Dow Chemical 2009 Annual Report Download - page 101

Table of Contents
Climate Change
Dow is committed to reducing its greenhouse gas (“GHG”) intensity (pounds of GHG per pound of product), developing climate-friendly products and
processes and, over the longer term, implementing technology solutions to achieve even greater climate change improvements. Since 1990, Dow has reduced its
absolute GHG emissions by more than 20 percent, a more rapid reduction than required by Kyoto Protocol targets. Since 1994, Dow has achieved a
22 percent improvement in energy intensity (the amount of energy required to produce one pound of product). In doing so, it has avoided consuming more than
1,700 trillion Btus, a savings that when converted to electricity would more than supply the residential electrical energy needs of California for one year.
Through its energy savings, Dow has prevented approximately 90 million metric tons of carbon dioxide from entering the atmosphere. This trend could
change, depending on business growth, capacity utilization and the pace of new technology development.
Dow also contributes to the climate change solution by producing products that help others reduce GHG emissions, such as lightweight plastics for
automobiles and insulation for energy efficient homes and appliances. Dow has demonstrated its commitment to technological innovation and conservation.
For example, Dow’s building insulation materials and air-sealing products can save up to 20 percent on heating and cooling costs and significantly reduce
GHG emissions. The Company’s STYROFOAM™ insulation is installed in over 20 million buildings worldwide, saving over $10 billion in energy costs
annually. Dow’s DOWTHERM™ A heat transfer fluids are used in three 50-megawatt solar units in Spain to help convert heat energy into electricity. The
three solar plants will generate 150 megawatts of clean energy annually, enough to power 90,000 homes and save 450,000 tons of carbon dioxide per year.
Gains made toward Dow’s Energy Efficiency goal will directly impact progress in meeting its 2015 Climate Change goal to reduce GHG intensity by
2.5 percent a year per pound of product, from a 2005 baseline. Dow is studying the life cycle impact of its products on climate change and additional global
projects that could offset the Company’s overall GHG emissions through carbon dioxide reduction.
Dow’s Energy & Climate Change Policy and Issue Management Team is tasked with developing and implementing a comprehensive strategy that
addresses the challenges of climate change and energy security and is advocating an international framework that establishes clear pathways to help slow, stop
and reverse the rate of GHG emissions.
Environmental Remediation
Dow accrues the costs of remediation of its facilities and formerly owned facilities based on current law and existing technologies. The nature of such
remediation includes, for example, the management of soil and groundwater contamination and the closure of contaminated landfills and other waste
management facilities. In the case of landfills and other active waste management facilities, Dow recognizes the costs over the useful life of the facility. The
accounting policies adopted to properly reflect the monetary impacts of environmental matters are discussed in Note A to the Consolidated Financial
Statements. To assess the impact on the financial statements, environmental experts review currently available facts to evaluate the probability and scope of
potential liabilities. Inherent uncertainties exist in such evaluations primarily due to unknown environmental conditions, changing governmental regulations
and legal standards regarding liability, and emerging remediation technologies. These liabilities are adjusted periodically as remediation efforts progress or as
additional technical or legal information becomes available. Dow had an accrued liability of $539 million at December 31, 2009, related to the remediation of
current or former Dow-owned sites. The balance included $86 million of environmental liabilities assumed from Rohm and Haas on April 1, 2009, related to
the remediation of current and former Rohm and Haas-owned sites (see Note D to the Consolidated Financial Statements). At December 31, 2008, the liability
related to remediation was $290 million.
In addition to current and former Dow-owned sites, under the Federal Comprehensive Environmental Response, Compensation and Liability Act and
equivalent state laws (hereafter referred to collectively as “Superfund Law”), Dow is liable for remediation of other hazardous waste sites where Dow allegedly
disposed of, or arranged for the treatment or disposal of, hazardous substances. Because Superfund Law imposes joint and several liability upon each party
at a site, Dow has evaluated its potential liability in light of the number of other companies that also have been named potentially responsible parties (“PRPs”)
at each site, the estimated apportionment of costs among all PRPs, and the financial ability and commitment of each to pay its expected share. The Company’s
remaining liability for the remediation of Superfund sites, including environmental liabilities of $73 million assumed from Rohm and Haas related to the
remediation of Superfund sites, was $80 million at December 31, 2009 ($22 million at December 31, 2008). The Company has not recorded any third-party
recovery related to these sites as a receivable.
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