(144d) Economically Critical Chemical Facilities: Findings and Policy Implications

Over a five-year period Sandia National Laboratories has been researching for DHS Infrastructure Security and Compliance Division (ISCD) if and how terrorist attacks on individual chemical facilities could cause national economic impacts, specifically, impacts that could warrant additional ISCD risk-based performance standards for these facilities based on economic criticality. While Sandia has found little evidence of national impacts, it has found significant local physical, public health, and economic impacts. Furthermore, historical U.S. chemical accidents including the 2012 West Texas fertilizer explosion give credence to the potential threats, vulnerabilities, and consequences of a terrorist event on a chemical facility. Important ISCD policy questions are then at least the following: (1) in the cases of chemical facilities where economic impacts could be significant at least at the local level, are these risks adequately covered by current CFATS regulations that address public health & safety risks? If not, (2) is there existing means of reducing these risks through a combination of private-sector resilience measures and state/local public policies? Detailed case-study economic-impact analyses and careful review of existing regulations gives insight into the most important economic impacts of a chemical facility disruption, and which private-public sector policies could do the best to minimize the economic criticality of chemical facilities at the lowest cost to industry and taxpayers.