Wastewater Facilities: Experts' Views on How Federal Funds Should
Be Spent to Improve Security (31-JAN-05, GAO-05-165).		 
                                                                 
Since the events of September 11, 2001, the security of the	 
nation's drinking water and wastewater infrastructure has	 
received increased attention from Congress and the executive	 
branch. Wastewater facilities in the United States provide	 
essential services to residential, commercial, and industrial	 
users by collecting and treating wastewater and discharging it	 
into receiving waters. These facilities, however, may possess	 
certain characteristics that terrorists could exploit either to  
impair the wastewater treatment process or to damage surrounding 
communities and infrastructure. GAO was asked to obtain experts' 
views on (1) the key security-related vulnerabilities affecting  
the nation's wastewater systems, (2) the activities the federal  
government should support to improve wastewater security, and (3)
the criteria that should be used to determine how any federal	 
funds are allocated to improve security, and the best methods to 
distribute these funds. GAO conducted a systematic, Web-based	 
survey of 50 nationally recognized experts to seek consensus on  
these key wastewater security issues. EPA expressed general	 
agreement with the report, citing its value as the agency works  
with its partners to better secure the nation's critical	 
wastewater infrastructure.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-165 					        
    ACCNO:   A16496						        
  TITLE:     Wastewater Facilities: Experts' Views on How Federal     
Funds Should Be Spent to Improve Security			 
     DATE:   01/31/2005 
  SUBJECT:   Counterterrorism					 
	     Facility security					 
	     Federal funds					 
	     Funds management					 
	     National defense operations			 
	     Potable water					 
	     Terrorism						 
	     Wastewater 					 
	     Wastewater management				 
	     Wastewater treatment				 
	     Water treatment					 
	     Homeland security					 
	     Wastewater treatment plants			 
	     Clean Water State Revolving Fund			 

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GAO-05-165

United States Government Accountability Office

GAO	Report to the Committee on Environment and Public Works, U.S. Senate

January 2005

WASTEWATER FACILITIES

    Experts' Views on How Federal Funds Should Be Spent to Improve Security

                                       a

GAO-05-165

[IMG]

January 2005

WASTEWATER FACILITIES

Experts' Views on How Federal Funds Should Be Spent to Improve Security

What GAO Found

Experts identified the collection system's network of sewer lines as the
most vulnerable asset of a wastewater utility. Experts stated that the
sewers could be used either as a means to covertly gain access to
surrounding buildings or as a conduit to inject hazardous substances that
could impair a wastewater treatment plant's capabilities. Among the other
vulnerabilities most frequently cited were the storage and transportation
of chemicals used in the wastewater treatment process and the automated
systems that control many vital operations. In addition, experts described
a number of vulnerabilities not specific to particular assets but which
may also affect the security of wastewater facilities. These
vulnerabilities include a general lack of security awareness among
wastewater facility staff and administrators, interdependencies among
various wastewater facility components leading to the possibility that the
disruption of a single component could take down the entire system, and
interdependencies between wastewater facilities and other critical
infrastructures.

Experts identified several key activities as most deserving of federal
funds to improve wastewater facilities' security. Among those most
frequently cited was the replacement of gaseous chemicals used in the
disinfection process with less hazardous alternatives. This activity was
rated as warranting highest priority for federal funding by 29 of 50
experts. Other securityenhancing activities most often rated as warranting
highest priority included improving local, state, and regional
collaboration (23 of 50 experts) and supporting facilities' efforts to
comprehensively assess their vulnerabilities (20 of 50 experts).

When asked how federal wastewater security funds should be allocated among
potential recipients, the vast majority of experts suggested that
wastewater utilities serving critical infrastructure (e.g., public health
institutions, government, commercial and industrial centers) should be
given highest priority (39 of 50). Other recipients warranting highest
priority included utilities using large quantities of gaseous chemicals
(26 of 50) and utilities serving areas with large populations (24 of 50).
Experts identified direct federal grants as the most effective method to
distribute the funds, noting particular circumstances in which a matching
contribution should be sought from recipients. Specifically, a matching
requirement was often recommended to fund activities that benefit
individual utilities. Grants with no matching requirements were often
recommended for activities that should be implemented more quickly and
would benefit multiple utilities. The other funding mechanisms experts
mentioned most frequently included the federal Clean Water State Revolving
Fund, loans or loan guarantees, trust funds, and tax incentives.

                 United States Government Accountability Office

Contents

Letter 1

Executive Summary 2

Purpose 2
Background 3
Results in Brief 4
Principal Findings 5
Agency Comments and Our Evaluation 12

Chapter 1 13

Introduction The Nation's Wastewater Systems and the Populations They

Serve 13

Key Components of a Typical Wastewater System 14

Government and Industry Have Recently Sought to Improve

Security 19
Objectives, Scope, and Methodology 21

Chapter 2
Experts Identified Key
Vulnerabilities That
Could Compromise
Wastewater Security

Experts Identified Five Key Vulnerabilities 25 Overarching Vulnerabilities
Affecting Overall Wastewater System

Security 35

Chapter 3
Experts Identified
Wastewater
Security-Enhancing
Activities That Warrant
Federal Support

38 Replace Gaseous Chemicals with Less Hazardous Alternatives 39 Improve
Local, State, and Regional Collaboration Efforts 41 Complete Vulnerability
Assessments 43 Expand Training Opportunities for Wastewater Utility
Operators and

Administrators 44
Improve National Communication Efforts between Utilities and Key
Entities Responsible for Homeland Security 45
Install Early Warning Systems in Collection Systems to Monitor for
or Detect Sabotage 46
Harden Physical Assets of Treatment Plants and Collection

Systems 46
Strengthen Operations and Personnel Procedures 49
Increase Research and Development Efforts to Improve Detection,

Assessment, and Response Capabilities 49

                                    Contents

Develop Voluntary Wastewater Security Standards and Guidance Documents 50

Strengthen Cyber Security and SCADA Systems 51

Chapter 4
Experts Identified Key
Allocation Criteria and
Funding Mechanisms
for Addressing
Wastewater Security
Needs

52 Key Criteria to Help Determine Which Utilities Should Receive Funding
Priority 53 Funding Mechanisms Recommended for Distributing Federal Funds
57 Conclusions 62

Appendixes

Appendix I: Participating Experts on Wastewater Security Panel 63

Appendix II:	Questions and Responses to the Final Questionnaire for the
Expert Panel 65

Appendix III:	GAO Contacts and Staff Acknowledgments 70 GAO Contacts 70
Staff Acknowledgments 70

Figures Figure 1:

Figure 2:

Figure 3:

Figure 4:

Figure 5: Figure 6: Figure 7: Figure 8: Figure 9:

Key Wastewater System Vulnerabilities Identified by
Experts
System Size by Population (POTW by system size and
population served)
Components of a Typical Community Wastewater
System
Key Wastewater System Vulnerabilities Identified by
Experts
Chlorine Delivery Truck
Chlorine Railroad Car
Pump Operated through Remote Automated Systems
Pumping Station
Experts' Views on Wastewater Security Activities Most
Deserving of Federal Support

                                       6

14

16

24 29 30 33 35

39

41 47

Figure 10: One-Ton Canisters of Chlorine Gas Stored at a Wastewater
Treatment Plant

Figure 11: Electronically-Controlled Security Gate

Contents

Figure 12: Security Camera and Infrared Motion Detectors 48

Figure 13: Experts' Views on Which Characteristics of Wastewater Utilities
Should Be Used to Set Priority for Federal Funds 53

Figure 14: Experts' Views on Mechanisms for Funding Wastewater Security 57

Abbreviations

AMSA Association of Metropolitan Sewerage Agencies
AMWA Association of Metropolitan Water Agencies
CWSRF Clean Water State Revolving Fund
DHS Department of Homeland Security
EPA Environmental Protection Agency
HSIN Homeland Security Information Network
HSPD Homeland Security Presidential Directive
ISAC Information Sharing and Analysis Center
LEL lower explosive level
MGD million gallons per day
POTW publicly owned treatment works
SCADA Supervisory Control and Data Acquisition
VA vulnerability assessment
VSAT Vulnerability Self Assessment Tool

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 Government Accountability Office Washington, D.C. 20548

January 31, 2005

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 wastewater security, including the
potential vulnerabilities of wastewater systems; activities that most
warrant federal support to mitigate the risk of terrorism; and the
criteria
that the experts believe should be used to determine how any federal funds
are allocated among recipients to improve their security and the methods
the experts suggest should be used to distribute these funds.

As agreed with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from
the
report date. 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
contact me at (202) 512-3841 or [email protected] or my Assistant
Director, Steve Elstein, at (202) 512-6515 or [email protected]. Major
contributors to this report are listed in appendix II.

John B. Stephenson Director, Natural Resources and Environment

Executive Summary

Purpose	Like safe drinking water, properly treated wastewater is critical
to modern life. Wastewater utilities across the country have long been
engaged in activities to ensure the health and safety of their customers
and to comply with regulatory requirements to prevent harmful pollutants
from being released into the nation's waters. Since the events of
September 11, 2001, the security of the nation's water infrastructure
against terrorist threats has received greater attention by Congress and
executive branch agencies. While more federal resources have been directed
toward drinking water security than wastewater security, some maintain
that wastewater systems, like drinking water systems, also possess
vulnerabilities that could be exploited. It has been alleged, for example,
that the numerous storm drains, manholes, and sewers that make up a
community's wastewater collection systems' network of sewers could be used
to covertly place explosives beneath a major population center or to
introduce substances that may damage a wastewater treatment plant's
process. Such events could result in loss of life, destruction of
property, and harm to the environment.

In 2003, Congress considered legislation that would have provided funds
to, among other activities, assess the vulnerability of wastewater
facilities, make physical security improvements, and conduct research.
Since then, the wastewater industry has expressed its desire for a strong
federal contribution to help meet its security needs. To inform further
deliberations on this topic, as agreed with the Chairman and Ranking
Minority Member of the Senate Committee on Environment and Public Works,
this report identifies experts' views on (1) the key security-related
vulnerabilities affecting the nation's wastewater systems, (2) specific
activities the federal government should support to improve wastewater
security, and (3) the criteria that should be used to determine how any
federal funds are allocated among recipients to improve their security and
the methods that should be used to distribute these funds.

To address these issues, GAO identified 50 recognized experts from the
wastewater community and surveyed them using a Web-based Delphi process.
The Delphi methodology is a systematic process for obtaining individuals'
views on a question or problem of interest and seeking consensus if
possible. In selecting experts for the expert panel, GAO sought
individuals who are widely recognized as possessing expertise on one or
more key aspects of wastewater security. GAO also sought to achieve
balance in representation from key federal agencies, state or local
agencies, industry and nonprofit organizations, academia, and water

                               Executive Summary

utilities of varying sizes. A detailed description of GAO's methodology is
presented in chapter 1.

Background	Wastewater systems vary by size and other factors, but all
include a collection system and treatment facility. Collection systems are
generally widely dispersed geographically and have multiple access points,
including drains, catch basins, and manholes, most of which are not
monitored. This underground network of sewers and pumping stations moves
the wastewater away from its point of origination to the treatment plant.
Typical wastewater treatment facilities use a series of physical,
biological, and chemical processes to treat wastewater. Chemicals used in
this process, most notably chlorine, are often stored on site at the
treatment plant. Wastewater systems have become increasingly computerized
and rely on the use of automated controls to monitor and operate them.

Nationwide, more than 16,000 publicly owned wastewater systems serve more
than 200 million people, or about 70 percent of the nation's total
population. About 500 large public wastewater systems provide service to
62 percent of the sewered population. To help address the security needs
of the wastewater sector, EPA, since 2002, has provided more than $10
million to help address the security needs of the wastewater sector. A
large portion of this funding has been awarded to nonprofit technical
support and trade organizations to develop tools and training on
conducting vulnerability assessments to reduce utility vulnerabilities, on
planning for and practicing response to emergencies and incidents, and for
research on a variety of security topics.

Wastewater utilities have had a history of openness with the communities
they serve by sharing, among other things, alerts of scheduled maintenance
activities and information about the quality of water that is released
back into the environment. Many utilities also provide detailed
information about their location, design, and treatment processes. The
September 11 attacks, however, have led many wastewater utilities to
reassess their openness to the general public and their ability to
guarantee safe and reliable services to their customers and communities.
In December 2003, the President issued Homeland Security Presidential
Directive-7, which designated EPA as the lead agency to address water
infrastructure security. EPA has worked with other organizations, such as
the Water Environment Research Foundation, the Association of Metropolitan
Sewerage Agencies, the Water Environment Federation, and the American
Society of Civil Engineers, to conduct research, provide guidance and,
importantly, to offer

                               Executive Summary

training on how to assess wastewater facilities' vulnerabilities. Unlike
drinking water facilities, wastewater utilities are not required by law to
complete these "vulnerability assessments."

Results in Brief	GAO's panel of experts identified five key wastewater
assets as most vulnerable to terrorist attacks: the collection systems'
network of sewers, treatment chemicals, key components of the treatment
plant, pumping stations, and control systems. Among these assets, 42 of
the 50 experts listed the collection systems' network of sewers as a key
vulnerability. Experts explained that adversaries could use this network
of pipes to gain access to intended targets within the service area,
convey hazardous substances that might destroy points along the system, or
incapacitate the wastewater treatment process. In addition, 32 of 50
experts identified process chemicals used in wastewater treatment as a key
vulnerability. Of particular concern is the accidental or intentional
release of gaseous chlorine, used for disinfection processes, which can
burn eyes and skin, inflame the lungs, and cause death if inhaled.

Experts identified 11 key actions when asked to identify and set
priorities for the security-enhancing activities most deserving of federal
support. Three were particularly noteworthy because they were given a
rating of highest priority by a substantial number of the experts. The
first activity was the replacement of gaseous chemicals used in wastewater
treatment with less hazardous alternatives. Experts viewed this action as
critical to reduce the vulnerability of systems that rely heavily upon
gaseous chlorine in their treatment processes. Several experts noted that
because replacing chlorine could be prohibitively expensive for many
wastewater utilities, replacement was a particularly strong candidate for
federal support. For example, the change to sodium hypochlorite can
require approximately $12.5 million for new equipment and increase annual
chemical costs from $600,000 for gaseous chlorine to over $2 million for
sodium hypochlorite. The second activity cited was improving local, state,
and regional efforts to coordinate responses in advance of a potential
terrorist threat. According to the experts, enhanced partnerships among
these entities can yield significant benefits to wastewater utilities
including an increased ability to monitor critical infrastructure and
facilities, improved understanding of agency roles and responsibilities,
and faster response time to deal with potential security breaches.
Finally, the third activity cited was completing vulnerability assessments
for individual wastewater systems. Experts viewed these assessments as key
steps toward informing stakeholders

                               Executive Summary

about wastewater system vulnerabilities and countermeasures, and taking
steps to implement appropriate countermeasures.

In identifying and setting priorities for the types of utilities that
should receive federal funds to improve wastewater security, 39 of the 50
experts gave a rating of highest priority to utilities serving critical
infrastructure. These utilities provide service to institutions that serve
as hubs for government activity; commercial and industrial centers such as
cities' financial districts, power plants, and airports; and public health
institutions, such as major medical centers and hospitals. Just over half
of the experts rated utilities using large quantities of gaseous chemicals
as warranting highest priority for federal funds. Several pointed out
that, if these chemicals were released to the atmosphere while being
transported to the treatment plant or while stored on site, evacuations
might be needed, and personal injuries or fatalities might result. Also
receiving widespread support by the experts were utilities serving areas
with large populations. Fewer experts recommended highest or high priority
for utilities serving entities that have symbolic value or that serve
medium or small populations.

The experts overwhelmingly favored direct federal grants as the best
method to distribute federal funds to potential recipients. They also
specified instances in which some type of match by recipients would be
particularly appropriate. Relatively fewer experts recommended the use of
trust funds or the Clean Water State Revolving Fund, particularly for
upgrades that need to be implemented quickly. Other mechanisms receiving
support from at least some experts included loans or loan guarantees, and
tax incentives for private utilities.

                               Principal Findings

Key Vulnerabilities	Figure 1 summarizes the 50 experts' identification of
which wastewater system components were among the systems' top five
vulnerabilities.

Executive Summary

     Figure 1: Key Wastewater System Vulnerabilities Identified by Experts

                               Number of experts

50

40

30

20

10 0

eatment chemCollection systems'r

T

als	atew

astea w

                                components ofr s

                        treatment plant Pumping stations

s

onetw

ontrol systemC

ic

                                  rk of sewer

eyK

Source: GAO analysis of expert panel's responses to GAO survey.

Collection systems' network of sewers. Forty-two of the 50 experts named
the collection systems' network of sanitary, storm, and combined sewers.
Several noted that sewers make underground travel from a point of entry to
a potential target almost undetectable. Many also suggested that
adversaries could use the collection system as an underground transport
system-without ever physically entering the system-for explosive or toxic
agents. For example, several experts explained, an adversary could pour a
highly toxic chemical into the sewer that could destroy the biological
agents vital to the treatment process.

Treatment chemicals. Thirty-two experts identified treatment chemicals
used in wastewater treatment. Most experts singled out chlorine gas as a
major chemical of concern. Chlorine is extremely volatile and requires
specific precautions for its safe transport, storage, and use. As experts
commented, although railroad tanker cars are designed to avoid leakage in
the event of a derailment, and withstand a bullet from a normal handgun or
rifle, one expert concluded that the "use of explosives to cause a rupture
is

Executive Summary

well within the skill set of a terrorist." Such an attack along a
congested transportation corridor could have catastrophic public health
and safety impacts.

Key components of the treatment plant. Twenty-nine experts identified the
components of the main wastewater treatment facility. Typical facilities
use multiple treatment processes before discharging the effluent back to
the environment, with each stage of the process serving an integral role.
Experts explained that damage to one or more of these processes could
result in inadequately treated wastewater, thereby contaminating drinking
water sources, harming the environment, and causing significant economic
damage. While many experts expressed concern for the security of the
entire treatment plant, several identified the headworks, where wastewater
carried through the collection system first enters the plant, as
particularly vulnerable to attack.

Pumping stations. Sixteen of the 50 experts identified pumping stations,
which are often used to move sewage to the treatment plant when gravity
alone is not sufficient, as among the top vulnerabilities. As one expert
explained, destroying or disabling a pumping station could cause the
collection system to overflow raw sewage into the streets, and into
surface waters, and back up sewage into homes and businesses. Experts
explained that the remoteness and geographic distribution of pumping
stations, and their lack of continuous surveillance, make them
particularly vulnerable.

Control systems. Eighteen experts cited the automated Supervisory Control
and Data Acquisition (SCADA) systems, which serve functions ranging from
storing and processing data to monitoring system conditions and
controlling vital system operations. These systems can be vulnerable
because of loose security in the control rooms at some plants, and remote
access to SCADA through the Internet, among other reasons. One expert
described a breach of cyber security in Australia which caused the release
of thousands of gallons of raw sewage.

In addition to the vulnerabilities associated with specific system
components, experts identified several overarching issues that compromise
the integrity of systems' physical assets and their operations. Chief
among them are (1) a general lack of security awareness within the
wastewater sector; (2) interdependencies among components of the
wastewater system, opening the possibility that a failure of any
individual component could bring down the entire system (e.g., undermining
the automated control system could cause numerous components to fail); and

                               Executive Summary

(3) interdependencies between the wastewater system and other critical
infrastructure that could fail, such as electric power supplies.

Security-Enhancing Activities That Most Warrant Federal Support

Three security-enhancing activities were most often cited by the experts
as warranting "highest" priority for federal support:

Replacing gaseous chemicals used in wastewater treatment with less
hazardous alternatives. Well over half of experts surveyed (29 of 50)
rated the replacement of gaseous chemicals at wastewater treatment
facilities with less hazardous alternatives as warranting highest priority
for federal funding. Fourteen more experts rated this activity as a "high"
priority. Experts asserted that wastewater systems carrying out treatment
processes using gaseous forms of chemicals, particularly chlorine,
inherently make themselves targets for terrorist attack. According to
several experts, some communities and utilities currently using gaseous
chemical treatment processes are interested in converting to an
alternative treatment technology, but financial costs associated with
conversion remain prohibitive. According to EPA, hypochlorite compounds
tend to have higher operating costs than chlorine gas.1 Nonchlorine-based
technologies, such as ozone and ultraviolet light, tend to have higher
capital costs than chlorine gas, according to a study prepared for the
U.S. Army.2 Another expert suggested that reducing the size of containers
used to transport and store gaseous chemicals could help to mitigate the
problem. This approach is being implemented by a facility where gaseous
chlorine is now stored in 1-ton containers-a significant reduction in size
from the larger 90-ton railroad car-sized containers the utility
previously employed.

Improving local, state, and regional collaboration efforts. Twenty-three
of 50 experts rated efforts to improve local, state, and regional
collaboration efforts as warranting highest priority for federal funding.
Fifteen more experts rated this activity as a high priority. As one expert
noted, wastewater facilities are often disconnected from other key
entities that participate in emergency planning and response, and the
facilities instead

1EPA Wastewater Technology Fact Sheet, Chlorine Disinfection, EPA
832-F-99-062, September 1999.

2Disinfection Technologies for Potable Water and Wastewater Treatment:
Alternatives to Chlorine Gas, Pacific Northwest National Laboratory, July
1998.

                               Executive Summary

conduct these critical activities without an appreciation of the need to
coordinate with other key players. An expert identified the nonprofit
California Utilities Emergency Association as an example of an effective
provider of communications, training, mutual aid coordination, and
simulation exercises to participating utilities.

Completing vulnerability assessments for individual wastewater systems.
Twenty of 50 experts rated the completion of vulnerability assessments as
warranting highest priority for federal funding. Fourteen others rated
this activity as a high priority. Experts suggested that vulnerability
assessments enable wastewater utilities to identify and understand their
systems' vulnerabilities and take steps to implement appropriate
countermeasures. As such, they characterized these assessments as a
logical first step in determining how best to spend funds to improve
security.

In addition to these three activities, experts cited eight other
activities as warranting high priority for federal funding: (1) training
utility employees on how best to conduct vulnerability assessments and
improve the security culture among employees; (2) improving national
communication efforts between utilities and key entities responsible for
homeland security; (3) installing early warning systems in collection
systems to monitor for or detect sabotage; (4) hardening physical assets
of treatment plants and collection systems; (5) strengthening operations
and personnel procedures; (6) increasing research and development efforts
aimed at improving threat detection, assessment, and response
capabilities; (7) developing voluntary wastewater security standards and
guidance documents; and (8) strengthening cyber security and SCADA
systems.

Key Allocation Criteria and Distribution Methods for Federal Funding

GAO asked its expert panel for its views on the appropriate criteria for
determining which utilities should receive federal funds, should Congress
and the administration agree to provide such support. The most frequently
cited criteria included the following:

Utilities serving critical infrastructure. Thirty-nine of the 50 experts
accorded highest funding priority to utilities serving critical
infrastructure. An additional 10 experts believed these utilities
warranted a high priority. These utilities provide service to institutions
that serve as hubs for government activity, to commercial and industrial
centers, and to public health institutions. Many experts noted in
particular that systems serving heavy commercial and industrial customers
are critical to the country's

Executive Summary

economic stability, and that a major or sustained disruption could have
severe economic and/or public health consequences. One noted, for example,
that a sustained shutdown in the computer chip manufacturing sector,
caused by the loss of a wastewater treatment plant, could cost the economy
millions of dollars per day.

Utilities using large quantities of gaseous chemicals. Citing the enormous
risks posed by gaseous chemicals, just over half of the experts (26 of 50)
recommended highest funding priority to help utilities convert from these
chemicals to safer alternatives. An additional 18 rated these utilities as
warranting a high priority for federal funds. Some experts cautioned,
however, that if funds are used by utilities merely to convert to less
hazardous chemicals (e.g., sodium hypochlorite), then the federal
government may be perceived as rewarding these utilities at the expense of
utilities that are considering much safer alternatives.

Utilities serving large populations. Almost half of the experts (24 of 50)
gave highest priority to utilities serving areas with large populations.
Seventeen additional experts rated these utilities as warranting a high
priority for federal funds. Many experts shared the view that providing
financial and technical assistance to the largest treatment plants would
protect the greatest number of people. One expert pointed to EPA's 2000
Clean Water Needs Survey, which indicated that 62 percent of the nation's
sewered population is served by about 500 of the largest wastewater
treatment facilities. Furthermore, a number of experts suggested that
terrorists often seek to maximize the number of people killed or injured
by their attacks, and are, therefore, more likely to target the systems in
large metropolitan areas that serve many customers.

GAO also asked its expert panel for their ratings of how effective each
method would be for distributing federal funds to potential recipients.
Among the mechanisms they recommended:

Direct grants. Direct federal grants were the most favored funding
mechanism, with 34 of the 50 experts indicating that direct federal grants
to utilities would be "very effective" in allocating federal funds. An
additional 12 experts indicated that they would be at least "somewhat
effective." Several experts commented that grants are preferable because
they are more likely to result in safety improvements and other desired
changes more quickly. Experts also offered the following opinions on
situations in which it would be appropriate to offer a grant with or
without a required match from the recipient:

Executive Summary

o 	Many favored grants without a matching requirement for activities that
benefit multiple utilities. Specific actions include conducting research
and development to improve detection, assessment, and response
capabilities; developing voluntary wastewater security standards and
guidance; completing vulnerability assessments; and providing training to
utility security personnel on how best to conduct vulnerability
assessments and improve the security culture.

o 	Many favored cost-shared grants for activities that benefit individual
utilities, such as establishing improved operation and personnel
procedures (e.g., conducting background checks on new employees);
installing early warning systems in collection systems to monitor for or
detect sabotage; improving cyber security; and hardening physical assets
through such actions as building fences and installing or upgrading locks.

Clean Water State Revolving Fund. Five experts cited the Clean Water State
Revolving Fund as a very effective funding mechanism, and 35 others cited
it as somewhat effective. Some experts expressed the view that the fund
can leverage appropriated funds and, thereby, assist more facilities than
direct grants. But several others expressed reservations about using the
fund for security enhancement, including one who said that it "was not
originally established to deal with security-related projects . . . the
program either needs to [be] fixed to deal with security issues or a
separate program needs to be created specifically for security projects."
According to one expert, unless additional security-related monies were
added to existing fund levels, the use of the fund for security would
divert much needed funding away from the kind of critical infrastructure
investments that have long been the fund's primary objective.

Loans or loan guarantees. Only one expert indicated that loans or loan
guarantees would be very effective, although 34 others agreed that they
would be somewhat effective. One expert pointed out that loans would
"allow the community to amortize the costs over 20 years," while another
commented that a low interest loan could provide some incentive and needed
capital to implement security programs. Others cautioned, however, that
while loans would have a smaller impact on the federal budget than grants,
many local governments are already carrying a heavy debt load for capital
improvements, making it difficult for them to take on significant
additional debt without affecting their bond ratings.

                               Executive Summary

Making Key Security Decisions in the Face of Uncertainty

To date, the federal government's role in promoting wastewater security
has been limited primarily to supporting various training activities on
how to complete vulnerability assessments and emergency response plans and
several research projects. However, legislation supporting an expanded
federal role, including a substantially greater financial commitment, has
been proposed in the past and may be considered again in the future.

Should such funds be 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 target
of an attack (i.e., a large but well-protected facility versus a smaller
but lessprotected facility); the nature of an attack (cyber, physical,
chemical, biological, radiological), and its timing. The experts on GAO's
panel have taken these uncertainties into account in deriving their own
judgments about these issues. These views, while not unanimous, suggested
some degree of consensus on a number of key issues.

GAO recognizes that such sensitive decisions ultimately must take into
account a variety of political, equity, and other considerations. It
believes they should also 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 these results as information
for the decisionmaking process that Congress and the administration will
likely go through as they seek to determine how best to use limited
financial resources to reduce the vulnerability to the nation's wastewater
utilities.

Agency Comments and Our Evaluation

GAO 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 Ground Water and Drinking Water, its Office of Homeland
Security, and other relevant offices. The comments expressed general
agreement with the content of the report and noted that the results will
be useful as the agency continues to work with its partners to better
secure the nation's critical wastewater infrastructure. EPA also offered
specific technical comments and suggestions, which have been incorporated
as appropriate.

Chapter 1

Introduction

Wastewater systems in the United States provide essential services to
residential, commercial, and industrial users by collecting and treating
wastewater and discharging it into receiving waters. In light of the
events of September 11, 2001, Congress and the executive branch have
placed increased attention on improving the security of the nation's water
infrastructure-including wastewater systems-to protect against future
terrorist threats. While more federal resources have been directed toward
drinking water security than wastewater security, some maintain that
wastewater systems, like drinking water systems, also possess
vulnerabilities that could be exploited. The unique characteristics and
components these systems possess provide for the efficient collection,
treatment, and disposal of wastewater-functions that are vital to the
health of the general public and the environment. However, many of these
same characteristics and components have been identified as potential
means for carrying out a terrorist attack. A terrorist could seek to
impair a wastewater system's treatment process, to use a wastewater system
to carry out an attack elsewhere, or some combination of both.

Documented accidents and intentional acts highlight the destruction that
arises from an attack on a wastewater system. For example, in June 1977 in
Akron, Ohio, an intentional release of naptha, a cleaning solvent, and
alcohol into a sewer by vandals at a rubber manufacturing plant caused
explosions 3.5 miles away from the plant, damaging about 5,400 feet of
sewer line and resulting in more than $10 million in damage.

The Nation's Wastewater Systems and the Populations They Serve

A majority of the nation's wastewater is treated by publicly owned
treatment works (POTW) that serve a variety of customers, including
private homes, businesses, hospitals, and industry. These POTWs discharge
treated water into surface waters and are regulated under the Clean Water
Act. Nationwide, there are over 16,000 publicly owned wastewater treatment
plants, approximately 800,000 miles of sewers, and 100,000 major pumping
stations. This infrastructure serves more than 200 million people, or
about 70 percent of the nation's total population. The remainder is served
by privately owned utilities or by on-site systems, such as septic tanks.
This report addresses both public and private wastewater systems.

Though outnumbered by the small systems, the relative handful of large
wastewater systems serve the great majority of people. As depicted in
figure 2, only 3 percent of the nation's total wastewater systems
(approximately 500 systems) provide service to 62 percent of the

                             Chapter 1 Introduction

populations served by POTWs. Each of these systems treats more than 10
million gallons per day (MGD) of wastewater.

Figure 2: System Size by Population (POTW by system size and population served)

                                  Source: EPA.

Key Components of a Wastewater systems vary by size and other factors but,
as illustrated in Typical Wastewater figure 3, all include a collection
system and treatment facility.

System

Chapter 1 Introduction

                     [This page left intentionally blank. ]

Chapter 1 Introduction

         Figure 3: Components of a Typical Community Wastewater System

Chapter 1 Introduction

Source: GAO.

                             Chapter 1 Introduction

Collection System	The underground network of sewers includes both sanitary
and storm water collection lines that may range from 4 inches to greater
than 20 feet in diameter. Storm water lines tend to be large in diameter
in order to accommodate a variety of precipitation events. Some of the
nation's older cities have combined sanitary and storm water lines. Sewers
are connected to all buildings and streets within typical communities
through indoor plumbing and curb drains.

Most systems were designed for easy and frequent access to facilitate
maintenance activities. Access for these purposes is usually conducted
through manholes that are typically located approximately every 300 feet.
Many collection systems rely on gravity to maintain the flow of sewage
through the pipes toward the treatment plant. However, the geographic
expanse of a collection system, both in size and topography, may impede
the flow. For this reason, collection systems may depend on pumping
stations to lift the flow to gain elevation for continued gravity flow
until the wastewater reaches the wastewater treatment plant.

The Wastewater Treatment Plant

Once the wastewater enters the treatment plant (influent) through the
collection system, the treatment process removes contaminants such as
organic material, dirt, fats, oils and greases, nitrogen, phosphorus, and
bacteria. The influent typically undergoes several stages of treatment
before it is released. Primary treatment includes the removal of larger
objects, such as rags, cans, or driftwood, through a screening device or a
grit removal system, and solids are removed through sedimentation.
Secondary treatment includes a biological process that consumes
pollutants, as well as final sedimentation. Some facilities also use
tertiary treatment to remove nutrients and other matter even further.
Following secondary or tertiary treatment, the wastewater is disinfected
to destroy harmful bacteria and viruses. Disinfection is often
accomplished with chlorine, which is stored on-site at the wastewater
treatment plant. The collection and treatment process is typically
monitored and controlled by a Supervisory Control and Data Acquisition
(SCADA) system, which allows utilities to control such things as the
amount of chlorine needed for disinfection.

                             Chapter 1 Introduction

Government and Industry Have Recently Sought to Improve Security

In December 2003, the President issued Homeland Security Presidential
Directive-7 (HSPD-7), which established a national policy for federal
departments and agencies to identify and set priorities for the nation's
critical infrastructures and to protect them from terrorist attacks.
HSPD-7 established the Environmental Protection Agency (EPA) as the lead
federal agency to oversee the security of the water sector, both drinking
water and wastewater. Presidential Decision Directive 63 had done so
earlier in May 1998, with a focus primarily on drinking water. Based on
the 1998 directive, EPA and its industry partner, the Association of
Metropolitan Water Agencies (AMWA) established a communication system, the
Water Information Sharing and Analysis Center (Water ISAC). The Water ISAC
was designed to provide real-time alerts of possible terrorist activity
and access to a library of information and contaminant databases to water
utilities throughout the nation. In fiscal year 2004, Congress
appropriated $2 million for the Water ISAC, which today serves more than
1,000 users from water and wastewater systems. In November 2004, the Water
ISAC launched a free security advisory system known as the Water Security
Channel to distribute federal advisories on security threats via e-mail to
the water sector.

EPA recently established a Water Security Working Group to advise the
National Drinking Water Advisory Council (NDWAC) on ways to address
several specific security needs of the sector. The working group is made
up of 16 members selected on the basis of experience, geographic location,
and their unique drinking water, wastewater, or security perspectives. It
represents a diverse collection of drinking water and wastewater utilities
of all sizes, state and local public health agencies, and environmental
and ratesetting organizations. The group's charge includes making
recommendations to the full council by the spring of 2005 that identify
features of an active and effective security program and ways to measure
the adoption of these practices. The working group is also charged with
identifying incentives for the voluntary adoption of an active and
effective security program in the water and wastewater sector.

The Department of Homeland Security (DHS) is also seeking to enhance
communication between critical infrastructure sectors, like the water
sector, with the government. The Homeland Security Information Network
(HSIN) is being developed to provide the water sector with a suite of
information and communication tools to share critical information both
within the sector, across other sectors, and with DHS. According to DHS,
these information and collaboration tools will facilitate the protection,

Chapter 1 Introduction

stability, and reliability of the nation's critical water infrastructure
and provide threat-related information to law enforcement and emergency
managers on a daily basis. A Water Sector Coordinating Council established
by the department with representative members of the water sector
community is charged with identifying information and other needs of the
sector, including the appropriate use of and the relationships among ISAC,
the Water Security Channel, and HSIN. According to a DHS official, the
department is also assembling a Government Coordinating Council made up of
federal, state, and local officials to assess impacts across critical
infrastructure sectors, including the water sector.

While federal law does not address wastewater security as comprehensively
as it addresses drinking water security,1 wastewater utilities have taken
steps, both in concert with EPA and on their own, to protect their
critical components. Since 2002, EPA has provided more than $10 million to
help address the security needs of the wastewater sector. A large portion
of this funding has been awarded to nonprofit technical support and trade
organizations including the Association of Metropolitan Sewerage Agencies
(AMSA) and the Water Environment Federation to develop tools and training
on conducting vulnerability assessments to reduce utility vulnerabilities
and on planning for and practicing response to emergencies and incidents.
Also, according to EPA, because of the relationship between the drinking
water and wastewater sectors, much of the work and funding that has been
allocated for drinking water security also directly benefits the
wastewater sector. The Water Environment Research Foundation, for
instance, has been conducting research on cyber security, real-time
monitoring, the effects of contaminants on treatment systems, and other
topics that could benefit both sectors. In addition, EPA has supported the
development of a variety of resource documents for utilities such as
guidance on addressing threats and security product guides for evaluating
available technologies and has offered additional technical support to
small systems.

1The Public Health Security and Bioterrorism Preparedness and Response Act
of 2002 (the Bioterrorism Act of 2002), Pub. L. No. 107-188, required
drinking water systems serving more than 3,300 people to complete
vulnerability assessments by June 2004. According to EPA officials, many
combined systems-those providing both drinking and wastewater
services-have voluntarily completed vulnerability assessments for both.
The act further required those systems to prepare or revise an emergency
response plan incorporating the results of the vulnerability assessment
within 6 months after completing the assessment.

                             Chapter 1 Introduction

To assist in the completion of vulnerability assessments, AMSA with EPA
funding cited above, developed technical assistance documents and software
including the Vulnerability Self Assessment Tool (VSAT) that are available
free of charge to water and wastewater systems. The VSAT methodology and
software offers utilities a structured approach for assessing their
vulnerabilities and establishing a risk-based approach to taking desired
actions.

Even though the wastewater industry has not been required by law to
undertake the security measures undertaken by drinking water utilities,
many in the industry maintain that enhanced security must be pursued. They
note, however, that the implementation of security measures imposes
additional financial costs on a sector that is already experiencing
difficulty in meeting the financial challenges of an aging infrastructure.
Accordingly, the industry has sought federal assistance through the
congressional appropriations process. In 2003, Congress responded by
considering legislation that would have authorized $200 million for use in
making grants to wastewater utilities to conduct vulnerability assessments
and implement security improvements, $15 million for technical assistance
for small systems, and $5 million over 5 years for refinement to
vulnerability assessment methodologies.

Objectives, Scope, and Methodology

As requested by the Chairman and Ranking Minority Member of the Senate
Committee on 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 wastewater systems?

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

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

It was outside the scope of this review to ascertain the desirability of
using federal funds to support wastewater security or to compare the
merits of federal support of the wastewater industry with others such as
the electric power or transportation industries. Rather, we sought to
obtain expert

Chapter 1 Introduction

advice on how best to use federal funds to improve wastewater security,
should Congress agree that they should be appropriated for this purpose.

To obtain information on these three questions, we conducted a threephase
Web-based survey of 50 experts on wastewater security. We identified these
experts from a list of more than 100 widely recognized experts in one or
more key aspects of wastewater 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, preparedness, engineering,
epidemiology, public policy, security, wastewater treatment, risk
assessment, water infrastructure, bioterrorism, and public health).

In addition, we sought experts from (1) key federal organizations (e.g.,
DHS, EPA, and National Science Foundation); (2) key state and local
agencies, including health departments and environmental protection
departments; and (3) key industry and nonprofit organizations such as
AMSA, Environmental Defense, Water Environment Federation, and the Water
Environment Research Foundation; and (4) water utilities serving
populations of varying sizes. Of the approximately 70 experts we
contacted, 50 agreed to participate and complete all three phases of our
survey. A list of the 50 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 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 adapted
the method to use on 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 able to
include many more experts than possible with a live panel, allowing us to
obtain a broad range of opinions.

For each phase in our three-phase Delphi process, we posted a
questionnaire on GAO's survey Web site. 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.

Chapter 1 Introduction

In the survey's first phase, we asked a series of open-ended questions. We
pretested these questions with officials from the wastewater utility
industry, nonprofit research groups, and a federal agency. Responses were
content analyzed to provide the basis for the questions asked in the
subsequent phases. Phase 2 questions were close-ended and asked experts to
rate the relative priority or effectiveness of the Phase 1-identified
security activities, allocation criteria, and funding mechanisms. Experts
were also invited to provide narrative comments.

During the third phase, we provided experts with aggregate group results
from Phase 2, along with their own individual answers to the Phase 2
questionnaire. Experts were asked to compare the group results with their
own individual answers and to use this information as a basis for
reconsidering their answers and revising their individual responses, if so
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, the Water Environment Research
Foundation, and AMSA. We also held interviews with EPA on the agency's
wastewater security programs. During our interviews, we asked officials to
provide information on program operations, policies, guidance, and funding
levels. We also received training on VSAT from the Water Environment
Federation, which was supported by AMSA, and attended specialized
conferences addressing water security by the American Water Works
Association and other organizations.

We conducted our work from January 2004 through December 2004 in
accordance with generally accepted government auditing standards.

Chapter 2

Experts Identified Key Vulnerabilities That Could Compromise Wastewater Security

Experts responding to our survey identified five key physical assets of
wastewater systems as among the most vulnerable to terrorist-related
attacks: (1) the collection systems' network of sewers, which includes
underground sanitary, stormwater and combined sewer lines; (2) treatment
chemicals, primarily chlorine, which are used to disinfect wastewater; (3)
key components of the wastewater treatment plant, such as its headworks,
where the raw sewage first enters the treatment plant; (4) control
systems, used to control plant operations; and (5) pumping stations along
the collection system, which lift or pump wastewater to allow gravity flow
to help move sewage to the treatment plant (see fig. 4). Of these assets,
experts ranked the collection systems' network of sewers and treatment
chemicals as the most vulnerable.

Figure 4: Key Wastewater System Vulnerabilities Identified by Experts

                              Number of experts 50

                                       40

                                       30

                                       20

                                      10 0

eatment chemCollection systems'r

T

als	atew

astea w

                                components ofr s

                        treatment plant Pumping stations

s

onetw

ontrol systemC

ic

                                  rk of sewer

eyK

Source: GAO analysis of expert panel's responses to GAO survey.

Experts also identified overarching vulnerabilities that could compromise
the overall integrity of the systems' security. These vulnerabilities
include (1) a general lack of security awareness within the wastewater
sector; (2)

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

interdependencies among components of the wastewater system, opening the
possibility that a failure of any individual component could bring down
the entire system; and (3) interdependencies between the wastewater system
and other critical infrastructure that could fail, such as electric power
supplies.

In general, our panel of experts' observations were consistent with those
of major organizations that have conducted research on wastewater system
vulnerabilities. Among these organizations are the Water Environment
Federation and the Association of Metropolitan Sewerage Agencies.

Experts Identified Five 	The five assets experts considered most
vulnerable included the collection systems' network of sewer lines,
treatment chemicals, key components of

Key Vulnerabilities the wastewater treatment plant, control systems, and
pumping stations.

                     Collection Systems' Network of Sewers

Forty-two of the 50 experts we surveyed identified the collection systems'
network of sanitary, storm, and combined sewer lines as among the top five
terrorist-related vulnerabilities of wastewater systems. Experts explained
that adversaries could use the network of sewers to (1) covertly gain
access to intended targets within the service area or to (2) convey
hazardous or flammable substances that may cause explosions at points
along the system or cause harm to the wastewater treatment system or
process.

As some experts explained, gaining access to buildings or other intended
targets could be accomplished covertly using sewer networks. Sewers make
underground travel from a point of entry to a potential target almost
undetectable. Entering the sewer system is relatively easy, due to the
large number of access points, such as manholes, that may or may not be
protected. Moreover, some sewers, particularly those in older cities, may
be large enough for people and even trucks to covertly pass through-often
beneath some of the most heavily populated and critical areas-and gain
access to potential targets, such as government and financial districts.
Sewer lines range in size from 4 inches to greater than 20 feet in
diameter. One expert explained:

Access controls to important installations, such as perimeter fencing, can
be countered by a terrorist gaining access to the facility unseen by using
the underground collectors. Once access is gained, any activity could then
occur-target reconnaissance or surveillance,

Chapter 2
Experts Identified Key Vulnerabilities That
Could Compromise Wastewater Security

planting of conventional explosives or weapons of mass destruction,
hostage taking, [or] theft of critical documents and items.

Many experts also suggested that adversaries could use the collection
system as an underground transport system-without ever physically entering
the system-for explosive or toxic agents. These substances could be
inserted into the system through storm drains, manholes, or household
drains. Several experts explained that with prior knowledge of a system's
gravity flow, an adversary could calculate the precise timing and location
of an explosion or calculate the amount of a substance that might be
necessary to disable or destroy the biological processes of a wastewater
treatment plant.

However, even without precise knowledge about a system, significant damage
can occur as a result of underground sewer explosions. These explosions
may also damage natural gas or electric lines often co-located with
sewers. One expert cited the effects of an unintentional explosion that
occurred in 1981 in Louisville, Kentucky, where thousands of gallons of a
highly flammable solvent, hexane, spilled into the sewer lines from a
local processing plant. The fumes created an explosive mixture that was
eventually ignited by a spark from a passing car. The result was a series
of explosions that collapsed a 12-foot diameter pipe and damaged more than
2 miles of streets. While no one was seriously injured, sewer line repairs
took 20 months, followed by several more months to repair the streets. A
more serious incident occurred in Guadalajara, Mexico, when a gasoline
leak into a sewer, in April 1992, caused explosions that killed 215
people, injured 1,500 others, damaged 1,600 buildings, and destroyed 1.25
miles of sewer. The explosion created craters as deep as 24 feet and as
large as 150 feet in diameter. Another alarming incident was an
intentional release of a cleaning solvent (naptha) and alcohol into a
sewer that caused explosions 3.5 miles away from the source and damaged
about 5,400 feet of sewer line. This June 1977 incident in Akron, Ohio, by
vandals at a rubber manufacturing plant resulted in more than $10 million
in damage.

Adversaries may also use the system to convey substances that disable the
treatment process. For example, as one expert explained, an adversary
could introduce a highly toxic chemical into the sewer that could damage
the biological processes involved in treatment. Several experts warned
that disabling the treatment process could cause the release of improperly
treated sewage, placing the receiving water in jeopardy and potentially
harming human health and the environment. In February 2002, such an
incident occurred in Hagerstown, Maryland, when chemicals from an

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

unknown source entered the wastewater treatment plant and destroyed the
facility's biological treatment process. This incident resulted in the
discharge of millions of gallons of partially treated sewage into a major
tributary of the Potomac River, less than 100 miles from a water supply
intake for the Washington, D.C., metropolitan area.

Wastewater Treatment Chemicals

Thirty-two of the 50 experts we surveyed identified process chemicals used
in wastewater treatment as among the top five terrorist-related wastewater
system vulnerabilities. Wastewater treatment facilities use a variety of
chemicals, including chlorine, sulfur dioxide, and ammonia during the
treatment process. Most experts singled out chlorine gas as a major
chemical of concern because it is an extremely volatile and hazardous
chemical that requires specific precautions for its safe transport,
storage, and use.

Chlorine is a disinfectant that is commonly used in the treatment process
before treated water (effluent) is discharged into local waterways.
However, if chlorine, which is stored and transported as a liquefied gas
under pressure, is accidentally released into the atmosphere, it quickly
turns into a potentially lethal gas. Because gaseous chlorine is heavier
than air, the cloud it forms tends to spread along the ground.
Consequently, accidental or intentional releases of chlorine could be
extremely harmful to those in the immediate area. Exposures to chlorine
could burn eyes and skin, inflame the lungs, and could be deadly if
inhaled. One expert pointed out that accidental releases of chlorine gas
have occurred numerous times and that a deliberate release would be
relatively feasible. The expert further explained that many wastewater
plants have been converting from chlorine gas to alternative disinfection
methods for various reasons, including the risk of a release.

Recognizing that chlorine gas releases pose threats to the public and the
environment, EPA requires, among other things, that any facility storing
at least 2,500 pounds of chlorine gas submit a risk management plan; as of
December 2004, EPA estimates that about 1,200 plants fit this category.
The plan includes an estimate of the potential consequences to surrounding
communities of hypothetical accidental "worst-case" chemical releases from
their plants. These estimates include the residential population

Chapter 2
Experts Identified Key Vulnerabilities That
Could Compromise Wastewater Security

located within the range of a toxic gas cloud produced by a "worst-case"
chemical release, called the vulnerable zone.1

Several experts stated that a terrorist could use chlorine gas as a
weapon, either at a wastewater plant that is in close proximity to a
specific target population, or through theft and use at another location.
In fact, on September 11, 2001, railroad tanker cars filled with toxic
chemicals including chlorine sat at a treatment plant across the river
from the Pentagon as it was being attacked. At that time, the population
within the plant's vulnerable zone was 1.7 million people. Within weeks
after September 11, this facility converted to an alternative disinfection
method. Other facilities have also eliminated the use of chlorine gas,
choosing instead chlorine-based technologies (e.g., sodium hypochlorite,
calcium hypochlorite, mixed oxidant generation) or nonchlorine-based
technologies (e.g., ozone and ultraviolet light). However, as one expert
noted, several dozen wastewater treatment plants in heavily populated
areas continue to use large amounts of chlorine gas.

In addition to concerns over on-site chlorine storage, experts were also
concerned about the safe transport of chemicals to treatment facilities.
Chlorine is delivered to facilities via railways and highways and in
various container sizes ranging from 1-ton cylinders to 90-ton railroad
cars (see figs. 5 and 6). As experts noted, although rail tank cars are
designed to avoid leakage in the event of a derailment, and the containers
can theoretically withstand a bullet from a normal handgun or rifle, one
expert concluded that the "use of explosives to cause a rupture is well
within the skill set of a terrorist."

1EPA's requirements for "worst-case" release analysis tend to result in
consequence estimates that are significantly higher than what is likely to
actually occur. For example, "worst case" release analysis does not take
into account active mitigation measures facilities often employ to reduce
the consequences of releases.

Chapter 2
Experts Identified Key Vulnerabilities That
Could Compromise Wastewater Security

Figure 5: Chlorine Delivery Truck

Source: Withheld. Photograph used with permission.

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

Figure 6: Chlorine Railroad Car

Source: Withheld. Photograph used with permission.

Such an attack along a congested transportation corridor could have severe
public health and safety impacts. One expert said that before converting
from chlorine to alternative disinfection methods, a major wastewater
treatment plant in Washington, D.C., received its chlorine supply via rail
shipments that traversed through the center of the city, close to the U.S.

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

Capitol Building and across two military installations before reaching its
final destination. Derailments of chlorine could have major impacts in
small communities as well, as occurred in Alberton, Montana, in April
1996. One of the five tankers that derailed ruptured and reportedly
released more than 60 tons of chlorine. Subsequently, a toxic plume of
chlorine gas crossed the Clark Fork River, a major interstate, and
surrounding residences. An estimated 1,000 people were evacuated, 350
people were hospitalized, and one person died.

Key Components of the Treatment Plant

In addition to the vulnerability of chemicals stored at a wastewater
treatment plant, experts also listed the key process components of the
treatment plant as vulnerable. Specifically, more than half of the experts
(29 of 50) identified one or more of these components as among the top
five vulnerabilities. One expert explained that, historically, security
was not a consideration in site selection or design of these facilities.
While many utilities planned for natural disasters or vandalism, it was
only after September 11, that many utilities have considered how best to
protect against potential terrorist attacks.

While experts expressed concern over the security of the entire treatment
plant, several identified the headworks as a component that is
particularly vulnerable to attack, as well as critical to the treatment
process. This unit is part of a plant's primary treatment process, where
wastewater carried through the collection system first enters the
treatment plant. It is here that large objects, such as cans, wood, and
plastics are removed from the wastewater stream. These structures may be
open to the atmosphere and, according to one expert, are easy to attack.
Experts explained that sabotage of the headworks could affect the proper
working order of subsequent treatment processes and could cause the
immediate interruption of the collection system, potentially restricting
or completely blocking wastewater flow. As one expert noted, restricted
flow would could cause backups through the collection system, and the
stagnant wastewater would become a public health hazard within hours,
either through physical contact or through cross-contamination of drinking
water supplies.

Control Systems	Control systems were also listed as a key vulnerability by
18 of the 50 experts. Many wastewater systems are increasingly relying on
the use of these control systems, including Supervisory Control and Data
Acquisition (SCADA) networks, to serve functions ranging from storing and
processing

Chapter 2
Experts Identified Key Vulnerabilities That
Could Compromise Wastewater Security

data to monitoring the system's condition and controlling its operation.
The primary role of SCADA systems is to monitor and control dispersed
assets from a central location. According to one expert, "The backbone for
process control is the SCADA system." The expert explained that several
factors contribute to the vulnerability of these controls, including
typically nonsecured process control rooms at treatment plants, remote
access to SCADA, and shared passwords between multiple users.

Experts generally explained that an attack on these systems could
interfere with critical operations. For example, one expert explained that
an adversary could use SCADA systems to introduce either dangerously high
or inadequate levels of chemicals; reduce biological treatment levels; or
cause remote points along the collection system to fail. Although some
facilities could operate their systems manually should the automated
system fail or be compromised, others do not have the personnel or
equipment to do so. For example, as one expert noted, large valves in
modern plants are now typically operated electronically and seldom used
manual operation components (see fig. 7).

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

            Figure 7: Pump Operated through Remote Automated Systems

               Source: Withheld. Photograph used with permission.

While SCADA networks offer operators increased flexibility and efficiency
by controlling processes remotely, they were not designed with security in
mind. The security of these systems is, therefore, often weak.2 According
to our experts, while many facilities take advantage of their system's
flexibility, they often do not provide the necessary training on cyber
security or implement security measures such as rotating passwords or
securing network connections. Experts also explained that penetration of

2Department of Energy. 21 Steps to Improve Cyber Security of SCADA
Networks. http\\www.eq.doe.gov/pdfs/21stepbooklet.pdf (Downloaded July 1,
2004).

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

SCADA systems, particularly those that may be nonencrypted and accessed
via the Internet, offers a particularly easy point of access and control
of a wastewater system. One expert provided an example of a breach in
cyber security in 2000 when such a system in Australia was attacked,
causing the release of thousands of gallons of raw sewage. While the
actions were not an act of terrorism, they illustrate how a computer or
cyber-related attack could be used to disrupt wastewater treatment.

Pumping Stations 	Sixteen of the 50 experts identified pumping stations,
which are components that help convey sewage to the wastewater treatment
plant, as among the top vulnerabilities. One expert explained that
destroying or disabling a pumping station could cause the collection
system to overflow raw sewage into the streets and into surface waters and
to back up sewage into homes and businesses. The expert added that adverse
effects on public health and the environment are likely if the target pump
station pumps several million gallons per day of wastewater. Another
expert explained, that within a service area, one pumping station has the
capacity to pump 25 million gallons of wastewater per day.

Experts explained that the remoteness and geographic distribution of
pumping stations, and their lack of continuous surveillance, make them
particularly vulnerable (see fig. 8). However, as one expert noted, should
these stations be disabled or destroyed, alternatives such as "pump-around
schemes," where sewage flow is diverted and rerouted, can often be
implemented within a few days or weeks.

                                   Chapter 2
                  Experts Identified Key Vulnerabilities That
                      Could Compromise Wastewater Security

                           Figure 8: Pumping Station

               Source: Withheld. Photograph used with permission.

Overarching Vulnerabilities Affecting Overall Wastewater System Security

In addition to the physical assets identified as among the greatest
vulnerabilities of wastewater systems, some experts also identified
vulnerabilities that may affect the overall security of the nations'
wastewater systems. First, they pointed out that wastewater utilities
generally do not have a security culture because they are often more
focused on operational efficiency and may, therefore, be reluctant to add
security procedures and access control elements to their operations. For
example, one expert noted the ease with which many types of individuals
(employees, contractors, and visitors) and vehicles typically enter
wastewater treatment plant facilities. As this expert pointed out, some
facilities do not check to ensure that individuals entering the property
have legitimate reasons for being there. This expert also raised a concern
about

Chapter 2
Experts Identified Key Vulnerabilities That
Could Compromise Wastewater Security

the lack of inspection of incoming truckloads at some wastewater treatment
plants. An adversary could exploit this lack of security by delivering
contaminants or explosives to destroy the treatment process or the entire
facility. In addition to securing entrance checkpoints, two experts
suggested there is little background screening of utility employees. One
expert noted, "People with criminal records, falsified educational
credentials, and other serious liabilities might be hired by utilities
that fail to thoroughly check their backgrounds. The result can be
intentional acts of terrorism on a utility."

Second, experts pointed to interdependencies among all major wastewater
assets within the treatment system. The system as a whole relies on the
proper working order of all its components to treat a community's
wastewater. One expert explained that, because treatment plants are less
able to recover from an attack, they may have a higher level of security
than other assets, such as the collection system. However, because
collection and treatment are part of one integrated system, securing one
asset does not ensure that the system as a whole is more protected. For
example, gates and fences around the main treatment plant may stop an
adversary from coming onto the physical property, but it will not prevent
a harmful agent from entering the facility through the collection
system-an event that could destroy the facility's entire secondary
treatment process.

Third, experts identified interdependencies between wastewater systems and
other critical infrastructures. As several experts explained, disruptions
in electric power, cyber systems, and transportation of treatment
chemicals can result in a failure of wastewater treatment systems. One
expert cautioned that the interruption of the power grid could render the
wastewater plant useless, noting, "Several hours without power would cause
the biological treatment process to halt and wastewater would back up on
the collection system." Such an event occurred in 2003, when a major power
failure caused treatment plants in Cleveland, Ohio, to release at least 60
million gallons of raw untreated wastewater into receiving waters. Without
electric power, operators had no other option but to bypass treatment and
directly discharge the untreated sewage into Lake Erie or the Cuyahoga
River and other tributaries.

Conversely, there are instances in which other infrastructure and
activities may depend on treated wastewater to properly function. For
example, in some parts of the country, effluent is reclaimed and used as
cooling water for power generation, to recharge groundwater, or to water
outdoor landscapes. One expert noted that wastewater treated at a plant in
the arid

Chapter 2
Experts Identified Key Vulnerabilities That
Could Compromise Wastewater Security

Western United States is reclaimed and used to provide the only cooling
source for a nuclear power plant that provides power for much of that
region. According to the same expert, the immobilization of this treatment
plant could, within a certain number of days, disable the nuclear plant,
causing a major, multistate power outage.

Chapter 3

Experts Identified Wastewater Security-Enhancing Activities That Warrant Federal
Support

Experts most frequently identified 11 specific activities to improve
wastewater security as deserving high priority for federal support (see
fig. 9). Three activities are particularly noteworthy because they were
given a rating of highest priority by a substantial number of the experts.
These activities include the following:

o 	Replacing gaseous chemicals used in wastewater treatment with less
hazardous alternatives. Experts viewed these actions as essential to
reduce the vulnerability inherent in systems that rely upon the transport,
storage, and use of potentially hazardous materials such as gaseous
chlorine in their treatment processes. Several experts noted that
replacement could be cost prohibitive for many wastewater utilities and
that it, therefore, warranted federal support.

o 	Improving local, state, and regional collaboration efforts. Experts
identified the development of strong working relationships among utilities
and public safety agencies as critical to protecting wastewater
infrastructure and system customers from potential threats. Some experts
also noted that enhanced partnerships among these groups would result in
improved response capabilities should a wastewater system be attacked.

o 	Completing vulnerability assessments for individual wastewater systems.
Experts cited these as necessary for utilities to understand their
security weaknesses, to identify appropriate countermeasures, and to
implement risk reduction strategies in a logical, coordinated manner.

The remaining eight activities experts frequently rated as warranting high
or highest priority for federal funding include (1) providing training to
utility employees related to conducting vulnerability assessments and
improving the security culture among employees; (2) improving national
communication efforts between utilities and key entities responsible for
homeland security; (3) installing early warning systems in collection
systems to monitor for or detect sabotage; (4) hardening physical assets
of treatment plants and collection systems; (5) strengthening operations
and personnel procedures; (6) increasing research and development efforts
toward improving threat detection, assessment, and response capabilities;
(7) developing voluntary wastewater security standards and guidance
documents; and (8) strengthening cyber security and Supervisory Control
and Data Acquisition (SCADA) systems.

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

Figure 9: Experts' Views on Wastewater Security Activities Most Deserving
of Federal Support

                              Number of experts 50

Over half of the experts surveyed (29 of 50) rated the replacement of
gaseous chemicals at wastewater treatment facilities with less hazardous
alternatives as warranting highest priority for federal funding. Another
14 experts rated this activity as high priority. Experts reported that
wastewater systems carrying out treatment processes using gaseous forms of
chemicals, particularly chlorine, make themselves targets for terrorist
attack. However, as one expert noted, changing disinfection technologies
effectively devalues these facilities as targets for "weaponization" of
their existing infrastructure.

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Highest priority Source: GAO analysis of expert panel's responses to GAO
survey.

Replace Gaseous Chemicals with Less Hazardous Alternatives

Chapter 3
Experts Identified Wastewater Security-
Enhancing Activities That Warrant Federal
Support

Several experts noted that some communities and utilities currently using
gaseous chemical treatment processes have expressed interest in
converting to an alternative treatment technology, but the financial costs
associated with conversion remain prohibitive. However, one stated that
replacing gaseous chemical treatment technology can actually result in
certain offsetting cost savings. For example, the Blue Plains Wastewater
Treatment Plant in Washington, D.C., employed around-the-clock police
units prior to replacing its chlorine gas treatment process. Following
conversion to a less hazardous treatment technology, Blue Plains found
that it could reduce this security posture. In addition, the utility was
able to
reduce the need for certain emergency planning efforts and regulatory
paperwork.

Experts suggested alternative treatment technologies such as sodium
hypochlorite (a solution of dissolved chlorine gas in sodium hydroxide)
and ultraviolet disinfection. These alternative processes have been
implemented at several facilities throughout the United States, including
Washington, D.C.; Atlanta, Georgia; Philadelphia, Pennsylvania;
Cincinnati,
Ohio; Jacksonville, Florida; and Harahan, Louisiana. The change, for an
individual plant, to sodium hypochlorite may require approximately $12.5
million for new equipment and increase annual chemical costs from
$600,000 for gaseous chlorine to over $2 million for sodium hypochlorite.1

Another expert suggested that reducing the size of containers used to
transport and store gaseous chemicals could also prove an effective
deterrent to terrorism. This approach is being implemented by a treatment
plant in the Western United States, where gaseous chlorine is now stored
in
1-ton canisters-a significant reduction in size from the larger 90-ton
railroad tanker car size containers the utility previously employed
(see fig. 10).

1http://c3.org/chlorine-issues/disinfection/water-disinfection.html

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

               Source: Withheld. Photograph used with permission.

Improve Local, State, and Regional Collaboration Efforts

Twenty-three of 50 experts rated efforts to improve local, state, and
regional collaboration as warranting highest priority for federal funding.
Fifteen more experts rated this activity as high priority. Several experts
noted the importance of establishing strong working relationships among
utilities, local and state law enforcement agencies, fire departments, and
other first response agencies in advance of a potential emergency
situation. Many added that enhanced partnerships among these entities can
yield significant benefits to wastewater utilities including an increased
ability to monitor critical infrastructure and facilities, improved
understanding of

Chapter 3
Experts Identified Wastewater Security-
Enhancing Activities That Warrant Federal
Support

agency roles and responsibilities, and faster response time to deal with
potential security breaches.

According to one expert, significant personnel and other resources devoted
to emergency response are theoretically available to the wastewater
sector. These resources include law enforcement agencies, fire
departments, public health care facilities, environmental authorities, and
other nonprofit and commercial entities. However, the expert noted that
wastewater facilities remain largely disconnected from these entities, and
wastewater facilities' efforts for emergency response planning are,
therefore, often undertaken independently. Consequently, emergency
response teams do not gain a full understanding or appreciation of the
unique challenges inherent in maintaining a utility's wastewater treatment
capability.

This lack of collaboration perpetuates the community's idea that "sewers
lead to [a] magical place where [materials] simply `go away' without
consequence," one expert suggested. The expert added that this
misperception is demonstrated by a failure of some in the medical response
community to adequately plan for proper disposal of waste resulting from
decontamination efforts of a chemical, biological, or radiological event.
Directly discharging such material to the wastewater influent stream could
significantly damage or destroy the wastewater treatment process.

Collaboration among local, state, and regional agencies should include
periodic field and "tabletop" exercises to establish and reevaluate the
roles, capabilities, and responsibilities of agencies that would respond
to a terrorist event, according to one expert. Another identified the
nonprofit California Utilities Emergency Association, an entity to which
most utilities in that state belong, as an effective provider of
communications, training, mutual aid coordination, and simulation
exercises. The expert also cited the San Francisco Bay Area Security
Information Collaborative as a successful example of regional
collaboration in which participating water utilities coordinate
communications, responses, and emergency planning.

The Environmental Protection Agency (EPA) has provided funding for
training on emergency response for wastewater utilities through agreements
with the Wastewater Operator State Environmental Training Program, the
Water Environment Federation, and other organizations. Through the
Department of Homeland Security's Office of Domestic Preparedness, EPA has
funded emergency response table-top exercise training to the nation's
larger wastewater utilities.

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

Complete Vulnerability Assessments

Twenty of 50 experts rated the completion of vulnerability assessments as
warranting highest priority for federal funding. Fourteen other experts
rated this activity as high priority. Vulnerability assessments help water
utilities evaluate their susceptibility to potential threats and identify
corrective actions to reduce or mitigate the risk of serious consequences
from vandalism, insider sabotage, or terrorist attack. One expert
explained that this process enables a utility to evaluate its
terrorist-related vulnerabilities and begin to implement security
enhancement plans that directly address those identified vulnerabilities.
Another added that the assessments also present useful findings that
should be incorporated into a utility's emergency response plan and that
they enable an active process for updating and exercising those plans.

The Bioterrorism Act of 2002 required vulnerability assessments for
drinking water utilities serving more than 3,300 people but did not
include a comparable requirement for wastewater utilities. To foster the
completion of vulnerability assessments among wastewater utilities, EPA
has funded the development of vulnerability assessment methodologies and
provided training to wastewater utilities. EPA has encouraged wastewater
utilities to use methodologies such as those provided by the National
Environmental Training Center for Small Communities, on security and
emergency planning, and the Vulnerability Self Assessment Tool (VSAT),
developed and released by the Association of Metropolitan Sewerage
Agencies. The VSAT methodology and accompanying software provide an
interactive framework for utilities of all sizes to analyze security
vulnerabilities to both manmade threats and natural disasters, evaluate
potential countermeasures for these threats, and enhance response
capability in the event of an emergency situation. This methodology has
been continually updated and improved; VSAT Version 3.1 is currently
available to utilities. Through EPA support, the Water Environment
Federation has provided extensive training of the VSAT tool free of charge
to wastewater utility operators and others involved in environmental
protection, public safety, and security.

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

Expand Training Opportunities for Wastewater Utility Operators and
Administrators

Thirteen of the 50 experts rated the expansion of training opportunities
for utility personnel as warranting highest priority for federal funding,
and an additional 27 experts suggested this activity warranted a high
priority. According to experts, creating a security-minded culture among
wastewater utilities is critical to building awareness of security
vulnerabilities and implementing appropriate countermeasures.

In particular, experts noted that wastewater system operators and
administrators need to become better educated about the importance of
focusing on security and emergency preparedness issues. Several experts
suggested that managers should have a full understanding of potential
types of terrorist attacks and the systems or mechanisms that could
preclude or mitigate these events. They added that other parties,
including boards of directors of wastewater systems, mayors, and city
councils need to be made aware of potential threats to wastewater systems
and the impact a terrorist event could have upon a facility. One expert
stated that successful development of security awareness among those
associated with wastewater systems could mean the difference between
simply installing security systems and actually becoming secure.

Experts also stated that additional technical training for operators is
necessary to ensure the security of wastewater systems. One noted that
this type of training could avert a catastrophe by enabling a wastewater
operator to recognize a pending disaster as early as possible. Another
expert stated that increased technical training, particularly for smaller
wastewater utilities, is necessary to ensure that funds for physical
security enhancements are used to their maximum potential, thus achieving
maximum benefit for the wastewater utility. One expert also suggested that
devoting funding toward increased technical training will provide
wastewater utility employees with the skills necessary for developing
comprehensive vulnerability assessments and implementing emergency
response plans before a terrorist attack.

Since 2002, EPA has provided more than $10 million to help address the
security needs of the wastewater sector. A large portion of this funding
has been awarded to nonprofit technical support and trade organizations to
develop tools and training on conducting vulnerability assessments to
reduce utility vulnerabilities and on planning for and practicing response
to emergencies and incidents.

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

Improve National Communication Efforts between Utilities and Key Entities
Responsible for Homeland Security

While only 8 of 50 experts rated efforts to improve communications between
utilities and federal entities responsible for homeland security as
warranting highest priority for federal funding, well over half of the
experts surveyed (31 of 50) rated this activity as high priority. One
expert stated that it is essential to develop an effective communications
strategy that involves the broad range of stakeholders responsible for
ensuring wastewater security. Another emphasized that wastewater utilities
need timely and useful information from federal authorities about
increased threat levels and protective actions that should be implemented.

To improve national communications, EPA provided a grant to AMWA to
develop the Water Information Sharing and Analysis Center (Water ISAC).
The Water ISAC is a secure, Internet-based subscription service that
provides time-sensitive information and expert analysis on threats to both
wastewater and drinking water systems. It serves as a key link in the flow
of water security information among utilities and federal homeland
security, intelligence, law enforcement, public health, and environmental
agencies.

However, according to some experts, Water ISAC does not sufficiently
ensure adequate communication between federal agencies and utilities. One
stated that despite a high reliance upon Water ISAC by drinking water
utilities, this communication vehicle has proven inadequate for meeting
the needs of the broad range of stakeholders involved in protecting
drinking water security. This expert added that the Water ISAC needs to be
better developed if it is to be an essential part of a communications
strategy for the wastewater sector. Another expert noted that several
water utilities have avoided the Water ISAC because of the subscription
fees associated with the service. In the fall of 2004, the Water ISAC
announced a new communication tool known as Water Security Channel. The
Water Security Channel is a password protected site that electronically
distributes federal advisories regarding threat information to the water
sector. Water Security Channel is a service that is free of charge to any
wastewater or drinking water utility that wishes to participate.

For its part, the Department of Homeland Security is implementing its
Homeland Security Information Network (HSIN) initiative, which will
provide a real-time, collaborative flow of threat information to state and
local communities, as well as to individual sectors. According to the
department, this network will be the only tool available that provides
collaborative communications between first responders, emergency

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

services, the government (local, state, and federal) and other sectors on
a real-time basis. In addition, the department has established a Water
Sector Coordinating Council to identify information and other needs of the
sector, including the appropriate use and the relationships among the
Water ISAC, the Water Security Channel, and HSIN.

Install Early Warning Systems in Collection Systems to Monitor for or
Detect Sabotage

Seven of 50 experts rated the installation of early warning systems in
collection systems to monitor for or detect sabotage as warranting highest
priority for federal funding, and an additional 31 experts rated this
activity as a high priority. A device these experts frequently mentioned
to achieve some degree of monitoring and detection for explosive
substances is the lower explosive level (LEL) meter, which can be inserted
into manholes and connected to central computers. One expert claimed LEL
meters have significantly improved response time in mitigating the
potential for structural damages resulting from explosions within the
wastewater collection system.

One expert also noted that disabling the biological processes occurring at
a wastewater treatment plant would require a large amount of toxic
compounds to be inserted into the collection system, but several experts
stated that this possibility remains of concern because of the open access
collection systems afford. Many experts suggest that additional research
is needed to develop early warning technologies that can sense the
presence and concentration of these types of toxic compounds in the
collection system and relay that information electronically to treatment
operators.

Harden Physical Assets of Treatment Plants and Collection Systems

Eight of 50 experts rated physical hardening of treatment plants and
collection systems as warranting highest priority for federal funding and
an additional 29 experts rated this activity as high priority. Experts
stated that physically securing the perimeter of the treatment plants and
pumping stations with fences, locks, security cameras, alarm systems,
motion detection systems, and other physical barriers can protect critical
treatment components from direct attack or sabotage (see figs. 11 and 12).
One expert noted that the more difficulty terrorists encounter in trying
to reach critical targets in a wastewater system, the less frequently
attacks will be attempted, and the lesser the impact will be if and when
these attempts succeed. Furthermore, improvements to perimeter defenses
surrounding wastewater treatment systems not only deter terrorist
intruders but also restrict access by vandals, contributing toward
improved

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

reliability of electronic surveillance systems. As one expert pointed out,
physical hardening of assets can largely be accomplished with hardware
that requires only minimal maintenance and replacement cost once
installed.

               Source: Withheld. Photograph used with permission.

Chapter 3
Experts Identified Wastewater Security-
Enhancing Activities That Warrant Federal
Support

Source: Withheld. Photograph used with permission.

Other experts suggested that actions are needed to provide redundant
capabilities to wastewater treatment systems. According to experts,
additional power, pumping, and collection bypass systems would provide
more reliable treatment capacity that would benefit the public not only in
the event of terrorism but also during nonterrorist events (e.g., natural
disasters, weather-related events, or interrelated infrastructure
failures).

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

Such actions could ensure that wastewater systems maintain full treatment
capabilities during a variety of unforeseen catastrophic events.

Although one expert claimed that protecting the several hundred miles of
sewers in a large urban system is virtually impossible, other experts
suggested that design improvements and physical alterations could limit
access to collection systems. Some experts suggested securing manhole
covers with maintenance-friendly lockdown mechanisms. In addition, one
expert suggested improving engineering designs for wastewater systems in
ways that reduce vulnerability risks posed by infrastructure
crossconnections with other water systems.

Strengthen Operations and Personnel Procedures

Seven of 50 experts rated the strengthening of operations and personnel
procedures at wastewater systems as warranting highest priority for
federal funding, and an additional 24 experts rated this activity as a
high priority. For example, one expert suggested that a highly efficient
background check system should be available to water utilities to get
accurate information on new and existing employees, contractors, and
others who are working at vital facilities, such as wastewater treatment
plants. This expert noted that access to such systems is afforded to
airport administrators and certain law enforcement entities but is largely
inaccessible to water utilities.

Another expert stated that wastewater utilities need procedures to ensure
the security of collection system maps and drawings, while also allowing
reasonable access to them by contractors and developers. The expert
suggested maps could be electronically stored and password protected with
a regularly changed password. Another expert suggested that all employees
and visitors have identification badges with photographs and electronic
strips or sensors that regulate points of access allowed by the badge.

Increase Research and Thirteen of 50 experts rated expanded research and
development efforts to

improve detection, assessment, and response capabilities for
wastewaterDevelopment Efforts to systems as warranting highest priority
for federal funding, and an Improve Detection, additional 17 experts
suggested this activity warranted a high priority. One Assessment, and
expert stated that new technologies are needed in the wastewater sector to

better protect physical assets by providing reliable surveillance
andResponse Capabilities detection capabilities with a minimal need for
on-site, around-the-clock

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

security personnel. According to another expert, technologies currently in
development for drinking water utilities could potentially be adapted for
use by wastewater utilities. These technologies would need to detect
hazardous chemical, biological, or radioactive contaminants while
operating in the harsh environment of common, everyday contaminants found
in sewage. Also, improved computer mapping systems tracking the course and
speed of sewage flow could greatly enhance emergency response activities
including evacuations, dilutions of harmful substances that have been
introduced to the sewage flow, and venting of volatile materials.

EPA's Office of Research and Development has recently funded research that
is intended to address many of these needs. According to an official with
EPA's Water Security Division, while these efforts have been primarily
directed toward drinking water security research, some of EPA's research
findings can be applied to wastewater security. EPA has also developed a
water security research and technical support action plan that outlines
various research and technical support needs that the water industry and
other stakeholders have identified. The plan also proposes specific
projects to address these needs, and EPA has begun work on some of these
projects in collaboration with the Water Environment Research Foundation
and the American Water Works Association Research Foundation. These
nonprofit research organizations have received funding to address a
variety of wastewater security research projects, such as assessing new
security technologies to detect and monitor contaminants and prevent
security breaches. According to EPA, other issues being addressed include
public health protection, vulnerability and protection of water and
wastewater infrastructure, and communication in the event of deliberate
attacks or natural disasters.

Develop Voluntary Wastewater Security Standards and Guidance Documents

Four of 50 experts rated the development of voluntary wastewater security
standards and guidance documents as warranting highest priority for
federal funding, and half of the experts surveyed (25 of 50) gave this
activity a high priority rating. Experts identified options including
development and issuance of voluntary standards for security of wastewater
facilities (including design standards), a peer review process to evaluate
the quality of wastewater utilities' vulnerability assessments and
emergency response plans, and creation of a secure Web site that
disseminates lessons learned by utilities throughout the various phases
and processes related to protecting wastewater security.

                                   Chapter 3
                    Experts Identified Wastewater Security-
                   Enhancing Activities That Warrant Federal
                                    Support

One expert suggested that developing government standards for the security
of all new facilities would help increase the overall ability of
wastewater systems to withstand threats. The expert stated such standards
should lay out minimum protection standards and provide a framework of
threats utilities should consider when completing vulnerability
assessments. Another expert suggested that, because water utilities seek
guidance from the federal government on whether their individual treatment
plants are secure, one option, in lieu of site visits by EPA, might be a
peer review process of vulnerability assessments and emergency response
plans across wastewater utilities. Development of a secure Web site for
wastewater utilities that includes lessons learned from assessments,
planning, training, and incident responses could also provide valuable
guidance for wastewater utilities, one expert noted.

EPA recently commissioned a study by the National Drinking Water Advisory
Council's Water Security Working Group to address some of these needs. The
group's charge is to identify: (1) the features of an active and effective
security program for drinking water and wastewater utilities; (2)
incentives that would encourage water utilities to implement features of
the security program; and (3) ways to measure the extent of utility
implementation of the security program. In addition, in September 2003,
EPA gave funding to the American Society of Civil Engineers to develop
voluntary security standards for drinking water, wastewater, and
stormwater utilities, which were released in December 2004 as interim
standards. A training module is planned for spring 2005.

Strengthen Cyber Security and SCADA Systems

Five of 50 experts rated efforts to improve cyber security and SCADA
systems as warranting highest priority for federal funding, and an
additional 22 experts gave this activity a high priority rating. According
to one expert, measures should be taken to minimize access to these
systems by improving the security capabilities of hardware systems and
software applications, as well as by implementing appropriate information
technology security policies at wastewater utilities.

One other expert suggested the federal government invest in programs
designed to create, accelerate, and deploy minimally acceptable cyber
security standards for all automated systems where a compromising event
could place a surrounding population at risk. This expert noted that the
need for cyber security standards is not limited exclusively to wastewater
systems, but stated that the particular needs and characteristics of these
utilities should be considered as these standards are developed.

Chapter 4

Experts Identified Key Allocation Criteria and Funding Mechanisms for Addressing
Wastewater Security Needs

Numerous wastewater utilities have begun to address security concerns by
completing vulnerability assessments or by undertaking security upgrades.
To date, most security initiatives have been financed by reallocating
funds from other important utility activities or embedding security into
ongoing operations. According to industry representatives, utilities may
ultimately have no choice but to pass these costs along to their customers
through rate increases. Given the cost of these security actions, however,
many in the utility industry believe federal assistance through the
congressional appropriations process is warranted. Experts do not all
agree that the wastewater industry as a whole should receive funding
priority, noting that other sectors such as electricity or transportation
may warrant higher priority. Indeed, while the vast majority of our
experts did support federal funds for security for wastewater utilities,
some voiced dissenting opinions on the matter.

Nonetheless, should Congress and the administration agree to a request for
funds, 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 (1) the types of utilities that should
receive funding priority and (2) the most effective mechanisms for
directing these funds to potential recipients. Overall, we found a high
degree of consensus on the following:

o 	Thirty-nine of the 50 experts indicated that utilities serving critical
infrastructure (including government, commercial, industrial, and public
health centers) should be given highest priority for federal funding. Half
of the experts gave utilities using large quantities of gaseous chemicals
a rating of highest priority while just under half of the experts gave the
same rating to utilities serving large populations.

o 	Direct federal grants are the most favored funding mechanism, with many
experts indicating the circumstances in which such grants should or should
not include matching funds from the recipient. Many favored direct grants
without a matching requirement for a wide variety of planning and
coordination activities, such as completing vulnerability assessments,
conducting training, and developing standards and guidance. Cost-shared
grants were favored for activities that benefit individual utilities, such
as strengthening operation and personnel procedures, installing early
warning systems in collection systems, and hardening physical assets.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

Key Criteria to Help Determine Which Utilities Should Receive Funding
Priority

The experts identified several characteristics of utilities that should be
used to set funding priorities. The most frequently identified were
utilities: (1) serving critical infrastructure including government,
commercial, industrial, and public health centers; (2) using large
quantities of gaseous chemicals; (3) serving areas with large populations;
(4) where a security breach would adversely impact environmental resources
(e.g., receiving waters); (5) having completed vulnerability assessments;
(6) serving areas with medium or small populations; and (7) serving
buildings, monuments, parks, tourist attractions or other entities that
have symbolic value (see fig. 13).

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

Utilities Serving Critical Infrastructure

More than three quarters of the experts (39 of 50) gave utilities serving
critical infrastructure a highest priority rating. An additional 10
experts gave these utilities a rating of high priority. These utilities
provide service to institutions that serve as hubs for government
activity; commercial and industrial centers, such as a city's financial
district, power plants, or major airports; and public health institutions,
such as major medical centers and hospitals. As one expert commented,
"while every wastewater system is a potential target, it seems prudent to
assume that the larger the system or the criticality of facilities served,
the greater the potential impact and hence the more likely the target."
Most experts shared this view, including one who said the highest priority
should go to "the impact the loss of the treatment facility would have on
other vital services" such as providing cooling water for a nuclear or
steam generating power plant.

Some experts said that systems with heavy commercial and industrial usage
are critical to the country's economic stability, and any major or
sustained disruption could have severe economic as well as public health
consequences. For example, one expert pointed out that critical industrial
customers such as the computer chip manufacturing sector could cost the
economy millions per day should a shutdown be caused by the loss of a
wastewater treatment plant.

Utilities Using Large Quantities of Gaseous Chemicals

More than half of the experts (26 of 50) gave a rating of highest priority
for funding of utilities using large quantities of gaseous chemicals. An
additional 18 experts rated these utilities as warranting a high priority
for federal funds. Some experts pointed out that many wastewater treatment
plants use large quantities of elemental chlorine and other toxic
materials which, if released to the atmosphere on-site or during transport
to the site, would necessitate widespread evacuations, and possibly cause
injuries and fatalities.

Several experts pointed out that the Environmental Protection Agency's
(EPA) Risk Management Planning program requires industrial facilities that
use threshold amounts of certain extremely hazardous substances to
selfidentify their worst-case chemical release scenarios. An expert
cautioned, however, that funds should not be provided to utilities for
converting to less hazardous chemicals (e.g., sodium hypochlorite) when
other utilities have already or are currently looking at disinfection
options that could pose little or no security worker risk, or public
health risks.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

Utilities Serving Areas with Large Populations

Almost half of the experts (24 of 50) gave a rating of highest priority to
utilities serving areas with large populations. Seventeen additional
experts rated these utilities as warranting a high priority for federal
funds. Many experts shared the view that providing financial and technical
assistance to the largest treatment plants would protect the greatest
number of people. One expert pointed to EPA's 2000 Clean Water Needs
Survey, which indicated that about 70 percent of the nation's sewered
population is served by the 3,500 largest wastewater facilities (out of a
total of 16,000 facilities). Each of these facilities maintains a flow
that is greater than 1 million gallons per day. Thus, this expert
concluded, funding the largest plants provided benefits to the greatest
number of people. Finally, a number of experts suggested that because
terrorists are likely to seek to maximize the number of people killed or
injured by their attacks, they may try to strike systems serving many
customers in large metropolitan areas.

Utilities Where a Security Breach Would Adversely Impact Environmental
Resources

While only four experts gave a rating of highest priority to utilities
where a security breach would adversely impact environmental resources, 28
of the experts rated these utilities as warranting a high priority.
Several experts pointed out the potential for a negative impact on the
environment and public health if raw sewage overflows into receiving
bodies of water. One expert commented that many wastewater treatment
plants discharge highly treated effluent to rivers upstream of the intakes
to water treatment plants serving downstream cities. Damage to these
wastewater treatment plants could cause the discharge of raw sewage that
would be only partially diluted before it reached the intakes of the
downstream drinking water treatment plants. Experts also cited significant
potential effects on the environment. Some mentioned that the discharge of
untreated sewage could impact beaches, critical habitats, or fisheries,
causing economic damage in addition to negative environmental and public
health effects.

Utilities That Have Completed Vulnerability Assessments

Three of the experts gave a highest priority rating to utilities that have
completed vulnerability assessments (VAs). An additional 18 experts gave
these utilities a high priority rating. Some experts said that only
utilities that have completed VAs should be given federal funding. Other
experts pointed out that there should be federal funding for those
utilities that have not yet completed VAs so that they can complete this
key task. As one expert commented, a key benefit of conducting a
vulnerability assessment of a wastewater system is that it allows the
areas of the greatest need to be identified.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

Properly conducted, a vulnerability assessment brings in all the necessary
divisions within a plant including operations, information technology,
management, and external forces such as fire departments and local police.
Should a plant demonstrate that it has conducted such an assessment, that
plant would be much more likely to use federal funding efficiently, this
expert added.

Utilities Serving Areas with Medium or Small Populations

Eight of the 50 experts rated utilities serving areas with medium or small
populations as a high priority for federal funding. An additional 27
experts rated these utilities as a medium priority. One expert pointed out
that such facilities are least able to afford security enhancements or
acquire the security expertise and, therefore, may be in need of federal
support.

The relatively small number of experts giving a high or highest priority
rating for utilities serving areas with medium or small populations may
not fully reflect the concern among some experts for the safety of these
utilities. For example, some who gave a higher priority rating to
utilities serving areas with large populations suggested that the need for
federal support should be an important associated criterion, regardless of
system size. Accordingly, these experts said that some funding could be
justified for both large and small populations based on need. One expert
favored a bifurcated focus with one effort seeking to ensure minimal
levels of security for all utilities, and another expert favored more
intensive efforts focusing on systems serving larger populations.

Utilities Serving Entities Only one expert gave a highest priority rating
to utilities serving buildings,

That Have Symbolic Value	monuments, parks, tourist attractions, or other
entities that have symbolic value. An additional 10 experts rated these
utilities as warranting a high priority. One expert commented that
terrorists have already shown that they want to cause serious economic
damage by disrupting tourism. Another noted that terrorists have also
targeted cities that have stadiums, convention centers, and other
attractions where large numbers of people gather.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

Funding Mechanisms Recommended for Distributing Federal Funds

When we asked the experts to identify how best to distribute federal funds
that may be made available to utilities to address wastewater security,
they overwhelmingly indicated that direct federal grants to utilities
would be the most effective mechanism. The experts also indicated that
grants in which some type of match is required of recipients would be
effective. Relatively fewer experts indicated that the use of trust funds
or the Clean Water State Revolving Fund, particularly for upgrades to be
implemented in the short term, would be effective. Other mechanisms that
were rated as less effective included loans, or loan guarantees, and tax
incentives for private utilities. Figure 14 shows how experts rated six
different mechanisms for funding wastewater security.

                              Number of experts 50

                                       40

                                       30

                                       20

                      10 0 Direct grantsCost-shared grants

olving Fund

v

ReClean W

                                   guarantees

ust fundsrT

xTa

                                   incentives

Somewhat effective

Very effective Source: GAO analysis of expert panel's responses to GAO
survey.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

Direct Federal Grants	Thirty-four of the 50 experts indicated that direct
federal grants to the utility would be very effective in allocating
federal funds. An additional 12 said these mechanisms would be somewhat
effective in doing so.

Experts expressed a variety of views regarding how best to implement these
grants. For example, some cautioned that a grant program for wastewater
security should be solely dedicated to the protection of the wastewater
infrastructure, rather than being consolidated together with other
programs, such as grants for enhancing homeland security. One said that,
contrary to the way grant programs usually operate, utilities should be
allowed to apply for grants during project implementation or even after
the project is completed. This could reward those who were proactively
addressing their security needs. Among other suggestions, one expert said
that EPA and the Department of Homeland Security (DHS) should collaborate
on allocating these grant funds. This expert stated that "EPA has
technical knowledge about facility operations that is especially important
and DHS has grant funds for homeland security that could be quickly made
available until Congress approves a special allocation." Some experts also
commented that direct grants are preferable because they are more likely
to result quickly in safety improvements and other desired changes.

Experts also offered opinions on situations in which it would be
appropriate to offer a grant without requiring a matching contribution
from the recipient. Many, for example, favored direct grants with no match
for activities that benefit multiple utilities, or which should be
addressed in the near term. Such actions would include conducting research
and development to improve detection, developing voluntary wastewater
security standards and guidance, completing vulnerability assessments, and
providing training to utility security personnel on how best to conduct
vulnerability assessments and improve the security culture.

Grants with Matching Thirty of the 50 experts indicated that grants with a
matching requirement Requirement (Cost-Shared (cost-shared grants) would
be very effective as a mechanism for providing Grants) funds to wastewater
utilities. An additional 16 rated such grants as

somewhat effective.

Experts generally favored cost-shared grants for activities that benefit
individual utilities. For example, 38 of the 50 experts indicated that
costshared grants were best for strengthening operation and personnel

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

procedures, such as securing sewer maps and conducting background checks
on new employees. Almost three-quarters of the experts (36 of 50)
indicated that cost-shared grants were also best for installing early
warning systems in collection systems to monitor for or detect sabotage.
Similarly, 32 of the 50 experts indicated that recommended cost-shared
grants would be best for improving cyber security and for activities
required to harden physical assets, such as building fences, installing
locks, and securing manhole covers.

Clean Water State Revolving Fund

The Clean Water State Revolving Fund (CWSRF) is an EPA-administered
program that provides grants to the states to allow them to assist
publicly owned wastewater utilities. States, in turn, use the funds to
provide loans to participating wastewater utilities to assist them in
making infrastructure improvements needed to protect public health and
ensure compliance with the Clean Water Act. Five experts indicated that
the CWSRF would be a very effective funding mechanism to improve
wastewater security. An additional 35 indicated that it would be somewhat
effective.

According to an EPA Fact Sheet, states may use the CWSRF to assist
utilities in completing a variety of security-related actions, such as
vulnerability assessments, contingency plans, and emergency response
plans. In addition, the EPA Fact Sheet identifies other infrastructure
improvements that may be eligible for CWSRF funds, such as the conversion
from gaseous chemicals to alternative treatment processes, installation of
fencing or security cameras, securing large sanitary sewers and installing
tamper-proof manholes.1 Some experts said that the advantage of the CWSRF
is its ability to leverage appropriated federal funds, thereby enabling it
to assist more facilities than direct federal grants.

A number of experts, however, expressed caution about relying heavily on
the CWSRF to support security enhancements. Several questioned whether the
CWSRF was appropriate in an environment where quick, emergencyrelated
decisions were needed, noting that the administrative process in applying
for and receiving the funds can be lengthy. Another noted that the CWSRF
"was not originally established to deal with security-related projects,"
and that the program therefore "either needs to [be] fixed to deal

1Environmental Protection Agency, Fact Sheet, "Use of the Clean Water
State Revolving Fund to Implement Security Measures at Publicly-owned
Wastewater Treatment Works," (Washington, D.C., 2003).

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

with security issues or a separate program needs to be created
specifically for security projects." Another expert noted that unless
additional securityrelated monies were added to existing CWSRF levels, it
would divert much needed funding away from the kind of critical
infrastructure investments that have been the CWSRF's primary purpose.

Loans or Loan Guarantees	Loans are a disbursement of funds by the
government to a nonfederal borrower under a contract that requires the
repayment of such funds with or without interest. Loan guarantees
represent a nonfederal loan to which a federal guarantee is attached.2
Only one expert indicated that loans and loan guarantees would be very
effective mechanisms for providing federal support for wastewater
security. An additional 34, however, indicated they would be somewhat
effective. Generally, these experts cited the primary advantage of loans
or loan guarantees as offering communities the option to amortize
security-related costs over an extended period of time, while minimizing
the overall cost to the federal treasury. Another expert commented that a
low interest loan could provide some incentive and needed capital to
implement security programs.

A number of experts, however, expressed reservations. One cautioned that
the establishment of any federal loan program to support wastewater
security needs should not come at the expense of federal support for the
CWSRF, given the critical infrastructure needs that already depend on it
for support. Another questioned the value of loans to utilities already
strapped for funds, noting that "while loans have less impact on the
federal government, many wastewater utilities and local governments
generally carry a heavy debt load for capital improvements, and they
cannot add significant additional debt that could affect their bond
ratings."

Trust Funds	Federal trust funds are accounting mechanisms used to link
receipts (from particular taxes or other sources) that by law have been
dedicated for a specific purpose or program, such as for infrastructure
improvement. For example, such a mechanism is in place for the
transportation sector through the Highway Trust Fund. Eight experts
indicated that trust funds would be a very effective mechanism for
distributing funds for the wastewater security sector. An additional 7
said they would be somewhat

2"A Glossary of Terms Used in the Federal Budget Process," (Washington,
D.C., 1993) 40, 50.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

effective. However, almost half of the experts (24 of 50) indicated that
they either had no opinion on this subject or that trust funds were
"neither effective nor ineffective."

Experts raised a number of issues as to how the trust fund concept would
be implemented. A key consideration was whether the fund would be
dedicated solely to wastewater security needs, or be part of a broader
fund that serves other wastewater infrastructure needs.3 One expert
suggested that, if wastewater security needs have to compete with the
broader range of the wastewater industry's infrastructure needs, they may
not receive sufficient priority to be funded adequately. Another expert
suggested that a trust fund should be supported annually by the federal
government and local wastewater utilities, and administered in a manner
similar to the former Wastewater Construction Grants program that funded
wastewater construction. This expert indicated that the fund should be
used exclusively for enhancing wastewater security.

Tax-Based Incentives	Federal tax-based incentives may include new tax
credits for spending on security improvements and the existing exemptions
from federal income tax of interest income from state and local government
bonds. One expert indicated that tax incentives are very effective, and an
additional 14 said they are somewhat effective. Notably, 20 experts
indicated that tax-based incentives would be very ineffective-a result due
in part to the fact that most wastewater utilities are publicly owned and
operated and would, therefore, not benefit from tax-based incentives, like
tax credits that would be used to reduce federal income tax.

Nonetheless, some experts said that for the smaller proportion of
privately owned systems, tax-based incentives could be beneficial and
particularly efficient. One expert noted, for example, that "in those
cases where the wastewater treatment facility is privately owned, nothing
succeeds as well as tax incentives." Recognizing the diversity of
wastewater systems, this expert stated further that the owners know their
utility better than anyone

3The Water Infrastructure Network, a coalition of groups representing the
interests of the water and wastewater industry, has advocated the
establishment of a trust fund to support a broad range of water and
wastewater infrastructure needs. Some experts on our panel suggested that
should this type of mechanism be established, it should be structured in a
way that supports the industry's security needs.

                                   Chapter 4
                   Experts Identified Key Allocation Criteria
                     and Funding Mechanisms for Addressing
                           Wastewater Security Needs

and are best able to achieve results in a more cost effective way, if they
are incentivized.

Conclusions	To date, the federal government's role in promoting wastewater
security has been limited primarily to supporting various training
activities on completing vulnerability assessments and emergency response
plans and several research projects addressing how contaminants affect
treatment systems and other areas. However, legislation supporting an
expanded federal role, including a substantially greater financial
commitment, has been proposed in the past and may be considered again in
the future.

Should such funds be 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 target
of an attack (i.e., a large but well-protected facility versus a smaller
but lessprotected facility); the nature of an attack (cyber, chemical,
biological, radiological); and its timing. The experts on our panel have
taken these uncertainties into account in deriving their own judgments
about these issues. These views, while not unanimous, suggest some degree
of consensus on a number of key issues.

We recognize that such sensitive decisions ultimately must take into
account a variety of political, equity, and other considerations. We
believe they should also consider the judgments of the nation's most
experienced individuals on these matters, such as those included on this
panel. It is in this context that we offer these results as an input into
the decision-making process that Congress and the administration will
likely go through as they seek to determine how best to use limited
financial resources to reduce the vulnerability to the nation's wastewater
utilities.

Appendix I

Participating Experts on Wastewater Security Panel

                               Expert Affiliation

Doug Abbott Maryland Center for Environmental Training

Mark Anderson Virginia Department of Health

Carol Andress Environmental Defense

Clifford Arnett Columbus Water Works

Curt Baranowski U.S. Environmental Protection Agency

Jeanette Brown	Stamford Water Pollution Control Authority/American Academy
of Environmental Engineers

Leonard Casson University of Pittsburgh

William Conlon Parsons Brinckerhoff Quade & Douglas, Inc.

Joseph Cotruvo Joseph Cotruvo & Associates, LLC

James Covel Upper Occoquan Sewage Authority

        Paula Dannenfeldt Association of Metropolitan Sewerage Agencies

Shuki Einstein IDC Architects

Richard Fox Camp Dresser & McKee, Inc.

Suzanne Goss JEA Electric, Water & Sewer

Neil Grigg Colorado State University

Michael Gritzuk City of Phoenix, Water Services Department

Charles Haas Drexel University

Gail Hackney Pima Community College

Rick Hahn R. Hahn & Company, Inc.

Alan Hais U.S. Environmental Protection Agency

Miriam Heller National Science Foundation

Richard Holstein Tetra Tech, Inc.

John Hoornbeek	National Environmental Training Center for Small
Communities

Alan Ispass CH2M Hill

David Jenkins University of California, Berkeley

Patrick Karney	CH2M Hill (formerly with Metropolitan Sewer District of
Greater Cincinnati)

Bruce Larson American Water

Cecil Lue-Hing Cecil Lue-Hing & Associates, Inc.

Michael Luers Snyderville Basin Water Reclamation District

Michael Marcotte	City of Houston, Department of Public Works and
Engineering (formerly with District of Columbia Water and Sewer Authority)

John Masek ABS Consulting

Appendix I Participating Experts on Wastewater Security Panel

(Continued From Previous Page)

                               Expert Affiliation

Paul Orum Working Group on Community Right-to-Know

Rebecca Parkin George Washington University Medical Center

Jay Pimpare U.S. Environmental Protection Agency

Roy Ramani Water Environment Research Foundation

Daniel Rees Scientech, LLC

Joan Rose Michigan State University

H.J. "Bud" Schardein	Louisville/Jefferson County Metropolitan Sewer
District

Tom Segars Miami-Dade Water and Sewer Department

Jim Sullivan Water Environment Federation

Richard Sustich	University of Illinois at Urbana-Champaign (formerly with
Metropolitan Water Reclamation District of Greater Chicago)

James Thomson Jason Consultants International

Mike Traubert Arizona Department of Environmental Quality

William Wallace Rensselaer Polytechnic Institute

Mike Wallis East Bay Municipal Utility District

Chuck Weber Prince William County Service Authority

David Weinberg U.S. Department of Homeland Security

Gary Westerhoff Malcolm Pirnie, Inc. Gary Yoshida Sanitation Districts of
Los Angeles County Rae Zimmerman New York University

Source: GAO.

Appendix II

Questions and Responses to the Final Questionnaire for the Expert Panel

The body of this report generally identifies which options received the
most favorable responses from the expert panel as to how federal funds can
best be spent to improve wastewater security (i.e., which activities were
viewed as warranting "highest" or "high" funding priority). The table
below provides the full range of responses (e.g., "highest priority" to
"lowest priority") by the experts to these questions. The tables also
indicate the number of experts in each case that responded with "no
opinion" or "no response."

Appendix II
Questions and Responses to the Final
Questionnaire for the Expert Panel

Appendix II
Questions and Responses to the Final
Questionnaire for the Expert Panel

Appendix II
Questions and Responses to the Final
Questionnaire for the Expert Panel

Appendix II
Questions and Responses to the Final
Questionnaire for the Expert Panel

Survey Question: We recognize that different funding mechanisms may be
used for different security activities. Considering the funding mechanisms
and security activities addressed in this questionnaire, which funding
method do you believe would be the best for each of the security
activities?

Cost-Shared Grants
Clean Water State Revolving Funds Loans or Loan Guarantees Trust Funds
Tax Incentives
No Response
26
10
0
0
0
3
12
1
1
2
0
7
10
5
1
1
0
5
12
2
2
0
0
6
28
5
1
2 0 6
36
3
2
1 0 5
32
11
2
0 0 4
38
1
2
0
0
5
8
2
1
0
0
4
7
6
1
1
0
5
32
8
2
2
0
4
                            Funding Mechanisms for Distributing Federal Funds
               Security-Enhancing Activities Direct Grants
                  Replace Gaseous Chemicals Used in Wastewater Treatment with
                                               Less Hazardous Alternatives 11
                  Improve Local, State, and Regional Collaboration Efforts 27
                                        Complete Vulnerability Assessments 28
               Expand Training Opportunities for Wastewater Utility Operators
                                                        and Administrators 28
               Improve National Communications Between Utilities and Homeland
                                                          Security Entities 8
                Install Early Warning Systems to Monitor or Detect Sabotage 3
                    Harden Physical Assets of Treatment Plants and Collection
                                                                    Systems 1
                             Strengthen Operations and Personnel Procedures 4
                         Increase Research and Development Efforts to Improve
                          Detection, Assessment, and Response Capabilities 35
                 Develop Voluntary Wastewater Security Standards and Guidance
                                                                 Documents 30
                                           Improve Cyber Security and SCADA 2

Note: Table gives the number of experts (out of 50) who indicated each
rating. Source: GAO analysis of experts' survey responses.

Appendix III

                     GAO Contacts and Staff Acknowledgments

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

Staff 	In addition to the individuals named above, important contributions
were made by Ulana Bihun, Christopher R. Durbin, Lynn Musser, and Diane B.

Acknowledgments	Raynes. Katherine M. Raheb and Carol Herrnstadt Shulman
also made key contributions.

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