[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.' ''
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    \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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