The Senate Committee on Homeland Security and Governmental Affairs on March 3 held a hearing on “Chemical Security: Assessing Progress and Charting a Path Forward.” The hearing gave Sen. Susan Collins (R-Maine) an opportunity to explain the Continuing Chemical Facilities Anti-terrorism Security Act of 2010 (S. 2996), legislation that she introduced with other lawmakers last month (GM Feb. 15, p. 15) that would reauthorize the current Chemical Facility Anti-Terrorism Standards (CFATS) without change for another five years.
The Agricultural Retailers Association, The Fertilizer Institute, CropLife America, and six other trade groups sent a March 2 letter to Collins and Sen. Joseph Lieberman (I-Conn.), committee chairman, voicing support for S. 2996 and reiterating industry opposition to an inherently safer technologies (IST) mandate.
“We encourage you to maintain the existing regulations and allow the Department of Homeland Security (DHS) to complete the first phase of their implementation,” the letter said. “We are pleased that the bill does not mandate government-selected security measures (e.g., inherently safer technologies (IST)) as part of the risk- and performance-based framework for protecting the nation’s high-risk chemical facilities. If an IST mandate were to be put in place for the nation’s agricultural industry, it could jeopardize the availability of lower-cost sources of plant nutrient products or certain agricultural pesticides used by farmers and ranchers, as well as products which are used for specific agronomic reasons.”
In his opening statement at the hearing, Sen. Lieberman said DHS “deserves credit for the hard work it has done to design and begin to implement these standards. It is a particularly challenging task because of the wide array of companies that use potentially dangerous chemicals, and the limited guidance Congress gave in the initial authorization.”
Lieberman acknowledged that “there now seems to be general agreement that CFATS is making a positive contribution to our national and homeland security and should be continued.” He noted the contentious IST issue, saying he believes it is “important to look at these alternatives as part of a comprehensive security system, since they are the only foolproof way to defeat a terrorist determined to strike a chemical facility. I know that some of my colleagues strongly oppose mandating inherently safer technology systems, or even mandating consideration of them, but we’re going to have a good healthy debate on that as we move forward, and we should.”
In her testimony, Sen. Collins spoke of the 18 risk-based performance standards outlined in CFATS, and how these are being implemented by chemical facilities and monitored by DHS. “This risk-based approach has made the owners and operators of chemical plants partners with the federal government in implementing a successful, collaborative security program,” she said.
Collins noted that taxpayers have invested nearly $300 million in the CFATS program during the three years of its existence, and chemical plants have invested hundreds of millions more to comply with the law. “As a direct result, security at our nation’s chemical facilities is much stronger than it was five years ago,” she said. “Now we are at a juncture where we must reauthorize the program or – as some have proposed ?Çô scrap what has been a clear success and set off in a different direction. I firmly believe that we should reauthorize the law. Simply put, the program works and should be extended.”
Collins characterized alternate proposals as “unproven and burdensome.” She specifically faulted H.R. 2868, the House bill approved last November (GM Nov. 16, 2009), arguing that the bill’s IST provision “may actually increase or unacceptably transfer risk to other points in the chemical process or elsewhere in the supply chain.”
Collins said DHS now lacks the authority to dictate specific security measures such as IST, and said it should stay that way. “The federal government should set performance standards, but leave it up to the private sector to decide precisely how to achieve those standards,” she said. “Forcing chemical facilities to implement IST could cost jobs at some facilities and affect the availability of many vital products.”
ARA and TFI also submitted a presentation detailing the negative effects an IST mandate would have on the nitrogen fertilizer industry. ARA and TFI said the IST language in H.R. 2868 would create disincentives for retailers to continue carrying anhydrous ammonia, depriving farmers of the lowest cost form of nitrogen fertilizer. A significant number of retailers would drop ammonia entirely from their product line in order to avoid falling under IST. “Replacing some to all of the 3.5 million tons of nitrogen currently used by U.S. farmers in the form of ammonia would be difficult, if not impossible, and very costly.”
ARA and TFI detailed the potential impacts of an IST mandate on retailers and farmers, including extra costs to purchase larger amounts of alternative to ammonia, such as UAN and urea; extra costs for increased storage capacity and application equipment; increased transportation costs due to a heavier reliance on imported fertilizer products; the loss of autumn application business in some parts of the U.S.; and the delayed availability of alternatives due to higher demand. The two associations calculated the total cost impacts of an IST mandate at $43,000 to $65,000 for a 1,000-acre corn farm.
ARA and TFI also assessed the implications of an IST mandate on the world fertilizer market, claiming substitutions will likely place strong upward pressure on the world price of urea and UAN. Countries dependent on agriculture production such as Asia, India, and Africa would be faced with higher urea prices, they argued, resulting in smaller harvest of rice and other products. “The decline in agricultural production will lead to tighter food supplies, resulting in an increase in world hunger,” ARA and TFI said.
The committee also heard statements from Timothy J. Scott of The Dow Chemical Company, speaking on behalf of Dow and the American Chemistry Council, and by Stephen Poorman of FUJIFILM Imaging Colorants Ltd., on behalf of the Society of Chemical Manufacturers and Affiliates (SOCMA). Both urged support for the Collins bill and voiced opposition to an IST mandate.
“SOCMA supports permanent chemical site security standards that are risk-based and realistic, and we urge Congress to reauthorize the existing CFATS program,” said Poorman. “Mandating inherently safer technology as a security measure will inevitably create negative unintended consequences, and Congress should not require DHS to do so.”
ARA noted that in early March DHS was scheduled to issue another 600 letters to facilities informing them of their final tiering status under the CFATS rules. All of these facilities have either been designated as Tier 4 facilities, or DHS has determined they are not “high risk” facilities and therefore not subject to the regulations, ARA said. To date, there are a total of 6,023 CFATS facilities, with 230 labeled as Tier 1, 563 as Tier 2, 1,231 as Tier 3, and 3, 999 as Tier 4. DHS has issued a final tiering notification letter to 3,507 of these facilities, ARA said.
According to ARA, DHS will also mail an “Agriculture Survey” within the next several months to agricultural chemical facilities regulated by CFATS. The purpose of the DHS survey, according to ARA, is to obtain information on farm and ranch customers, which have been operating under an indefinite Ag Extension of the CFATS rules.