CONOCO MAPS BROAD PROGRAM DESIGNED TO PROTECT ENVIRONMENT

Conoco Inc. has adopted a sweeping environmental program that includes requiring all its new tankers to be of double hull construction--a first for a U.S. company.

Cost of the entire program is expected to be more than $50 million/year.

Conoco Pres. Constantine S. Nicandros last week said the petroleum industry must step up its efforts to protect the environment. Studies are under way to determine the added operational safety benefits of double hulled tankers, he said, "but we cannot wait for the verdict."

Tankers with double hulls cost about 15% more than those with single hulls.

Conoco's program, in addition to the double hull tanker policy, includes reducing toxic air emissions and hazardous solid waste to less than current legal requirements, creation of citizen groups to assume an environmental watchdog role over Conoco's worldwide operations, and double containment systems in all Conoco owned gasoline stations.

Nicandros said Conoco is taking a leading role in adopting many of the measures. In response to a question, he said the company's earnings will suffer if other companies choose not to follow the lead.

"But so be it," he said. "There is a price to cleaning up the environment. The need is there."

CONOCO'S PROGRAM

Conoco's program involves nine environmental initiatives:

Construction of only double hulled tankers in the future as a means to decrease the environmental risk in crude oil transportation. Conoco Shipping Co. has ordered two 95,000 dwt tankers from Samsung's Koje Island, South Korea, shipyard for delivery in mid-1992. The tankers, which will have capacity to deliver 500,000 bbl of crude each to Conoco's 156,500 b/d Lake Charles, La., refinery, will have double skins and double bottoms.
More than a one-third reduction in toxic air emissions and hazardous solid wastes compared with current company levels by the end of 1993. Conoco's U.S. operations currently produce 2,000 tons/year of toxic air emissions and 30,000 tons/year of hazardous solid wastes.
Watchdog citizen advisory councils, designed to help identify and implement environmental plans and activities, to be established at U.S. and European refineries, major production offices, and other major installations worldwide.
Commitment to double containment systems at all newly constructed and renovated company owned gasoline stations, along with encouragement of all branded stations to do the same. The system includes double walled tanks, piping in protective casings, and state of the art leak detection equipment.
The company will continue its research and development effort of fuels that improve environmental quality. Efforts include reformulated gasolines, new refining processes and additives, and greater use of natural gas and propane for fleet vehicles.
In an effort to make environmental protection equal in priority to workplace safety, Conoco will increase the emphasis on specific environmental action plans in the compensation program of all its top managers. "We will reward those top managers who do well and penalize those who do not perform," Nicandros said.
Creation of an annual environmental fellowship program for several outsiders to work with Conoco on environmental matters. Nicandros said the program will contribute to the growing need for people with professional skills in environmental matters.
Step up emphasis on understanding environmental sensitivities involved in developing oil and gas discoveries anywhere in the world. The company will conduct two major conferences in the spring with environmentalists, anthropologists, and government officials to discuss ways to develop hydrocarbons in rain forests.
Work toward a goal to recycle 100% of the waste generated at the Houston headquarters, which amounts to 200 tons/month. The program, with a goal to recycle all paper, plastic, and other office waste, will later be expanded to include the Ponca City, Okla., and London offices.

DOUBLE HULLED TANKERS

While doubled hulled tankers are not the total answer to preventing oil spills, Nicandros said, they offer an increased margin of protection.

The U.S. faces increased tanker traffic due to its growing dependence on imported oil. And more traffic means more chances of accidents.

In addition to double hull construction, Nicandros said better ships, operations, and crews are needed as well as broadened governmental efforts to monitor and regulate tanker movements.

"In the U.S., we are calling for government to enhance the role of the Coast Guard in carrying out spot inspections of vessel integrity, lightering operations, and safety equipment," he said.

"The objective is to keep oil spills from happening in the first place. This is the best way to protect our natural resources and our quality of life."

PURPOSE OF THE PROGRAM

Nicandros said Conoco's environmental initiatives are designed to be responsive to public views.

"The public perception of what is acceptable and what is not acceptable has changed," he said.

"We know that we must do more, for we accept and embrace society's higher standards for environmental protection that exist today."

Nicandros said he has not shared any of the initiatives with the managements of other companies. Within his own company there is pressure to improve earnings, he said, which generated debate about the high cost of taking a leading role in pushing environmental initiatives.

Nicandros said Conoco's program is not an effort to stop adoption of tougher requirements by Congress.

Conoco's efforts to protect the environment will not end with last week's initiatives, he said. The company will add programs as they are identified.

"We are sincere in our concern for the air, water, and land of our planet as a matter of enlightened self-interest," Nicandros said.

"We are in business by the public's consent. Our goal is to be welcome in all operating environments. Indeed, we would like to be the company of choice in even the environmentally sensitive areas."