Reed Smith Client Alert

In the aftermath of the April fertilizer plant explosion in West, Texas, that killed 14 people, the Obama Administration has taken the first steps toward a regulatory response aimed at strengthening the oversight of chemical storage facilities. As we noted in a prior client alert, both Congress and the Executive Branch are considering a number of legislative and regulatory responses to this tragedy. The Obama Administration has taken the first step with an Executive Order ("EO") aimed at improving the coordination between (1) federal agencies, state and local governments, and first responders on chemical facility safety and security issues and (2) federal agencies responsible for chemical safety and security issues. These changes would start with the creation of a Chemical Facility Safety and Security Working Group at the federal level. But the reach of this EO goes beyond process-based moves. The EO opens the door, for example, to more information being made available to state and local governments on which chemicals are being stored at facilities around the country. It also opens the door to more chemicals being listed on key safety and security registries with the federal government. Finally, it specifically addresses the chemical responsible for the blast – ammonium nitrate – and tasks the Departments of Labor, Homeland Security and Agriculture with determining safer and more secure ways of its storage and handling. As we noted previously, pressure continues to build for a regulatory and/or legislative response. We expect this step on chemical safety and security to be the first and not the last.

Creation of a Chemical Facility Safety and Security Working Group: with the stated purpose of improving and enhancing the sharing of information on chemical facilities. 

Section 2 of the EO creates a Chemical Facility Safety and Security Working Group ("Working Group"), which has a broad scope of membership from the Departments of Homeland Security, Labor, Justice, Agriculture, and Transportation, along with the Environmental Protection Agency ("EPA"). Sections 3 and 4 task the Working Group with developing plans to improve and enhance intergovernmental coordination at the federal level, and intra-governmental coordination between the federal state and local and tribal levels, including ways to provide "ready access to key information" on chemical facilities at the state and local level (Section 3(iii)). Lack of information was cited as critical to the loss of life at West, and was the subject of a hearing before the House Homeland Security Committee, Subcommittee on Cybersecurity, Infrastructure Protection and Security Technologies, chaired by Congressman Patrick Meehan (R-PA-7) and held August 1, 2013. The firefighters who initially arrived at the scene were unaware of the ammonium nitrate and its explosive potential. As Sean Moulton, Director of Open Government Policy at the Center for Effective Government, testified, this lack of knowledge was in large part because of the fact that West had never reported the approximately 270 tons of the ammonium nitrate stored there to the Department of Homeland Security, despite being required to do so under the Chemical Facilities Anti-Terrorism Standards ("CFATS") program. With both congressional and Executive Branch focus on collecting better information from those who are non-compliant with federal chemical facility safety requirements, the result of the EO could be stricter reporting requirements and the creation of tools, such as an online database, to allow state, local and tribal governments access to this data.

Will this lead to the EPA updating the Risk Management Plan to include Ammonium Nitrate?

We would note, too, that Democrats in the Senate are going further and urging the EPA to expand its Risk Management Program ("RMP") for hazardous chemical safety to include ammonium nitrate as well. Senate Environment and Public Works Chair Barbara Boxer (D-CA) called for this step during a committee hearing June 27. With ammonium nitrate identified as the reason behind the blast, the question is which agency will ultimately take steps to regulate it: Homeland Security, through its CFATS program, or the EPA, through its RMP program. The EO leaves the possibility for both to take action. Section 6 requires the Administrator of the EPA to review the RMP to determine whether it should be expanded to include "additional regulated substances and types of hazards." It also requires the Secretary of Homeland Security (along with the Secretaries of Labor and Agriculture) to "develop a list of potential regulatory and legislative proposals to improve the safe and secure storage, handling, and sale of ammonium nitrate and identify ways in which ammonium nitrate safety and security can be enhanced under existing authorities."


A final report on the explosion in West, Texas, is due soon from the Chemical Safety Board. The response by federal regulators will continue for much longer.


Client Alert 2013-223