May 31, 2004

Shell Canada includes "challenge" feature in latest sustainable development progress report

Shell Canada's just-released 13th Progress Toward Sustainable Development report for 2003 includes a new "Challenge" feature within each section. Accompanying quantitative measures and activity profiles, this feature summarizes the main issue facing the company. Within the environmental protection section, for example, the prime challenge remains reducing greenhouse gas (GHG) emissions in the context of business growth and new project development, in particular the Athabaska Oil Sands project.

The latest has been organized to reflect the company's revised commitment to sustainable development (SD): last year, Shell Canada endorsed seven specific SD principles, similar to those used by Shell companies around the world. These include: generating robust profitability; delivering value to customers; protecting the environment; managing resources; respecting and safeguarding people; benefiting communities; and working with stakeholders.

"Our goal is to assess performance and show continuous improvement against the targets and measures that are relevant to the key business issues we face and that matter to our various stakeholders," says Shell Canada

president and CEO Linda Cook. "While we have not chosen to audit every measure in this report, we have obtained external verification of some of our environmental data sets for greenhouse gas emissions and SO2 emissions. We plan to advance this verification process during 2004," she adds in her introduction to the report.

Since achieving its 2000 target of stabilizing GHG emissions for existing businesses at 1990 levels, Shell has committed to a further 6% reduction by 2008 for the 2000 base business. With total GHG emissions of 7,650,000 tonnes in 2003 (excluding oil sands operations), the company is on track to achieve or even surpass its 2008 target of 7,567,000 tonnes. The report notes that each business unit develops its own GHG management plan to support the overall corporate commitment; by the end of 2003, for example, the products and resources businesses had recorded reductions of 316,000 tonnes below 2000 levels. In 2003 as well, Shell also maintained its gold level reporting status from the Voluntary Challenge and Registry for the fifth consecutive year.

GHG emissions for the 2003 start-up year of the Alberta Oil Sands project were estimated at approximately 2.7 million tonnes. The report notes that while total emissions will increase in 2004, the first full year of production, the emissions per barrel should decrease from 69 kilograms per barrrel as of December 2003 to 65 kg per barrel.

Among the initiatives being pursued to address the emissions challenge posed by the oil sands development is a major tree-planting partnership, launched in 2001 in partnership with Tree Canada. Nearly half a million trees have been planted to date, mainly around Fort Saskatchewan and Strathcona County, the communities closest to the Alberta Oil Sands Scotford upgrader. This will help offset GHG emissions from the development, in addition to improving the overall environment and enhancing wildlife habitat.

Other environmental achievements in 2003 included:

*reducing benzene emissions to air from downstream operations to 42 tonnes in 2002 (latest available data; in addition to surpassing the target of less than 70 tonnes, these emissions are now 85% below 1988 levels);

*reducing downstream operation emissions of volatile organic compounds (VOCs) to 9,900 tonnes, well below the target of less than 11,000 tonnes (this represents a reduction of about 1,000 tonnes per year over the past 14 years);

*maintaining SO2 emissions at or below regulatory requirements )while daily average guidelines were met, six short-term exceedances were recorded);

*meeting the company's goal of zero health, safety and environment (HSE) incidents resulting in charges (this applied over all three business areas, i.e. resources, products and oil sands, although one charge in products was received in 2003 relating to an incident in 2001); and

*meeting the goal of zero high severity leaks from the resources, products and oil sands businesses.

A target of reducing effluent quality compliance incidents by at least 50% over 2002 was not met due to a spill of 37,800 litres of furfural (an aldehyde) from the Montreal East refinery in October 2003. Although the spilled material was contained within the refinery site and treated by the wastewater treatment system, the extended upset in the system resulted in several exceedances of water quality limits.

The report includes specific HSE objectives and targets for 2004. Published annually since 1991, the latest SD report is posted in pdf format on Shell Canada's Web site, www.shell.ca/code/values/reports/sd03.pdf, along with a selection of previous reports. Print copies may also be requested from the company's public affairs department, 403-691-3198. More information is available from public affairs manager Jan Rowley, 403/691-3899.

Shell Canada has also announced that Cook will be leaving the company in July 2004 to assume the post of a managing director at the parent company, Royal Dutch Petroleum Company of the Netherlands, effective August 2004 (pending approval of her nomination at its Annual General Meeting of Shareholders). Clive Mather, currently chairman of Shell UK, will be appointed by Shell Canada's board of directors to succeed Cook as president and CEO. Mather has been with Shell for 35 years, his career spanning all its major businesses. At the senior management level, he has held Royal Dutch/Shell Group responsibility for Information Technology, Contract and Procurement, eBusiness, International Affairs and Leadership Development.

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