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Summary

"Critical infrastructure" consists of systems and assets so vital to the United States that their incapacity would harm the nation's physical security, economic security, or public health. Critical infrastructure is often geographically concentrated, so it may be distinctly vulnerable to events like natural disasters, epidemics, and certain kinds of terrorist attacks. Disruption of concentrated infrastructure could have greatly disproportionate effects, with costs potentially running into billions of dollars and spreading far beyond the immediate area of disturbance. Hurricanes Katrina and Rita demonstrated this kind of geographic vulnerability by disrupting a substantial part of the U.S. energy and chemical sectors in 2005. As the nation's response to recent hurricanes and other disasters continues, and as its homeland security activities evolve, Congress is examining federal policies affecting the geographic concentration and vulnerability of critical infrastructure. For example, the Energy Policy Act of 2005 (P.L. 109-58) facilitates construction of new liquefied natural gas import terminals in diverse ports by granting the Federal Energy Regulatory Commission exclusive siting approval authority (Section 311). The Gasoline for America's Security Act of 2005 (H.R. 3893) would similarly facilitate construction of geographically distributed oil refineries. Geographic concentrations of U.S. critical infrastructure have developed for multiple reasons--typically some combination of market influences including resource location, agglomeration economies, scale economies, community preferences, and capital efficiency. Congress and federal agencies also have adopted a wide range of policies affecting the capacity and location of critical infrastructure, including prescriptive siting, economic incentives, environmental regulation, and economic regulation. Some federal policies have been developed specifically to address perceived threats to critical infrastructure. These influences often have been in place for decades, gradually driving critical infrastructure to its geographic configuration today. Some analysts may argue that little government intervention is necessary to alleviate geographic vulnerabilities of critical infrastructure because the private sector will adjust its practices out of its own financial interest. However, if Congress concludes that federal intervention is needed, it may employ a number of policy options to encourage geographic dispersion (including eliminating policies that encourage concentration ), ensure survivability, or ensure that effective infrastructure recovery capabilities are in place to mitigate impacts of concentrated infrastructure disruption. Addressing geographic vulnerabilities may call for a combination of options. Congress may also consider whether other legislative proposals with the potential to affect critical infrastructure development--directly or indirectly--are likely to relieve or exacerbate geographic vulnerability. The economic efficiency of public critical infrastructure and the efficient use of federal funds for infrastructure development may also be important considerations. This report will not be updated.

Related Legislation:
• H.R.3893

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