The countdown clock has begun for the Chemical Facility Anti-Terrorism Standards (CFATS) program, as it will sunset on January 18, 2019—unless Congress acts first to reauthorize it. Unfortunately, with Congress set to adjourn in a matter of weeks and a limited number of days remaining on the legislative calendar, manufacturers are becoming increasingly concerned that CFATS will lapse and our nation’s security will be at risk. This is an issue of critical importance to the National Association of Manufacturers (NAM): our members operate 2,152 CFATS-regulated facilities spanning a range of major industrial sectors—such as oil and gas refining; chemical production and distribution; mining; agricultural goods and services; and electrical utilities—and they are counting on Congress to act expeditiously and reauthorize this program without delay.
Operated by the Department of Homeland Security (DHS), the CFATS program relies on a multitiered risk assessment process to identify and regulate high-risk facilities. DHS ensures that CFATS-regulated sites have appropriate security measures in place to mitigate, prevent and protect against terrorist exploitation. Since its inception in 2007, CFATS was tied to short-term appropriations measures, which prevented Congress from making statutory improvements to the program. However, the four-year congressional authorization of CFATS in 2014 was a pivotal moment for the program’s longevity. Manufacturers were provided with the regulatory certainty needed to make long-term security investments, and it enabled DHS to run the program more effectively. Now is the time to pass a full reauthorization once more for this vital program—and there are multiple different proposals already introduced in both chambers of Congress to do so:
- Senate: Ron Johnson (R-WI) is committed to moving the Protecting and Securing Chemical Facilities from Terrorist Attacks Act of 2018 (S. 3405) forward by regular order and is engaged in negotiations with his colleagues. The bill reflects the NAM’s top three reauthorization priorities that we asked for during the Senate Homeland Security and Governmental Affairs Committee (HSGAC) roundtable in June. The legislation would reauthorize the CFATS program for five years, provide needed certainty to the regulated community and enhance the security of our nation. The Senate HSGAC favorably approved S. 3405 on September 26.
- House: The House also has two CFATS reauthorization bills in play. On September 28, Reps. John Katko (R-NY), John Moolenaar (R-MI) and Henry Cuellar (D-TX) introduced a bipartisan bill similar to S. 3405. The NAM joined with the CFATS Coalition and sent letters to Sen. Johnson and Reps. Katko, Moolenaar and Cuellar for their leadership on this important issue. In addition, on November 29, House Homeland Security Committee leadership and Energy and Commerce Committee leadership introduced legislation that would reauthorize CFATS for two years.
Securing the homeland requires strong partnerships among government at all levels, the private sector and concerned citizens across the country. Action to support these partnerships is needed now. CFATS reauthorization is and should continue to be a bipartisan issue that lawmakers on both sides of the aisle work on together to achieve. Security will remain a top priority for manufacturers, and they are dedicated to protecting their facilities and the communities in which they live and serve. Manufacturers call on Congress to reauthorize the CFATS program without delay for the sake of our nation’s national security.
Manufacturers take environmental stewardship seriously. As outlined in an op-ed that ran just this morning, manufacturers are looking to the future and leading by example through the implementation of sustainable practices and reducing their environmental footprint.
With the National Association of Manufacturers’ (NAM) most recent economic outlook survey—released last week—underlining the industry’s strong economic optimism, manufacturers are taking the opportunity to not only invest more, grow their workforces and increase salaries but also embrace practices that protect the environment. One way this commitment is being demonstrated is through the NAM’s Sustainability in Manufacturing Partnership with the Department of Energy’s Better Plants Program. Launched on April 10, this partnership has provided a national platform for manufacturers to highlight their company’s projects, encourage the adoption of energy-efficient and sustainable practices and explore emerging technologies and evaluate future challenges that need to be addressed.
Moreover, when the NAM recently surveyed its member companies on sustainability, the numbers came back overwhelmingly positive. Not only do 93.8 percent report tracking energy usage and 81 percent report tracking water consumption, but 74 percent report they have a recycling program in place to do something about it, and 72 percent of manufacturers report they have a sustainability policy in place to do something about it (another 8.3 percent have programs under development). What are they doing? Well, as the op-ed notes, you can check out Manufacturing a Sustainable Future to see many different examples. The op-ed contains a few examples itself, for instance:
“When wallboard waste comes back to USG Corporation’s Rainier, Ore. plan, a machine separates the gypsum core from the paper. The paper is then sent to a local dairy farm, where it’s used for bedding, while the recovered gypsum goes back into the manufacturing process to be recycled into new wallboard . . . ”
“Union Pacific reduced its energy consumption by 3.8 million kilowatt hours in 2017—enough to power more than 400 American homes for a year.”
With an eye toward the future, the NAM is once again proving that modern manufacturing in America is synonymous to innovation, investment and environmental stewardship. We know that manufacturers will continue to keep their promises, too, because they remain committed to safeguarding the health and longevity of our planet and its people.
Today, the Senate Environment & Public Works Committee held a markup and approved the Blocking Regulatory Interference from Closing Kilns Act of 2018 (S. 2461), a bipartisan bill that would permit a full legal review of national emissions standards for brick, clay products and clay ceramics manufacturing before the Environmental Protection Agency (EPA) requires regulatory compliance. On March 7, the House passed similar legislation (H.R. 1917) that was strongly supported by the National Association of Manufacturers (NAM).
The NAM fully supports the ongoing national effort to protect our environment and improve public health through appropriate laws and regulations. However, manufacturers need policies that provide regulatory certainty and ensure a sustainable environment and economy. In September 2015, the EPA issued final National Emissions Standards for Brick, Structural Clay Products and Clay Ceramics Manufacturing, often referred to as Brick MACT. It is estimated that this rule will collectively cost the brick industry, which is made up of predominantly small and medium-sized manufacturers, more than $100 million per year.
When regulations stretch beyond what the law allows, manufacturers and other stakeholders must turn to the courts for relief–a lengthy process that can take months, if not years. Under the Blocking Regulatory Interference from Closing Kilns Act of 2018, if a final rule under this Act is challenged in court, the compliance date extension would be limited to December 26, 2020. However, if the court refutes the EPA’s rule, the legislation requires the agency to issue new regulations within one year. This bill is a commonsense approach, as it ensures that manufacturers will have the certainty that the investments they make are based on laws that the courts have determined are appropriate and legal.
Manufacturers support reasonable environmental policies but need regulatory certainty to make necessary, long-term investments, and they believe both goals can be achieved through S. 2461. With the committee’s approval of the bill today, the measure will now proceed to the Senate for consideration.
“This program establishes a risk-based tiering system for facilities that are engaged in what DHS considers chemicals of interest.”
Across the nation, manufacturers have demonstrated a firm resolve in protecting critical infrastructure, their facilities and key assets from natural disasters, manmade hazards and terrorism. The industry prudently engages in risk management planning and invests in security as a necessary component of its business operations. To achieve this, manufacturers need regulatory certainty to make appropriate, economically justifiable long-term investments to protect facilities’ threat and vulnerability conditions. Unfortunately, the U.S. Coast Guard (USCG)’s Transportation Worker Identification Credential (TWIC) Reader Requirements Final Rule (Final Rule) runs counter to manufacturers’ efforts to efficiently and effectively protect their facilities. In four short months, manufacturers must comply with a Final Rule that not only lacks regulatory certainty, but also creates significant logistical challenges for the regulated community.
The TWIC reader rulemaking was a long time in coming, as it took the USCG several years to study readers’ performance, solicit and evaluate stakeholder feedback and develop the rule. But when it emerged, the Final Rule was alarmingly flawed. Without notice, the scope of the Final Rule was expanded beyond what was initially proposed and departed from established Coast Guard policy (PAC 20-04). Specifically, the Final Rule requires electronic TWIC inspections at facilities that only receive Certain Dangerous Cargoes (CDCs) by non-maritime modes of transportation, such as truck or rail. It also requires electronic inspections at facilities that only receive, but do not unload, vessels containing CDCs. These changes did not go through public notice and comment—a clear violation of the Administrative Procedure Act.
Moreover, the TWIC Reader Rule is out of step with the new administration’s regulatory-reduction efforts. The rule runs counter to the White House executive order to reduce regulation burdens, as it would create substantial new regulatory burdens for manufacturing sites and for thousands of workers nationwide.
Congressionally mandated assessments have called into question the effectiveness of the TWIC reader program. In May 2013, the Government Accountability Office (GAO) issued a report (GAO 13-198) that raised concerns about the TWIC reader program’s effectiveness in enhancing security. As a result, the GAO called on Congress to halt the promulgation of a Final Rule until the assessment is completed. In December 2016, Congress passed legislation (PL 114-278) that requires the Department of Homeland Security (DHS) to conduct an assessment of the effectiveness of the TWIC program. The DHS has yet to complete this critical assessment, but it is still moving forward and requiring that more TWIC readers be installed at more facilities and in more locations despite uncertainty about their benefits. This situation is creating logistical challenges for facilities that are already in compliance with TWIC visual inspection requirements.
Importantly, for many months, the industry expressed its concerns to the DHS, the USCG and Congress that the rulemaking process was undeniably flawed. The regulated community has relied on representations by the USCG that it would extend the Final Rule’s compliance date by three years, but this extension has not materialized. The industry is very concerned at the rapidly approaching deadline for the new rule, as manufacturers now lack the required lead time to sufficiently plan and install new equipment, infrastructure and software and to train new employees.
Facility security remains a top priority for manufacturers and they want to ensure that their facilities are in compliance with all DHS and USCG regulations. With the compliance deadline looming, manufacturers’ concerns are growing as they remain in limbo. This flawed rule’s compliance deadline must be delayed while the USCG addresses the critical issues regarding effectiveness of the new requirements and the scope of coverage.