Occidental Petroleum 2003 Annual Report Download - page 32
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The seven sites with individual reserves over $10 million in 2003 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) and a
municipal drinking water treatment plant in Western New York.
ACTIVE FACILITIES
Certain subsidiaries of OPC are currently addressing releases of substances
from past operations at 13 active facilities. Four facilities -- certain oil and
gas properties in the southwestern United States, a chemical plant in Louisiana,
a chemical plant in Texas, and a phosphorous recovery operation in Tennessee --
account for 89 percent of the reserves associated with these facilities.
CLOSED OR SOLD FACILITIES
There are 39 sites formerly owned or operated by certain subsidiaries of
OPC that have ongoing environmental remediation requirements. Three sites
account for 72 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.
ENVIRONMENTAL COSTS
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 2003 2002 2001
============================= ======== ======== ========
OPERATING EXPENSES
Oil and Gas $ 40 $ 32 $ 22
Chemical 49 46 47
-------- -------- --------
$ 89 $ 78 $ 69
======== ======== ========
CAPITAL EXPENDITURES
Oil and Gas $ 98 $ 70 $ 60
Chemical 15 16 20
-------- -------- --------
$ 113 $ 86 $ 80
======== ======== ========
REMEDIATION EXPENSES
Corporate $ 63 $ 23 $ 109
============================= ======== ======== ========
Operating expenses are incurred on a continual basis. Capital expenditures
relate to longer-lived improvements in currently operating facilities.
Remediation expenses relate to existing conditions caused by past operations and
do not contribute to current or future revenue generation. Although total costs
may vary in any one year, over the long term, segment operating and capital
expenditures for environmental compliance generally are expected to increase.
22
In October 2001, the federal Environmental Protection Agency (EPA) approved
a State Implementation Plan (SIP) for eight counties in the Houston-Galveston
area of Texas to implement certain requirements of the federal Clean Air Act.
The SIP contains provisions requiring the reduction of 80 percent of nitrogen
oxide emissions and 60 percent of certain volatile organic compound emissions by