October 18-25, 2004

Imperial to spend $500M to produce ultra-low-sulfur diesel

Imperial Oil will invest about $500 million to produce ultra low-sulfur diesel fuel at its refineries across Canada. On October 14, the company reported that work to reduce sulfur levels in diesel fuel for on-road vehicles by almost 95% has begun at Imperial's Strathcona refinery in Alberta, its Sarnia and Nanticoke refineries in Ontario, and its Dartmouth refinery in Nova Scotia.

"It will take the efforts of over 1,500 people and almost two years to complete," said Brian Fischer, Imperial's senior vice-president for products and chemicals. "But at the end of the day, Imperial Oil will be producing ultra low-sulfur diesel which, in combination with 2007 model vehicle engines, will reduce smog-causing nitrogen oxides and particulate matter emissions from diesel-powered vehicles by almost 90%."

Government regulations introduced in February 2001 call for the sulfur levels in on-road diesel to be reduced to 15 parts per million (ppm) by June 1, 2006. Imperial Oil will be meeting this new requirement well in time for the introduction of 2007 model vehicles whose new engine designs will benefit from ultra low-sulfur diesel.

This initiative to reduce sulfur in on-road diesel follows the company's multi-year investment of more than $600 million to reduce the sulfur content of its gasoline by over 90%, to 30 ppm. This work at was completed last year and in November 2003, Imperial's four refineries began producing 30 ppm gasoline more than a year ahead of government regulations.

This is one of several environmental achievements noted in the company's 2003 Corporate Citizenship Report: A Partner in the Canadian Community, released earlier this month and available on-line at www.imperialoil.ca. Other milestones include: a 10% reduction in refinery emissions; an investment of $380 million to improve overall environmental performance; and the construction of two cogeneration facilities.

Imperial's 2003 emissions of all air pollutants were 13% lower than in 2002, although they were higher than those of 2001. The increase over 2001 is attributed to expanded reporting requirements for Environment Canada's National Pollutant Release Inventory (NPRI), which since 2002 have included releases to the air of sulfur dioxide (SO2) and nitrogen oxides (NOX); these substances are typically of higher volume than previously listed NPRI substances. However, the report notes that releases of NPRI core substances (i.e. those that have been reported on since the inventory began in 1993) decreased by 10% over 2002.

In 2003 as well, the company recorded reductions of 50% in carbon monoxide emissions, 11% in emissions of volatile organic compounds (which have been cut to half of 1999 levels), and 1% in SO2 (marking the second consecutive year of reduced emissions from refining operations). NOX emissions declined as well in 2003, reversing a two-year trend.

Greenhouse gas (GHG) emissions from Imperial's facilities remained about the same in 2003 as in 2002, and were 20% below 1990 levels. However, excluding emissions from divested operations would put the 2003 GHG levels at 5% above those of 1990.

Noting that improving energy efficiency reduces both GHG emissions and costs, the company reports that it achieved a further 1% improvement last year in energy efficiency at its refineries and chemical plant. Over the past 30 years, it adds, refinery energy efficiency has improved by more than 40%.

Imperial is a participant in Canada's Climate Change Voluntary Challenge and Response (VCR) program and in 2003 again received a gold rating for its report.

Also noted in the report are 3R achievements (reduction, re-use, recycling). For example, Imperial is now recovering virtually all natural gas associated with oil production, which would otherwise be flared or vented into the air. As well, sulfur recovered during the refining process is sold for use in products such as fertilizer. In 2003, all the company's office printers were set to default to double-sided printing, resulting in a reduction of nearly 50% in paper use. Other initiatives include used battery collection at the Cold Lake operation (these are sent for recycling), and participation by the Nanticoke refinery in a local pop can recycling program.

A Partner in the Canadian Community also reports on Imperial's health and safety performance, community contributions, corporate governance and ethical priorities and standards, along with its commitments to continuing dialogue with communities and other partners. More information is available from Richard O'Farrell of Imperial's public affairs department, 416/968-4875.

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