    [Senate Hearing 111-1020]
    [From the U.S. Government Publishing Office]

                                                           S. Hrg. 111-1020

       CHEMICAL SECURITY: ASSESSING PROGRESS AND CHARTING A PATH FORWARD

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

                                    HEARING

                                   before the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   ----------

                                 MARCH 3, 2010

                                   ----------

            Available via the World Wide Web: http://www.fdsys.gov/

           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

                            CHEMICAL SECURITY--2010

                                                           S. Hrg. 111-1020

       CHEMICAL SECURITY: ASSESSING PROGRESS AND CHARTING A PATH FORWARD

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

                                    HEARING

                                   before the

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 MARCH 3, 2010

                                   __________

            Available via the World Wide Web: http://www.fdsys.gov/

           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

                      U.S. GOVERNMENT PRINTING OFFICE
    56-889                    WASHINGTON : 2011
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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   JOSEPH I. LIEBERMAN, Connecticut, Chairman
    CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
    DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
    THOMAS R. CARPER, Delaware           JOHN McCAIN, Arizona
    MARK L. PRYOR, Arkansas              GEORGE V. VOINOVICH, Ohio
    MARY L. LANDRIEU, Louisiana          JOHN ENSIGN, Nevada
    CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina
    JON TESTER, Montana                  ROBERT E. BENNETT, Utah
    ROLAND W. BURRIS, Illinois
    PAUL G. KIRK, JR., Massachusetts

                      Michael L. Alexander, Staff Director
                        Holly A. Idelson, Senior Counsel
         Brandon L. Milhorn, Minority Staff Director and Chief Counsel
       Robert L. Strayer, Minority Director of Homeland Security Affairs
              Devin F. O'Brien, Minority Professional Staff Member
                      Trina Driessnack Tyrer, Chief Clerk
             Patricia R. Hogan, Publications Clerk and GPO Detailee
                        Laura W. Kilbride, Hearing Clerk

                                C O N T E N T S

                                     ------
    Opening statements:
                                                                       Page
        Senator Lieberman............................................     1
        Senator Collins..............................................     3
        Senator Voinovich............................................    14
        Senator Pryor................................................    15
        Senator Carper...............................................    16
        Senator Levin................................................    19
    Prepared statements:
        Senator Lieberman............................................    39
        Senator Collins..............................................    41

                                   WITNESSES
                            Wednesday, March 3, 2010

    Hon. Rand Beers, Under Secretary, National Protection and
      Programs Directorate, U.S. Department of Homeland Security,
      accompanied by Sue Armstrong, Acting Deputy Assistant Secretary
      for Infrastructure Protection, U.S. Department of Homeland
      Security.......................................................     5
    Hon. Peter S. Silva, Assistant Administrator for Water, U.S.
      Environmental Protection Agency................................     8
    Darius D. Sivin, Ph.D., Legislative Representative, International
      Union, United Automobile, Aerospace, and Agricultural Implement
      Workers of America.............................................    22
    Timothy J. Scott, Chief Security Officer and Corporate Director,
      Emergency Services and Security, The Dow Chemical Company, on
      behalf of the American Chemistry Council.......................    25
    Stephen E. Poorman, International Environment, Health, Safety,
      and Security Manager, Fujifilm Imaging Colorants, Inc., on
      behalf of the Society of Chemical Manufacturers and Affiliates.    27

                         Alphabetical List of Witnesses

    Beers, Hon. Rand:
        Testimony....................................................     5
        Prepared statement...........................................    44
    Poorman, Stephen E.:
        Testimony....................................................    27
        Prepared statement...........................................    75
    Scott, Timothy J.:
        Testimony....................................................    25
        Prepared statement...........................................    71
    Silva, Hon. Peter S.:
        Testimony....................................................     8
        Prepared statement...........................................    56
    Sivin, Darius D., Ph.D.:
        Testimony....................................................    22
        Prepared statement...........................................    64

                                    APPENDIX

    Submitted for the Record by Senator Lieberman:
        Center for American Progress, survey and reports.............    87
        United Steel Workers, letter in support of H.R. 2868.........   189
        Greenpeace, prepared statement with attachments..............   192
    Submitted for the Record by Senator Collins:
        Letters in support of S. 2996................................   238
        American Water Works Association, prepared statement.........   270
        National Petrochemical and Refiners Association, prepared
          statement..................................................   280
        M. Sam Mannan, Ph.D., Texas A&M University, prepared
          statement with attachments.................................   286
    Responses to questions for the Record:
        Mr. Beers....................................................   306
        Mr. Sivin....................................................   322

       CHEMICAL SECURITY: ASSESSING PROGRESS AND CHARTING A PATH FORWARD

                                  ----------

                            WEDNESDAY, MARCH 3, 2010

                                         U.S. Senate,
                               Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 9:34 a.m., in
    room SD-342, Dirksen Senate Office Building, Hon. Joseph I.
    Lieberman, Chairman of the Committee, presiding.
        Present: Senators Lieberman, Levin, Carper, Pryor, Collins,
    and Voinovich.

                OPENING STATEMENT OF CHAIRMAN LIEBERMAN

        Chairman Lieberman. The hearing will come to order. One of
    our witnesses on the first panel is not here yet. Senator
    Collins and I will proceed with our opening statements, and the
    two witnesses, and I am sure that in short order Mr. Beers will
    be here.
        We have called this hearing this morning to review the
    Federal Government's efforts to strengthen the security of
    hundreds of chemical sites around our country and to chart, if
    we can, a path forward to reduce the possibility that
    terrorists could take advantage of existing security
    vulnerabilities at these sites.
        In the aftermath of September 11, 2001, all of us developed
    a new awareness of potential targets of terrorists in our
    homeland. Many quickly realized that some of our Nation's most
    robust and varied industries--while obviously a source of great
    economic strength and job creation--also inherently posed
    substantial security risks, if attacked. And that included the
    many facilities that produce or use hazardous chemicals that
    could be turned against us and converted effectively into pre-
    positioned weapons of mass destruction.
        In a worst-case scenario, a successful attack on a facility
    using toxic chemicals in a densely populated area--and we know
    that those facilities do exist--could put hundreds of thousands
    of lives at risk. So there was a need for action.
        In 2005 and 2006, under the leadership of Senator Collins,
    this Committee spent a fair amount of time exploring these
    risks and drafting legislation to address the threat. I was
    pleased to cosponsor that legislation, and while it did not
    itself become law, it certainly helped prompt Congress, in late
    2006, to grant the Department of Homeland Security (DHS)
    limited authority to begin a chemical site security program.
    DHS has taken up that charge and launched the Chemical
    Facilities Antiterrorism Standards program (CFATS). The
    Department deserves credit for the hard work it has done to
    design and begin to implement these standards. It is a
    particularly challenging task because of the wide array of
    companies that use potentially dangerous chemicals and the
    limited guidance Congress gave in the initial authorization.
        Today we want to take stock of how the program is faring
    and determine how to strengthen it going forward, since the
    program's initial 3-year authorization has lapsed and we are
    now operating on a 1-year extension.
        I am pleased to say that though there was intense
    controversy over whether to begin a chemical security program
    at all because of opposition to government regulation in this
    area, there now seems to be general agreement that CFATS is
    making a positive contribution to our national and homeland
    security and should be continued. So the question becomes:
    Should we improve it and, if so, how can we improve the CFATS
    program as we extend it?
        I want to briefly discuss in this statement two issues that
    are commonly cited by some as ways to add strength to the
    program.
        First, the current authorization exempts drinking and waste
    water facilities, even though we know that some of these
    facilities would pose a high risk to surrounding communities in
    the event of a terrorist attack because of the chemicals used
    there. Does that exemption make sense? Personally, I join with
    the Administration in thinking that exemption leaves a
    troublesome security gap.
        Second, the current authorization is silent on the issue of
    inherently safer technology (IST), the practice of using safer
    chemicals or processes to reduce the risks at a chemical
    facility. I think it is important to look at these alternatives
    as part of a comprehensive security system since they are the
    only foolproof way to defeat a terrorist determined to strike a
    chemical facility. And there are encouraging developments on
    this front. For instance, Clorox recently announced it will
    begin substituting high-strength bleach for chlorine in its
    manufacturing process, a move that should greatly reduce the
    transport and storage of toxic chlorine gas in relation to its
    operations. I know that some of my colleagues strongly oppose
    mandating inherently safer technology systems, or even
    mandating consideration of them, so we are going to have a good
    healthy debate on that as we move forward, and we should.
        The House has already passed a CFATS reauthorization bill,
    which is H.R. 2868, which has been referred to this Committee.
    The House bill would make significant changes in the program,
    such as including an IST component and creating parallel
    security programs for drinking and waste water facilities at
    the Environmental Protection Agency (EPA).
        Closer to home, here in the Senate and this Committee,
    Senators Collins, Pryor, Voinovich, and Landrieu have offered a
    5-year reauthorization of the existing rules, and that is S.
    2996. So we have before us two different approaches on how to
    move forward, and we may, I would guess, hear some additional
    ideas this morning from the witnesses or from other Members of
    the Committee.
        We are fortunate to have as witnesses some Administration
    and private sector leaders on these issues, and we will call on
    them soon and look forward to their testimony.
        Senator Collins.

                  OPENING STATEMENT OF SENATOR COLLINS

        Senator Collins. Thank you, Mr. Chairman.
        More than 70,000 products are created through the use of
    chemicals, helping to supply the consumer, industrial,
    construction, and agricultural sectors of our economy. The
    United States is home to thousands of facilities that
    manufacture, use, or store chemicals.
        This industry is vital to our economy, with annual sales of
    nearly half a trillion dollars, exports of $174 billion, and
    direct employees exceeding 850,000 people.
        But as the Chairman indicated, after September 11, 2001, we
    realized that chemical facilities were vulnerable to terrorist
    attack. Given the hazardous chemicals present at many
    locations, terrorists could view them as attractive targets,
    yielding a terrible loss of life, significant injuries, and
    major destruction if they were successfully attacked.
        In 2005, as Chairman of this Committee, I held a series of
    hearings on chemical security. Following these hearings,
    Senators Lieberman, Carper, Levin, and I introduced bipartisan
    legislation authorizing the Department of Homeland Security to
    set and enforce security standards at high-risk chemical
    facilities. My view of what happened to that bill is a little
    different from the Chairman's. In my view, it was incorporated
    into the homeland security appropriations act and signed into
    law in 2006. In fact, I remember well how difficult the
    negotiations were with the Bush Administration and the House as
    we proceeded with that bill.
        To implement this new authority, DHS established the
    Chemical Facility Antiterrorism Standards program. This program
    sets 18 risk-based performance standards that high-risk
    chemical facilities must meet. The security standards cover a
    wide range of threats, such as perimeter security, access
    control, theft, internal sabotage, and cybersecurity.
        High-risk chemical plants covered by the program are
    required to conduct vulnerability assessments, develop site
    security plans, and invest in protective measures. The
    Department must approve these assessments and site security
    plans, using audits and inspections to ensure compliance. The
    Secretary--and this was an authority that I insisted on--is
    empowered to actually shut down facilities that are non-
    compliant.
        This risk-based approach has made the owners and operators
    of chemical plants partners with the Federal Government in
    implementing a successful, collaborative security program.
        This landmark law has been in place slightly more than 3
    years. Taxpayers have invested nearly $300 million in the
    program. Chemical plants also have invested hundreds of
    millions more to comply with the law. As a direct result,
    security at our Nation's chemical facilities is much stronger
    than it was 5 years ago.
        Now we are at a juncture where we must reauthorize the
    program or, as some have proposed, scrap what has clearly been
    a clear success and set off in a different direction. My view
    is that we should reauthorize the law.
        Simply put, the program works and should be extended.
        Proposals to drastically change this successful law would
    discard what is working for an unproven and burdensome plan. We
    must not undermine the substantial investments of time and
    resources already made in CFATS implementation by both DHS and
    the private sector. Worse would be requiring additional
    expenditures with no demonstrable increase to the overall
    security of our Nation.
        Last November, as the Chairman has indicated, the House
    passed a bill that would alter the fundamental nature of the
    chemical security law. It would require the Department to
    completely rework the program. I am concerned about several
    aspects of the House bill, not the least of which is the
    authority to mandate the use of so-called inherently safer
    technology.
        What is IST? It is an approach to process engineering. It
    is not, however, a security measure. An IST mandate may
    actually increase or unacceptably transfer risk to other points
    in the chemical process or elsewhere in the supply chain.
    Currently DHS cannot dictate specific security measures like
    IST, nor should it. The Federal Government's job should be to
    set the performance standards, but to leave it up to the
    private sector to decide precisely how to achieve those
    standards. Forcing chemical facilities to implement IST could
    actually cost jobs at some facilities and affect the
    availability of many vital products.
        Last year, one of the associations which will be testifying
    before us today testified that mandatory IST would restrict the
    production of pharmaceuticals and microelectronics, hobbling
    those industries. The increased cost of a mandatory IST program
    may force chemical companies to simply transfer their
    operations overseas, costing American workers thousands of
    jobs, at a time when we can least afford job loss.
        Now, I want to be clear that some owners and operators of
    chemical facilities may choose and do choose to implement IST.
    But that decision should be theirs, not a decision established
    in Washington. Our focus is to make sure that the standards are
    met, not to dictate how to meet those standards.
        Congress should not dictate specific industrial processes--
    we do not have that expertise--under the guise of security when
    a facility could choose other alternatives that meet the
    Nation's security needs.
        A straightforward, common-sense reauthorization of this
    program is, however, critical. The legislation which I have
    introduced with Senators Pryor, Voinovich, and Landrieu would
    extend the CFATS program for 5 more years. And, Mr. Chairman, I
    would ask to submit for the record 27 letters of support for S.
    2996. They range from the Chamber of Commerce to the American
    Forest and Paper Association, and many others, and I would ask
    that those be submitted for the record.\1\
    ---------------------------------------------------------------------------
        \1\ The letters submitted by Senator Collins appear in the Appendix
    on page 238.
    ---------------------------------------------------------------------------
        Chairman Lieberman. Without objection, so ordered.
        Senator Collins. Mr. Chairman, no one is more conscious
    than I of the risks that our Nation faces through an attack on
    a chemical facility. That is why I was the primary author of
    the chemical facility security bill, and it is why I battled
    considerable opposition to get this landmark law enacted. We
    should support the continuation of a program that is working,
    and we should do so without the addition of costly and unproven
    Federal mandates.
        Thank you, Mr. Chairman.
        Chairman Lieberman. Thanks, Senator Collins.
        Mr. Beers, welcome. We are not going to abuse you as we
    have earlier when Secretary Napolitano did not make it here at
    the starting time of a hearing, but we are just glad to see you
    here.
        Mr. Beers is the Under Secretary for the National
    Protection and Programs Directorate (NPPD) at the Department of
    Homeland Security. In this capacity, he leads the Department's
    efforts to reduce risks to physical, communications, and cyber
    infrastructure. Accompanying Mr. Beers today is Sue Armstrong,
    Acting Deputy Assistant Secretary for Infrastructure Protection
    in the Department of Homeland Security.
        Mr. Beers, we would welcome your testimony now.

      TESTIMONY OF HON. RAND BEERS,\1\ UNDER SECRETARY, NATIONAL
        PROTECTION AND PROGRAMS DIRECTORATE, U.S. DEPARTMENT OF
    HOMELAND SECURITY, ACCOMPANIED BY SUE ARMSTRONG, ACTING DEPUTY
        ASSISTANT SECRETARY FOR INFRASTRUCTURE PROTECTION, U.S.
                    DEPARTMENT OF HOMELAND SECURITY

        Mr. Beers. Thank you very much, Mr. Chairman, Ranking
    Member Collins, Senator Voinovich, and other Members of the
    Committee who are not present. It is a pleasure for me to be
    here today to discuss with you the Department of Homeland
    Security's regulatory authority for security at high-risk
    chemical facilities. I am pleased to be joined by Peter Silva
    from the Environmental Protection Agency and, of course, my
    colleague at DHS, Sue Armstrong. I think we have developed a
    constructive relationship with the Environmental Protection
    Agency and look forward to a continued dialogue with them as we
    move forward together on this important issue.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Beers appears in the Appendix on
    page 44.
    ---------------------------------------------------------------------------
        As you are aware, and as Senator Collins just noted, the
    Department's current authority expires in October of this year,
    and we are eager to work with this Committee as one of the
    central elements of the Congress and, as Senator Collins
    indicated, the author of the original CFATS legislation. We are
    eager to work with you, with all levels of government, and with
    the private sector to achieve passage of appropriate
    legislation that permanently authorizes and appropriately
    matures our chemical security program.
        The CFATS program has been, I think, a tremendous success
    to date, due in large part to the work of this Committee which,
    through its initial work on this issue, gave the Department of
    Homeland Security a solid foundation upon which to build a
    comprehensive chemical security program. CFATS currently covers
    over 6,000 high-risk facilities nationwide across all 50
    States. The Department continues to issue final tier
    notifications to approximately 500 facilities across all four
    risk tiers each month and expects to notify all of the 6,000-
    plus facilities of their final tier assignments by the end of
    the summer of 2010.
        We began in February of this year the inspection program of
    the final tiered facilities starting with the Tier 1
    facilities, or the highest-risk facilities. Since the release
    of CFATS in April 2007, the Department has taken significant
    steps to publicize the rule and to ensure that our security
    partners are aware of its requirements. We have also made a
    point to solicit feedback from both the public and private
    sector partners in this endeavor and, where appropriate, to
    reflect that feedback in our implementation activities.
        The Department also continues to focus on fostering solid
    working relationships with State and local officials as well as
    first responders in jurisdictions with the high-risk
    facilities. To meet the risk-based performance standards under
    CFATS, facilities need to cultivate and maintain an effective
    working relationship--including a clear understanding of roles
    and responsibilities--with local officials who could aid in
    preventing or mitigating or responding to potential attacks.
        In addition, we are working with the private sector as well
    as all levels of government to identify facilities that may
    meet the threshold for CFATS regulation but have not yet
    registered. We have completed pilot efforts in both New York
    and New Jersey, and we have commenced a targeted outreach
    effort to certain segments of the industry for which we believe
    compliance may need improvement.
        We have also enjoyed a constructive dialogue with Congress,
    including this Committee, as it contemplates new authorizing
    legislation. The Department supports a permanent authorization
    for the CFATS program, and we intend to provide Congress with a
    draft of a comprehensive authorization bill this fiscal year.
        We recognize, however, the time constraints and challenges
    in passing such comprehensive legislation, which is why the
    President's fiscal year 2011 budget indicates a request for a
    1-year extension of CFATS to ensure the time, if needed, to
    complete enactment of a permanent program.
        It is important to highlight, therefore, the
    Administration's guiding principles in this reauthorization of
    CFATS, which will be the foundation of the Department's
    legislative position on the permanent CFATS reauthorization.
        The Department believes that we should be given reasonable
    deadlines to implement any new legislative requirements, and
    CFATS, as currently implemented, should remain in effect until
    supplemented by any new regulations which the Congress should
    deem to put forward.
        The Administration also supports, where possible, using
    inherently safe technology such as less toxic chemicals to
    enhance the security of the Nation's high-risk chemical
    facilities. We recognize, however, that risk management
    requires balancing threat, vulnerabilities, and consequences
    with the costs and benefits that might mitigate risk.
    Similarly, we would take into account potential public health
    or environmental consequences of any alternative chemical that
    might be considered with respect to the use of safer
    technology.
        In this context, the Administration has established the
    following policy principles in regard to inherently safer
    technology at high-risk chemical facilities:
        The Administration supports consistency of IST approaches
    for facilities regardless of the sector.
        The Administration believes that all high-risk chemical
    facilities should assess IST methods and report that assessment
    in the facility's site security plan and that the appropriate
    regulatory entity using regime-wide guidelines should have the
    authority to require Tier 1 and Tier 2 facilities to implement
    IST methods if such methods demonstrate an enhancement of
    overall security, are determined to be feasible, and in the
    case of the water sector in particular, consider public health
    and environmental requirements.
        The Administration believes that flexibility and staggered
    implementation would be required in implementing any new IST
    policy, should Congress choose to pass that policy.
        The Administration also supports maintaining the
    Department's current Chemical Terrorism Vulnerability
    Information (CVI), regime for protecting sensitive information
    relating to chemical facility security.
        As DHS and EPA have stated before, we believe that there is
    a critical gap in the U.S. chemical security regulatory
    framework, namely, the exemption of drinking water and
    wastewater treatment facilities from CFATS. The Department
    supports amending the current exemption to specify that EPA
    should have the lead on regulating for security with the
    Department of Homeland Security supporting EPA to ensure
    consistency across all sectors.
        The Department supports modifying the exemption for
    facilities regulated under the Maritime Transportation Security
    Act (MTSA), to require facilities currently subject to MTSA to
    submit information to the Secretary of Homeland Security to
    determine whether they should be designated as high-risk
    chemical facilities under CFATS.
        We are ready to engage in technical discussions with the
    Committee staff, affected stakeholders, and others to work out
    the remaining details. We must focus our efforts on
    implementing a risk- and performance-based approach to
    regulation and in parallel fashion continue to pursue the
    voluntary programs that have already resulted in considerable
    success.
        Thank you for holding this important hearing, and I would
    be happy to respond to your questions at an appropriate time.
    Thank you, Mr. Chairman.
        Chairman Lieberman. Thanks very much, Under Secretary
    Beers.
        I understand that Ms. Armstrong will be available to answer
    questions but has no opening statement. Is that correct?
        Ms. Armstrong. Yes.
        Chairman Lieberman. Thank you very much.
        Now we are going to hear from Peter Silva, who is the
    Assistant Administrator for Water at the Environmental
    Protection Agency. With more than 30 years in the water and
    wastewater management fields, Mr. Silva is a leader in efforts
    to ensure the safety of drinking water and the viability of
    aquatic ecosystems.
        We appreciate your presence and would ask for your
    testimony now.

     TESTIMONY OF HON. PETER S. SILVA,\1\ ASSISTANT ADMINISTRATOR
            FOR WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY

        Mr. Silva. Thank you. Good morning, Mr. Chairman, Ranking
    Member Collins, and Members of the Committee. I am Peter Silva,
    Assistant Administrator for Water at the U.S. EPA. I welcome
    the opportunity to discuss EPA's efforts to promote security
    and resiliency in the water sector with an emphasis in
    addressing chemical security at water facilities, and I am very
    pleased to be here with Under Secretary Beers as we discuss
    this important issue.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Silva appears in the Appendix on
    page 56.
    ---------------------------------------------------------------------------
        EPA has worked over the last several years to support the
    water sector in improving security and resiliency, and I am
    pleased to report that the sector has taken its charge
    seriously. EPA has been entrusted with important
    responsibilities for coordinating the protection of the water
    sector through congressional authorization under the Public
    Health Security and Bioterrorism Preparedness and Response Act
    of 2002--the Bioterrorism Act--and through presidential
    mandates under Homeland Security Presidential Directives 7, 9,
    and 10.
        Promoting the security and preparedness of the Nation's
    water infrastructure remains a priority of the Agency in a
    post-September 11, 2001, and post-Katrina world. A loss of
    water service can seriously jeopardize the public health,
    economic vitality, and general viability of a community. In
    working with the water sector, we have emphasized a multi-
    layered approach to security consisting of prevention,
    detection, response, and recovery so that we can assist water
    facilities in avoiding incidents and, should an incident occur,
    in quickly identifying and recovering from such events.
        At this point I would like to take a step back to consider
    the broader implications of chemical security for the water
    sector. It is of paramount importance to us to acknowledge in
    this discussion that the primary purpose of drinking water
    systems is the provision of safe drinking water, while that of
    wastewater systems is the protection of water bodies. In fact,
    the effective treatment of drinking water to control infectious
    diseases like typhoid and cholera has been hailed by the U.S.
    Centers for Disease Control and Prevention as one of the
    greatest public health achievements of the 20th Century.
        Therefore, chemical security regulations, when applied to
    the water sector, should enable a reasoned balance of multiple,
    important factors so that we can achieve the joint policy goals
    of protecting public health and the environment while at the
    same time enhancing security.
        EPA has worked closely with the water sector to assess and
    reduce the risks associated with hazardous chemicals. To this
    end, EPA and industry associations, often in partnership, have
    developed tools, training, and technical assistance to help
    drinking water utilities identify and mitigate those risks.
        For example, EPA has developed software tools that assist
    drinking water systems with assessing vulnerabilities,
    including chemical storage and handling.
        I understand this Committee and others in Congress are in
    the process of considering chemical security legislation. To
    inform those deliberations, the Administration has developed a
    set of guiding principles.
        First, the Administration supports permanent chemical
    facility security authorities.
        Second, cover systems that use substances of concern above
    threshold levels should be required to conduct an assessment of
    inherently safer technologies. Further, the appropriate
    regulatory agency should be authorized to require the highest-
    risk facilities to implement IST under certain conditions.
        Third, the existing security gap for wastewater and
    drinking water facilities should be closed, with EPA having the
    authority to regulate chemical security at such water
    facilities.
        As a final thought on the legislation, EPA supports a
    robust State role in the regulation of chemical security in the
    water sector, including a prominent role in IST determinations
    and auditing and inspections. This approach would leverage
    decades-old EPA and State relationships under the drinking
    water and wastewater programs, as well as the States' unique
    expertise and familiarity with individual water facilities.
        In conclusion, over the past several years, we have made
    progress in ensuring the security of our Nation's drinking
    water and wastewater systems. We have produced a broad array of
    tools, training, and other assistance that the water sector
    uses to assess its vulnerabilities, reduce risk, and prepare
    for emergencies, including chemical theft and release. In
    developing these tools, we have worked effectively with our
    partners within the sector, and reached out to build new
    relationships beyond the sector, to ensure that water utilities
    can be prepared to prevent, detect, respond to, and recover
    from intentional incidents and natural disasters.
        With respect to security at water sector facilities, we
    look forward to continuing to work with Members of the
    Committee on legislation that ensures the security of drinking
    water and wastewater facilities while supporting the critical
    mission of these facilities for public health and environmental
    protection.
        Thank you again for the opportunity to--for my role here in
    terms of water security, and I would be happy to answer any
    questions that you may have.
        Chairman Lieberman. Thanks, Mr. Silva. That is a good
    beginning. We will do 7-minute rounds of questioning for the
    Members.
        Under Secretary Beers, I appreciate that in your opening
    statement you have committed to providing suggested bill
    language from the Administration that we might consider. What
    is your sense of timing on that? In other words, when do you
    think you could have that for us?
        Mr. Beers. Sir, the draft legislation exists within NPPD.
    It is awaiting the completion of this hearing before we start
    the clearance process in terms of moving forward to clear it
    both within the Department of Homeland Security and obviously
    with the rest of the Administration. It is not just DHS's
    legislative proposal. It would have to be an Administration
    proposal.
        The time frame for that process is entirely dependent upon
    the degree of controversy that the draft legislation creates. I
    am a little reluctant to tell you--certainly I would not want
    to suggest that it is going to be up in the next couple of
    weeks.
        Chairman Lieberman. Right.
        Mr. Beers. I am hoping that it can be up in the next couple
    of months.
        Chairman Lieberman. That gives us a helpful guide as we go
    forward.
        Let me ask you, Under Secretary Beers, a historical
    question about this, which is what we have learned about who in
    our communities is using these chemicals and where they are
    located. I know that many of the chemicals that are covered by
    CFATS may be regulated for safety or environmental purposes on
    an industry-specific basis. But the CFATS program was an
    attempt to craft broad security standards across a wide array
    of industries.
        I know that at the beginning it was a challenge for the
    Department of Homeland Security to reach judgments about who
    should fall under the CFATS program, and I wanted to ask you
    whether based on that experience you think we, and the
    Department, have a clearer picture of where these potentially
    dangerous chemicals are located, and if so, how we might put
    that information to use both in our legislating but also to
    prepare communities against the risks of a possible attack.
        Mr. Beers. You are absolutely correct, this was a process
    that I think all of us learned from in terms of the development
    of the list of chemicals of interest and then the outreach
    program to get those firms who were going to be covered or who
    thought they might be covered to begin the process of providing
    materials to the Office of Infrastructure Protection so we
    could begin to catalog those.
        As I indicated in my oral statement and in my written
    testimony, this is still an ongoing process, quite honestly.
    There is a category that we call outliers that were not covered
    in the original screening process, and which we are looking for
    in conjunction with state governments to try to make sure that
    the regime, in fact, covers all of those.
        Having said that, in the two pilot programs that we have
    conducted in New Jersey and in New York State, based on the
    initial calculation of who might be covered and the end
    determination of who might be covered, we are pleased to
    discover that it is a very small number of firms that would
    actually be covered. Ms. Armstrong, correct me. It was in the
    neighborhood of 20?
        Ms. Armstrong. Yes.
        Mr. Beers. In each of those, and we thought it was a larger
    number, quite honestly, when we began the process.
        So this has been a learning process which we would be happy
    to share with the Committee at any point in time to the extent
    that would be helpful in your considerations.
        Chairman Lieberman. Good. It would be helpful.
        Let me ask you to speak a little bit more about the debate
    and discussion about inherently safer technologies. I
    appreciate your statement that the Administration would like to
    build a meaningful IST component into the CFATS program. I
    wonder at this point if you could talk about how you think that
    might best be done.
        Mr. Beers. If I can suggest that we all bear in mind that
    the legislation that you all produced was over the objection of
    a large segment of the chemical sector of the economy, and that
    the implementation of that regulation that you gave us ends up
    now being something that you tell us, not we tell you, that has
    been well received by the chemical industry, we would expect to
    take the same kinds of deliberative measures and the same kind
    of broad-based outreach before we even set the guidelines that
    we would have to set in order to ask facilities to modify their
    site security plans or their vulnerability assessments based on
    the consideration of an inherently safer technology.
        We are not going to say in some kind of a blast email
    everybody revise your plans. We are going to sit down; we are
    going to talk to the industry; we are going to talk about what
    the environment in this area looks like. We are going to
    understand their concerns, and then we are going to suggest
    what the guidelines might be in order that they can then report
    back to us.
        We would expect that this will be implemented, if it is
    passed, in a manner exactly consonant with the efforts to
    listen to all the stakeholders in this process before moving
    toward final implementation and the mandate or requirement to
    compel changes if we get to that point.
        Chairman Lieberman. So you have not reached a conclusion,
    am I right, about whether the Administration will recommend
    legislation that would mandate inherently safer technologies,
    for instance at a top tier based on risk, of chemical
    facilities, or whether the legislation would simply mandate
    consideration of inherently safer technologies?
        Mr. Beers. There are two levels in our proposal, sir. One
    would take the Tier 1 and Tier 2 facilities and give the
    Administration the ability to require that they adopt an
    inherently safer technology. That is a decision that would be
    made on a facility-by-facility basis. It would not take into
    account simply the issue that there was a clearly agreed upon
    inherently safer technology, that is, a change of the chemical
    or a change of the process.
        Chairman Lieberman. Right.
        Mr. Beers. There are other factors that would be taken into
    consideration, including the economic impact of such a change,
    the time frame over which such a change might, in fact, be
    implemented, whether or not they are in conflict with some
    public health or environmental requirement. This is not, ``Gee,
    we have discovered this inherently safer technology; now you
    all go ahead and do it.'' It is going to be a dialogue starting
    from the very beginning of the process.
        Chairman Lieberman. I appreciate your answer. My time is
    up. Thank you. Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Mr. Secretary, only 10 months ago during your nomination
    before this Committee, you stated that the chemical security
    law, ``is an effective program for addressing the security
    risks associated with the Nation's high-risk chemical
    facilities and is helping to make our country more secure.''
        You went on to say, ``I believe the Department has
    developed an effective approach for both identifying high-risk
    chemical facilities and assessing the security risks associated
    with them.''
        Finally, when you were asked whether you believed the CFATS
    program's current requirements for physical protection of a
    facility were sufficient, you said yes.
        Just to clarify for the record, since it is obvious from
    that testimony--and indeed your testimony today--that this law
    has worked well and that it has made a difference, is it fair
    to say that your first priority is to prevent the law from
    expiring?
        Mr. Beers. Were we unable to agree between the Congress and
    the Administration--and ultimately it is your decision to
    change the law, not ours--on the enhancements that we would be
    seeking, then it is absolutely critical that this legislation
    be reauthorized in its current form as a minimal statement of
    maintaining the progress that I think we have made, that you
    have given us the opportunity to make, yes.
        Senator Collins. I want to talk a little bit about the
    inherently safer technology issue, since that is a major
    difference between the bill that Senator Pryor is the chief
    Democratic cosponsor of, and Senators Voinovich and Landrieu
    are cosponsors of, to extend the law.
        Just this past weekend, in Houston, the Department of
    Homeland Security, working with the Center for Chemical Process
    Safety, held a conference with the world's leading experts in
    chemical process safety, and the conference title is
    instructive. It is ``Creating a Technical Definition of IST.''
        We have talked to many of the participants of that
    conference, and I want to read to you what one of the leading
    experts emailed to us. He said, ``With regard to the IST
    meeting in Houston, one thing is very clear. That is that there
    is still a lot of disagreement on just the definition of IST,
    let alone quantification methods, assessment methods, and a
    host of other issues.''
        One expert, Dr. Sam Mannan, who is a leading expert in this
    field, has submitted testimony for the record, and I want to
    highlight a statement that he makes. He says, ``There is no
    clearly established scientific basis on which inherently safer
    technology options could be mandated by any legislation or
    regulation at chemical facilities.''
        The reason I mention this conference, which DHS helped to
    sponsor, is that it shows all the uncertainties surrounding
    IST. When the leading experts in the world say that there is
    not even a commonly agreed upon definition of IST, how in the
    world can we consider making that a Federal mandate?
        Mr. Beers. I would respectfully submit that the same kinds
    of issues were of concern when we drew up the list of chemicals
    of interest. This is an area that requires a great deal more
    work, and that is why I want to repeat that we are not, if you
    give us this authority, intending to proceed willy-nilly into
    an implementation regime.
        We have been asking our Science and Technology Office for
    some time now to help us with the definition of inherently
    safer technology, to help us with models of inherently safer
    technology, to give us the kind of information that we would
    need were we to be required to do this.
        So I fully understand and am aware that this is an area
    that requires a great deal more work. But we are in the process
    at this point in time of looking at what we would regard as a
    permanent reauthorization of the chemical facilities anti-
    terrorism legislation, and we would like to have this authority
    as part of that permanent reauthorization. So, yes, there is
    still work to be done. No question.
        Senator Collins. Well, I guess the point that I would make
    is the Department has done a first-rate job of implementing
    this law. It has made a difference by your own assessment. And
    it is appropriate for us to set the security standards, but for
    us to mandate a particular approach, particularly an approach
    about which there are so many questions, to me is premature at
    best.
        Let me just quickly in my remaining time switch to a
    different issue. In June of last year, your Deputy Under
    Secretary testified before the House Homeland Security
    Committee and was asked about the civil enforcement provisions
    included in the House bill, and he said, ``I have a concern
    that civil litigation involving the CFATS regime would lead to
    a higher likelihood of disclosure of sensitive information.''
        Does DHS continue to oppose the civil suits included in the
    House-passed bill reauthorizing and changing the law?
        Mr. Beers. Before answering your question, I am obligated
    to tell you that the Administration has not taken a position
    yet on this particular issue. So in that context, the concern
    that we had previously, which is that the civil suit entry into
    a security regime and the need for a civil plaintiff to have
    the information necessary to bring this suit to bear or for the
    government to defend why it was opposed to this suit, will
    inevitably raise questions about an array of information that
    in the first instance would be information that was proprietary
    information on the part of the facility and vulnerability
    information on the part of the facility, both of which are
    currently protected by the regime that you have given us.
        Second, the decision process for getting to a decision
    about a security plan, whether or not it included an inherently
    safer technology decision, or a non-decision, would also have
    potential as part of that process the use of even higher
    classified information that might bear on a specific threat to
    either the facility itself or to the sector. And we would like
    to keep that information in the security regime that it is. And
    while people have indicated that there might be a carve-out
    that would say that we could say, well, that was protected
    information, if that judgment were then subject to
    consideration by sources outside the government, then we would
    still be in the process possibility in which that information
    might be disclosed.
        So we would very much be concerned about this, and the
    Administration will be taking this issue into consideration for
    an Administration position in the weeks ahead. But we do not
    have a position. That is our concern at this point.
        Senator Collins. Thank you.
        Chairman Lieberman. Thanks, Senator Collins. Senator
    Voinovich.

                 OPENING STATEMENT OF SENATOR VOINOVICH

        Senator Voinovich. Thank you, Mr. Chairman.
        I just went over the bill's history. This bill passed in
    October 2006, and my recollection is that we spent an enormous
    amount of time on this piece of legislation listening to
    everybody, any group that was out there. The rules were issued
    in April 2007. The process, in November 2007, began with
    initial Top-Screen assessments, and inspections will commence
    in March 2010.
        We have not even got into implementing the legislation that
    we have already passed, and I think to myself, in terms of
    management, do you have the people that you need to get the job
    done. You have also indicated in your testimony that DHS is
    currently undertaking a multi-year examination of inherently
    safer technology.
        Do we realize where we are at today? Do we understand that
    we have a Federal Government that is in deep trouble and we
    keep expanding it and expanding it? For what? What are we going
    to get out of the inherently safer technologies?
        Then we are going to move into the area of involving the
    EPA. Do you know, Mr. Silva, that many State EPAs in this
    country have laid off people? Do you realize how bad things are
    out in the States? And you are going to get them involved in
    more of this stuff? Do you realize that in my State we have 100
    jurisdictions that are under orders from the EPA and their rate
    increases are 13 and 14 percent a year and they still cannot
    pay their bills? And you are talking about getting EPA more
    involved and increasing the cost of running those facilities?
        Let us get real. Do the people in this Administration, does
    the President understand how bad things are out there? Does he
    understand it? And we just keep growing and growing the
    government, and the departments are being given more and more
    responsibilities and do not have the human capital to get the
    job done.
        I think we need to get real, Mr. Chairman. If we are going
    to spend time on this issue, it is going to take a whole lot of
    time for us to go through this. It seems to me at this stage of
    the game the best thing we could do is reauthorize the program,
    give DHS the chance to get the program implemented, see how it
    works out, and then go on maybe 2 or 3 years from now and see
    how this program is working out. But to spend this Committee's
    time on going through this issue, getting the testimony, all of
    the other stuff that we are going to have to do, amendments and
    the rest of it--let us put it in perspective.
        The real issue is: What is the need? Is there an overriding
    need that we have to do this now? Is there something that is
    going to happen that is catastrophic or something of that sort?
    We have not even implemented the program yet.
        So that is the only thing I have to say. I could ask a
    bunch of questions whether you have the management people to
    get the job done or do you have the people, Mr. Silva, or where
    are you in terms of this IST assessment work and how long is it
    going to take you to figure out that issue. And once you grant
    the Letter of Approval to somebody that says they have complied
    with the law, are you going to come back with them 2 years
    later or 6 months later and say, by the way, we forgot about
    IST and let us go back over and do that?
        Thank you, Mr. Chairman.
        Chairman Lieberman. Thanks, Senator Voinovich. I would just
    say for the record--obviously, I understand what you are
    saying--that because the CFATS program has essentially run out,
    the President has recommended a 1-year extension in the budget
    to keep it going. And the House bill, which extends the program
    but alters it, came to the Committee, and Senator Collins,
    yourself, Senator Pryor, and Senator Landrieu have introduced
    legislation to extend it to 5 years. That is why we are holding
    the hearing as part of our oversight to see what we should do.
    Obviously, the Committee ultimately will work its will, but
    that is why I thought it was worth the hearing this morning.
        Senator Pryor.

                   OPENING STATEMENT OF SENATOR PRYOR

        Senator Pryor. Thank you, Mr. Chairman, and I want to thank
    Senator Collins for taking the lead on this piece of
    legislation. As always, she is showing great leadership and I
    think really is trying to set the right public policy and the
    right course for the country.
        Let me start with you, if I may, Under Secretary Beers, and
    let me ask about inherently safer technologies. I know we have
    already had a little bit of discussion about it today, but the
    Administration's guiding principles indicated that there should
    be a consistency of IST approaches for all facilities. Can you
    tell me what that means, a consistency of approaches for all
    facilities?
        Mr. Beers. Because we are also considering and proposing
    that the Environmental Protection Agency would retain its
    primary relationship with water and wastewater and would be the
    regulating authority, with or without inherently safer
    technology. Were inherently safer technology added to that then
    with respect to both the existing legislation and that possible
    addition, DHS--together with EPA--would set up a consistent
    regime for implementation across all the sectors.
        We do not want to have one sector--let us just say water or
    wastewater--in a different regime. Obviously, the regimes will
    adapt, as we do already within DHS, with respect to the
    chemicals of interest that are not necessarily in the chemical
    sector.
        So the notion here is to convey to you that there will not
    be a differentiated regime just because EPA is going to have
    responsibility for some part of the implementation of whatever
    the CFATS regime looks like, should you remove the exemption.
        Senator Pryor. But you are not talking about a one-size-
    fits-all.
        Mr. Beers. Absolutely not. This is sector by sector,
    facility by facility, and that is why the outreach program at
    the sector level is so important and why the individualized
    approach to each of the facilities is important.
        Senator Pryor. I think one thing that at least some of the
    Members of the Committee have, maybe all, is just this lack of
    clarity on what IST means and how it will be applied. So, I
    have some concerns about that, and I also have a concern about
    the cost factor if this concept or a similar concept goes
    forward. Because safety is one thing, and certainly that is
    very important. But there is also a very real cost factor for
    industries, communities, etc. Have you all talked about the
    cost factor?
        Mr. Beers. We have talked about that. That is a specific
    element in the consideration. In fact, for those who have also
    expressed a concern about the added cost of revising their
    security plan and/or assessments, we will take that into
    account in terms of the guidelines where we are asking for
    additional information with respect to inherently safer
    technology and, in particular, assist smaller firms if this
    legislation is implemented in the actual preparation.
        The larger firms may have that information already
    available in their own data banks. We are not expecting that
    all firms will have that, and we are really not interested in
    imposing some kind of initial research requirement on any of
    the companies. That is why the other part of the outreach
    program will be the scientific community. That is why our
    Science and Technology Office has already begun trying to think
    about that issue well before this Administration came to
    office.
        Senator Pryor. And it sounds like you are working with the
    scientific community as well as with the private sector?
        Mr. Beers. Yes, sir.
        Senator Pryor. And are there new technologies that are
    coming online that may indeed be safer and maybe should be
    implemented?
        Mr. Beers. Sir, that issue is the particular issue in
    question. My understanding--and I profess not to be an expert
    in this issue, but I am trying to ensure that I am sufficiently
    informed. My understanding is that is the case, but let me ask
    my colleague Ms. Armstrong here with respect to that.
        Ms. Armstrong. Well, I think it is fair to say that part of
    the U.S. economy is being innovative and inventive, and I think
    from our dealings with the industry through the Sector
    Coordinating Councils that we have socialized a lot of CFATS
    and the tools and compliance mechanisms for CFATS with private
    industry, I think they are looking at newer advanced
    technologies. I think you may be hearing about some of those
    from the next panel, in fact.
        Senator Pryor. Thank you, Mr. Chairman. That is all I have.
        Chairman Lieberman. Thanks very much, Senator Pryor.
    Senator Carper.

                  OPENING STATEMENT OF SENATOR CARPER

        Senator Carper. Thanks very much. Ms. Armstrong, are there
    any questions you would like for me to ask of you? [Laughter.]
        They are taking it pretty easy on you here this morning.
        Mr. Beers. Actually, I already prompted Senator Collins to
    ask me the two questions that I wanted asked on the
    reauthorization and DHS's concern about civil suits.
        Senator Carper. Good. I did not get the memo.
        Mr. Beers. We are trying to be bipartisan here.
        Senator Carper. A good thing. It is good to see all of you.
    Mr. Silva, very nice to see you. We thank you again for coming
    to Southern Delaware to help us move forward on a thoughtful
    approach to reducing runoff waste from chickens on the Delmarva
    Peninsula.
        Mr. Silva. Thank you, sir.
        Senator Carper. I hope we are making some progress. I am
    encouraged that we might be. But thank you for coming and thank
    you for continuing to pay attention to that issue.
        As I think each of you might know, the Northeastern United
    States--and that includes Midatlantic States like Delaware--are
    the home of many of our Nation's largest chemical plants, and
    these plants can pose significant harm to the surrounding areas
    and to the people who live and work in those surrounding areas
    if they are not properly secured.
        I believe that the Federal Government has an obligation to
    work with States to identify what works for a particular
    facility rather than imposing strict mandates that might hurt,
    we will say, a company as a whole.
        I also understand that there is still considerable debate
    over inherently safer technologies--we have heard that again
    here this morning--and whether or not Congress should impose
    inherently safer technologies as an approach onto the chemical
    industry.
        And I would just have maybe at least one of you take a
    minute to discuss the Administration's perspective, again, on
    inherently safer technologies and what would be the cost/
    benefit to mandating such a policy.
        Mr. Beers. Let me start on that, Senator Carper. We
    recognize that this is an area that is still in a process of
    being better defined. But having said that, we believe that
    just because an issue is difficult is not a reason to avoid
    trying to deal with that issue. We believe that in addition to
    the possibility in the chemical security regime to put in place
    a number of physical and procedural safeguards that will
    protect an individual facility and the surrounding citizenry,
    changing the way that facility actually conducts its operations
    is an additional way in which security can be increased.
        So let me start with what we already have as a process, and
    that is that a facility can change the level of its holdings of
    a chemical of interest in order to reduce the risk, the
    security risk to the surrounding community. As Senator Collins
    has already said, that same facility could choose to change the
    way that it processes the chemicals or that it substitutes a
    less risky chemical for that, the notion here being that there
    is a range of activity that might allow these vulnerable
    facilities to reduce the risk both to themselves and to the
    surrounding communities. And if that process could result in
    the total reduction of risk for that facility to that
    community, then it seems to us that represents a forward
    security movement to totally remove that risk, and inherently
    safer technologies represent an approach to that.
        This process I think will help all of us come to a better
    understanding and I think for facilities that we are working
    with to make their facilities safer. So that is the underlying
    idea behind wanting this authority.
        Senator Carper. All right. Thank you.
        In the Administration's point of view, how has the CFATS,
    the Chemical Facility Antiterrorism Standards program been in
    protecting chemical plants since its enactment in 2007? What
    have been the challenges facing the Department of Homeland
    Security in the program's implementation, including maybe a
    lack of resources or a lack of funding?
        Mr. Beers. I am going to let my colleague here, who has
    lived through the entirety of this program, provide the real
    flavor to this. But let me just say from my own perspective, I
    think that the challenges have also been opportunities, and I
    think the opportunity here was to show that the Administration
    could be given responsibility for a program that it could
    implement in a way in which at the other end at this particular
    point in time Senator Collins tells me that the report from the
    chemical industry is that the Administration has done a good
    job, has been open to suggestions and comments and ideas from
    the regulated sector, while at the same time I think achieving
    a sense that all of us have that security at chemical
    facilities is a heck of a lot better than it was before you all
    provided us with this opportunity.
        But, Ms. Armstrong, you have been close to this on a daily,
    weekly, and monthly basis, so why don't you add to that?
        Ms. Armstrong. Thank you, sir.
        I would echo the Under Secretary in that implementing CFATS
    has been a challenge because it is doing something new to the
    Federal Government inside a new Department. But it has also
    been a successful opportunity to use the effective public-
    private partnership set forth in the National Infrastructure
    Protection Plan to engage the affected sectors, to have them
    tell us what they think all along the way, to have them pilot
    the tools that they will then use to comply with the program.
    And I think we have substantially grown the CFATS program both
    in terms of staffing, opening field offices, hiring the right
    people to do the job, and staying closely connected with
    industry.
        So we have progressed from our initial regulatory due date
    for Top-Screens on January 22.
        Senator Carper. What are you saying, due date for Top-
    Screen?
        Ms. Armstrong. Top-Screen is the initial step to determine
    if a facility is preliminarily determined to be high risk. It
    is a consequence assessment that a facility in possession of
    Appendix A chemical of interest at or above screening threshold
    quantities submits to us and we evaluate it. So at that point
    in 2008, we had 29,453 Top-Screens in. We preliminarily tiered
    7,010 facilities, and over 6,300 of those submitted security
    vulnerability assessments, which we are continuing to review.
        We have assigned over 3,500 facilities a final tier, and
    they are doing and submitting their site security plans. We
    have 1,600 completed plans, and we are reviewing them, and we
    have begun the inspections process. So I think we have made,
    again, substantial progress.
        Senator Carper. All right. Thanks so much. My time has
    expired. Our thanks to each of you. Good to see you again.
    Thank you.
        Chairman Lieberman. Thanks, Senator Carper.
        Senator Carper, Senator Collins, and I always look forward
    to your first question, because it is always unique and
    refreshing, and you did not disappoint.
        Senator Carper. I almost asked Ms. Armstrong, why do we use
    so many acronyms in the Federal Government? One of my briefing
    memos, we had in one sentence four acronyms.
        Chairman Lieberman. See?
        Senator Carper. I will save that one for the next panel.
    [Laughter.]
        Ms. Armstrong. Thank you, sir.
        Mr. Beers. I asked you that when I started the job, too.
        Ms. Armstrong. Oh, wait. Let me get to the best one: The
    State, Local, Territorial, and Tribal Government Coordinating
    Council (SLTTGCC).
        Mr. Beers. SLTTGCC. [Laughter.]
        Senator Carper. I rest my case.
        Mr. Beers. And I have worked in the State Department and
    with the Pentagon, so I know acronyms. That one just blew me
    away when I first heard it.
        Chairman Lieberman. I am not even going to ask you how you
    pronounce it. [Laughter.]
        Mr. Beers. We have been struggling with that, too, Senator
    Lieberman.
        Chairman Lieberman. Thank you. Senator Levin.

                   OPENING STATEMENT OF SENATOR LEVIN

        Senator Levin. I am going to have to check the record to
    see what the first question was that I missed. It was not about
    acronyms, though, I guess. Thank you, Mr. Chairman, and our
    Ranking Member, for holding the hearing.
        Has the Administration specifically taken a position on the
    House bill that they oppose or do not oppose?
        Mr. Beers. No, sir, we have not taken a position on the
    House bill.
        Senator Levin. Do you oppose it or support it?
        Mr. Beers. I cannot speak for the Administration at this
    point.
        Senator Levin. Can anybody here speak for the
    Administration?
        Mr. Beers. On that bill, no.
        Senator Levin. On that question.
        Mr. Beers. No. We have not taken a position. You can draw
    an interpretation in that we plan to submit our own
    legislation.
        Senator Levin. OK, and I understand the question was asked
    regarding when you are going to be submitting that language.
        Of the 6,000-plus high-risk facilities that are covered
    under the--does everyone call it ``CFATS''? I am afraid to use
    an acronym--CFATS standards, half apparently received final
    risk determinations, tier assignments, but only a quarter of
    the high-risk facilities have submitted security plans, and
    apparently only a few of the facilities have been inspected.
        How long do you expect it will take to approve the plans?
    And how long will it take to inspect the facilities?
        Mr. Beers. Our plan is to inspect all the Tier 1 facilities
    by the end of this calendar year, sir.
        Senator Levin. And the plans?
        Mr. Beers. That will be dependent upon the plans and the
    iteration back and forth. We had, in all candor, hoped to begin
    the inspection process in December. We did not, in part because
    of the iteration back and forth on the site security plans.
    But, Ms. Armstrong, do you have a better, more precise answer
    on that?
        Ms. Armstrong. No. That is correct. We have done
    preliminary inspections at two Tier 1 facilities this month; we
    will do 10 more next month, and our target is to get all of
    Tier 1, which is 235 facilities, done this year.
        Senator Levin. And do you think that the inspections of
    high-risk facilities might help inform the reauthorization
    process? Will your experience in going and looking at those
    high-risk facilities give us some useful information, practical
    information to help us in the reauthorization issues?
        Mr. Beers. I cannot but believe that it would, but let me
    talk specifically about that question.
        Part of the reason that we are doing the preliminary
    assessments is to ensure that the regime of the full
    inspections is informed by an understanding of that. At any
    point in this process of your deliberations, we would be happy
    to come forward and brief you on what we have done with respect
    to that as you would consider legislation.
        Senator Levin. All right. Well, you might want to furnish
    that even if we do not ask if there is specific information
    that you get which----
        Mr. Beers. Point taken, sir.
        Senator Levin. Thanks. There are, as I understand it, a
    number of current standards which are inconsistent with the
    House bill. Some of those CFATS standards are inconsistent. For
    instance, what information would be provided to law
    enforcement? Is there any consistency between the House
    language on that issue and the current regulation which
    protects that information more carefully? Could you give this
    Committee the list of what current standards are inconsistent
    with the House bill? Could you do that for the record?
        Mr. Beers. Yes, sir.
        Senator Levin. Now on the IST issue, your testimony, as I
    understand it, says that the Administration will support IST
    for the Tier 1 and 2 facilities if the IST method
    ``demonstrably enhances overall security'' or is ``determined
    to be feasible,'' and then something relative to the water
    sector. Who would have the burden to demonstrate under your
    proposed language? Is it the regulator that has the burden? Who
    has that burden?
        Mr. Beers. The decision process would be done by the
    regulator, and the decision information would be developed
    between the facility to be regulated and the regulator.
        Senator Levin. Well, the decision, but who has the burden
    of demonstrating?
        Mr. Beers. The burden of demonstration would presumably be
    on the part of the facility.
        Senator Levin. They have to demonstrate that it does not
    enhance overall security?
        Mr. Beers. If we are in a discussion about the
    Administration having a view that it does, they would have the
    opportunity to represent a countervailing view, yes, sir.
        Senator Levin. Yes, but then where does the burden lie, the
    burden of proof? I mean, one says yes, one says, Hey, there is
    a----
        Mr. Beers. Then the regulator becomes the judge.
        Senator Levin. The regulator is the judge. Then that goes
    to court?
        Mr. Beers. I am not a lawyer, sir, so----
        Senator Levin. Oh, that is OK. Now, where does the cost
    come in here? And where does the impact on the environment of
    something which may be more secure but which has a negative
    environmental impact, how is that incorporated in your
    language?
        Mr. Beers. With respect to the cost, we would be seeking to
    understand what the cost of the facility would be to change
    from----
        Senator Levin. Is that in your standard, your test?
        Mr. Beers. That is absolutely a part of our standards. This
    is not an effort to drive firms out of business or to impose--
    --
        Senator Levin. I understand that. I understand that it is
    not an effort to do that. The question is whether you
    inadvertently might do it or have such large cost increases
    that it may not be worth it in terms of the additional security
    compared to the additional cost and the additional negative
    environmental impact which might be created.
        Mr. Beers. Yes, sir.
        Senator Levin. There are many specific situations where it
    may not be worth the cost. The delta, the improvement in
    security, may not be worth the cost. It may be a minor increase
    compared to a major cost increase. And there could be a
    negative environmental impact in that additional security
    requirement. And I want to know how in your standard is that
    incorporated. In the language that you used today, I do not see
    it. Was it in your opening statement, both those factors? All I
    saw was ``demonstrably enhance overall security'' and ``be
    feasible.'' So something could be feasible but not worth it.
        Mr. Beers. Cost is specifically a factor that will be part
    of the decision process, and your formulation about whether the
    marginal return on security versus the cost required to do it
    would be a consideration which might bear on not choosing to do
    it.
        With respect to public health and environmental
    requirements or risks that would somehow be created by an
    alternative chemical being used in the process, we are not
    going to make--that is, I think, a pretty clear balancing issue
    that says what security gain for what environmental or public
    health risk.
        Senator Levin. I agree. It is clear it should be.
        Mr. Beers. Without being able to comment on a specific
    case, my view would be that would trump other considerations.
    But I am giving you a personal view now, sir.
        Senator Levin. Well, that is my personal view, too, but I
    did not see it in your formulation. So I agree with your
    common-sense response to that, and I hope it is incorporated.
        I am over my time.
        Mr. Beers. Well, it will be if I am the administrator of
    this, yes, sir.
        Senator Levin. Thank you.
        Mr. Beers. Thank you for the opportunity, sir.
        Chairman Lieberman. Thanks, Under Secretary Beers. Thanks,
    Senator Levin.
        I thank the members of the panel. We have a second panel,
    so the remainder of our questions we will submit to you for
    answers for the record. I thank you very much for your time,
    and we would now call the second panel to the table.
        That would be Darius Sivin, Timothy Scott, and Stephen
    Poorman. While we are waiting, I, by unanimous consent, ask
    that we enter into the record letters in favor of the House
    bill on this subject and several reports on IST.\1\
    ---------------------------------------------------------------------------
        \1\ The letters submitted by Senator Lieberman appear in the
    Appendix on pages 189-237.
    ---------------------------------------------------------------------------
        I will begin some biographical information of our witnesses
    while they are shifting.
        Darius Sivin is the legislative representative of the
    International Union of the United Automobile, Aerospace, and
    Agricultural Implement Workers of America (UAW), and also
    worked in UAW's Health and Safety Department.
        Timothy Scott will testify on behalf of the American
    Chemistry Council (ACC). He is the Chief Security Officer and
    Corporate Director of Emergency Services and Security at the
    Dow Chemical Company responsible for managing security crisis
    management and emergency planning for Dow facilities around the
    world.
        Stephen Poorman is the International Environmental Health
    Safety and Security Manager for Fujifilm Imaging Colorants. He
    has worked for more than 20 years in environmental safety and
    regulation in both the private and public sector, and he will
    testify today on behalf of the Society of Chemical
    Manufacturers and Affiliates, of which Fuji is one of almost
    300 corporate members.
        We thank the three of you for being here, and, Mr. Sivin,
    we look forward to your testimony now.

          TESTIMONY OF DARIUS D. SIVIN, PH.D.,\2\ LEGISLATIVE
        REPRESENTATIVE, INTERNATIONAL UNION, UNITED AUTOMOBILE,
        AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA

        Mr. Sivin. Chairman Lieberman, Senator Collins, and Members
    of the Committee, I am Dr. Darius Sivin. I represent the
    International Union, and we appreciate the opportunity to
    testify at this hearing on ``Chemical Security: Assessing
    Progress and Charting a Path Forward.''
    ---------------------------------------------------------------------------
        \2\ The prepared statement of Mr. Sivin appears in the Appendix on
    page 64.
    ---------------------------------------------------------------------------
        We and more than 50 partners in a coalition of labor,
    public interest, public health, and environmental organizations
    strongly believe that the existing Chemical Facility
    Antiterrorism Standard is inadequate. The path forward must be
    a comprehensive chemical security bill at least as strong as
    H.R. 2868.
        As indicated, DHS has identified about 6,000 high-risk U.S.
    chemical facilities and classified them into four tiers. That
    number does not include drinking water or MTSA facilities, as
    indicated earlier. According to the Congressional Research
    Service (CRS), almost 100 U.S. facilities each put a million or
    more people at risk. Union members are concerned that their
    workplaces and communities are not adequately protected from
    deadly terrorist attacks on chemical facilities and drinking
    water systems, and it is the employees who will get hurt first
    and worst in case of any attack.
        The UAW represents workers at more than 15 facilities that
    are required to file EPA risk management plans (RMPs), and
    therefore are potentially covered by chemical security
    legislation. These include a chemical manufacturer in Adrian,
    Michigan, and a wastewater facility in Detroit. Both of them
    use chlorine gas transported by the rail car. We are concerned
    that Detroit has recently been a terrorist target, and many of
    our members live and work in the vulnerability zone of the
    Detroit wastewater facility, which is more than 2 million
    people. Should there be a chlorine release from that facility
    due to a terrorist attack, the question will not be: Is
    government too big? Instead it will be: Why wasn't the
    government's authorities expanded to protect people from that?
        We are encouraged by the fact that 11 wastewater treatment
    facilities in Michigan have already converted from chlorine gas
    to ultraviolet light or liquid chlorine bleach and that the
    Detroit facility can likely do the same thing.
        Other UAW-represented facilities that are required to file
    RMPs include: A pigment facility in St. Louis, Missouri; a
    brewery in Trenton, Ohio; and a plumbing fixture manufacturer
    in Searcy, Arkansas. The Missouri facility could expose up to
    88,000 people to anhydrous ammonia in case of an attack.
        The UAW and our coalition partners believe that water
    facilities should be covered by chemical security legislation.
    In 2006, the Government Accountability Office reported that
    two-thirds of large U.S. wastewater facilities use a
    disinfectant other than chlorine gas or plan to switch away
    from chlorine gas. Many switches, according to the Center for
    American Progress, about 15, between 1999 and 2007, removed
    about 26 million people in nearby communities from
    vulnerability zones. The Center for American Progress reported
    that the cost of converting was typically no more than $1.50
    per ratepayer per year, and many more could convert, removing
    another 25 million people from vulnerability zones. The cost is
    low. The alternatives, including chlorine bleach and
    ultraviolet radiation, are well established, safe for public
    health, and there is no reason that water facilities should not
    be covered.
        We think that the solution is comprehensive chemical
    security legislation, and we oppose a mere extension of the
    existing CFATS program. Its authorizing statute, as mentioned,
    called Section 550, exempts wastewater treatment and MTSA
    plants. It also prohibits DHS from disapproving a plan merely
    because of the presence or absence of a particular measure.
        In addition to the IST question, DHS, for example, could
    not disapprove a plan because a surveillance camera was put in
    a gaping hole in a fence instead of actually repairing the
    fence.
        Also, Section 550 provides no redress procedure for an
    employee who poses no security risk, but who suffers an adverse
    employment decision due to erroneous or irrelevant information
    arising from a background check. And it fails to recognize that
    security requires that the public have enough information to
    hold the government accountable for protecting its security.
    This kind of protection needs to balance protection of security
    information.
        It has been claimed that replacing CFATS with comprehensive
    chemical security legislation would force facilities to redo
    work they have already done. This claim is simply a red
    herring. It ignores the fact that H.R. 2868 was intentionally
    written to build seamlessly on the existing CFATS and that the
    ACC acknowledged that in its testimony of October 1, 2009. We
    and our coalition partners believe that Senate passage of a
    bill similar to H.R. 2868 would provide continuity and
    permanence to the CFATS program.
        Such legislation should cover water facilities, require
    assessments of methods to reduce the consequences of a
    terrorist attack, and here I would like to address some issues.
        One, it has been said in this room today that people favor
    a facility-by-facility method. H.R. 2868 is exactly that.
        Two, the biggest change in IST, which is both true for
    water facilities and industrial facilities, is simply
    converting from chlorine gas to liquid chlorine. In many
    industries, that is the solution. It is tried and true. It is
    not radical. It is not new. It is not undefined. There are
    other solutions such as converting from hydrofluoric acid to
    sulfuric acid in refining, and we can go over them. But the
    major point here is we are not talking about anything radically
    new or undefined.
        Also, the bill has a precise definition of methods to
    reduce the consequences of a terrorist attack, and the fact
    that academics may disagree on the definition of IST is simply
    irrelevant to H.R. 2868 because the words ``inherently safer
    technology'' appear nowhere in the bill.
        I would like to say that we were very pleased with the
    process that led to the passage of H.R. 2868, which included
    input from all stakeholders, especially the ACC who praised the
    process both in testimony and in a letter to the Committee.
        I would also like to say that we are quite convinced that
    requiring a facility to implement its own plan to reduce the
    consequences of a terrorist attack will have no negative impact
    on jobs. There are studies that show so. There is also the fact
    that Clorox expects no negative impact from its conversion of a
    paper mill in New Jersey, similarly. In contrast, jobs can be
    lost when disasters strike. For example, there is a Sunoco
    facility that is not going to be reopened after an ethylene
    unit exploded in Philadelphia.
        In addition to that, should there be an exceptional case,
    H.R. 2868 has specific language endorsed by six unions who
    believe that the existing language of H.R. 2868 is such that
    those exceptional cases will be covered and are adequate to
    protect jobs. The requirement in H.R. 2868 that allows DHS to
    require a facility to implement its own plan, according to a
    letter signed by Representative Charlie Melancon and four
    colleagues from the Blue Dog Coalition, indicates that the
    provisions will apply to less than 3 percent of all facilities
    under CFATS, and they indicate that they endorse: ``The
    legislation also provides a robust technical appeals process
    for chemical facilities that disagree with this determination.
    The Energy and Commerce Committee developed this provision
    using considerable input from the largest chemical industry
    association, the American Chemistry Council.''
        Chairman Lieberman. Dr. Sivin, excuse me. Let me ask you if
    you would put the rest of your statement in the record because
    you are over your time.
        Mr. Sivin. Sure.
        Chairman Lieberman. I appreciate it. We will get back to
    you in the questions and answers.
        Mr. Scott, welcome.

     TESTIMONY OF TIMOTHY J. SCOTT,\1\ CHIEF SECURITY OFFICER AND
     CORPORATE DIRECTOR, EMERGENCY SERVICES AND SECURITY, THE DOW
     CHEMICAL COMPANY, ON BEHALF OF THE AMERICAN CHEMISTRY COUNCIL

        Mr. Scott. Chairman Lieberman, Ranking Member Collins, and
    Members of the Committee, my name is Timothy Scott, and I am
    the Chief Security Officer for the Dow Chemical Company. Dow is
    a member of the American Chemistry Council, and I am here today
    speaking on behalf of our industry association.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Scott appears in the Appendix on
    page 71.
    ---------------------------------------------------------------------------
        The three points I would like Committee Members to take
    away from my remarks are:
        First, safety and security are top priorities of the
    chemical industry. Our industry, which is critical to our
    Nation's infrastructure and the quality of life in the United
    States and around the world, has taken aggressive action to
    improve its security posture voluntarily before the Chemical
    Facility Antiterrorism Standards were launched and continuing
    now with the successful implementation of CFATS.
        Second, DHS has had many success stories in its short
    history, and the implementation of CFATS to date is already
    achieving its objectives to reduce the number of high-risk
    sites, lower the risk profile of remaining high-risk sites, and
    improve the security of all sites. CFATS is, in fact, working.
        And, third, DHS should be allowed to maintain the current
    momentum and complete the task at hand using a risk-based
    methodology to establish stringent performance standards, and
    industry should be allowed to use the security tools that best
    address the security, operational, and business issues at each
    unique site to meet those established standards.
        The American Chemistry Council represents the leading
    chemical companies in the United States who produce the
    essential products used in everyday life. Because of our
    critical role in the economy and our responsibility to our
    employees, communities, and shareholders, security continues to
    be a top priority for ACC members. In 2001, our members
    voluntarily adopted an aggressive security program that became
    the Responsible Care Security Code. Responsible Care
    implementation and regular independent review is mandatory for
    membership in the ACC.
        The security code is a comprehensive security program that
    addresses both physical and cybersecurity vulnerabilities and
    requires ACC members to perform a comprehensive assessment of
    its security risks and implement appropriate protective
    measures throughout a company's value chain.
        On April 9, 2007, the U.S. Department of Homeland Security
    published CFATS. This comprehensive Federal regulatory program
    requires every chemical facility to register with DHS using
    their Top-Screen to identify chemicals of interest above a
    threshold value and, for those considered a high risk, to
    conduct a thorough site security assessment and implement
    protective measures that comply with 18 risk-based performance
    standards.
        Since CFATS became effective, the number of high-risk
    chemical facilities has been reduced by close to 1,000
    facilities, a 14-percent improvement. This clearly demonstrates
    that CFATS is working, even though we are in the early stages
    of implementation.
        CFATS is, in fact, working. Progress is being made, and we
    need to maintain the momentum without unnecessary diversions or
    obstacles. We were, therefore, pleased to see that Congress
    approved the DHS 2010 budget request and provided a 1-year
    extension for CFATS to November 2010. While this extension is
    helpful, we encourage Congress to provide permanence to the
    CFATS program, ensuring certainty and providing stability so
    the industry can continue to move forward making security
    investments.
        On February 4, 2010, Ranking Member Collins introduced a
    bipartisan bill to extend the current CFATS regulations for 5
    years. Titled ``Continuing Chemical Facilities Antiterrorism
    Security Act of 2010,'' S. 2996 would give DHS sufficient time
    to fully implement the standards that are just now gaining
    traction. ACC supports that goal.
        CFATS is by far the most robust, comprehensive, and
    demanding chemical security regulatory program to date. CFATS
    takes a well-designed approach, sets a high bar through
    performance-based standards, and then holds facilities
    accountable for meeting those standards by choosing from a full
    potential range of security enhancements.
        The result is a security plan that is uniquely designed to
    address the specific risk issues of each individual facility.
    It is a risk-based and performance-based approach.
        We, therefore, believe that it is unnecessary and
    inadvisable for Congress to provide DHS the authority to
    mandate prescriptive chemical process changes by including an
    IST provision within the CFATS regulatory program. Through the
    use of risk-based performance standards, CFATS has demonstrated
    that it drives facilities to consider all possible risk
    reduction options, including inherently safer approaches, when
    developing a site security plan. We are focused on results.
        The highest-risk facilities subject to CFATS face
    significant capital investments to implement enhancements, thus
    providing additional incentive for the facility to consider all
    such risk reduction options in order to move into a lower risk-
    based tier or potentially out of the program. While you cannot
    mandate innovation, CFATS already provides the incentives to
    unleash the ingenuity, expertise and resources of the chemical
    industry. Congress should not abandon a strategy that employs
    performance-based security standards that recognizes the need
    for site-specific solutions and that holds facilities
    accountable while avoiding the potential for risk shifting.
        CFATS is working today, and we need to continue the
    momentum to fully implement the standards developed in 2007. We
    need to let DHS finish the current task before revising the
    scope. The American Chemistry Council supports the bipartisan
    Senate legislation before this Committee as a step that
    provides certainty and ensures that this country continues to
    benefit from the security measures in place while recognizing
    the significant efforts already underway.
        The members of the ACC are committed to a continuing and
    aggressive approach in safeguarding America's chemical
    facilities, and it is in this spirit that we look forward to
    working alongside DHS and this Committee. Thank you.
        Chairman Lieberman. Thank you, Mr. Scott. Very helpful
    testimony. I appreciate it. I look forward to the questions.
        Mr. Poorman.

    TESTIMONY OF STEPHEN E. POORMAN,\1\ INTERNATIONAL ENVIRONMENT,
        HEALTH, SAFETY, AND SECURITY MANAGER, FUJIFILM IMAGING
         COLORANTS, INC., ON BEHALF OF THE SOCIETY OF CHEMICAL
                      MANUFACTURERS AND AFFILIATES

        Mr. Poorman. Good morning, Chairman Lieberman, Ranking
    Member Collins, and Members of the Committee. My name is Steve
    Poorman, and I am the International Environment, Health and
    Safety Manager for Fujifilm Imaging Colorants, Incorporated. I
    am pleased to provide this testimony regarding the Chemical
    Facility Antiterrorism Acts Standards. I speak before you today
    on behalf of the Society of Chemical Manufacturers and
    Affiliates (SOCMA), of which my company is a member.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Poorman appears in the Appendix
    on page 75.
    ---------------------------------------------------------------------------
        Less than 4 years ago, and working in a bipartisan manner,
    Congress enacted a strong chemical security regulatory program.
    It was this Committee's sustained effort over 2 years that
    drove that legislation. Thanks to the bipartisan leadership
    shown by your Committee, DHS and regulated facilities are deep
    in the middle of implementing this vital program in a focused
    and cooperative manner.
        SOCMA strongly supports DHS's current CFATS program. This
    demanding program is now requiring over 6,000 chemical
    facilities nationwide to develop and deploy meaningful security
    enhancements. It protects facilities against attack without
    impairing the industry's ability to remain innovative and
    maintain some of the Nation's highest-paid jobs in the
    manufacturing sector.
        Congress can best assure the CFATS program's success and
    forward momentum by passing S. 2996, the Continuing Chemical
    Facilities Antiterrorism Security Act of 2010, as recently
    introduced by Ranking Member Collins, together with Senators
    Pryor, Voinovich, and Landrieu. This bill would reauthorize the
    CFATS program until 2015, thus allowing DHS and facilities to
    remain focused on successfully implementing that program as
    quickly as possible.
        SOCMA is also supportive of the bill's provisions to create
    voluntary chemical security training and exercise programs.
    Properly executed, such programs would enhance the capabilities
    of high-risk chemicals facilities to prevent, prepare, and
    respond to acts of terrorism. Similar to provisions in the
    Security and Accountability for Every (SAFE) Port Act, these
    features of the bill would create valuable solutions to protect
    our Nation's critical infrastructure from a terrorist attack.
    Training and exercise programs would support a collaborative
    environment, involving Federal, State, and local governments,
    facilities, and public and private universities, all dedicated
    to achieving the goals set forth in the National Infrastructure
    Protection Plan.
        The House has taken a very different approach than the
    Senate so far to address the future of CFATS. First, it
    approved largely a partisan bill, H.R. 2868, with no support
    from the minority, not a single vote in favor. That bill
    includes provisions such as inherently safer technology that
    are fundamentally unwise and potentially counterproductive to
    our shared goal of preventing terrorist incidents at chemical
    facilities. The House bill was approved despite testimony from
    numerous witnesses who share strong concerns regarding these
    provisions.
        As the voice of many small, medium, and large chemical
    manufacturers that employ thousands of employees in key
    manufacturing States, we ask you to please seriously consider
    our concerns about mandatory IST, especially in a security
    regulatory context.
        One of SOCMA's greatest concerns with the House bill is the
    real possibility that its IST provisions will negatively
    restrict the production of active pharmaceutical ingredients
    (APIs), key raw materials that are included in DHS's Appendix A
    of covered chemicals. These APIs are used in prescription and
    generic drugs, life-saving vaccines, and over-the-counter
    medicines. They are thoroughly regulated by the Food and Drug
    Administretion (FDA) and must meet demanding quality and purity
    requirements. Substituting chemicals or processes used for API
    production would likely violate the conditions of their FDA
    approvals. Requiring IST could delay clinical trials while new
    replacement chemicals are identified or invented, and would
    force API manufacturers and their customer drug manufacturers
    to reapply for FDA approval of their products because of the
    significant change in the manufacturing.
        SOCMA and its members have supported Federal regulations
    that require manufacturers to adhere to workplace safety
    requirements such as the Occupational Safety and Health
    Administration's Process Safety Management standard as well as
    mitigating off-site consequences in the event of an accident,
    such as EPA's risk management program. These are comprehensive,
    effective regulations that are already in place. However,
    process or product changes driven by IST mandates will have a
    negative impact on the jobs at facilities forced to make these
    changes. Spending money to design new products or conduct
    process changes necessarily causes companies to assess how they
    will pay for it. There is not much available capital these days
    for manufacturers to take on new regulations that are aimed at
    their livelihood, especially our small manufacturers.
        There are other reasons not to require IST mandates other
    than cost, despite whether it is only an assessment
    requirement. Safety experts and academics have testified
    against mandating it. There is no consensus among experts about
    how to define it in a security regulatory context, and there is
    no method with which to measure it. While it may be feasible to
    develop a technical consensus methodology for measuring and
    comparing inherent safety, none exists at present. Before
    Congress and the Administration could even consider mandating
    IST assessment or implementation, they would need to know that
    methodologies exist to compare various alternatives from the
    standpoint of inherent safety.
        As a pragmatic alternative, Congress might ask DHS to study
    the over 1,000 facilities that have changed products or
    processes and, thus, reduce their risk sufficiently that they
    have been removed from the CFATS program. But Congress should
    otherwise avoid legislating in this area while that process is
    still ongoing.
        In conclusion, SOCMA supports permanent chemical site
    security standards that are risk-based and realistic, and we
    urge Congress to reauthorize the existing CFATS program.
    Mandating inherently safer technology as a security measure
    will inevitably create negative unintended consequences, and
    Congress should not require DHS to do so. SOCMA asks that you
    please support S. 2996 and maintain the same bipartisanship
    this Committee demonstrated in 2005 when it initiated the
    process that led to CFATS.
        On behalf of SOCMA, I appreciate this opportunity to
    present the association's views on these important issues, and
    I look forward to your questions.
        Chairman Lieberman. Thanks, Mr. Poorman.
        Let me begin with some questions about IST since it is at
    the center of this discussion about how to go forward. Both of
    you, I think, have stated in your opening statements and the
    ones you have given us for the record that existing CFATS rules
    have and will motivate facilities, chemical facilities, to
    consider and, at their own discretion, obviously, adopt
    inherently safer technology measures, in part because of the
    natural desire to move to a lower risk tier or potentially out
    of the program altogether.
        Can you be more specific? Have there been cases that you
    are aware of where the existing CFATS rules have, in fact,
    motivated chemical facilities to consider and, at their
    discretion, adopt IST?
        Mr. Scott. I can take a shot at answering that question.
    There are several examples. The easiest example of IST to see
    is reduction of inventories below the threshold level of any
    particular chemical that might be on the list. And in going
    back and looking at your process, that is a fairly easy thing
    to do in some cases, but not in all cases. So if you can reduce
    that inventory, you have come below the threshold value, and
    that would take you off the list. But there are other examples
    where we have looked at IST, and it is simply not economically
    feasible or operationally feasible to implement.
        The bottom line on this is that IST is a part of the
    toolkit that you have available to meet the risk-based
    performance standards. And we think that is the way it should
    be included, as one of many security enhancements that you can
    look at to address the risk-based performance standards and
    meet those standards. And then the results are the proof of the
    effort that you have gone through.
        Chairman Lieberman. Mr. Poorman, do you want to add
    anything to that about the experience of your members?
        Mr. Poorman. Yes, absolutely. I think we can say pretty
    much the same type of thing where I would say that the examples
    that I have heard of from other member companies are where they
    are able to reduce inventory. And whether that shifts that
    inventory's risk to some other off-site location or not, I do
    not know. I do not know the complete details. But it does
    remove the risk from that particular facility, which would
    either lower its tier or, as you said, push it out of the
    program and remove it from the burden of the regulation.
        Our members, we have a lot of small manufacturers, and we
    are batch manufacturers, and our processes are very unique. The
    value that comes from the chemicals that we produce are
    basically because it is the uniqueness of that molecule, and,
    therefore, the process is very specific.
        So looking at that process, which we have done internally,
    it is a no-go or it is a go, and we really have limitations as
    to how much we can really alter our processes.
        Chairman Lieberman. Mr. Scott, obviously you are here on
    behalf of the American Chemistry Council. We appreciate that
    and have a lot of good working relations with the ACC. In the
    House, Marty Durbin, who represents the ACC, testified that ACC
    members are comfortable with a requirement to consider IST
    because they already do so under the group's Responsible Care
    Code. So I wanted to ask you two questions about that. One, is
    that correct? And, two, can you describe the approach Dow
    particularly or other ACC members have used to consider IST
    options?
        Mr. Scott. Well, inherently safer technology is best
    considered in new process development when you are building a
    plan. That is the easiest time and the most economically
    feasible and operationally feasible time to implement IST.
    Going back to a facility that is already built and the process
    is already running and your products are already designed
    around that process is much more difficult. But Dow does
    include IST in the process design.
        Chairman Lieberman. Right.
        Mr. Scott. We do include IST in the process design when we
    are developing plants. We include reviews of IST and process
    safety throughout on a regular review basis. And we included it
    in our site vulnerability assessments (SVAs) that we did both
    for the Responsible Care Security Code and as a result of
    CFATS.
        You go back and you look at the sites, and we took in every
    situation with the SVAs, we had a physical security person and
    a process safety person go along and conduct those SVAs and
    looked at it from both perspectives to see what alternatives
    were there.
        Chairman Lieberman. Good to hear. So is it fair to say, as
    Mr. Durbin did in the House, that the ACC would be comfortable
    with a requirement to consider IST as opposed to mandating
    implementation of it?
        Mr. Scott. In mandating, we have always been willing to sit
    down and talk with any organization or any group or any
    legislative body about various options around inherently safer
    technology. We have never come to a formal agreement where we
    have sat down and formalized the agreement that is our
    position. So we are not in support of mandating implementation
    or mandating consideration of IST.
        Chairman Lieberman. So perhaps we will take that second
    alternative up with you as this goes on.
        Dr. Sivin, we have talked a few times, both Mr. Silva and
    yourself, about drinking water facilities and whether they
    ought to be included. And I think we have approached it on a
    somewhat technical and statutory basis. Just take a moment,
    because it may not be obvious, with a typical chemical
    facility, people understand how that might be the target of an
    attack. But what are we worried about when it comes to drinking
    water facilities?
        Mr. Sivin. We are worried about drinking water facilities
    that bring in chlorine gas by the rail car to treat the
    drinking water, and the releases of chlorine gas could affect
    both the workers who work there and the surrounding population.
        The most simple change with demonstrably zero public health
    impact is instead of bringing chlorine in in gaseous form,
    bring it in in aqueous form as liquid bleach.
        Chairman Lieberman. Right.
        Mr. Sivin. In other cases, it may be possible to go to
    other technologies such as ultraviolet radiation, but at least
    there you have to do some public health analysis to see whether
    there is an impact or a change. Bringing in chlorine in liquid
    bleach, there is no question it is the same chlorine. It is
    just in a different form which cannot be breathed.
        Chairman Lieberman. Right. So are we concerned about an
    escape of chlorine in its non-bleach form or that it might be a
    subject of an attack, for instance, a terrorist attack?
        Mr. Sivin. Both.
        Chairman Lieberman. Both.
        Mr. Sivin. If a facility brings in chlorine gas by the rail
    car, the rail cars could be attacked at the facility. They
    could be attacked in the process of transferring chlorine from
    the rail car to the facility to treat the water could be
    attacked. And they could be attacked anywhere on the open rail.
    I realize the last case is a problem for the Transportation
    Committee and not this Committee, but just in terms of
    describing the problem, that is the problem.
        Chairman Lieberman. Very helpful. Thanks. My time is up.
    Senator Collins.
        Senator Collins. Thank you, Mr. Chairman.
        Mr. Chairman, it is obviously legitimate for us to have a
    robust debate over what the chemical security reauthorization
    bill should include. But I want to start my questioning of this
    panel by noting an issue that is not legitimate, and that is,
    when the Blue-Green Coalition in its letter to this Committee
    completely misrepresents comments that I previously made in
    2007, doing so does not advance the debate and is certainly
    disappointing.
        The coalition's letter to the Committee, dated March 1,
    2010,\1\ quotes me as saying, ``In fact, Senator Collins' own
    comments to DHS in 2007 were clear. She said, `The Department
    does not have broad discretion to regulate beyond the interim
    3-year period without a comprehensive authorization from
    Congress. Any contrary interpretation of the sunset provision
    is plainly wrong.' ''
    ---------------------------------------------------------------------------
        \1\ The letter referenced by Senator Collins appears in the
    Appendix on page 201.
    ---------------------------------------------------------------------------
        That is exactly what I did say, and as the Chairman and
    other Members may recall, the debate back in 2007 with the Bush
    Administration was that the Bush Administration wanted the
    authorization to expire and to have only a continuing
    appropriation, which the Department was saying that it could
    use to set standards however it wanted to. And I was making
    very clear that it was Congress' prerogative to reauthorize the
    law.
        So I think it is extremely disappointing that the Blue-
    Green Coalition, represented by Dr. Sivin today, deliberately
    misrepresented my comments, and I know it was deliberate
    because my staff has communicated with the coalition. So I just
    wanted to put that on the record. It was very disappointing,
    and it also does nothing to advance what is an important debate
    and legitimate disagreements over IST and other issues which
    reasonable people could certainly disagree on.
        There is another gross misinterpretation that I want to
    bring out, and we just heard it in Dr. Sivin's testimony. He
    claimed that based on his interpretation of the chemical
    security law and regulations, it ``would be very difficult for
    DHS to disapprove of a plan that indicates that a surveillance
    camera would be used instead of fixing a gaping hole in a
    fence.''
        Now, first of all, I cannot imagine any chemical facility
    not caring about a gaping hole in its fence. But let us accept
    the premise that maybe there is an irresponsible chemical
    facility that does indeed have a gaping hole in its fence. I
    find the interpretation of the law by Mr. Sivin to be a gross
    misinterpretation of the authorizing law, the final rule, and
    the Department's own risk-based performance standards guidance
    document.
        If you look at Section 550 of this document, there is a
    whole area on the perimeter's security, and Section 550 clearly
    states that the Secretary may disapprove a site security plan
    if it fails to satisfy the risk-based performance standards
    established by this rule.
        I could go on and on, but I would like instead to ask our
    two experts here today, Mr. Poorman and Mr. Scott, whether you
    agree with Mr. Sivin's testimony that it would be very
    difficult for DHS to deal with that gap in perimeter security.
    Mr. Poorman.
        Mr. Poorman. Well, I would say that I would agree with you,
    Senator Collins, that I have never worked for any entity that
    would allow for such a gap to stay in effect, and I think that
    DHS could easily, through their risk-based standards that they
    are holding us all accountable to, do enforcement if somebody
    left a gap like that in their security perimeter fence in this
    case, absolutely.
        We basically take a lot of time and effort and spend a lot
    of money in meeting these standards which are designed to
    harden our facilities against a terrorist attack. And that is
    the idea of the risk-based performance standards, and that is
    why we are fully in support of S. 2996, because it continues
    this program, which we think is very good for the chemical
    security of our country.
        Senator Collins. Mr. Scott.
        Mr. Scott. I agree with you, Senator Collins. First of all,
    the performance standards are very clear, and a security
    program that started off with a gaping hole in the fence, the
    plan would not be approved, and the site would be sent back to
    square one to come up with a better plan.
        In addition, there is another risk-based performance
    standard. If you have an approved plan and your fence is whole
    and in good shape and you have electronic surveillance but you
    have to do maintenance and open a hole in that fence, there is
    a maintenance performance standard that you have to follow in
    how you secure that hole while the maintenance is being done,
    and when it is closed, it needs to be reported back to DHS.
        So there is a very clear guidance on situations like that,
    and DHS certainly has the authority to disapprove a plan.
        Senator Collins. Thank you.
        Mr. Chairman, if I could proceed? Thank you. I want to
    discuss with our witnesses the issue of whether an IST mandate
    could transfer the risk to a different part of the supply chain
    or actually increase other risks. This is a complicated issue,
    and we just had a discussion of wastewater treatment plans and
    about the benefits of converting from chlorine gas to other
    procedures for purifying the water.
        But the fact is it is not nearly that simple, and I would
    like to give an example that a water utility that is located in
    an isolated area of the Northwest gave to me. It told me that
    if Congress were to force the replacement of chlorine gas with
    sodium hypochlorite, then the utility would have to use as much
    as seven times the current quantity of treatment chemicals to
    get the same kind of water quality results.
        Now, what does that mean? That means that the utility would
    have to have far more trucks delivering the bulk chemical into
    the watershed, and the greater quantities of chemicals and the
    increased frequency of truck deliveries would heighten the risk
    of an accident that would result in a chemical spill into the
    watershed. And, in fact, according to this utility, the
    accidental release of sodium hypochlorite into the watershed
    would likely cause greater harm to the soils, and vegetation,
    and streams than a release of chlorine gas in this remote area.
        My point is that it is difficult to assess exactly what the
    replacement of one chemical for supposedly a less hazardous
    chemical will produce. And I would like to ask both of you to
    comment on the issue of transferring risk.
        Mr. Scott, we will start with you.
        Chairman Lieberman. Senator Collins, if I may, and I
    apologize for interrupting. As Senator Collins knows, I have a
    previous commitment. I have to go on to another meeting. I have
    some other questions which I will submit for the record, and if
    you can, go as long as you like and then please wind up.
        Senator Collins. Thank you.
        Chairman Lieberman. I thank the witnesses. It has been a
    good, thoughtful discussion, and the Committee will try to also
    act in a good and thoughtful way.
        Senator Collins [presiding]. Thank you, Mr. Chairman. I
    will only proceed for a few more moments, but I very much
    appreciate your holding this hearing.
        Chairman Lieberman. Thank you.
        Senator Collins. Mr. Scott.
        Mr. Scott. There is the potential for shifting risk. As you
    mentioned, there are a lot of examples where the balance is
    very critical on how you apply the process or IST technologies
    to your process.
        The other piece of this is the product differentiation,
    which I think was also mentioned earlier, the differences in
    the processes that make a Dow product, for example, those sorts
    of things.
        So the shifting of risk is one of the major concerns that
    we have as far as the mandatory implementation of IST in the
    whole language, and that is why we think the best result is for
    the site to apply the whole realm of potential security
    enhancements to each site-specific instance so that we do not
    shift the risk but we meet the risk-based performance
    standards, which is the end goal, to meet those standards using
    any one of these alternatives.
        The IST is not a panacea for all things security and all
    things process safety. It is a good tool, but it is one of many
    tools that we have available to us so we do make the right
    answer, we meet the risk-based performance standards, and we do
    not shift the risk to other areas at our sites.
        Senator Collins. Mr. Sivin, do you not see a concern with
    shifting the risk?
        Mr. Sivin. H.R. 2868 prohibits DHS from approving any plan
    that shifts risk.
        Senator Collins. Mr. Poorman, is it that easy to determine
    whether risk will be switched to a different part of the supply
    chain or to a different area?
        Mr. Poorman. Well, I think it would be very difficult. In
    our company members' specific situations, many of us are small
    batch manufacturers, as I said earlier, and our processes are
    very unique, and we know them best, and there is just a great
    concern about DHS telling us what to do with our processes.
    They are very specific to deliver a certain type of end product
    that goes to a customer. It has to meet their specifications
    and in some cases has to meet specifications that are basically
    written in stone with FDA, the Toxic Substances Control Act,
    the Federal Insecticide, Fungicide, and Rodenticide Act, or
    other regulatory programs.
        So it brings up a whole host of, I will say, collateral
    damage that could occur if we are instructed by the Department
    of Homeland Security to do something that would alter our
    process and shift risk potentially but also shifts risk to our
    ability to conduct business.
        Senator Collins. From talking to many experts in this
    field, it seems that there is a great deal of dispute and that
    there is not an established scientific methodology for making
    that determination. Do you agree with that?
        Mr. Poorman. We certainly do, and we have been privy to
    witness a great deal of this debate. But we also know from our
    experience that chemical processes are complex, and the
    expertise lies usually in-house in the companies that develop
    it. Again, I go back to our example. We specifically develop
    very specific processes using really world-class expertise,
    process chemistry, and process technology. And when we do that
    effort, we make sure that these processes are as safe as can be
    to deliver the end result. And so we just feel that tinkering
    with that process could wreak havoc not only with shifting
    risks or making things more unsafe as an unwanted consequence,
    but also impacting our ability to do business.
        Senator Collins. Mr. Scott, you made an interesting point
    that when Dow Chemical applies IST as a possibility or as a
    method of reducing risk, that is much easier to do if you are
    building a new plant or you are starting a new process. And,
    indeed, the water associations have told us about the overly
    simplistic assumption that mandatory chemical substitution is
    something that is easy, and they talk about the switch
    specifically from using chlorine gas to other chemicals and
    talk about that it would require a complete overhaul of a
    plant's units and that it could cause upwards of $100 million
    in some cases.
        So could you comment further on the cost issue as far as
    the application of mandatory IST rather than focusing on what
    the goal is, what the standard is rather than telling a company
    how to achieve that standard. What are the cost implications?
        Mr. Scott. Well, I do not have a dollar figure, but the
    cost implications could be significant. You are talking about
    process changes. You are talking about significant changes in
    the way you do your business, maybe in the products that you
    are able to make as opposed to developing a layered security
    approach around identified special targets within your facility
    that really improve the physical security.
        One example that we have in Dow is that we produce
    chlorine, but we use our chlorine internally. We are an
    integrated facility, and have integrated sites within Dow
    across the United States. So that chlorine is used internally,
    but we do have to shift chlorine between facilities.
        We were looking at opportunities to reduce the risk by
    stopping the shipment of chlorine from one plant to another and
    looked at a provider that was closer. But a molecule as simple
    as chlorine, the locally available chlorine was not compatible
    with our process. It is not an easy task to say chlorine is
    chlorine or any chemical is the same as that chemical somewhere
    else.
        So, as a result, we are partnering with a company to build
    a facility closer to our facility. The difference, that is a
    considerable investment that is being made, but the end result
    is very good in that we have made some improvements in shipment
    at a facility that is not the same issue.
        So we focus on IST as one of the potential options that is
    available to us to improve security, but it is only one of the
    options, and we have to look at that and get the right balance.
        Senator Collins. Mr. Poorman, when people think of the
    chemical industry, they tend to think of Dow Chemical. They
    tend to think of large multinational enterprises, multi-
    billion-dollar corporations. And, of course, those large
    companies do make valuable contributions to our way of life and
    our economy.
        But the fact is that the chemical industry is also
    compromised of thousands of small and medium-sized chemical
    companies, and they may focus on the production of just a few
    specific chemicals. They may sell their products to larger
    companies that use them for manufacturing or other industrial
    purposes. So their financial resources for regulatory
    compliance are far less than those of large companies.
        Could you talk about what the implementation of inherently
    safer technology would mean for those smaller companies both in
    terms of their ability to operate efficiently, to provide jobs?
    Your comments in general.
        Mr. Poorman. Sure. I appreciate that opportunity, Senator
    Collins. Just relating back, the small chemical manufacturers
    are, again, typically batch manufacturers, making what we will
    call unique or novel molecules that provide some type of
    benefit to a product that is being made by the customer in many
    cases, and those are used in all sorts of applications and
    impact us in very positive ways.
        But the problem lies in the complexities around this. The
    processes are very specific. They have been developed through a
    great deal of effort and expenditure to get to that point, and
    approvals in some cases by not only customers who are being
    sold the products that we make but also by regulatory entities
    such as FDA, an example of the pharmaceutical intermediates.
        So if that changes, if someone comes in and indicates that,
    well, we could trade a raw material out, for instance, with
    something that somebody deems will be safer, of course, there
    will be debate as to whether that is true or not, but also we
    have to approach our customers and say we are going to have to
    ask you to change your proprietary formulation so that we can
    meet the requirements of the Department of Homeland Security,
    and you can probably imagine how our customers would react,
    especially when they can have the opportunity to have this
    material made outside of the United States of America.
        So we are very concerned about that type of impact, but
    also, by changing the formulation, we may have to go back to a
    regulatory body such as FDA and make a request to change our
    proprietary formulation on a particular material that we are
    manufacturing. And that can take 1 to 4 years to go through
    that process. What do we do in the interim?
        So these are the concerns we have about that, and these are
    the impacts that we would face as a small chemical
    manufacturer.
        Senator Collins. Thank you. I want to thank our witnesses
    today for helping us understand this complex issue. I am going
    to submit three additional statements from various
    organizations for the record. In particular, the testimony of
    Dr. Sam Mannan, the Director of the Process Safety Center at
    Texas A&M, is very illuminative. He is a leading expert in the
    fields of chemical engineering and process safety, and his
    testimony focuses on the need for far more research and data
    before any kind of Federal mandate to implement or even
    consider IST should be incorporated into the law. So I am going
    to submit those three statements for the record.\1\
    ---------------------------------------------------------------------------
        \1\ The prepared statements submitted by Senator Collins appear in
    the Appendix on pages 270-305.
    ---------------------------------------------------------------------------
        The Committee is going to be continuing to look at this
    important issue. It is ironic, as I look back on this law's
    birth, because it was extremely difficult to get this law
    enacted in the first place because the previous Administration
    was not enamored with having chemical security authorization.
    And today we can look back with pride on a lot that has been
    implemented effectively and in my view is working very well.
    And I think some of the skepticism in the chemical industry
    about having a Federal law has been replaced by a true
    partnership where industry has worked with the Department of
    Homeland Security and as a result, as Under Secretary Beers
    said today, our Nation is far safer.
        So I look forward to working with the Administration, with
    my colleagues on both sides of the aisle, and with the Chairman
    as we pursue this issue.
        I also want to thank my staff for their hard work on this
    issue. This is enormously complex, and it is very important
    that we get it right. And in that regard, I thank our witnesses
    as well.
        The record for this hearing will be held open for 15 days
    to allow for the submission of any questions for the record
    from our colleagues as well as additional testimony and other
    documents.
        And, again, I want to thank all of the witnesses for being
    here today, and this hearing is now adjourned.
        [Whereupon, at 11:50 a.m., the Committee was adjourned.]

                                A P P E N D I X

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