Dow Chemical 2013 Annual Report Download - page 87

65
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 and Recovery Act (“RCRA”), in concert with the state of Texas. At December 31,
2013, the Company had an accrual of $35 million ($31 million at December 31, 2012) related to environmental remediation at
the Freeport manufacturing site. In 2013, $5 million ($5 million in 2012) 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 the City of Midland area soils; the
Tittabawassee and Saginaw River sediment and floodplain soils; and the Saginaw Bay, and requires the Company to conduct
interim response actions. In January 2010, the Company, the U.S. Environmental Protection Agency ("EPA") and the State of
Michigan ("State") entered into an administrative order on consent that requires the Company to conduct a remedial
investigation, a feasibility study and a remedial design for the Tittabawassee River, the Saginaw River and the Saginaw Bay,
and will pay the oversight costs of the EPA and the State under the authority of the Comprehensive Environmental Response,
Compensation, and Liability Act Administrative Order. See Note 14 to the Consolidated Financial Statements for additional
information. At December 31, 2013, the Company had an accrual of $77 million ($85 million at December 31, 2012) for
environmental remediation and investigation associated with the Midland site. In 2013, the Company spent $27 million
($24 million in 2012) on environmental remediation at the Midland site.
On April 1, 2009, the Company acquired Rohm and Haas’ Philadelphia Plant, which has been an industrial site since the early
1700s, and since the 1920s used by Rohm and Haas for the manufacture of a wide range of chemical products. Chemical
disposal practices in the early years resulted in soil and groundwater contamination at the site and in the sediments of the
adjacent Frankford Inlet. The site has undergone a number of investigations and interim cleanup measures under the RCRA
Corrective Action Program and, in 2009, was transferred to the regulatory management of the Pennsylvania One Cleanup
Program. At December 31, 2013, the Company had an accrual of $48 million ($57 million at December 31, 2012) for
environmental remediation at the Philadelphia Plant. In 2013, the Company spent $3 million ($1 million in 2012) on
environmental remediation at the Philadelphia Plant.
Rohm and Haas is a PRP at the Wood-Ridge, New Jersey Ventron/Velsicol Superfund Site, and the adjacent Berry’s Creek
Study Area ("BCSA"). Rohm and Haas is a successor in interest to a company that owned and operated a mercury processing
facility, where wastewater and waste handling resulted in contamination of soils and adjacent creek sediments. Remediation of
the upland portions of the Ventron/Velsicol site was completed in 2011. Currently, the Berry’s Creek Study Area PRP group is
undertaking a multi-stage Remedial Investigation/Feasibility Study ("RI/FS") to identify contamination in surface water,
sediment and biota related to numerous contaminated sites in the Berry's Creek watershed. The RI/FS eventually will support a
remedial action plan for the BCSA and is expected to require several more years to complete. At December 31, 2013, the
Company had an accrual of $15 million ($15 million at December 31, 2012) for environmental remediation at the Wood-Ridge
sites. In 2013, the Company spent $4 million ($4 million in 2012) on environmental remediation at the two Wood-Ridge sites.
Dow Brasil Indústria e Comércio de Produtos Quimicos Ltda. acquired a toluene diisocyanate ("TDI") manufacturing plant
located within the Camaçari, Brazil petrochemical complex from Pronor in 1998. Since the acquisition, the TDI plant has
undergone a number of environmental investigations that indicate that pre-acquisition materials/waste management practices
resulted in extensive soil and groundwater contamination with mono and dichlorobenzenes, dinitrotoluene, and toluene, among
other compounds. Additional investigation is needed to further delineate the vertical limits of soil and groundwater impacts. An
initial accrual was recorded in December 2011 in the amount of $50 million to address environmental remediation of soils and
long-term groundwater remediation at the site. At December 31, 2013, the Company had an accrual of $43 million ($44 million
at December 31, 2012) for environmental remediation at the Camaçari TDI manufacturing site. In 2013, the Company spent $1
million (less than $1 million in 2012) on environmental remediation at the Camaçari TDI manufacturing site.
In total, the Company’s accrued liability for probable environmental remediation and restoration costs was $722 million at
December 31, 2013, compared with $754 million at the end of 2012. This is management’s best estimate of the costs for
remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although it is
reasonably possible that the ultimate cost with respect to these particular matters could range up to approximately two and half
times that amount. Consequently, it is reasonably possible that environmental remediation and restoration costs in excess of
amounts accrued could have a material impact on the Company’s results of operations, financial condition and cash flows. It is
the opinion of the Company’s management, however, that the possibility is remote that costs in excess of the range disclosed
will have a material impact on the Company’s results of operations, financial condition and cash flows.