Scope of Report Message From the Chairman Our Company 2006 Highlights 2006 At A Glance 2006 Performance Data How We Operate Review of Operations Safety Performance Environmental Performance Global Workforce Community & Social Performance Global Compact Index GRI & IPIECA/API Index Verification Statement

ENVIRONMENTAL PERFORMANCE

We are committed to meeting the highest standards of corporate citizenship by safeguarding the environment.

AIR EMISSIONS

As with greenhouse gases the predominant source of sulfur oxides (SOx) and nitrogen oxides (NOx) from our operations are power generation and flaring. Major sources of volatile organic compounds (VOC) are flaring and hydrocarbon loading operations. Our goal, where possible, is to reduce our normalized emissions.

In 2006, we reduced the absolute emissions of NOx, SOx and VOC by 5%, 9% and 12% respectively . When normalized against production, our company wide NOx emissions increased by 3%, due, in part, to temporary power arrangements and startup emissions in the U.S. Gulf Coast following hurricane related shutdowns in 2005.

Normalized SOx emissions decreased by 2% between 2005 and 2006.

Normalized VOC emissions were reduced by 5%. These VOC reductions were due largely to improvements at terminal facilities.

Stage I vapor recovery is the process of recovering hydrocarbons that are emitted during the transfer of gasoline from the delivery truck into the underground storage tank. The vapors are routed through a hose back into the tanker instead of venting directly into the atmosphere. All of our retail stations have Stage I vapor recovery fitted to tanks.





Stage II vapor recovery systems collect gasoline vapors from vehicles' fuel tanks while customers dispense gasoline products into their vehicles. The Stage II system consists of special nozzles and coaxial hoses at each gasoline pump that captures vapors from the vehicle's fuel tank and routes them to the station's storage tanks. Stage II helps to eliminate the escape of gasoline vapors to the atmosphere. In 2006, approximately 49% of Hess owned and operated stations employed Stage II vapor recovery.