SUSTAINABLE DEVELOPMENT, REFINERIES AND CHEMICAL
PLANTS
By Jim Blackburn and Abi Johnson
Prepared for Texas Environmental Superconference, August 2-3, 2007
Table of Contents
I.
Introduction
II.
Worldwide Support and Call to Action
III.
USA- Slow to Act
IV.
Practical Concepts of Sustainable Development
1. Meeting Basic Needs
2. Community Empowerment
3. Eco-efficiency
4. Ecology and Place
V.
Endpoints
2
Sustainability is the [emerging] doctrine that economic growth and development must
take place, and be maintained overtime, within the limits set by ecology in the broadest
sense—by the interrelations of human beings and their works, the biosphere and the
physical and chemical laws that govern it… It follows that environmental protection and
economic development are complementary rather than antagonistic processes. 1
- William Ruckelshaus, Scientific American, September 1989
I. Introduction
Sustainable development is a concept that was unveiled in the World Commission
on Environment and Development’s 1987 report titled Our Common Future.2 In this
groundbreaking publication, the global problems of poverty, biological diversity loss,
stratospheric ozone depletion, population growth and even climate change were identified
along with an innovative approach to address these problems called sustainable
development.
Sustainable development was defined as “development that meets the needs of the
present without compromising the ability of future generations to meet their own needs”. 3
The premise is simple – we should not deplete the Earth in a manner that prevents future
generations from achieving a similar standard of living, adding inter-generational equity
to past considerations of development. Sustainable development can be seen as a way to
maintain our ecological and social integrity while generating economic capital through
human action.
Robert Solow, the Nobel Prize winning economist, has described sustainability as
an obligation to conduct ourselves so that we leave future generations the option or the
capacity to be as well off as we are today, which implies that sustainable development is
capitalism with ethics.4 The Business Council for Sustainable Development has
analogized sustainable development with living off of a trust fund.5 The concept is to live
only off the income gained and preserve the principle of the trust. These concepts do not
prohibit resource utilization, but they do require consideration of the long-term
implications of certain resource consumption patterns.
Herman Daly, an economist, discusses sustainability in terms of the flow of
materials and energy through the economy in his book Beyond Growth. Dr. Daly speaks
of “empty world” thinking verses “full world” thinking, with sustainable development
being a prime example of “full world” thinking.6 Dr. Daly claims that we humans
developed our thoughts regarding society, law, economics and even science during a time
when relatively few humans were on the Earth. As a result, “empty world” thoughts
currently dominate our thinking as the Earth becomes full of humans and human impacts.
As Albert Einstein once said,
William Ruckelshaus, “Toward a Sustainable World,” Scientific American, September 1989, p. 114.
World Commission on Environment and Development. Our Common Future. 1987. Available at
http://www.un-documents.net/wced-ocf.htm
3
Ibid.
4
Robert Solow, “An Almost Practical Step Toward Sustainability.” Elsevier, (19):3, 162-172.
5
Stephan Schmidheiny, World Business Council on Sustainable Development, Changing Course: a global
business perspective on development and the environment, (MIT Press: 1992)
6
Herman Daly, Beyond Growth, (Beacon Press: 1992).
1
2
3
“the world we have created today as a result of our thinking thus far has problems
that cannot be solved by thinking the same way as we were thinking when we
created them.”7
This quote describes the role of sustainable development – to create an alternative
framework of thought from the one we used when we created many of our problems, in
order to solve them.
II. World-wide Acknowledgement and Call to Action
The push for sustainable development has become apparent throughout the global
arena. In 1992 at the United Nations Conference on Environmental and Development
held in Rio de Janeiro, every major country in the world signed a document called the Rio
Declaration on Environment and Development. The declaration, consisting of 27 major
sustainable development principles, was augmented by an international guidebook,
Agenda 21.8 Since the conference, countries around the world have adopted the concept
of sustainability by utilizing this guide to direct their development.
In 2002, ten years after the Rio Earth Summit, a follow-up conference called the
World Summit on Sustainable Development was held in Johannesburg, South Africa. At
the conference, Tony Blair, the Prime Minister of the UK, stated:
“We know the problems. A child in Africa dies every three seconds from
famine, disease or conflict. We know that if climate change is not stopped,
all parts of the world will suffer. Some will even be destroyed, and we
know the solution—sustainable development.”
The conference reaffirmed the global commitment to sustainable development as
a means of solving not only environmental problems, but also economic and
social development issues. The goals set at the summit were more specific than
those originally laid out in 1992 and included several partnerships and pledges to
further advance sustainable development in third world countries.9
In 2005, the UK released a new sustainable development strategy (in addition to
the one released in 1999) that integrates sustainable practices into every government
department by requiring individual development plans for each sector. In addition, the
government has committed to buying and operating cleaner cars, offsetting the carbon
emissions for unavoidable air travel, and hiring a third party government watchdog to
complete reviews of sustainable development progress.10 On a countrywide scale, the
government has four major priorities—sustainable consumption and production, climate
change, natural resource production, and sustainable communities. The plan of action
includes establishing community awareness and engagement programs, evaluating
environmental taxes to determine their effectiveness, participating in the EU carbon
emission-trading scheme, committing to GHG emissions reduction of 20% below 1990
7
Albert Einstein quoted in Stephan Schmidheiny, World Business Council on Sustainable Development,
Changing Course: a global business perspective on development and the environment, (MIT Press: 1992).
8
United Nations, “The Rio Declaration on Environment and Development, ” 1992. Available at
http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=78&ArticleID=1163
9
UN, “Key Outcomes from the World Summit on Sustainable Development,” September 2002,
Johannesburg, South Africa. http://www.un.org/jsummit/html/documents/summit_docs.html
10
UK Government. “Securing Our Future: the UK government sustainable development strategy.” March
2005. Available at http://www.sustainable-development.gov.uk/
4
levels by 2010, working with businesses to improve resource efficiency, reduce waste
production and minimize emissions, and several other progressive initiatives.11
The UK is not the only country that has gone above and beyond what global
treaties have requested to ensure sustainable development is firmly and rapidly
established in their country. Several European countries and others throughout the world
have taken the lead on sustainable development by integrating the concept into laws,
education, and society. 12
III. USA- Slow to Act
To date, the United States has been slow to implement sustainable development
practices. While various documents and forms of guidance exist in many US government
agencies, there is no overriding law requiring either the federal government or
corporations to apply sustainable principles to their operations. In fact, there is virtually
no leadership at all from the federal government in regards to sustainable development.
Although the US government has failed to take any actions that bind businesses to
operate in a sustainable manner, they have supported voluntary actions and openly stated
that it is necessary for businesses, specifically the oil and gas industries, to incorporate
sustainability into their future development. The EPA has a Natural Gas STAR program
that assists industries in voluntarily reducing their greenhouse gas emissions, and a 2004
Department of Energy Report stated:
“Sustainable development of our resources will depend on sustaining
innovation. Tomorrow’s pioneers in the natural gas and oil industry will
rely on such diverse disciplines as geology, environmental science,
engineering, and information technology. The continued advancement of
technology in the oil and gas industry—and the inevitable environmental
improvements that will result from these advances—will be constrained
only by the level of commitment, imagination, and resourcefulness of
those focused on its pursuit.”13
The government has acknowledged the need, but is leaving the decision to pursue
sustainable development up to businesses. Many businesses and industries are not
opposed to the idea and think it is appealing but want regulations to ensure that their
competitors will have to take the same measures as they do so that their business can
remain competitive in the market.14
“The truth is only Government can create and police the framework within
which progress can be made. I am not a historian but I think it is true to
say that at moments of a fundamental shift of values, the leadership role
which has enabled society to keep making progress has been the
responsibility of Government.”15
11
Ibid.
UN Division for Sustainable Development. “National Information.” June 2007. Available at
http://www.un.org/esa/sustdev/natlinfo/natlinfo.htm+
13
United States Department of Energy, “Sustainable Development of North America’s Oil and Natural
Gas: Ensuring Plentiful Energy and a Clean Environment,” April 2004.
14
US Climate Change Partnership. “A Call for Action.” Available at http://www.us-cap.org/
15
Lord Browne, BP Chief Executive, “Energy and the Environment, 10 Years On,” speech given at
Stanford University, April 26, 2007.
12
5
Despite the lack of active government support and regulation, many corporations
within the United States have proceeded to adopt policies directed at sustainable
development for various reasons. Some international corporations have operations in
countries requiring sustainable development assessments and policies. Others work with
major lenders, such as the World Bank, which have requirements associated with
sustainability for their major development projects.16 However, some are simply
interested in the promises offered by sustainable development, which in some cases
include lower energy costs, waste reduction, public image enhancement, and new,
profitable product markets.
One thing about sustainable development is clear. Done correctly, it requires the
integration of ecological, economic, and social considerations. It is a distinct way of
thinking about development, driven by an innovative balance of costs and benefits for all
parties included. It requires new methodologies and alternative ways of thinking about
old problems. Many companies believe that the key to success in the 21st Century will be
found through the integration of sustainable development concepts into business
operations, particularly those companies who have interests in international development
where implementation of the concept is well underway.
The idea of sustainable development is robust. It is applicable at the national
level, the state level, the corporate level, the city level and even the household level.
While the issues and scale will be different, most of the general principles remain the
same. That is what makes this concept exciting – it has several faces and meanings for
different people, corporations and countries.
A quick review of corporate policies will demonstrate the widespread appeal of
sustainable development. However, there are relatively few examples of the chemical
industry and refineries applying sustainable development concepts to their operations. In
this paper, two case study situations that offer insight into particular issues regarding
corporate sustainable development will be discussed.
IV. Practical Concepts of Sustainable Development
For purposes of this paper, an attempt has been made to extract some practical
applications of sustainable development from a petrochemical plant and refinery along
the Texas Coast. It is important to note that this paper addresses existing industries and
accepts this status quo, meaning that these industries are operating today and will
continue to do so. This paper does not address the long-term sustainability of the use of
gasoline or plastics in society. In that sense, this paper is practical. It takes existing
situations and works with them, rather than detailing an ideal, theoretical approach that
has no chance of being implemented on the Texas coast. For this reason, approaches to
sustainable development such as the Natural Step were not wholly utilized, although they
were consulted and considered.17
World Bank. “Operational Manual: Safeguard Policies.” July 2005. Available at
http://wbln0018.worldbank.org/institutional/manuals/opmanual.nsf/284229c803270fad8525705a00112597/
4f259df5b66ff0ee8525705c0022f931?OpenDocument
17
The Natural Step Network, “The Natural Step International Gateway,” 2003. Available at
http://www.naturalstep.org/com/nyStart/
16
6
One case study involves Formosa Plastics, a $2.5 billion integrated plastics plant
located in Point Comfort, Texas, whose air, construction, and wastewater permits were
challenged by a shrimper, Diane Wilson, and one of the authors of this paper, Jim
Blackburn, in the early 1990’s. To address this dispute, three contracts were signed,
including the Blackburn-Formosa audit/performance agreement, the Wilson-Formosa
Zero-Discharge Wastewater Agreement and the Sustainable Development Agreement.18
The second case study arose from community challenges to Motiva’s proposal in 2005 to
rebuild and expand its Port Arthur refinery in order to double its capacity to 650,000
barrels per day.19 In this case, Hilton Kelly and the community group, Community Inpower and Development Association, Inc.(CIDA, Inc.), of West Port Arthur, reached an
agreement called “The Community Enhancement Agreement” with Motiva concerning
social conditions in West Port Arthur. In the recitations of that agreement, it is stated that
CIDA, Inc. and Hilton Kelly believe this agreement to be an “excellent example of the
social side of sustainable development.”20
Together, these agreements focus on four specific aspects of sustainable
development: (1) meeting basic needs; (2) community empowerment; (3) eco-efficiency;
and (4) ecology. It should be noted that there is substantial overlap between these issues
and the boundaries between the inquiries are not exact.
1. Meeting Basic Needs
A focal point of Our Common Future was addressing poverty by finding a source
of income for populations in destitute regions of the world, which is somewhat different
than examining poverty in the context of United States’ communities in the vicinity of a
refinery or chemical plant.21 However, the poverty in West Port Arthur is quite serious,
and the quality of life and housing is inadequate to say the least. According to an EPA
Brownfield site investigation in the community of West Port Arthur, “40 percent of the
West Side’s minority residents live below the poverty level and almost 50 percent are
unemployed.”22 The community is in disrepair; virtually all retail has left the area to
move to the Mid-County area leaving most of the buildings in nearby downtown Port
Arthur abandoned and boarded up. While there may be an economic boom on the Texas
coast, West Port Arthur has been left far behind.
In the context of sustainability, the economic engine--the corporation or the
facility—must be maintained, meaning it must be profitable. Corporations and their
facilities require revenues to remain open, provide employment opportunities, and
maintain production. This necessity is often overlooked or dismissed by protesters even
though it is a key component of sustainable development. Without profit, the company
will not exist—jobs, capital, and investments will all be lost. It is that simple.
Formosa
Plastics
Corporation,
“Historical
Highlights,”
2004.
Available
at
http://www.fpc.com.tw/enfpc/suba1-2.htm
19
CIDA, Inc., “Environmental Issues.” 2005. Available at http://www.cida-inc.org/pressrelease.htm
20
CIDA,Inc., “Precedent Setting Settlement: Refinery and Community Group Reach Agreement on Future
of West Port Arthur.” November 8, 2006.
21
World Commission on Environment and Development.Our Common Future. 1987. Available at
http://www.un-documents.net/wced-ocf.htm
22
US EPA, “EPA Brownfield Assessment Pilot Factsheet: Port Arthur, TX.” May 2000. Available at
http://www.epa.gov/swerosps/bf/html-doc/aportart.htm
18
7
A more difficult inquiry is the relationship between the refinery or chemical plant
and the host community. Communities have basic needs that may or may not be
addressed by a proposed major investment in a plant. It is reasonable to ask, “Who or
what community is at risk and will benefit or suffer from the facility expansion? Will
local residents be employed? Will the plant or corporation support local institutions? Will
the community be forced to suffer from exposure to high levels of pollutants from the
plant that may compromise their health? Will the community be better off with an
expansion?”
Meeting the community’s needs became a major focal point in the Motiva
Agreement. West Port Arthur is enveloped by two large chemical plants and two large
refineries, including the existing Motiva facility. When discussions began on the
proposed expansion of Motiva, the community expressed opposition, which was mainly
based on air pollution concerns. It soon became clear that certain key pollutants had been,
or would be, adequately controlled by Motiva to satisfy the community needs and this
cooperation provided an opportunity to settle the remaining issues in an innovative
manner.23
One concern of community members was whether or not Motiva would be
willing to hire local residents to either work in the plant or on the construction project.
Motiva was very receptive to the request for local employment but explained that they
had encountered problems finding trained workers from the community that met
Homeland Security requirements for working within a refinery. Motiva had been and
continues to support job training at a local community college and expressed a
willingness to work with off-site contractors in cooperation with CIDA, Inc. Although
not explicitly included in the agreement, this issue was included within the scope of the
community fund discussed below. 24
The bulk of the Community Enhancement Agreement was dedicated to the
redevelopment of West Port Arthur. Motiva and CIDA, Inc. agreed to establish a fund “to
foster the economic and social revitalization of the communities of Port Arthur in the
vicinity of the refinery.”25 The specific purposes of the fund were to:
1. Improve the quality of housing in the adjacent communities;
2. Foster new commercial development in the adjacent communities;
3. Facilitate the establishment of community programs that provide recreational,
social or economic opportunities for residents of adjacent communities; and
4. Support the establishment of projects impacting the adjacent communities’
quality as supplemental environmental projects by the TCEQ.
To implement these goals, Motiva donated an initial $2 million to the fund with
provisions for the amount to be increased to $5 million over time, if not more. This fund
provides seed money to develop innovative projects for the revitalization of West Port
Arthur and is jointly administered by Motiva and CIDA, Inc. through a seven-member
panel, which will be discussed further in the community empowerment section of this
paper.
In addition to West Port Arthur revitalization, this Community Enhancement
Agreement devoted significant attention to concepts intended to ensure greater
CIDA-Motiva. “Community Enhancement Agreement,” November 6, 2006.
Ibid.
25
Ibid.
23
24
8
compatibility between the plant and the community. This agreement would have never
been accepted by community members without the sophisticated air pollution controls
proposed by Motiva. However, concerns remained about certain sulfur compounds and
particulate matter. To address this concern, a new stationary monitoring station will be
constructed adjacent to the community to monitor carbon monoxide, sulfur dioxide,
hydrogen sulfide, carbon disulfide, PM2.5 and total suspended particulate matter.
Significant improvements were also agreed to with regard to the community warning
system and Motiva agreed to accelerate implementation of a fugitive control program
within the plant.26
The Motiva Agreement represented one approach to community relations with a
plant. Motiva refused to buy out local homes, insisting that housing development and
refinery operations could and would coexist. Many members of the West Port Arthur
community wanted a buy-out, but they eventually settled for a redevelopment agreement,
partially due to the extensive air-pollution controls promised and Motiva’s good
operating record.
A different approach was taken at Formosa Plastics. 27 Formosa initially did not
want to make a buy-out of surrounding homes part of their agreement, but as a result of
pressure from the community members, they reassessed their position and agreed to buy
out anyone’s home in the area who wanted to leave. Many other refineries and chemical
plants have done the same for homeowners near their factories in areas including Corpus
Christi, Texas City, and Baytown. Over 162 of approximately 380 houses in Point
Comfort have been sold to Formosa at fair market value over a fifteen-year time period.
Renters currently occupy approximately 60 of these 162 houses. The initial group of
residents bought out by Formosa was concerned about plant performance and health
issues, whereas many of the later purchases have been to assist those who simply needed
to move elsewhere. This process was definitely beneficial to the individuals who wanted
to leave; yet, a small city that has lost cohesiveness was left behind.28
Both the community enhancement approach and the buy-out approach have merit.
If the local community has faith in the pollution controls and the company’s ability to
operate the facility, then community redevelopment can be advantageous. In terms of
meeting basic needs, the question is whether a facility can bring together a community
with jobs, long-term security, and possibly even redevelopment, or whether it will
threaten the community’s health and long-term welfare while offering no new local
employment opportunities. In large cities, green space buffers near facilities make
excellent sense and the loss of community cohesion can be integrated into a larger
community base, which makes buy-outs in urban areas a mutually beneficial option for
the community and business. In smaller cities, the choices are more difficult, because the
loss of population to buy-outs can be substantial enough to have a major impact on the
cities’ economy and growth.
Community and worker safety is clearly a major component of meeting basic
needs. A company has to be able to operate its plant without accidental explosions or
accidental releases. If the community is to live with a facility, they must be safe and feel
safe. When the Formosa Agreements were signed, many members of the community did
CIDA-Motiva. “Community Enhancement Agreement.”
Formosa Sustainable Development Agreement
28
Ibid.
26
27
9
not feel safe. This issue of community health and plant performance was addressed in the
first Formosa agreement that brought in specialists to assess worker safety, examine
emergency releases, and propose changes to the facility’s operations. Under the
agreement, Formosa was bound to accept these recommendations if two of three
members of a Technical Review Commission voted in favor of them. Over 800
recommendations for change in practices within the Formosa facility were adopted on
subjects as diverse as worker safety, compliance with air, solid waste, wastewater and
product safety management regulations, mechanical integrity of new construction, fire
prevention and emergency releases. Today, the performance of the plant reflects these
changes. Although one major accident occurred in 2006, the overall trend has been
toward a much safer facility. The injuries of the work force went from 6.52 per 200,000
work hours in 1993 to 0.67 in 2006 [See Figure 1].29 Today, Formosa’s plant is safer and
generates much less negative impacts due to these agreements.
To further meet the basic needs of the community, both Formosa and Motiva
implemented monitoring systems. Formosa now has a Fourier Transform Infrared
Spectroscopy monitoring system to provide data about chemical constituents in the air
crossing the boundaries.30 Motiva agreed to provide CIDA with CERES HOUNDS
handheld monitoring devices to allow citizens to monitor their own air quality. Motiva
also agreed to improve the transmission system for warnings regarding releases, making
these warnings available in English, Spanish, and Vietnamese, as well as providing radios
and other equipment to transmit warnings in community areas such as schools and
churches.31
The bottom line regarding meeting basic needs is that some needs are being met
better than others. Some members of the community have not benefited from plant
construction and expansion in the past, while others in the community have. It is the
equitable provision for the community that is most often lacking. It is important for the
entire community, and particularly the community most at risk from the facility, to have
their needs considered and met as part of a company’s sustainable development
framework. In order for their needs to be heard and considered it took two things in the
previous examples, action and empowerment, both of which are addressed later in this
paper.
2. Community Empowerment
In order for there to be a healthy relationship between a community and
corporation or facility, the community must feel like they are being recognized and their
interests and well-being matter to the businesses and plants that they must live amongst.
According to the World Bank’s Community Empowerment and Social Inclusion
program, community empowerment is comprised of four major elements: (1) access to
information, (2) inclusion/participation, (3) accountability, and (4) local organizational
Formosa, “Reportable Annual Workforce Injuries, 1993-2007.”
Formosa “Sustainable Development Agreement”
31
Motiva-CIDA Agreement
29
30
10
capacity.32 First, it is necessary that the community be informed of any actions that
corporations or facilities plan to take and they must be able to understand what the
implications of these changes will be. Second, they must not only be aware of the
company’s or facility’s actions, but they must be included in the planning/development
process and have a participatory role in the decision-making process when it comes to
issues that will affect their community, such as an expansion. Third, businesses and
plants must also be held accountable for their actions by taking responsibility for any
mistakes they have made. Finally, a key to community empowerment is local
organization capacity, which means that the people of the community must be able to
unite into a group, organize their interests, and mobilize movements that protect their
interests. 33
As a general proposition, communities and community activists in the United
States have been empowered by environmental and governmental transparency and
disclosure laws. Citizen participation is a key element of various environmental laws and
acts such as the federal Freedom of Information Act and Texas Open Government Act
ensure that information will be publicly available. Citizens, therefore, have access to
documents filed with both state and federal agencies as well as internal government
documents.
As part of the permitting process, citizens have the right to access permit
applications, request public meetings, and ask for contested case hearings as a means of
challenging whether permits meet legal requirements or not. However, this procedural
pathway is a limited one, extending only to permit issuance as opposed to the operation
of the facility, unless extended by the innovative use of settlement concepts.
The larger issue concerns the relationship of the facility to the community over
time. Once the construction permit is issued, the community has a very limited
opportunity to formally affect a facility’s performance. To address this void, most plants
have chosen to participate in Community Advisory Panels (CAPs), which provide a
chance for the public to meet with plant officials, obtain briefings, ask questions and get
information. However, many citizen activists have become disenchanted with this process
because many companies control the informational flow and balance of power, which
leads to an inequity in the decision-making process. At their worst, CAPs are little more
than a company’s public relations (PR) tool.
True community empowerment grants substantial rights to locals verses the PR
ploys used to enhance a facility’s public image that minimally weigh the opinions of
community members in operations and decision-making processes. The Formosa and
Motiva agreements empower the public/community in several ways
In the Motiva conflict, Hilton Kelley and CIDA Inc. of West Port Arthur
protested against the facility’s plan to double its size in their community where
unemployment was recorded as high as half the population, the air quality had already
reached non-attainment levels, and Motiva was employing less than one percent of the
The World Bank, “Community Empowerment and Social Inclusion,” 2007. Available at
http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/CESILPROGRAM/0,,menuPK:
459702~pagePK:64156143~piPK:64154155~theSitePK:459661,00.html
33
Deepa Narayan, Senior Advisor, PREM, “Empowerment and Poverty Reduction: A Sourcebook for
World Bank Staff,” April 2002.
32
11
population.34 According to the University of Texas Medical Branch, one in two men and
one in three women in West Port Arthur will die from cancer and the public generally
blames the emissions from surrounding chemical plants and refineries for the high cancer
mortality rates.35 When Mr. Kelly and CIDA, Inc. learned of the Motiva expansion, they
assumed it could only hurt them. However, they were willing to sit down and work
through the pollution issues, leading to the basis for the Community Enhancement
Agreement.
As discussed earlier, the agreement included Motiva establishing a West Port
Arthur redevelopment fund and the formation of a community-based steering committee
to make grants and awards from this fund to aid and assist the redevelopment of West
Port Arthur. The initial funding of $2 million is seen as seed money to entice foundations
and other sources to join in to help West Port Arthur rediscover and redefine itself. More
money will be forthcoming if the initial efforts are successful.
The Motiva agreement provides the community with funding and a major role in
the selection and establishment of a committee to make grants and oversee projects. The
power sharing between CIDA, Inc., an activist organization that had been critical of
Motiva, and this Port Arthur refinery reflects a major concession in the relative political
power structure. CIDA Inc. and Motiva each get to select two of the seven members for
the committee to oversee the fund, and they each get approval authority over the
remaining members that are nominated from the community. Here, empowerment is both
real and perceived among the members of the community, which is very important.
The Formosa Agreement provided public interest involvement of quite a different
type. In this case, the issue was whether or not Formosa was willing and able to clean up
their operations. The initial Blackburn-Formosa Agreement was a binding agreement
with subject matter control over virtually all environmental and safety issues at the
facility. Matters under this agreement were to be determined by a three-member
committee called the Technical Review Commission (TRC) comprised of Ken Mounger,
the plant manager, Dr. Davis Ford, the third party and Jim Blackburn. Here, two of three
parties were outside parties. Under this agreement, the TRC had authority to hire auditors
to determine if Formosa was complying with federal and state environmental regulations
and/or using best management practices. The TRC would receive these audits and give
them to Formosa who could either accept or reject the recommendations. If the
recommendations were rejected, then the TRC could vote to force Formosa to implement
them. Interestingly, a vote has ever been required for the over 800 recommendations that
Formosa has received.
The Wilson-Formosa Zero Discharge Agreement was a mediation agreement
involving a shrimper/critic named Diane Wilson, the TRC, a Formosa representative, the
TNRCC and the EPA. Under this agreement, Formosa agreed to study zero discharge
and to implement steps toward zero discharge if such actions were economically
beneficial and environmentally superior to the status quo.
The third agreement – the Sustainable Development Agreement – led to Diane
Wilson and Jim Blackburn assisting the company in developing a sustainable
KPFT News, “Port Arthur Suffers Health Problems.” November 29, 2002. Available at
http://www.kpft.org/news/080802story4.html
35
Houston Independent Media Center. “No VX in Port Arthur Texas,” 2003. Available at
http://houston.indymedia.org/archives/archive_by_id.php?id=883&category_id=1
34
12
development policy for the plant. The document resulted in a proposed sustainability
position for the Point Comfort facility that was never published and circulated but not
adopted. The results of the agreements are presented in the next section.
The Formosa Agreements brought in outside parties to participate in decisionmaking at the Formosa facility. It was an amazing empowerment of a few members of
the community/public to come in and help bring about change at Formosa. The Motiva
empowerment was more limited, yet it represents a true empowerment of the local
community.
3. Ecoefficiency
The World Business Council on Sustainable Development defines ecoefficiency
as “creating more value with less impact.” The council decided on seven main targets to
achieve ecoefficiency—save natural resources, save energy, emit less harmful substances,
look for more recycling, use renewable resources, look for long-lasting products, and
look for useful, efficient products.36 These targets require a full life-cycle analysis of
facility operations from natural resource consumption to waste generation. This analysis
requires analyzing and understanding what Herman Daly refers to as the “flow of
materials and energy through society.” 37
Environmental compliance is the key starting point for ecoefficiency. In the
Formosa agreements, a unique, participatory audit process was used to ensure compliance
with government regulations, which had been a problem for the plant in the late 1980s
and early 1990s. Under the original Blackburn-Formosa agreement, the TRC was granted
the authority to hire consultants for the review of regulatory requirements and industry
best practices, and as a result, environmental compliance has not been a major issue at the
facility since the TRC began its compliance operations. The environmental compliance
record reflects this improvement even with the facility essentially quadrupling in size
from the early 1990s into the 21st Century.
The next level of inquiry into ecoefficiency is pollution prevention and resource
use reduction. Here the Formosa agreements were quite effective. As a result of the best
practices audit, the release of reportable quantities of certain hazardous substances was
significantly reduced even though the facility’s output was substantially increased. From
1993 to 2006, the reportable quantities (RC) of pollutant releases were reduced from 16
per year to 9 per year while the plant has more than quadrupled in size [See Figure 2].38
In addition, over the same time period the number of TNRCC violations and permit
violations have significantly decreased. Arguably it was in both the economic best
interest of the company and of the community for these RQ releases, violations, and
exceedances to be lowered.
A more difficult commitment to sustainable development requires reducing
emissions below that which the state and federal governments allow by permit or
regulation. The Wilson-Formosa Zero-Discharge Agreement was quite successful in its
evaluation of water usage and wastewater generation for the facility. Each waste stream
World Business Council for Sustainable Development, “Eco-efficiency,” August 2000. Available at
http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf
37
Herman Daly, Beyond Growth, (Beacon Press: 1992).
38
Formosa, “Reportable Quantity Releases, 1993-2007.”
36
13
generated within the plant that contributed to the total discharge of 7.9 million gallons per
day (MGD) was assessed. As a result, a number of streams that could be recycled were
discovered. The evaluation criteria developed under the discharge agreement required
that pollution reduction make sense from both an economic and an environmental
standpoint. This methodology led to the discovery of 2.5 MGD of wastewater that could
be recycled economically, resulting in a drastic reduction of water usage and wastewater
production within the plant.
Under this agreement, pathways were found that would lead to zero wastewater
discharge into Lavaca Bay. However, one waste stream that was 26% brine proved to be
a major impediment to the concept. This stream originated from a nearby salt dome and
was piped to the plant as a raw material input. In the plant’s wastewater scheme, this
stream was diluted with other wastewater streams for dilution prior to discharge into
Lavaca Bay. If the company or EPA had been thinking holistically at the time of
permitting, it would have been relatively simple to return this spent brine to the salt
dome. Some ten years after the initial zero-discharge work, Formosa applied for and
received a deep well injection permit to discharge this brine back into the subsurface
saltwater formations beneath the plant. Once this is constructed, the facility will be
poised to undertake further recycling options and to implement reverse osmosis for full
wastewater recycling.
The brine disposal issue demonstrates how pollution reduction extends beyond the
boundaries of the plant. In order to fully understand the impacts of a facility, a life cycle
analysis must be completed that identifies the resources and residuals contributing to
production at the facility and, if possible, traces the products to their final resting place.
Such an analysis was conducted at the Formosa facility as required by the Sustainable
Development Agreement. The ultimate goal of the study was to provide information
about the production of pollution and use of resources over the life cycle of the product in
order to better understand the total resource and pollution burden and provide metrics for
making reductions in both.
The conceptual diagram for Formosa shown in Figure 3 illustrates certain obvious
components of the life cycle that are easy to identify, such as energy use, water, and
pollution, which includes the generation of plastic waste. This diagram clearly identifies
plastics recycling as a major component of a closed-loop life cycle, a cradle-to-cradle
process verses a cradle-to-grave process resulting in waste generation. The cradle-tocradle approach to plastics, as well as other products, has not been addressed by industry
or society. In this specific case, plastic products are ending up on the street rather than
being recycled and reused, which adds to the overall pollution burden from the plant
producing the plastic. It should be noted that the full life cycle analysis for Formosa
included understanding the resource and pollution attributes of the production of naptha,
raw condensate, natural gas, brine, and water.39
In the Formosa life cycle analysis, an attempt was made to quantify energy and
water inputs and identify pollution generated on a per unit of production basis. In this
manner, various products can be compared on the basis of the amount of resources
required and pollution produced per pound of product. A flow chart from the study of
environmental metrics at Formosa Plastics is shown in Figure 4.40 Here, the general flow
39
40
Jim Blackburn and Susan Locke, “Formosa Environmental Metrics Report,” January 2000.
Ibid.
14
of materials and energy through the chemical complex in shown. It is essential that a
methodology exist in order to “allocate” electricity, water, emitted pollution, etc. on a
product-by-product basis if decisions are to be made based upon “product footprint,” a
key aspect of material product substitution inquiries under ecoefficiency.
Dematerialization is another component of ecoefficiency. Recent online, digital
download stores, such as iTunes, are perfect examples of dematerialization, because they
sell media and information directly over the internet as opposed to selling recordings at
stores where they must be shipped, bound by hard plastic, and further wrapped in thinfilm plastic packaging. Dematerialization is a difficult task for an individual plant to
tackle, and it generally must be addressed as a headquarters sustainability issue, a supply
chain sustainability issue and a society sustainability issue rather than at the plant level. It
may not be in the interest of companies to dematerialize if it could hurt them
economically. For example, Formosa Plastics sells plastic products and, therefore,
probably would not encourage and help implement ways to decrease society’s plastic
product use.
Durability of products and machines is another component of ecoefficiency. If
you have to replace a product or machine every five years instead of ten, then there is
twice the amount of waste over ten years and twice the amount of cost than would have
been incurred if the product or machine bought had a ten-year verses five-year lifespan.
General Electric (GE) has a relatively new line of eco-efficient products called the
“Ecomagination” line. They make light bulbs that use less energy and last longer,
airplane engines that are 15% more fuel efficient and release 94% less emissions than
those required by 2008 laws, and paint replacement film that can make cars more lightweight and reduce the amount of VOCs released from paint into the environment.41 GE’s
Ecomagination products are not only lowering energy costs and consumption, but they
are also saving customers money over the long-run while simultaneously GE’s sales and
profits are skyrocketing. According to one of GE’s statistics,
“If every household in the U.S. replaced just one 100-watt incandescent
light bulb with a GE compact fluorescent light bulb, over the bulbs'
lifetime, we would save enough energy to power more than one million
U.S. homes for an entire year.”42
This ecoefficient product line is helping consumers, the environment, and the company,
bringing together and mutually benefiting all three legs of the sustainability stool.
Ecoefficient practices will cause the matriculation of environmental issues from
“end of the pipe” to “strategic.” Practices that address environmental problems, such as
dematerialization and efficiency maximization, are beneficial for businesses and
facilities, socially and financially, as demonstrated in the previous examples. Therefore,
businesses and facilities should look to ecoefficiency as an opportunity, not a hindrance,
to their successful operation. Ultimately, this issue may determine the fate of many
companies, not to mention industries.43
General
Electric,
“Ecomagination:
Imagination
at
Work,”
2007.
Available
at
http://ge.ecomagination.com/site/index.html#pair
42
Ibid.
43
William McDonough and Michael Braungart, Cradle to Cradle: Remaking the Way We Make Things
(North Point Press: New York, 2002).
41
15
4. Ecology and Place
In many respects, ecology is one of the more difficult issues to effectively
integrate into a facility or plant structure. For the most part, refineries and petrochemical
plants are already constructed and operating with modifications continuously being made
to the existing, developed sites, and with relatively few new, greenfield facilities being
constructed. As a result, the natural system where these facilities are located has been
converted to industrial uses for decades.
Another aspect of the relationship between ecology and the corporation is
mitigation. Mitigation is usually required when natural resources are negatively impacted
by plant construction or expansion, such as when wetlands are filled. Mitigation is
required by federal and state law, but does not represent anything other than damage
replacement. Much more is required if a facility is to mitigate for all impacts, such as
climate change. To date, climate change impact mitigation has been limited in scale but it
will most likely expand rapidly in the future.
Environmental carrying capacity is the major regulatory focus of wastewater
permitting and, to some extent, air permitting. For example, the TCEQ required Formosa
to complete computer modeling of Lavaca Bay’s ability to assimilate to the proposed
waste discharge. In order for the permit to be issued, it had to be proven that the
wastewater released into Lavaca Bay would not compromise the bay’s ability to support
fish populations. Additionally, monitoring of effluent quality and bay-receiving water
quality was required. According to reports to date, bay productivity has not been
impeded. Similarly, computer modeling of air pollution levels has been undertaken to
demonstrate compliance with health-based air quality criteria that also serves to protect
natural features of the landscape.
The problem with carrying capacity analyses is that they imply we understand
ecological relationships and the impact of pollutants on ecological pathways. Many
citizen protesters have concerns about toxicity thresholds and the impact of chemicals for
which modeling has not been undertaken. These people have pushed for zero discharge.
Another issue with carrying capacity analyses is citizen’s lack of trust in the professionals
completing these analyses.
A different type of carrying capacity analysis is necessary for surface or
groundwater impacts, which industries in Texas are generally not required to address. As
indicated by the wastewater/brine example at Formosa, many relative ecological impacts
are not even considered because they do not fall within any regulatory program. Another
prime example is the ecological impacts of carbon dioxide emissions and climate change,
an issue where concerns for sustainable development should lead to additional
requirements beyond those mandated by state and federal law, if in fact a company truly
cares about sustainability.
The overall relationship between a facility and the ecological system in which it
operates is based on the concept of stewardship. In the Formosa sustainability work, this
was labeled as the “Aldo Leopold step” in recognition of Leopold’s groundbreaking
concept of “the land ethic,” which was, in fact, ecological stewardship.44 The
understanding and appreciation of place is key to the ecological component of
sustainability. The more a corporation embraces its place and understands and protects its
44
Aldo Leopold, A Sand County Almanac, (Ballatine Books, 1949).
16
ecological setting, the more in tune with sustainability the business and its employees will
be.45 From a stewardship perspective, the Formosa facility was viewed in the context of
its ecological setting, or “place.” For most Texas refineries and petrochemical facilities,
their setting is the Texas Gulf Coast, which is home to millions of migratory waterfowl
and neotropical songbirds, as well as wetlands that are being lost to unregulated filling
activities. As a tribute to their ecological place, Formosa had several hundred acres set
aside and converted to wetlands for waterfowl and other species as part of their
sustainability agreement.
A reasonable manner for a corporation to incorporate ecology into its concept of
sustainable development would be to foster the understanding of their relative ecological
place. Houston Wilderness is a group with collaborated environmental and business
interests dedicated to preserving and comprehending the unique ecological diversity
surrounding the Houston metropolitan area. With the assistance of Conoco Philips, Inc.,
Houston Wilderness published the Houston Atlas of Biological Diversity in 2007 and it is
currently distributed by Texas A&M Press. This guide combined with an Aldo Leopold
ethic could make a major contribution to ecosystem preservation in Texas and the United
States.
V. Endpoints
As a society, we are far from being sustainable. However, movement toward
sustainability is both possible and, in fact, occurring. Sustainability will not be
accomplished with one big step, but rather, through a series of small steps. Sustainable
development thinking – “full world thinking” – is new and different, representing change.
Change generates fear – fear of failure, and yes, even fear of looking foolish.
During change, it is sometimes helpful to envision endpoints. Here, there are two
important endpoints. The first concerns economics; economic value is not simply income
and operating costs. There is a larger view of economic value that comes from thinking
sustainably. There is dollar value from good community relations – from negotiation
rather than litigation, from compromise rather than dispute. There is dollar value in a
permit modification being issued without objection from the community. There is dollar
value from fewer accidents and fewer fines. There is value in efficient operation that
requires less consumption of natural resources that may not be available, and there is
value in finding more efficient ways to make products and deliver benefits for the
population.
Secondly, one can envision two types of partnerships as an endpoint – a
partnership between the facility and the community and a partnership between the facility
and the ecological system. Success in sustainable development terms requires that the
corporation, the community and the ecological system all survive and prosper.
This is development—the right way. This is the future.
Motiva and Formosa are trying to do the right thing, and their examples have
proven that even businesses that are thought by some to be the opposite of sustainable
can integrate important elements of sustainability into their operations. The incorporation
of such elements can significantly benefit all parties at stake—habitats, local
Shell
Corporation.
“CNOOC
Petrochemicals:
http://www.shellchemicals.com/nanhai/1,1098,1894,00.html
45
Overview.”
2006.
Available
at
17
communities, and future generations. It is obvious these specific businesses may never be
sustainable by certain definitions, and it is not being claimed that they will be the end
product of sustainable development in these industries. Rather, these case studies show us
positive steps in the right direction. With enough small steps, we can walk anywhere.
18
Figure 1: Recordable Injuries at Formosa Plastics, 1993-2007
Incident Rates per 200,000
man hours
Recordable Injuries
7
6
5
4
3
2
1
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
0
Year
Figure 2: Recordable Quantities Released at Formosa Plastics, 1993-2007
Recordable Quantity Releases per 550,000 ST
20
15
10
5
07
06
20
05
20
20
04
03
20
02
20
01
Year
20
00
20
99
20
98
19
97
19
96
19
95
19
94
19
19
93
0
19
Tons Produced
25
19
Figure 3: Formosa Conceptual Diagram
20
Figure 4: Generalized Flow Chart from Formosa’s Life Cycle Analysis