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Background: Addressing an Operational Risk
Approach: Focusing on Prevention
Performance: Establishing a Commitment to Improve
Future Goals: Setting an Aggressive Target
Background: Addressing an Operational Risk
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| A spill drill in Port Dickson, Malaysia, brought together government groups and 80 employees from the U.S., Asia, the Middle East and Africa. |
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Over the past several decades, ChevronTexaco has taken significant steps to improve its performance in the area of oil and chemical spill prevention and response. We focus first on prevention by assessing our risks and taking necessary steps to mitigate them. Despite our best efforts, spills and leaks do occur, and we have developed a rigorous emergency preparedness and response system. As part of the system, ChevronTexaco helps fund numerous industry oil spill cleanup organizations worldwide and sponsors two or three major oil spill drills each year to provide training to several hundred key responders throughout the company. In 2002, we conducted major spill exercises in Malaysia and Grenada. Individual facilities also conduct numerous emergency response drills each year, many in coordination with local and national authorities and other industry operators.
Approach: Focusing on Prevention
Our business units are taking a comprehensive and systematic approach to reducing the risk of spills. For example:
- The California-based San Joaquin Valley Business Unit formed an Oil Spill Prevention Team with a goal of eliminating spills. The unit established a spill-prevention budget to supplement facilities' operating budgets, identified and prioritized the highest spill risks, and applied new and existing technology to prevent spills. The unit decreased spills by 700 barrels, or approximately 60 percent, between 2001 and 2002 and is sharing its technology and learning across the company.
- In Nigeria, ChevronTexaco's upstream business unit implemented a new process to better assess the risk of leaks from pipelines. Through this analysis, it identified and is implementing more than 25 distinct projects designed to achieve a tenfold reduction in the risk of spills related to pipeline corrosion, erosion-induced failure, mechanical damage, operational upsets or equipment failures.
- ChevronTexaco's North American pipeline company is implementing a Pipeline Integrity Management Plan. Under the plan, more than 8,000 miles of pipelines that could affect a "high consequence area" will be assessed, half by the end of 2004 and the remainder by the end of 2010. High-consequence areas include populated areas, commercially navigable waterways, unusually sensitive ecological areas and drinking water sources. These assessments will include the use of internal inspection tools, called "smart pigs," to measure and analyze conditions along the walls of the pipes to pinpoint potential problems before they can become leaks.
- In 2002, ChevronTexaco Shipping (CTS) Company led the industry in spill prevention. With an intense focus on spill prevention, CTS transported more than 250 million barrels of crude oil in its controlled fleet of vessels, without a single spill to water.
Performance: Establishing a Commitment to Improve
We were not satisfied with our performance in this area in 2002 because we did not make progress in reducing spills from the previous year, and we did not meet our performance target. In 2002, ChevronTexaco had 1,502 oil spills, with a total spilled volume of nearly 55,000 barrels. This is in the context of 2002 net production of crude oil and natural gas liquids of approximately 638 million barrels and product sales totaling approximately 1.4 billion barrels. Many of these spills were contained within areas such as dikes around tanks. We track all spills because they have the potential to affect the environment. Less than 1 percent of the spilled oil went to water, and a little more than half of the total spilled volume was immediately recovered.
| ChevronTexaco Petroleum Spills* |
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| Number of spills |
2,169 |
1,553 |
1,428 |
1,502 |
| Volume of spills (barrels) |
164,686 |
34,460 |
54,834 |
54,696 |
| Volume recovered (barrels) |
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48,348 |
27,805 |
*1999-2001 data are combined Chevron and Texaco. 2002 data are ChevronTexaco.
Note: Prior to 2001, volume recovered was not tracked at the corporate level. |
ChevronTexaco experienced two significant oil spills in 2002: a 14,000-barrel spill at a storage facility in Panama, which was contained within the tank dike area, and an 18,000-barrel spill in Nigeria associated with a tank fire ignited by a lightning strike. In the latter case, a small amount of oil was released from the tank containment area. This event is a primary factor contributing to our relatively low amount of spilled oil recovered when compared with 2001; oil consumed in the fire was not counted as "recovered."
We recognize that even minor spills can have an impact. For example, a relatively small spill (nine barrels) in our upstream operations in Cabinda, Angola, had a significant impact on the local community. Fishing in the vicinity was suspended immediately for a number of days as a health and safety precaution. While the environmental effects were minimal, and we believe we responded effectively and responsibly, our reputation nevertheless was damaged as a result of this incident. During the investigation into the cause, it was determined that the undersea pipeline involved could not be repaired easily and returned to service without some risk of an additional leak. Therefore, some oil production was shut into allow for replacement of portions of the line on a priority basis. During this period, ChevronTexaco reduced production by approximately 2.7 million barrels rather than run the risk of an additional spill from the pipeline.
ChevronTexaco also tracks spills of chemicals, including industrial chemicals, some catalysts used in refining operations and some types of materials used in drilling oil and gas wells. In 2002, we had 75 chemical releases totaling 135 metric tons (135,075 kg) in our worldwide operations. Of that amount, 62 metric tons (62,303 kg), or slightly under half of the volume, was recovered immediately. Because we began tracking spills of chemicals consistently across our operating companies in late 2001, trend history data are not yet available.
Future Goals: Setting an Aggressive Target
ChevronTexaco's goal is to be a leader in its industry in spill prevention. Our near-term target is to reduce total volume of oil spilled by 20 percent each year over the next three years. We also are working within industry associations to help bring consistency to the collection and reporting of spill data industrywide. Such standardization will help us better measure progress against our world-class performance standard.
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ChevronTexaco Shipping Company's 2002 safety and environmental performance led the industry.
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