Jess October 3, 2008 2:58 PM

Another solution occurs to me: sliding license fees, based on population density. As in, a phosgene gas license for a remote county in North Dakota would cost $10,000/year, but one for, say, northern New Jersey would cost $10 million/year.

Maybe there are holes in this, but I can’t think of them.

NM October 3, 2008 4:27 PM

Excuse me for nitpicking, but ammonia or chlorine are not toxins, even though they are toxic. Toxins, by definition, are produced by organisms (ex: botulin toxin, AKA Botox®). (Fishes’ metabolism produce ammonia IIRC but not at toxic levels, or they’d die, obviously)

thoreau October 3, 2008 9:28 PM

Your point about the costs of externalities is a perfectly valid one, but there’s also the issue of diminishing returns. Once you have cameras and locked gates and failsafes and things of that sort, there is of course still more that can be done, but how much more effect will you get?

There is no such thing as 100% security, as every reader of this blog knows, and not every measure will live up to its promise of taking you from 99% to 99.9%. In particular, a chemical plant will be vulnerable to attack from within: A few determined individuals who get jobs at the plant could probably smuggle in materials for a bomb and plant it at a weak point. Yes, you can reduce that risk with background checks and cameras and a certain amount of bag screening, but at some point it’s worth asking how much good the incremental bit of spending does.

I’m skeptical of any external bureaucracy that tries to regulate how carefully employees will be searched….we don’t need another TSA. Perhaps it makes more sense for society (which would bear the cost of an attack) to pay the companies to move their plants away from heavily populated areas. I’d rather spend the money to move the plant elsewhere than spend the money to put up security measures that may turn out to be pointless.

thoreau October 3, 2008 9:31 PM

To clarify that last sentence, I don’t want to spend a bunch of money on securing a plant and then discover that DHS screwed it up and I’m still vulnerable. I’d rather spend the same amount of money to move the plant away from me, and then let the company worry about protecting its own property once mine is no longer threatened.

Also, what Jess said seems like a good starting point for discussion.

Joe October 3, 2008 10:31 PM

Would personal liability help? This could be done by requiring that both the CEO and security chief personally sign the paperwork required to legally store large amounts of dangerous chemicals. If a terrorist attack is successful, they will be considered an accessory to the crime.

mayfield October 3, 2008 10:39 PM

@Jess: for that to work, you’d need to tax fuel much higher in the country than the city, to ensure it wasn’t feasible to transport it back …

Clive Robinson October 4, 2008 2:24 AM

@ thoreau,

” I’d rather spend the money to move the plant elsewhere than spend the money to put up security measures that may turn out to be pointless.”

People have tried this “factories at a safe distance” idea before and it has always failed.

The earlist I can think of where there is supporting documentation is the gunpowder mills at Ewell in Surrey S.W. England. The works used to work long hours and they started to build their homes closer and closer to the mill. Eventually there was an explosion and people in their dwellings where hurt and injured.

A more modern example is Buncefield petrolium storage / processing plant which had a fire and massive explosive burn which was heard over thirty miles away on the oposit side of London. It was only by luck it happened at a time when few people where in the industrial sites around it.

The two points are,

1, people do not want to travel to work.

2, instalations that where at a safe distance expand both physicaly and with what they do over time.

In both cases the risk goes up from the original assessment.

Then the issue of transportation comes in to make having a factory or plant at a safe distance you need roads and transportation. This is expensive to put in and the plant owners will not pay for it as it has a “social good” asspect and they will not be given exclusivity. Therefore to make it cost effective other plants and buildings are allowed at the plant end, and housing and other plants etc are allowed at the other and within a few short years the two grow together.

Then there is the issue compensating land owners. Their farmland now is blighted due to factory effluent etc so. The land gets rezoned into light/heavy industrial. Land speculators move in and activly drive the problem.

There are a whole host of other issues but whichever way you cut or dice it you are always going to end up with lowcost housing adjacent to dangerous industrial plant as society is not prepered to pay the cost to prevent it…

Marc B. October 4, 2008 4:04 AM

Market economy approaches aren’t as popular these days anymore as they were two or three months ago, but their angle would be a mandatory insurance with a limit based on the whole risk, assessed every two or maybe five years.

If the cost of insurance becomes prohibitive, the owner will either move the plant or change the processes.

Konstantin Surkov October 4, 2008 5:04 AM

@Mark B:
I totally agree, and this is the only option out of three that makes economical sense. Of course in this case it becomes just another cost of doing business, no different than any other such cost, and you can’t really call the article “Why Society Should Pay the True Costs of Security” anymore, just as you can’t say “why society should pay the true cost of car insurance”.

fmillar October 4, 2008 1:34 PM

Interesting to explore licensing fees, etc. But such taxes should also be based on inherent hazard levels. Some other measures to reduce huge chemical security risks:
1. Inherently Safer Technology — e.g., using bleach or UV or ozone for water treatment instead of chlorine. Best local law here (not perfect) is Contra Costa County’s Industrial Safety Ordinance —
2. Re-routing the most dangerous poison gas cargoes around major target cities onto non-target routes. US and Canadian railroads have so far blocked any progress on this. Next Congress will have to improve the current terrible Bush Admin regs which give all power to the railroads to select routes, in utter secrecy, and with no meaningful input from state and local officials.
No interest I can discern in Europe or UK for such protective urban re-routing…
3. Market swaps and re-sourcing (e.g., from nearby) suppliers that reduces the risk.
4. Strict liability laws would be helpful. Railroads are in US Congress asking for a bailout on liability, a Price-Anderson type indemnification like the one the US nuclear industry has.
5. For more on these themes in a Chicago rail politics setting, see:

Jess October 4, 2008 2:46 PM


Bruce’s article indicated that many of these dangerous chemicals are not end products but interim products, that are produced, stored, and consumed in the process of producing other chemicals. They are never transported (especially via the highway system), because transportation is many times more dangerous than producing and consuming them in the same spot.

That seems like a good thing, and I see no reason why regulators can’t just say, “no transportation of these chemicals period”. That would have fewer externalities for the general rural population than your tax plan. When transportation is unavoidable, it would be possible to have a similar sliding scale for license fees, that would approximate a path integral of the density function over the transportation route. This still leaves a role for the market to make up its own mind about plant location.

@Clive Robinson:
Modern chemical plants have far lower personnel needs than 18th-century gunpowder mills. In terms of plant location, one of the charms of (North American) rural areas is that towns are really far apart. Until the recent fuel price increases, most residents would have thought nothing of driving 30-40 miles for work (which could have taken 30-40 minutes since there isn’t traffic). Some of the farmland is valuable, but less so than inhabited areas.

John David Galt October 8, 2008 10:53 PM

There’s more than one way to create a market solution. I like Marc B’s idea, but historically, regulatory authorities tend to become “captured” by the industries they regulate, and fairly quickly. So I suggest an alternative:

Prohibit corporations from operating chemical plants or any other “ultra hazardous” activity. That is, make the owners do without any corporate veil, and preferably also without the option of bankruptcy, so that they stand to lose their life savings and maybe be sold into slavery if they truly mess up.

(Off topic, but: I would also apply this rule to banking and related businesses. Anybody you entrust with your family’s life savings ought to have his own at stake.)

Mitar July 9, 2009 3:26 AM

I think there is more than just economics to the chemical plant security. As described by the employee of my local nuclear plant, they have their families, relatives and other close friends living in a nearby city so for them there is much more in the security than just money.

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