Chemical Security: Separating Risk from Excessive Regulation


Chemical Security: Separating Risk from Excessive Regulation

November 4, 2009 4 min read Download Report
Jena Baker McNeill
Jena Baker McNeill
Senior Associate Fellow

Jena Baker McNeill is a homeland security policy analyst.

This week, the U.S. House of Representatives will consider the Chemical Facility Anti-Terrorism Act. This legislation would reauthorize and expand the Chemical Facility Anti-Terrorism Standards (CFATS), which were put in place under the Homeland Security Appropriations Act of 2007. These standards have been used to regulate the security activities of chemical facilities.

While ensuring the safety and security of chemical facilities is important, excessive regulation that prevents the private sector from doing business is a poor approach. Congress should pursue commonsense, market-conscious policy solutions that are based on an accurate assessment of risk and infrastructure vulnerabilities--not politics or economy-crippling regulatory schemes.

Needless Regulatory Expansion

CFATS expired on October 4. Since then, Members of Congress have submitted legislation, including the Chemical Facility Anti-Terrorism Act, that would not only reauthorize the existing CFATS provisions but provide for additional regulations.

One of the most disconcerting of these possible additions has been the idea of an "inherently safer technology" (IST) provision. While the language used to denote such a provision has varied from draft to draft, the effect is the same: An IST provision would allow the Secretary of Homeland Security to mandate what products and processes could be used by the private sector to meet government security standards.

Proponents of the IST argue that such an addition will ensure that the private sector is choosing the safest products and processes by which to run their facilities. The word safety can be broadly interpreted and consequently is often used by those seeking to force excessive regulatory schemes on the private sector under the guise of public safety.

CFATS guidelines already provide incentives for chemical facilities to choose safer products and processes. An IST provision would needlessly expand these guidelines, dictating what the private sector should use regardless of the cost of the technology or its impact on American security. Given the safety precautions already required of the private sector and estimates that indicate that the current CFATS program will cost as much as $18.5 billion by 2015, these types of provisions inappropriately blur the line between safety and security to the detriment of the economy.

Chemical Security in 2009

It would be disingenuous to downplay the fact that chemicals and chemicals facilities are something that terrorists might target. But adding more requirements and more regulation does not necessarily equate to more security. Furthermore, confusing security with the need for more and more regulation is a mistake Congress has repeated all too often to little success.

Therefore, it is time to rethink the approach to chemical security. Providing the kind of chemical security that will keep Americans safe by making chemical facilities are harder target for terrorists, while sustaining the economy requires commonsense security policies. Such policies should focus on the following principles:

  • Learn the risk. It is time to rethink the CFATS approach--a method that places the primary burden for solving security problems on the federal government. Instead, security policy should be focused on determining exactly what the risk and vulnerabilities are for a particular sector and leaving room for creative, cost-effective private-sector solutions. In the chemical sector, entities that possess chemicals capable of causing catastrophic chemical disasters are a high risk. These entities might best be serviced through more aggressive regulations. But this does not mean that the private sector should yield responsibility for safety to the federal government. A performance-based approach could be an effective way to reach the same goal but in a way that gives the private sector the freedom to take security steps that are cost-efficient and individualized for their specific facility. Such steps should be taken with the expectation that companies will be required to undergo substantial federal oversight to monitor their performance.
  • Facilitate communication within the private sector. Congress should work with the Administration to encourage private-sector companies to communicate with one another and with the government about threats, vulnerabilities, and best security practices. One way this could be done is by providing and expanding upon "safe harbors" to protect businesses that share of critical and sensitive information.
  • Do not confuse the issues. Lumping security together with a whole host of other regulatory or political goals is not an appropriate way to make policy. For instance, an IST provision may serve multiple purposes, but it does not contribute to the security of the homeland. Confusing the need for public safety with the need to prevent terrorism provides a disservice to the public and should not be tolerated in the legislative process.
  • Encourage innovation. Creating technologies that protect chemical facilities against acts of terrorism will help all Americans. But the private sector will not invest the time and money associated with this research and development without proper liability limits. The SAFETY Act is a great way to provide this protection. It lowers the liability risks of creating products and services for combating terrorism by limiting third-party claims for losses resulting from an act of terrorism where the technology was deployed to help prevent or mitigate the danger of a terrorist attack. The Department of Homeland Security should continue to encourage companies to learn about the act's protections.
  • Move infrastructure forward. U.S. infrastructure, including chemical facilities, is inadequate and aging. Through public-private partnerships, the U.S. should promote private sector-led infrastructure projects that create quality infrastructure capable of bouncing back quickly when disaster strikes This approach does not mean that there is a need for heavily subsidized public funding to attain this goal; instead, policymakers should shift the risks and rewards to the private sector.

Market-Oriented Security

Keeping Americans free, safe, and prosperous must be at the forefront of legislative initiatives aimed at reducing America's chemical vulnerabilities. Stifling innovation and economic expansion through excessive regulatory schemes will not make Americans safer. What will accomplish this task is putting forward commonsense, market-oriented security policies that allow the private sector to find ideal solutions that are cost-efficient and reduce the incentives for terrorism.

Jena Baker McNeill is Policy Analyst for Homeland Security in the Douglas and Sarah Allison Center for Foreign Policy Studies, a division of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.


Jena Baker McNeill
Jena Baker McNeill

Senior Associate Fellow