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ENVIRONMENTAL,
HEALTH, AND SAFETY PERFORMANCE HEALTH AND SAFETY We believe that any occupational injury or illness is unacceptable and are committed to continuous improvement of our health and safety performance. One of our highest priorities is to provide a safe and healthy workplace. We also expect our employees to take individual responsibility for their own health and safety and to exhibit and encourage safe work behaviors. We have made progress in our safety performance. Since 1989, we have reduced our Occupational Safety and Health Administration (OSHA) recordable workplace injury rates and lost work time incident rates by 45%. These rates are an annualized measure of the number of recordable incidents per 100 employees. In 2002, our OSHA recordable rate was 2.80, and our lost work time incident rate was 2.07. These rates correspond to a 2% reduction and 7% increase in our 2001 OSHA and lost work time incident rates. (Evidence - Charts) We have established aggressive improvement targets for our business units in support of achieving our 2005 OSHA and lost work time incident rate goals. (Evidence - Charts) We have not yet achieved the degree of improvement and performance levels that we seek. Despite this, we are happy to report some areas of significant improvement. Led by our Terminal Operations, which recorded a 24% reduction in OSHA recordable rates and a 35% reduction in lost work time incident rates, and our Retail Operations, which reduced its OSHA rate by 8%, our Refining and Marketing Division reduced its overall OSHA recordable rate by 7% compared to 2001. In addition, many of our Exploration and Production (E&P) operations completed 2002 with zero recordable incidents, a notable accomplishment. Our HOVENSA joint venture refinery in St. Croix was unable to sustain the excellent safety performance in 2002 that it achieved in 2001. The facility's OSHA recordable rates increased by 28% and lost work time incident rates increased by 6% due to an increase of 6 OSHA incidents and 1 lost time incident in 2002. (Evidence - Charts) In addition to tracking the safety performance of our own employees, we also monitor our contractors as a further measure of workplace safety and to ensure that our contractors have acceptable safety records. We note with regret that two fatalities occurred in 2002. The first occurred as a result of an apparent robbery at a convenience and fuel service store in Charleston, South Carolina. The second fatality occurred as a result of a vehicle collision involving a HOVENSA employee. Although we have made progress, we are not satisfied with our current safety performance. As we progress towards our 2005 safety goals, we continue to stress and prioritize health and safety in our work culture. Highlights of activities that we are undertaking are presented in our web-based report at www.hess.com. (Link to Safety Initiatives) ENVIRONMENTAL PERFORMANCE Amerada Hess recognizes that its operations will impact the environment. We manage impacts according to their significance within our business as identified by both our environmental management systems and by our key stakeholders. GLOBAL CLIMATE CHANGE Greenhouse gases have been linked to global climate change, which can affect ecosystems, agriculture, forestry and human health. Within our operations, sources of greenhouse gas emissions include combustion of hydrocarbon fuels for power generation and flaring of associated gas. On a normalized basis, our company-wide greenhouse gas emissions were approximately 13.2 tons per 1000 barrels in 2002 based on overall production and throughput. This equates to a 1% decrease compared to 2001. (Evidence - Charts 1, 2, 3) We have established a 2005 target of reducing our company wide greenhouse gas emissions by 5% on a normalized basis in comparison to our 2001 asset base. As we expand our operations, we acknowledge that our total atmospheric emissions may increase and we are evaluating options to sustain or reduce our overall emissions. Since Amerada Hess only commenced operations in Equatorial Guinea in August 2001 following the acquisition of Triton Energy Limited, emissions from these operations have not been integrated into our current targets. However, we are currently collecting and evaluating emissions data from these operations in order to set appropriate targets. The emissions from the operations in Equatorial Guinea are included in our emission summary tables presented in our web-based report at www.hess.com. (Evidence - Tables) ACIDIFICATION AND SMOG Acidification occurs when certain gases, mainly oxides of sulfur (SOx) and oxides of nitrogen (NOx), are emitted to the atmosphere and react to enhance the natural acidity (pH) of precipitation. Smog, or ground level ozone, is formed by complex chemical reactions between volatile organic compounds (VOC) and NOx in sunlight. As with greenhouse gases, the predominant source of SOx and NOx from our operations are power generation and flaring. Major sources of VOC emissions are flaring and hydrocarbon loading operations. We made progress in reducing our NOx, SOx, and VOC emissions in 2002 compared to our 2001 performance. On a normalized basis, we decreased our company-wide NOx emissions by 13%, SOx emissions by 24%, and VOC emissions by approximately 5%. Significant SOx reductions were achieved at our U.S. Gas Plants through process improvements and better coordination with field production. We note that our absolute NOx and VOC emissions increased considerably between 1999 and 2001, mainly due to the addition of new assets such as our Algeria operations. Our current emission accounting procedures do not make any adjustments for material changes resulting from acquisitions and divestitures. (Evidence - Charts 1, 2) The HOVENSA facility saw an average 6% decrease in total criteria pollutant emissions (NOx, SOx, VOC) compared to 2001, largely as a result of a shift from fuel oil to fuel gas, lower fuel consumption, and a temporary outage of its Fluidized Catalytic Cracking Unit. (Evidence - Charts) AQUEOUS IMPACTS Our operations have the potential to impact water resources. Offshore, we undertake a number of activities that can affect the marine environment, such as the discharge of oil and chemicals in produced water or the use of seawater for re-injection. Similarly, onshore operations may result in discharges to rivers and also have the potential to impact ground water supplies. We are cognizant of these impacts and have established controls to minimize impacts and metrics to help us monitor and improve our performance. OIL SPILLS Spills and releases to the environment can occur accidentally. Therefore, the avoidance of any oil and chemical spills from our operations is an important concern. Our overall goal is to achieve zero spills. Our total company spill volume in 2002 was the lowest since 1998. In 2002, we had 183 spills which totaled 426 barrels of oil. On a normalized basis, this equates to less than 1 barrel of spilled oil per million barrels total oil production and throughput (including Retail Operations). In 2002, the number of spills was reduced by 9% and the overall volume of spills was reduced by 84% compared to 2001. (Evidence - Tables & Charts) CONTROLLED DISCHARGES At the Port Reading facility and HOVENSA joint venture refinery, we continued our excellent discharge performance, with actual concentrations of discharged materials substantially below permitted levels. (Evidence - Tables) The volume of oil discharged in produced water at offshore facilities decreased from 3,209 barrels in 2001 to 2,551 barrels in 2002. Concentration data shows that performance is improving with time; average overall concentrations were 14 parts per million (ppm) in 2002 compared to 20 ppm in 2001 and 25 ppm in 1999. (Evidence - Tables & Charts) We decreased our overall drilling mud and cuttings discharged worldwide due, in part, to reduced drilling activities and to an increase in cuttings shipped to shore for treatment, reuse and disposal. The amount of oil discharged with the cuttings also declined. (Evidence - Table) RESOURCE USE Our operations and design decisions ultimately have an effect on the use of raw materials and natural resources. Material selection, re-use, recycling or the use of alternatives is a consideration when making these decisions. Although the waste we produce is a function of our overall level of activity, it is an indirect measure of resource usage. In addition to reducing the amount of materials used in our operations, we are initiating the collection of water use and energy data in order to better assess our overall resource usage performance and to facilitate target setting. WASTE Our total waste in 2002 was approximately 109,000 tons, an increase of 58% compared to 2001. The overall increase is in large part due to the introduction of waste reporting by our U.S. E&P operations in 2002. Excluding U.S. E&P in our 2002 total, our absolute waste production decreased by 10% compared to 2001. Wastes that were beneficially reused or recycled increased in 2002. (Evidence - Tables) EXCEEDANCES AND ENFORCEMENT ACTIONS Company policy has long stressed our fundamental commitment to comply with applicable environment, health and safety laws and regulations. Although 100% compliance is an operational goal, exceedances of permitted levels can occur, as do citations from regulatory authorities. In 2002, Amerada Hess had a total of 1,617 major regulatory inspections and received 67 violations. The amount of fines paid in 2002 decreased approximately 50% compared to 2001. |
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