Shutdown Threat Risks Stalling Work, Pushing Out Staff

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By Sam Pearson

Companies dealing with Chemical Safety Board investigations this year face the prospect of a distracted, inefficient agency after the Trump administration proposed to shutter it in the upcoming budget cycle.

ExxonMobil Corp., Sunoco Logistics, DuPont Co. and others could see their efforts to cooperate with the CSB’s investigations go to waste if the board, an independent agency that probes industrial chemical accidents, is shut down without finishing ongoing projects.

The Trump administration’s budget proposal would shutter the board and leave logistical questions unanswered. Companies could also be left in the lurch if the board starts probing their plants only to stop later due to a disruption in funding.

Some have suggested, however, that the board’s investigative responsibilities can reasonably be transferred to another agency.

Congress could “think seriously about moving this mission to another entity with better defined administrative and investigatory protocols to ensure that the facts and not political agendas drive outcomes,” said Stephen Brown, vice president of government affairs at Tesoro Corp., which has been the subject of two CSB investigations in the past eight years.

“That mission is equally important to industry, our employees and the general public as safety is paramount,” Brown told Bloomberg BNA. “That said, there is no reason to believe that this mission can only be carried out by the CSB,” rather than another agency.

Mechanics of Shutdown Unclear

The budget provided $9.42 million for the CSB in fiscal 2018 to wind down operations, but the board and White House have not explained how the number came about. How a shutdown could happen is unclear, but the specifics could leave the nine companies under investigation as well as any other firms that may come under scrutiny without information on the causes of fatal incidents at their facilities.

Pending investigations include probes of an ExxonMobil Corp. refinery, a former DuPont Co. chemical plant in LaPorte, Texas, and facilities in Missouri, Kansas and Mississippi. The board also sent investigators to a Wisconsin corn processing plant June 1 and to a chemical tank explosion in Barbour County, W.Va., May 25.

The White House Office and Management and Budget and CSB have not specified if the plan would bar the board from taking on new work while allowing it to finish existing investigations, or leave those probes incomplete.

Mark Farley, a partner at the law firm Katten Muchin Rosenman LLP who has represented companies being investigated by the CSB, told Bloomberg BNA his clients have heard the agency is making contingencies for a possible disruption in appropriations.

Investigators “have been told to be in a position to conclude their investigations by the end of the fiscal year,” Farley said, including at a minimum having their findings ready to be published either as a report or a shorter “lessons learned” document. The CSB also faces operational risks if key investigators leave the agency over the fiscal uncertainty, he said, and losing staff would only make it harder for the board to function.

“I know investigators who are thinking that way,” Farley said.

Hillary Cohen, a spokeswoman for CSB, said in an email to Bloomberg BNA the agency “has every intention of completing all of its open accident investigations if [fiscal year] 2018 funding is provided and the agency is able to carry forward its mission.”

Continuing Investigations

The CSB has continued to launch investigations since the March release of the White House’s “skinny budget"—which was the first mention the administration wanted to close the agency.

Jeff Ruch, the director of Public Employees for Environmental Responsibility, said in an email to Bloomberg BNA the logistics of closure were unclear. The prospect of deep funding cuts “raises questions as to whether CSB should open any new investigations no matter how big or significant the chemical accident,” Ruch said.

Shutting down a federal agency is fairly rare. Congress closed two small agencies in the 1990s—the Administrative Conference of the United States and the Office of Technology Assessment. Their cases provide some glimpse of how a shutdown of the CSB could play out.

ACUS, which describes itself as an agency dedicated to improving the administrative process and providing nonpartisan expert advice for improving federal agency procedures, closed in October 1995 after Congress withheld funds for the fiscal year. It reopened in March 2010 after receiving funds for fiscal 2009. When ACUS was shutdown, work was left unfinished, according to Alan Morrison, one of about 100 attorneys at the agency at the time.

Pending work “didn’t go any place,” Morrison said, “it just stopped.”

Morrison, a co-founder of the Public Citizen Litigation Project, who is now an associate dean at George Washington University, said his former agency was doomed because “it didn’t have any strong supporters in Congress, it didn’t have any clout on its own and nobody cared enough to fight about it.”

ExxonMobil spokesman Aaron Stryk referred questions to the American Petroleum Institute and the American Chemistry Council. ACC spokesman Scott Jensen told Bloomberg BNA he hasn’t heard complaints about the CSB from member companies. API did not respond to a request for comment.

“We will continue to follow all applicable rules and regulations that impact our business,” Vicki Granado, a spokeswoman for Energy Transfer Partners, which operates a Nederland, Texas, terminal facility formerly owned by Sunoco Logistics Partners, which completed a merger with Energy Transfer Partners in April.

The seven other companies—Didion Milling Co., Midland Resources Recovery, Loy Lange Box Co., Packaging Corporation of America, MGPI Processing Inc., Enterprise Product Partners LP and DuPont Co.—did not respond to requests for comment.

To contact the reporter on this story: Sam Pearson in Washington at spearson@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

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