transport, and use of chemicals;
    These proposed regulations would have sweeping applicability and 
significant implications for design and operation of facilities 
handling hazardous materials. Many of the facilities mentioned to be 
included are from the USEPA Risk Management Planning regulated sources 
(40 CFR Part 68), which may not be either highly consequential or 
attractive to terrorists. Any new initiatives such as this have to be 
rational, measured, cost-effective, and fully justified.
    The anticipated regulatory benefit seems to be that IS can remove 
the hazard entirely or reduce hazards to de minimis levels to where 
there is no interest in causing the attack. It is often expressed to be 
a possible strategy for security risk management, and sometimes is 
mistaken as a relatively obvious and simple approach to execute or 
regulate. Other proven security measures are often seemingly weighed as 
less effective or reliable.
    These existing and proposed regulations typically end in a goal of 
IS consideration `to the extent practicable' and sometimes allow cost 
or feasibility as a basis for justifying a change is `practicable'. 
There is no standard measurement of what this means. While companies 
may believe they are moving toward inherently safer processes, they 
often find obstacles to the theoretically possible complete application 
of the four IS strategies.
    Homeland security is not that simple and the implementation of IS 
is not that easily accomplished or even necessary for that purpose in 
all cases.

                     PROBLEMS WITH REGULATION OF IS

Holistic security v. singular issues
    The problem is not IS, but the expectation of the value of 
regulation of IS. It forces industry to focus on a few safety 
strategies to the possible detriment of the complete approach to risk 
management. There seems to be an overemphasis of inherent safety as a 
singular strategy for security assurances in many of the proposed 
regulations.
    Inherent safety has to be considered in light of other security 
risk management approaches where one is not necessarily preferable over 
another. That decision should be made on a case by case basis rather 
than blanket regulatory requirements. Most security experts would agree 
that it is about providing sufficient layers of security, combined with 
an understanding of the threat and risk-based approaches to limiting 
access to possible assets of interest to adversaries that is the 
desired homeland security approach.
    Both chemical process security and inherent safety are complex 
topics that are not easily mandated. To isolate inherent safety as a 
particularly necessary one is good practice but not necessarily good 
Government regulation. IST is not the panacea. It is not a ``thing'' 
that can be measured. It is a process towards safe manufacturing. It is 
a system of interdependent values and not something that can be 
distilled into a legislative definition and then regulated. Security 
management itself isn't a singular strategy. Furthermore, IS cannot be 
regarded as the sole design or operating criteria as it must be 
integrated with other considerations. The real issue is risk, whether 
safety or security risks, that IS can be applied to.
Degree of regulatory compliance effort
    If IS is forced onto industrial facilities, there could be 
considerable dilemmas in interpretation, technical judgment, fairness, 
and liabilities. It isn't possible for everyone to fairly be dictated 
as to what is inherently safer. If the degree of inherent safety is 
left to discretion, there could be a very uneven treatment of the 
issue.
    If the regulator was to make the judgment of what is practicable or 
the extent of practicality, there could be numerous issues develop. Do 
we want outside third parties to force changes in technology or 
operating philosophy on a company and to take on the liability of that 
decision when they may clearly lack the expertise for making this 
decision?
    Since you can't measure it, how could you ever comply. . . how much 
IST is enough. . . what is compliance. . . how can you ever demonstrate 
that you adequately considered something so that it met some arbitrary 
definition. IST for every facility is not even feasible as there fewer 
options for some sites (where substitution of chemicals isn't possible 
since it is the only way or decidedly the best way or common practice 
for a given process).
    No one is sure, therefore, of the degree of difficulty that 
requirements such are being proposed will cause but there will be, no 
doubt, considerable confusion due to the degree of ambiguity involved.
Diversion of scarce resources needed for homeland security
    Regulatory impacts may cause a possible diversion of attention to 
the complete set of security measures available to the industry given 
the threat, consequences, and vulnerabilities. It provokes an enormous 
effort with possibly little to no additional gain, possibly at the 
detriment to security as resources are expended on less critical 
issues. It may not get at the heart of the matter--the degree of risk 
primarily caused by the degree of vulnerability of the industrial 
facilities.
    This is process for chemical engineers together with safety experts 
to examine on a case-by-base basis, not in a sweeping edict from 
Congress. I am very concerned that rather than addressing true homeland 
security issues of the chemical sector, many hours of effort and 
resources would be diverted to proving the a process was already 
inherently safe as is practicable. The potential for litigation trying 
to ``prove'' you considered something is enormous.
    Although a process or plant can be modified to increase IS at any 
time in its life cycle, the potential for major improvements is 
greatest at the earliest stages of process development. At these early 
stages, the process engineer has maximum degrees of freedom in the 
plant and process specification. The U.S. infrastructure that is being 
considered for chemical security regulation initially under any future 
regulation that requires IS is existing plant.
Judging adequacy and effectiveness
    There is little guidance on how to judge effectiveness and 
completeness of inherent safety, particularly in a meaningful, fair and 
equitable way to all parties. This could prove to be a major dilemma 
for both industry and regulators as they try to justify that `enough' 
inherent safety has been applied to be considered `in compliance' with 
inherent safety requirements of security regulations. Experience has 
shown that regulators and industry have a difficult time interpreting 
inherent safety and agreeing on adequacy of efforts.
    Given that inherent safety is a rather subjective concept, it makes 
the matter a difficult one to understand, implement, and regulate. 
Companies should be knowledgeable of inherent safety and actively 
encourage the use of it at every turn in a holistic approach to risk 
reduction.

                     EXPERIENCE WITH IS REGULATIONS

    In actual practice IS implementation has proven to be problematic. 
The reason is that IS, at this time, is more of a theoretic concept 
rather than a codified procedure with a well established and understood 
framework for evaluation and implementation. Furthermore, it cannot be 
regarded as the sole design criteria as it must be integrated with 
other considerations. Industry
    Today there is only one example of an implemented IS regulatory 
requirement for process safety and that is part of the Contra Costa 
County, CA, local Industrial Safety Ordinance (ISO) enacted in 1998 
which effects only eight chemical sites. As for security, the only one 
that exists is in New Jersey where the Governor enacted a Prescriptive 
Order in November of 2005 which includes the need to consider IS for 
chemical security for certain sites in the state. Neither regulation 
goes so far as to require a change in technology due to the enormous 
challenges and liabilities associated with that move.
Contra Costa County, CA, Industrial Safety Ordinance
    The Contra Costa County, CA, Industrial Safety Ordinance (ISO) 
became effective January 15, 1999. The ordinance applies to eight oil 
refineries and chemical plants that were required to submit a Risk 
Management Plan to the U.S. EPA\7\ and are a program level 3 regulated 
stationary sources as defined by the California Accidental Release 
Prevention (CalARP) Program.
---------------------------------------------------------------------------
    \7\ Environmental Protection Agency (EPA) (1996). ``Accidental 
Release Prevention Requirements: Risk Management Programs Under Clean 
Air Act Section 112 (r) (7).'' Federal Register 61, 120 (June 20), 
31668-730.
---------------------------------------------------------------------------
    Part of the ISO requirements is the need for the regulated 
stationary sources to consider inherently safer systems when evaluating 
the recommendations from process hazard analyses for existing processes 
and to consider inherently safer systems in the development and 
analysis of mitigation items resulting from a review of new processes 
and facilities. Contra Costa Health Services completed and issued a 
Contra Costa County Safety Program Guidance Document on January 15, 
2000. This document included a definition of inherent safety and some 
rules for implementation of the ordinance.
    Lessons Learned from the Contra Costa County, CA, implementation of 
inherent safety requirements for their Industrial Safety Ordinance were 
presented in 2002 (Moore, 2002)\8\.
---------------------------------------------------------------------------
    \8\ Moore, David A., ``Experiences in the Regulation of Inherent 
Safety'', Mary Kay O'Connor Process Safety Center, Texas A&M University 
System, 2002 Annual Symposium, Beyond Regulatory Compliance, Making 
Safety Second Nature, October 29-30, 2002, College Station, Texas

     Companies found IS to be difficult if not infeasible to 
accomplish, particularly for existing processes;
     There are different perspectives on what is reasonable and 
what is feasible when it comes to decisions on the need for 
implementing IS;
     The guidance provided to ensure that IS was being 
considered consistently and fully was not informative enough, so there 
was some confusion and an education gap;
     The public and regulators often mistrust industry if 
anything less than a total technology change is implemented despite 
that IS includes a wide variety of ideas to meet the four strategies of 
minimization, substitution, simplification and moderation;
     Application of IS at only the most purely inherent level 
(first principles) is often at odds with practical and cost effective 
risk reduction, especially for existing construction;
     Guidance/training is needed for a team to know how to 
apply IS effectively.
New Jersey Prescriptive Order
    On November 21, 2005, the State of New Jersey became the first 
State to require chemical plant security measures to protect against 
terrorist attacks. Acting Governor Richard J. Codey set new 
requirements for the 140 facilities that must comply with the 
Prescriptive Order, 43 of which are subject to the state's Toxic 
Catastrophe Prevention Act (TCPA) program. As part of the new 
requirements, these 43 facilities must review the potential for 
adopting inherently safer technology (IST) as part of their assessment.
    This is very significant for three reasons--it sets precedent for 
State mandate of security of the chemical industry, it incorporates the 
need to evaluate IST more widely than any other regulation in the 
United States, and it forces industry to prove compliance to security 
`best practices' they developed.
    In 2003, the New Jersey Domestic Security Preparedness Task Force 
approved best security practices that were built upon the security code 
of the American Chemistry Council's responsible care program and the 
American Petroleum Institute's security guidelines, respectively. The 
best practices were developed by the Task Force and its Infrastructure 
Advisory Committee, which includes representatives of the State's 
chemical and petroleum industry. Many New Jersey-based facilities have 
voluntarily begun to implement these practices. The Prescriptive Order 
action clarifies that the best practices for chemical facilities are 
now mandatory.
    The 43 chemical facilities in the TCPA program must analyze and 
report the feasibility of:

     reducing the amount of material that potentially may be 
released;
     substituting less hazardous materials;
     using materials in the least hazardous process conditions 
or form; and,
     designing equipment and processes to minimize the 
potential for equipment failure and human error.

    Best practices included provisions for the facilities to prepare an 
emergency incident prevention, preparedness and response plan and 
outline the status of implementing other security practices. The State 
standards also now require worker participation in the development of 
the security assessments and prevention and response plans at each 
facility.
    Under the new requirements, chemical facilities had 120 days to 
develop an assessment of facility vulnerabilities and hazards that 
might be exploited by potential terrorists. The assessments must 
include a critical review of:

     security systems and access to the facility grounds 
(including the regular testing and maintenance of security systems);
     existing or needed security measures outside the perimeter 
of the facility that would reduce vulnerabilities to an attack on the 
facility;
     storage and processing of potentially hazardous materials;
     employee and contractor background checks and other 
personnel security measures; and,
     information and cyber security;

    The Prescriptive Order timing is critical as the nation struggles 
with how to more completely manage terrorism risks and to sort out the 
need for regulations for industries that are otherwise unregulated 
today. At this point the effectiveness of this rule is still in 
question. What is clear is the degree of change that most complex, 
existing plants will incur due to the identification of IS 
opportunities will be very limited based on personal experience.

             RESEARCH ON THE EVALUATION OF INHERENT SAFETY

    Some methods have been proposed to provide a benchmark for inherent 
safety. Most of these involve indices or fuzzy logic. While these are 
excellent developments in the right direction, they are not fully 
validated or comprehensive enough to assure that the aforementioned 
issues are satisfied.
    There is a need for metrics and rules for how to evaluate inherent 
safety before regulations can be effective. Without a fair and 
legitimate way to measure the total risk balance created by changes in 
the name of inherent safety it will be subjective and possibly unfair.
    Complex process systems, particularly with a long history of safe 
performance, cannot suddenly be dictated that a system is inherently 
safer without a great deal of individualized risk-risk tradeoff 
evaluation. Inherent safety is not fully understood, so regulating it 
and forcing change against typical engineering practices (with a strong 
empirical basis of success) is not recommended
    There have been many experts recognize that this may be creating 
many other problems by overly relying on one strategy vs. a holistic 
approach. Facilities should be given that flexibility all the while 
bounded by appropriate layers of safety to reduce risk to an acceptable 
level.

                  PUBLIC PERCEPTION OF INHERENT SAFETY

    Often inherent safety is seen as `obvious' and `common sense' when 
in reality the issue may not be that simple. Risk-risk tradeoffs can 
have unfortunate results if not properly evaluated. Priorities to 
inherent safety may mean compromises elsewhere. Efforts to reduce risks 
often neglect the possibility that measures to reduce the ``target 
risk'' may introduce or enhance ``countervailing risks.''\1\
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    \1\Harvard Center for Risk Analysis, ``Risk/Risk Tradeoffs in 
Pesticide Regulation: Evaluating the Public Health Effects of a Ban on 
Organophosphate and Carbamate Pesticides'', George M. Gray and James K. 
Hammitt, Harvard Center for Risk Analysis And Department of Health 
Policy and Management, Harvard School of Public Health 718 Huntington 
Ave, Boston, MA 02115, August 6, 1999.
---------------------------------------------------------------------------
    An important point is that we need to consider risk management 
interventions, not a single risk reduction strategy alone. Like 
medications, any intervention can have side effects. Instead industry 
and Government should advocate a proactive, holistic approach rather 
than heuristic, piecemeal reactions to homeland security.

                BARRIERS IDENTIFIED FOR IMPLEMENTING IS

    A workshop was held on the challenge of IS at the 17th Annual CCPS 
International Conference & Workshop on Risk, Reliability and Security 
in Jacksonville, Florida, on October 11, 2002, to address the concerns 
of implementing IS. Speakers from the USEPA, AIChE, Contra Costa 
County, and industry presented their experiences on the issue. In 
summary of that discussion, the audience agreed that there were 
barriers for effectively
    implementing IS, and issues and challenges for any regulation of 
IS. Some of the constraints were reported to be as follows:
    Adoption and implementation of IS by industry:

    1. Existing facilities vs. new facilities--one dilemma is that the 
majority of the applications for IS are with the existing industrial 
installed base whereas the feasibility of applying IS to the fullest 
diminishes as the facility is actually built. This leaves many 
companies where new processes (and particularly new technologies) are 
rarely implemented resulting in few occasions to practice the methods.

        ``Although a process or plant can be modified to increase IS at 
        any time in its life cycle, the potential for major 
        improvements is greatest at the earliest stages of process 
        development. At these early stages, the process engineer has 
        maximum degrees of freedom in the plant and process 
        specification. The engineer is free to consider basic process 
        alternatives such as fundamental technology and chemistry and 
        the location of the plant. Imperial Chemical Industries (ICI) 
        describes six stages of hazard studies, including three during 
        the process design phase and three during construction, startup 
        and routine plant operation. The identification of inherently 
        safer process alternatives is most effectively accomplished 
        between the first and second process design hazard studies 
        (Preston and Turney 1991). At this stage the conceptual plant 
        design meets the general rule for an optimization process--that 
        a true optimum can be found only if all of the parameters are 
        allowed to vary simultaneously (Gygax 1988).'' (CCPS, 
        ``Guidelines for Engineering Design for Process Safety, 
        1993)''\9\
---------------------------------------------------------------------------
    \9\ Center for Chemical Process Safety (CCPS) (1993). Guidelines 
for Engineering Design for Process Safety. New York: American Institute 
of Chemical Engineers.

    2. Unproven Value--Companies many be unclear on the value of IS or 
may be unable to easily prove that IS is cost-effective and worthwhile 
to employ, particularly for security. Methods to prove the value of IS 
and to quantitatively measure whether a given process is `as inherently 
safe as is practicable' are generally unavailable or unproven. Agreed 
upon and practical tools for systematically conducting IS reviews under 
repeatable methodologies are not available with the exception of 
checklists or adaptation of safety analysis methodologies. Case studies 
showing the economic benefit are not available for a wide array of 
industrial situations.
    3. Unclear vision of scope of IS--One can take a broad or a narrow 
view of IS. The narrow viewpoint only credits major changes in the 
degree of hazard whereas the broad viewpoint of inherent safety finds 
any change by the application of IS principles to be an advantage. All 
of the proposed regulations are very vague in their definition of 
inherent safety and industry experts themselves have mixed opinions on 
this point. Is reducing some inventory IS or is it only IS if the 
material hazards was substituted, which is the IS strategy that seems 
to be of most interest for the regulatory proposals reviewed?

                            REGULATION OF IS

    The constraints to the regulation of IS include many of the 
concerns above plus:

    1. Criteria for making compliance decisions--An obstacle to clear 
cut regulation is the lack of consensus on appropriate IS metrics. 
Assuming that the regulation is performance-based, there must be 
metrics for consistent regulation. These criteria are very hard to 
define with a broad conceptual topic such as IS for the wide variety of 
chemical processes to be regulated. This dilemma was recently described 
by the Mary Kay O'Connor Process Safety Center--``Regulation to improve 
inherent safety faces several difficulties. There is not presently a 
way to measure inherent safety. Process plant complexity essentially 
prevents any prescriptive rules that would be widely applicable. It 
would seem that legislation could explicitly require facilities to 
evaluate inherently safer design options as part of their process 
hazard analysis. But inherent safety would be almost impossible to 
enforce beyond evaluation because there are unavoidable technical and 
economic issues.'' (Mannan, et.al, 2003\10\)
---------------------------------------------------------------------------
    \10\ Mannan, M.S., ``Challenges in Implementing Inherent Safety 
Principles in New and Existing Chemical Processes,'' White Paper, Mary 
Kay O'Connor Process Safety Center, College Station, Texas, August 
2002.
---------------------------------------------------------------------------
    2. Need to consider risk rather than only hazard--There is little 
sense to the idea of imposing a requirement for `change for the sake of 
change', i.e., requiring that every hazardous situation be made 
inherently safer. Industry is interested in referencing a measure of 
acceptable risk which limits the need for additional risk reduction 
since beyond that level resources may be better spent on other matters.
    3. Unclear how to measure performance or compliance--Will 
regulations require only fundamental strategies to be employed, such as 
a site reports it reduced some materials onsite, or will it be based on 
vulnerability to the chemicals that remain? The factors and process to 
measure the effectiveness of IS regulations is not defined so it 
becomes very subjective.--Inherent safety regulations would have to 
show measurable benefit. If there was a reduction or increase in the 
number of incidents it could be incorrect to infer whether IS was the 
leading factor or whether other measures were involved. It is, 
therefore, difficult to measure the effectiveness of IS regulations.
    The USEPA representatives at the workshop reported that the EPA 
intends to include IS in their analysis of the effectiveness of the 
Risk Management Plan (RMP) regulation (USEPA, 1996)\11\ when they 
review the next submittals of registrations and hazard assessments. 
This is likely to be challenging given the state of implementation of 
IS and EPA's own admission on their expectation for inherent safety in 
the Risk Management Planning regulation. When EPA promulgated the RMP 
rule, some commenters asked EPA to require facilities to conduct 
``technology options analyses'' to identify inherently safer 
approaches. EPA declined to do so, stating that ``PHA teams regularly 
suggest viable, effective (and inherently safer) alternatives for risk 
reduction, which may include features such as inventory reduction, 
material substitution, and process control changes. These changes are 
made as opportunities arise, without regulation or adoption of 
completely new and unproven process technologies. EPA does not believe 
that a requirement that sources conduct searches or analyses of 
alternative processing technologies for new or existing processes will 
produce additional benefits beyond those accruing to the rule already. 
(FR, 1996\12\)
---------------------------------------------------------------------------
    \11\ Environmental Protection Agency (EPA) (1996). ``Accidental 
Release Prevention Requirements: Risk Management Programs Under Clean 
Air Act Section 112 (r) (7).'' Federal Register 61, 120 (June 20), 
31668-730.
    \12\ 61 Fed. Reg. 31699 (June 20, 1996).
---------------------------------------------------------------------------
    4. IS means different things to different audiences--One person's 
opinion of IS is not another person's necessarily, and as a result 
risks could be simply transferred to others.
    5. Macro v. Micro benefit--If IS regulations encourage individual 
plants to take the most inherently safe position to them, that is not 
necessarily the most inherently safe (or secure) position for the 
community they operate in thereby potentially increasing the societal 
risks. A common example is that of transportation risk, where the 
increased number of transits caused by lowering the onsite volume of a 
required feedstock increases the number of transits through the 
communities in the distribution chain. In addition, though, is the 
prospect that the total societal risk from a wide collection of 
inherently safer individual decisions leads to a redistribution of risk 
across the country--the analog of squeezing a balloon.
    6. Economic Security--Another example of this concern is the 
possible lack of appreciation of the economic security of the chemical 
infrastructure in legislative discussions on inherent safety. At a 
national, State or local level, the economic impacts of an attack or 
disruption of the chemical infrastructure should be a key concern. If 
the plant is disabled for any reason, such as a distribution chain 
disruption, the lack of inventory may make the plant inoperative for a 
longer period of time than if it had accumulated and secured supplies 
necessary to function. It is more likely that plants will face supply 
issues due to natural or manmade disasters than be attacked and so the 
macro view of homeland security is compromised at the expense of a 
local viewpoint. These goals need to be balanced from a risk 
perspective with other hazard reduction goals.

                            RECOMMENDATIONS

    Rather than attempt to regulate a vague and creative safety concept 
for chemical security, it should be left to industry and Government to 
work together to consider the full spectrum of available security risk 
management strategies and to meet performance standards for security 
based on site specific needs. Inherent safety should not be seen as the 
most important strategy to implement. Risk should be the measure of 
security preparedness given consequence, vulnerability, and threat 
considerations.
                                 ______
                                 
          Responses by David A. Moore to Additional Questions 
                          from Senator Inhofe

    Question 1. ``As you may know, 2 years ago we has elevated levels 
of lead in Washington DC's drinking water. Subsequently studies 
indicate that the changing of chemicals switching from chlorine to 
chloramines was to blame. Isn't this one of the big problems if the 
Federal Government seeks to mandate IST? Unintended adverse 
consequences? What happens when the federal Government is wrong?''
    Response. Government intervention on the design and operating 
practices of chemical facilities has a high potential to cause 
inadvertent safety or security consequences. History is ripe with past 
ideas which, in retrospect, didn't reduce risks as intended or caused 
other parties to be exposed to higher risks. At one time the following 
technologies were considered `safer':

     Underground storage tanks (later found to cause 
environmental problems);
     Freons as a refrigerant gas (later found to contribute to 
ozone depletion, and then replaced primarily with anhydrous ammonia, 
the most popular chemical used prior to the introduction of freons);

    The design of plants is based on years of experience in chemistry 
and engineering, and plant operating practices are established that are 
commensurate with the design and operating parameters of the plant. 
Change is not necessarily healthy for a plant especially abrupt changes 
after years of successful and safe operation. Most accidents occur 
during startup, shutdown, changes, and maintenance to a plant. If, in 
someone's opinion, a global change of technology would be inherently 
safer and this was to be mandated, it may be that arbitrarily forcing a 
change on a facility could have one of the following example effects:

     A plant that was forced to minimize feedstock inventory, 
such as a reagent, could result in less flexibility for operators to 
manage an emergency;
     A plant that was forced to use an alternative chemical may 
be less familiar with the technology resulting in a higher chance of an 
incident or less experience in control of the process in an excursion.
     A chemical could be `inherently safer' from the 
perspective of toxicity or flammability, but be much more difficult to 
process leading to higher risk of incidents.

    Inherently safer doesn't necessarily mean zero risk--it may be that 
the hazard is simply different. Efforts to reduce risks often neglect 
the possibility that measures to reduce the ``target risk'' may 
introduce or enhance ``countervailing risks.''\1\
---------------------------------------------------------------------------
    \1\ Harvard Center for Risk Analysis, ``Risk/Risk Tradeoffs in 
Pesticide Regulation: Evaluating the Public Health Effects of a Ban on 
Organophosphate and Carbamate Pesticides'', George M. Gray and James K. 
Hammitt, Harvard Center for Risk Analysis And Department of Health 
Policy and Management, Harvard School of Public Health 718 Huntington 
Ave, Boston, MA 02115, August 6, 1999.
---------------------------------------------------------------------------
    An important point is that we need to consider risk management 
interventions, not a single risk reduction strategy alone. Like 
medications, any intervention can have side effects. Instead industry 
and Government should advocate a proactive, holistic approach rather 
than heuristic, piecemeal reactions to homeland security.

    Question 2. ``In his opening statement Senator Obama pointed to the 
need to process to ``ensure that individual facilities are not making 
short-sighted decisions that merely shift risks elsewhere.'' You talked 
extensively about this dynamic in your testimony. Senator Obama also 
points to wastewater treatment facilities that have switched from 
chlorine gas to liquid bleach as an IST approach that has worked and is 
relatively easy too. Aside from the cost of such a change, one major 
utility spent $13 million, liquid bleach, or sodium hypochlorite has a 
very short shelf life. It must be produced within the vicinity of the 
treatment works. Further, gaseous chlorine is used to make sodium 
hypochlorite. While the treatment works may not be storing gaseous 
chlorine, another facility in the near community must be in order to 
supply the sodium hypochlorite. Therefore, isn't switching to liquid 
bleach essentially shifting some of the risk somewhere else?''
    Response. That is correct. Sodium hypochlorite (NaOCl) is a 
solution made from reacting chlorine with a sodium hydroxide solution. 
Since the manufacturing of sodium hypochlorite depends on gaseous 
chlorine and if a plant was to supply a larger quantity of sodium 
hypochlorite to a wider market area, it is conceivable that the 
manufacturing plant could increase the frequency of transits and 
quantity of chlorine required in order to meet demand. This could 
increase the societal risk of the community near to the plant and the 
workers involved.
    Also please note that sodium hypochlorite is not without hazards. 
People have been seriously injured as a result of the chlorine released 
when sodium hypochlorite solutions are accidentally mixed with acids or 
acidic materials. Sodium hypochlorite is incompatible with many acids, 
ethylene glycol, propane, metals such as copper and nickel, and 
reducing agents such as sodium sulfite, and hydrogen peroxide to name a 
few.

    Question 3. ``To follow-up on a question from Senator Jeffords 
about the use of chlorine by the nations water and wastewater 
utilities, in January 2005 report on security at wastewater utilities, 
the GAO estimated it would cost a utility $12.5 million to switch from 
chlorine to sodium hypochlorite. According to a March 2006 GAO report, 
after careful review of cost, technical feasibility and safety 
considerations, and without the presence of a federal mandate on 
technology, 116 of the 206 largest POTWs switched from gaseous chlorine 
to another technology, most likely sodium hypochlorite. In that same 
report, GAO found that another 20 plan to switch to a technology other 
than chlorine. Nearly two-thirds of the nations largest POTWs are not 
using chlorine. Those who continue to use chlorine have taken steps to 
ensure that chlorine is secure. In your view, have these utilities gone 
though the appropriate process and decided, without a federal IST 
mandate, to continue using chlorine based on their individual systems' 
needs and is this not the best way to make these decisions? In your 
experience developing site security plans and vulnerability 
assessments, so you believe companies will consider IST even if we 
don't create a mandatory federal IST program?''
    Response. The water treating industry is well aware of the options 
for biocides. The GAO report you cite seems to be evidence of the fact 
that inherent safety is being practiced where practical and feasible. 
Industry has been using inherent safety philosophy for years before 
they coined the term `inherent safety'. Engineers naturally optimize 
designs and strive to achieve performance with efficiency and safety.
    The elimination of chlorine simply due to its inherent hazards is 
not always feasible or necessary. Chlorine is used due to the long 
history of success in achieving the end goal--the effective and safe 
disinfection of water. Chlorine chemistry is also important to the 
production of pharmaceuticals, medical devices, safety equipment, 
computers, automobiles, aircraft parts and crop protection chemicals in 
other processes.
    Companies may balance their safety and security needs by a number 
of strategies besides inherent safety, so it is possible that even 
those that chose to keep chlorine have addressed security and safety in 
other ways. In addition, it may be that some of the facilities had 
lesser public consequences in the event of a release due to quantity 
stored or the density of population in the neighboring area.
                                 ______
                                 
          Responses by David A. Moore to Additional Questions 
                         from Senator Voinovich

    Question 1. ``Across the entire chemical manufacturing industry in 
the U.S., how many of the chemicals listed on EPA's Risk Management 
Plan list have scientifically proven alternatives that increase safety, 
reduce risk, and operate at least as effectively, in terms of both cost 
and end product, as the chemical compound that is being replaced?
    Who or what body should determine what IST is? Should it be defined 
by Government, industry, or academia? If Government does define it, 
which agency should be responsible for that? To your knowledge has IST 
ever been defined as a security measure in Federal law?
    Response. Section 112(r) of the Clean Air Act (CAA) requires EPA to 
promulgate regulations for the prevention and mitigation of accidental 
releases of extremely hazardous substances. Under this rule, 77 
specific toxic substances and 63 specific flammable substances were 
regulated. According to Mr. Jim Belke of EPA in a presentation he gave 
in 2004\2\, approximately 14,600 active RMPs were filed with EPA in 
2004 involving some 20,000 processes including about 17,150 that 
contain toxic chemicals and 7,700 that contain flammable chemicals. 
These represent a wide variety of industry facility types from Food and 
Beverage, Energy, Water and Wastewater, Agriculture, and Chemical 
Manufacturing. Even for any given industry or chemical there it is 
difficult if not impossible to say that there is a single `technology' 
substitution or inherently safer strategy that could be universally 
employed. Each process has a specific use for the chemical substance 
and it is far too complex to find a magic bullet solution, let alone 
risk reduction may not justify the action. The feasibility of an 
inherently safer strategy must be individually evaluated.
---------------------------------------------------------------------------
    \2\ Belke, James, USEPA, RMP 2004 Update, AIChE CCPS Technical 
Steering Committee, November 9, 2004.
---------------------------------------------------------------------------
    In most cases it is not feasible to substitute the basic chemicals 
manufacturing process. For example, anhydrous ammonia or chlorine 
manufacturing will have those chemicals involved as end products. These 
are fundamental building block chemicals that may not have substitutes 
depending on their case by case use.

    Question 2. ``Who or what body should determine what IST is? Should 
it be defined by Government, industry, or academia? If Government does 
define it, which agency should be responsible for that?
    Response. I believe the definition of what is inherently safer for 
any given plant must be made by a site specific analysis. Industry is 
in the best position to make this judgment given their intimate 
knowledge of all of the risk factors that are involved in this 
determination.

    Question 3. ``To your knowledge has IST ever been defined as a 
security measure in federal law?
    Response. I have not seen IST requirements in any Federal law 
regarding security. Security regulations address reducing 
vulnerabilities to threats through security strategies including 
deterrence, detection, delay, or response activities.

    Question 4. ``The EPA has concluded that:

     ``Inherently safer processes'' is a developing concept and 
is not ready for general application;
     IST frequently displaces risk rather than reducing it;
     Even if a few examples of workable alternative approaches 
do exist, there is not a rational basis for imposing an additional 
industry-wide regulatory burden; and
     The concept is normally considered when designing new 
processes, a time when changes can be implemented cost effectively.

    Do you agree with the above assessments? In that context, do you 
believe that IST a concept that is ready for broad implementation as a 
regulatory requirement?''
    Response. My testimony contained similar conclusions to the USEPA 
so I am in complete agreement with this statement. Also, as stated in 
my testimony, regulation of a concept is not credible as we lack 
objective measures of inherent safety's value. It is precisely because 
IS is vague and involves considerable judgment that it is very 
difficult to define and implement to any degree of uniformity and 
objectivity. This is particularly true in the chemical sector where the 
diversity of chemical uses and processes and site specific situations 
prevents clear characterization of the industry and a one-sized-fits-
all solution.
    IS can also be very subjective--how `safe or secure' is `safe or 
secure enough' is a decision of the analyst conducting the study. There 
are no clear and objective guidelines on how to make these decisions as 
it is considered both a concept to apply as one sees fit and as 
opportunities arise.

    Question 5. Senator Voinovich asked: ``Mr. Moore, you mention that 
``reduction of risk'' may actually increase ``countervailing risk.'' 
Can you explain this in greater detail?''
    Response. A countervailing risk is one that is created (expectedly 
or unexpectedly) by the action of implementing an inherently safer 
strategy (minimize, substitute, simplify, or moderate) that has an 
opposing or neutralizing effect to the desired end goal (which was 
reduction of risk). Every action taken has the potential for this 
effect. For example, by decreasing onsite inventory a plant increases 
the amount and frequency of transportation of chemicals. If a chemical 
is substituted the new chemical may have other unexpected hazards to 
have to manage that may or may not be known. If a process is 
simplified, redundancy or reliability may be decreased rather than 
increased leading to the higher likelihood of a release.

    Question 6. ``Mr. Moore, I would gather from your statement that 
you feel that without incentives, the innovation and development of IST 
standards is too heavy a burden to place on industry. You seem to 
suggest that Government could be responsible for researching and 
developing standards for IST. Could you please elaborate?''
    Response. Government's role should be to fund research on 
fundamental challenges that implementation of IST faces today: 1) 
defining exactly what it is and isn't; 2) how to evaluate IST benefits 
v. risks gained 3) IST applications and examples 4) education of 
managers and engineers and Government officials on the appropriate use, 
expectations, and limitations of IST.
                                 ______
                                 
          Responses by David A. Moore to Additional Questions 
                           from Senator Obama

    Question 1. ``Department of homeland Securities officials told EPW 
staffers in preparation for this hearing that if left to their own 
devices, individual facilities might make IST decisions that decrease 
risk at one plant, but increase risk system-wide. What are your 
thoughts on that assertion, and of DHS's potentially helpful role in 
coordination IST at the most dangerous facilities?
    Response. While I am not familiar with the conversation involving 
DHS I would offer that DHS's role should be to participate in the 
suggested Government research and education needs mentioned in response 
to question No. 6 above and for investigating the security benefits of 
IST in particular. Also, I believe it would be extremely difficult if 
not impossible for DHS to make these judgments fairly and technically 
given their complexity. All of the reasons listed in my testimony as to 
why IST is a difficult regulatory scheme applies to the DHS as well.

    Question 2. ``In march of this year, Secretary Chertoff said he was 
open to the idea of requiring high-risk facilities to consider safer 
approaches. This is a position the industry opposes. What is your view 
on requiring high-risk facilities to consider IST?''
    Response. I believe industry should be left to prove that security 
risks are adequately addressed in total rather than to digress into 
academic exercises proving a negative in many cases, i.e., that IST 
isn't feasible. This is especially true with security where the 
emphasis should be on security strategies rather than safety strategies 
and Government should prioritize reducing vulnerabilities rather than 
focusing on changing technology. To me this is equivalent to requiring 
the airline industry to handle less passengers, fly smaller aircraft, 
or to not fly over populated areas since the inherent hazards are that 
there could be an accident. Following 9/11 the airline industry 
implemented security measures and accommodated commercial needs for the 
conveniences and necessity of passenger travel.
                               __________
 Statement of Lisa P. Jackson, Commissioner, New Jersey Department of 
                        Environmental Protection

    Good morning Chairman Inhofe, ranking member Jeffords and Members 
of the Senate Committee on Environment and Public Works. I would like 
to thank the Committee for the opportunity to appear before you to 
discuss the role of inherently safer technology in United States 
chemical plant security legislation.
    Chemical plant security is a subject that Governor Jon S. Corzine 
and every New Jersey resident regard with urgent concern. We view our 
Chemical Standards, including requirements for inherently safer 
technology evaluation, as vital to providing New Jersey with an 
accurate reflection of our current state of security preparedness, as I 
will further outline in my testimony.
    Our residents live in the shadow of the attacks of September 11, 
2001, which claimed the lives of 674 New Jerseyans and transformed our 
northern waterfront into an evacuation zone. New Jersey also was the 
launching site for the first major bio-terror attacks on United States 
soil resulting in fatalities, when a still-unknown terrorist mailed 
anthrax-laden letters that severely contaminated the United States 
Postal Service facility in Hamilton, NJ.
    New Jersey's very strengths create particular vulnerability to acts 
of domestic terrorism. Our chemical, petroleum and other industrial 
plants that support the economy of the Nation are clustered around 
well- developed transportation infrastructure linking the New York and 
Philadelphia metropolitan regions. The Port of New Jersey and New York 
is the entry point for more than 4 million cargo containers and 55 
million tons of bulk cargo valued at over $100 billion. New Jersey is 
home to Newark Liberty International Airport--one of the busiest 
airports in the country serving more than 30 million passengers 
annually. My state is well-known as the center of pharmaceutical, 
biotechnology, and other life science industries targeted by violent 
and extreme animal rights activists. All of these infrastructure sites 
and more are potential targets for terrorists, and all lie in the most 
densely populated State in the Union.
    I shall begin with a brief overview of New Jersey's domestic 
security preparedness activities, and then turn to the specific reasons 
why the evaluation of inherently safer technologies in the chemical 
industry is of vital importance.
    Overview of New Jersey's Domestic Security Preparedness Effort
    New Jersey's unique vulnerabilities have made us a leader among 
states in initiating and implementing measures to counter potential 
terrorist operatives, to reduce the risk of attack at critical 
infrastructure facilities, and to reduce the potential impacts to 
public health and safety if any such attacks should occur in the 
future. New Jersey undertakes these efforts through our Domestic 
Security Preparedness Task Force (Task Force), chaired by Director 
Richard L. Canas of our Office of Homeland Security and Preparedness 
(OHSP).
    As Commissioner of the Department of Environmental Protection 
(DEP), I serve as the Task Force lead for the pharmaceutical and 
biotechnology, chemical, nuclear, petroleum, wastewater, and dam safety 
sectors of our critical infrastructure. I share responsibility for the 
water sector as well in cooperation with the New Jersey Board of Public 
Utilities. Through the Task Force and the OHSP, I also participate in 
New Jersey's preparedness and response effort for other sectors.
    The Task Force has undertaken a comprehensive program to reduce 
terror risk, to ensure preparedness at critical infrastructure 
facilities, and to test the efficacy of both public agencies and the 
private sector in responding to acts of terrorism. Every Task Force 
agency and every sector of our critical infrastructure has developed, 
through a public-private collaboration, a series of ``Best Practices'' 
for domestic security. Each set of Best Practices was reviewed and 
approved by the Task Force and the Governor. Every Task Force agency 
and every sector of our critical infrastructure has also participated 
in appropriate exercises to test the strengths and limits of terror 
detection and response capability.
    New Jersey's current challenge is to ensure full implementation of 
security ``Best Practices'' across all sectors, consistent with a 
policy of ``Zero Tolerance'' for noncompliance, and to identify those 
additional regulatory and other measures that are appropriate to 
contend with emerging threats and challenges. Throughout this process, 
DEP is working with OHSP, State Police, Attorney General's Office and 
private companies within our sectors to reduce or eliminate specific 
threats that we have identified on a case-by-case basis.
    New Jersey's Toxic Catastrophe Prevention Act (TCPA) Program
    The Toxic Catastrophe Prevention Act (TCPA) program was created in 
1986 as a result of a chemical accident in Bhopal, India that killed 
thousands of nearby residents. Several chemical facilities in New 
Jersey had experienced minor accidents prior to this time, clearly 
indicating that a similar risk existed in New Jersey. The TCPA requires 
facilities that handle extraordinarily hazardous substances above 
certain inventory thresholds to prepare and implement risk management 
plans. The plans must include detailed procedures for safety reviews of 
design and operation, operating procedures, maintenance procedures, 
training activities, emergency response, process hazard analysis with 
risk assessment and self-auditing procedures. An extraordinarily 
hazardous substance is defined as a substance, which if released into 
the environment would result in a significant likelihood of causing 
death or permanent disability.
    In 1998 the program adopted USEPA's 112(r) Accidental Release 
Prevention Program (40 CFR 68) by reference. This program included 
additional toxic substances and highly flammable substances. It also 
required each facility to complete a worst case scenario analysis. The 
worst case scenario models the resultant toxic cloud to a predetermined 
concentration. The USEPA end point concentrations are approximately 
one-tenth of the concentration that would cause death to persons 
exposed.
    On August 4, 2003, the readoption of the TCPA rules added reactive 
hazards substances to the list of extraordinarily hazardous substances 
covered under the program. Industrial accidents in New Jersey resulting 
from reactive hazards demonstrated the need to include reactives under 
the TCPA program. Owners and operators having listed reactive hazard 
substances in quantities that meet or exceed thresholds are required to 
develop risk management plans to reduce the risk associated with these 
unstable substances. In addition, and the focus of this testimony, this 
readoption included a requirement that owners and operators evaluate 
inherently safer technology for newly designed and constructed covered 
processes.
    Chemical Sector Best Practices Standards
    New Jersey recognizes that facilities in the Chemical Sector are 
diverse in size, complexity, and potential for off site impacts to the 
community and therefore a blanket approach to addressing security 
concerns may not be practical. The Best Practices represent a risk-
based approach to security consisting of a site-specific vulnerability 
assessment that evaluates threats to a facility's operation, its 
particular vulnerabilities and likely consequences of a chemical 
release, and the physical and procedural security measures already in 
place. The Chemical Sector Best Practices were predominantly derived 
from the Security Code of the American Chemistry Council's Responsible 
Care program.
    Subsequently the Task Force determined that additional measures 
were necessary to ensure that appropriate prevention and response 
measures are implemented by the chemical sector to address emerging 
domestic security threats. As a result, Chemical Sector Best Practices 
Standards (Standards) were put in place on November 21, 2005.
    The Standards require chemical sector facilities to, among other 
things:

     comply with the Chemical Sector Security Best Practices;
     conduct a terrorism-based security vulnerability 
assessment; and
     develop a prevention, preparedness, and response plan to 
minimize the risk of a terrorist attack.

    In addition, chemical sector facilities subject to TCPA are 
required to conduct a review of practicability and potential for 
adopting inherently safer technology.
    Inherently Safer Technology
    Facilities required to conduct an inherently safer technology 
review must evaluate:
     reducing the amount of extraordinarily hazardous 
substances materials that potentially may be released;
     substituting less hazardous materials;
     using extraordinarily hazardous substances in the least 
hazardous process conditions or form;
     and, designing equipment and processes to minimize the 
potential for equipment failure and human error.
    I must emphasize that the inherently safer technology requirement 
under the Standards represents a practicability test; it is not 
mandatory that a covered facility implement IST, only that they 
evaluate. The results of the evaluations are held at the facility site, 
and are made available to DEP inspectors during an on-site visit.
    Compliance with the Standards was required within 120 days of the 
effective date, March 21, 2006. DEP staff are on schedule to complete 
inspections to evaluate compliance at all the 157 facilities subject to 
the Standards by July 31, 2006. Of the total 157 facilities, 45 are 
regulated TCPA facilities required to perform IST analysis. It is 
important to note that with the majority of the inspections completed 
to date, compliance with the Standards has been excellent with a small 
percentage of exceptions. To date, we have inspected about 100 
facilities subject to compliance with the Standards and over half the 
TCPA universe. In all cases, facilities required under the Standards to 
conduct IST review have done so. It is expected that Task Force orders 
will be generated to address any cases where gross non-compliance is 
determined. I believe that our compliance results clearly indicate that 
the evaluation of inherently safer technology is not overly burdensome 
on industry and is an effective tool for critically evaluating the risk 
reduction opportunities available at a specific facility.
    But these measures alone are merely a starting point. Our knowledge 
of both the threat and the appropriate response is evolving daily. As 
we implement the ``Best Practices'' and work with facilities on site-
by-site review of security vulnerabilities, we also have begun a public 
process to review what additional regulatory measures may be 
appropriate to harden potential targets, to reduce risk to surrounding 
communities, and to involve workers and communities in the process.
    While New Jersey is doing its part, we renew our call for federal 
standards and protections that will reinforce our work, ensure a level 
playing field for firms operating in New Jersey, and provide equivalent 
protection from facilities that operate near our borders. The 
Standards, including the inherently safer technology evaluations, are 
vital to providing New Jersey with an accurate picture of the current 
state of preparedness within the Chemical Sector and provide a 
foundation to move forward with the appropriate actions necessary to 
safeguard our citizens.

                               CONCLUSION

    Added Federal safeguards in these areas would complement New 
Jersey's tradition of strict rules to ensure safety at major chemical 
facilities and to protect surrounding communities.
    But we remain persuaded that both security and interstate fairness 
would be advanced significantly, and with far less economic impact, if 
State measures were coupled with a Federal framework of regulatory 
protections. New Jersey is prepared to work with all members of the 
committee to achieve appropriate legislation to establish that 
framework. Finally, I must emphasize that given New Jersey's 
demonstrated attractiveness as a target for terrorism our State must 
have the discretion to impose stricter requirements, when necessary, to 
adequately safeguard our citizens from potential acts of terrorism. 
Therefore, we strenuously oppose the prospect of Federal preemption in 
the area of homeland security.
                                 ______
                                 
  Response by Lisa P. Jackson to an Additional Question from Senator 
                                 Inhofe

    Question. Whose judgment prevails if the decision not to implement 
Inherently Safer Technology (IST) is made? How do you envision dealing 
with difference of opinion between a compliance inspector and a family 
about the decision that something is not practible?
    Response. On November 21, 2005, the Governor approved Best 
Practices Standards for TPCA/DPCC Chemical Facilities, pursuant to the 
authority found in the New Jersey's Domestic Security Preparedness Act 
of October 4, 2001. These Best Practices require that an IST review 
must be conducted and must include an analysis of whether adoption of 
IST is practicable and the basis for any determination that 
implementation of IST is impractical. To interpret ``practicable and 
the basis for any determination that implementation of 1ST is 
impractical,'' the Department of Environmental Protection intends to 
use a definition of ``feasibility'', which would include such factors 
as whether the implementation of IST is ``capable of being accomplished 
in a successful manner within a reasonable period of time, taking into 
account economic, environmental, legal, social and technological 
factors.''
    Should the Department determine that the review/analysis required 
by the Standards did not appropriately incorporate the factors detailed 
above and a facility resists steps to remedy these deficiencies, the 
New Jersey Domestic Security Preparedness Act provides compliance and/
or enforcement mechanisms. The New Jersey Office of Homeland Security & 
Preparedness would initiate steps aimed at requiring the recalcitrant 
entity to come into compliance with the Standards.
                                 ______
                                 
         Response by Lisa P. Jackson to an Additional Question 
                         from Senator Jeffords

    Question. Why is it important for States like New Jersey to be able 
to implement their own chemical security programs?
    Response. The residents of New Jersey live in the shadow of the 
attacks of September 11, 2001, which claimed the lives of 674 New 
Jerseyans and transformed our northern waterfront into an evacuation 
zone. New Jersey also was the launching site for the first major bio-
terror attacks on U.S. soil resulting in fatalities, when a still-
unknown terrorist mailed anthrax-laden letters that severely 
contaminated the U.S. Postal Service facility in Hamilton, NJ.
    New Jersey's very strengths create particular vulnerability to acts 
of terrorism. Our chemical, petroleum and other industrial plants that 
support the economy of the Nation are clustered around well-developed 
transportation infrastructure linking the New York and Philadelphia 
metropolitan regions. The Port of New Jersey and New York is the entry 
point for more than 4 million cargo containers and 55 million tons of 
bulk cargo valued at over $100 billion. New Jersey is home to Newark 
Liberty International Airport--one of the busiest airports in the 
country serving more than 30 million passengers annually. Our State is 
well-known as the center of pharmaceutical, biotechnology, and other 
life science industries targeted by violent and extreme animal rights 
activists. All of these infrastructure sites and more are potential 
targets for terrorists, and all lie in the most densely populated state 
in the country.
    The concentration of critical infrastructure and density of our 
population may have no comparison in the United States. Clearly, our 
circumstances are vastly different than those of most other States. A 
``one size fits all'' standard can not work across our diverse Nation. 
New Jersey, and all States, need to retain the ability to go beyond any 
threshold Federal security standards to ensure that our preparedness is 
measured in line with our potential vulnerabilities.
                                 ______
                                 
         Responses by Lisa P. Jackson to Additional Questions 
                         from Senator Voinovich

    Question 1. How many of the chemicals listed in BPA's RMP rule have 
scientifically proven alternatives that Increase safety, reduce risk, 
and operate at least as effectively, in terms of cost and end product, 
as the chemical compound that is being replaced?
    Response. Information is not available to folly answer this 
question. However, examples of IST successes include substituting 
sodium hypochlorite for chlorine for wastewater disinfection, 
substituting anhydrous ammonia with aqueous ammonia in air pollution 
control systems, substituting broroochlorohydantoin for chlorine for 
treating cooling water. In addition, replacing a chemical compound, or 
substitution, is only one of the inherently safer technology principles 
or techniques. Other IST techniques include reducing the amount of 
hazardous material that potentially may be released, using 
extraordinarily hazardous substances (EHSs) in the least hazardous 
process conditions or form, and designing equipment and processes to 
minimize the potential for equipment failure and human error. For a 
particular process or chemical product being manufactured, substitution 
may not be a feasible alternative, but use of one or more of the other 
three IST techniques could provide a feasible reduction in risk.

    Question 2. Who or what body should determine what IST is? Should 
It be defined by Government, industry, or academic? If Government does 
define it, which agency should be responsible for that?
    Response. A generic definition of IST should be provided through 
Government regulation. In the New Jersey Toxic Catastrophe Prevention 
Act (TCPA) rule, the definition of 1ST is ``the principles or 
techniques incorporated in a newly designed and constructed covered 
process to minimize or eliminate the potential for an Extraordinarily 
Hazardous Substance (EHS) accident that include, but are not limited 
to, the following: (1) reducing the amount of EHS material that 
potentially may be released; (2) substituting less hazardous materials; 
(3) using EHSs in the least hazardous process conditions or form; and 
4) designing equipment and processes to minimize the potential for 
equipment failure and human error.'' In our country, this definition is 
widely recognized by industry and organizations such as the Center for 
Chemical Process Safety of the American Institute of Chemical 
Engineers.
    It is difficult to provide a defined list of required specific 
inherently safer technologies or equipment because each chemical 
process must be evaluated individually. Also, many processes are 
proprietary. However, it is possible to provide guidance on 
technologies or equipment for consideration by facilities in their 
process. This guidance could be prepared with input and assistance from 
academia, Government, industry, and organizations such as CCPS, the 
American Chemistry Council, and the American Petroleum Institute.
    We believe that the Federal Government should be the lead in 
establishing regulations, defining 1ST, and providing or coordinating 
guidance for IST. However, New Jersey, and all States, must retain the 
ability to go beyond any threshold Federal security standards to ensure 
that preparedness is measured in line with potential vulnerabilities.

    Question 3. To your knowledge has IST ever been defined as a 
security measure in Federal law?
    Response. To our knowledge IST has never been defined as a security 
measure in Federal law. However, in Guidelines for Analyzing and 
Managing the Security Vulnerabilities of Fixed Chemical Sites. August 
2002, published by the CCPS of the American Institute of Chemical 
Engineers, CCPS states that security risk reduction at a site can 
include inherently safer systems, to the extent that they can be 
designed and installed practically, particularly for existing 
processes. CCPS further states that the concept of inherently safer 
approaches to chemical processing and the design of plants can be 
directly applied to the security of hazardous materials. If a process 
is run under more moderate conditions, or a chemical is used in lesser 
amounts, the risk associated with one of the four malicious acts 
(theft/diversion, release, use as a contaminant,

    Question 4a. Do you agree with the following conclusions from the 
EPA: ``Inherently safer processes'' is a developing concept and Is not. 
ready for general application?
    Response. The concept of IST was first introduced publicly by Dr. 
Trevor Kletz, a noted process safety expert, approximately 30 years 
ago. Since that time, IST studies have been widely performed by 
industry. In Inherently Safer Chemical Processes. A Life Cycle 
Approach. 1996, the CCPS discusses various methods and techniques on 
how to perform an IST study. In fact, Dennis Hendershot, who also gave 
testimony at the June 21 Hearing, has published several papers and case 
studies during his industry career detailing IST studies that he has 
conducted, the IST alternatives that were implemented as a result of 
those studies, and how the decision for feasibility to implement those 
IST alternatives was supported using risk assessment techniques. 
Therefore, we strongly believe that IST evaluation is a well-
established concept that is ready for general application.

    Question 4b. Do you agree with the following conclusions from the 
EPA: IST frequently displaces risk rather than reducing it?
    Response. We do not agree with this conclusion. It is true that for 
any change that is ever made to a chemical process, the change roust be 
evaluated carefully to ensure that a new, unintended, or unforeseen 
risk is not being introduced. We strongly believe that facilities 
should perform IST evaluations to search for feasible alternatives that 
will reduce the risk of a release to the surrounding community.

    Question 4c. Do you agree with the following conclusions from the 
EPA: Even if a few examples of workable alternative approaches do 
exist, there is not a rational basis for Imposing an additional 
Industry-wide regulatory burden?
    Response. We disagree with this statement. We reiterate that 
facilities should perform IST equations to search for feasible 
alternatives that will reduce the risk of a release to the surrounding 
community.

    Question 4d. Do you agree with the following conclusions from the 
EPA: The concept Is normally considered when designing new processes, a 
time when changes can be implemented cost effectively?
    Response. We disagree with this statement It is true that it is 
most cost effective to evaluate and implement IST during the design 
stages of a new process. However, CCPS states in its Inherently Safer 
Client Processes. A Life Cycle Approach on page 16, ``It is never too 
late to consider inherently safer alternatives. Major enhancements to 
the inherent safety of plants which have been operating for many years 
have been reported (CCPS, 1993a; Wade, 1987; Camthers et al., 1996).'' 
Also, continuing to perform IST evaluations in the later stages of a 
plants life cycle is valuable because new technologies may be available 
that were not available when the plant initially was designed and 
constructed.

    Question 5. Do you believe that IST is a concept ready for broad 
Implementation as a regulatory requirement? Do you believe that IST is 
a mature process that can be cost-effectively Implemented across the 
broad range of chemicals used in this country?
    Response. From the responses above and the responses to Senators 
Inhofe's and Jeffords' questions, we believe that IST evaluations can 
and should be broadly implemented as a regulatory requirement. We 
believe that the IST evaluations and determinations of feasibility of 
IST alternatives can be done cost-effectively. These IST evaluations 
should be performed by the facilities handling the most hazardous 
chemicals above specified threshold quantities, such as in New Jersey's 
TCPA rule or the EPA's Accidental Release Prevention rule, 40 CFR 68.

    Question 6. Under New Jersey's Toxic Catastrophe Prevention Act, 
certain facilities are required to conduct a review of IST. Of the 45 
facilities that have been required under the Act to conduct a review of 
practicability and potential for adopting IST, how many have actually 
implemented or intend to implement IST? Of that number, how many were 
actual chemical manufacturing facilities (as opposed to water treatment 
facilities)? How does New Jersey DEP measure the implementation of IST 
and compliance with the Act?
    Response. The 45 facilities that are referred to are those that are 
subject to the Best Practices Standards, adopted November 21, 2005, 
under the authority of New Jersey's Domestic Security Preparedness Act 
of October 4, 2001. These 45 facilities, which are a subset of the 
total 102 regulated under New Jersey's TCPA rule, N.J.A.C. 7:31, are 
all chemical manufacturing facilities defined and selected by their 
North American Industry Classification System (NAICS) or Standard 
Industrial Classification (SIC) codes. Pursuant to the Best Practices 
Standards, these 45 facilities were required to complete an IST 
evaluation by March 21, 2006. During the course of our inspections at 
these facilities, they all have stated that they have implemented past 
IST or other risk reduction measures. Approximately one-third have 
provided a schedule to implement additional IST or risk reduction 
measures, and about one-third have identified additional IST or risk 
reduction measures but have not yet scheduled their completion. About 
one-third had no additional recommendations. It should be noted that 
these are facilities that have been regulated under our TCPA program 
for many years.

    Question 7. Has your department or any other Agency of the New 
Jersey Government tried to assess the financial impact on the New 
Jersey chemical industry of studying and possibly implementing 1ST? If 
so, what was the conclusion? Is New Jersey concerned about losing 
chemical Industry Jobs? You Indicate that the evaluation of IST is not 
overly burdensome on Industry--who is making that Judgment?
    Response. Our department has not performed a formal financial 
impact assessment on the New Jersey chemical industry of studying and 
possibly implementing IST, and we do not know of any other New Jersey 
Agency that has done so. In our experience so far under the Best 
Practices Standards, facilities primarily have completed the IST review 
with in-house personnel with backgrounds in chemistry, engineering, 
process controls and instrumentation, maintenance, production and 
operations, and chemical process safety. Some facilities have hired 
consultants to assist or lead the study. Facilities have not expressed 
to us that performing the IST review has been overly burdensome, and 
the extraordinary compliance record further supports this position.
                                 ______
                                 
         Responses by Lisa P. Jackson to Additional Questions 
                           from Senator Boxer

    Question 1. Please provide a description of how New Jerseys Toxic 
Catastrophe Prevention Act could provide an opportunity for businesses 
to have a more stable business plan as a result of using inherently 
safer technologies.

    Response. Performing an IST review and implementing IST or other 
risk reduction measures provide several positive benefits resulting in 
a more stable business plan for a facility. First of all the reduction 
in risk of a release lowers the companies potential liabilities. This 
has the secondary benefit of increasing the surrounding community's 
perception, confidence, and acceptance of the facility. Many IST 
alternatives, which have an initial capital cost, have lower operating 
costs in areas such as maintenance, operations, and emergency response 
requirements. If the risk of release can be eliminated or substantially 
reduced, the facility would become less attractive to a terrorist and 
thus less likely as a terrorist target. Reducing or eliminating the 
risk of a release caused by a terrorist or occurring accidentally would 
avoid business losses from a production shutdown following the 
incident. All of these serve to provide the facility a more stable 
business plan.

    Question 2. Please provide the type of economic impact analysis 
that your Agency conducts to determine whether a business should use 
inherently safer technology.
    Response. The standards require that an IST review must be 
conducted and must include an analysis of whether adoption if IST is 
practicable and the basis for any determination that implementation of 
IST is impractical. To interpret ``practicable and the basis for any 
determination that implementation of IST is impractical,'' the 
Department of Environmental Protection intends to use a definition of 
``feasibility'', which would include such factors as whether the 
implementation of IST is ``capable of being accomplished in a 
successful manner within a reasonable period of time, taking into 
account economic, environmental, legal, social, and technological 
factors.''

    Question 3. Will your Agency be tracking the economic benefits 
derived from business's use of any inherently safer technologies 
required to be used under New Jersey's Toxic Catastrophe Prevention 
Act? Please provide any such analysis that you currently possess.
    Response. We do not currently possess any analysis tracking the 
economic benefits derived from business's use of any inherently safer 
technologies. However, our Department will be tracking the evaluation 
and implementation of IST alternatives to provide a valuable reference 
universe for the chemical industry. Documented IST success stories, if 
applicable, will serve as a valuable tool as facilities investigate 
available options.
                               __________
      Statement of Charlie Cott, Vice President, Plant Foods and 
                         Transportation MFA Inc

                              INTRODUCTION

    I would like to thank Chairman Inhofe and Senator Jeffords for 
holding this important hearing today. My name is Charlie Cott, Vice 
President, Plant Foods and Transportation, with MFA Incorporated, a 
regional farmer cooperative operating and headquartered in the state of 
Missouri. I am here today to testify on behalf of the Agricultural 
Retailers Association (ARA), which represents a significant majority of 
the Nation's retail dealers who provide essential agricultural 
pesticides, fertilizer, seed and other agronomic services to America's 
farmers. As the only national organization exclusively representing the 
interests of the agricultural retail and distribution industry, ARA is 
vitally interested in any Federal laws or regulations related to 
inherently safer technology (IST) requirements that may affect the 
operation of facilities and chemicals utilized in the Nation's 
agricultural sector. I appreciate the opportunity to testify today on 
this important issue.
    MFA Incorporated is built upon a solid commitment to its farmer/
owners to provide quality products and services, embracing honesty in 
business and offering professional advice that farmers can depend on. 
MFA Incorporated is a farm supply cooperative established in 1914, and 
has retail facilities in Missouri, Iowa, Kansas, Oklahoma, and 
Arkansas. We have approximately 150 full service retail facilities, 
both company owned and affiliates, and 100 bulk fertilizer plants. Our 
Board of Directors is made up of our farmer/owners, and they keep us in 
tune with the needs of our more than 45,000 members. The heart of our 
operations is our Agri Services Centers providing farmers and ranchers 
with the products and services they need to do business in today's 
complex farming environment. I grew up in north central Missouri in 
Saline County. I graduated from the University of Missouri, Columbia in 
1976, and have worked for MFA Incorporated in various capacities since 
1977.

              OVERVIEW OF AG RETAIL/DISTRIBUTION INDUSTRY

    In 2002, there were an estimated 10,586 farm retail outlets in the 
United States.\1\ The overall number of retail outlets is even lower 
today and has been declining due to a number of factors taking place 
within the industry: consolidation, increased domestic and global 
competition, higher operating costs, and low profit margins. ARA 
members range in size from family-held businesses or farmer 
cooperatives to large companies with multiple outlets located in many 
states. A typical retail outlet may have 3 to 5 year-round employees 
with additional temporary employees added during the busy planting and 
harvesting seasons. Many of these facilities are located in small, 
rural communities.
---------------------------------------------------------------------------
    \1\ Doane's Ag Professional Magazine, Summer 2003, p.40-41
---------------------------------------------------------------------------
    The goods and services that we provide include: seed, crop 
protection chemicals, fertilizer, crop scouting, soil testing, custom 
application of pesticides and fertilizers and development of 
comprehensive nutrient management plans, and state of the art IPM 
programs. Certified crop advisors (CCA's) are retained on retailer's 
staff to provide professional guidance and crop input recommendations 
to farmers and consumers. Retail and distribution facilities are 
scattered throughout all 50 states and provide important jobs in rural 
and suburban communities. The food and agriculture production and 
processing industry contributes substantially to the American economy ? 
accounting for 13 percent of the U.S. gross domestic product and 18 
percent of domestic employment.

      EXISTING SAFETY REGULATIONS AND INHERENTLY SAFER TECHNOLOGY

    Even before the terrorist attacks on September 11, 2001, 
agricultural retailers have been one of the most heavily regulated 
industry segments in the country. Many of the products used by the 
industry are hazardous materials, which are highly regulated and 
expensive materials. There are countless Federal and State laws and 
regulations related to the safe handling, transportation and storage of 
agricultural crop
    inputs. For example, many agricultural retail facilities that 
handle and store a threshold amount of listed substances such as 
ammonia are required to comply with the U.S. Environmental Protection 
Agency's (EPA) Risk Management Program (RMP)\2\. Under the rule, 
covered facilities must develop an RMP that describes their chemical 
accident prevention programs and submit full updates and resubmissions 
to EPA at least once every 5 years. The RMP Rule divides regulated 
facilities into three program focuses according to the level of 
potential danger they may present to surrounding communities.
---------------------------------------------------------------------------
    \2\ Accidental Release Prevention Requirements: Risk Management 
Programs Under Clean Air Act Section 112(r)(7); Final Rule; 40 CFR Part 
68
---------------------------------------------------------------------------
    Most agricultural retailers fall under the RMP's Program 2 
Requirements, which generally are processes of low complexity and do 
not typically involve chemical reactions. Program 2 RMP requirements 
for retailers include written operating and maintenance procedures; 
training; mechanical integrity, compliance audits, incidence 
investigations and employee participation. They also conduct hazard 
assessments, which include analyses of worst-case and alternative 
release scenarios; establish emergency response programs that include 
plans to inform the public and emergency response organizations about 
the chemicals onsite and their health effects and strategies to 
coordinate those plans with the community; and report steps taken to 
prevent incidents that can release dangerous chemicals. Program 2 RMP 
reporting requirements are less stringent than Program 3 RMP 
requirements, which are usually for higher risk chemical facilities and 
involve complex chemical processing operations. The prevention program 
requirements for Program 3 are very similar to those of the OSHA 
Process Safety Management (PSM) requirements.
    The Federal Insecticide Fungicide and Rodenticide Act\3\ (FIFRA) 
continues to be the basis of EPA regulations covering agricultural 
pesticides. Sections of the code cover handling, labeling, crop 
tolerance requirements, precautionary statements, environmental 
protection issues, worker protection standards, storage requirements, 
transportation regulations and considerations, product use, and lots 
more issues designed to protect the public and all workers.
---------------------------------------------------------------------------
    \3\ 7 U.S.C. s/s 136 et seq. (1996)
---------------------------------------------------------------------------
    The Department of Transportation's (DOT) Pipeline and Hazardous 
Materials Safety Administration (PHMSA) formulates, issues and revises 
Hazardous Materials Regulations (HMR) under the Federal Hazardous 
Materials Transportation Laws. The HMR issued by the DOT cover 
hazardous materials definitions and classifications, hazard 
communications, shipper and carrier operations, training and security 
requirements, and packaging and container specifications. Agricultural 
retailers and distributors are required to comply with many of these 
DOT regulations.
    As an industry, we have done a good job of educating and training 
employees to judiciously handle hazardous materials and to make sure 
they remain in the hands of authorized personnel. Employees of 
agricultural retailers and distributors complete numerous training and 
certification programs that help ensure hazardous materials are being 
stored and handled with proper care. An employer at an agricultural 
retail facility is responsible that their employees comply with several 
regulatory requirements such as: (1) Commercial Applicator 
Certification; (2) DOT Hazmat training for hauling hazardous materials 
such as anhydrous ammonia, ammonia nitrate and other certain 
agricultural chemicals; (3) Worker Protection Standard training; (4) 
OSHA Standards such as Worker Right to Know, Lockout/Tagout, Confined 
Space Entry, Personal Protective Equipment, etc.; (5) Random drug and 
alcohol testing; (6) Commercial Drivers Licenses and Hazardous Material 
Certification; and Restricted Use Pesticide recordkeeping.
    Because existing regulations are working, ARA does not believe the 
Federal Government should mandate the use of ISTs or alternative 
approaches for chemical processing, which is extremely complex, and 
which differs from company to company. Our industry would support 
common-sense chemical security regulations that recognize the needs of 
America's agricultural industry. ARA is working closely with the U.S. 
Department of Homeland Security (DHS) and the Senate Homeland Security 
and Governmental Affairs Committee on this very matter. However, we do 
strongly oppose efforts by anti-chemical activist groups that are 
attempting to tie new IST mandates to chemical facility security 
legislation. If an IST mandate was put in place for the Nation's 
agricultural industry it could jeopardize the availability of lower-
cost sources of plant nutrient products or certain agricultural 
pesticides used by farmers and ranchers. It will also hurt our ability 
to compete with growing threats from countries such as Brazil and 
China. It is estimated that 96 percent of the world's consumers reside 
outside the United States. According to the USDA Economic Research 
Service (ERS), the U.S. agricultural trade surplus for 2006 is 
estimated to be only $1 billion compared to a $21 billion surplus in 
1997. This change is being caused by increased international 
competition and higher operating costs for our farmers and ranchers due 
to more regulations and higher input costs, primarily due to higher 
fuel and fertilizer costs.
    ARA believes it is important for Congress to oppose legislative 
proposals such as S. 2486 sponsored by Senators Frank Lautenberg (D-NJ) 
and Barrack Obama (D-IL) that according to Senator Lautenberg would 
``require every chemical facility in the nation to adopt inherently 
safer technology.'' IST is not a security issue and relates to process 
safety decisions that should be left to the safety experts that help 
manage these facilities. We strongly agree with concerns expressed by 
DHS Secretary Chertoff that his agency not move from a security based 
focus into broader environmental objectives that are unrelated to 
security. We also agree with Senate Homeland Security and Governmental 
Affairs Committee Chairman Susan Collins that the Lautenberg-Obama 
approach ``would impose costly, intrusive, and burdensome mandates that 
take the wrong approach to homeland security'' and that ``process 
engineering decisions are best left to the private sector.'' We 
appreciate Chairman Collins efforts to work with our industry on 
chemical site security issues where we have serious concerns such as 
the IST issue. We were pleased last week when an IST mandate amendment 
offered last week during committee consideration of the ``Chemical 
Facilities Anti-Terrorism Act of 2005'' (S. 2145) was soundly defeated.
    Uninformed anti-chemical groups have been pushing for an IST 
mandate long before September 11, 2001. Congress should be very careful 
about how it handles this issue. A March 2003 General Accounting Office 
(GAO) report\4\ found that ISTs could result in shifting, rather than 
reducing, the risk of terrorist attacks. In that report, GAO stated, 
``reducing the amount of chemicals stored may shift the risk onto the 
transportation sector as reliance on rail or truck shipments 
increases.'' Availability of lower-cost sources of plant nutrient 
products or certain pesticides used by farmers could be at risk under 
an IST or other alternative approaches mandate. As this committee 
should be aware, the EPA already monitors IST technologies when 
reviewing agricultural pesticides for new section 3 registrations and 
during the re-registration process. It also considers agricultural 
pesticides for fast track registration that it deems the product safer 
for use. A new IST approach or mandate would set up a duplicative 
effort that is not needed and potentially opens the door for anti-
chemical groups to file lawsuits against the industry. Agricultural 
retailers and their farmer customers cannot afford the loss of 
essential crop input products, new expensive Federal mandates or 
defending against frivolous lawsuits.
---------------------------------------------------------------------------
    \4\ GAO-03-439 Homeland Security: Voluntary Initiatives Are Under 
Way at Chemical Facilities, but the Extent of Security Preparedness is 
Unknown, March 2003, p. 29
---------------------------------------------------------------------------
    If MFA was forced to recommend less effective pest management 
products or less efficient plant nutrient products to our farmer 
customers, the net results would be lower yields, less quality, less 
farm revenue, and markets shifting to foreign countries. Would you buy 
a wormy apple, a scared tomato, or rotten grapes? Of course not, and 
neither will other American consumers; but that is what you can expect 
if an IST mandate becomes law.
    In addition, our nation is making a strong effort to become more 
energy independent and less dependent on foreign sources of energy. ARA 
is a supporter of Federal policies that promote the use of renewable 
fuels and serves as a member of the 25x25 Ag Energy Working group, 
whose goal is for farms, ranches, forests, and other working lands to 
provide 25 percent of the United States' energy needs from renewable 
sources by 2025. For example, corn is a major component in the 
manufacture of ethanol, a clean-burning, renewable, domestically 
produced fuel. According to the Renewable Fuels Association (RFA), 
ethanol production is the third largest use of U.S. corn, utilizing a 
record 1.43 billion bushels of corn in 2005. The state of Missouri 
ranks ninth in total corn production in the U.S. Corn is Missouri's 
second largest crop in production, producing nearly 300 million bushels 
of corn annually. If an IST mandate became law, it could force the use 
of less efficient fertilizer for corn crops, which in turn would 
directly impact crop yields. According to ethanolfacts.com, one bushel 
of corn yields about 2.8 gallons of ethanol. A reduction of one bushel 
per acre in corn production would reduce Missouri net farm income by $5 
million. It would also mean that there would be less corn available to 
produce ethanol and hinder the Nation's efforts to become more energy 
independent.
    ARA believes that Congress should not go to such extremes as 
actually picking winners and losers in the crop protection and plant 
nutrient industry. This is an issue best left up to the market place 
and consumers.

                               CONCLUSION

    ARA and our members strongly support the war on terrorism and are 
committed to do our part to address security related concerns. As an 
industry we have already made great strides, but we believe it is 
important to have commonsense, workable regulations in effect that do 
not place unreasonable and unnecessary IST mandates on the industry. 
America's agricultural industry is currently faced with high fuel, 
fertilizer and transportation costs. It is also important to note that 
about 80 percent of U.S. counties were declared disaster or contiguous 
disaster counties last year due to devastating hurricanes, fires, 
floods, excessive moisture and severe drought. With the current state 
of the domestic and international agricultural markets and 
uncertainties facing America's agricultural industry, now is not the 
time for Congress to try to place further burdens on farmers and 
ranchers by limiting their product choices, increasing their input 
costs, and impacting their crop yields. This type of Federal policy 
could help further drive many within agriculture out of business and 
increase our dependence on foreign sources of food and fiber, similar 
to what we now face with foreign oil.
    Thank you for considering ARA's views. We appreciate Chairman 
Inhofe's interest and support on this important issue. We welcome the 
opportunity to provide further input to the committee on the issue of 
IST and address any security gaps that may exist within the industry. 
ARA stands ready to work with Congress on the development of a chemical 
site security legislation that adequately reflects the needs of 
America's agricultural industry and our rural economy. As we face these 
challenges, we can only accomplish what needs to be done if we work 
together.
                                 ______
                                 
           Responses by Charlie Cott to Additional Questions 
                          from Senator Inhofe

    Question 1. Your company is a large distributor of ammonium nitrate 
based fertilizers. Based on events in Oklahoma City, I, more than 
anyone, understand how dangerous ``A-N'' can be. I am also concerned 
with your comments about effects on the food supply if other 
alternatives were forced upon agriculture. How are best management 
practices and current safety rules for distributors, farmers, and 
ranchers working?
    Response. Retailers handle hazmat materials regularly in the 
production of American's food supply with out any incidents. We all 
realized after OK City and 9-11 that we need to be even more 
responsible and knowledgeable of issues surrounding terrorism. Before 
that time our focus was on accidents not intentional misuse. MFA has 
incorporated a number of new security measures that will help prevent 
ammonium nitrate or hazardous materials we handle from falling into the 
wrong hands, including registration and name/address of users (where 
required), no sales of bagged AN, no sales of AN to non-agricultural 
users, and no sales of bagged bulk fertilizer products sold. AN is 
still a very useful and economical farming tool, but can it be 
replaced? Anything can be replaced, but at a cost, most of those 
production programs that could switch from AN to other materials have 
already done so and the remaining users need AN just to remain 
productive and produce an economical crop. On certain crops, AN is 
still the recommended plant nutrient product of choice by the 
University of Missouri, the State's land grant college. Current 
alternatives to AN are not desirable to many of our farmer customers 
because they do not exhibit the same chemical characteristics and would 
not fit well in their crop production practices, or economic value.

    Question 2. Are you concerned that DHS rules and regulations, 
including IST, could conflict with the Department of Transportation's 
regulations governing safety and security of the transit system?
    Response. The agrichemical industry is the most regulated business 
segment in the entire United States and we are constantly trying to 
work in an environment when agency regulations conflict. Currently DHS 
has very limited regulatory authority but we believe that soon Congress 
will address this area and I hope that the new DHS will coordinate with 
other agencies on existing hazmat security rules. ARA supports the DOT 
maintaining their jurisdiction and oversight for the transportation of 
hazmat materials. The DOT already has security rules in effect related 
to the secure transportation of hazmat and they seem to be working 
well. I do however have concerns there will not be regulatory harmony 
and that conflicts over interpretation of IST's will be very confusing 
and bad for business. It is ARA's understanding that DOT and DHS have 
or are working on an interagency agreement that establishes the ground 
rules on how they will interact on these types of security regulations 
related to hazmat transportation.
                                 ______
                                 
    Response by Charlie Cott to an Additional Question from Senator 
                                Jeffords

    Question. Your written testimony discusses a range of federal laws 
governing agricultural operations. Are any of these laws designed to 
address the unique risks posed by terrorism?
    Response. It is my understanding that the DOT's hazmat 
transportation security laws and the fingerprint and background check 
requirements for applicants seeking a commercial drivers license (CDL) 
with a hazmat endorsement were implemented following 9/11 due to 
concerns of terrorists. I believe the same is true as it relates to the 
Coast Guard's MTSA rules. While I am not aware of any other direct 
federal laws that address terrorism or terrorist activities, I can 
assure you that MFA operates in an environment where we are carefully 
regulated as to the safety and security of our facilities by several 
federal agencies such as the EPA, DOT, OSHA and DHS as well as state 
and local agencies. Industry has initiated several programs to assist 
retailers and local authorities to do a better job of preventing 
criminal activities thus also stopping terrorist activities.
                                 ______
                                 
    Responses by Charlie Cott to Additional Questions from Senator 
                               Voinovich

    Question 1. Across the entire chemical manufacturing industry in 
the United States, how many of the chemicals listed on EPA's Risk 
Management Plan list have scientifically proven alternatives that 
increase safety, reduce risk, and operate at least as effectively, in 
terms of both cost and end product, as the chemical compound that is 
being replaced?
    Response. I have not done a study nor am I aware of any study on 
the EPA's RMP's than determines which chemicals are good IST 
substitutes.

    Question 2. Who or what body should determine what IST is? Should 
it be defined by Government, industry, or academia? If Government does 
define it, which agency should be responsible for that?
    Response. In the agricultural pesticide segment the EPA has 
responsibility for chemical approvals and that process is extensive 
taking many years to complete, detailed in it's science, and very 
expensive for registrants. I do not see any reason to have another 
agency or organization duplicate or try to out guess what the EPA has 
done in regards to the approval of chemicals. MFA or any other 
agricultural retailer or farmers would have a hard time to determine 
what an IST is because we do not have the funds to conduct such a 
costly analysis.

    Question 3. To your knowledge has IST ever been defined as a 
security measure in federal law?
    Response. I am not aware of any regulation that defines IST as a 
security measure. I can not see how IST's can even be considered 
security measures, there appear to be more of a philosophy.
    The EPA has concluded that:

     ``Inherently safer processes'' is a developing concept and 
is not ready for general application;
     IST frequently displaces risk rather than reducing it;
     Even if a few examples of workable alternative approaches 
do exist, there is not a rational basis for imposing an additional 
industry-wide regulatory burden; and
     The concept is normally considered when designing new 
processes, a time when changes can be implemented cost effectively.

    Question 4. Do you agree with the above assessments? In that 
context, do you believe that IST a concept that is ready for broad 
implementation as a regulatory requirement?
    Response. I agree with the above statements and do not believe that 
IST programs are ready for adoption for broad implementation as a 
regulatory requirement.

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