Occidental Petroleum 2002 Annual Report Download - page 73

of contaminant plumes requires years of monitoring data and computer
modeling. Migration of contaminants may follow unexpected pathways along
geologic anomalies that could initially go undetected. Additionally, the
size of the area requiring remediation may change based upon risk
assessment results following site characterization or interim remedial
measures.
>> Remediation technology might improve to decrease the cost of remediation.
In particular, for groundwater remediation sites with projected long-term
operation and maintenance, the development of more effective treatment
technology, or acceptance of alternative and more cost-effective treatment
methodologies such as bio-remediation, could significantly affect
remediation costs.
>> Laws and regulations might change to impose more or less stringent
remediation requirements.
For Management's opinion, refer to Note 9.
At December 31, 2002, OPC or certain of its subsidiaries have been named in
124 CERCLA or state equivalent proceedings, as shown below.
Description ($ amounts in millions) Number of Sites Reserve Balance
============================================================ =============== ===============
Minimal/No Exposure (a) 102 $ 7
Reserves between $1-10 MM 14 54
Reserves over $10 MM 8 223
--------------- ---------------
TOTAL 124 $ 284
============================================================ =============== ===============
(a) Includes 33 sites for which Maxus Energy Corporation has retained the
liability and indemnified Occidental, 7 sites where Occidental has denied
liability without challenge, 48 sites where Occidental's reserves are less
than $50,000 each, and 14 sites where reserves are between $50,000 and $1
million each.
The eight sites with individual reserves over $10 million in 2002 are a
former copper mining and smelting operation in Tennessee, two closed landfills
in Western New York, groundwater treatment facilities at three former chemical
plants (Western New York, Montague, Michigan and Tacoma, Washington),
replacement of a municipal drinking water treatment plant in Western New York,
and various sediment clean-up actions in Washington.
Certain subsidiaries of OPC are currently addressing releases of substances
from past operations at 14 active facilities. Three facilities - certain oil and
gas properties in the southwestern United States, a chemical plant in Louisiana,
and a phosphorous recovery operation in Tennessee -- account for 62 percent of
the reserves associated with these facilities.
There are 44 sites formerly owned or operated by certain subsidiaries of
OPC that have ongoing environmental remediation requirements. Three sites
account for 66 percent of the reserves associated with this group. The three
sites are: an active refinery in Louisiana where Occidental indemnifies the
current owner and operator for certain remedial actions, a water treatment
facility at a former coal mine in Pennsylvania, and a former chemical plant in
West Virginia.
Occidental's costs, some of which may include estimates, relating to
compliance with environmental laws and regulations are shown below for each
segment:
In millions 2002 2001 2000
============================================= ======== ======== ========
OPERATING EXPENSES
Oil and Gas $ 32 $ 22 $ 17
Chemical 46 47 51