April 29 (Bloomberg) -- As lawmakers pushed a bill to tighten U.S. security standards on chemical factories, fertilizer depots and water-treatment plants in 2009, they faced a formidable opponent: the U.S. business community.
Mining companies, refiners, paint makers, explosive fabricators and fertilizer plants combined in a multimillion-dollar lobbying campaign to stop the measure. Two of the capital’s most potent lobbying forces -- the U.S. Chamber of Commerce and American Farm Bureau -- labeled it a “key vote” of the year. The bill, called a highwater mark of chemical-safety efforts by one supporter, passed the House of Representatives, only to die without a vote in the Senate.
Safety advocates say the deadly explosion of a fertilizer depot in Texas this month underscores the need for action on the issue, both from Congress and President Barack Obama, even in the face of strong industry opposition.
“It highlights and reminds us of the need for better regulations to make this industry safer,” Bob Bostock, a consultant and former adviser at the Environmental Protection Agency under President George W. Bush who supported the 2009 legislation. “This is the largest vulnerability of our infrastructure left unaddressed.”
Chemical companies spent more than $51 million on lobbying the following year, as the bill was debated in the Senate, with companies such as Dow Chemical Co. and DuPont Co., the largest U.S. chemical company by market value, near the top, according to the Center for Responsive Politics. As a whole, the industry gave $34 million to political candidates in the last three elections, with more than two-thirds donated to Republicans.
The Adair Grain Inc. fertilizer facility in West, Texas, caught fire and exploded on April 17, killing 14 and leaving a crater 93 feet by 10 feet. The explosion, large enough to register a 2.1 magnitude on earthquake monitors, damaged structures in a 37-block area and leveled two large buildings on the site. Investigators are poring over the scene to determine what went wrong.
There are no indications the blast was caused by terrorism, the focus of the legislative efforts. And the company failed to follow existing rules to report that it was able to store 270 tons of ammonium nitrate, which can be explosive, to the Department of Homeland Security, according to an agency official.
Instead of focusing on rewriting legislation, officials need to “enforce the law as it now exists,” Jamie Conrad, a lawyer who works with the Society of Chemical Manufacturers & Affiliates, said in an interview.
So far, lawmakers are focused on gaps in regulation by the Environmental Protection Agency and Department of Labor, asking the Government Accountability Office to investigate fertilizer depots.
“We are also concerned that such an explosion may be possible at similar facilities across the nation, and that other workers and the communities may not be adequately protected,” Democratic Representatives George Miller of California and Joe Courtney of Connecticut wrote the GAO on April 25.
Daniel Keeney, a spokesman for Adair, declined to comment during the investigation. Donald Adair, the company’s owner, in a statement issued April 19, said, “We pledge to do everything we can to understand what happened to ensure nothing like this ever happens again in any community.”
Bostock warns that an explosion like that of the Texas fertilizer distributor could be much more devastating if it happened in an urban area such as Houston or Chicago, and the kinds of changes he and others have been calling for would mitigate the impact of a catastrophe, whether it’s caused by an accident, terrorist or Mother Nature.
“Whether deliberate or accidental, really what is needed are measures to eliminate the consequences,” Paul Orum, a consultant who wrote reports for the Center for American Progress about chemical security, said in an interview. “It’s not very satisfying to wait until you have a catastrophic event, and then have an enforcement action.”
Orum called the 2009 measure the “highwater mark” of the decade-long efforts by Congress to fix regulatory oversight.
The U.S. has about 90 facilities -- including chemical factories, refineries and water-treatment plants -- that in a worst-case scenario would pose risks to more than 1 million people, according to a Congressional Research Service report in November that analyzed reports submitted by companies to the EPA.
About 400 other facilities could pose risks to more than 100,000 people, according to the report. The calculations were based on a “worst-case release scenario” such as an explosion or leak, and the proximity of the plant to population centers.
Those risks prompted the EPA after the Sept. 11, 2001, attacks to both prepare tightened regulations covering chemical plants, refineries, and those, such as the facility in West, that hold or store large quantities of dangerous chemicals. The EPA shelved the rules, and instead began to develop legislation, according to Bostock, who was part of the effort.
“At the 11th hour, the Office of Management and Budget stepped in, and said it would be dead on arrival,” Bostock said. After that decision, the Bush administration never picked back up the idea of EPA rules.
The issue wasn’t dead. As a first-term senator, Democrat Barack Obama made chemical security one of the top issues he championed. He introduced a bill that would have given federal regulators the ability to force companies to swap chemicals for safer options, or to adopt practices, such as storing smaller quantities on site, that would reduce the effect of an explosion or leak.
“By employing safer technologies, we can reduce the attractiveness of chemical plants as a target,” Obama said then. “Unfortunately, the chemical industry has been lobbying nonstop on this bill,” he said. “So far, because the industry wields so much influence in Washington, it’s been getting its way.”
The concept Obama proposed, called Inherently Safer Technologies, would put government regulators in the position of second-guessing companies’ business plans, and cause a regulatory traffic-jam, industry critics warn.
“It would require a retail facility to substitute products,” Richard Gupton, senior vice president for public policy at the Washington-based Agricultural Retailers Association, which represents fertilizer sellers, said in an interview. (The Adair plant isn’t a member.) That “could drive a plant out of business.”
During his 2008 presidential campaign, Obama pledged to take on the industry, and act unilaterally with regulations if necessary. Instead, Democrats in control of Congress worked with chemical lobbyists on compromise legislation, easing off on the most prescriptive elements of the earlier provisions, according to Rick Hind, the legislative director for Greenpeace.
In the end, it wasn’t enough to get the support of the American Chemistry Council, which represents companies such as Dow and DuPont.
“ACC members are concerned that providing government with authority to direct process changes or product substitutions would result in making critical products unavailable throughout our economy,” Cal Dooley, the group’s president, wrote in a letter to Democratic Representative Henry Waxman at that time.
Others in the business community outright opposed the bill.
“If enacted, it could lead to disruption in our nation’s food supply,” the U.S. Chamber of Commerce and 25 other groups representing companies that mine, refine fuels, mill grains or make fertilizer, wrote in a letter to congressional leaders.
Without that legislation, the safety of facilities is left to Homeland Security’s Chemical Facility Anti-Terrorism Standards program, which was tacked onto a funding bill as a temporary measure in 2007, and has been extended for a few months or years at a time ever since.
Under that program, federal officials are prohibited by law from requiring companies to take specific security measures.
With a legislative overhaul dead, unions, environmental groups and safety advocates petitioned Obama’s EPA to pickup the effort from the Bush administration and expand safety regulation of chemicals on their own. It’s a longshot effort, but one given a new impetus in recent days.
Obama should “give EPA the right to regulate,” Bostock said. “This has been dragging on for so long.”
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