Using Your EMS: Attaining Integrated Membership in State and Federal Programs

1. Using Your EMS: Attaining Integrated Membership in State and Federal Programs StrategicPetroleum Reserve DynMcDermott Petroleum Operations Company

2. Environmental Management System Evolution Process Matures Evolution of our Process 1-99 6-99 5-00 11-00 9-02 5-03 1-05 • EPA Names SPR Charter NEPT Member • EPA Supports with EMR • Merged EMS & Clean TX Audits • SPR Commits to ISO 14001 EMS-Positive Gap Analysis • 3rd Party Certification Achieved -5 sites • SPR named Clean TX Partner • SPR 1st Clean TX Cleaner World National Leader

3. Our Approach: 5 Sites - 1 EMS • Single mission • Fill & distribution operations managed as a unit • Multiple, non-adjacent, multi-state operations • Minimize additional resources • Project lead with facility focal points • Maximize use of existing systems • Standardize - don’t re-invent • Alternative to 5 facility EMS’s

4. Federal Considerations • Involve EPA • Federal Facilities support • Performance Track membership • Integrate where practicable

5. EMR Disciplines ISO Requirements Environmental Commitment Environmental Policy Planning & Risk Management Management Review Formality of Program Planning Communications Implementation & Operation Staff & Resource Training General Organizational Structure Program Evaluation & Reporting Checking & Corrective Action Augment Your Gap Analysis:Use an EPA Environmental Management Review

6. Join P-Track • Once 13148 conformant, your almost there • Independent verified EMS • Good compliance record • Benefits we’ve seen • Action on permit renewals…after 13 years • Eliminates scheduled EPA inspections • $60,000 annual savings in reduced monitoring

7. Integrate • Actively integrate NEPA processes • ID, track & prioritize aspects • Streamlines workload • Integrate ES&H Management • EMS is Environmental Leg • Behavioral Environmental& Safety

8. State Considerations • Identify your lead agency • Is there an MOU or other EPA arrangement • Does your state have a formal program • Talk to them • The ECOS Report • Found the need for collaboration and partnerships • Federal/states/facilities

9. National Leader • Integrated with federal Performance Track program Lone Star Leader • State specific

10. Background • CTCW: voluntary leadership program • Texas EMS Program – 30 TAC Chapter 90 • State version of EPA’s Performance Track • Provides incentives • Change compliance inspection schedule (reduce oversight) • Accelerated access to TCEQ program information • Single point of contact • Receive on-site technical assistance • Recognition • Receive modifications in regulatory requirements that do not change emission or discharge limits

11. Clean Texas Cleaner World • Lone Star Leader • On-ramp for National Leader • State-based recognition & incentives • National Leader • Combines state and federal programs • State & federal recognition and incentives • EMS has broadened community element

12. Certified National Leader • EMS must have… • Environmental policy • Identified and prioritized environmental aspects • Set objectives and targets • Assigned responsibilities in Env. Management • Documented results: meeting objectives, reduced risk, reduced impact, enhanced compliance, and reduced pollution beyond requirement • Performance evaluations (audits) • Clean compliance record

13. Membership Process • Submit Declaration of Commitment • Choose “Lone Star” or “National” Leader levels • Choose method of having EMS evaluated • Complete Application • Site information • Applicable regulatory requirements • EMS description • Auditing description • Two past achievements • Four future commitments • Stakeholder involvement and community outreach

14. Membership Process • Request Incentives • SPR requested… • Reduce fugitive emissions monitoring of components from quarterly to biennial • Reduce water use permit fees to that commensurate with actual usage instead of potential peak usage • Pre-assessment review by TCEQ • Compliance screening

15. Membership Process • Undergo an Audit • Similar to ISO 14001 certification • Follow 3rd party protocol if registrar used • EMS must be performance based… • demonstrate improvement • produce on-going results • Emphasis on… • interviews in the field • Visible results • Stakeholder and outreach activities • TCEQ completes audit report

16. Membership Process • Technical Review • Relationship of these key elements is important: • Aspect identification and prioritization • Objective setting reflective of significance • Achievement of objectives • EPA involved with evaluation • TCEQ Recommendation • Approved • Conditionally approved • Denied • Annual reporting • Re-audit every three years

17. Audit Process Pre Audit Planning: Compliance screen, documentation.Agree to resource requirements, schedule Opening Meeting: Decision makers present Bottom-up Analysis: How it is Site Walk-through: Physical observations (photos with permission), operator interviews Causal Analysis: Scheduled interviews with managers EMS Analysis: Environmental aspect/impact development, goals Top-down Analysis:Why it is Review Performance Improvement Business Review Meeting with Senior Person Closing Meeting Plan Audit on-site Review for Decision

18. The SPR’s Clean TexasAudit • Combined with ISO 14001 recertification audit • Incorporated TCEQ protocol • Robust internationally recognized platform • Outcome oriented • Registrar lead audit • TCEQ participated • Cut contact time in half • Institutionalizes integration

19. Future Commitments (by 2006) • Reduce VOCs by 15% from workover operations • From 8.0 tons to 6.8 tons at BH & BM • Reduce lead on site • By 250 lb at BH • By 200 lb at BM • Reduce hazardous waste generation • To 275 lbs/yr at BH • To 167 lbs/yr at BM

20. Future Commitments (by 2006) • Reduce potential downstream VOC emissions – Big Hill • 500 ton VOC avoidance from customers • Enhance wildlife habitat – Bryan Mound • Set aside at least 40 acres • No cutting from late summer to early spring • Will remain secure

21. Acceptance • SPR is Fully Approved • BH and BM corrected one moderate nonconformance • Inadequate input received from local community • Opened process to facilitate identification of any community concerns

22. Cumulative Savings: Spill Cleanup: $327,000 Hazardous Waste: $34,000 Sanitary Waste: $357,000 E&P Waste: $2,398,000Total: $3,116,000 Cumulative Costs: Training: $25,000 Implementation: $45,000 Maintenance: $75,000 Registrar: $88,000Total: $233,000 Bottom Line Impacts: $Million

23. Conclusion • Performance based programs naturally follow verified EMSs • Can provide business case benefits • Integrated federal state programs provide the broadest benefits • Addresses delegation issues • Make your interest known