President Obama’s Executive Order on Chemical Facility Safety Is a Step in the Right Direction

Yesterday President Obama signed an executive order, entitled “Improving Chemical Facility Safety and Security,” that is designed to get state, federal and local chemical safety agencies and first responders to improve coordination, information gathering, and regulation with respect to the risks posed by the many highly reactive chemical compounds that are stored and used throughout the United States.

Inspired by the tragic explosion of a fertilizer plant in West, Texas on April 17 of this year, the Executive Order establishes a federal working group chaired by Secretaries of Labor and Homeland Security and the Administrator of the Environmental Protection Agency (EPA) and orders the working group to develop a plan to “support and further enable efforts by State regulators, State, local, and tribal emergency responders, chemical facility owners and operators, and local and tribal communities to work together to improve chemical facility safety and security.”

Coordination and Data Sharing.

The Executive Order also addresses the easier question of coordination and data sharing among agencies with responsibility for protecting the public from chemical explosions.

Among other things the working group is supposed to:

• Identify ways to improve coordination among the Federal Government, first responders, and State, local, and tribal entities

• Identify ways to ensure that the various state, local and federal entities with responsibilities for regulating reactive chemicals and reacting to explosions, either accidental or intentional (for example, acts of terrorism) of reactive chemicals “have ready access to key information in a useable format”

• Identify areas where joint collaborative programs can be developed or enhanced

• Identify opportunities and mechanisms to improve response procedures and to enhance information sharing and collaborative planning between chemical facility owners and operators and the relevant governmental agencies; and

• Examine opportunities to improve public access to information about chemical facility risks consistent with national security needs and appropriate protection of confidential business information

The working group must within 270 days promulgate “comprehensive and integrated standard operating procedures (SOPs) for a unified Federal approach for identifying and responding to risks in chemical facilities that reflect best practices. Among other things, these SOPs must address referrals from one agency to another and joint inspections by two or more agencies of a single facility.

The working group must within 180 days come up with a proposal for a “coordinated, flexible data-sharing process” capable of tracking data submitted to agencies for federally regulated chemical facilities, “including locations, chemicals, regulated entities, previous infractions, and other relevant information.” The working group is also to recommend “possible changes to streamline and otherwise improve data collection.”

There is no question that better coordination and better data sharing among federal, state and local agencies are urgently needed to prevent tragedies like the West explosion from happening in the future. As the media looked into the various agencies that had jurisdiction over the West fertilizer plant, it soon became apparent that with respect to the risk of a powerful explosion, nobody was minding the store. In addition, nobody knew that nobody was minding the store. There was virtually no coordination among the state and federal agencies with responsibility for the West facility, and the local authorities were clueless about the risks posed by the tons of ammonium nitrate stockpiled at the plant.

So any effort to get the relevant governmental actors on the same page with respect to the risky materials that chemical plants and storage facilities contain is very encouraging. 

The job, however, will not be an easy one. Government bureaucracies are often as concerned about protecting their “turf” as they are about protecting the public. And the tensions between state and federal agencies are well known and frequently result in unseemly disputes in courts and the media. The ongoing tussle between the Environmental Protection Agency and the State of Texas over the administration of the federal greenhouse gas reduction program is characteristic of this “vertical” coordination (or, rather, lack thereof).

The fact that the president ordered the working group to explore opportunities for better coordination and data sharing among agencies may inspire federal agencies to work together more closely.   In this day of big data and rapid communication, greater coordination should be a no brainer. We should expect to see more “horizontal” coordination and data-sharing among federal agencies to flow from this initiative if the agencies have sufficient resources to get their computers to talk to one another. That, of course, is a big if.

The willingness of state and local agencies to go along with the project is much less clear. Success will probably depend on the degree to which the federal agencies are willing to provide resources to state and local agencies to provide an incentive for them to participate. In the environmental area, state and federal coordination has worked reasonably well when the federal Environmental Protection Agency comes to the table with money to dole out to state agencies to carry out federally mandated missions. The coordination sometimes breaks down, however, when the federal requirements come in the form of “unfunded mandates.”

Thus, the success of the coordination and data-sharing mission envisioned by the Executive Order is likely to depend on the resources that the federal government is prepared to devote to the effort. Given that we live in an age of sequestered government, with one political party willing to sacrifice public safety at the alter of austerity, we should not be too optimistic about the working group’s ability to bring about significant increases in coordination and data-sharing. 

Still, the fact that the president has made these functions a high priority makes me hopeful that the effort will yield some positive results. After all, coordination is not that hard to do, and if two individuals can share data easily with their cell phones, two government agencies ought to be able to figure out how to make data in the possession of each available to the other.

Greater Disclosure of Risks.

The Executive Order also requires the working group to “examine opportunities to improve public access to information about chemical facility risks consistent with national security needs and appropriate protection of confidential business information.” Greater public access to information about the risks posed by facilities that manufacture, store or use flammable and explosive chemicals is an extremely worthwhile goal. Many of the victims of the West explosion were volunteer firemen who had no idea what they were about to encounter. Indeed, it appears that no one in the tiny community of West knew that there was a huge bomb in their midst that could explode if a fire broke out in the fertilizer plant. I would venture that there are many other communities in this country that are similarly unaware of the risks posed by similar facilities.

Do not, however, expect much to come of this injunction. I predict that the working group will find very few “opportunities to improve public access” to information about chemical facilities that are “consistent with national security needs and appropriate protection of confidential business information.” The companies that own these facilities are not anxious to inform nearby residents of the risks of catastrophic loss posed by their activities. That kind of information can only stir up opposition, and that in turn can make it difficult for the owners of the facilities to obtain necessary permits and approvals from state and local agencies.

The companies that operate such facilities have developed convincing arguments over the years for the proposition that making information about the risks that they pose will encourage terrorists to attack the facilities or competitors to steal valuable trade secrets. History tells us that when informing the public of unknown risks clashes with the threat of terrorism or loss of confidential business information, the outcome is rarely greater disclosure. Don’t expect much to come of this injunction.

More Effective Regulation.

At the heart of the Executive Order is a series of commands to the working group and specific Departments and agencies to take steps to improve the regulation of reactive chemicals. 

One of those commands speaks directly to ammonium nitrate, the chemical that caused the West explosion but was inexplicably not regulated under any of the relevant federal programs. By the end of this year, the Departments of Agriculture, Homeland Security, and Labor must “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.” There is no doubt that this reflects  the President’s exasperation with those agencies for not addressing the hazards posed by that substance, which, after all, was the chemical that Timothy McVeigh used to blow up the Murrah Federal Building in Oklahoma City in 1995. We can expect that the agencies with authority to regulate ammonium nitrate will get busy promulgating regulations aimed at reducing the risk of future intentional or accidental ammonium nitrate explosions. 

The Executive Order also requires OSHA and EPA to review the chemical hazards covered by OSHA’s Process Safety Management Standard and EPA’s Risk Management Program to determine whether they should be expanded “to address additional regulated substances and types of hazards” and a timeline for amending the standards to bring about the needed expansion. 

The OSHA Process Safety Standard establishes requirements for companies to manage highly hazardous substances to prevent or reduce the risk of catastrophic releases of flammable, explosive, reactive, and toxic chemicals into workplaces. Under the EPA Risk Management Program, owners of facilities that manufacture, use, store, or handle highly toxic and flammable substances must develop a risk management program that includes hazard assessment, prevention mechanisms and emergency response measures. Emergency response personnel then use the Risk Management Plans that companies prepare when releases or explosions occur.

In addition, the Executive order tells OSHA to identify any changes that need to be made in the retail and commercial grade exemptions in the Process Safety Standard and issue a Request for Information designed to identify issues related to modernization of that standard and related standards necessary to meet the goal of preventing major chemical accidents. Presumably, the agency is supposed to promulgate revisions to the process safety standard and perhaps additional standards based on the information gleaned from the West explosion and other information received in response to the request.

As a practical matter, this may be the most important directive of the Executive Order. The OSHA standard is very much in need of updating, but OSHA has been extremely reluctant to engage in rulemaking to update aging standards or to promulgate new standards. The Executive Order should provide the impetus needed to inspire OSHA to initiate a rulemaking aimed at updating the Process Safety Standard. It should also give OSHA head David Michaels sufficient leverage to force the revised standards through the review process run by the Office of Information and Regulatory Affairs in the Office of Management and Budget. When OIRA’s economists raise their objections to the costs of complying with the revised standard, Michaels can point to the Executive Order as an indication of the high priority that the Oval Office assigns to this particular rulemaking effort.

Conclusion.

The new Executive Order represents a significant step in the right direction. President Obama should be commended for stepping up to the plate to address the chemical time bombs that are ticking away in the nation’s large cities and small towns. It makes addressing this problem a high priority for the Administration, and it should give the advocates of strong protective action in the relevant federal agencies the leverage they need to accomplish some legitimate reforms. 

The proof, however, is in the pudding. Whether the Executive Order brings about real change or is just an attempt to give the impression that the government is attempting to prevent future West catastrophes will depend upon the seriousness with which the working group that it establishes takes on its responsibilities and the ability of the Administration to persuade reluctant Republicans to devote more resources to protecting the public.