May 27, 2002

Shell reports further improvements in environmental performance

Shell Canada met or surpassed the majority of its environmental performance targets during 2001, as documented in the company's eleventh annual sustainable development report, Progress Toward Sustainable Development 2001. The report, released last week, assesses company performance against specific, measurable sustainable development targets, indicating both areas of success and those that need improvement.

Shell continued to make progress in reducing greenhouse gas emissions, with last year's levels 1% below those of the previous year. An update of the corporate climate change action plan was filed with Voluntary Challenge and Registry Inc in October 2001 and Shell received Gold level reporting status for its submission. The company also succeeded in improving refinery energy efficiency by more than 2%, and obtained ISO 14001 registration for all of its refineries and gas plants.

Targets were met in other areas as well: emissions of benzene and volatile organic compounds (VOCs) were below 1999 levels, at 81 tonnes (down from 93 tonnes) and 12,000 tonnes, respectively. SO2 emissions remained at or below legislated requirements, notes the report.

Other targets met included:

no new process applications of hydrofluorocarbons;

95% of well sites reclaimed within three years of abandonment;

all contaminated high-risk sites remediated or managed;

quantities of waste sent for disposal maintained at or below 50% of 1988 levels.

Spills were indicated as a focal point for performance improvement: the number of spills increased, while the spill frequency figure of 21,300 litres per billion litres exceeded the target of 3,500 litres per billion litres for downstream spills.

There were four large spills during 2001, two of them classified as priority spills. All four occurred in refinery tank farm areas and accounted for over 85% of the total spill volume for the year, notes the report. No off-site environmental damage resulted, however.

Two of the spills occurred early in the year and were caused by lines that had frozen and split. Shell consequently undertook an extensive review of winterizing procedures and shared the results with local industry. The company also reported eight compliance incidents related to effluent quality (over the zero-incident target).

Shell substantially increased its environment-related spending during 2001, to $173 million, up from $112 million in 2000. Investments in the products division rose by 50%, mainly in connection with gasoline hydrotreating projects at the Sarnia and Montreal East refineries. The company's resources division spent $28 million, up 35% from 2000, on well abandonment, site assessment and remediation activities. Oil sands costs increased from $2 million in 2000 to $7 million last year to cover the costs of environmental equipment and staff for the Muskeg River mine and Scotford upgrader projects. Environmental spending levels are expected to remain at about the same level for 2002.

Progress Toward Sustainable Development 2001 is available in print from Shell Canada Public Affairs (403) 691-3198 or on the Shell Canada Web site, www.shell.ca.

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