DuPont 2007 Annual Report Download - page 45

Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, continued
regional, and international climate change policies could provide the business community with greater certainty for
the regulatory future, help guide investment decisions, and drive growth in demand for low-carbon and energy-
efficient products, technologies, and services.
The company actively manages the potential risks that climate change could present, including those associated
with the company’s physical assets, as well as with regulatory and economic issues. DuPont looks for opportunities
to make its overall portfolio less energy intensive, and energy use is one factor that is weighed when investments or
divestitures are considered. DuPont is committed to continuing to bring to market more products and services to
meet new and expanded demands of a low-carbon economy.
DuPont has discovered that very low levels of dioxins (parts per trillion to low parts per billion) and related
compounds are inadvertently generated during its titanium dioxide pigment production process. Over 99 percent of
the dioxin generated at DuPont’s production plants becomes associated with process solid wastes that are disposed
in controlled landfills where public exposure is negligible. A multi-year research and process engineering
development program has culminated in capital projects and other process modifications intended to reduce
dioxin generation by at least 90 percent. The last of these projects and process modifications were completed during
2007. As of December 31, 2007, the company’s operations had results verifying the capability to reduce dioxin
generation by 90 percent.
Remediation Expenditures
The RCRA extensively regulates and requires permits for the treatment, storage and disposal of hazardous waste.
RCRA requires that permitted facilities undertake an assessment of environmental contamination at the facility. If
conditions warrant, companies may be required to remediate contamination caused by prior operations. In contrast
to CERCLA, the costs of the RCRA corrective action program are typically borne solely by the company. The
company anticipates that significant ongoing expenditures for RCRA remediation activities may be required over the
next two decades. Annual expenditures for the near term, however, are not expected to vary significantly from the
range of such expenditures experienced in the past few years. Longer term, expenditures are subject to
considerable uncertainty and may fluctuate significantly. The company’s expenditures associated with RCRA
and similar remediation activities were approximately $47 million, $44 million and $49 million in 2007, 2006 and
2005, respectively.
From time to time, the company receives requests for information or notices of potential liability from the EPA and
state environmental agencies alleging that the company is a PRP under CERCLA or similar state statutes. CERCLA
is often referred to as the Superfund and requires companies to undertake certain investigative and research
activities at sites where it conducts or once conducted operations or where company generated waste has been
disposed. The company has also, on occasion, been engaged in cost recovery litigation initiated by those agencies
or by private parties. These requests, notices and lawsuits assert potential liability for remediation costs at various
sites that typically are not company owned, but allegedly contain wastes attributable to the company’s past
operations.
As of December 31, 2007, the company had been notified of potential liability under CERCLA or state laws at 383
sites around the U.S., with active remediation under way at 139 of these sites. In addition, the company has resolved
its liability at 161 sites, either by completing remedial actions with other PRPs or by participating in “de minimis
buyouts” with other PRPs whose waste, like the company’s, represented only a small fraction of the total waste
present at a site. The company received notice of potential liability at six new sites during 2007 compared with six
similar notices in 2006 and eight in 2005. The company’s expenditures associated with CERCLA and similar state
remediation activities were approximately $20 million, $19 million and $27 million in 2007, 2006 and 2005,
respectively.
For nearly all Superfund sites, the company’s potential liability will be significantly less than the total site remediation
costs because the percentage of waste attributable to the company versus that attributable to all other PRPs is
relatively low. Other PRPs at sites, where the company is a party, typically have the financial strength to meet their
obligations and, where they do not, or where PRPs cannot be located, the company’s own share of liability has not
materially increased. There are relatively few sites where the company is a major participant and the cost to the
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Part II