[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
H.R. 908, A BILL TO EXTEND THE AUTHORITY OF THE SECRETARY OF HOMELAND
SECURITY TO MAINTAIN THE CHEMICAL FACILITY ANTI-TERRORISM STANDARDS
PROGRAM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
MARCH 31, 2011
__________
Serial No. 112-28
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
JOE BARTON, Texas HENRY A. WAXMAN, California
Chairman Emeritus Ranking Member
CLIFF STEARNS, Florida JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania EDOLPHUS TOWNS, New York
MARY BONO MACK, California FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina GENE GREEN, Texas
Vice Chair DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma LOIS CAPPS, California
TIM MURPHY, Pennsylvania MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana ANTHONY D. WEINER, New York
ROBERT E. LATTA, Ohio JIM MATHESON, Utah
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi JOHN BARROW, Georgia
LEONARD LANCE, New Jersey DORIS O. MATSUI, California
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
_____
Subcommittee on Environment and the Economy
JOHN SHIMKUS, Illinois
Chairman
TIM MURPHY, Pennsylvania GENE GREEN, Texas
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky TOMMY BALDWIN, Wisconsin
JOSEPH R. PITTS, Pennsylvania G.K. BUTTERFIELD, North Carolina
MARY BONO MACK, California JOHN BARROW, Georgia
JOHN SULLIVAN, Oklahoma DORIS O. MATSUI, California
CHARLES F. BASS, New Hampshire FRANK PALLONE, Jr., New Jersey
ROBERT E. LATTA, Ohio DIANA DeGETTE, Colorado
CATHY McMORRIS RODGERS, Washington LOIS CAPPS, California
GREGG HARPER, Mississippi JOHN D. DINGELL, Michigan
BILL CASSIDY, Louisiana HENRY A. WAXMAN, California (ex
CORY GARDNER, Colorado officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
(ii)
C O N T E N T S
----------
Page
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 1
Prepared statement........................................... 2
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 6
Hon. Tim Murphy, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 7
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 8
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 109
Hon. Joe Barton, a Representative in Congress from the State of
Texas, prepared statement...................................... 111
Witnesses
Rand Beers, Under Secretary, National Protection and Programs
Directorate, U.S. Department of Homeland Security.............. 9
Prepared statement........................................... 11
Answers to submitted questions............................... 113
Andrew K. Skipp, President and Chief Executive Officer, Hubbard-
Hall, Inc., on behalf of the National Association of Chemical
Distributors................................................... 54
Prepared statement........................................... 56
Answers to submitted questions............................... 121
David C. Tabar, CSP, Global Director of Safety, Sherwin-Williams
Company, on behalf of the American Coatings Association........ 65
Prepared statement........................................... 67
Answers to submitted questions............................... 124
William E. Allmond IV, Vice President, Government Relations,
Society of Chemical Manufacturers and Affiliates............... 73
Prepared statement........................................... 75
Answers to submitted questions............................... 125
James S. Frederick, Assistant Director, Health, Safety, and
Environment, United Steelworkers............................... 82
Prepared statement........................................... 85
Submitted Material
H.R. 908, A Bill to extend the authority of the Secretary of
Homeland Security to maintain the Chemical Facility Anti-
Terrorism Standards program.................................... 4
Letter of March 28, 2001, from Randall S. Dearth, President and
CEO, LANXESS Corporation, to Mr. Murphy........................ 38
Letter of March 30, 2011, from Cal Dooley, President and CEO,
American Chemistry Council, to Mr. Shimkus and Mr. Green,
submitted by Mr. Murphy........................................ 39
Letter of March 29, 2011, from Charles T. Drevna, President,
National Petrochemical & Refiners Association, to Members of
Congress, by Mr. Green......................................... 45
Written statement of March 31, 2011, from the National
Petrochemical & Refiners Association........................... 47
Written statement of March 31, 2011, from Hon. Charles W. Dent, a
Representative in Congress from the Commonwealth of
Pennsylvania................................................... 106
H.R. 908, A BILL TO EXTEND THE AUTHORITY OF THE SECRETARY OF HOMELAND
SECURITY TO MAINTAIN THE CHEMICAL FACILITY ANTI-TERRORISM STANDARDS
PROGRAM
----------
THURSDAY, MARCH 31, 2011
House of Representatives,
Subcommittee on Environment and the Economy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 9:07 a.m., in
room 2322 of the Rayburn House Office Building, Hon. John
Shimkus (chairman of the subcommittee) presiding.
Members present: Representatives Shimkus, Murphy,
Whitfield, Bass, Latta, McMorris Rodgers, Harper, Cassidy,
Gardner, Green, Butterfield, Barrow, and Waxman (ex officio).
Staff present: David McCarthy, Chief Counsel, Environment
and Economy; Tina Richards, Senior Policy Advisor, Chairman
Emeritus; Gerald S. Couri, Senior Environment Policy Advisor;
Chris Sarley, Policy Coordinator, Environment and Economy; Alex
Yergin, Legislative Clerk; Jackie Cohen, Democratic Counsel;
Greg Dotson, Democratic Energy and Environment Staff Director;
Caitlin Haberman, Democratic Policy Analyst; and Karen
Lightfoot, Democratic Communications Director and Senior Policy
Advisor.
Mr. Shimkus. I would like to call the hearing to order. And
I will start by recognizing myself for 5 minutes.
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Today we will hold our first legislative hearing on H.R.
908, a bill that will give regulatory certainty, while
providing the necessary security to keep chemical facilities,
the employees who work there, and the American public safe.
Under the leadership of Chairman Emeritus Barton, language
authorizing the creation of the Chemicals Facility Anti-
Terrorism Standards Act, which we know as CFATS, became law
during the 109th Congress. CFATS takes a common-sense approach
to chemical facility security by allowing the Department of
Homeland Security to register facilities and determine where
the biggest security threats exist. This is done through the
development of risk-based standards that greatly reduce or
eliminate vulnerabilities. To date, this framework has been
used successfully, with thousands of facilities around the
country identified, and industry working collaboratively with
DHS to comply with regulations. It is important that these
efforts move forward because the continuation of the CFATS
program remains critical to our national security.
Introduced by Vice-Chairman Tim Murphy and Ranking Member
Gene Green, H.R. 908 will allow our antiterrorism security
efforts at chemical facilities across the country to remain
strong and the law underpinning them to remain in effect. At
the same time it gives DHS time to fully implement this law,
but most importantly, it provides a signal of clarity to
business that they will not face uncertainty, fostering job
creation and getting our economy back on track. I am encouraged
by the bipartisan effort with introduction of this bill. It has
played no small part in us holding this legislative hearing
today and I look forward to continuing these efforts together.
I appreciate Under Secretary Beers for working with us on
his schedule to make sure he could testify today and that is
why we are starting a little bit earlier than we normally do. I
look forward to an update on the Department's progress as well
as its thoughts on CFATS moving forward.
Regarding our second panel, CFATS is a law that affects
facilities with chemicals, not just chemical facilities. I
believe it is important for this committee to hear from some of
those interests. DHS's own information shows that some
universities, hospitals, warehouses, distributors, and paint
manufacturers are considered high-risk sites under CFATS. I
welcome these interests and all our members on the second
panel. I am equally interested in hearing how their sectors
have managed implementation, whether they think major new
additions to the law are warranted, and what type of affects an
extension of CFATS could have moving forward.
Finally, I want to raise one more matter in case there have
been many questions. As everyone knows, our committee has sole
jurisdiction over the Safe Drinking Water Act and existing
drinking water security program at EPA. While I am not opposed
to looking at this issue separately and at a later date, the
fact of the matter is CFATS is set to expire very shortly and
the drinking water provisions aren't. In a true risk-based
spirit, we are going to attack the problem that is the most
pressing first and then later look into seeing whether
something more needs to be done in the other area.
My time has expired. I will look for any one of my
colleagues who may want a minute and 30, and if not, I will
yield back my time and yield to the ranking member, Mr. Green
from Texas, for 5 minutes.
[The prepared statement of Mr. Shimkus follows:]
Prepared Statement of Hon. John Shimkus
The Subcommittee will now come to order. Today we will hold
our first legislative hearing on H.R. 908, a bill that will
give regulatory certainty while providing the necessary
security to keep chemical facilities, the employees who work
there, and the American public safe.
Under the leadership of Chairman Emeritus Barton, language
authorizing the creation of the Chemical Facilities Anti-
terrorism Standards Act (CFATS) became law during the 109th
Congress. CFATS takes a common sense approach to chemical
facility security by allowing the Department of Homeland
Security (DHS) to register facilities and determine where the
biggest security threats exist. This is done through the
development of risk-based standards that greatly reduce or
eliminate vulnerabilities. To date this framework has been used
successfully, with thousands of facilities around the country
identified, and industry working collaboratively with DHS to
comply with regulations. It is important that these efforts
move forward because the continuation of the CFATS program
remains critical to our national security.
Introduced by Vice-Chair Tim Murphy and Ranking Member Gene
Green, H.R. 908 will allow our anti-terrorism security efforts
at chemical facilities across the country to remain strong and
the law underpinning them to remain in effect. At the same time
it gives DHS time to fully implement this law, but most
importantly, it provides a signal of clarity to businesses that
they will not face uncertainty; fostering job creation and
getting our economy back on track. I'm encouraged by the bi-
partisan effort with introduction of this bill. It has played
no small part in us holding this legislative hearing today and
I look forward to continuing these efforts together.
I appreciate Under Secretary Beers for working with us on
his schedule to make sure he could testify today. I look
forward to an update on the Department's progress as well as
its thoughts on CFATS moving forward.
Regarding our second panel, CFATS is a law that affects
facilities with chemicals, not just chemical facilities. I
believe it is important for this committee to hear from some of
those other interests. DHS's own information shows that some
universities, hospitals, warehouses, distributors, and paint
manufacturers are considered high risk sites under CFATS. I
welcome these interests and all our members on the second
panel. I am equally interested in hearing how their sectors
have managed implementation, whether they think major new
additions to the law are warranted, and what type of affects an
extension of CFATS could have moving forward.
Finally, I want to raise one more matter in case there may
be questions. As everyone knows, our committee has sole
jurisdiction over the Safe Drinking Water Act and the existing
drinking water security program at EPA. While I am not opposed
to looking at that issue separately and at a later date, the
fact of the matter is CFATS is set to expire very shortly and
the drinking water provision aren't. In a true risk-based
spirit, we are going to attack the problem that is the most
pressing first and then later look into seeing whether
something more needs to be done in that area.
My time has expired, and I yield 5 minutes to the ranking
member of the subcommittee, the gentleman from Texas and
cosponsor of H.R. 908, Ranking Member Green.
[H.R. 908 follows:]
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OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Mr. Chairman, for holding the
legislative hearing today on H.R. 908, the full implementation
of the Chemical Facility Anti-Terrorism Standards Act
introduced by Representative Tim Murphy and myself.
Chemical facility security is extremely important in the
protection of public health and safety and particularly in our
congressional district in Houston. The Houston Ship Channels
are the heart of the petrochemical complex that stretches along
the Texas Gulf Coast producing many products essential to
modern life. It is also the largest petrochemical complex in
the country. These chemical facilities contribute much in our
economy and way of life in employing thousands of workers in
high-paying quality jobs. These dedicated employees, as well as
the communities that surround these facilities deserve the best
security standards possible to prevent an act of terrorism on
U.S. soil.
Section 550 of the Department of Homeland Security
Appropriations Act of 2007, Congress authorized the Department
to regulate security at high-risk chemical facilities. Under
Section 550, covered facilities must perform security
vulnerability assessments and implement Site Security Plans
containing security. According to DHS, since CFATS became
effective in June of 2008, they have analyzed nearly 40,000
facilities across the United States. Initially, DHS identified
more than 7,000 facilities as potential high-risk. Then over
2,000 facilities have been downgraded or are no longer
regulated. Currently, CFATS covers 4,744 high-risk facilities
nationwide across all 50 States, of which 4,126 facilities have
received high-risk determinations.
The program is funded through appropriation rider due to
expire on March 18 with the CR. It is very important for the
security of this country to revisit this statute to determine
what is working in this program and what can be improved upon.
Additionally, it is important we provide industry with some
assurance that the program will continue to be funded. Since
2001, chemical facilities have already invested billions in
security improvements or fully complying with current
regulations. Last year, H.R. 2868, the Chemical Facility
Antiterrorism Act introduced by Representatives Thompson,
Waxman, and Markey passed out of this committee and the full
House. But unfortunately, like many good pieces of legislation,
the House passes H.R. 2868 was never taken up by the Senate,
and we are here today to begin discussions on how to proceed
with chemical security.
I worked hard with Ranking Member Waxman and Markey to
improve H.R. 2868. One of these provisions was to avoid
unnecessary duplication between CFATS and exempted MTSA
facilities. I continue to support provisions to avoid overlap
with existing security programs and I intend to ask our
witnesses today about this issue as well.
And again, I want to thank our witnesses for appearing and
welcome Under Secretary Beers. And with that, thank you for
taking the time to discuss this important program. And Mr.
Chairman, if I have any time left, I would like to yield to our
ranking member of the full committee.
Mr. Shimkus. Do you want your full time?
Mr. Green. You want your full time? OK. I will yield back.
Mr. Shimkus. The gentleman yields back. The chair now
recognizes the subcommittee vice-chairman, Mr. Murphy, for 5
minutes.
OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Murphy. Thank you, Mr. Chairman. I want to thank you
and also my colleague, Gene Green of Texas, for working with me
on this bill.
The chemical industry, we know, touches every segment of
our economy from agriculture to energy production to paint and
plastics. Certainly, there is nothing we can go through for an
hour in our lives without touching several layers of it, and
its safety and security is of high importance to all of us and
essential to our Nation's economic recovery in maintaining a
strong domestic chemical industry. So any federal policy on
plant security has to be mindful of that public health and
safety but also has to make sure we have a regulatory certainty
climate and stability so the chemical employers can continue to
safely grow jobs and create a better economy.
Under the Chemical Facility Anti-Terrorism Standards, our
chemical plant and refineries have made significant
improvements towards keeping our communities safe. In fact,
since September of 2001, the domestic chemical industry has
spent an estimated $8 billion on plant security and under the
existing framework will spend another $8 billion. The law, we
know, identifies four high-risk categories that require
vulnerability assessments and Site Security Plans, but more
importantly, the oversight and enforcement of the Department of
Homeland Security.
By the way, I am pleased that we will be hearing today from
a Marine to talk about that because if anybody can tell us
about security, call in the Marines, right? Important that we
also have here today information on how this is working and
present to us any information with regard to its effectiveness
and implementation. Certainly, it does not deal with all
aspects of chemical safety. That is for other issues on other
legislation. This is specifically as it relates to some of
these antiterrorism security measures. And we will look forward
to hearing about this.
So given that we have a successful program here, instead of
changing it, the issue is let us provide domestic employers
certainty on the regulatory front so they can continue to work
towards the issue of security. Otherwise, we would be creating,
I think, more barriers, more confusion with regard to security
and jobs.
So I look forward to working with Chairman Shimkus and
Upton of the Energy and Commerce Committee, and of course with
Ranking Member Gene Green to pass this bipartisan legislation
and ensure that a key part of our Homeland Security policy is
maintained. And with that, Mr. Chairman, I yield back.
Mr. Shimkus. The gentleman yields back his time. The chair
recognizes the ranking member of the full committee, Mr.
Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman.
After the terrorist attack of 9/11/2001, federal officials
and outside experts warned that the Nation's drinking water,
utilities, and chemical facilities were vulnerable to terrorist
attack. The risk that common, useful chemicals could be wielded
as weapons by those who would seek to harm us became an
alarming possibility and concern.
In 2006 the Appropriations Committee established a program
to protect the Nation's chemical facilities from terrorist
attack and other intentional acts. The Chemical Facility Anti-
Terrorism Standards Act was established by a provision tacked
onto an appropriations bill. Today's hearing examines H.R. 908,
legislation to extend the authorization for this 2006 program
for another 7 years.
The Department of Homeland Security has made tremendous
progress in developing its chemical security program. They have
done so without a great deal of congressional guidance.
Although the provision establishing the program was within the
jurisdiction of this committee, the committee didn't mark up a
report the provision. The members of this committee didn't
consider and revise it. Unfortunately, it was enacted without
our input.
The rationale was that this program was an emergency
measure. It would be established quickly but would also end
quickly, giving our committee the opportunity to develop a
comprehensive policy. The Department of Homeland Security was
directed to issue regulations in just 6 months and the program
was slated to expire in 2009. But now we have seen that
deadline extended with each appropriations bill.
The Department has done well in getting the program off the
ground, but it is unable to correct shortcomings in the
underlying law authorizing its program. That task falls to us
as the committee of jurisdiction.
And there are serious shortcomings with the law that create
dangerous security gaps. For instance, drinking water
facilities are not covered at all. Unfortunately, H.R. 908
simply extends the authorization of the existing program and
would not address significant security gaps that put Americans
at risk. It doesn't have to be this way. In the last Congress,
Democratic and Republican staff spent hundreds of hours
methodically working through the issues surrounding the CFATS
program. We worked with the Majority and Minority of the
Committee on Homeland Security. Industry, labor, and affected
stakeholders were consulted throughout the process.
The result was H.R. 2868, the Chemical and Water Security
Act of 2009, which this committee reported and passed the House
on a vote of 230 to 193. That legislation would have closed
significant security gaps by establishing a security program
for drinking water facilities and wastewater treatment works.
The legislation would have harmonized the Chemical Facility
Anti-Terrorism Standards Act with the Maritime Transportation
Security Act. It also would have removed exemptions from
Federal facilities.
H.R. 2868 would have strengthened security at covered
facilities by requiring assessment and in some cases adoption
of safer chemicals, processes, or technologies to reduce the
consequences of a terrorist attack. That common-sense policy
would help facilities reduce the likelihood that they will
become attractive terrorist targets.
H.R. 2868 would also have strengthened security nationwide
by creating an important mechanism for citizen enforcement.
Companies, state attorneys general, and ordinary citizens could
have used this provision to hold the Department to deadlines
and ensure that the program was implemented.
Unfortunately, in its current state, H.R. 908 would make
none of these changes and would do nothing to close the
significant security gaps we face as a Nation. I hope that we
can have a robust committee process, find common ground to
close those security gaps once and for all, and to make our
country safer.
Finally, I would like to note a number of issues with this
legislation relating to the legislative protocols announced by
the majority leader. For instance, legislation authorizing
discretionary appropriations is required to specify the actual
amount of funds being authorized. H.R. 908 does not do this.
The Republican leadership has also said that they require a new
or increased authorization to be offset by the termination of
an existing authorization of equal or greater size. H.R. 908
does not terminate any existing authorization. As we move
forward in the legislative process, it is important that we
understand how H.R. 908 comports with these protocols.
Mr. Chairman, thank you for holding today's hearing. This
is an important issue and one that I hope we can work on
together. I yield back my time.
Mr. Shimkus. Thank you, Mr. Waxman. Now, I would like to
recognize the Honorable Rand Beers. I will just say before--we
are honored to have you. I have gone through your bio and
career: public servant, Marine rifle company commander in
Vietnam and then all over the place working in service to this
country. So we do appreciate you coming and thank you for your
service. And you are recognized for 5 minutes for your opening
statement.
STATEMENT OF RAND BEERS, UNDER SECRETARY, NATIONAL PROTECTION
AND PROGRAMS DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY
Mr. Beers. Thank you, Mr. Chairman, Ranking Member Green,
distinguished----
Mr. Shimkus. Sir, there is probably a button on the front
there.
Mr. Beers. Oh, there is. There we go. Thank you, sir. Thank
you, Mr. Chairman, Ranking Member Green, and distinguished
members of the committee. It is a pleasure to be here today and
thank you for working to accommodate our schedules jointly.
As you all are aware, Section 550 of the fiscal year 2007
Department of Homeland Security Act, as amended, set up the
expiration of this program in October of 2010, and it has been
extended through the legislative process, including to this
committee and is set to expire. So we are very eager to work
with the committee and all levels of government and the private
sector to achieve passage of the legislation and permanently
authorize the Chemical Facilities Anti-Terrorism Standards
program.
While the inspection process is still ongoing, our analysis
indicates that this program is delivering tangible results that
make our Nation more secure. For example, since our inception,
there have been 1,246 committees having completely removed
their chemicals of interest and an additional 584 facilities
that no longer possess the quantity of chemicals of interest
that meet the threshold to be considered as high-risk
facilities.
Currently, as has been indicated, there are 4,744 high-risk
facilities nationwide in all 50 States, of which 4,126
facilities have received a final high-risk determination and
due dates for the submission of their Site Security or
Alternate Security Plans. This is a reflection of the
significant work that has been done to date, beginning with the
review, as indicated, of more than 39,000 facilities that
submitted initial consequence screenings.
More than 4,100 facilities have submitted their Site
Security Plans, and in February of 2010, the Department began
conducting inspections of the final-tiered facilities, starting
with the highest risk, or Tier 1, facilities. The Department
has completed approximately 175 preauthorization inspections to
date.
An important point that I hope does not get lost in these
statistics is the open dialogue that DHS has established with
industry through this program and the successful security gains
that have already been implemented as a result.
We enjoy a constructive dialogue with Congress, including
members of this committee, as it contemplates new authorizing
legislation for the CFATS program. The Department supports
permanent authorization for the program, is committed to
working with the Congress and other security partners to pass
stand-alone chemical security legislation that includes the
permanent authority beginning in fiscal year 2011.
As you know, the administration believes that such an
authorization should close security gaps in the current
structure, such as eliminating the exemption for water and
wastewater facilities and prudently approaching mandatory
consideration of inherently safer technology.
Again, thank you very much for holding this important
hearing, and I would be happy to respond to any questions that
you might have, Mr. Chairman, and other members of this
distinguished committee.
[The prepared statement of Mr. Beers follows:]
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Mr. Shimkus. Thank you, sir. I will recognize myself for
the first 5 minutes of questioning.
The last time you were before our committee, you testified
that 6,156 facilities fell into one of the top four high-risk
tiers. Today, on your testimony you are suggesting that there
are 4,744 facilities or around 1,400 less than before now fall
into one of the top four high-risk tiers. I think you mentioned
some of that in your opening statement as far as the amount of
chemicals being removed so they fell out of the criteria. The
decline, is some of it due to plant closings themselves? Do you
know?
Mr. Beers. Sir, I can't give you an exact figure on plant
closings, but almost all of them are a result of the movement
of the chemicals of interest offsite or the reduction in the
amount onsite that resulted in the removal of them from the
list of the high-risk tier.
Mr. Shimkus. Your staff could probably check these numbers
and get us that information?
Mr. Beers. We will, sir.
Mr. Shimkus. And thank you. Also, Ranking Member Waxman
talked about the budgetary aspects, but based upon the present
submission of a budget, there is probably a line item for this
program in that budget, is that not correct?
Mr. Beers. That is correct, sir. It is approximately 100
million a year. It was 105 in FY '10, it was 203 in the FY '11
request, and it is 99 million in the FY '12 request, so roughly
100 million, sir.
Mr. Shimkus. Great, thank you. Great. That is helpful.
Thank you. Also the last time you testified you stated that you
did not have any idea of how much industry was spending to
comply with CFATS, but you did note that based on the number of
top-screened DHS was receiving that many material modifications
were being made by covered facilities. You didn't have last
time--do you know of how much industry has had to spend to
upgrade to meet CFATS compliance?
Mr. Beers. Sir, I don't have that number at the tip of my
fingertips. Let me have staff----
Mr. Shimkus. Is that something that in your negotiations
they talk to you about at all or----
Mr. Beers. One of the considerations that we bring to bear
is we develop Site Security Plans is yes, sir, the cost of
those security plans. Security is not a free good, as you well
know, and we are very mindful of that. That doesn't mean that--
everyone has to recognize that some costs may be required to
implement a good security plan. But a good security plan is
good neighborliness on the part of the chemical industries in
the areas that their facilities exist.
Mr. Shimkus. Are there still implementation issues that
need clarifying, such as personnel surety or agricultural
chemical issues?
Mr. Beers. Yes, sir. Both of those are still works in
progress. The personnel surety plan has been a subject of
discussion between ourselves and the chemical industry. We are
close to being in a position to come forward with that
proposal. The indefinite extension of this regulation applying
to some agricultural production facilities remains in effect.
We have done several studies, but I can't give you an
indication of when we are going to get to the end of that
indefinite extension, sir.
Mr. Shimkus. And in my opening statement I mentioned
numerous programs from hospitals. This is a wide range, a
portfolio, and I just wanted to put that out just for the
public to understand that this does more than just chemical
plants. It is a pretty wide range. And of course, from
universities to hospitals are some that we would not normally
think would be involved in this program. And in testimony in
the last Congress sometimes that got confused. So I am just
reiterating. You would agree with that, that there are
hospitals and universities and it is a wide range of areas that
are involved with the CFATS program?
Mr. Beers. Yes, sir. I mean just beyond the chemical
manufacturers themselves, this affects warehousing
distributors, oil and gas operations, hospitals, semiconductor
manufacturers, paint manufacturers, colleges and universities,
some pharmaceuticals, and some parts of the agricultural
industry. And I have not finished the list there but that is
certainly enough for giving people an indication of how broadly
this particular law affects companies and facilities around the
country.
Mr. Shimkus. Great, sir. Thank you very much. Now, I yield
back my time and recognize Mr. Green for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. I have some questions
on coordination, but let me follow up with that.
In your testimony you talk about the exemption, for
example, of water and wastewater facilities. Are there any
other facilities that are not part of the law now that you
think should be included in it other than wastewater and water
facilities?
Mr. Beers. Sir, we have talked before and you mentioned in
your opening statement the MTSA exemption, which takes marine
facilities or facilities that are located in areas defined as
marine areas, which do in fact have chemical facilities that
would fall under this regulation if they were not exempted from
it. I can report to you that the Secretary has made it very
clear both to me and the Commandant of the Coast Guard that she
wants that harmonized with or without a law. We have engaged,
over the course of the last year, in a working group study.
There are 18 recommendations that are now moving up the chain
as a result of that committee's study, and I am hopeful that we
will have that to the Secretary for final approval in the not-
too-distant future.
Mr. Green. I appreciate that and that is one of my concerns
is that MTSA, you know, is part of the Transport Worker
Identification Card, and my concern was that we would have a
separate card for employees who actually go between these
facilities and is it hope that Homeland Security under current
authority could require or give credit to the TWIC card for
someone at a chemical security facility or vice versa?
Mr. Beers. Yes, sir. That is exactly the point that the
chairman was making when he asked about the Personnel Surety
Program, and that is an effort that we are trying to merge
between the two programs. It certainly defies logic, may I say,
if we have one card for one kind of facility and one card for
another. Having said that, and having spent some time around a
table with a number of members of my staff and other staff, it
is not a simple process, but it is a process which we are
committed to and engaged in and I hope to have, as I said, an
answer in the very near future.
Mr. Green. OK. I have 260,000 TWIC cards issued in our
district and so I would hope that we would have some
coordination because we have plants that are not on the water
side but they are owned by the same company and yet, you know,
they would have the flexibility to transfer those staff between
the two.
I am glad in your testimony you also talked about prudent
IST. Under current authorization, does the Department have the
authority to look at inherently safer technology?
Mr. Beers. It is not so much an authority question as it is
that we have asked our Science and Technology Directorate
within the Department to do a study of this issue. I don't want
to indicate that it is exhaustive but we in the CFATS area have
not at this point in time as part of the CFATS program made any
investigatory effort. Should such a requirement be enacted, we
are poised to begin that process but no, sir, we haven't
actually begun it.
Mr. Green. So is your testimony you don't think you have
the authority right now or you just haven't begun to explore
that?
Mr. Beers. We just haven't begun to explore it. That is why
I said we did have the Science and Technology Directorate
explore information on that and that is available to us. At
this particular point in time we didn't feel it was appropriate
to move any further than that initial exploratory effort on
their part.
Mr. Green. OK. Well, it would seem that if there is an
issue, hopefully the Department would come to Congress and say
this is something we need and that way we could respond.
The exemption of water and wastewater facilities, last
Congress we had legislation that included that, included lots
of, you know, multiple utility districts that were very small,
of course, some of the largest cities in the country. Is there
anything under current law in CFATS that would allow for
Homeland Security to also coordinate with our local
communities, again, from the smallest to the largest to deal
with some of the chemicals that are stored that makes our
drinking water safe.
Mr. Beers. Sir, as part of our general outreach voluntary
program under the National Infrastructure Protection Plan, we
certainly can talk to those facilities in a best-practices
sense. But in terms of any formal regulatory authority,
obviously we have that exemption and no, we have not had that
kind of a discussion in that sense. We have certainly worked
with EPA to come to an understanding of the size of the
population that we might be talking about. We have coordinated
with them about the general notions that would come under a
cooperative regime, which we have agreed to should that be
enacted. But the actual communications of what a regulatory
regime might look like, no, sir, it is a voluntary outreach
program at this particular point.
Mr. Green. Thank you.
Mr. Shimkus. Thank you. And chair now recognizes Mr. Murphy
for 5 minutes.
Mr. Murphy. Thank you. And again, welcome here, Mr. Beers.
For all practical purpose, CFATS, which took effect in June
of 2007, and it has taken DHS 3 years and 10 months to work out
the Tier 1 facilities and I think about 175 preliminary
authorization inspections and four formal authorization
inspections. How much longer do you think it will take to
conclude the preliminary authorization inspections on the other
41 Tier 1 facilities? Do you have any idea?
Mr. Beers. Sir, I have told my staff that I expect those to
be completed by the end of this calendar year. We have
obviously taken more time than you or we would have liked in
terms of moving this program forward, but part of the reason
that that time has been taken is that one, we are absolutely
committed to a dialogue with industry on this issue, and we are
trying to and continuing to try to set up a program that is a
cooperative program. I think that by and large if you talk to
industry, they will give you a response not dissimilar to what
I am telling you right now. That dialogue has taken time. We
have learned a lot on the path from the law's enactment to
today and I have no doubt that we will continue to learn that.
But we are definitely committed to getting the Tier 1
facilities done by the end of this year. And as you know, at
the beginning of this calendar year, we began a major effort to
move this forward.
Mr. Murphy. Thank you. What about the other authorization
inspections? Same thing? You feel that----
Mr. Beers. The other categories?
Mr. Murphy. Yes.
Mr. Beers. We will move onto them as soon as we get through
the preauthorization inspections of the Tier 1 facility. So as
you note, we have done 175. There are 216 facilities that are
in Tier 1 and 3 that are pending final tiering. So we should be
able to move through those on the pre-inspection relatively
quickly. It is getting the final version of the Site Security
Plan and reviewing it and issuing letters that they should
begin implementation that has taken up the time. They and we
discovered that the original submissions didn't always have a
sufficient amount of detail and that has required a dialogue.
We have learned a lot from that dialogue and I think we can
move this program more quickly now based on that information.
Mr. Murphy. Thank you. And you feel industry has been
cooperative with you in trying to implement these?
Mr. Beers. Absolutely been cooperative, sir.
Mr. Murphy. Thank you. When you testified for this
committee before, DHS stated that it has not studied the
inherently safer technologies' potential effects on employment.
Has that taken place since this hearing?
Mr. Beers. No, sir, not to my knowledge.
Mr. Murphy. OK. All right. How about can you explain to me
how inherently safer technology works to prevent theft and
diversion of chemicals in any way? Is that part of the things
that you would have jurisdiction or would be looking at
yourselves?
Mr. Beers. The simplest explanation of inherently safer
technology actually deals with a water issue, as you are well
aware. The use of chlorine in water creates a chemical that
represents a risk depending upon the volume of the chemical
stored at the particular site. There is an alternative which
does not require a toxic chemical to be put there and use in
that. And the question is whether or not we are going to have
movement in that direction.
But let me be clear. While there may be an estimated 6,000
water and wastewater facilities that might fall under this were
it included. We don't have enough firm data to tell you how
those would stratify out and in fact whether they would all in
fact be within the regime as you----
Mr. Murphy. OK. Have you been communicating with EPA on
these issues? Are you able to talk with them?
Mr. Beers. We have been talking with EPA since the last
Congress and the bill that this committee----
Mr. Murphy. Is that a cooperative relationship as well?
Mr. Beers. Yes, sir, I think it is.
Mr. Murphy. Do we need a federal law to tell you to do
that? Or it sounds like you are already doing that, which I
appreciate.
Mr. Beers. No, we don't need a federal law to tell us to do
that.
Mr. Murphy. Thank you. Because I know before we passed the
Title IV, the Public Health Security and Bioterrorism
Preparedness Response Act in 2002, which requires security for
drinking water facilities and we are pleased that things are
going over and that you are working cooperative on that. But I
see I am out of time, so thank you so much, sir, and I yield
back my time.
Mr. Beers. Thank you, sir.
Mr. Shimkus. Gentleman yields back his time. Chair
recognizes ranking member of the full committee, Mr. Waxman,
for 5 minutes.
Mr. Waxman. Thank you, Mr. Chairman. I am concerned that
this legislation would leave unanswered many questions about
our Nation's vulnerability to attack on chemical facilities and
I would like to explore some of these questions with you, Mr.
Beers.
Is it true that drinking water and wastewater facilities
are statutorily exempt from the CFATS program?
Mr. Beers. Yes, sir.
Mr. Waxman. Are they exempt because there is no risk of a
terrorist attack?
Mr. Beers. Sir, I was not present when the law was
originally put forward. I am not privy to the decision-making
process that resulted in the exemption.
Mr. Waxman. OK. Is it true that nuclear facilities are also
statutorily exempt from the CFATS program?
Mr. Beers. Yes, it is, sir.
Mr. Waxman. Should I rest assured that terrorists will not
target these facilities?
Mr. Beers. No, sir, you should not rest assured that they
will not, but we believe that the security regime that the
regulatory agency has there is sufficient. Having said that, we
have an outreach program between the Department of Homeland
Security, the Nuclear Regulatory Commission, and the Department
of Energy to talk in a voluntary mode about facilities that are
also regulated by another department or agency.
Mr. Waxman. What about the federal facilities that have
large stores of chemicals that the Department is concerned
about, the so-called Appendix A chemicals? Are they exempt?
Mr. Beers. Yes, sir. That is my understanding.
Mr. Waxman. Is there any reason to think that chemicals
pose less of a risk when they are at federal facilities than
when they are at private facilities?
Mr. Beers. No, sir. But we have a lot more control over the
security at federal facilities than we do without the CFATS
program over private-sector facilities.
Mr. Waxman. Are you concerned about these gaps created by
these exemptions?
Mr. Beers. Sir, the administration is taking the position,
which I support, that water and wastewater ought to be included
in this regime. We have also undertaken an effort within the
Department of Homeland Security, as I indicated earlier, to
ensure that there is a common regime between those facilities
that are regulated under the MTSA and those facilities that are
regulated under CFATS. That committee effort is completed. The
recommendations are now moving up the chain to the Secretary to
approve that, but she has made very clear to both me and the
Commandant of the Coast Guard that she expects a harmonious
regime across these two areas.
Mr. Waxman. There are gaps and you expressed concern about
them. You think they are otherwise being addressed but would
H.R. 908 address those gaps?
Mr. Beers. H.R. 908 focuses on the permanent authorization.
Sir, we also need the permanent authorization. The fact that we
are living from year to year or CR to CR is not a particularly
good way for us to run a program and work with our partners in
the industry if we are uncertain about the future of it. You--
--
Mr. Waxman. Uncertain about the future of CR?
Mr. Beers. Excuse me?
Mr. Waxman. Are you uncertain about the future of a CR?
Mr. Beers. Sir, a CR has an end date. If the next act with
respect to this year's appropriations doesn't address this
issue, yes, sir. I am.
Mr. Waxman. I can understand that. I was being a little
facetious in my question to you.
We have only touched upon some of the significant security
gaps. As you know, port facilities are not held to the same
security standards as chemical facilities even though they may
pose the same risk, and I hope that this subcommittee is able
to work together to address those security deficiencies and
craft legislation to secure our Nation.
It has been almost 10 years since the attacks of 9/11 but
the job of securing our country's vulnerable assets is still
unfinished, and I am concerned that DHS continues to miss
milestones for implementation of this important program.
Mr. Beers, how many facilities have completed the CFATS
process?
Mr. Beers. Sir, in terms of the final approval of a plan,
no facilities have. We have 175 that have received
authorization letters and we have inspected--that means that
they go forward implementing their Site Security Plan so that
we can then go out and look at the implementation of the Site
Security Plan. We have four of those 175 who have had an
inspection after they have begun to implement those plans and
we expect that those four, which are currently under review,
will be finally approved in the not-too-distant future.
Mr. Waxman. Um-hum. Well, let me just say--and I only have
a few seconds left--it has been almost 4 years since the
Department's rules took effect and not one facility has
completed the process. With that success rate I think we should
all have concern about simply rubberstamping this program for
another 7 years. And I just want to put that issue on the
table. Thank you, Mr. Chairman.
Mr. Shimkus. Thank you, sir. And before I recognize Mr.
Latta, I want to recognize Mr. Murphy for unanimous consent
request.
Mr. Murphy. Thank you, Mr. Chairman, a request for two
letters, with unanimous consent, to submit. One is a letter
from the CEO Randy Dearth of LANXESS and the other one is from
the American Chemistry Council.
Mr. Shimkus. Without objection, so ordered.
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Mr. Shimkus. The chair now recognizes the gentleman from
Ohio, Mr. Latta, for 5 minutes.
Mr. Latta. Well, thank you very much, Mr. Chairman, and Mr.
Under Secretary, thanks very much for being with us today.
If I can just go back, on page 3 of your testimony on the
very bottom of the paragraph there, talking about what is
listed about 322 chemicals of interest. And I think that a
question was asked mainly on agriculture, which I think the
chairman had mentioned. The other thing you say there is an
indefinite suspension on agriculture. What was that again,
please?
Mr. Beers. Sir, because of the use of fertilizer in the
agricultural industry, quantities of that fertilizer that are
stored on farms, as well as at the wholesale distributor, that
represented a large problem that we recognize but were not
prepared in the initial effort to try to get at the heart of
the problem, which are these larger facilities. So we gave them
an extension, we have conducted some studies, but we are not to
the point where we are prepared to talk about rule-making with
respect to those facilities.
Mr. Latta. Thank you very much. Because the reason is I
represent kind of an interesting district. I represent one of
the largest manufacturing districts in Ohio and I represent the
largest agricultural district because, of course, with
anhydrous ammonia, that is one of the ones that our farmers are
out there using all the time.
And then another chemical listed is propane because in my
area we have a lot of folks that live in the country that use
propane for their main source of heat. Now, would propane be
another one of those that down the road there might be
something that--because, again, this is something that folks
back home rely on all the time.
Mr. Beers. Sir, with respect to that yes, it is, but we are
talking about levels of propane, not the fact of propane. And
sir, I am not a farmer and I don't know how much propane in a
rural setting a farmer might have on his site, but I do have
some rural property and I don't have that many propane tanks.
Mr. Latta. You know, it is mainly for folks that live--and
even in small villages. They don't have natural gas. They use
propane tanks that are there to heat their homes. I just wanted
to double-check that with you.
And I guess there is also the other question that I have is
when you are looking at the release and the theft and the
diversion, the sabotage and contamination, so down the road
would you be looking at that, then, or because, again, on
release, again, of course, the farmer is out there when you are
spraying with anhydrous. I guess that is my question is that
would somebody in agricultural production fall under these
regulations? It would be kind of an undue hardship on them.
Mr. Beers. Sir, that is part of the issue that we are
working our way through. I mean the point here is that those 4
issues that you just read out are all considerations, but we
have the authority to make judgments on how to or what to
interpret on that. There is a level of storage that we look at,
but it is also a question of where it is and what kind of
potential threat it is.
Mr. Latta. Thank you.
Mr. Beers. So we take all those issues into consideration.
Mr. Latta. Thank you very much.
Mr. Beers. This is not a mechanistically implemented
regulatory regime.
Mr. Latta. Mr. Chairman, I yield back. Thank you very much.
Mr. Shimkus. If the gentleman would yield just your last 50
seconds for me. I represent parts of 30 counties in Southern
Illinois so this propane debate is an interesting one. These
residential tanks are about the size of a pickup truck, the bed
of a pickup truck. If you were doing a development in a rural
area where you had 10 or 15 homes with that, based upon the
footprint of this development, could they fall into this
process?
Mr. Beers. No, I don't believe they could. I can give you--
--
Mr. Shimkus. I guess the issue is how much----
Mr. Beers. But this is the issue of how much----
Mr. Shimkus. How much over--right.
Mr. Beers. And that particular----
Mr. Shimkus. That might be a good thing because, look, I
mean we will have an agricultural perspective always through
this process.
Mr. Beers. My staff is giving me a prompt.
Mr. Shimkus. Good.
Mr. Beers. Sixty thousand pounds----
Mr. Shimkus. OK.
Mr. Beers. --is the threshold screening quantity.
Mr. Shimkus. All right. I will have to find out how many
pounds are in one of those big tanks.
Mr. Beers. So there is a propane tank out back of my rural
property without a dolly of some sort.
Mr. Shimkus. Right.
Mr. Beers. Even the larger tanks that you are talking about
are----
Mr. Shimkus. And we will follow up. That is what we have
hearings for. So thank you, sir. Now, the chair would like to
recognize Mr. Barrow. No, he is not here. Ms. McMorris Rodgers
for 5 minutes? No questions. Mr. Cassidy for 5 minutes. Would
the gentleman yield for a second? And hit your button again and
then pull the microphone up.
Mr. Cassidy. Now, Mr. Waxman's question implied that the
NRC is doing a poor job of regulating the security at nuclear
power plants. When I visited the one in my district, oh, 6 or 8
months ago, I was impressed with the perimeter fences, the .50
caliber guns, the check-in process, et cetera. Have you had a
chance to review the security requirements for such facilities
and would you accept the implication of his questioning, that
there is an inadequacy of those?
Mr. Beers. Sir, as I said in answer to his question, we
believe that the regulatory regime that those plants are
currently under is adequate to ensure their protection.
Mr. Cassidy. OK. I just wanted to make sure that was
documented.
Secondly, now, I don't have your expertise--I am totally up
front about that--but it seems like if we have incompletely
implemented the rules--doing a great job working at it, but it
just takes time--of something passed in 2007, it seems almost
counterproductive to implement a whole other regulator regime
when people have to adjust midstream. That is just intuitive to
me. Would you accept that or would you dispute that?
Mr. Beers. Sir, you point out a challenge that would be
true if that were the case, but the administration put forward
its recommendation to add water and wastewater in the belief
that we, in fact, have learned a great deal----
Mr. Cassidy. Now, not to be rude but water and wastewater
were not previously included, so that would not be a regulatory
regime change if you will. That would be an addendum.
Mr. Beers. Yes, sir.
Mr. Cassidy. That is different from saying oh, listen,
guys, you have been working on this, but by the way, we now
have another set of rules before you completed the first set.
Mr. Beers. I am sorry. Are you specifically referring to
the Inherently Safer Technology part?
Mr. Cassidy. Correct.
Mr. Beers. Sir, that is why in the administration's
presentation of this possible expansion that we want to be very
clear that the deadlines, if any, take into account the need in
moving in that direction that would be required by moving into
an area that we would have to spend some time and effort.
Mr. Cassidy. But again, just to drill down on my question,
it seems like if someone has not completely incorporated the
recommendations of rules issued and regulations issued dating
back to 2007, to come up with another regulatory regime before
you have finished the first is almost like a whipsaw and,
frankly, somewhat wasteful of resources if it turns out IST
takes you in another direction.
Mr. Beers. Sir, we put forward the recommendation on this
in the belief that we could, given sufficient time, be able to
deal with an expansion of the regime. The challenge that you
put forward is, I think, an accurately characterized challenge.
Mr. Cassidy. OK.
Mr. Beers. I am not disagreeing with you on that. And that
is why we have been very clear that we would not want to be
held to a heroic set of deadlines in that regard, because it
will require an expanded effort; it will require some new
information.
Mr. Cassidy. Now, again, you have so much more expertise in
this area than I that with trepidation that I go forward. But
still, when I think of IST, I think that that is a fairly
static concept. Now, it has to be one vetted, you have to have
public comments, you have got to look at it when frankly there
may be some innovation out there which doesn't have time to be
processed. I think of the Maginot Line as being the IST of its
day and yet clearly tank warfare, you know, ruined the concept.
Now, do you accept that or is Maginot Line a poor example of
where we are going with this?
Mr. Beers. Sir, I am a military historian. I love your
example. But as the process that we have undertaken with
respect to the facilities under the current regime has gone
from a large number of firms that submitted top-screen down to
a much smaller number, which is approximately 10 percent, and
we have had 1,200 firms that have fallen off of this because
they have changed the holdings and we had another several
hundred that are in lower screening, we recognize that this is
a dynamic process. And the point that you make about changes in
technology, we would of course incorporate changes in
technology as they occurred.
Mr. Cassidy. But is it fair to say the bureaucracies have a
difficult time--I am a physician. Whenever they come up with a
practice guideline, I am always struck that the practice
guideline has to ignore that which is on the cusp. Because in
order to get the consensus for the practice guideline, the cusp
almost has to be marginalized because 90 of the cusp is
marginalized. But there is 10 percent of that cusp that, wow,
is the brave new future. Now, I have to think that in your area
that that may also be true as kind of fertile as yours is for
innovation.
Mr. Beers. Sir, that is an excellent example and I think
you are correct in saying that sometimes bureaucracy appears to
be slower than reality, but I would also say that one of the
things about this program that we have absolutely learned is
that we have to be flexible and adaptable in terms of looking
at new situations and new pieces of information.
Mr. Cassidy. Thank you.
Mr. Beers. So that is what we would do.
Mr. Cassidy. He is gaveling us. I yield back.
Mr. Shimkus. The gentleman's time has expired. The chair
would like, with unanimous consent, recognize the ranking
member for a UC request and then follow up with a statement.
Mr. Green. Mr. Chairman, I would like to ask unanimous
consent to place into the record both a letter and testimony
from the National Petroleum Refiners Association.
Mr. Shimkus. Without objection, so ordered.
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Mr. Green. And also one last question. Part of the
testimony that is going to be submitted by the Petroleum
Refiners--and let me read a little bit of it--``Under CFATS, it
is required that personnel with access to sensitive information
and relevant operations be vetted under the National Terrorism
Screening Database, no matter if the person has been vetted by
other government credentialing programs, such as the Transport
Worker Identification Card or the Hazardous Materials
Endorsement, or a host of other federal government
credentialing programs. In the last 2 years, DHS has twice
proposed in the Federal Registry that employees at CFATS sites
would have to obtain multiple government credentials.''
Obviously, there is some confusion out there concerning
what DHS is doing, and that is our concern about this
legislation. One of the things, we would like to give you the
authority to make sure you streamline it instead of people
having--it is bad enough--I work at the Port of Miami, and I
have to have a Miami Port card along with a DHS card or a TWIC
card. We surely don't need multiple federal cards. And so that
is our concern.
Mr. Beers. And that is our concern as well, sir, and that
is what we are trying to work to resolve.
Mr. Green. OK. Thank you.
Mr. Shimkus. I want to thank you for coming and appreciate
your response to the questions. And if you have got information
on Mr. Green's issue and you want to be receptive to his
concerns, so if there are ways in which you can provide us
information as we move forward on this process, we would
appreciate it. So sir, you are excused and we will sit the next
panel.
Mr. Beers. Sir, thank you very much for the opportunity and
I look forward to continuing to work with you and the
committee. I appreciate it.
Mr. Shimkus. Thank you. We will give everyone a chance to
get seated and then I will do an introduction of the entire
panel and then we will recognize each member on the second
panel for 5 minutes, your full statements are submitted for the
record, and then we will follow up with questions.
So first of all, we would like to thank the second panel
for joining us. On the second panel, we have Mr. Andrew Skipp,
President and CEO of Hubbard-Hall, Incorporated, from
Waterbury, Connecticut. Also Mr. David Tabar, CSP--what is CSP?
Mr. Tabar. Certified safety professional.
Mr. Shimkus. Oh, I should know that. Global Director of
Safety, Sherwin-Williams--I do know that--from Cleveland; Mr.
Bill Allmond, Vice President, Government Relations, Society of
Chemical Manufacturers and Affiliates; and then Mr. James
Frederick, Assistant Director of Health, Safety, and the
Environment, and the United Steelworkers.
And we want to welcome you all here and we will start. Mr.
Skipp, you are recognized for 5 minutes.
STATEMENTS OF ANDREW K. SKIPP, PRESIDENT/CEO, HUBBARD-HALL,
INC., ON BEHALF OF THE NATIONAL ASSOCIATION OF CHEMICAL
DISTRIBUTORS; DAVID TABAR CSP, GLOBAL DIRECTOR OF SAFETY,
SHERWIN-WILLIAMS, ON BEHALF OF THE AMERICAN COATINGS
ASSOCIATION; WILLIAM E. ALLMOND IV, VICE PRESIDENT, GOVERNMENT
RELATIONS, SOCIETY OF CHEMICAL MANUFACTURERS AND AFFILIATES;
AND JAMES S. FREDERICK, ASSISTANT DIRECTOR, HEALTH, SAFETY, AND
ENVIRONMENT, UNITED STEELWORKERS
STATEMENT OF ANDREW K. SKIPP
Mr. Skipp. Thank you, and good morning, Chairman Shimkus,
Ranking Member Green, and subcommittee members. My name is
Andrew Skipp and I am president of Hubbard-Hall, a chemical
distributor based in Waterbury, Connecticut. I am also chairman
of the National Association of Chemical Distributors (NACD),
and I am pleased to provide testimony today in support of H.R.
908 to extend DHS's authority to continue the CFATS program.
NACD is an association of over 250 chemical distributors
who purchase and take title to products and market them to a
customer base of more than 750,000. Most NACD members are
small, privately-owned businesses. The typical member has 26
million in annual sales, three facilities, and 28 employees. We
demonstrate our commitment to product stewardship through
compliance with Responsible Distribution, our mandatory and
third-party-verified environmental, health, safety, and
security program.
As owners and managers, our members have a personal stake
in safety and security of our employees and companies. We
demonstrate this through our commitment to Responsible
Distribution, our relationships with our employees and our
union members, and through our careful compliance with numerous
environmental, transportation, safety, regulatory concerns,
both on a federal, state, and local level.
On behalf of Hubbard-Hall and NACD, I commend
Representatives Murphy and Green for introducing the
legislation to extend DHS's authority to continue CFATS for 7
years. NACD was a strong supporter of the 2006 legislation that
resulted in CFATS. H.R. 908 would allow time for the full
implementation and evaluation of CFATS before changes to this
important program are considered.
Because CFATS is a major regulation based upon performance
standards for each facility rather than on one-size-fits-all
mandate, it is taking time for DHS to evaluate and inspect over
4,100 Site Security Plans. However, this approach has the
advantages of designing plans to address each facility's unique
situation while avoiding the creation of a single road map for
potential terrorists.
The bottom line is the real security measures are being
implemented at facilities around the Nation because of CFATS.
For example, my company has three facilities that are covered
by this program. We have worked hard and spent substantial
resources to design our Site Security Plans and implement
additional security measures.
CFATS is a major regulatory commitment for Hubbard-Hall. We
are willing to invest the time and the resources to comply with
this important regulation, and I know that our company and all
NACD members would welcome the certainty of a clean, long-term
extension.
Prior CFATS proposals included measures that would have
been counterproductive to the good progress that has been made.
The most disruptive of these have required all CFATS-covered
facilities, including chemical distributors to conduct
inherently safer technology, IST assessments, and for those in
the highest-risk tiers to implement these measures. Such a
mandate would shift the focus away from the real security
issues and force companies to consider full-scale engineering
and product changes.
I want to emphasize that NACD opposes mandatory IST
consideration. The fact of conducting IST assessments would be
extremely costly for NACD members and would not reduce risk.
For most NACD members, IST assessments would have to be
outsourced at significant cost and produce limited options.
Chemical distributors maintain specific inventories in order to
respond to customer needs. If distributors are required to
reduce inventories of certain products that would prevent us
from meeting these needs. Particularly in these tough economic
times, in addition to the myriad of regulations that already
affect us, this could be the final straw to put some companies
out of business, which would result in further job loss.
Required inventory reductions would also assign additional risk
to transportation and increase the likelihood of product
handling incidents.
Finally, CFATS currently provides incentives to companies
to use the safest possible methods so they can assign to a
lower-risk tier. In fact, over 1,200 facilities have reduced
their security risk so much that they have tiered-out of the
program. Many more facilities have been assigned to lower
tiers.
In conclusion, I repeat that NACD strongly supports the
legislation to extend the current chemical security program
with no changes. A clean extension will both provide regulatory
certainty and allow for continued progress in implementing real
security measures at our facilities.
On behalf of Hubbard-Hall and NACD, I appreciate this
opportunity to present our views on this critical issue and I
look forward to your questions. Thank you.
[The prepared statement of Mr. Skipp follows:]
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Mr. Shimkus. Thank you very much, sir. And I would like to
recognize--and I guess I mispronounced it--Mr. Tabar from
Sherwin-Williams. You are recognized for 5 minutes.
STATEMENT OF DAVID TABAR
Mr. Tabar. Thank you. Good morning, Chairman Shimkus and
members of the subcommittee. My name is David Tabar and I am
the global director of safety for the Sherwin-Williams Company
in Cleveland, Ohio. I am also here representing the American
Coatings Association. My purpose here today is to support H.R.
908, and I thank you for this opportunity to present our views
before the subcommittee today.
The paint and coatings industry has been working to enhance
the security of their manufacturing operations over the last
decade. Specific steps the ACA has taken include the addition
of a new security code to our Coatings Care Stewardship
Program. ACA is a long-standing participant in the Chemicals
Sector Coordinating Council and continues to work with the
Department of Homeland Security on both voluntary and mandatory
security measures under the Chemical Facility Anti-Terrorism
Standards.
Over the last several years, the coatings industry has
worked hard to achieve CFATS compliance, including the
submission and the conduct of Top-Screens, Security
Vulnerability Assessments, and Site Security Plans, along with
the development of proposed action plans requiring further
review with the DHS. Facilities that were identified as ``high-
risk'' were ultimately assigned one of four tiers by DHS. The
process is ongoing, and while several coatings industry sites
have completed this process, including related DHS inspections,
other firms await DHS response to their Site Security Plans or
Alternative Security Plans.
ACA supported the original CFATS legislation and strongly
supports the current program. This demanding program is now
requiring thousands of chemical manufacturers and formulators
nationwide to develop and deploy meaningful security
enhancements. As a result, ACA supports permanent--or at least
long-term--reauthorization of the existing CFATS statute in
order to allow regulated facilities to continue their
implementation of stringent DHS chemical facility security
standards in an orderly manner. In our view, it is premature to
seek to change the existing framework substantially until it
has been fully implemented and we have gained a better
understanding of what works and what does not.
It is important that any uncertainty created by possible
short-term reauthorizations is eliminated, so as to provide
regulatory clarity, thus allowing affected industries to make
prudent business decisions about how best to implement the
current regulations. ACA, along with other groups, has opposed
previous efforts to mandate product and process substitutions
with technology established by regulation. Any move away from
the current risk-based standards would lead to confusion, loss
of viable security products, systems methodologies, and would
create prohibitive legal liability and possible business
failures. A move away from risk-based standards would most
certainly put U.S. manufacturers at a competitive disadvantage
with foreign manufacturers not facing such requirements. By
making the existing chemical security framework permanent, a
certainty will be provided that is necessary to enable
companies to protect our citizens and to facilitate economic
recovery.
As a result, although ACA has consistently favored
permanent CFATS reauthorization, we support the approach taken
in H.R. 908, the full implementation of the Chemical Facility
Anti-Terrorism Standards Act. The extension to 2017 provides
industry with sufficient breathing room to implement CFATS on a
permanent basis prior to a required revisiting of the law 7
years from now.
Many operations throughout the coatings industry are
covered by CFATS, primary due to commercial grades of raw
materials that are commonly used to formulate specialty roof,
emissivity, infrastructure, or automotive coatings. As a
responsible corporation, Sherwin-Williams has devoted
considerable resources to CFATS compliance and works hard to
meet our obligations to neighboring communities, customers,
shareholders, and the public.
Examples of CFATS-related actions include: new staff
positions in chemical facility anti-terrorism; raw material
elimination or substitution; control of purchasing, sales,
inventories; development and enhancement of chemical tracking
technologies; onsite and program-related consultative reviews;
organization-wide safety and security support team development;
Alternative Security Plans developed for small facilities;
development of internal chemical security compliance standards;
development of Facility Security Officer training; development
of new risk- and regulatory-based management of change systems
to improve risk identification, control, and action-closure;
and the development of employee security awareness training
programs.
In light of our own experience, we agree with the position
of ACA and our industry colleagues concerning a more permanent
reauthorization of CFATS. Because of significant requirements
placed on our company and other coatings manufacturers, we
believe that Congress should continue to recognize this very
stringent and well-constructed industrial antiterrorism
program. Thank you.
[The prepared statement of Mr. Tabar follows:]
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Mr. Shimkus. Thank you, sir. Now the chair recognizes Mr.
Allmond for 5 minutes, sir.
STATEMENT OF WILLIAM E. ALLMOND IV
Mr. Allmond. Thank you. Good morning, Chairman Shimkus,
Ranking Member Green, and Vice Chairman Murphy, and members of
the subcommittee.
My name is Bill Allmond and I am the vice president of
government relations at the Society of Chemical Manufacturers
and Affiliates. For 90 years, SOCMA has been and continues to
be the leading trade association representing the batch,
custom, and specialty chemical industry. SOCMA's 250-member
companies employ more than 100,000 workers across the country
and produce some 50,000 products--valued at $60 billion
annually--that help make our standard of living possible. Over
80% of our members are small businesses.
I am pleased to provide this testimony regarding H.R. 908,
the full implementation of the Chemical Facility Anti-Terrorism
Standards Act. SOCMA strongly supports DHS's current Chemical
Facility Anti-Terrorism Standards, or CFATS. This demanding
regulation is now required in nearly 5,000 chemical facilities
nationwide and facilities that use chemicals nationwide to
develop and deploy meaningful security enhancements. This
performance-based regulation protects facilities against attack
without impairing the industry's ability to remain innovative
and maintain some of the Nation's highest-paying manufacturing
jobs. Furthermore, the standards have teeth. DHS has the
authority to levy significant fines on a facility for
noncompliance, can even shut a facility down.
Congress can best assure CFATS's continued success and
forward momentum by passing H.R. 908. This bill would
reauthorize CFATS through 2017, thus allowing DHS and
facilities to concentrate on successfully implementing that
regulation through completion.
SOCMA regards this regulation thus far as a success. Due to
the outstanding cooperation of the chemical sector, there has
been 100 percent compliance with the requirements to submit
Top-Screens, Security Vulnerability Assessments, and Site
Security Plans. DHS has not yet had to institute a single
administrative penalty action to enforce compliance.
Additionally, 2,000 facilities have changed processes or
inventories in ways that have enabled them to screen out of the
program. Thus, as predicted, CFATS is driving facilities to
reduce inherent hazards, where in their expert judgment doing
so is in fact safer, does not transfer risk to some other point
in the supply chain, and makes economic sense.
To fully gauge the effectiveness of the CFATS program,
Congress should allow all tiered facilities to come into
compliance. Completing the program's implementation from start
to finish would provide DHS and chemical companies the ability
to assess the overall efficacy of CFATS, identify its areas of
strengths and weaknesses, and subsequently make or recommend to
Congress any necessary improvements.
Conversely, the need for annual reauthorization of CFATS
has created uncertainty for regulated facilities. Without the
assurance of a long-term authorization of these regulations,
companies do run the risk of investing in costly activities
today that might not satisfy regulatory standards tomorrow.
Statutory authority for CFATS, which has been tied to a
series of continuing resolutions passed by Congress since last
year, is set to expire next week, as you know. Congress must
act now to ensure continuation of the current standards and
reauthorize the underlying statute for multiple years.
As Congress considers chemical security legislation
further, there is an issue of particular concern to us, which
is interest among some to mandate Inherently Safer Technology
within CFATS. One of our greatest concerns with mandatory IST
is the real possibility that it will negatively restrict the
production of active pharmaceutical ingredients, or APIs, many
of the key raw materials of which are regulated under CFATS.
APIs are used to fight many types of cancer, used in
prescription and generic drugs and over-the-counter medicines.
They are thoroughly regulated by the Food and Drug
Administration and must meet demanding quality and purity
requirements. Substituting chemicals or processes used for the
production of APIs would create substantial unintended
consequences. Substitution would likely violate the conditions
of companies' FDA approvals. Requiring IST could also delay
clinical trials while new replacement chemicals are identified,
and meanwhile, to meet continuing consumer demand, API
production would likely shift to foreign countries where FDA is
less able to monitor conformance to quality standards.
There is a legitimate federal role in IST at the moment,
however, and DHS is actually serving that role well. A few
years ago, DHS initiated an increasing safety of hazardous
chemicals process to develop a consensus definition of IST, and
from that, to begin crafting metrics that would allow people to
begin to compare inherent safety of different processes. The
definition process was open and engaging and concluded last
year with a document that has been universally praised. This
program has now begun work on its metrics project, although
SOCMA understands that there is no funding for that effort in
the President's fiscal year 2012 budget. That is unfortunate
because this is an example of how the Federal Government can
play a useful role in the field of inherent safety. Any attempt
to mandate even consideration of IST is premature otherwise.
We recommend the subcommittee move forward and place a
higher priority on ensuring the current standards are extended.
H.R. 908 does just that. I appreciate this opportunity to
testify before you today and I look forward to your questions.
[The prepared statement of Mr. Allmond follows:]
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Mr. Shimkus. Thank you. And now I would like to turn to Mr.
James Frederick, who is from the United Steelworkers. Before I
give you your 5 minutes, during the district work period, I
visited the U.S. steel plant in Granite City, Illinois. We
still make steel in this country. It is difficult to do. It is
the second time I have been there but it is phenomenal, a big
operation, so thanks to you and the membership for the guide
and the tour and I look forward to hearing your testimony.
STATEMENT OF JAMES S. FREDERICK
Mr. Frederick. Thank you, Mr. Chairman and members of the
subcommittee. Thank you for the opportunity to appear before
you this morning to discuss the United Steelworkers' views on
H.R. 908. The USW appreciates the opportunity to share our
views with the Subcommittee on the important aspects of this
issue and how H.R. 908, if passed, will extend the Department
of Homeland Security Chemical Facility Anti-Terrorism
Standards, CFATS.
My name is Jim Frederick. I am a member of the United
Steelworkers and the assistant director of the union's Health,
Safety, and Environment Department in Pittsburgh, Pennsylvania.
I have spent my 20-year career identifying and addressing
workplace health and safety hazards; responding and
investigating worker deaths, injuries, and illnesses; assisting
local unions with health, safety, and environment improvements;
and developing and delivering worker health, safety, and
environment education and training programs.
The full name of our union is the United Steel, Paper and
Forestry, Rubber, Manufacturing, Energy, Allied-Industrial, and
Service Workers International Union. As the largest industrial
union in North America, we represent a total of 1.2 million
active and retired members in the United States, Canada, and
the Caribbean. More than 125,000 of these work in 800-plus
chemical industry workplaces. Many of these are small
workplaces and some are small businesses.
The USW involvement in chemical plant security started long
before the original promulgation of CFATS or the September 11,
2001, terrorist attacks on the United States. Our union has
always been actively engaged and involved with our members,
communities, regulators, and legislators to improve workplace
safety for our members, as well as their families and the
community.
The importance of this issue and these rules were well laid
out in the Senate Committee on Homeland Security and
Governmental Affairs hearing yesterday, titled ``10 Years After
9/11.''
As part of a broad coalition of more than 100
organizations, the USW believes that legislation must be passed
to improve chemical industry workplace safety and security, not
just to extend the existing interim measures that generated
CFATS rule. We believe that this is absolutely necessary to
properly protect the communities that our members and their
neighbors live and work. Recent examples from the Gulf oil
spill to the earthquake and tsunami in Japan resonate of what
can happen if catastrophic events take place in this country.
And we believe the problems with CFATS include the
following: (1), specific security measures. CFATS prohibits DHS
from requiring any specific security measure. H.R. 908 would
extend the prohibition from the DHS Secretary from denying
approval for a Site Security Plan based on the presence or
absence of a particular measure. The performance based
standards will continue to allow employers to determine how
they comply with the rules. Performance standards often result
in cost and productivity taking precedence over safety.
Performance standards also typically equate to less regulator
oversight.
An example of this is sometimes seen in chemical storage
areas or tank farms at a chemical plant or oil refinery where
retaining dikes are constructed to keep unexpected releases of
chemicals from escaping to the environment beyond the tank
farm. However, the retaining dikes are often in disrepair or
are not engineered to retain the proper volume of chemicals in
the tank farm.
Next, smart security--CFATS fails to develop the use of
smart security--safer and more secure chemical processes that
can cost-effectively prevent terrorists from triggering
chemical disasters. When we train workers and others to correct
health and safety hazards in our workplaces we turn and follow
the hierarchy of controls. The hierarchy of controls instructs
us that the most effective way to control a hazard from causing
an injury is to eliminate it or substitute it with something
less hazardous. Legislation and standards addressing chemical
plant security should utilize the same hierarchy principles to
recognize and encourage the elimination or reduction of
hazardous materials when possible and use substitution with
less hazardous components.
Safer processes may not be feasible in some circumstances,
but they should at least be considered in a security plan. Many
safety measures may be possible without expensive redesign and
newer equipment. Since 1999, more than 500 facilities have used
smart security to eliminate risks and create communities that
are less vulnerable to harm. 500 is an impressive number but
many, many more need specific guidance from legislation and
regulation to implement such changes.
Exemptions of too many workplaces at risk, as I already
discussed this morning, CFATS explicitly exempts thousands of
chemical and port facilities, including water treatment
facilities and including at least half of the oil refineries in
this country.
Worker involvement: CFATS fails to involve knowledgeable
workers in the development of vulnerability assessments and
Site Security Plans or protect employees from its excessive
background checks. Lesson after lesson can be taken from the
input from workers in various workplace health and safety
exercises of how that input has helped the employer to
integrate and put in place effective security and safety
measures.
And one last point on risk shifting, CFATS fails to address
the current problem of risk shifting, such as when companies
shift chemical hazards to unguarded locations such as rail
sidings. Risk shifting takes place continually in many
workplaces. There are several reasons that this practice
occurs, but the results are always the same. The community is
at increased risk of exposure to a release of hazardous
materials or to a terrorist obtaining these materials.
In one recent example at a USW workplace, railcars of
hydrofluoric acid are being stored off site property on rail
sidings. The workplace stores approximately 2 million pounds of
hydrofluoric acid, some offsite. The railcars are located near
residential areas in the community. A release from 1 or more of
these would be devastating to the residents close by and for a
large area of the surrounding communities. Chemical plant
security legislation can fully eliminate risk shifting by
banning the practice legislatively and in subsequent
regulation.
The USW believes that legislation must be passed to improve
chemical industry workplace safety and security that includes
these items, not just to extend the existing interim measures
that generated CFATS as a final rule. We believe that this is
absolutely necessary to properly protect communities. However,
if CFATS is going to be extended by this bill, please consider
reduction of the time for the extension to 1 year and charge
all stakeholders involved to convene as necessary to develop
longer-term solutions to these problems.
On behalf of the USW membership and their communities,
thank you for the opportunity to testify this morning.
[The prepared statement of Mr. Frederick follows:]
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Mr. Shimkus. Thank you. Now, the chair recognizes himself
for 5 minutes for questions.
We have used the word ``permanent'' and I guess in this
system of authorization that 7 years would seem like permanent,
but Mr. Allmond, you mentioned it is really a long-term
authorization, which would then give us a time to look at the
bill through the next process. Would you all agree with that,
that this is really not a permanent authorization or
reauthorization? This is a 7-year authorization. Mr. Skipp?
Mr. Skipp. Yes, I would say that that is true. I think that
there is a very steep learning curve that is going on here.
Certainly, the efforts of the Department of Homeland Security
have been admirable about how they bring this thing up. And I
think we are now finding that we are getting our hands around
this thing but we need more time. And I think this does that.
Recognize the fact that rules can change down the way, but this
is a great first step.
Mr. Shimkus. Mr. Taber?
Mr. Taber. I would agree with that wholeheartedly. Seven
years is going to go by rather quickly. We have got a lot that
we have done in the last several years. We need the next few
years to tighten that up, and we also need the direct
involvement with DHS more specifically now that we have filed,
all our plants are willing to move forward.
Mr. Shimkus. Mr. Allmond?
Mr. Allmond. Yes, sir, Mr. Chairman. Seven years would
provide a lot more time. I mean, Congress, you know, has a very
important oversight responsibility down the road, but it would
give, certainly, industry a lot more certainty.
Mr. Shimkus. Mr. Frederick, you said 1 year so I want you
to weigh in also.
Mr. Frederick. Certainly. I already stated that we would
recommend a shorter extension. The program has been in place
for several years already. Extension only adds to making
essentially this into a permanent fix as what was started and
agreed to at the time to be a temporary interim quick solution.
Mr. Shimkus. But 7 years is not permanent. I mean 7 years
will come and there will be another reauthorization period to
look at. I guess because the next point following up on this is
that the full implementation CFATS hasn't occurred to date, is
that correct?
Mr. Skipp. That is correct.
Mr. Shimkus. And anyone disagree with that? So the point
being I think we have to be very, very careful about changing
the rules midstream before everyone has completed the process
that was designed originally. And so that is part, you know, I
like what Mr. Murphy has done with the 7 years. Maybe that will
be discussed as we move the process through in the committee.
Maybe that time frame may be adjusted. I am not sure how the
committee would do in an open process that that may come up.
But I think it is important that we give the existing
authorization time to get through the whole process. We heard
the deputy secretary talk about they are not even through the
process of tiering folks out, moving people around, and so that
is just kind of an editorial comment.
Do you all believe that there are other existing
requirements for health and safety such as OSHA's Process
Safety Management Program, the Emergency Planning and Community
Right-to-Know Act, the EPA's Risk Management Program, and are
these appropriate for safety protections?
Mr. Skipp. Well, they are part of that as far as I am
concerned. And we implemented all of those things in our
community. We are a company that goes back to 1849 in the city
of Waterbury. I am the 6th generation to run the family
business, and I can tell you that being thoughtful to our
community and making sure we are communicating well with them
is something that we do every day, and we integrate that with
our police and fire as well. So this would just complement
those efforts, I believe.
Mr. Tabar. Now, I know both for the coatings industry and
with Sherwin-Williams, global process safety is very critical
to us. We have made efforts not only here in the U.S., but we
are looking at exporting our programs internationally. We think
that a lot is embodied in process safety that deals with IST
already and it is very normal for us to deal with substitutions
and changes, reformulations as part of our chemical process
safety efforts.
Mr. Allmond. Yes, that is correct, Mr. Chairman, and as the
under secretary testified, DHS is nowhere near close to
understanding how to regulate IST at the moment.
Mr. Shimkus. Mr. Frederick?
Mr. Frederick. And it is certainly correct that these are
pieces of a very complex issue that do come into play of
providing some semblance of safety in those workplaces.
Mr. Shimkus. Great. Thank you. My time is about expired, so
I will yield to the ranking member, Mr. Green, for 5 minutes.
Mr. Green. Mr. Chairman, I am just glad to hear you say you
all. I thought that was something that I said----
Mr. Shimkus. I am from Southern Illinois.
Mr. Green. I know, Southern Illinois. Well, you all heard
my questions earlier about coordination between because I have
a lot of plants. In fact, along the Houston Ship Channel, all
of my refineries--I have five refineries. Four of them are, by
the way, organized by steelworkers and thank you. I used to
have real steelworkers but now they are all refinery and
chemical plant workers. The coordination of that to where we
only have 1 federal identification card and that is our goal.
And I know for your facilities it is the same thing.
Mr. Frederick, you represent many of the workers at the
chemical facilities. In fact, I was last year at a Conoco/
Chevron facility. It actually has 500 steelworkers, and it was
after the economy cratered and some of my chemical plants are
closing, but since they make these plastic bottles we all drink
out of, they were running 3 shifts and 500 union members. Do
you have concerns about the MTSA issues? Because I know that
plant is on the channel, Ship Channel of Houston and Exxon/
Mobil refinery and Shell, but they also have facilities that
are not covered by MTSA.
Mr. Frederick. Yes. And for a number of reasons bur a
couple of very good examples. One is just inconsistencies from
within employers from one facility that is covered by CFATS to
a facility that is not and how they have addressed the facility
safety and security as a result of that inconsistency. So
certainly, yes, there is a number of examples that we could go
into of why we think those should be included in the same set
of rules as those off the waterways.
Mr. Green. OK. Mr. Skipp, you testified about potential for
duplicative regulations. Under 2868, we would have ensured that
facilities under MTSA would see only one regulator, the U.S.
Coast Guard. Do you think that is important?
Mr. Skipp. I liked what I heard Under Secretary Beers say,
which is the harmonizing between those two departments of CFATS
and MTSA. And I think that would be great. It all depends on
how you define harmonized. As long as there is not a redundancy
or duplicative efforts, which I know is a concern of yours,
then I think it would be fine.
Mr. Green. I guess because when you rolled out the
Transport Worker Card, believe me, I had a lot of constituent
case work when constituents, because of whatever reason, we had
to work case-by-case through Lockheed who had the contract. And
like I said, we have 260,000 of those, more than that now
probably, and we want to make sure that we don't have to go
through that again, don't remake the wheel. Don't we already
have some----
Mr. Skipp. Agreed.
Mr. Green. Mr. Frederick, I am interested in your testimony
you gave about the concerns of workers and regarding personnel
security requirements. Are changes in 908 needed to ensure that
workers' rights are protected?
Mr. Frederick. Yes. And in one of the examples that is in
my written statement, the need for worker involvement in the
process of the Site Security Plans is very important. And in
order to have thorough and good worker participation, some
safety net of protection for them, a whistleblower protection
for them is necessary. You know, in almost any other instance
we recognize the deficiencies of that and can see that at some
workplaces it is very encouraged, workers are involved, and at
others for many reasons it is not. So we are concerned that,
yes, there should be some provisions to protect workers as they
participate in this process.
Mr. Green. And I know in your testimony I agree with you.
And I guess because there are other agencies that also regulate
these same plant sites like OSHA and every once in a while I
still get to go speak at one of my what I call share committee
that we have a group of industries that bring the community
involved, the fence line and also the employees are there, both
unionized and management, and sit down and talk with the
constituents. CFATS doesn't exempt that from current law like,
for example, OSHA requirements.
Mr. Frederick. Correct, and then some of that it has been,
you know, referred to in the past by DHS as the employers
certainly have the ability to do that, so it becomes somewhat
of the voluntary piece for employers to do so. The problem is
that not all employers volunteer.
Mr. Green. OK. And having been on both sides of the
bargaining table, the best way you get there is you talk to the
folks actually producing a product and you can get the best
ideas from them because they are living it every day.
One of your exceptions, too, in your testimony, and you use
the example of a chemical storage and tank farms, particularly
with berms, EPA regulates those now or the State Environmental
Agencies with the deference of EPA, because we have had some
problems with those berms that are not updated. We end up
contacting EPA instead of using another law. So there is
already some current law that we can deal with on enforcement
of those. And again, I know your members are out there every
day and we work with our locals every way we can.
So Mr. Chairman, I appreciate it. I know I would like to
talk a little bit more about IST because having managed a
business, we didn't call it inherently safer technology, but
believe me, if we could save money and save on potential worker
injuries, we used that as a part of our business practice. But
thank you for your patience.
Mr. Shimkus. Thank you. The chair now recognizes Mr. Murphy
for 5 minutes.
Mr. Murphy. Thank you. And I appreciate all the panel's
comments. It is very helpful.
Mr. Taber, with regard to the American Chemistry Council,
how much have members spent overall--do you have any idea--in
terms of----
Mr. Taber. I could answer that but I am not a member of the
American Chemistry Council but the American Coatings
Association.
Mr. Murphy. Well, how about Sherwin-Williams? I am sorry.
Mr. Taber. That is OK.
Mr. Murphy. I thought you had some knowledge of that, too.
Does anybody there know in terms of how much----
Mr. Taber. As far as the ACA goes I would say that we have
not yet collected that data, party because we are awaiting the
direct involvement with DHS on the interpretation of the Site
Security Plans and Alternate Security Plans at the moment.
Mr. Murphy. I appreciate that.
Mr. Skipp. And I would echo that also. That is something we
were waiting to find out more information from our people and
how DHS will implement that.
Mr. Murphy. But are you able to share how much your own
companies have invested in all of this in terms of compliance
or in terms of working through the security issue?
Mr. Skipp. We have three relatively small facilities. It is
just around $200,000.
Mr. Murphy. OK. Mr. Taber, do you have----
Mr. Taber. I can state it this way. It will likely be in
the huge numbers in terms of the true capital cost. Right now
we aggregate safety, health, environmental security----
Mr. Murphy. Put together.
Mr. Taber [continuing]. Expenditures and we are projecting
a very large possible impact on the corporation as a function
of this regulation.
Mr. Murphy. Mr. Allmond, do you have any comments in terms
of money that is invested in some of these security measures?
Mr. Allmond. Congressman Murphy, I have an approximate
amount, you know, tens of millions of dollars, especially when
you factor in the staff time, the employee time to actually go
through the Site Security Plans. You know, there is a lot of
staff time built into complying with this regulation,
especially up front.
Mr. Murphy. I see. Mr. Frederick, do you have any idea how
much some of the companies you work with have invested in
working on these issues of security?
Mr. Frederick. We are not privy to that information.
Mr. Murphy. Is it working? OK. Very good. Sorry.
Mr. Frederick. We typically don't receive that information
from----
Mr. Murphy. But your workers are engaged in these
processes? You talked about the importance of sharing----
Mr. Frederick. Yes. Yes.
Mr. Murphy. OK. And how about one of the other members
here? Do you include workers in Site Security reviews and
welcome their input? Can you give us an idea of how you use
that?
Mr. Skipp. Sure. They participate on our safety committee.
All employees do that. It is on a right-to-know basis. It is
where their expertise might be able to help in one specific
area, but as far as knowing the overall plan per se, they
aren't necessarily involved in every aspect of that.
Mr. Murphy. Is that done for security purposes?
Mr. Skipp. Yes.
Mr. Murphy. Same with you, Mr. Taber?
Mr. Taber. Well, certainly under the OSHA programs, we are
one of the leaders, at least in our firm with voluntary
protection programs and OSHA cooperation and so we take the
same perspective with safety and health as we do with security.
I think some of the developing areas are the Employees Security
Awareness Training programs that we are just on the verge of
implementing that will take our security awareness and
involvement with all employees to another level.
Mr. Murphy. Mr. Allmond, agree?
Mr. Allmond. Well, our organization has a program called
ChemStewards that encourages all of our members to include
employees into the decision-making process. I think generally
they would agree with Mr. Skipp and Mr. Taber as well.
Mr. Murphy. The reason I am asking that is Mr. Frederick
brings up a point here and all of you are saying the companies
recognize that people who do this every day have an inherent
value in being able to provide that information. And given
that, my impression when I have toured chemical facilities,
even ones that maybe have been written up in the newspaper
where someone snuck onto the site as part of a reporter's
story, they have invested a great deal in taking care and have
asked employees for their ideas. Is this something we need to
codify into law or is something that is being done?
Mr. Allmond. It doesn't need to be codified from my
perspective and I am sure from our association's perspective
because it is part of good business practice and what we do
every day.
Mr. Skipp. I would concur. I mean, as Mr. Green said, it is
very important to tap into the knowledge of our expertise of
our people and we do that every day through LEAN and other
initiatives that it is just good business sense.
Mr. Murphy. OK. I appreciate that. We want to make this
bill work and we want to have the flexibility for Homeland
Security to enact it. We heard before that they are working
carefully with EPA. And I personally recognize I like it, as
when I owned a business, I would ask my employees as well for
suggestions along the way. The whole is greater than some of
the parts and getting information from workers and goodness
knows I believe with regard to management and employees,
everybody wants to have a safe and secure workplace, and I
would certainly encourage the association's continuing to hold
those high standards.
I recognize I am out of time, Mr. Chairman.
Mr. Skipp. Can I make 1 other comment just about that? And
I think that you didn't get a lot of clear numbers as far as
where things are. We are really looking for certainty, and I
think that is what this CFATS bill will do in order for people
to invest more. There is some holding back because people are
not sure which way to go because they haven't gotten enough
feedback yet from the Agency.
Mr. Murphy. That is important. Thank you, Mr. Chairman.
Mr. Shimkus. Thank you. The chair recognizes Mr.
Butterfield for 5 minutes.
Mr. Butterfield. Thank you very much, Mr. Chairman and
Ranking Member. Ladies and gentleman, it is good to see all of
the witnesses today and thank you very much for your
willingness to come forward and to give us your testimonies.
Mr. Frederick, let me start with you. In your testimony I
am told that you said that ``performance standards often result
in cost and productivity taking precedence over safety.'' Did I
quote you correctly?
Mr. Frederick. Yes.
Mr. Butterfield. We have seen several examples in the past
year alone of major industrial actors placing profits over the
safety of their workers and the safety of the environment,
notably, with the BP oil spill. It is a serious issue and CFATS
should be structured to limit the ability of covered facilities
to place too much emphasis on cost at the expense of worker
safety or the safety of the surrounding area.
Question: Can you give an example of these performance
standards resulting in cost concerns outweighing the concerns
of security?
Mr. Frederick. Yes. Without the specific workplace but
within the oil-refining industry, some of the performance-based
standards--this is the day-to-day case of the performance is
achieved on paper but on the shop floor where the folks are
working around the hazardous materials, the shortcuts have been
taken, the hole in the fence has been filled with a camera
instead of a new fence, whatever the case may be. We could
provide some specifics from specific facilities for the record
after the hearing if you would like.
Mr. Butterfield. Well, what about a specific requirement
from DHS to address the problem?
Mr. Frederick. And on that, in some of just the perimeter
security issues, the issue has been around fencing and when a
gap in the fence, a hole in the fence has been in place, other
measures have been taken instead of putting the more secure
fencing in place.
The example from the testimony of the berms or dikes to
keep the unexpected release of chemicals from a tank is for
compliance with other reasons but also comes into play the
security because if there is a terrorist attack on that
facility and the materials are released from more than 1 tank,
oftentimes those are not designed to hold back that amount of
the quantity of the materials within the tanks.
Mr. Butterfield. Well, one thing leads to another. Then we
get into a question of whether it is preferable to have a DHS-
sponsored security measure requirement that guarantees a level
of safety but may not be flexible enough for the variety of
facilities that are tiered from traditional chemical plants or
refineries to labs that are at our universities. We understand
that security isn't cheap and that one size does not fit all.
It is a difficult job for DHS.
I completely agree with you, with your assessment of the
value of workers' input to the process. Workers must be
involved and they must also to feel free to blow the whistle
without fear of reprisal. This is something we have talked
about extensively in previous legislation on this issue.
My final question is do you feel that the current CFATS
program adequately protects whistleblowers?
Mr. Frederick. No. We would not believe it does. However,
at this juncture we also have not had cases to cite, only in
feedback from our members that work in those facilities that
they have some concerns that they have reservations about
raising because there is not an adequate safety net for them to
speak out on those issues.
Mr. Butterfield. All right. Thank you.
Mr. Skipp. Congressman?
Mr. Butterfield. Yes. I am going to yield. Yes, you may
respond.
Mr. Skipp. May I respond to that also?
Mr. Butterfield. I have a minute left, yes. Sure.
Mr. Skipp. I am Andrew Skipp and I run a chemical company
in Connecticut and I can tell you that 90 percent of our
members are owner/managers of their businesses. They live their
business day in those facilities. There is nothing more
important than the safety and security of those plants.
And I can assure you that our members take that very
seriously and that they don't compromise for the benefit of
just expediency. It is critical. It is our lifeblood. It is our
livelihood. And so we take that initiative very seriously.
The matter about whistleblowers, I can't refer to that
relative to CFATS, but certainly there are laws in place to
protect them and it is something that we take very seriously in
our business.
Mr. Butterfield. Thank you. All right. Anyone else want to
respond to that? I have a few seconds left.
Mr. Frederick. Just I think the laws that are in place
would not--for example, the protections within the OSHA Act
would not protect a worker for calling into question something
under the CFATS regulations.
Mr. Butterfield. All right. Mr. Chairman, I will yield back
my time.
Mr. Shimkus. If the gentleman would yield me his last 4
seconds.
Mr. Butterfield. Sure.
Mr. Shimkus. I just want to make sure, Mr. Frederick, that
none of your comments are under CVI. In other words, the
information that you were alluding to is under CVI?
Mr. Frederick. In the example of the----
Mr. Shimkus. Well, you were giving some anecdotal stories
and we want to make sure that----
Mr. Frederick. I don't believe so.
Mr. Shimkus. OK.
Mr. Frederick. To my knowledge, no.
Mr. Shimkus. OK. That is what we need to know. Thank you.
The chair now recognizes Mr. Cassidy for 5 minutes.
Mr. Cassidy. I never knew steelworkers' name was so long. I
once sat on a plane next to a guy who worked for you all and
who was I think doing mining, which I thought--so anyway, now
kind of the light bulb goes on.
Mr. Frederick, there was one sentence in your testimony in
which you suggested you would oppose more extensive background
checks for workers. Did I hear that correctly?
Mr. Frederick. Yes. And our concern around background
checks is twofold. One is to make certain that there is a
process in place that if an error results of the background
check, that that individual has an opportunity to clarify that
error and correct it prior to losing his or her employment.
Mr. Cassidy. Now, I accept that, but inherent in having
more involvement in a process is greater risk that a background
check may show something which would eliminate somebody's job
frankly. I mean if it turns out a kid smoked marijuana in
college and got busted for it and now he is 45, well, then that
may come back and reflect upon him in a negative way. Would you
object to, you know, drug screens, et cetera, all this that
takes place?
Mr. Frederick. Well, there are drug testing programs in a
variety of----
Mr. Cassidy. And I just use that as an example, not as a
concrete particular. So it is not background checks in
particular you object to or more even exhaustive ones. Rather
it is the lack of safeguards if someone loses employment
because of that.
Mr. Frederick. Yes. And recognizing that there are
necessary pieces of information that are needed. Our experience
thus far has been that this is and will be a very expensive
process, expensive and extensive, for a very limited amount of
return of finding things more than somebody who perhaps had a
minor item such as you----
Mr. Cassidy. So if you will, kind of the principle that for
last marginal benefit, you got to pay a heck of a lot of money?
Mr. Frederick. And in some of the other examples we are
talking about yes, there are costs associated with doing
dangerous work.
Mr. Cassidy. And if you increase the cost, ultimately it is
going to affect employment?
Mr. Frederick. It may, yes.
Mr. Cassidy. So my concern is, for example, that that same
principle is involved here. I mentioned earlier to the earlier
witness I went to visit the nuclear power plant and I was
struck how much security they have, three different perimeter
fences. Even if they cut a hole, there is a camera
surveillance. And so they told me about how an armadillo
wandered across and their motion detectors got it.
Now, if we are going to have NRC do this level of
requirement and overlay CFATS, do you see that as appropriate?
Mr. Frederick. Well, specifically to the NRC provision, I
don't have firsthand knowledge or experience. Our union does
not represent workers at nuclear generators----
Mr. Cassidy. But you mentioned that in your testimony as
kind of a concern that they are excluded.
Mr. Frederick. The NRC. And so what I want to explain is
that within the NRC they also have regulatory authority over
non-energy producing facilities beyond the nuclear plants. And
in some of those facilities, one example being the NRC has
oversight of a very narrow piece of the production process, so
a very large facility, narrow piece is NRC, but because the NRC
has authority over that narrow piece, CFATS does not apply. For
example, that is the facility that has 2 million pounds of
hydrofluoric acid onsite and some of it in railcars offsite.
That is a real concern that the NRC, small piece of the
operation that they have oversight for, a large facility
excluded from CFATS.
Mr. Cassidy. Now, my concern is that if we have overlay of
federal agency over federal agency, that is not just a
multiplier. That is an exponent in terms of the complexity and
the expense of compliance.
Now, it also seems this IST--I used the example of the
Maginot Line where you have got this kind of, OK, this is the
current technology but really there is something on the cusp
but it has not been vetted, reviewed, public comments, so
therefore it can't be because the de facto standard becomes the
IST. That actually seems like a counterproductive mechanism. I
don't see the problem--in fact, I see IST as almost the same
problem you defined earlier going after marginal benefit with
greater expense, ultimately costing jobs.
Mr. Frederick. In some cases the using other technologies
is certainly not costing jobs. There are many examples of
better technologies being brought in place across worker health
and safety, as well as site security. There are other examples
that jobs have benefitted.
Mr. Cassidy. If you have IST, that becomes a de facto
standard, and if it becomes a de facto standard, even if there
is a better technology, it most likely won't be implemented
because there is a de facto standard issued by a reg 8 months
ago even if 1 month ago there is a better technology that comes
out.
Mr. Frederick. However, if it is looked at and with a
system in place as suggested in the testimony and in other
folks that are looking at this issue currently in other bills,
there are the ability to have a DHS appeals process that would
ensure that the facility, the employer has the ability to refer
this back with some questions and move on to----
Mr. Cassidy. Now, I have been under this Federal Government
now for 2 \1/2\ years but it is my impression that it dances
like an elephant upon the head of a pin. It is very slow-
moving. It is very awkward. It is very laborious and expensive
to work through that process. So I kind of return to my point
that the reg issued 9 months ago becomes a de facto standard
and 2 years later you finally work through the appeals process
and in the meantime you are 3 generations ahead what you
originally offered on appeal is now outdated. Do you follow
what I am saying?
Mr. Frederick. Yes.
Mr. Cassidy. And so do you really see the bureaucracy in
the appeals process working so well that we will always have
the most current technology being used to secure our plants?
Mr. Frederick. I see that we certainly would have better
technology than is in place at the start of the process and the
ability for the employer, the manufacturer to continue to move
forward as long as it is within the scope of their security----
Mr. Cassidy. But if there is a new technology that comes
out and it is not part of the IST, what is the likelihood that
it will be immediately implemented?
Mr. Frederick. Well, and so perhaps I guess we are a little
bit off of what we perceive the prescriptive standard on IST to
look like. We believe that in the instance in some of the other
applications of this issue that are in place, there is the
flexibility for----
Mr. Cassidy. Well, the assistant secretary actually,
though, conceded the possibility that there would be a standard
which would leave out something that would be technologically
more advanced because it had not had a chance to be reviewed.
And he actually, you know, frankly said yes, that is going to
happen. He accepted that as a probability. And frankly that
concerns me because I think that there is so much explosion of
technology, we would be remiss in terms of safety and all of
the other things if we didn't have a standard which allowed its
usage.
I yield back. Thank you.
Mr. Shimkus. The gentleman yields back his time. Unanimous
consent for the ranking member for a minute.
Mr. Green. Yes. I want to ask, your response, Mr.
Frederick, to our colleague from Louisiana that because NRC has
jurisdiction over, for example, nuclear facility but they don't
have jurisdiction over something else on that plant site that
that would exempt any other regulation because NRC has it?
Mr. Frederick. Just in this instance that I was referring
to, just the CFATS regulation.
Mr. Green. We are going to explore that because I know we
have OSHA requirements at nuclear facilities and we really
don't want overlay and duplication but we do want somebody
looking at it.
Mr. Frederick. Correct.
Mr. Green. And so that is the concern.
Mr. Shimkus. And I thank my colleague. I have a couple of
pieces of business to finish up. Unanimous consent request that
a letter from Mr. Dent on this be submitted for the record.
Without objection, so ordered.
[The information follows:]
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Mr. Shimkus. I also want to advise all members that we have
10 legislative days to submit questions for the record and if
you would be so good to return those questions to us to fulfill
the hearing.
With that, we do appreciate your time. Please feel free to
visit with us on this issue as we move forward. We do want to
bring some certainty to this. We do want to have a longer-term
reauthorization of some size so that you all can move forward
in helping in this process. So with that, the hearing is
adjourned.
[Whereupon, at 10:58 a.m., the subcommittee was adjourned.]
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