Type: Client Alerts
The global demand for natural resources continues unabated. As revenues increase and profits soar in the face of this demand, there has been a resurgence of “resource nationalism” with resource-rich host states seeking greater control or a larger share of the revenue generated from its resources.
The issue of chemical plant safety has long been a target of environmental, and other, groups concerned with operational safety, as well as protection from terrorist intentions. The recent explosion at a Texas fertilizer plant provides further impetus to these groups, to some in Congress and with the Executive Branch agencies to act now on mandating at least some level of heightened safety standards. Rules are already in place requiring (1) chemical facilities to develop “risk management plans” that detail the potential effects of an accidental chemical release and outline the steps that are to be taken to prevent or address such an event; and (2) facilities identified as “high risk” to develop an effective site security plan. Safety and security concerns, whether from a release of chemicals that harms the public or from terrorist threats, add further pressure in support of a greater federal response; it may be that now is the time when new requirements are established. In this client alert, we identify pending legislation and possible regulatory responses for chemical plant safety, and discuss their potential for enactment.
Congress has already put standards in place to prevent the accidental or deliberate release of chemicals
Risk Management Plan
As mandated under the Clean Air Act Amendments of 1990 (Public Law 88-206), the Environmental Protection Agency (“EPA”) has promulgated “Chemical Accident Prevention Provisions” to address the accidental release of chemicals (found at 49 C.F.R. 68). This includes the creation of a “Risk Management Plan” (“RMP”). The EPA describes the RMP to include:
- A hazard assessment that details the potential effects of an accidental release, an accident history of the past five years, and an evaluation of worst-case and alternative accidental releases
- A prevention program that includes safety precautions and maintenance, monitoring, and employee training measures
- An emergency response program that spells out emergency health care, employee training measures, and procedures for informing the public and response agencies (e.g., the fire department) should an accident occur” www.epa.gov/oem
The RMP must be revised and resubmitted every five years.
Chemical Facilities Anti-Terrorism Standards
As part of the Department of Homeland Security’s Fiscal Year 2007 Appropriations, Congress mandated the Department of Homeland Security (“DHS”) to protect chemical plants from the deliberate release of chemicals (Public Law 109-295). In response, the DHS has promulgated the “Chemical Facilities Anti-Terrorism Standards” (“CFATS”), which evaluate facilities using 322 “chemicals of interest” for risk of deliberate release (found at 72 Fed. Reg. 65,396-65,435). Certain facilities are exempt from CFATS, including clean and drinking water plants and those located on a navigable waterway.
But many insist it is not enough to prevent the release of chemicals
Critics, including environmentalists and many in Congress, argue that the federal government needs to go beyond simply identifying vulnerabilities among our nation’s chemical facilities and move towards a more proactive role of actual prevention of the release of chemicals. The most significant proposal is to mandate the use of “inherently safer technologies” (“IST”), i.e., replacing a chemical when its use is considered to be too dangerous. Senator Frank Lautenberg (D-NJ) has two bills pending in the Senate that mandate the use of IST where feasible: S. 67, the Secure Water Facilities Act, which applies to drinking and wastewater facilities, and S. 68, the Secure Chemical Facilities Act, which applies to facilities regulated by the DHS under CFATS. Both bills contain other measures to prevent or mitigate the accidental or deliberate release of chemicals, including:
- Train employees to help spot safety and security lapses
- Provide whistleblower protections to those employees who report those lapses to authorities
- Allow for citizen lawsuits to force compliance with all applicable chemical safety laws and regulations
- Provide funds for greater safety measures, such as the purchase of nearby property to serve as “buffer zones,” i.e., to provide greater protection to the public
S. 67, the Secure Water Facilities Act and S. 68, the Secure Chemical Facilities Act, were both introduced January 23, 2013, and referred to the Senate Environment and Public Works and Senate Judiciary Committees, respectively. No further legislative action has occurred, nor has any companion legislation been introduced in the House of Representatives, to date. It is noted, however, that both Representative Ed Markey (D-MA-5) and Representative Frank Pallone (D-NJ-6) have sponsored legislation in previous Congresses dealing with chemical safety, both at chemical facilities and on the rails.
Could the EPA act unilaterally?
Many environmentalists argue that authority to mandate IST is already granted to the EPA under the Clean Air Act Amendments of 1990. Section 112 (r)(1) Prevention of Accidental Releases, Purpose and General Duty states:
It shall be the objective of the regulations and programs authorized under this subsection to prevent the accidental release and to minimize the consequences of any such release of any substance listed…or any other extremely hazardous substance.
Environmentalists have argued that this statutory language is sufficient authority for the EPA to mandate IST or any other prevention or mitigation measure, therefore, avoiding the need for subsequent congressional action. The EPA has not adopted this view, yet.
However, it should be noted that strong, partisan opposition exists to any regulation of chemical plant safety. In the Senate, this has been a major factor in preventing the Lautenberg legislation from reaching the Senate floor. In the House, it can be seen in legislation sponsored by Congressman Mike Pompeo (R-KS-4), which would prohibit the EPA from regulating IST. H.R. 888, the General Duty Clarification Act of 2013, states under Section C. Designs, Approaches or Technologies:
the Administrator shall not, directly or indirectly, impose any obligation on any owner or operator of any stationary source to consider or implement particular designs, approaches, or technologies relating to manufacturing, processing, handling, or storage.
This legislation was introduced February 28, 2013, and referred to the House Energy and Commerce Committee. On March 1, it was referred to the Subcommittee on Energy and Power. No additional legislative action has occurred.
While the proposals for chemical plant safety are familiar, opposition from Congress, industry, and others, remains strong. Yet, the potential for further releases, with the threat of human loss and property damage, as well as the consistent concerns with possible terrorist activity, seem to suggest that something more will ultimately be done. As has been seen in other regulatory programs, a pro-active approach might provide a bipartisan solution. We expect current pressure to “do something” to remain and grow. Ways to accommodate public fears with commercial realities might lead to beneficial, and protective, results.
Client Alert 2013-142