    Drinking Water: Experts' Views on How Future Federal Funding Can
    Best Be Spent to Improve Security (31-OCT-03, GAO-04-29).

    After the events of September 11, 2001, Congress appropriated
    over $100 million to help drinking water systems assess their
    vulnerabilities to terrorist threats and develop response plans.
    As the Environmental Protection Agency has suggested, however,
    significant additional funds may be needed to support the
    implementation of security upgrades. Therefore, GAO sought
    experts' views on (1) the key security-related vulnerabilities of
    drinking water systems; (2) the criteria for determining how
    federal funds should be allocated among drinking water systems to
    improve their security, and the methods for distributing those
    funds; and (3) specific activities the federal government should
    support to improve drinking water security. GAO conducted a
    systematic Webbased survey of 43 nationally recognized experts to
    seek consensus on these key drinking water security issues.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-29
        ACCNO:   A08812
      TITLE:     Drinking Water: Experts' Views on How Future Federal
    Funding Can Best Be Spent to Improve Security
         DATE:   10/31/2003
      SUBJECT:   Appropriated funds
    	     Counterterrorism
    	     Federal funds
    	     Funds management
    	     Internal controls
    	     Potable water
    	     Public utilities
    	     Safety regulation
    	     Water quality
    	     Water treatment
    	     National preparedness

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    GAO-04-29

    United States General Accounting Office

    GAO

    Report to the Committee on Environment

                             and Public Works, U.S. Senate

    October 2003

    DRINKING WATER

    Experts' Views on How Future Federal Funding Can Best Be Spent to Improve
                                        Security

                                           a

    GAO-04-29

    Highlights of GAO-04-29, a report to the Committee on Environment and
    Public Works, U.S. Senate

    After the events of September 11, 2001, Congress appropriated over $100
    million to help drinking water systems assess their vulnerabilities to
    terrorist threats and develop response plans. As the Environmental
    Protection Agency has suggested, however, significant additional funds may
    be needed to support the implementation of security upgrades. Therefore,
    GAO sought experts' views on (1) the key security-related vulnerabilities
    of drinking water systems; (2) the criteria for determining how federal
    funds should be allocated among drinking water systems to improve their
    security, and the methods for distributing those funds; and (3) specific
    activities the federal government should support to improve drinking water
    security.

    GAO conducted a systematic Webbased survey of 43 nationally recognized
    experts to seek consensus on these key drinking water security issues.

    GAO recommends that as EPA refines its efforts to help drinking water
    utilities reduce their vulnerability to terrorist attacks, the agency
    consider the information in this report to help determine: how best to
    allocate security-related federal funds among drinking water utilities;
    which methods should be used to distribute the funds; and what specific
    security-enhancing activities should be supported.

    www.gao.gov/cgi-bin/getrpt?GAO-04-29.

    To view the full product, including the scope and methodology, click on
    the link above. For more information, contact John Stephenson at (202)
    512-3841 or Stephensonj@gao.gov.

    October 2003

    DRINKING WATER

    Experts' Views on How Future Federal Funding Can Best Be Spent to Improve
    Security

    GAO's expert panel cited distribution systems as among the most vulnerable
    physical components of a drinking water utility, a conclusion also reached
    by key research organizations. Also cited were the computer systems that
    manage critical utility functions, treatment chemicals stored on site, and
    source water supplies. Experts further identified two overarching
    vulnerabilities: (1) a lack of information individual utilities need to
    identify their most serious threats; and (2) a lack of redundancy in vital
    system components, which increases the likelihood that an attack could
    render an entire utility inoperable.

    According to over 90 percent of the experts, utilities serving
    high-density areas deserve at least a high priority for federal funding.
    Also warranting priority are utilities serving critical assets, such as
    military bases, national icons, and key academic institutions. Direct
    federal grants were clearly the most preferred funding mechanism, with
    over half the experts indicating that such grants would be very effective
    in distributing funds to recipients. Substantially fewer experts
    recommended using the Drinking Water State Revolving Fund for security
    upgrades.

    When experts were asked to identify specific security-enhancing activities
    most deserving of federal support, their responses generally fell into
    three categories:

    o  	physical and technological upgrades to improve security and research
    to develop technologies to prevent, detect, or respond to an attack
    (experts most strongly supported developing near realtime monitoring
    technologies to quickly detect contaminants in treated drinking water on
    its way to consumers);

    o  	education and training to support, among other things, simulation
    exercises to provide responders with experience in carrying out emergency
    response plans; specialized training of utility security staff; and
    multidisciplinary consulting teams to assess utilities' security
    preparedness and recommend improvements; and

    o  	strengthening key relationships between water utilities and other
    agencies that may have key roles in an emergency response, such as public
    health agencies, law enforcement agencies, and neighboring drinking water
    systems; this category also includes developing protocols to encourage
    consistent approaches to detecting and diagnosing threats.

    Contents

    Letter 1

      Executive Summary 2

    Purpose 2
    Background 2
    Results in Brief 5
    Principal Findings 7
    Recommendation for Executive Action 13
    Agency Comments 13

    Chapter 1 14

    Key Components of a Typical Drinking Water System 14
    Introduction The Nation's Drinking Water Systems and the Populations They
    Serve 16
    Government and Industry Have Recently Sought to Improve
    Security 17
    Efforts to Further Improve Security after the September 11
    Attacks 18
    Potentially Larger Federal Financial Commitment Sought in Future
    Years 19
    Objectives, Scope, and Methodology 19

    Chapter 2
    Experts Identified Key
    Vulnerabilities That
    Could Compromise
    Drinking Water
    Systems' Security

    Vulnerability of Physical Assets 23 Overarching Issues Affecting Drinking Water
                                  Systems' Security 28

    Chapter 3 31
    Experts' Views on the Strong Agreement That Allocation Decisions Should
    Consider a

    Utility's Vulnerability Assessment 32 Allocation and Key Criteria to Help
    Determine Which Utilities Should Receive

    Distribution of Federal Funding Priority 35
    Funds Funding Mechanisms Recommended for Distributing Federal Funds
    37

                                        Contents

    Chapter 4 43 Activities Experts Activities to Enhance Physical Security
    and Support Technological

    Improvements 43 Identified As Most Activities to Improve Education and
    Training 54 Deserving of Federal Activities to Strengthen Relationships
    between Agencies and

                                                                     Utilities 59
                                                           Support Conclusions 65
                                           Recommendation for Executive Action 66

      Appendixes

    Appendix I: Participating Experts on Drinking Water Security Panel 67

    Appendix II:	GAO Contacts and Staff Acknowledgments 69 GAO Contacts 69
    Acknowledgments 69

    Table Table 1: Vulnerability Assessment Completion Deadlines

    Figures	Figure 1: Figure 2: Figure 3:

    Figure 4:

    Figure 5:

    Figure 6: Figure 7: Figure 8: Figure 9:

    Key Components of a Typical Drinking Water System
    Key Components of a Typical Drinking Water System
    Number of Drinking Water Systems That Serve Various
    Populations
    Key Vulnerabilities Identified As Compromising Drinking
    Water Systems' Security
    Experts' Views on Whether Federal Funds Should Be
    Allocated Based on Vulnerability Assessment
    Information
    Experts' Views on Which Types of Water Utilities Should
    Receive Priority for Federal Funds
    Recommended Approaches for Distributing Federal
    Funds
    Activities Identified by Expert Panel to Enhance Physical
    Security and Support Technological Improvements
    ActivitiesIdentifiedby Experts to Improve Education and
    Training

    4 15

    16

    24

    33 35 38 44 55 60

    Figure 10: Activities Identified by Experts to Strengthen Relationships
    between Agencies and Utilities

    Contents

    Abbreviations

    AMSA Association of Metropolitan Sewerage Agencies
    AMWA Association of Metropolitan Water Agencies
    AWWA American Water Works Association
    BASIC Bay Area Security Information Collaborative
    CDC Centers for Disease Control and Prevention
    DWSRF Drinking Water State Revolving Fund
    EPA Environmental Protection Agency
    ETV Environmental Technology Verification
    FBI Federal Bureau of Investigation
    ICMA International City/County Management Association
    ISAC Information Sharing and Analysis Center
    MADIRT Mutual Aid Disaster and Intervention and Response Teams
    NRWA National Rural Water Association
    NRDC Natural Resources Defense Council
    PDD Presidential Decision Directive
    SCADA Supervisory Control and Data Acquisition
    VA vulnerability assessment
    VSAT Vulnerability Self Assessment Tool
    WEF Water Environment Federation

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    A

    United States General Accounting Office Washington, D.C. 20548

    October 31, 2003

    The Honorable James Inhofe
    Chairman
    The Honorable James Jeffords
    Ranking Minority Member
    Committee on Environment and Public Works
    United States Senate

    As requested, this report discusses the views of nationally recognized
    experts on key issues concerning drinking water security, including
    serious
    vulnerabilities of drinking water systems, criteria for allocating federal
    funds among systems, and activities that most warrant federal support to
    mitigate the risk of terrorism.

    As agreed in discussions with your offices, unless you publicly announce
    its contents earlier, we plan no further distribution of this report until
    30
    days from the date of this letter. We will then send copies to other
    appropriate congressional committees, and to the Administrator of the
    Environmental Protection Agency. We will also make copies available to
    others upon request. In addition, the report will be available at no
    charge
    on the GAO Web site at http://www.gao.gov.

    If you or your staffs have any questions concerning this report, please
    call
    me at (202) 512-3841 or my Assistant Director, Steve Elstein, at
    (202) 512-6515. Major contributors to this report are listed in appendix
    II.

    John B. Stephenson Director, Natural Resources and Environment

    Executive Summary

    Purpose	Drinking water utilities across the country have long been
    recognized as potentially vulnerable to terrorist attacks of various
    types, including physical disruption, bioterrorism, chemical
    contamination, and cyber attack. Damage or destruction by terrorists could
    disrupt not only the availability of safe drinking water, but also the
    delivery of vital services that depend on these water supplies, such as
    fire suppression. Such concerns were greatly amplified by the September
    11, 2001, attacks on the World Trade Center and the Pentagon and then by
    the discovery of training manuals in Afghanistan detailing how terrorist
    trainees could support attacks on drinking water systems.

    Congress has since committed significant federal funding to assist
    drinking water utilities, with over $100 million appropriated through
    fiscal year 2004 to help systems assess their vulnerabilities to terrorist
    threats and develop response plans. As significant as these funds are, it
    is likely that drinking water utilities will ask the federal government to
    provide larger sums to go beyond the planning for upgrading drinking water
    security to the actual implementation of security upgrades. Consequently,
    as agreed with the Chairman and Ranking Minority Member of the Senate
    Committee on Environment and Public Works, this report identifies (1) the
    key securityrelated vulnerabilities affecting the nation's drinking water
    systems; (2) the criteria that should be used to determine how federal
    funds are allocated among recipients to improve their security, and the
    methods that should be used to distribute these funds; and (3) specific
    activities the federal government should support to improve drinking water
    security.

    To address these issues, GAO conducted a Web-based Delphi survey process
    involving 43 nationally recognized experts. The Delphi method is a
    systematic process for obtaining individuals' views on a question or
    problem of interest and seeking consensus, if possible. In selecting
    members for the expert panel, GAO sought individuals who were widely
    recognized as possessing expertise on one or more key aspects of drinking
    water security. GAO also sought to achieve balance in representation from
    key federal agencies, key state or local agencies, key industry and
    nonprofit organizations, and water utilities of varying sizes. A detailed
    description of GAO's methodology is presented in chapter 1.

    Background	Drinking water systems vary by size and other factors, but as
    illustrated in figure 1, they most typically include a supply source,
    treatment facility, and distribution system. A water system's supply
    source may be a reservoir,

    Executive Summary

    aquifer, or well, or a combination of these sources. Some systems may also
    include a dam to help maintain a stable water level, and aqueducts and
    transmission pipelines to deliver the water to a distant treatment plant.
    The treatment process generally uses filtration, sedimentation, and other
    processes to remove impurities and harmful agents, and disinfection
    processes such as chlorination to eliminate biological contaminants.
    Chemicals used in these processes, most notably chlorine, are often stored
    on site at the treatment plant. Distribution systems comprise water
    towers, piping grids, pumps, and other components to deliver treated water
    from treatment systems to consumers. Particularly among larger utilities,
    distribution systems may contain thousands of miles of pipes and numerous
    access points.

                                   Executive Summary

    infrastructure against criminal and terrorist attacks. The directive
    designated the Environmental Protection Agency (EPA) as the lead federal
    agency to address the water infrastructure and to work with both public
    and private organizations to develop emergency preparedness strategies.
    EPA, in turn, appointed the Association of Metropolitan Water Agencies to
    coordinate the water industry's role in emergency preparedness. During
    this time, this public-private partnership focused primarily on cyber
    security threats for the several hundred community water systems that each
    served over 100,000 persons. The partnership was broadened in 2001 to
    include both the drinking water and wastewater sectors, and focused on
    systems serving more than 3,300 people.

    Efforts to better protect drinking water infrastructure were accelerated
    dramatically after the September 11 attacks. EPA and the drinking water
    industry launched efforts to share information on terrorist threats and
    response strategies. They also undertook initiatives to develop guidance
    and training programs to assist utilities in identifying their systems'
    vulnerabilities. As a major step in this regard, EPA supported the
    development, by American Water Works Association Research Foundation and
    Sandia National Laboratories, of a vulnerability assessment methodology
    for larger drinking water utilities. The push for vulnerability
    assessments was then augmented by the Public Health Security and
    Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act).
    Among other things, the act required each community water system serving
    more than 3,300 individuals to conduct a detailed vulnerability assessment
    by specified dates in 2003 or 2004, depending on their size.

    Results in Brief	GAO's expert panel identified several key physical assets
    as the most seriously vulnerable to terrorist attacks. In general, their
    observations were similar to those of major public and private
    organizations that have assessed the vulnerability of these systems to
    terrorist attacks, including the National Academy of Sciences, Sandia
    National Laboratories, and key industry associations. In particular, when
    asked to identify what they believed to be among the top vulnerabilities
    of drinking water utilities, nearly 75 percent of the experts (32 of 43)
    identified the distribution system (one or more components). More experts
    identified the distribution system as the top vulnerability (12 of 43)
    among the components of the drinking water system. The other physical
    assets most frequently cited were source water supplies, critical
    information systems, and chemicals stored on site that are used in the
    treatment process. Importantly, the experts also identified overarching
    vulnerability issues that may involve multiple system

    Executive Summary

    components, or even an entire drinking water system. Chief among these
    issues were (1) a lack of redundancy in vital systems, which increases the
    likelihood that an attack could render a system inoperable; and (2) the
    difficulty many systems face due to a lack of information on the most
    serious threats to which they are exposed.

    Key criteria experts cited for determining how federal funds to improve
    drinking water security should be allocated included (1) the extent to
    which information on utilities' vulnerabilities should be considered in
    making allocation decisions; and (2) characteristics of the utilities
    themselves, such as size and proximity to population centers.

    o 	About 90 percent of the panelists strongly agreed or somewhat agreed
    that allocation decisions should be based on vulnerability assessment
    information. Several factors, however, complicate the government's ability
    to use utilities' vulnerability assessments for this purpose.

    o 	Panelists favored funding priority for utilities serving high-density
    populations, with over 90 percent indicating that they deserve at least a
    high priority and over 50 percent indicating they deserve highest
    priority. Utilities serving critical assets (such as military bases and
    other sensitive government facilities, national icons, and key cultural or
    academic institutions) were also recommended as high-priority recipients,
    while relatively few experts recommended priority for utilities serving
    rural or isolated populations.

    When asked to identify the most effective mechanisms of distributing
    federal drinking water security funds to recipients, over half the experts
    indicated that direct federal grants would be very effective in doing so.
    Many also favored including a requirement for matching funds as a grant
    condition. Fewer experts recommended using the Drinking Water State
    Revolving Fund (DWSRF) for this purpose, particularly to support upgrades
    that need to be implemented quickly.

    When asked to identify and set priorities for security-enhancing
    activities most deserving of federal support, the experts most frequently
    identified activities that generally fell into three broad categories:

    o 	Physical and technological improvements includes both physical
    alterations to improve the security of drinking water systems and the

                                   Executive Summary

    development of technologies to prevent, detect, or respond to an attack.
    The need to develop near real-time monitoring technologies, which would be
    particularly useful in quickly detecting contaminants in water that has
    already left the treatment plant for the consumer, had by far the
    strongest support.

    o 	Education and training would be used for both utility and nonutility
    personnel responsible for preventing, responding to, and recovering from
    an attack. These activities include, among other things, support for
    simulation exercises to provide responders with experience in carrying out
    utilities' emergency response plans; specialized training of utility
    personnel responsible for security; general training of utility personnel
    to augment security awareness among all staff; and multidisciplinary
    consulting teams to independently analyze utilities' security preparedness
    and recommend security-related improvements.

    o 	Strengthening relationships is seen as critical between water utilities
    and other agencies (public health agencies, enforcement agencies, and
    neighboring utilities, among others) that may have key roles in an
    emergency response. This category also includes developing common
    protocols to engender a consistent approach among utilities in detecting
    and diagnosing threats, and the testing of local emergency response
    systems to ensure that participating agencies coordinate their actions
    effectively.

                                   Principal Findings

    Key Vulnerabilities	Nearly 75 percent of the experts on GAO's panel (32 of
    43) named the distribution system (one or more components) as among the
    top vulnerabilities of drinking water systems. In fact, 12 of the 32
    experts identified the distribution system as the single most important
    vulnerability, a considerably greater number than any other element of the
    drinking water system. Their explanations most often related to the
    accessibility of distribution systems at numerous points. One expert, for
    example, cited the difficulty of preventing the introduction of a
    contaminant into a distribution system from inside a public building.
    Another expert noted that since the water in a distribution system has
    already been treated and is in the final stages of being transferred to
    consumers, the distribution of a chemical, biological, or radiological
    agent

    Executive Summary

    in such a manner could be difficult to detect until it is too late to
    reverse any harm done.1

    Several other components, though not considered as critical as the
    distribution system, were still the subject of concern. Nearly half the
    experts (20 of 43) identified source water as among drinking water
    systems' top vulnerabilities. One expert noted, for example, that "because
    of the vast areas covered by watersheds and reservoirs, it is difficult to
    maintain security and prevent intentional or accidental releases of
    materials that could have an adverse impact on water quality." Yet some
    experts cited factors that mitigate the risks associated with source
    water, including (1) that source water typically involves a large volume
    of water, which in many cases could dilute the potency of contaminants;
    (2) the length of time (days or even weeks) that it typically takes for
    source water to reach consumers; and (3) that source water will go through
    a treatment process in which many contaminants are removed. In addition,
    EPA pointed out that as source water goes through the treatment process,
    many contaminants are removed.

    Also cited as a vulnerability were the sophisticated computer systems that
    drinking water utilities have come to rely upon to manage key functions.
    These Supervisory Control and Data Acquisition (SCADA) systems allow
    operators to monitor and control processes throughout their drinking water
    systems. Although SCADA systems have improved water utilities' efficiency
    and reduced costs, almost half of the experts on GAO's panel (19 of 43)
    identified them as among these utilities' top vulnerabilities. Finally, 13
    of the 43 experts identified treatment chemicals, particularly chlorine
    used for disinfection, as among utilities' top vulnerabilities. Experts
    cited the inherent danger of storing large cylinders of a chemical on
    site, noting that their destruction could release toxic gases in densely
    populated areas. Some noted, however, that this risk has been alleviated
    by utilities that have chosen to use the more stable liquid form of
    chlorine instead of the more vulnerable compressed gas canisters that have
    traditionally been used.

    Experts also identified overarching issues that compromise the integrity
    of multiple physical assets, or even the entire drinking water system.
    Among these is the lack of redundancy among vital systems. Many drinking
    water

    1An EPA official noted, however, that distribution systems generally carry
    disinfectant residuals that can counteract the potentially harmful effects
    of contaminants.

                                   Executive Summary

    systems are "linear"-that is, they have single transmission lines leading
    into the treatment facility, single pumping stations along the system, and
    often employ a single computer operating system. They also depend on the
    electric grid, transportation systems, and single sources of raw materials
    (e.g., treatment chemicals). Many experts expressed concern that problems
    at any of these "single points of failure" could render a system
    inoperable unless redundant systems are in place. Experts also cited the
    lack of sufficient information to understand the most significant threats
    confronting individual utilities. According to the American Water Works
    Association, assessments of the most credible threats facing a utility
    should be based on knowledge of the "threat profile" in its specific area,
    including information about past events that could shed light on future
    risks. Experts noted, however, that such information has been difficult
    for utilities to obtain. One expert suggested that the intelligence
    community needs to develop better threat information and share it with the
    water sector.

        Allocation and Distribution of Federal Funds

    Many drinking water utilities have been financing at least some of their
    security upgrades by passing along the costs to their customers through
    rate increases. Given the cost of these upgrades, however, drinking water
    industry representatives have also sought federal assistance. GAO asked
    its expert panel to comment on the factors that should be considered in
    allocating federal funds. Specifically, GAO asked the experts to comment
    on the following:

    o 	Appropriate use of vulnerability assessment information. About 90
    percent of the experts (39 of 43) strongly agreed or somewhat agreed that
    funds should be allocated on the basis of vulnerability assessment
    information, with some citing the vulnerability assessments (VA) required
    by the Bioterrorism Act as the best available source of this information.
    Several experts, however, pointed to a number of complicating factors.
    Perhaps the most significant constraint is the Bioterrorism Act's
    provision precluding the disclosure of any information that is "derived"
    from vulnerability assessments submitted to EPA. It is important to
    protect sensitive information about each utility's vulnerabilities from
    individuals who may then use the information to harm the utility. The law
    specifies that only individuals designated by the EPA Administrator may
    have access to the assessments and related information. Yet even those
    individuals would face constraints in using the information. They would
    have difficulty, for example, in citing vulnerability assessments to
    support decisions on

    Executive Summary

    allocating security-related funds among utilities, as well as decisions
    concerning research priorities and guidance documents. Others cited an
    inherent dilemma affecting any effort to set priorities for funding
    decisions based on the greatest risk-whatever does not receive attention
    becomes the best target.

    o 	Criteria to help determine which utilities should receive funding
    priority. According to 93 percent of the experts (40 of 43), utilities
    serving high-density population areas should receive a high or highest
    priority in funding (55 percent deemed this criterion as the highest
    priority). Most shared the view of one expert, who noted that directing
    limited resources to protect the greatest number of people is a common
    factor when prioritizing funding. Experts also assigned high priority to
    utilities serving critical assets, such as national icons representing the
    American image, military bases, and key government, academic, and cultural
    institutions. At the other end of the spectrum, only about 5 percent of
    the experts (2 of 43) stated that utilities serving rural or isolated
    populations should receive a high or highest priority for federal funding.
    Generally, these panelists commented that such facilities are least able
    to afford security enhancements and are therefore in greatest need of
    federal support. Importantly, the relatively small percentage of experts
    advocating priority for smaller systems may not fully reflect the concern
    among many of the experts for the safety of these utilities. For example,
    several who supported higher priority for utilities serving highdensity
    populations cautioned that while problems at a large utility will put more
    people at risk, utilities serving small population areas may be more
    vulnerable because of weaker treatment capabilities, fewer highly trained
    operators, and more limited resources.

    As for effective mechanisms for distributing federal funds, the expert
    panelists viewed direct federal grants as most effective, with 86 percent
    of the experts (37 of 43) indicating that this mechanism would be somewhat
    or very effective in allocating federal funds. One expert cited EPA's
    recent distribution of direct security-related grant funds to larger
    systems to perform their VAs as a successful initiative. Also, 74 percent
    cited a matching requirement for such grants as somewhat or very
    effective. One expert pointed out that such a requirement would
    effectively leverage limited federal dollars, thereby providing greater
    incentive to participate. The Drinking Water State Revolving Fund received
    somewhat less support, with a number of the experts cautioning that as a
    funding mechanism, it is suited more for longer-term improvements than for
    those requiring more immediate attention.

                                   Executive Summary

        Security-Enhancing Activities That Most Warrant Federal Support

    When experts were asked to identify and set priorities for the
    securityenhancing activities most deserving of federal support, their
    responses generally fell into three broad categories:

    o 	Enhancing Physical Security and Supporting Technological Improvements.
    These activities fell into nine subcategories. Of these, the development
    of "near real-time monitoring technologies," capable of providing near
    real-time data for a wide array of potentially harmful water constituents,
    received far more support for federal funding than any other
    subcategory-over 93 percent of the experts (40 of 43) rated this
    subcategory as deserving at least a high priority for federal funding.
    More significantly, almost 70 percent (30 of 43) rated it highest
    priority. These technologies were cited as critical in efforts to quickly
    detect contamination events, minimize their impact, and restore systems
    after an event has passed. The experts also voiced strong support for (1)
    increasing laboratories' capacity to deal with spikes in demand caused by
    chemical, biological, or radiological contamination of water supplies, and
    (2) "hardening" the physical assets of drinking water facilities through
    improvements such as adding or repairing fences, locks, lighting systems,
    and cameras and other surveillance equipment. Some experts, however, cited
    the limitations inherent in attempts to comprehensively harden a drinking
    water facility's assets. They noted in particular that, unlike nuclear
    power or chemical plants, a drinking water system's assets are spread over
    large geographic areas, particularly the source water and distribution
    systems.

    o 	Improving Education and Training. Over 90 percent of the experts (39 of
    43) indicated that improved technical training for security-related
    personnel warrants at least a high priority for federal funding, with over
    55 percent (24 of 43) indicating that it deserved highest priority. To a
    lesser extent, experts supported general training for other utility
    personnel to increase their awareness of security issues. The panelists
    also underscored the importance of conducting regional simulation
    exercises to test emergency response plans, with more than 88 percent (38
    of 43) rating this as a high or highest priority for federal funding. Such
    exercises are intended to provide utility and other personnel with the
    training and experience needed both to perform their individual roles in
    an emergency, and to coordinate these roles with other responders.
    Finally, about half the experts assigned at least a high priority to
    supporting multidisciplinary consulting teams ("Red Teams"), comprising
    individuals with a wide array of backgrounds, to provide independent
    analyses of utilities' vulnerabilities.

                                   Executive Summary

    o 	Strengthening Relationships between Utilities and Other Key
    Organizations. Experts cited the need to improve cooperation and
    coordination between drinking water utilities and certain other
    organizations as key to improving utilities' security. Among the
    organizations most often identified as critical to this effort are public
    health and law enforcement agencies, which have data that can help
    utilities better understand their vulnerabilities and respond to
    emergencies. In addition, the experts reported it is valuable for
    utilities to develop mutual aid arrangements with neighboring utilities.
    Such arrangements sometimes include, for example, the sharing of back-up
    power systems or other critical equipment. One expert described an
    arrangement in the San Francisco Bay Area-the Bay Area Security
    Information Collaborative (BASIC). The collaborative's eight utilities
    meet regularly to address security-related topics. Finally, over 90
    percent of the experts (39 of 43) rated the development of common
    protocols among drinking water utilities to monitor drinking water threats
    as warranting a high or highest priority for federal funding. Drinking
    water utilities vary widely in how they perceive threats and detect
    contamination, in large part because few common protocols exist that would
    help promote a more consistent approach toward these critical functions.
    Some experts noted in particular the need for protocols to guide the
    identification, sampling, and analysis of contaminants.

        Making Key Security Decisions in the Face of Great Uncertainty

    EPA has identified improved drinking water security as an important
    national goal, and has stated in its Strategic Plan on Homeland Security
    that as funds are appropriated, federal resources will be available to
    help achieve this goal. Yet key judgments about who should receive
    priority for federal resources, and how those funds should be spent, will
    have to be made in the face of great uncertainty about the likely target
    of an attack, the nature of an attack (whether physical, cyber, chemical,
    biological, or radiological), and its timing. The experts on GAO's panel
    have had to consider these uncertainties in deriving their own judgments
    about these issues. Their judgments, while not unanimous on all matters,
    suggested a high degree of consensus on a number of key issues.

    GAO recognizes that sensitive funding decisions ultimately must take into
    account political, equity, and other considerations. It also believes such
    decisions should consider the judgments of the nation's most experienced
    individuals on these matters, such as those included on its panel. It is
    in this context that GAO offers the results presented in this report as
    information

                                   Executive Summary

    for Congress and the Administration to consider as they seek the best way
    to use limited financial resources to reduce the threat to the nation's
    drinking water supply.

    Recommendation for 	GAO recommends that, as EPA refines its efforts to
    help drinking water utilities reduce their vulnerability to terrorist
    attacks, the EPA

    Executive Action	Administrator consider the information in this report to
    help determine: how best to allocate security-related federal funds among
    drinking water utilities, which methods should be used to distribute the
    funds, and what specific security-enhancing activities should be
    supported.

    Agency Comments	We provided EPA with a draft of this report for review and
    comment. EPA did not submit a formal letter but did provide comments from
    officials in its Office of Water and its Office of Homeland Security. The
    comments from the Office of Water said that the report's results were
    "useful and well thought out." EPA's Office of Homeland Security said that
    the report "demonstrates a well conceived and executed project," and that
    "a number of the issues raised in the document will be useful to the
    agency as it moves forward in the drinking water security program." Both
    offices also offered specific technical comments and suggestions, which
    have been incorporated.

    Chapter 1

    Introduction

    Drinking water utilities across the country have long been recognized as
    being potentially vulnerable to terrorism of various types, including
    physical disruption, bioterrorism, chemical contamination, and cyber
    attacks. Damage or destruction by such a terrorist attack could disrupt
    not only the availability of safe drinking water to consumers, but also
    the delivery of vital services that depend on these water supplies, such
    as fire suppression.

    These concerns were greatly amplified by the September 11, 2001, attacks
    on the World Trade Center and the Pentagon. They were further amplified in
    ensuing months when training manuals were discovered in Afghanistan
    detailing how terrorist trainees could support attacks on drinking water
    systems.

    Key Components of a 	Drinking water systems vary by size and other factors
    but, as illustrated in figure 2, most typically include a supply source,
    treatment facility, and

    Typical Drinking Water distribution system.

      System

                                 Chapter 1 Introduction

    systems, particularly larger systems, rely on surface water such as lakes,
    rivers, and streams.

    Water treatment generally uses filtration, flocculation, sedimentation,
    and other processes to remove impurities and harmful agents, and
    disinfection processes (such as chlorination) to eliminate biological
    contaminants. Chemicals used in these processes, most notably chlorine,
    are often stored on site.

    The distribution system comprises several components, such as water
    towers, piping grids, and pumps that deliver treated water from treatment
    systems to consumers. A key feature of most distribution systems is their
    size: Particularly among larger utilities, distribution systems may have
    many thousands of miles of pipes.

    The Nation's Drinking Nationwide, there are more than 160,000 public water
    systems that

    individually serve from as few as 25 people to 1 million people or more.
    AsWater Systems and the figure 3 illustrates, nearly 133,000 of these
    water systems serve 500 orPopulations They fewer people. Only 466 systems
    serve more than 100,000 people each, but Serve these systems, located
    primarily in urban areas, account for nearly half of

    the total population served.

    Figure 3: Number of Drinking Water Systems That Serve Various Populations

    Source: GAO.

                                 Chapter 1 Introduction

      Government and Industry Have Recently Sought to Improve Security

    Most drinking water systems long ago developed and maintained emergency
    preparedness plans that specified how to notify the public in cases of
    emergency, and how to coordinate an emergency response with law
    enforcement and other emergency response officials. These plans, however,
    paid little attention to the kinds of threats posed by international
    terrorist organizations. Rather, they were generally oriented toward
    responding to natural disasters and, in some cases, domestic threats such
    as vandalism.

    Both government and industry officials took a number of steps to broaden
    emergency planning in the 1990s. In 1996, the President issued Executive
    Order 13010, which listed water supply as one of eight national
    infrastructures vital to the security of the United States. In 1997, the
    President's Commission on Critical Infrastructure Protection, also
    established by executive order, issued a report on the vulnerabilities of
    the eight categories of infrastructure and strategies for protecting them.
    The report identified three attributes crucial to water supply users:
    Water must be available on demand, it must be delivered at sufficient
    pressure, and it must be safe for use.1 It warned that susceptibility to
    contamination and the loss of flow or pressure can be caused by extensive
    water main breaks, the destruction of pumps, or the disruption of power
    supplies, and cited these as major vulnerabilities to the nation's water
    supply systems.

    In response to the report's findings, the President issued Presidential
    Decision Directive (PDD) 63 on critical infrastructure protection in 1998.
    This directive established a public-private partnership to put in place
    prevention, response, and recovery measures that would augment the
    security of the nation's critical infrastructure components against
    criminal or terrorist attacks. The directive designated the Environmental
    Protection Agency (EPA) as the lead federal agency to work with both
    public and private organizations to protect the nation's water
    infrastructure through the development of emergency preparedness
    strategies. The agency, in turn, appointed the Association of Metropolitan
    Water Agencies, a nonprofit organization representing the nation's largest
    utilities, to coordinate the water industry's role in emergency
    preparedness.

    1The President's Commission on Critical Infrastructure Protection,
    Critical Foundations: Protecting America's Infrastructures, October 1997.

                                 Chapter 1 Introduction

    Initially, this public-private partnership focused on the several hundred
    community water systems that each served more than 100,000 persons; the
    partnership was broadened in 2001 to include systems serving more than
    3,300 people. Moreover, as was the case with other infrastructure sectors,
    PDD-63 focused primarily on threats to cyber security. Specifically, the
    directive established a goal to develop, within five years, a Water
    Information Sharing and Analysis Center (Water ISAC). The intent of the
    Water ISAC is, among other things, to facilitate the dissemination of
    alerts to drinking water and wastewater utilities about threats to their
    systems, to analyze incident information, and to serve as a secure source
    of sensitive information.

      Efforts to Further Improve Security after the September 11 Attacks

    Efforts to improve protection of drinking water infrastructure were
    broadened and accelerated after the September 11 attacks. In particular,
    the partnership accelerated efforts to develop the Water ISAC, which
    became operational in December 2002. EPA and the drinking water industry
    also launched efforts to develop guidance, tools, and training programs to
    assist utilities in identifying their systems' vulnerabilities. As a major
    step in this regard, EPA supported the American Water Works Association
    Research Foundation and the Sandia National Laboratories to develop a
    vulnerability assessment (VA) methodology and training primarily for the
    largest water systems. EPA awarded approximately $51 million in fiscal
    year 2002 for water security grants to help these water systems complete
    vulnerability assessments.

    These efforts to better understand drinking water systems' vulnerabilities
    were given a significant boost when the President signed the Public Health
    Security and Bioterrorism Preparedness and Response Act in June 2002.2
    Among other things, title IV of the Bioterrorism Act amended the Safe
    Drinking Water Act to require each community water system serving more
    than 3,300 individuals to conduct "an assessment of the vulnerability of
    its system to a terrorist attack or other intentional acts intended to
    substantially disrupt the ability of the system to provide a safe and
    reliable supply of drinking water." As illustrated in table 1, the act
    phased in this requirement according to system size, requiring
    vulnerability assessments for all systems serving populations greater than
    3,300 to be completed by June 30, 2004.

    2Pub. L. No. 107-188, 116 Stat. 594 (2002) ("Bioterrorism Act").

                                 Chapter 1 Introduction

    Table 1: Vulnerability Assessment Completion Deadlines

    System size (based on population Vulnerability assessment completion
    served) deadline

    100,000 or more March 31, 2003

    50,000 to 99,999 December 31, 2003

    3,301 to 49,999 June 30, 2004

    Source: Bioterrorism Act, S 401(a)(2).

    EPA guidance calls for these assessments to include: a characterization of
    the water system; the identification of possible consequences of
    malevolent acts; the critical assets subject to malevolent acts; an
    assessment of the threat of malevolent acts; an evaluation of
    countermeasures; and a plan for risk reduction. The Bioterrorism Act also
    requires each community water system serving more than 3,300 individuals
    to prepare or revise an emergency response plan incorporating the results
    of the VA no later than 6 months after completing the assessment. In
    addition, it directed EPA to provide guidance to smaller systems on how to
    conduct vulnerability assessments, prepare emergency response plans, and
    address threats.

      Potentially Larger Federal Financial Commitment Sought in Future Years

    While significant federal funds have been committed to assist utilities in
    developing vulnerability assessments and emergency response plans, the
    likelihood exists that Congress and the Administration will be asked to
    provide much larger sums to go beyond planning for upgrading drinking
    water security to the actual implementation of security upgrades. By most
    accounts, it will cost billions of dollars to upgrade security for
    drinking water utilities. The American Water Works Association, for
    example, estimates that it will cost $1.6 billion for initial security
    upgrades at all drinking water utilities.

    Objectives, Scope, and 	As requested in a June 9, 2003, letter to the
    Comptroller General from the Chairman and Ranking Minority Member of the
    Senate Committee on

    Methodology	Environment and Public Works, this report identifies experts'
    views on the following questions:

    o 	What are the key security-related vulnerabilities affecting the
    nation's drinking water systems?

    Chapter 1 Introduction

    o 	What are the criteria that should be used to determine how federal
    funds are allocated among recipients to improve drinking water security,
    and how should the funds be distributed?

    o 	What specific activities should the federal government support to
    improve drinking water security?

    To obtain information on these three questions, we conducted a threephase
    Web-based survey of 43 experts on drinking water security. We identified
    these experts from a list of more than 50 widely recognized experts in one
    or more key aspects of drinking water security. In compiling this initial
    list, we also sought to achieve balance in terms of area of expertise
    (i.e., state and local emergency response, engineering, epidemiology,
    public policy, security and defense, drinking water treatment, risk
    assessment and modeling, law enforcement, water infrastructure, resource
    economics, bioterrorism, public health, and emergency and crisis
    management).

    In addition, we attempted to achieve participation by experts from (1) key
    federal organizations (e.g., Argonne National Laboratory, Centers for
    Disease Control and Prevention, Department of Defense, Department of the
    Interior's Bureau of Reclamation, Environmental Protection Agency, and
    Federal Bureau of Investigation; (2) key state and local agencies,
    including health departments and environmental protection departments; and
    (3) key industry and nonprofit organizations such as the American Water
    Works Association (AWWA), RAND Corporation, Natural Resources Defense
    Council (NRDC), and National Rural Water Association (NRWA); and (4) water
    utilities serving populations of varying sizes. Of the 50 experts we
    contacted, 43 agreed to participate and complete all three phases of our
    survey. A list of the 43 participants in this study is included in
    appendix I.

    To obtain information from the expert panel, we employed a modified
    version of the Delphi method. The Delphi method is a systematic process
    for obtaining individuals' views and seeking consensus among them, if
    possible, on a question or problem of interest. Since first developed by
    the RAND Corporation in the 1950s, the Delphi method has generally been
    implemented using face-to-face group discussions. For this study, however,
    we administered the method through the Internet. We used this approach, in
    part, to eliminate the potential bias associated with group discussions.
    These biasing effects include the dominance of individuals and group
    pressure for conformity. Moreover, by creating a virtual panel, we were

    Chapter 1 Introduction

    able to include many more experts than possible with a live panel, which
    allowed us to obtain a broad range of opinions.

    For each phase in the Delphi method, we posted a questionnaire on GAO's
    survey Web site addressing the issues of our study. Panel members were
    notified of the availability of the questionnaire with an e-mail message.
    The e-mail message contained a unique user name and password that allowed
    each respondent to log on and fill out a questionnaire but did not allow
    respondents access to the questionnaires of others.

    In the first questionnaire, we asked several broad questions, such as,
    "What strategies or methods should the federal government consider for
    allocating funds to water utilities (or other relevant entities) so as to
    ensure that allocation achieves the greatest mitigation of risk per
    dollar?" We pretested these questions with officials from the water
    utility industry, a nonprofit research group, and academe. Participants
    were invited to provide detailed narrative explanations for their
    responses.

    In the case of two key questions, we sought to identify both additional
    detail and the degree to which consensus could be achieved among the
    experts on our panel. We used experts' responses to phase 1 questions to
    develop more detailed questions for phase 2 about specific actions or
    strategies regarding two overall issues: how federal funds could best be
    allocated among potential recipients to achieve the most security
    improvements per dollar, and which specific activities are most deserving
    of federal support. This second questionnaire included closed-ended
    questions that allowed panelists to rate the relative priority or
    effectiveness of these activities. It also provided experts with the
    opportunity to comment on their ratings.

    During the third phase of the Delphi process, we provided the aggregated
    results from the ratings made in the second questionnaire. We also
    provided panel members with the individual ratings they had made in
    response to each question. We then invited panel members to use this
    information as a basis for changing their answers if they desired.

    In addition to the information obtained from our expert panel, we obtained
    documentation from representatives of professional organizations, such as
    the National Academy of Sciences, RAND Corporation, American Water Works
    Association Research Foundation, and Association of Metropolitan Water
    Agencies. We also held several interviews with officials at EPA on the
    agency's drinking water security programs. During our interviews, we

    Chapter 1 Introduction

    asked officials to provide information on program operations, policies,
    guidance, and funding levels. We also received training on the
    Vulnerability Self Assessment Tool supported by the Association of
    Metropolitan Sewerage Agencies, and attended specialized conferences
    addressing drinking water security by the Water Environment Federation and
    other organizations.

    We conducted our work from July 2002 through August 2003 in accordance
    with generally accepted government auditing standards.

    Chapter 2

    Experts Identified Key Vulnerabilities That Could Compromise Drinking Water
    Systems' Security

    Our panel of experts identified several key physical assets of drinking
    water systems as the most vulnerable to intentional attack. In general,
    their observations were similar to those of public and private
    organizations that have assessed the vulnerability of these systems to
    terrorist attacks, including the National Academy of Sciences, Sandia
    National Laboratories, and key industry associations. In particular,
    nearly 75 percent of the experts (32 of 43) identified the distribution
    system or its components as among the top vulnerabilities of drinking
    water systems.

    In addition to identifying systems' physical assets, experts also
    identified overarching issues compromising how well these assets are
    protected. Chief among these issues are (1) a lack of redundancy in vital
    systems, which increases the likelihood that an attack could render a
    system inoperable; and (2) the difficulty many systems face in
    understanding the nature of the threats to which they are exposed.

    Vulnerability of 	As illustrated in figure 4, when asked to identify what
    they believed to be the top vulnerabilities of drinking water utilities,
    the four physical assets

    Physical Assets	most frequently identified by the panel were: (1) the
    distribution system, (2) source water supplies, (3) Supervisory Control
    and Data Acquisition (SCADA) and other information systems, and (4)
    chemicals stored on site that are used to treat source water.

                                       Chapter 2
                      Experts Identified Key Vulnerabilities That
                        Could Compromise Drinking Water Systems'
                                        Security

    Figure 4: Key Vulnerabilities Identified As Compromising Drinking Water
    Systems' Security

      Experts Identified Distribution Systems as Most Vulnerable

    The distribution system delivers drinking water primarily through a
    network of underground pipes to homes, businesses, and other customers.
    While the distribution systems of small drinking water utilities may be
    relatively simple, larger systems serving major metropolitan areas can be
    extremely complex. One such system, for example, measures water use
    through 670,000 metered service connections, and distributes treated water
    through nearly 7,100 miles of water mains that range from 2 inches to 10
    feet in diameter. In addition to these pipelines and connections, other
    key distribution system components typically include numerous pumping
    stations, treated water storage tanks, and fire hydrants.

    Nearly 75 percent, or 32 of 43 of the experts on our panel, named one or
    more components of the distribution system as among the top
    vulnerabilities of drinking water systems. In fact, 12 of the 32 experts

                                       Chapter 2
                      Experts Identified Key Vulnerabilities That
                        Could Compromise Drinking Water Systems'
                                        Security

    identified distribution systems as the most critical vulnerability, a
    considerably greater number than any other system component. The
    explanations they offered most often related to the accessibility of
    distribution systems at numerous points. One expert, for example, cited
    the difficulty in preventing the introduction of a contaminant into the
    distribution system from inside a building "regardless of how much time,
    money, or effort we spend protecting public facilities." Experts also
    noted that since the water in the distribution system has already been
    treated and is in the final stages of being transferred to the consumer,
    the distribution of a chemical, biological, or radiological agent in such
    a manner would be virtually undetectable until it has affected consumers.
    An EPA official added, however, that distribution systems generally carry
    disinfectant residuals that can counteract the potentially harmful effects
    of contaminants. This official further stated that routine monitoring
    performed in drinking water systems might provide some advance warning.
    While research on the fate and transport of contaminants within water
    treatment plants and distribution systems is under way, according to one
    expert, limited technologies are readily available that can detect a wide
    range of contaminants once treated water is released through the
    distribution system for public use.

    Source Water	Nearly half the experts (20 of 43) identified source water as
    among drinking water systems' top vulnerabilities. Drinking water may come
    from surface water, groundwater, or both. The water cycle begins with
    rainwater and snowmelt that collect in lakes and rivers and that, in many
    cases, interact with groundwater. Large urban water supply systems tend to
    rely on surface water sources (rivers, lakes, and reservoirs), while
    smaller systems tend to rely more heavily on groundwater.

    One expert raised concerns about the inherent challenge in protecting
    source waters, noting, "Because of the vast areas covered by watersheds
    and reservoirs, it is difficult to maintain security and prevent
    intentional or accidental releases of materials that could have an adverse
    impact on water quality." Other experts raised additional concerns about
    the vulnerability of water intake transmission lines, which regulate the
    transfer of water supplies to the systems' treatment plants.

    Panel experts and others, however, have stated that concerns over source
    water contamination are mitigated somewhat by a number of factors. First,
    a large volume of water generally exists at the source, which in many
    cases can dilute the potency of agents introduced at this stage of the
    drinking

                                       Chapter 2
                      Experts Identified Key Vulnerabilities That
                        Could Compromise Drinking Water Systems'
                                        Security

    water production process. Second, unlike treated water in the distribution
    system, it generally takes many days before source water reaches the
    consumer, making it more likely that a contamination problem at this early
    stage of the drinking water production process can be detected or treated
    before consumers are affected. One utility official noted, for example,
    that his water system's surface water supplies travel hundreds of miles
    before reaching the treatment plant. Water that was contaminated at the
    source would take between 10 days and 6 months to reach the treatment
    plant, depending on the source, providing ample opportunity for detection
    and adjustments to protect public health.

    SCADA Systems	To improve their efficiency and reduce operating costs,
    drinking water utilities (particularly larger utilities) have come to rely
    increasingly on sophisticated computer systems to manage their facilities'
    key functions. These Supervisory Control and Data Acquisition (SCADA)
    systems allow utility operators to monitor and control processes
    throughout their systems, even at remote facilities. SCADA systems
    communicate with other control facilities and provide the necessary data
    to ensure that the right chemicals are mixed in the right amounts for
    treatment processes, and that water pressure and flow are at proper
    levels. SCADA systems may also monitor activity along water transmission
    pipelines, detecting breaks or pressure loss.

    While SCADA systems help utilities manage their operations, they can
    create an additional opportunity for sabotage. Almost half of the experts
    on our panel (19 of 43) identified SCADA and other information systems as
    being among the top vulnerabilities of drinking water systems (although
    only one expert ranked it as the top vulnerability). Experts' concerns
    include cyber attacks on SCADA systems from a remote location, which
    could, for example, release harmful amounts of water treatment chemicals
    (such as chlorine) into treated water.

                                       Chapter 2
                      Experts Identified Key Vulnerabilities That
                        Could Compromise Drinking Water Systems'
                                        Security

    Treatment Chemicals	The types and amounts of treatment chemicals applied
    by a drinking water facility to its influent varies, depending on the type
    of source water (for example, surface water or groundwater) as well as its
    quality. Because surface water systems are exposed to direct wet-weather
    runoff and to atmospheric forces, they generally require more treatment
    under federal and state regulations than do groundwater systems.1

    Water suppliers use a variety of treatment processes to remove
    contaminants from drinking water. The most commonly used treatment
    processes for surface water include filtration to remove particles such as
    clays, silts, and microorganisms; flocculation and sedimentation to
    consolidate small particles into larger particles that can be more easily
    removed from the water; and disinfection to eliminate bacteria and other
    microbiological contaminants.

    Treatment chemicals are used in some of these processes. The disinfection
    process is particularly noteworthy in this regard; chlorine, chloramines,
    or chlorine dioxide not only are used at the treatment plant, but also are
    frequently present in some form in the pipes that distribute water to
    homes and businesses.

    Thirteen of the 43 experts identified treatment chemicals as among the top
    vulnerabilities of drinking water systems, second only to the distribution
    system. Experts commented that it was inherently dangerous to use and
    store large cylinders of gaseous chlorine, noting that the destruction of
    these storage containers could release toxic chlorine gas in densely
    populated areas. Some of these experts noted, however, that this risk is
    being alleviated as utilities increasingly use the more stable liquid form
    of chlorine instead of the more vulnerable large compressed-gas chlorine
    canisters that have traditionally been used. In addition to the risks of
    chemical sabotage at the treatment facility, one expert cited the risk of
    using tainted treatment chemicals at the facility. According to another
    expert, "If these treatment chemicals have been purposely contaminated . .
    . prior to delivery, every precautionary measure taken by the water system
    has been bypassed."

    1A discussion of the influence of these factors on treatment is available
    in the preamble in both the Surface Water Treatment Rule and the Stage I
    Disinfectants/Disinfection Byproducts Rule.

                                       Chapter 2
                      Experts Identified Key Vulnerabilities That
                        Could Compromise Drinking Water Systems'
                                        Security

    Overarching Issues In addition to the vulnerabilities associated with
    specific water system

    components, experts identified several overarching issues thatAffecting
    Drinking compromise the integrity of physical assets and the drinking
    water systemWater Systems' in its entirety. Chief among these issues are
    (1) the lack of redundancy Security among vital systems, and (2) the
    difficulty many operators face due to a

    lack of information on the most serious threats to which their systems

    might be exposed.

      Lack of Redundancy among Vital Systems

    Drinking water systems are generally "linear" in nature in that they have
    single transmission lines leading into the treatment facility, single
    pumping stations along the system, and a single computer operating system.
    Furthermore, drinking water systems may rely on outside sources of power
    and communications, and depend on the transportation sector for the
    delivery of supplies, often from a limited number of suppliers. If any of
    these external sources were impaired or destroyed, the entire system could
    be compromised. Under these circumstances, any "single point of failure"
    could render a system inoperable unless there are redundant systems in
    place.

    Several experts reflected concerns relating to a single point of failure
    as a vulnerability. For example, according to one expert, the destruction
    of a single physical component of the system, such as a single water
    transmission line into the treatment facility, could render the entire
    system inoperable. Moreover, she noted, a system that depends on pumps can
    be completely put out of service if its electrical supply were
    interrupted. Echoing this point, another expert commented, "Experience
    with Y2K planning efforts revealed one of the critical interdependencies
    nearly all water utilities have is with the electrical power supply
    system. Disruption of power supply could have significant impacts on
    source, treatment and distribution systems."2

    According to one expert, efforts are needed to add redundancy to drinking
    water systems and to mitigate systems' near-total reliance on power
    suppliers, communications systems, and the transportation sector. However,
    such efforts to duplicate major system components would be expensive and
    could conflict with the systems' goals of controlling rate

    2These comments, made prior to the electric supply disruption of August
    2003, were vividly illustrated when that power outage severely disrupted
    the water supplies of several cities.

                                       Chapter 2
                      Experts Identified Key Vulnerabilities That
                        Could Compromise Drinking Water Systems'
                                        Security

    increases. To address the problem, some experts advocated the creation of
    utility consortia, such as the Bay Area Security Information Collaborative
    (BASIC) and the Mutual Aid Disaster Intervention Response Teams (MADIRT),
    through which regional utilities share resources in the event of a
    disaster.

      Insufficient Information to Understand the Most Significant Threats

    A number of experts commented that it is impossible to accurately identify
    a utility's most significant vulnerabilities unless the utility has
    reliable intelligence regarding its most significant threats. Threats
    include the type of adversary (a casual vandal, an anonymous hacker, a
    disgruntled employee, or a dedicated terrorist) as well as the mode of
    attack (physical, psychological, chemical, biological, or radiological).
    According to the American Water Works Association, a utility's assessment
    of its most credible threats should be based on knowledge of the threat
    profile in its specific area, including such information as past events,
    that could shed light on future risks. These assessments often require
    information from outside sources, such as local law enforcement officials.

    Many experts on our panel noted, however, that such information has not
    been easy for utilities to obtain. The following examples illustrate some
    of the difficulties utilities have regarding threats:

    o 	According to one expert, "The utility community has very little
    specific and useful information on the threat posed to this industry. This
    represents a real vulnerability since it makes it harder to judge where
    resources might do the most good." Furthermore, "an ongoing working
    relationship with groups (mostly federal) that do this type of analysis
    could prove extremely valuable in determining how to allocate the limited
    resources available."

    o 	Utilities may be preoccupied with unsubstantiated threats, according to
    another expert. She noted, "There are many very vulnerable areas, but the
    terrorists may not be technically able to target them, or they may not be
    interested."

    o 	Another expert stated that utilities need to better understand "how the
    threats may . . . exploit utility operations and infrastructure," through
    such things as simulation exercises.

    Chapter 2
    Experts Identified Key Vulnerabilities That
    Could Compromise Drinking Water Systems'
    Security

    o 	One expert suggested that the intelligence community provide better
    threat information and share it with the water sector through the Water
    ISAC.

    Since the consequences associated with various potential threats are
    markedly different, EPA guidance suggests that the threats be analyzed in
    the system's vulnerability assessments.3 Some vulnerability assessment
    methodologies refer to the threats selected for consideration as a Design
    Basis Threat. Because there is no single Design Basis Threat4 for all
    water systems in the United States, water systems often have a difficult
    time identifying their unique threat profile. As a result, EPA developed a
    Baseline Threat Information document for systems serving populations
    greater than 3,300 to help assess the most likely threats to their
    systems.

    3Environmental Protection Agency, Vulnerability Assessment Fact Sheet, EPA
    816-F-02-025, November 2002, available on the Web at
    http://www.epa.gov/ogwdw000/security/va_fact_sheet_12-19.pdf.

    4Design Basis Threat: The threat serves as the basis for the design of
    countermeasures as well as the benchmark against which vulnerabilities are
    assessed.

    Chapter 3

    Experts' Views on the Allocation and Distribution of Federal Funds

    Many drinking water utilities have been financing at least some of their
    security upgrades by passing along the costs to their customers through
    rate increases. Given the cost of these upgrades, however, the utility
    industry is also asking that the taxpayer shoulder some of the burden
    through the congressional appropriations process. Should Congress and the
    Administration agree to this request, they will need to address key issues
    concerning who should receive the funds and how they should be
    distributed. With this in mind, we asked our panel of experts to focus on
    several key questions: (1) To what extent should utilities' vulnerability
    and risk assessment information be considered in making allocation
    decisions? (2) What types of utilities should receive funding priority?
    and (3) What are the most effective mechanisms for directing these funds
    to recipients? Overall, we found a high degree of consensus on the
    following:

    o 	Vulnerability assessment may be a useful tool in determining which
    utilities receive priority for federal funds to improve security. Several
    factors, however, complicate the government's ability to use a primary
    source of this information-the vulnerability assessments (VA) required of
    utilities under the Bioterrorism Act. Among the factors, the act prohibits
    disclosure of information derived from these assessments submitted to EPA.

    o 	Almost all of the experts gave utilities serving high-density
    populations a high or highest funding priority. Utilities serving critical
    assets (such as military bases and other sensitive government facilities,
    national icons, and key cultural or academic institutions) were also
    recommended as high-priority recipients, while relatively few experts
    recommended a high or highest priority for utilities serving rural or
    isolated populations.

    o 	Direct federal grants are the most favored funding mechanism, with many
    experts indicating that such grants should include a requirement for
    matching funds from the recipient. Relatively fewer experts recommended
    the use of the Drinking Water State Revolving Fund, particularly for
    upgrades to be implemented in the near term.

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

      Strong Agreement That Allocation Decisions Should Consider a Utility's
      Vulnerability Assessment

    As noted in chapter 1, the Bioterrorism Act requires that vulnerability
    assessments be prepared by all community water systems serving more than
    3,300 individuals. EPA guidance on preparing these assessments states that
    the assessments should (1) characterize the water system, including its
    mission and objectives; (2) identify and rank the possible consequences of
    malevolent acts; (3) determine the critical assets subject to malevolent
    acts; (4) assess the threat of malevolent acts; (5) evaluate existing
    countermeasures; and (6) analyze risk and develop a plan for reducing risk
    and addressing critical priorities first.

    In considering whether it is appropriate to use vulnerability and risk
    assessment information when making federal funding decisions, about 90
    percent of the experts on our panel (39 of 43) strongly agreed or somewhat
    agreed that funds should be allocated on the basis of VA information. Some
    experts cited the vulnerability assessments required by the Bioterrorism
    Act as the best available information about the current condition of our
    security infrastructure for drinking water (see fig. 5).

    Chapter 3
    Experts' Views on the Allocation and
    Distribution of Federal Funds

    Figure 5: Experts' Views on Whether Federal Funds Should Be Allocated
    Based on Vulnerability Assessment Information

    It may not be a straightforward matter, however, to use this information
    in making such decisions. Several experts pointed to a number of
    complicating factors. One pointed out that "vulnerability assessment (VA)
    tools were not set up for the purpose of identifying and prioritizing
    capital improvement needs for EPA or other federal agencies." He added,
    "Using the VAs would require a high degree of interpretation and judgment
    on someone's part . . ., using a tool that was not designed to clearly
    delineate capital construction needs." Another expert noted similarly that
    "since there is no written guidance for threat analysis, there will have
    to be some method to rank relative threats among different areas." In
    addition, one expert pointed out an inherent dilemma affecting any effort
    to prioritize

    Chapter 3
    Experts' Views on the Allocation and
    Distribution of Federal Funds

    funding decisions based on the greatest risk-whatever does not receive
    attention becomes the best target.1

    In addition, a provision of the Bioterrorism Act precludes disclosing all
    information "derived" from the vulnerability assessments submitted to EPA.
    The provision's intent was to protect sensitive information about
    utilities' vulnerabilities from falling into the hands of individuals who
    seek to harm the utility. The act therefore specifies that only
    individuals designated by the EPA Administrator may have access to the
    copies of the VA and information contained in or derived from it. It
    further specifies that the information must remain protected at all times.

    Thus, while some EPA officials may have access to the information, the
    requirement limits how the agency may use that information. EPA would have
    difficulty, for example, in citing vulnerability assessment findings to
    support decisions or recommendations on allocating security-related funds
    among utilities, as well as decisions concerning research priorities or
    guidance documents.

    To compensate somewhat for these limitations, the American Water Works
    Association Research Foundation has initiated a project in which
    consultants and trainers, who have conducted multiple assessments, are
    seeking to identify lessons learned from the vulnerability assessments
    done to date. According to EPA's draft Water Security Research and
    Technical Support Implementation Plan, this project is designed to obtain
    a more accurate picture of the major vulnerabilities that are generally
    facing the nation's drinking water systems and to share that understanding
    with interested parties.2 EPA and the Research Foundation plan to use the
    results of this project to identify high priority needs and concerns that
    could likely be best addressed by EPA, the research community, or both.
    This project is scheduled for completion in mid-2004.

    1Citing this reason, one expert suggested the addition of a "dual use"
    criterion in which the funds spent would also fix some existing utility
    deficiency, such as noncompliance with a drinking water standard.

    2Environmental Protection Agency, Office of Water, Office of Research and
    Development, Water Security Research and Technical Support Implementation
    Plan, Preliminary Working Draft, July 2003.

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

    Key Criteria to Help The experts identified several characteristics of
    utilities that should be

    used to set funding priorities. The most frequently identified were
    utilitiesDetermine Which (1) serving high-density populations; (2) serving
    sensitive or critical assets, Utilities Should such as military bases,
    academic institutions or icons of American culture; Receive Funding (3) in
    proximity to population centers (whether they serve these population

    centers or serve outlying areas); and (4) serving rural or
    isolatedPriority populations, such as small systems with less
    sophisticated water systems (see fig. 6).

    Figure 6: Experts' Views on Which Types of Water Utilities Should Receive
    Priority for Federal Funds

    Utilities Serving High-Density Populations. Approximately 93 percent of
    the experts (40 of 43) gave high or highest priority to funding utilities
    serving high-density populations. As one expert commented, directing

    Chapter 3
    Experts' Views on the Allocation and
    Distribution of Federal Funds

    limited resources to protect the greatest number of people is a common
    strategy when setting priorities. Most experts shared this view, including
    one who noted the "population served would probably lead to economies of
    scale-you can protect the most people by spending monies at the large
    systems." This expert and others, however, though supportive of funding
    priority for utilities serving high-density populations, cautioned that
    while targeting high-density populations may be the most equitable to the
    entire country, it might not allocate enough to small systems.

    Utilities Serving Sensitive or Critical Assets. Seventy-seven percent of
    the experts (33 of 43) indicated that utilities serving sensitive or
    critical assets should receive a high or highest priority for federal
    funding. Experts identified such utilities as those servicing national
    icons that represent the American image, those serving military bases, or
    those serving sensitive government, academic and cultural institutions. In
    addition, according to one expert, utilities in areas typically receiving
    extensive media coverage, or that serve venues where large groups gather,
    may be of interest to terrorists.

    Utilities in Proximity to Population Centers. Twenty-eight percent of the
    experts (12 of 43) cited the proximity of a given utility to a major
    population center as at least a high funding priority. While most
    utilities close to population centers would be expected to serve the
    population center in which they are located (hence, this third criterion
    would overlap with the first criterion above-utilities serving
    high-density populations), some experts pointed out that this is not
    always the case. Exceptions cited include suburban utilities that may
    serve communities or their major metropolitan areas. Several particularly
    noted that the risks associated with an airborne release of chlorine gas
    elevated their funding priority for this criterion.

    Utilities Serving Rural or Isolated Populations. About 5 percent of the
    experts (2 of 43) identified utilities serving rural or isolated
    populations as at least a high priority for federal funding. Generally,
    these panelists commented that such facilities are least able to afford
    security enhancements, and therefore most need federal support. One
    expert, for example, stated that in light of their financial constraints,
    "smaller utilities do the cheapest thing possible, which means you do a
    quick checklist and then forget about it." He added that because these
    smaller systems do not have enough staff to do a comprehensive assessment,
    they need funding to either hire additional staff or to contract for
    outside expertise.

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

    Importantly, the relatively small percentage of experts supporting funding
    for rural utilities may not fully reflect the concern many panel experts
    have for the safety of these utilities. For example, several who supported
    higher priority for utilities serving high-density populations cautioned
    that, while problems at a large utility will put more people at risk,
    utilities serving small population areas may be more vulnerable because of
    weaker treatment capabilities, fewer highly trained operators, and more
    limited resources. Another expert added that most waterborne disease
    outbreaks have occurred in the systems of smaller utilities.

    Funding Mechanisms We also asked the expert panel to comment on how
    federal funds should be

    distributed to recipients. Nearly 90 percent said that direct federal
    grants toRecommended for utilities would be a somewhat or very effective
    means of distributing funds Distributing Federal to support security
    improvements. The experts also showed strong support Funds for grants in
    which some type of match is required of recipients. Figure 7

    shows their views on these and other funding mechanisms.

    Chapter 3
    Experts' Views on the Allocation and
    Distribution of Federal Funds

    Figure 7: Recommended Approaches for Distributing Federal Funds

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

    Direct Federal Grants	Eighty-six percent of the experts (37 of 43)
    indicated that direct federal grants to the utility would be somewhat or
    very effective in allocating federal funds. Federal grants typically
    provide funding for fixed or known periods for specific projects and often
    have associated terms and conditions. One expert cited EPA's recent
    efforts to quickly distribute security-related grant funds to systems
    serving over 100,000 people (mentioned earlier in this chapter), noting,
    "By far the most successful funding program I have seen to date was the
    large water system Vulnerability Assessment Grant program directed through
    the EPA."3

    Many experts commented that direct grants could be particularly useful in
    quickly addressing lower-cost and more obvious fixes, such as adding gates
    and security cameras. Two others said that with some of these shorter-term
    items addressed, it may then be appropriate to deal with more complex
    issues that require longer-term fixes, such as new buildings and
    securityoriented building design. Another expert added that the use of
    direct EPA grants could help ensure proper use of the funds, noting,
    "Direct EPA grants to water systems should be made available and should
    carry a requirement to use Sandia-like methodologies and concepts," and
    that "the use of [these tools] will lead water systems to develop
    cost-effective risk reduction through effective physical systems, better
    policies, procedures and training and through creative consequence
    mitigation."

    Matching Grants	Many favoring direct grants were among those who said that
    a matching requirement for such a grant would be desirable for
    distributing future federal funds. Specifically, 74 percent of the experts
    (32 of 43) said that federal grants with a matching requirement would be
    somewhat or very effective in distributing federal funds. One expert
    pointed out that such a requirement would effectively leverage limited
    federal dollars. Another agreed, noting that such a cost-sharing approach
    would offer "a big incentive" in getting utilities to devote their own
    funds to enhance their security. The expert cautioned, however, that the
    required match would

    3As noted earlier in this report, these grants supported VAs, remediation
    planning, and emergency plan development through August 2002. EPA issued
    grant awards to over 400 publicly owned and privately owned community
    water systems that regularly serve populations over 100,000. This program
    was noncompetitive, and all eligible utilities that submitted completed
    grant applications received awards. The value of each grant did not exceed
    $115,000. An EPA official pointed out that higher dollar grant programs
    might have additional administrative requirements.

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

    have to be low enough to make the grant attractive, suggesting a maximum
    of 50 percent.

    Another suggested a strategy to get the most out of a matching grant
    program. One, for example, said that participating utilities should be
    provided with some initial matching funds to get started, and that
    additional funds would then be contingent upon how effective or creative
    they were in using the first round of funding.

        Funds Distributed by an Independent Agency

    Sixty-five percent of the experts (28 of 43) indicated that it would be
    somewhat or very effective to have federal funds distributed through an
    independent agency. Experts generally characterized an independent agency
    as, among other things, being independent of regulatory decision making,
    and not bound by traditional points of view.

    Several experts elaborated on the desirability of such an independent
    entity to allocate security-related funds. One expert, for example,
    favored moving the responsibility for allocating funds to a disinterested
    third party-one with no infrastructure to support or hidden agenda but
    instead with strong decision analysis and consensus building expertise.
    Another expert suggested that federal funding be "leveraged with industry
    funding through an organization like [the American Water Works Association
    Research Foundation.]" The expert further stated that the use of an
    organization like the Research Foundation is important because it has a
    demonstrably effective two-way communication with the end users, namely
    the U.S. water utility industries; the Research Foundation can adequately
    represent the needs of industry to the research community as well as
    inform the industry of important national-level research findings that
    will influence their day-to-day operations. He indicated that
    communication between the water utilities and such an independent agency
    would be superior to communication between the utilities and EPA, noting,
    "Although [EPA] is legitimately engaged in research, [it] is also
    perceived as an agency with regulatory authority and is thus viewed
    somewhat circumspectly by industry as a whole."

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

        Drinking Water State Revolving Fund

    About 51 percent of the experts (22 of 43) indicated that the Drinking
    Water State Revolving Fund (DWSRF) would be somewhat or very effective in
    distributing federal funds. The DWSRF program provides federal grant funds
    to states, which in turn allow the states to help public water systems in
    their efforts to protect public health and ensure their compliance with
    the Safe Drinking Water Act. States may use DWSRF funds to provide loans
    to public water systems, and may reserve a portion of their grants to
    finance other projects that protect sources of drinking water and enhance
    the technical, financial, and managerial capacity of public water systems.
    In particular, under EPA's November 2001 guidance, states may use DWSRF
    assistance to help systems complete both vulnerability assessments, and
    contingency and emergency response plans.4 Many types of securityrelated
    infrastructure improvements to ensure security are also eligible for DWSRF
    funding, as specified in the EPA guidance.

    According to one expert who favored existing grant and loan programs like
    the DWSRF for enhancing security, continuing to support the training and
    assistance efforts of lead state agencies "is the most beneficial activity
    the federal government could play to encourage water utilities across the
    country to address security related issues in a comprehensive and
    costeffective manner." Another shared this view, explaining that states
    are wellpositioned to help manage the process, and that they "must approve
    system upgrades anyway." This expert also suggested that by using the
    stateadministered DWSRF, "states could track this information and report
    it on a regular basis to EPA and Congress," thereby documenting what has
    been accomplished and what still needs to be done.

    One expert cautioned, however, that the DWSRF would be effective only if a
    process were established that separated funding for security-related needs
    from other infrastructure needs. Reflecting the concern expressed by many
    others about the timeliness of distributing funds through the DWSRF, this
    individual commented that the current DWSRF process is too bureaucratic
    and requires too many hurdles for it to be an expeditious means for
    providing funds.

    4Environmental Protection Agency, Office of Water, Use of the Drinking
    Water State Revolving Fund (DWSRF) to Implement Security Measures at
    Public Water Systems, EPA 816-F-02-040, November 2001, available on the
    Web from http://www.epa.gov/ogwdw000/dwsrf/security-fs.pdf.

                                       Chapter 3
                          Experts' Views on the Allocation and
                             Distribution of Federal Funds

    Tax-Based Incentives	About 28 percent of the experts (12 of 43) reported
    that tax-based incentives would be somewhat effective in encouraging water
    utilities- specifically privately owned utilities-to invest in security
    improvements. The inducements offered in these programs may include tax
    credits, property tax exemptions or abatements, and sales and use tax
    exemptions.

    According to one expert, tax incentives could increase the efficiency of
    dollars spent on water security, generating new ideas and approaches.
    Furthermore, by offering additional funds for creative and cost-effective
    solutions, these ideas could become best practices and shared with others.
    Finally, he commented, "If allocations were phased and secondary funds
    were based upon how well the first funds were spent, there would be
    incentive to spend the first funds wisely." Another expert suggested that
    the provision of financial or other tax incentives to utilities should be
    contingent upon evidence that they have improved their security as defined
    by a standard set of measurements.

    Chapter 4

    Activities Experts Identified As Most Deserving of Federal Support

    When experts were asked to identify and rate the specific
    securityenhancing activities most deserving of federal support, the
    activities experts most frequently identified fell into three broad
    categories:

    o 	Physical and technological improvements. These improvements include
    altering drinking water systems to improve physical security, and
    conducting research and development on technologies to prevent, detect, or
    respond to an attack. Experts most strongly supported near real-time
    monitoring technologies, which they considered particularly useful in
    quickly detecting contaminants in water that has left the treatment plant
    for consumers.

    o 	Education and training. This category includes, among other things,
    supporting simulation exercises to provide responders with experience in
    carrying out utilities' emergency response plans; specialized training of
    utility personnel charged with security and general training to improve
    the security awareness of their staffs; and multidisciplinary teams that
    can provide independent analysis of utilities' security preparedness and
    recommend security-related improvements.

    o 	Strengthening working relationships between utilities and other public
    agencies. This category includes strengthening relationships between water
    utilities and other entities that may have key roles in an emergency
    response (such as public health agencies, enforcement agencies, and
    neighboring utilities). It also includes developing common protocols to
    engender a consistent approach among utilities in detecting and properly
    diagnosing threats, and testing local emergency response systems to ensure
    that participating agencies coordinate their actions effectively.

    We found that EPA has a number of initiatives that address many of these
    activities, some of which are required by the Bioterrorism Act. In most
    cases, however, the activities are in the planning stages, are limited in
    scope, or are dependent on the availability of future appropriations.

    Activities to Enhance Our panel of experts most frequently recommended
    nine types of activities

    to improve physical security and support technological improvements,
    asPhysical Security and figure 8 shows. Of the nine types, the development
    and implementation of Support Technological near real-time monitoring
    technologies was rated by far the most important Improvements activity
    warranting federal support, with many experts stating that this

                                       Chapter 4
                         Activities Experts Identified As Most
                              Deserving of Federal Support

    critical activity would probably not be implemented by many utilities
    without some degree of federal support.

    Figure 8: Activities Identified by Expert Panel to Enhance Physical
    Security and Support Technological Improvements

    Developing Near Real-Time Approximately 93 percent of the panel experts
    (40 of 43) rated the Monitoring Technologies expansion of research and
    development of near real-time monitoring Viewed As Highest Priority
    technologies as having at least a high priority. These technologies were

    cited as critical to helping drinking water systems detect and respond
    quickly to threats or actual contamination events, to minimize the impact
    of any contamination by facilitating a quick response, and to help in
    restoring systems after an event. Significantly, almost 70 percent of the
    experts (30 of 43) rated this activity as warranting the highest priority
    for

    Chapter 4
    Activities Experts Identified As Most
    Deserving of Federal Support

    federal funding-far surpassing the rating of any other category. Most of
    these experts indicated that smaller utilities would be unable to use
    these technologies without federal support.

    A wide variety of monitoring technologies can be used in drinking water
    systems and, depending on their specific functions, may be deployed at
    locations upstream from, within, or downstream from drinking water
    treatment plants. Conventional monitors typically measure things such as
    pH (acidity and alkalinity), turbidity, conductivity, temperature, organic
    compounds and other contaminants. Biomonitors employ living organisms,
    such as fish or algae, to provide information on other water constituents
    that may impair human health or the environment.

    Emerging monitoring technologies are capable of providing near real-time
    results for a wider array of potentially harmful water constituents.
    According to some experts, near real-time monitors may be strategically
    placed at points within the distribution system, where they may be able to
    quickly detect potentially dangerous backflows that may enter the system.
    They may also be used to augment a system's conventional monitoring
    system. As some experts suggested, for example, pressure sensor systems
    and biodetector networks could benefit the utility in its security
    preparedness as well as its regular operations by describing breaches or
    leaks in water mains, or by observing microbial contamination in a
    nonterrorist event. Some monitors based on emerging technologies capable
    of providing near real-time results may also be placed at the "point of
    service," where they can alert the consumer or utility about the potential
    for contaminated water entering a home or business.

    These views are substantiated by a 2002 report by the National Academies
    of Science, which also highlighted the need for improved monitoring
    technologies as one of the four highest-priority areas for drinking water
    research and development. The report noted that such technologies differ
    significantly from those currently used for conventional water quality
    monitoring, stating further that sensors are needed for "better, cheaper,
    and faster sensing of chemical or biological contaminants."1

    1The National Research Council of the National Academies, Making the
    Nation Safer: The Role of Science and Technology in Countering Terrorism
    (Washington, D.C.: The National Academies Press, 2002).

    Chapter 4
    Activities Experts Identified As Most
    Deserving of Federal Support

    The need for near real-time monitoring technologies was also recognized in
    the Bioterrorism Act, which directed EPA to review analytical
    methodologies and detection techniques that can quickly and accurately
    provide information on contaminants.2 As an initial step in meeting this
    requirement, the agency is reviewing such early warning systems, including
    those designed to monitor levels of chemical, biological, and radiological
    contaminants or indicators of contaminants.

    EPA is also planning to launch a number of projects through its Office of
    Water and Office of Research and Development. For example, one project,
    planned for November 2003 through May 2004, would entail a detailed
    examination of commercially available real-time monitors. According to
    EPA, the information derived from this project would be placed in a
    compendium for manufacturers and vendors of monitoring technology,
    allowing them to better focus technology development efforts.3 Another
    project aims to evaluate how well many currently used water monitoring
    technologies would deal with the introduction of various contaminants.4
    Among other efforts, EPA also hopes to begin a project in November 2003 to
    test and evaluate the applicability of other industries' monitoring
    technologies to the security-related monitoring needs of drinking water
    systems. EPA's preliminary cost estimates for monitoring-related projects
    are about $5 million, and their initiation or completion will depend on
    the availability of fiscal year 2004 and 2005 funds.

    2Bioterrorism Act, S 402.

    3In addition, since August 2002, EPA has augmented its Environmental
    Technology Verification (ETV) Program to include water security issues.
    The ETV Program can be used to test, evaluate, and eventually bring
    promising technologies (e.g., detection and "point of use" treatment
    technologies) to the marketplace. EPA has spent approximately $2 million
    of fiscal year 2002 supplemental funds on the ETV Program and its related
    projects, and estimates the total costs for the ETV projects at $8.1
    million. Once technologies are verified, EPA believes the technology can
    be tested in pilot-scale studies and potentially used at drinking water
    systems.

    4This work is planned to review both large and small treatment system
    monitoring capabilities, distribution systems, and remote telemetry
    monitoring research, and will be conducted in controlled conditions at the
    Office of Research and Development's Water Awareness Technology Evaluation
    Research and Security Center, located at EPA's Test & Evaluation Facility.
    The work is projected to end around December 2005.

                                       Chapter 4
                         Activities Experts Identified As Most
                              Deserving of Federal Support

      Increasing Laboratories' Capacity to Deal with Terrorist Attacks

    Over two-thirds of the experts (29 of 43) rated increasing laboratory
    capacity as a high or highest priority for federal funding. Many experts
    on our panel commented that laboratories are being challenged just to keep
    up with their normal responsibilities to collect, test, and analyze large
    volumes of water samples for water utilities and other clients.
    Consequently, they expressed reservations about the ability of
    laboratories to handle these responsibilities in the event of "surge"
    events caused by the chemical, biological, or radiological contamination
    of water supplies.

    As one expert explained, few laboratories can test for a full range of
    contaminants, and these limitations would be amplified if the laboratories
    had to respond to a terror-related emergency. Another expert believed that
    in the event of an emergency, many utilities would be confused about which
    labs to use for testing samples of suspect water, and that a network of
    labs needs to be established so that quick results of tests could be
    obtained. The National Academies of Science report raised similar
    concerns, adding that legal concerns over the accuracy of laboratories'
    tests may make them reluctant to participate in testing under such severe
    conditions. The report concludes that a "dearth of laboratory capacity
    poses a serious limitation to our ability to respond to a contamination
    attack on the water system."5

    One panelist suggested that state health departments need additional
    federal funds to better develop the regional capacity to sample water, and
    to improve analytical techniques used to detect contaminants. He further
    noted that state laboratories can and would serve as a component of an
    emergency response team, and that it would be effective for state
    laboratory programs to integrate these new or increased responsibilities
    with their existing responsibilities under grants from the Centers for
    Disease Control and Prevention.6

    5The National Research Council of the National Academies, Making the
    Nation Safer: The Role of Science and Technology in Countering Terrorism
    (Washington, D.C.: The National Academies Press, 2002).

    6The Centers for Disease Control and Prevention (CDC) currently supports
    programs directed to states in order to improve laboratory capacity and to
    ensure public health preparedness, such as the Emerging Infections
    Program, the infectious disease Epidemiology and Laboratory Capacity
    Program, and the National Electronic Disease Surveillance System. For
    fiscal year 2003, CDC made approximately $870 million available to
    applicants.

                                       Chapter 4
                         Activities Experts Identified As Most
                              Deserving of Federal Support

    EPA is actively supporting research in order to improve laboratory
    capacity nationwide, and has identified a series of ongoing and future
    projects toward that end. One project, which was due for completion in
    September 2003, would result in a water-specific compendium of
    laboratories that may be able to assist water utilities if contamination
    occurs. A related project would assess existing laboratory capacity to
    analyze drinking water samples in emergency situations. Another project,
    initiated in June 2003, is intended to analyze resource limitations at
    laboratories, such as personnel, equipment, training, and methods, and to
    provide recommendations to address these limitations.

    According to EPA water officials, the agency may spend approximately $2.4
    million starting in fiscal year 2003 to carry out these and other projects
    to assess and address the capacity of the nation's laboratories to deal
    with emergency situations. However, the experts' views on this matter
    suggest that given the magnitude of this long-standing problem-even under
    normal circumstances-it will be difficult enough to accurately
    characterize the challenge of laboratory analysis during a drinking water
    emergency, much less address the problem effectively.

      "Hardening" Assets and Completing Other Physical Improvements

    Over two-thirds of the experts (29 of 43) rated activities that would
    improve (or "harden") the basic physical security of drinking water
    systems as warranting either a high or highest priority for federal
    funding. These activities include, among others, adding or repairing
    fences, locks, lighting systems, and cameras and other surveillance
    equipment. The National Academies of Science report reached similar
    conclusions about the need to harden certain facilities. It describes how
    many parts of the drinking water infrastructure remain highly accessible,
    and notes that access controls need to be improved. The report further
    noted that improved technologies are needed to protect against explosives
    delivered by motor vehicle or rail.7

    However, the experts' support for hardening activities came with some
    notable caveats. For example, one expert said that many utility operators
    are reluctant to invest in physical upgrades because of fiscal shortfalls
    and other competing Safe Drinking Water Act requirements, despite the
    potential for such upgrades to be relatively cheap (many costing less than

    7The National Research Council of the National Academies, Making the
    Nation Safer: The Role of Science and Technology in Countering Terrorism
    (Washington, D.C.: The National Academies Press, 2002).

                                       Chapter 4
                         Activities Experts Identified As Most
                              Deserving of Federal Support

    $5,000 per system). According to this expert, if "an effective and
    adequate grant program could be developed and managed," small amounts of
    funding could address the problems of many small drinking water systems.

    Some experts also cited the limitations inherent in efforts to
    comprehensively harden the physical drinking water facility. For example,
    unlike nuclear power or chemical plants, drinking water system assets are
    not concentrated in a geographically secure area that can be hardened
    against all types of contamination or attack. Rather, they are spread over
    large geographic areas, particularly the source water and distribution
    systems. Thus, these panelists noted, while some degree of physical
    security enhancement at drinking water facilities is appropriate, efforts
    to construct physical barriers to comprehensively thwart attacks would be
    of limited effectiveness. Several said that efforts might be better
    directed at intruder detection, or adding security guards or electronic
    equipment.

    The American Water Works Association Research Foundation is designing a
    project that will collect information on vulnerabilities, threats,
    potential security improvements, and innovative solutions to certain
    physical vulnerabilities. This project began in June 2003 and is scheduled
    for completion in July 2004. EPA also noted that utilities may be eligible
    to use a portion of the Drinking Water State Revolving Fund for this
    purpose.8

      Establishing Engineering Building Standards

    Approximately 49 percent of the experts (21 of 43) rated the establishment
    of engineering and building standards for drinking water systems, which
    integrate security concepts into building design, as having either a high
    or highest priority for federal funding. Some noted that improved
    standards could yield multiple benefits by improving upon the design and
    functionality of a drinking water system while augmenting security to
    guard against attack.

    Others wrote that new drinking water systems, which are being constructed
    and designed regularly, provide opportunities for incorporating security
    measures. One expert noted specifically that new design measures "may
    include increased physical security, elimination of

    8Environmental Protection Agency, Office of Water, Use of the Drinking
    Water State Revolving Fund (DWSRF) to Implement Security Measures at
    Public Water Systems, EPA 816-F-02-040, November 2001, available on the
    Web at http://www.epa.gov/ogwdw000/dwsrf/security-fs.pdf.

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                         Activities Experts Identified As Most
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    `single points of failure,' the inclusion of redundancy into the overall
    design," or the creation of multiple pathways from source to tap. Another
    noted that the development and implementation of new or upgraded systems
    with better layouts can reduce unauthorized access, improve detection, and
    assist in isolating problems at the water facility.

    According to another expert, standardization is needed across local
    jurisdictions so that neighboring providers may assist one another in a
    crisis. This view was echoed in the National Academies of Science report,
    which concluded that the lack of standardization impedes the introduction
    of new processes and technology."9

    According to the EPA Action Plan, the agency is also considering the
    development of information on building standards that could enhance
    security of drinking water facilities, while improving operations and
    better protecting water quality. The plan noted that such standards would
    be modeled after those developed by the Department of Defense, which found
    that "dual use" aspects of improved design features are desirable because
    many security enhancements are not cost effective without some form of
    multiple benefit.10 Specifically, the proposed EPA plan includes working
    with standards-setting organizations to develop voluntary design standards
    and recommendations for new construction, reconstruction, and retrofitting
    of drinking water facilities with a focus on integrating security with
    ongoing operations.

              Requiring Backflow Protections in Water Distribution Systems

    Inappropriate use of piping systems, whether intended or not, could result
    in a backflow of contaminated water into distribution systems, where it
    could then find its way to other consumers. Backflow protection devices
    are one way to potentially mitigate this threat when installed either at
    access points to buildings or homes, or at cross connections in the
    distribution system.

    9The National Research Council of the National Academies, Making the
    Nation Safer: The Role of Science and Technology in Countering Terrorism
    (Washington, D.C.: The National Academies Press, 2002).

    10Department of Defense, Unified Facilities Criteria (UFC): Department of
    Defense Minimum Antiterrorism Standards for Buildings, UFC 4-010-01, July
    2002, available on the Web at
    http://www.acq.osd.mil/ie/irm/irm_library/UFC%204_010_01%20-%2031JUL2002.pdf.

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                         Activities Experts Identified As Most
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    Approximately 47 percent of the experts in our study (20 of 43) said
    research and implementation of such backflow protection warranted a high
    or highest priority for federal funding. These backflow protection devices
    could be coupled closely with monitoring and metering technologies that
    can sense contaminant concentrations in drinking water systems. Another
    noted further that automated meter reading is already being used, but the
    ability to get real-time readings is essential in order to rapidly notify
    technicians or officials if a backflow is detected. This could help reduce
    or eliminate threats to the distribution system.11

      Testing and Further Protecting SCADA and Cyber Systems

    Section 402 of the Bioterrorism Act requires a review of "methods and
    means by which information systems, including process controls and
    Supervisory Control and Data Acquisition (SCADA) and cyber systems at
    community water systems, could be disrupted by terrorists or other
    groups." Slightly more than one-third (15 of 43) of the experts on our
    panel rated federal funding to test and further protect SCADA systems as
    warranting a high or highest priority. Information provided at the 2003
    American Water Works Association (AWWA) Water Security Congress
    highlighted the limited security features inherent in many SCADA systems,
    citing few security protocols, lack of firewalls, and SCADA data being
    routed outside of a facility. Other SCADA systems are placed in networks
    that are accessible through the Internet and, therefore, are exposed to
    additional vulnerabilities. One expert added that because the majority of
    the SCADA software is created outside the United States, the expert
    favored establishing and enforcing security standards for the software, as
    well as testing the software before installation at water utilities. This
    expert believed that federal activities should include working with
    vendors of SCADA systems and related software in order to ensure that
    security concerns are appropriately incorporated into the design of these
    systems.

    According to EPA, to meet its responsibilities under the Bioterrorism Act,
    the agency is planning to pursue research in a number of areas to reduce

    11The Bioterrorism Act recognized the importance of dealing with this
    potentially serious source of contamination. Specifically, section 402 of
    the Bioterrorism Act calls for a review of "methods and means by which
    pipes, constructed conveyances, collection, pretreatment, treatment,
    storage and distribution systems that are utilized in connection with
    public water systems could be altered or affected so as to be subject to
    cross-contamination of drinking water supplies." In addition, section 402
    requires the review of "procedures and equipment necessary to prevent the
    flow of contaminated drinking water to individuals served by public water
    systems."

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                         Activities Experts Identified As Most
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    the risks of attacks on drinking water SCADA systems and to better
    understand their potential consequences, starting with an identification
    of the possible threats posed to such systems. Starting in fiscal year
    2004, EPA also intends to (1) develop models that can simulate the
    consequences of physical and cyber attacks, emphasizing the distribution
    system and eventually cascading or interrelated consequences; (2) assess
    the consequences of a loss of pressurized water on other critical
    infrastructure sectors such as power, transportation, chemical supplies,
    and communications; (3) compile technical information and informational
    tools that can help in analyzing the consequences of potential physical
    and cyber threats; and (4) establish minimum security standards for the
    protection of SCADA systems.

      Developing Computer Models of Terrorist Events in Water Systems

    Computer modeling can be an important tool in understanding how to prevent
    or mitigate contamination episodes. Specifically, modeling can be used to
    simulate contamination events, which in turn can enhance the development
    of emergency response plans, help select critical locations in
    distribution systems for positioning and placing monitoring devices, and
    guide the actions of first responders.

    About 30 percent of the experts (13 of 43) rated the development of
    computer models of terrorist events as deserving a high or highest
    priority for federal funding. A number of experts noted the relevance of
    this work for understanding the characteristics of distribution systems.
    One expert, for example, advocated a "model-based distribution system flow
    simulator that can be easily tailored to a specific water system such that
    `what-if' contamination scenarios can be posed to the system through
    simulation in order to explore weaknesses in the system." The expert
    further stated that such a modeling system would also have to take into
    account the fate and transport of the candidate contaminants throughout
    the system, and that the approach "would be a fusion of information from
    both threat assessment and system modeling research efforts."

    According to EPA officials, the agency is evaluating distribution system
    and source water hydraulic models, such as EPANET, PipelineNet, and
    Riverspill, that can be used to follow water movements and tracer
    chemicals through distribution systems. EPA notes that several large
    utilities are currently using such models, but that medium and small
    utilities face challenges in applying them to their systems. EPA was also
    planning to initiate a project in September 2003 that will attempt to
    improve these models by incorporating health-related data, data

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                         Activities Experts Identified As Most
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    concerning consumer complaints, Geographic Information System data, and
    information from SCADA systems. Overall, EPA's preliminary cost estimates
    are $2.8 million for modeling projects to develop more effective
    protection of distribution systems.

      Establishing Baseline Values for Water Constituents

    About 23 percent of the experts (10 of 43) rated the importance of
    establishing baseline values (e.g., concentrations of certain chemicals
    typically found in a drinking water system) for drinking water system
    constituents as a high or highest priority warranting federal support. One
    expert noted that developing and understanding the basic characteristics
    and typical monitoring results of a distribution system are essential to
    understand if and when a drinking water system is subject to
    contamination. According to other experts, because distribution systems
    may be the most vulnerable portion of a system, and the most complex in
    terms of understanding appropriate response actions, baseline data
    available from pre-emergency studies could be helpful.

    In addition to providing utility operators with information on normal
    operating conditions within their systems, understanding baseline levels
    of water constituents is often needed to develop certain monitoring
    technologies. For example, monitoring devices that measure the light given
    off during certain organic reactions can be indicative of possible water
    contaminants, but only if baseline luminescence levels are known and can
    be incorporated into measurements and calibrations.

    In March 2004, EPA plans to launch a project to survey available
    information on background levels of certain contaminants of concern that
    are known or suspected to occur in source or treated drinking water. The
    initiation of this project depends on the progress of another planned
    project to develop an improved understanding of the biological, physical,
    chemical, and toxicological properties of contaminants.

    Improving Treatment About 23 percent of the experts (10 of 43) rated the
    improvement of

    Technologies	technologies that can better treat the kind of chemical or
    biological agents likely to be used in attacking a drinking water system
    as warranting a high or highest priority for federal funding. While water
    treatment technologies have advanced, as indicated in EPA's research and
    implementation action plans, treatment capabilities still need to be
    evaluated and improved for a wide array of microbial and other
    contaminants. One expert noted that research on membranes (filters that
    can remove small particulates or

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                         Activities Experts Identified As Most
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    microorganisms) and other advanced treatment techniques is producing
    promising results, and that further progress in this area may be important
    in making "water an unattractive target."12 Specifically, treatment
    technologies needing further development include ultraviolet systems and
    improved reverse osmosis techniques. Finally, other experts believed that
    there should be more research and development of point-of-use treatment
    devices (possibly installed at the meter), and that a distributed
    treatment process-one that involves the treatment of water at multiple
    locations within a drinking water system or uses a variety of
    methods-would provide additional security against contamination.

    According to EPA officials, the agency hopes to initiate a series of
    projects to address drinking water treatment issues. Among these are
    efforts to (1) identify alternative treatment options by reviewing
    literature on contaminants most likely to be used in attacking drinking
    water systems; (2) prepare systematic methods to evaluate treatment
    technologies for likely contaminants; (3) perform bench-scale studies
    (those performed in a laboratory under controlled conditions) to determine
    the effectiveness of typical disinfection and contaminant removal
    technologies; (4) identify alternative treatment options at the point of
    use or point of entry; and (5) develop guidance for discharging
    contaminated water that had been used to clean contaminated substances or
    equipment.

      Activities to Improve Education and Training

    Experts strongly supported improved training and education to help ensure
    that utility personnel can detect and respond to malevolent acts affecting
    their facilities. As shown in figure 9, the education and training
    activities most frequently recommended for federal support generally fell
    into four categories: (1) specialized training of utility personnel with
    security-related responsibilities, (2) support for regional simulation
    exercises to test emergency response plans, (3) general security awareness
    training for utility personnel not specifically charged with
    security-related responsibilities, and (4) use of multidisciplinary
    consulting teams ("Red Teams") to independently evaluate drinking water
    utilities and their security concerns.

    12For general information on membrane treatment options or examples, refer
    to EPA's proposed draft Membrane Filtration Guidance Manual, EPA
    815-D-03-008, Office of Water, June 2003.

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                         Activities Experts Identified As Most
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      Figure 9: Activities Identified by Experts to Improve Education and Training

      Required Training of Key Utility Personnel

    Many experts underscored the importance of training drinking water
    personnel with security-related responsibilities in techniques to prevent,
    detect, and, if necessary, respond to an attack on their system. This
    training would include, for example, training for laboratory technicians
    who test for potential contaminants; for utility operators who perform
    day-to-day duties or who are uniquely positioned to monitor and respond to
    potential contaminants at a treatment facility; and for mechanical, civil,
    and environmental engineers who design, repair, and maintain drinking
    water systems.

    Overall, over 90 percent of the experts (39 of 43) indicated that required
    training for security-related personnel warrants at least a high priority
    for

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                         Activities Experts Identified As Most
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    federal funding, with approximately 56 percent (24 of 43) indicating that
    it deserved highest priority. One expert said that there should be
    mandatory federal training for employees at drinking water systems serving
    10,000 people or more.

    To date, EPA has launched at least three programs that emphasize technical
    training, one directed to states and another to utility employees and
    officials. Through one program, beginning in fiscal year 2002, EPA has
    made grants available to states and territories that, in part, are
    intended to support security-related training and education.13 Also, EPA
    has developed two train-the-trainer programs. One of these, begun in
    fiscal year 2003 to provide assistance to drinking water systems serving
    fewer than 50,000 people, awarded $1.5 million in grants to five nonprofit
    training and technical assistance organizations.14 Another program makes
    available "no cost" security training for drinking water systems that
    serve populations of 50,000 to 100,000.15 This program, which also
    provides assistance to develop vulnerability assessments and emergency
    response plans, includes provisions for follow-up technical assistance and
    training.

    Regional Simulation Regional simulation exercises to test emergency
    response plans are Exercises to Test intended to provide utility and other
    personnel with the training and Emergency Response Plans experience needed
    both to perform their individual roles in an emergency

    and to coordinate these roles with other responders within and outside the
    utility. A successful emergency response plan can help these staff members
    more quickly identify and respond to an emergency and more quickly restore
    services and public confidence.

    13The additional monies are for coordination within the state or territory
    on homeland security issues, developing or enhancing vulnerability
    assessments and emergency response plans, and setting up a communications
    strategy for states and utilities.

    14The grants (up to $300,000 per entity) were intended to build staff
    expertise in drinking water security, after which these individuals would
    train state, tribal and local agencies at no cost on security and
    technical issues. Grant recipients included the Maryland Center for
    Environmental Training, the National Environmental Services Center, the
    National Rural Water Association, the Rural Community Assistance Program,
    and the Water Environment Federation.

    15This is a program implemented by the International City/County
    Management Association (ICMA), an organization representing local
    government leaders, and the Water Environment Federation (WEF), a
    not-for-profit technical and educational organization.

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                         Activities Experts Identified As Most
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    The experts on our panel underscored the importance of conducting such
    exercises, with more than 88 percent (38 of 43) rating these exercises as
    warranting a high or highest priority for federal funding. Exercises not
    only give individuals invaluable practice, but also allow officials to
    better determine what kind of coordinated response is best for a given
    adverse event. Other experts described the need to identify responsible
    agencies that will make difficult decisions during an emergency, such as
    whether to restrict use of the drinking water supplies. And if water
    supplies were disrupted, subsequent issues would also need to be
    anticipated, such as how to fight fires, mobilize resources (such as the
    distribution of bottled water), and communicate among the emergency
    responders and to the public.

    EPA's Water Protection Task Force has developed a program to support
    training exercises across the United States at systems serving over
    100,000 people. In 2003, the agency intends to conduct workshops at
    approximately 30 to 45 locations across the United States to provide
    guidance on emergency response plans and on the Bioterrorism Act's
    requirements; to present an overview on protocols for responding to
    contamination events; and to provide information on environmental
    laboratory capabilities.16

      General Awareness Training on Security Issues

    In addition to supporting the specialized training recommended for
    responders "on the front lines" of an emergency, experts strongly endorsed
    a more general level of training for all utility personnel. The need to
    emphasize culture change at utilities, as well as among law enforcement
    staff, was summarized by an AWWA official who commented at a recent
    security conference about how multimillion-dollar investments in security
    technology can be undermined by an employee using a brick to prop open a
    usually locked door.

    About 79 percent of the experts (34 of 43) rated such "general awareness"
    training as warranting at least a high priority for federal funding. One
    expert noted that such training is needed because the water sector has
    traditionally been slow to respond to new challenges (such as new

    16In addition to these workshops, EPA published a guidance document for
    utilities to provide for uniform response, recovery and remediation
    processes. (See Guidance for Water Utility Response, Recovery &
    Remediation Actions for Man-Made and/or Technological Emergencies, EPA
    810-R-02-001, April 2002).

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                         Activities Experts Identified As Most
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    regulations), and that such training could therefore be particularly
    important in raising the consciousness of staff to security-related
    issues.

    During fiscal year 2002, EPA completed general security training, in
    collaboration with the American Water Works Association and the Water
    Environment Federation, to educate water utility managers and operators
    about the "entire spectrum of security issues," including vulnerability
    assessments, development of emergency response plans, and risk
    communication. The organizations convened workshops, conducted webcasts,
    and offered online courses. More recently, EPA's Office of Research and
    Development has developed a draft Water Security Research and Technical
    Support Implementation Plan for key research-related projects, some of
    which involve developing training modules and related guidance documents
    that will address monitoring, threat evaluation, and analytical protocols.
    This training would address the specialized needs of field and laboratory
    personnel. However, according to EPA officials, some of these efforts
    would also support the general awareness training needs of the larger
    universe of utility personnel.

      Multidisciplinary Consulting Teams to Analyze Utilities' Risks and
      Vulnerabilities

    Multidisciplinary consulting teams, often called "Red Teams," consist of
    experts in a wide variety of security-and drinking water-related
    disciplines. Red Teams could be used to provide independent analyses of
    utilities' vulnerabilities, and to assess their emergency response
    preparedness, as well as to educate law enforcement and public health
    agencies. Approximately half of the experts (22 of the 43) rated support
    for certified Red Teams as warranting either a high or highest priority
    for federal funding.

    According to one expert, an effective Red Team would consist of "at least
    six people with widely varying areas of expertise (physical, water
    quality, SCADA, policies and procedures, emergency response, etc.), and
    are able to work together and sort through various concerns and priorities
    to develop a unified understanding of the security issues at a given
    utility." He noted further that the team would visit utilities, and
    recommend changes or upgrades to security standards, procedures, and
    facilities, based on their best professional judgment. Another expert
    noted that Red Teams could make client utilities aware of threat
    assessment information, and may be able to review vulnerability
    assessments independently.

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                         Activities Experts Identified As Most
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      Activities to Strengthen Relationships between Agencies and Utilities

    Experts also cited enhanced cooperation and coordination among government
    organizations and utilities as a key component in drinking water
    utilities' efforts to improve their security. Our analysis of experts'
    responses identified six types of activities in this category as most
    deserving of federal support.17 These activities, in figure 10, include
    (1) developing common protocols for monitoring drinking water threats, (2)
    improving relationships between drinking water utilities and public health
    agencies, (3) improving relationships between utilities and law
    enforcement agencies, (4) testing local emergency response systems, (5)
    sharing resources among utilities, and (6) establishing physical
    interconnections between drinking water facilities and distribution
    systems.

    17More than 50 percent of the experts rated these activities as deserving
    a high or highest priority for federal funding relative to the other
    activities. Experts also identified three other activities scoring under
    50 percent, including the formation of better relationships between water
    associations and federal agencies (about 26 percent), developing public
    education programs (about 19 percent), and forming a tracking system to
    monitor security funding (about 12 percent).

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                         Activities Experts Identified As Most
                              Deserving of Federal Support

      Developing Common Protocols to Monitor Drinking Water Threats

    According to EPA, drinking water utilities vary widely in how they
    perceive threats and detect contamination. These differences often occur
    because utilities have few common protocols to help promote a more
    consistent approach in performing activities such as assessing or
    monitoring threats.

    The experts in our study also identified this lack of consistency, with
    over 90 percent (39 of 43) rating the development of common protocols to
    monitor drinking water threats as warranting a high or highest priority
    for federal funding. Some experts described the need for a nationally
    consistent and uniform analytical response to contamination threats,

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                         Activities Experts Identified As Most
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    noting in particular the need to have protocols in place for identifying,
    sampling, and analyzing contaminants. Some also cautioned that older
    methodologies need to be reexamined in the context of terrorism, and that
    new protocols need to be reviewed as they are developed. For example, any
    standard process developed for detecting potentially harmful
    microorganisms in drinking water needs first to be validated, and then
    implemented appropriately for different sizes and types of utilities.

    EPA officials cited a number of projects under way to develop or improve
    protocols that address a variety of activities highlighted in other
    sections of this chapter. They noted that guidance documents in
    development will include a "toolbox" with information on how to respond to
    threats and attacks. EPA also intends to develop guidance to assist law
    enforcement officers and utility officials in assessing the credibility of
    threats, and guidance on sampling and performing recovery and remediation
    work at the sites of potential or real contamination.

      Improving Relationships between Utilities and Public Health Agencies

    Drinking water utilities and public health agencies would appear to be
    natural allies in a common health-related enterprise-delivering safe,
    sanitary water supplies to the vast majority of the nation's population.
    Their relationship is seemingly reinforced further in many states where
    the state's drinking water office is located within its health department.

    Nonetheless, about 86 percent of the experts in our study (37 of 43)
    recommended a high or highest funding priority for activities devoted to
    improving working relationships between drinking water utilities and
    health agencies. Such activities may include

    o 	characterizing and studying potential biological, chemical, and
    radiological contaminants and getting this information to all levels of
    public health departments and officials;

    o 	clarifying and testing the effectiveness of disinfectants or other
    approaches to neutralize such contaminants; and

    o 	standardizing effective public notification processes in the event of
    potential or real contamination of drinking water systems.

    For example, one expert described an array of potentially valuable
    information that should be developed and made available to utilities-
    information typically held by public health agencies. Examples cited

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                         Activities Experts Identified As Most
                              Deserving of Federal Support

    include (1) epidemiological data on diseases or other health incidents in
    communities, and (2) data on infections in subgroups of the population
    (such as nursing homes) and on hospital laboratory diagnoses, absenteeism
    from schools, and pharmacy sales of certain medications such as
    antidiarrheal medications. Because state health agencies often regulate
    public water utilities and therefore are highly knowledgeable about them,
    these agencies should serve an enhanced role in the security of water
    systems by, for example, disseminating timely information to utilities and
    the public about possible contamination.

    EPA has devoted funds to address drinking water security issues as they
    relate to public health concerns. For example, the agency's Office of
    Water is developing contaminant lists that officials say will better guide
    future research and identify information needs. Other planned work
    includes determining the infectious or toxic doses of potential
    contaminants, and providing information (including restricted information)
    to utility operators, public officials, and other security stakeholders.

      Strengthening Relationships between Drinking Water Utilities and Law
      Enforcement Agencies

    More than 80 percent of the experts (36 of 43) rated establishing or
    strengthening relationships between drinking water utilities and law
    enforcement as having either a high or highest priority for federal
    funding. Several experts noted that a close working relationship between
    these organizations could help to prevent incidents, through increased
    police patrols and the sharing of intelligence information. One expert
    noted also that improving these relationships might result in a more rapid
    and comprehensive response to adverse or malevolent acts. Another expert,
    however, pointed to an underlying problem that often characterizes this
    relationship: "There are very few people that currently have a good
    understanding of utility operations as well as security issues and
    approaches. The lack of understanding of utility operations by law
    enforcement and even regulatory agencies is detrimental, as is the lack of
    law enforcement and security understanding at utilities. Development of
    people that understand both types of knowledge would be highly valuable in
    addressing water security." He said that the development of such people is
    currently being done by chance.

    To date, EPA has largely facilitated security-related training programs
    intended for utility officials, although it has recently initiated
    programs involving outreach to law enforcement organizations. One program
    involves developing outreach materials such as a "top 10" list of tips on
    water security for law enforcement officials, a "citizens brochure," and
    law

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                         Activities Experts Identified As Most
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    enforcement training workbooks. EPA has also contacted the National Chiefs
    of Police and the National Sheriffs' Association to improve awareness
    about drinking water security.

      Testing Local Emergency Response Systems

    It has long been accepted that in light of the critical function they
    serve in local communities, drinking water utilities should have effective
    emergency response plans to deal with emergencies. This imperative was
    further reinforced by the Bioterrorism Act's recent requirement for such
    plans. However, the execution of these plans requires staff to perform
    functions beyond their day-to-day responsibilities, as well as coordinate
    with personnel from different organizations that may have little to do
    with each other except in emergency situations.

    Further, an emergency response plan can only be considered reliable if it
    is tested periodically. About 60 percent of the experts (26 of 43) in our
    study indicated that testing of local emergency response systems warrants
    a high or highest priority for federal funding. One expert stated that
    funds should be made available to ensure that plans are updated, perhaps
    annually. Another noted, "Everyone has been concentrating on assessment
    and addressing vulnerabilities [to drinking water systems]. What is even
    more important to public safety are the correct response actions to any
    emergency situation."

    In September 2003, EPA conducted a study to evaluate the performance of a
    group of laboratories in a simulated emergency situation involving a
    chemical contamination threat to drinking water. This study also assessed
    the effectiveness of draft guidance provided by EPA to laboratories for
    developing their own response protocols. EPA plans to deliver a series of
    workshops in early 2004 that will involve tabletop exercises and drills
    for various emergency responders, such as public health and law
    enforcement officials, laboratory staff, and selected utility employees.

    Sharing Resources among Experts cited mutual aid arrangements among
    neighboring drinking water

    Utilities	utilities as activities that may result in a more efficient use
    of resources during a terrorist action. Over half of the experts (23 of
    43) said that a high or highest priority should be assigned to federal
    funding of activities that facilitate the sharing among utilities of such
    resources as common back-up power systems and other critical equipment.
    One expert described a collaborative in the San Francisco Bay Area, the
    Bay Area Security Information Collaborative (BASIC), in which eight
    utilities meet regularly

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                         Activities Experts Identified As Most
                              Deserving of Federal Support

    to address a wide range of security-related topics. Topics have included
    the development of a database of chemical and biological contaminants and
    response protocols, regional exercises to prepare for an event, regional
    training, information sharing on preparing vulnerability assessments, and
    public information messages. Such mutual aid arrangements might be
    designed in coordination with state water agencies and their related water
    security programs.

    Another expert cited standardized Mutual Aid Disaster and Intervention
    Response Teams (MADIRT) established by the North Carolina League of
    Municipalities, the North Carolina Urban Water Consortium, and North
    Carolina's Disaster Preparedness Committee. This cooperative approach is
    intended to allow municipalities a means to share personnel, equipment,
    materials, and emergency assistance with other communities. MADIRT allows
    communities to identify their capabilities in advance of an event,
    increase standardization to save time and reduce costs, and simplify
    communications. One key effort of this cooperative has been to draft
    specifications for water pipe repair, although other repair actions (e.g.,
    for generators or SCADA systems) are being considered. The cooperative
    also establishes mutual aid coordinators-volunteers across the state who
    are trained in the types of aid that utilities may need during
    emergencies. At present, municipalities that sign a statewide mutual aid
    agreement, and in turn use the teams, would be able to fully qualify for
    reimbursement from the Federal Emergency Management Agency, the state, or
    both.

      Establishing Physical Interconnections between Drinking Water Facilities and
      Distribution Systems

    Physical interconnections-the linkages and junctions between pipes both
    within and between utilities-can be useful in mitigating intentional
    contamination. Once contamination has occurred and has been identified,
    interconnections might allow a utility operator or emergency response
    official to continue to provide service from another source, and aid in
    isolating contaminated water from reaching the population at large. They
    can also allow fresh, clean water to be pumped in from another part of the
    system or from an entirely different system.

    Approximately 51 percent of the experts (22 of 43) indicated the
    establishment of such interconnections deserves either a high or highest
    priority for federal funding. The overarching idea is to have a higher
    degree of redundancy in a drinking water system, with distributed sources
    of water (e.g., water from both wells and surface water); a wider and more
    redundant distribution of treated water (e.g., more than one pipeline of
    treated water at a critical location); and increased controls over the
    flow of

                                       Chapter 4
                         Activities Experts Identified As Most
                              Deserving of Federal Support

    such water. According to one expert, system interconnections have been
    used for some time, but that more recently, efforts have focused
    increasingly on developing them to handle emergency situations. Another
    expert commented on the need for remote-controlled valves, and on the need
    to be able to connect or bypass pipelines to access alternative sources of
    water. Finally, one expert suggested that water could be shared across
    interconnected utility systems if one system experienced a suspension of
    service. This individual stated that there is so much excess capacity in
    the systems that many utilities could supply their own needs and another
    system of a similar size.

    EPA's preliminary cost estimate for interconnectivity research, such as
    contingency planning for alternative sources of water, is about $2.6
    million. Among other things, the agency intends to develop case studies
    that describe how utilities and populations can share water, how
    truck-mounted and portable water facilities can be designed and
    implemented during crises, and how redundancy in water systems can better
    ensure sustained and consistent water supplies. The agency's work in this
    area has been complemented by other projects that use computer modeling to
    simulate water flows in distribution systems.

    Conclusions	EPA's Strategic Plan on Homeland Security sets forth the goal
    that "by 2005, unacceptable security risks at water utilities across the
    country will be significantly reduced through completion of appropriate
    vulnerability assessments; design of security enhancement plans;
    development of emergency response plans;and implementation of security
    enhancements." The plan further commits to providing federal resources to
    help accomplish these goals as funds are appropriated.

    Key judgments about which recipients should get funding priority, and how
    those funds should be spent, will have to be made in the face of great
    uncertainty about the likely targets of attacks, the nature of attacks
    (whether physical, cyber, chemical, biological, or radiological), and the
    timing of attacks. The experts on our panel have had to consider these
    uncertainties in deriving their own judgments about these issues. These
    judgments, while not unanimous on all matters, suggested a high degree of
    consensus on a number of key issues.

    We recognize that such sensitive decisions must ultimately take into
    account political, equity, and other considerations. But we believe they
    should also consider the judgments of the nation's most experienced

                                       Chapter 4
                         Activities Experts Identified As Most
                              Deserving of Federal Support

    individuals regarding these matters, such as those included on our panel.
    It is in this context that we offer the results presented in this report
    as information for Congress and the Administration to consider as they
    seek the best way to use limited financial resources to reduce threats to
    the nation's drinking water supply.

    Recommendation for 	We recommend that, as EPA refines its efforts to help
    drinking water utilities reduce their vulnerability to terrorist attacks,
    the Administrator of

    Executive Action	the EPA consider the information in this report to help
    determine: how best to allocate security-related federal funds among
    drinking water utilities; which methods should be used to distribute the
    funds; and what specific security-enhancing activities should be
    supported.

    Appendix I

    Participating Experts on Drinking Water Security Panel

    Gregory Baecher
    Pete Baxter
    Kevin Bennett

    Paul Bennett

    Frank Blaha

    Jennifer Brower
    Liz Casman
    Jeff Danneels
    Rolf Deininger
    John Ditmars
    David Dobbins
    Jane Downing
    Wayne Einfeld
    James H. Fetzer
    Tim Gablehouse
    Gregg Grunenfelder
    Eugene Habiger
    Todd Humphrey
    Gerald Iwan
    Steve Jackson

    Brian Jenkins
    Janet Jensen

    Dennis Juranek

    Michael Keegan
    Dave Lawrence
    Vanessa Leiby

    Carrie Lewis
    John McLaughlin

    University of Maryland

    Jane's Information Group

    Federal Bureau of Investigation, National
    Infrastructure Protection Center

    New York City Department of
    Environmental Protection

    American Water Works Association
    Research Foundation

    RAND
    Carnegie Mellon University

    Sandia National Laboratories

    University of Michigan

    Argonne National Laboratory

    Black & Veatch Company

    U.S. Environmental Protection Agency

    Sandia National Laboratories

    Tennessee Valley Authority

    Gablehouse and Eppel

    Washington State Department of Health

    San Antonio Water System

    Portland Water Bureau

    Connecticut Department of Public Health

    U.S. Department of the Interior, Bureau
    of Reclamation

    RAND

    U.S. Department of Defense, U.S. Army,
    Aberdeen Proving Grounds

    U.S. Department of Health and Human
    Services, Centers for Disease Control and
    Prevention

    National Rural Water Association

    Wisconsin Rural Water Assocation

    Association of State Drinking Water
    Administrators

    Milwaukee Water Department

    Brown and Caldwell

    Appendix I
    Participating Experts on Drinking Water
    Security Panel

    Christine L. Moe
    Erik Olson
    Julian Palmore
    Janet Pawlukiewicz
    E.L. Quarantelli
    Brian Ramaley
    Alan Roberson
    Ken Rubin
    Leonard Shabman
    Jim Shell

    Kimberly Shoaf
    David Spath
    Mic Stewart

    Billy Turner
    Ray Yep

    Emory University

    National Resources Defense Council

    University of Illinois

    U.S. Environmental Protection Agency

    University of Delaware

    Newport News Waterworks

    American Water Works Association

    PA Consultants

    Resources for the Future

    Metropolitan Washington Council of Governments

    University of California at Los Angeles

    California Department of Health Services

    Metropolitan Water District of Southern California

    Columbus Water Works

    Santa Clara Valley Water District

    Appendix II

                         GAO Contacts and Staff Acknowledgments

    GAO Contacts	John Stephenson, (202) 512-3841 Steve Elstein, (202) 512-6515

    Acknowledgments	In addition to the individuals named above, important
    contributions were made by Don Cowan, Lynn Musser, Diane Raynes, and Aaron
    Shiffrin. Charles Bausell, Brandon Haller, Katherine M. Raheb, and Carol
    Shulman also made key contributions.

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