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2002 ChevronTexaco Corporate Responsibility Report Environmental IssuesEnvironmental and Social Impact AssessmentsBackground: Using an Important Tool for Managing ImpactsEnvironmental Impact Assessment (EIA) processes are used by energycompanies to identify the potential environmental impacts of proposedprojects and to show how they intend to manage and mitigate them.ChevronTexaco and other energy companies have been conducting formalEIAs for a number of years, and many governments now requiresuch EIAs. Often, the perception of a company’s ability to effectivelymanage the environmental impacts of a project determines whethergovernment agencies, local communities, business partners and otherstakeholders will grant the company permission to undertake theproject. In recent years, companies have begun experimenting with conductingformal Social Impact Assessments (SIAs) and more comprehensiveEnvironmental and Social Impact Assessments (ESIAs).Approach: Integrating Results into Decision MakingHistorically, ChevronTexaco has conducted EIAs wherever legallyrequired and for major new projects in environmentally sensitive locations.More recently, we have begun conducting SIAs and comprehensiveESIAs for some major projects. For example, ChevronTexaco conductedESIA activities as part of several projects in 2002, including the Escravosgas-to-liquids facility in Nigeria and the West Africa Gas Pipeline. In thecase of the pipeline, early input from the EIA allowed for up-front identificationof significant impact areas and issues to be incorporated inproject design, as well as development of contractor requirements toaddress such impacts. Integration of the EIA into the detailed pipelinesiting work helped to avoid sensitive areas and to reduce the project’s“footprint” in sensitive areas that could not be avoided.For another major project, early assessment of possible sites for a liquefiednatural gas facility in the Congo River Delta in northern Angolaenabled us to incorporate environmental criteria – such as sensitiveareas, fauna and flora, protected areas, and cultural and historical sites –into the site selection process.ChevronTexaco also participates in several industry initiatives designedto increase awareness of the need for and value of ESIAs and enhanceour own knowledge for designing and conducting them. For example,we participated in the International Association of Oil and Gas Producers(OGP) and International Petroleum Industry EnvironmentalConservation Association’s efforts to develop a tool to help companiesidentify and manage social impacts in oil and gas projects. In 2003, weare participating in new OGP projects to further promote integrationof ESIAs into capital projects.Future Goals: Establishing Consistent Processes inUpstream OperationsWe believe we can more systematically use ESIAs as a tool to improveour project planning, design and execution and to help manage thesocial and environmental issues in both new projects and ongoingoperations. Consequently, in 2002 ChevronTexaco launched an effortto establish a consistent set of ESIA expectations and work processesto apply to its international upstream activities. This work is continuingin 2003.Case Study >Using environmental baselineingtechnology, Chevron Nigerialaunched a mangrove reforestationproject.Environmental Monitoring withHyperspectral ImagingIn the Niger Delta, where lush,towering mangroves providecommunities food and shelter,ChevronTexaco’s affiliate, ChevronNigeria Ltd. (CNL), uses a spacetechnology, called hyperspectralimaging, to “see” what the eyecannot. The company is a leaderin environmental remote sensingamong oil and gas companies inNigeria. By conducting “environmentalbaseline” surveys usingthis technology, CNL better monitorsits operations’ impacts on theenvironment over time.The human eye sees a small portion of the electromagnetic spectrumreferred to as visible light. Hyperspectral instruments record more than200 bands, allowing our technical experts to see objects over a continuousportion of the electromagnetic spectrum that includes ultraviolet,visible, near infrared and a portion of solar reflected infrared radiation.CNL uses this and other remote sensing techniques onboard airplanesand satellites to snap “photos” of the 2,510 sq miles (6,500 sq km)where it conducts drilling, production and transportation operations.With this technology, comprehensive information about the environmentis obtained on a regional and ecosystem scale that reveals patterns andrelationships unavailable when using traditional data-gathering techniques.© 2003 ChevronTexaco Corporation. All Rights Reserved.53
2002 ChevronTexaco Corporate Responsibility Report Environmental IssuesCase Study >Environmental Monitoring with(Continued)Hyperspectral ImagingAs the result of a baseline survey, the company developed a detailedmap for its operations in the Niger Delta to accurately depict the differentvegetation types of the region. The area comprises brackish andfreshwater swamps, both of which are interspersed and connected bycreeks, but they still maintain distinct characteristics in a delicate balance.Oil and gas activities can disrupt this balance. For example,pipeline construction or dredging activities that cross vegetation typescan introduce salt water into freshwater zones causing damage to thefreshwater habitats. By developing this detailed map, CNL is able toplan its construction activities to avoid sensitive areas and help preservethe delicate balance of the ecosystem. CNL also uses the technologyfor planning facilities, improving dredging practices, restoring impactedsites and developing Environmental Sensitivity Index maps to aid inoil spill response.Product StewardshipApproach: Identifying Issues Early and Minimizing RiskChevronTexaco seeks to manage the environmental, health and safetyimpacts of its products throughout their entire life cycle. This concept isknown as “product stewardship.”Product stewardship is an integral part of ChevronTexaco’s health, environmentand safety policy and approach. We require our businesses to:> Identify potential health, environment and safety impacts early in thedevelopment of new or improved products, and minimize risks topeople and the environment throughout each product’s life cycle.> Communicate information on potential hazards to people who useour products or who might be affected by them, including workers,customers, third parties and distributors.ChevronTexaco has a variety of processes and programs in place thathelp it meet these commitments. For example, several of our downstreamoperating companies have established formal risk managementprocesses in which they conduct routine product stewardship reviewson all product lines on a three- to five-year cycle. They also conductproduct stewardship reviews for major changes and projects that havepotentially significant environmental, health and safety impacts. Tooversee those efforts, several businesses employ staffs devoted exclusivelyto product stewardship.Product stewardship reviews sometimes result in significant changes.For example, a review of the 2003 introduction of ethanol into gasolinemarketed in California resulted in the development of an internalethanol storage and handling standard that we believe is among themost comprehensive in the industry.We also work to educate customers and the public on safe and responsiblehandling of our products. We are implementing a new, Web-basedglobal system for managing material safety data sheets (MSDSs) andother health, environment and safety information. These documentsprovide information on safe handling procedures for each ofChevronTexaco’s products. Many countries require that this informationbe made available, and ChevronTexaco is working to provideMSDSs worldwide. The Web-based system currently stores more than50,000 MSDSs, and we plan to complete implementation of the worldwideMSDS system in 2004. We also have a 24-hour-a-day global hotlinethat provides public access to on-call technical specialists who cananswer questions about our products.© 2003 ChevronTexaco Corporation. All Rights Reserved.54
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