The fertilizer, agribusiness, and chemical industries are ramping up efforts to make sure Chemical Facility Anti-Terrorism Standards (CFATS) are not expanded as Congress prepares to reauthorize the rules, which are set to expire on Sept. 30, 2009.
The original CFATS rules took effect in 2007 and establish security standards and requirements for “high risk” chemical facilities, which include many fertilizer manufacturers, agricultural retailers, and distributors. Green Markets sponsored an audio conference in October 2007 to familiarize industry participants with the new requirements (GM Oct. 29, 2007).
Now Congress is considering alternatives, including HR 2868, the Chemical Facility Anti-Terrorism Act of 2009, which would renew the CFATS requirements but also permit civil suits against chemical facilities not in compliance with the regulations, and would require companies to use inherently safer technologies (IST) if alternatives to dangerous chemicals are available.
The House Homeland Security Committee held a hearing on HR 2868 on June 16 after it was introduced by Rep. Bennie Thompson (D-Miss.), committee chairman. The committee’s mark-up on HR 2868 was originally scheduled for June 18, but was delayed due to other House votes. Mark-up on the bill was slated to resume Friday morning, June 19.
The Agricultural Retailers Association is pressing members to contact Congress to oppose HR 2868 and urge support for HR 2477, the Chemical Facility Security Authorization Act, which was introduced by Rep. Charlie Dent (R-Penn.) and simply extends authorization of the current program through Oct. 1, 2012.
“Currently, many well-funded anti-chemical activist groups are pressuring Congress to expand these rules, which would result in additional regulations and significant compliance expenses for many ARA members,” ARA warned in emails to members on June 12 and 16. “A simple reauthorization of existing regulations will prevent enactment of counter-productive provisions that will have an adverse economic impact on American agriculture and disrupt the cooperative working relationship between industry and DHS.”
ARA warned that HR 2868 would change CFATS rules to include provisions that “mandate industry to utilize ISTs, allow for citizen suits, weaken protection of sensitive security information, impose stiff monetary penalties for administrative errors, and create conflicts with other existing federal security standards.”
Martin Jeppeson, director of regulatory affairs for the California Ammonia Company (Calamco), testified for The Fertilizer Institute last week at the hearing before the House Homeland Security Committee. In his remarks, Jeppeson pressed for the maintenance of existing CFATS regulations to allow DHS to complete the first phase of implementation before altering the existing program.
Jeppeson noted that much of the fertilizer supply chain was regulated in 2002 with the passage of the Maritime Transportation Security Act, and highlighted the industry’s support of the Secure Handling of Ammonium Nitrate Act in 2008. “Our facilities can be protected without implicitly or explicitly discouraging the use of our products in legislative text,” he said.
Jeppeson told the committee that the requirement to assess the use of ISTs for all regulated facilities, including manufacturers, wholesale distributors, and retailers, as proposed in the draft legislation, could have a crippling impact on American agriculture. He said such a mandate could jeopardize the availability of lower-cost and more efficient sources of fertilizer such as anhydrous ammonia and ammonium nitrate. “The options for an agricultural retail operation under IST provisions are to switch to a ‘safer’ product or reduce the quantity on-site – both options potentially remove several regulated products from the farmer’s agronomic tool box,” he said.
Jeppeson said Calamco is one of only two ammonia terminals in the state of California and handles approximately 80 percent of all of the ammonia used in the state. Under the proposed legislation, he said, if urea is encouraged as a safer alternative to anhydrous ammonia, the cost could be devastating to the nation’s food supply.
“The additional cost for a typical 1,000 acre corn farm of utilizing urea instead of anhydrous ammonia, given the current cost and nitrogen content of each product, would exceed $15,000,” he said. “However, this does not provide an accurate and fully comprehensive picture as this cost increase would only hold true if there was ample additional urea available at today’s prices. The United States, however, is already the world’s largest importer of nitrogen fertilizer and the second largest importer of urea, accounting for a full 17 percent of urea traded in the world. If the United States had to turn to the world market to import an additional 7,576,066 tons of urea to replace the nitrogen in anhydrous ammonia – a 116 percent increase from our level of imports in the latest fiscal year 07/08 – it would drive the world price of urea sky high.”
Jeppeson stressed that TFI and its member companies support DHS in its efforts to implement the existing CFATS regulations. “What is important to recognize and analyze, however, is the impact of changes to the CFATS regulation on not just fertilizer manufacturers, but all aspects of the fertilizer supply chain and still, potentially, our farmer customers,” he concluded.
The American Chemical Council also added its voice to the debate last week. “While we share the goal of establishing permanent chemical security regulations, we are concerned several provisions in the legislation as introduced could undermine the important work that is already underway,” said Marty Durbin, ACC’s vice president of federal affairs, in a June 16 statement. “While we have strong views on these issues, we appreciate the willingness of both the House Homeland Security and the Energy & Commerce Committee to seek our input and consider our viewpoint. We have had constructive discussions, and remain hopeful that our concerns can be addressed as the legislative process progresses.”
Other industry advocates were taking a more confrontational approach, however, and were using Tea Party tactics to attack HR 2868. The Agribusiness Freedom Foundation, a website billing itself as the “freedom watchdog for American agriculture,” charges that the bill “proposes to mandate the government to take a large measure of control over products and processes in the chemical industry, much like it has taken over leadership, compensation and control functions at some banks, insurance and auto companies.”