| AggBeat |
August 2007
Beefed up Chemical Regulations May Affect Aggregates Operations
Department of Homeland Security tightens security for facilities that keep chemicals, such as those used in blasting, on hand.
by , Senior Editor
A new rule from the U.S. Department of Homeland Security (DHS) may require some aggregates producers whose facilities preliminarily qualify as high risk to prepare and submit an assessment of its vulnerabilities and a site security plan (SSP).
The “Department of Homeland Security Chemical Facility Anti-Terrorism Standards” interim final rule, which DHS published in the April 9 Federal Register (Vol. 72, No. 67, Page 17867) and became effective on June 8, requires the facility owners/operators to complete an online screening assessment by Aug. 7 to determine if their facilities are a high security risk because of chemicals on site.
Operations storing “Appendix A Chemicals of Interest” would qualify as high risk. The list of chemicals includes some of those used in conjunction with blasting such as ammonium nitrate (with a nitrogen concentration of 28 to 34 percent).
At Aggregates Manager press time, the final version of Appendix A chemicals was expected to be published no later than July 8.
Completion and submission or a “Top Screen” — triggered by the presence of an Appendix A chemical — must be done within 60 days of publication of the final list of included chemicals.
The Top Screen is done online using the Chemical Security Assessment Tool (CSAT), a suite of four applications including user registration, Top-Screen, Security Vulnerability Assessment (SVA), and SSP through which DHS collects and analyzes key data from the facilities. The facilities are then categorized into risk tiers of one to four, depending on the apparent risk. Each tier will have performance-based security obligations.
There are very few exceptions to the type of facilities potentially covered by the rules. Mines and quarries, educational institutions, manufacturing plants, chemical producers, power plans, laboratories, and commercial facilities are all potentially included, according to the DHS New Chemical Security Requirements prepared in a report by Reading, Pa.-based Liberty Environmental.
The rule requires covered facilities to maintain various records related to security and emergency preparedness for three years. The rule also contains provisions concerning inspections, audits, recordkeeping, and the protection of sensitive information, according to the Liberty report. The new rule also gives DHS the authority to seek compliance by imposing up to $25,000 per day in civil penalties and to shut down non-compliant facilities.
“I know that the vast majority of people in this business are by culture and by training very attuned to doing the right thing — making sure you don’t endanger your communities,” Homeland Security Secretary Michal Chertoff said at the 2007 Chemical Sector Security Summit. “I have little doubt that the vast majority of people are going to comply energetically and in good faith. But my experience...is that every once in a while you do find some people who think they’re going to cut corners...therefore, I do need to make it clear that we will hold everybody accountable.”
For the complete report and full list of “Chemicals of Interest,” click here for a downloadable PDF.
Aggregates Manager garners national, regional editorial awards
The American Society of Business Publication Editors (ASBPE), a national, professional organization for b-to-b editors, will be honoring Aggregates Manager with two Azbee awards for editorial excellence in the organization’s 29th Annual Azbee Awards of Excellence Competition.
Aggregates Manager is being given a national award in the “Under 80,000 circulation” class in the “Regular Column, Contributed” category for its monthly “Carved in Stone” column written by Bill Langer, a regular magazine contributor and U.S. Geological Survey sand and gravel specialist. The winning entry was comprised of the February 2006 and July 2006 columns.
The magazine is also being awarded a regional award in the same circulation class in the “Original Research” category for the January 2006 article, “Producers Predict Strong Year in 2006.” This article was written from original research gathered from an exclusive survey conducted by Aggregates Manager.
The level of the national award (gold, silver, or bronze) will be announced at the ASBPE National Awards Dinner on Aug. 3 in New York City. A gold regional award was given at the Midwest-South regional awards banquet on July 19 in Chicago.
Aggregates Manager also won two awards last year in its 2005 for 2006 awards in the Under 80,000 circulation class. The magazine won a regional Gold Award in the Original Research category for its January 2005 article, “Producers See a Solid Year Ahead.” Aggregates Manager also won a regional Gold Award in the Under 80,000 class in the “Feature Series” category for its January 2005 and February 2005, respectively, articles “Going Underground — Part One” and “Going Underground — Part Two.”
“We are very proud of our editorial staff for receiving this prestigious honor, which recognizes their efforts and the passion they have for the aggregates industry and the journalism profession,” says Mike Porcaro, president and publisher of Aggregates Manager.
The ASBPE competition recognizes the hard work and commitment of business and professional magazines, newsletter, and Web editors and designers, ASBPE says in its award notification letter. “The awards are a prestigious acknowledgement that the work has met high standards of excellence and is the top of its profession,” the letter notes. “The Society’s contest is extremely competitive, drawn from more than 2,600 entries...”
Non-residential sectors continue to be strong despite sharp residential declines
The ongoing correction to the residential market will continue to adversely impact construction activity and cement consumption in 2007, according to the most recent forecast from the Portland Cement Association (PCA). Despite a strong performance in the commercial and public sectors early in 2007, the decline in cement consumption this year could exceed 3 percent, PCA says.
PCA’s spring forecast had predicted a 1.5-percent decline in cement use.
PCA Chief Economist Ed Sullivan reports that record housing foreclosures will worsen the housing inventory situation and prolong the downturn in new construction activity in this sector. He believes the recent use of exotic and sub-term mortgages are a primary contributor to the high foreclosure rate as well as a drag on consumer spending.
“As these mortgages reset, consumers are being faced with monthly payments that increased as much as 50 percent,” Sullivan says in a press release from PCA.
Sullivan expects the slowdown to extend to the non-residential sector, although not until the second half of the year. Year-to-date non-residential construction in 2007 has grown 17.7 percent, but Sullivan anticipates momentum to be lost as with the reduction in growth.
With the decline in cement consumption, a reduction of cement imports also is expected.
“A large pull back in imports is materializing,” Sullivan says in the release. “Increased freight rates and pessimism regarding 2007 consumption could lead to a 5 million to 6 million ton reduction in imports compared to 2006 levels.”
Risk-Based Performance Standards
Each facility that is covered by the Department of Homeland Security Chemical Facility Anti-Terrorism Standards, must satisfy the following performance standards in their Site Security Plan (SSP):
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Restrict Area Perimeter. Secure and monitor the perimeter of the facility.
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Secure Site Assets. Secure and monitor restricted areas or potentially critical targets within the facility.
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Screen and Control Access. Control access to the facility and to restricted areas within the facility by screening and/or inspecting individuals and vehicles as they enter.
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Deter, Detect, and Delay. Deter, detect, and delay an attack, creating sufficient time between detection of an attack and the point at which the attack becomes successful.
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Shipping, Receipt, and Storage. Secure and monitor the shipping, receipt, and storage of hazardous materials for the facility.
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Theft and Diversion. Deter theft or diversion of potentially dangerous chemicals.
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Sabotage. Deter insider sabotage.
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Cyber. Deter computer sabotage by preventing unauthorized onsite or remote access to critical process controls, critical business system, and other sensitive computerized systems.
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Response. Develop and exercise an emergency plan to respond to security incidents internally and with assistance of local law enforcement and first responders.
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Monitoring. Maintain effective monitoring, communications, and warning systems.
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Training. Ensure proper security training, exercises, and drills of facility personnel.
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Personnel Surety. Perform appropriate background checks on and ensure appropriate credentials for facility personnel, and as appropriate, for unescorted visitors with access to restricted areas or critical assets.
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Elevated Threats. Escalate the level of protective measures for periods of elevated threat.
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Specific Threats, Vulnerabilities, or Risks. Address specific threats, vulnerabilities, or risks identified by the Assistant Secretary for the particular facility at issue.
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Reporting of Significant Security Incidents. Report significant security incidents to DHS and to local law enforcement officials.
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Significant Security Incidents and Suspicious Activities. Identify, investigate, report, and maintain records of significant security incidents and suspicious activities in or near the site.
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Officials and Organization. Establish official(s) and an organization responsible for security and for compliance with these standards.
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Records. Maintain appropriate records.
(Source: Liberty Environmental for U.S. Department of Homeland Security)
Mergers & Acquisitions
Merger & Acquisition activity in the past month slowed, following a flurry of activity and mega, cross-border transactions. On June 1, 2007, Granite Construction Inc. announced the acquisition of certain assets of Raisch Products, an asphalt manufacturer in the Santa Clara County, Calif., market. The acquired assets will be consolidated into Granite’s existing regional operations as a tuck-in. Transaction terms and conditions were not disclosed.
In addition, the final takeover of Rinker Group by Cemex appears almost complete. On July 3, 2007, Cemex announced it had secured 85.53 percent of the shares of Rinker, slightly less than the 90 percent required to automatically acquire the remainder of the company. Since Cemex’s offer (at Aggregates Manager press time) is set to expire on July 16, 2007, expectations are that Cemex will eventually control the required shares during the final 14-day period.
— by Bill Watkins, managing director, National City Capital Markets. Watkins is a contributing editor and may be reached at
216-222-7134 or william.watkins@nationalcity.com.
