Dow Chemical 2011 Annual Report Download - page 162

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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 $664 million at December 31, 2011, related to the remediation of current or
former Dow-owned sites. At December 31, 2010, the liability related to remediation was $548 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 was $69 million at
December 31, 2011 ($59 million at December 31, 2010). The Company has not recorded any third-party recovery related to
these sites as a receivable.
Information regarding environmental sites is provided below:
Environmental Sites
Number of sites at January 1
Sites added during year
Sites closed during year
Number of sites at December 31
Dow-owned Sites (1)
2011
289
3
(6)
286
2010
291
2
(4)
289
Superfund Sites (2)
2011
120
5
(5)
120
2010
124
3
(7)
120
(1) Dow-owned sites are sites currently or formerly owned by Dow, where remediation obligations are
imposed in the United States by the Resource Conservation Recovery Act or analogous state law.
150 of these sites were formerly owned by Dowell Schlumberger, Inc., a group of companies in
which the Company previously owned a 50-percent interest. Dow sold its interest in Dowell
Schlumberger in 1992.
(2) Superfund sites are sites, including sites not owned by Dow, where remediation obligations are
imposed by Superfund Law.
Additional information is provided below for the Company’s manufacturing sites in Freeport, Texas; Midland, Michigan;
Philadelphia, Pennsylvania; and Camaçari, Brazil, the sites for which the Company has the largest environmental remediation
accruals; as well as a Superfund site in Wood-Ridge, New Jersey.
From the start of operations at the Freeport site in the 1940s until the mid-1970s, manufacturing wastes were typically
placed in on-site pits and landfills. The resulting soil and groundwater contamination is being assessed and remediated under
the provisions of the Resource Conservation Recovery Act (“RCRA”), in concert with the state of Texas. At December 31,
2011, the Company had an accrual of $29 million ($28 million at December 31, 2010) related to environmental remediation at
the Freeport manufacturing site. In 2011, $6 million ($3 million in 2010) was spent on environmental remediation at the
Freeport site.
Similar to the Freeport site, in the early days of operations at the Midland site, manufacturing wastes were usually disposed
of on-site, resulting in soil and groundwater contamination, which has been contained and managed on-site under a series of
RCRA permits and regulatory agreements. The most recent Hazardous Waste Operating License for the Midland site, issued in
2003, also included provisions for the Company to conduct an investigation to determine the nature and extent of off-site
contamination from historic Midland site operations. The scope of the investigation includes Midland area soils; the
Tittabawassee and Saginaw River sediment and floodplain soils; and Saginaw Bay, and requires the Company to conduct
interim response actions. In January 2010, the Company entered into a Federal Comprehensive Environmental Response,
Compensation, and Liability Act Administrative Order on Consent to perform a Remedial Investigation, Feasibility Study and
Remedial Design for the Tittabawassee and Saginaw River sediment and floodplain soils, and Saginaw Bay. See Note N to the