Statement of Robert Shinn, Nov. 14, 2001

Good afternoon. My name is Robert C. Shinn, Jr. I am Commissioner of the New Jersey Department of Environmental Protection. With me is Allan Edwards, Assistant Administrator for the Office of Release Prevention. We appreciate the opportunity to come before you today to discuss the important topic of chemical plant safety and security. I especially want to take this opportunity to acknowledge and thank Senator Corzine for the leadership he is showing in this area.

In light of September 11th, a discussion on the need to ensure that there are adequate safeguards to protect the public from any accidental or intentional releases of hazardous chemicals is especially pertinent and timely. I trust that you will understand that, due to security concerns, my testimony will be general and not refer to specific facilities or specific security measures we have implemented in New Jersey.

There are two major themes that I would like to touch upon today. First, I would like to give the committee the benefit of New Jersey’s experience and success in the area of chemical safety preparedness and response. The second point I will make is that, even in a state such as New Jersey with a successful and comprehensive chemical safety program, there are certain areas in which augmented federal authority would support our effort.

While New Jersey’s program has focused on prevention of accidental releases of extraordinarily hazardous substances and not those releases caused by terrorist actions, we feel that the system we have set up and the preparedness we have instituted positions us in good stead. We are not only on guard against such an unfortunate occurrence, but we must be better able to respond if it did occur.

Over the course of nearly two decades, we have built a coordinated, effective program that not only works to prevent releases of hazardous chemicals but also provides us with the information and infrastructure so that we can be ready at a moment’s notice to respond if a release of a hazardous substance does happen. In this way, any releases that occur, whether they are accidental or intentional, can be contained and the impacts minimized.

While our program in its entirety may not be transferable to the federal level, I hope that this committee will be able to take what New Jersey has done and use it, or components of it, as a model for federal action where appropriate.

New Jersey is the nation’s most densely populated state. It also has a large number of facilities that produce or use highly hazardous chemicals. This has forced us to be especially diligent in ensuring that there is little to no possibility that the public will be exposed to the release of these substances. I am not here to imply that our level of regulation would be appropriate for or should necessarily be imposed upon other states that do not have New Jersey’s population or number of facilities.

In 1986, shortly after the tragic accident in Bhopal, India, the New Jersey State Legislature passed the centerpiece of our effort, the Toxic Catastrophe Prevention Act, commonly known as TCPA. It has enabled our state to develop what is still the most comprehensive program in the country to prevent accidental releases. I may be biased, but we think it is also the most effective.

Before I describe some of the more salient points regarding our regulatory process, there is one feature of our program that I would like to highlight. While it is a regulatory program, it was designed in cooperation with the regulated community. Cooperation has been in place since the very beginning of the program. When we created the initial rules in 1986-87, we had very heavy industry involvement. Professional chemical safety experts from the chemical industry and the insurance industry helped us write the rules in the first place. A lot of time was spent with these professionals to make sure that the technical requirements were valid.

Then, a few years ago when we readopted our TCPA regulations to incorporate the federal Accidental Release Prevention requirements and to make other improvements, we again had intense interaction and discussions with the regulated community over a period of months. We asked for and received up-front input from the regulated community. We feel that this hand-in-hand approach has made for a more effective regulatory scheme.

This cooperative spirit has also been reflected in the implementation of our program. In the past, an environmental inspection could often be an adversarial encounter resulting in fines, penalties and orders. We have found it very effective to use these inspections to emphasize compliance assistance rather than solely as violation spotting visits. When we perform an inspection of a TCPA-regulated facility, a typical inspection will be performed over the course of an entire week where we work with the facility to examine alternatives - in many cases involving the use of innovative technologies - to get the facility into compliance.

To their surprise, many facilities realize efficiencies and increased profits once they implement the changes to their processes that were decided upon in this cooperative manner.

We would strongly recommend that any federal legislation in this regard promote a compliance assistance approach to regulation, without sacrificing appropriate enforcement response, when necessary. I realize that it is a fine line that has to be considered, but it is well worth the effort.

There are several key features of New Jersey’s TCPA program that have contributed to the success of this program and which you may wish to consider for incorporation into the federal scheme. The main thing I would suggest is that the overall philosophy, as expressed in section 112(r) of the Clean Air Act, place a greater emphasis on prevention and preparedness. In New Jersey, we emphasize identification of risks and the steps that should be taken to reduce those risks. At this time, where we need to be cognizant not only of accidental releases but those that may be intentional as well, an emphasis on up-front prevention and quantitative risk analysis is called for.

In New Jersey, our law requires regulated facilities to perform comprehensive reviews and risk assessments of all possible release scenarios that may cause off-site impacts. Presently, federal regulation only requires facilities to perform analysis of worst-case scenarios and one alternate case scenario. Furthermore, in New Jersey, we require that facilities quantitatively assess and characterize risk, going a step beyond any other process safety management and risk management program regulations in the U.S.. This means that the potential releases and resultant off-site impacts that may occur under each scenario must be quantified. To date, federal regulation does not require quantitative analysis of risk. We would recommend that such quantification be required.

Our requirement that any and all release scenarios that may possibly result in off-site impacts be analyzed and planned for has had positive benefits not only for the public but also, in many cases, for the facilities themselves. Because of the intense review and planning efforts, state and local emergency response officials, as well as the response officials for the plants themselves, have comprehensive plans that cover a whole range of situations.

This review process has also benefited businesses, which invariably improve their processes as they have gone through the scenario review. Many improvements that otherwise would not have been considered come to light. Some of the process improvements performed by the facility were not specifically required by our regulations, but instead were inspired by the facility itself. These are processes that make good economic sense but would never have been done had the analysis not been performed.

For example, the use of remote control shut off valves on chlorine rail cars has become pretty common practice. However, this was not always the case. It was not until facilities began to analyze scenarios that it became obvious that in certain situations, emergency workers would have to endanger themselves by going into what could be the thickest part of the plume, find the switch and shut down the release. There would also be the danger that the switch could not be reached and the release would continue unabated. Remote switches make good business safety and health decision sense.

As a practical matter, we would recommend the incorporation of threshold amounts into any legislation that is considered. TCPA only kicks in if a facility handles, uses, manufactures, stores or has the capability to generate an extraordinarily hazardous substance at specified threshold quantities. These thresholds have been developed for each individual substance through scientific analysis of the respective potential off-site impacts. The fact that there are thresholds, and also the fact that there are fees applied based on the amounts maintained over that threshold, provide real financial and regulatory incentives to convince facilities that it would be in their best interest to reduce inventories of extraordinarily hazardous substances.

Over the life of this program, we have seen numerous facilities either reduce the amount of the substances they keep on hand or change their processes altogether so that they use more benign substances to accomplish the same ends. For example, when our program first got up and going in the fall of 1988, New Jersey had 575 TCPA-regulated water treatment facilities meeting the then 500-pound or greater threshold quantity of chlorine. In less than three years, 375 of these facilities had reduced the amount of chlorine on hand to levels below the threshold, removing them from the program. Another 100 facilities changed their processes and ceased the use of chlorine altogether; instead using alternatives that have the potential for only very limited off-site impacts.

As I have emphasized, we are very proud of the program we have developed in New Jersey to minimize the risk of catastrophic releases. The TCPA program, working in conjunction with other programs such as Discharge Prevention Containment and Countermeasures, Worker and Community Right-to-Know and Emergency Response has established a prevention and response system that is second to none. The DPCC Program, for example, covers the universe of facilities whose releases would not have the dire consequences of a TCPA release, but would still cause adverse impact to the public and the environment. This program has some requirements that mirror the TCPA requirements regarding secondary containment and preparedness and prevention.

Still, however, there are areas where additional federal regulation would improve our efforts. Let me briefly describe those areas.

One thing that we would support is federal promotion of the use of inherently safer technology. It goes beyond what we feel we could require at the state level in New Jersey, but we do believe that it would be proper policy to promote safer technology at the federal level. Installation of inherently safer equipment would help to ensure that facilities and emergency responders would have the most up-to-date technology at their disposal in the event of a release.

It would also be helpful to New Jersey if a federal statute allowed for state regulation of the transportation of extraordinarily hazardous materials. DOT regulations have historically been unclear as to when freight is in transit and when it is not. Our TCPA program generally regulates material once it enters onto a plant site. However, the longer freight is in transit, the less opportunity we have to impose regulations as a state. For example, there are some who are pushing for railcars to be exempt from State regulation until they are completely unloaded. Due to interstate commerce concerns, a State’s jurisdiction over the railcar and its contents is unclear while in transit.

DOT is currently taking comments on a proposal to define when a commodity is to be considered “in transit.” This might be an appropriate time for Congress to weigh in on this issue.

I thank you for this opportunity to come before you and discuss this vital topic. We are available to answer any questions that you may have.