Caltex Environment, Health, Safety and Community Report 2004

Message from the Managing Director
In early 2004 Caltex took another step forward in furthering open communication with stakeholders by releasing a detailed Environment, Health, Safety and Community Report for 2002 and 2003. The present report is an update on our progress in key areas of environmental and social performance during 2004. 2004 began with the announcement of the decision to upgrade facilities at the Kurnell and Lytton refineries to make cleaner fuels. Construction on the more than $400 million clean fuels project at the two refineries commenced in October. The upgrades will contribute to improving urban air quality and public health through lowering the levels of benzene in petrol and sulfur in diesel fuels. They will enable Caltex to meet the tougher Australian fuel quality standards that come into force in the period 2006 – 2009 to protect air quality. Health and safety were once again at the top of the list of Caltex’s sustainability issues in 2004. We completed the introduction of the Loss Prevention System with over 4,000 employees and contractors undergoing training. Though still falling short of our ultimate target of zero injuries, there was a pleasing improvement in the injury rate as the Total Treated Injury Rate (TTIFR) fell from 15 injuries per million hours worked in 2003, to 12 in 2004. Significant reductions in the number of motor vehicle and tanker truck accidents were also recorded as we continued with the Drive to Survive training program. As part of our effort to achieve further improvement in health and safety performance, the TTIFR was included as a key performance indicator in the balanced scorecard that is used as the basis for Caltex’s employee incentive program. We recorded some improvement in our environmental performance in 2004 with decreases in the number of spills and licence exceedences. Increases in total greenhouse gas emissions and some air emissions reflected increased production. So while total greenhouse gas emissions rose by 2%, greenhouse gas emissions per tonne of throughput fell by 4%. Limiting greenhouse gas emissions will continue to be a challenge for Caltex because producing cleaner fuels requires additional energy consumption and consequently increased greenhouse gas emissions. However, these increases over time will be more than offset by lower greenhouse gas emissions, as well as lower emissions of hydrocarbons, nitrogen oxides and fine particulates from motor vehicles running on the cleaner fuels. Caltex has continued its commitment to benefiting the communities where we work particularly through active support for the Starlight Children’s Foundation in 2004. As the year ended I was proud of the response of Caltex employees, contractors, franchisees and resellers in supporting our Litres for Life tsunami disaster appeal project. In addition to the one million litres of fuel contributed by Caltex, additional fuel was donated by resellers and franchises and matched by the company, while employees donated amounts from their pay which were met dollar for dollar by Caltex. 2004 was a particularly active year for Caltex’s Marketing business with work to achieve a stronger customer focus, the release of a new premium petrol, Vortex 98, and the

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Caltex Environment, Health, Safety and Community Report 2004 launch of Caltex’s new brand essence - Great performance from people you like, and the advertising tag line – we put more in. The rollout of the Caltex Woolworths venture network continued with 348 sites jointly branded by the end of the year. A disagreement between Caltex and some franchisees about product discounting through the venture network was resolved leading the way to repairing the company’s valuable relationships with franchisees. Overall, the summary of performance provided in this report represents real progress in implementing Caltex’s environment, health, safety and community goals. This achievement, along with Caltex’s commitment to transparency and accountability through honest and open disclosure, have been recognised through Caltex’s recent inclusion in the Australian SAM Sustainability Index in 2005. In 2005 Caltex will also participate in the Corporate Responsibility Index (a project of the St James Ethics Centre together with The Sydney Morning Herald and The Age and supported by Ernst & Young). Caltex’s dedication to continued improvement is embedded in the business plan for 2005-2007 and summarised in the formula Zero incidents One in the hearts and minds of customers 85% utilization in our refineries 100% engagement of all employees by 2007.

0 : 1 : 85 : 100 2007

Dave Reeves Managing Director and CEO November 2005

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Caltex Environment, Health, Safety and Community Report 2004

Caltex Vision, Values and Strategic Intents
OUR VISION
Our vision is to be the Australian oil refining and marketing company most admired for its people, partnership and performance.

OUR VALUES
We treat all people with fairness, respect and dignity. We meet the highest ethical standards and operate in a socially responsible manner. We respect and comply with the law. We conduct our business in a manner that respects the environment and benefits the communities where we work. We are committed to incident free operations and are passionate about achieving results that exceed expectations. We are focused on providing products and services that meet or exceed the needs of our customers.

OUR STRATEGIC INTENTS
• operational excellence through safe, secure, reliable, efficient, incident free and environmentally sound operations • cost management by lowering unit-costs through innovation, technology and work-process improvements capital stewardship by investing in the best project opportunities and executing them better than our strongest competitors • strong and sustained profitability through leadership in brand, supply chain and asset management, in developing new opportunities, and favourably shaping the business environment • partnering with employees and other stakeholders by engaging the hearts and minds of our employees through empowerment, respect and dignity, and by building mutually beneficial relationships.

OUR SUCCESS
We earn “most admired” status when we are: • the Australian industry leader in incident free operations (safety, security, reliability, efficiency and environmental stewardship) • maintaining a competitive cost structure • generating above-industry returns through prudent investments and pace-setter project implementation (safer, faster and at lower cost) • using our brand, supply chain and assets to achieve industry leading profitability • preferred as a place to work, the business partner of choice, and valued contributors to the quality of life in the communities where we do business • highly competitive in shareholder returns. We will measure our progress toward these goals by use of appropriate metrics.

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Caltex Environment, Health, Safety and Community Report 2004

About this report
This report is a brief update on Caltex’s more comprehensive Environment Health Safety and Community Report 2002 and 2003. The report provides information on Caltex’s performance against key corporate indicators, and on the more significant achievements and challenges of 2004. Some subsequent events are also referred to where they are material. The report should be read in conjunction with the Environment Health Safety and Community Report 2002 and 2003, and Caltex’s Annual Report 2004. These reports, along with other relevant information on Caltex’s operations and products, are available on the website www.caltex.com.au The report is confined to the Caltex Australia Group and does not consider the performance of Caltex’s suppliers or customers. The preparation of the report has once again been informed by the Global Reporting Initiative’s Sustainability Reporting Guidelines. Caltex will prepare the next comprehensive Environmental Health Safety and Community Report for the year 2005.

Profile of the organisation
The Caltex Australia Group consists of: • • Caltex Australia Limited (ACN 004 201 307), which is the parent company of the Caltex Australia Group the major operating companies including Caltex Australia Petroleum Pty Ltd, Caltex Refineries (NSW) Pty Ltd, Caltex Refineries (Qld) Pty Ltd, Caltex Petroleum Distributors Pty Ltd and Caltex Lubricating Oil Refinery Pty Ltd, and a number of wholly-owned entities and other companies that are controlled by the group.

Terms such as Caltex and Caltex Australia have the same meaning in the 2004 Environment, Health, Safety and Community Report as the Caltex Australia Group unless the context requires otherwise. The principal activities of Caltex are the purchase, refining, distribution and marketing of petroleum products and the operation of convenience stores throughout Australia. Caltex’s Supply and Refining departments purchase crude oil, arrange its transportation to the company’s refineries, refine the crude into petrol, diesel, jet and specialty products, buy and sell products, and arrange product movements to meet marketing sales.

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Caltex Environment, Health, Safety and Community Report 2004 The Marketing department distributes petroleum products to a network of terminals and retail sites around Australia; and promotes and sells Caltex fuels, lubricants, specialties and convenience store goods through a national network of more than 2,000 Caltex, Caltex Woolworths and Ampol branded service stations and branded resellers. Marketing also sells directly to a large number of commercial customers. Table 1. A snapshot of Caltex operations Year ended 31 December 2001 1 Number of employees 2,934 Fuel refineries 2 Lube oil refinery 1 Road tankers 27 Rail cars (operational) 60 Storage terminals (owned or leased 11 and operational) Star Mart convenience stores Service stations (owned or leased) Depots Fuel production (ML) Lubes production (ML)
1

2002 2,638 2 1 28 60 11 175 643 124 11,045 125

2003 2,986 2 1 17 60 11 187 605 115 11,011 135

2004 2,989 2 1 18 62 11 197 577 108 11,608 170

171 651 126 10,858 169

Includes employees of Calstores Pty Ltd (2004:804) and Caltex 100% owned distributors (2004:256)

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Caltex Environment, Health, Safety and Community Report 2004

Table 2. Summary of safety and environmental performance Year ended 31 December Total Treated Injury Frequency Rate – employees (per million hours worked)1 Total Treated Injury Frequency Rate – contractors (per million hours worked) Total Treated Injury Frequency Rate Major spills Minor spills Infringements & Prosecutions Fines & Penalties Fires <$2000 loss Fires >$2000 loss Motor vehicle accidents Tanker truck accidents Greenhouse gas emissions (million tonnes of CO2-e) Total water usage in refining (ML)
1

2001 21 38 26 5 208 0 $0 26 0 46 29 2.123
4,117

2002 21 30 23 4 153 6 $129,600 31 3 54 48 2.135
4,301

2003 16 12 15 4 249 2 $3,000 35 1 64 34 2.095
4,176

2004 11.8

Target 2004 -

12.5 12 6 208 5 $6,600 38 0 55 22 2,172 11 2 0 47 24

Includes employees of Calstores Pty Ltd

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Caltex Environment, Health, Safety and Community Report 2004

Caltex Environment, Health and Safety Policy

Environment Health & Safety

September 2003

Our vision is to be the Australian oil refining and marketing company most admired for its people, partnerships and performance. With respect to environment, health and safety our policy is to:
Achieve safe and incident free operations: Provide a safe and healthy workplace for all employees and contractors on our sites. Operate and maintain our facilities and sites in a way that will not adversely affect the health and safety of our neighbours, customers and public, or the environment. Integrate EHS into our business and corporate values: Assess risks to the environment, health and safety as part of all business decisions. Ensure environment, health and safety objectives are part of our business planning process. Ensure compliance: Verify conformance with relevant legislation and with the company's environment, health and safety management systems at all levels through regular auditing. Ensure that our performance is consistent with stakeholder expectations. Consult with employees: Provide our employee with opportunities to contribute to the making of decisions affecting the environment and their health, safety and welfare at work. Ensure all who work with us, work in accordance with this policy: Train and motivate employees, business partners and contractors so that they understand their environment, health and safety roles and responsibilities, and have the tools (or systems in place) to achieve a safe, secure, reliable, efficient, incident free and environmentally sound operation. Utilise risk management practices: Apply sound risk management principles to identify, communicate and control workplace hazards. Aim to remove hazards so incidents and injuries do not occur. Achieve ongoing improvement: Plan to continually improve our environment, health and safety performance and monitor our improvement against world class targets. We aim for results that exceed expectations and move us to our goal of operational excellence. Build community partnerships: Communicate openly with government and the community on environment, health and safety policies and performance. Reduce our environmental impact: Continually improve processes and products to conserve company and natural resources, increase energy efficiency, prevent pollution and minimise waste. Be good stewards of our products: Provide information and advice on safe and responsible use of our products throughout the production and supply process. Be prepared for emergencies: Prevent incidents as a first priority but be prepared for any emergency and mitigate the effect of all incidents quickly and effectively. Be accountable: Hold all employees and contractors accountable for environment, health and safety performance in their area.

No job is so important that we cannot take time to perform our work safely and with proper regard for the environment.

Dave Reeves Managing Director Meeting the needs of customers
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Caltex Environment, Health, Safety and Community Report 2004

Summary of achievements and challenges for 2004
Engaging with stakeholders
We meet the highest ethical standards and operate in a socially responsible manner. In August 2004 Caltex undertook a survey of customers’ and the community’s views on their corporate performance. This covered, for example, how Caltex is viewed as an ethical company, how they respect local communities and the environment, and awareness of the Starlight sponsorship.

Our people and workplace
We treat all people with fairness, respect and dignity. We are committed to incident-free operations and are achieving results that exceed expectations. Continued focus on Caltex’s Loss Prevention System Over 4,000 people have now been trained in the Loss Prevention System (LPS) as the rollout of the system moved to completion during the year. Employees use five LPS tools: • • • • • Safe Performance Self Assessment Job Safety Analysis Loss Prevention Observation Loss/Near loss Investigation Stewardship

Short Term Incentive Bonus Scheme The Short Term Incentive (STI) bonus scheme linked employees’ remuneration to performance in achieving Caltex’s key targets. In 2004 the scheme allowed up to 8% of base remuneration to be earned by the achievement of company-wide targets, and 4% for business specific targets. Company-wide targets reflect Caltex’s commitment to Operational Excellence (Number of Good Days and Total Treated Injury Frequency Rate) as well as financial performance (Profit and Free Cash Flow). A new personal performance based bonus scheme, to apply from 2005, was introduced in 2004 to replace the STI. Work progressed on the development of an enhanced Performance Management Process (PMP) through which all employees not covered by awards enter into PMP plans with their supervisors. The plans provide the basis for assessing and rewarding individual performance in 2005. Training for the new system commenced in November 2004.

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Caltex Environment, Health, Safety and Community Report 2004 Refinery Performance Improvement Program Markets for petroleum products in Asia have undergone a fundamental shift in the last few years as the capacity of refineries to supply petroleum products moved from surplus to deficit, largely as a result of demand growth in China and India. In Australia the closure of the Mobil refinery in Port Stanvac in 2003 moved the Australian market into a short gasoline and diesel position. This provided an opportunity for Caltex to increase refinery production to meet the higher demand. The Refinery Performance Improvement Program has engaged employees at the Kurnell and Lytton refineries in finding ways for Caltex the meet this opportunity. Employees participated in over 70 workshops from August through November generating ideas for efficiency improvement, cost reduction and new capital projects. A substantial number of suggestions that were generated by the workshops are being implemented.

Protecting the environment
We conduct our business in a manner that respects the environment. Progress on the Clean Fuels Project Construction of new production plant and upgrade of existing plant at the Kurnell and Lytton refineries commenced in October 2004. Costing more than $400 million, the Clean Fuels Project is Caltex’s largest capital project for many years. Employing a combined workforce of more than 600 people, this new investment will bring significant environmental benefits as a result of lower benzene in petrol and lower sulfur in diesel. The project is also underpinning industrial development and employment. From 1 January 2008, the standard for the maximum level of sulfur in premium unleaded petrol will be 50 parts per million (ppm), compared with 150 ppm today. The maximum level of sulfur in diesel will be reduced to 10 ppm from 1 January 2009, compared with 500 ppm today and 50 ppm from 2006. The maximum allowable benzene in petrol will fall to a maximum of 1% by volume by January 2006. Biofuels Caltex extended the trial marketing of E10 Unleaded petrol in Queensland in 2004. E10 was made available at Cairns, Mareeba, Townsville and Ingham. The ethanol content in E10 Unleaded is a renewable fuel. It also reduces greenhouse gas emissions, increases Australia’s liquid fuels security of supply, and helps with development and employment in regional and rural Australia. Caltex is committed to the Australian Government's biofuels production target of 350 megalitres annual sales of ethanol or biodiesel to the Australian market by

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Caltex Environment, Health, Safety and Community Report 2004 2010 and will play a part in helping to achieve that target through the sale of ethanol/petrol and biodiesel/diesel blends. Environmental Management Systems Development of new ISO 14001 compliant environmental management systems at the two refinery sites continued in 2004. Marketing also continued to improve environmental management systems. We are focused on providing products and services that meet or exceed the needs of our customers. New brand position In response to recent research on how Caltex is viewed by customers, a new brand essence and tagline were released in mid 2004. Great performance from people you like is a summary statement for internal use of Caltex’s core values. The tag line used in advertising we put more in expresses Caltex’s commitment to excellent execution and doing more for customers and the community. Caltex Woolworths venture Implementation of the Caltex Woolworths venture continued in 2004. In February the Australian Competition and Consumer Commission gave its approval to the arrangement to offer discounted fuel to Woolworths’ customers by ruling that it was unlikely to result in substantial lessening of competition in relevant markets. In April, Woolworths Limited and Caltex Australia Limited finalised interim arrangements for the national expansion of the Woolworths' fuel discount redemption offer. The arrangement involves the joint branding of Woolworths sites and Caltex sites which are in the vicinity of Woolworths sites. The Caltex sites covered by the arrangement include company-operated sites and franchisees selling fuel under a commission agency agreement. By the end of 2004, 348 sites had been co-branded including 106 Caltex sites. Up to 470 sites are expected to be co-branded by the end of the roll out. The Caltex Woolworths venture has brought increased fuel sales as well as sales growth at jointly branded stores. Caltex sites that have joined the Caltex Woolworths network have reported an average 80% increase in fuel sales. The venture has provided a strong response by Caltex to significant changes in the national retail fuel markets the major supermarkets captured a large proportion of fuel sales when their customers took advantage of discount dockets available with the purchase of goods. The product discounting caused concern to some Caltex franchisees among the 1650 Caltex and Ampol sites that were not co-branded under the Caltex Woolworths arrangement. Caltex worked hard to mend relationships with franchisees. A Federal Court action taken by franchisees against Caltex

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Caltex Environment, Health, Safety and Community Report 2004 Australia seeking a halt to the discount fuel venture was settled out of court in July. The agreement included changes to the Caltex retail economic model used to calculate additional financial support for franchisees facing increased competition as a result of market changes; and an exit package for franchisees within 5 km of a Caltex Woolworths branded service station, who within the first two years of the nearby brand conversion, experience a specified fuel sales decrease. The Star Mart and Star Shop retail network In the late 1990s Caltex recognised the opportunities to be gained by expanding the convenience store business and this area has continued to grow. At December 2004 Caltex had 491 Star Marts and Star Shops. They recorded over 5% growth in sales in 2004. The All Stars performance management program with its training, monitoring and incentives components, continued to ensure the success of the Caltex retail network. Launch of Vortex 98 In November 2004 Caltex launched Vortex 98, a new premium unleaded high octane petrol in Sydney. This product innovation contains a unique detergent that breaks down and removes fuel deposits on injectors and intake valves. It meets customer demand from the increasing number of owners of high performance and prestige vehicles including those with high compression engines and turbochargers. Vortex 98 will be available throughout NSW by early 2005 then spread to south eastern Queensland and other states.

Benefiting our communities
We conduct our business in a manner that benefits the communities where we work. Caltex support for the Starlight Children’s Foundation The Starlight Children’s Foundation continued to be Caltex’s largest corporate community sponsorship in 2004. Over 500 Caltex volunteers participated in Star Day on May 6 and this, together with Starlight sales and promotions by franchisees and resellers, raised over $225,000. In addition Caltex made a significant corporate donation and provided fuel for the four Starlight vans used to visit children in country hospitals. As well as benefiting seriously ill children and their families, Caltex’s partnership with the Starlight benefits employees by providing opportunities for personal development and team building across the company.

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Caltex Environment, Health, Safety and Community Report 2004 The Caltex and Rotary Club of Sydney Award for Innovation in the Vocation of Teaching. Three teachers were recognised by an Innovation in the Vocation of Teaching award in 2004. • Stephanie Brown at Kelso High School in Central West NSW received an award for developing Circus Surreal, a program providing high school students with the opportunity to develop physical skills and creative abilities. Ian Judd at Dorrigo High School was awarded for his environmental improvement projects involving staff and students. Julie Grimshaw, Deputy Principal at Punchbowl Boys High School in Sydney was recognized for her leadership and initiative in setting up a program to train senior students in nursing.

• •

Litres for Life to help tsunami victims Caltex was quick to respond to the tragic Boxing Day tsunami in Asia by launching the Litres for Life project that provided: • • • 1 million litres of fuel contributed by Caltex Australia as a corporate donation additional fuel donated by Caltex resellers and franchisees – with Caltex matching each donation Caltex employees donating an amount from their pay matched dollar for dollar by the company. The funds to be made available to disaster relief aid agencies nominated by employees.

Caltex made a total corporate commitment to the project of up to $1 million. The Caltex Best All Rounder award Caltex Best All Rounder awards were made for the nineteenth year, recognising and rewarding final year secondary schools students for outstanding academic, sporting, community service and leadership achievements. The Australian Chamber Orchestra For the eighth year, Caltex recognised excellence in the performing arts through its sponsorship of a national tour of Australian Chamber Orchestra in June. Imogen, Richard and Friends was the title of the highly successful tour that featured pianist Imogen Cooper and the ACO’s director and lead violin Richard Tognetti.

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Caltex Environment, Health, Safety and Community Report 2004 Fuel support Caltex supplies fuel support for each Ronald MacDonald House in Australia, which provides a home away from home near hospital for families of seriously ill children. Caltex also provides fuel for three charity flights each year which are either used to raise funds for charity or to provide a flight to disadvantaged children.

Managing risk
We are passionate about achieving results that exceed expectations. Caltex has identified the company’s key risks to the environment, the health and safety of our employees and contractors; and the community through the Caltex Key Risk Profile and the strategic planning process. Caltex’s response to managing these risks is expressed in the overarching Operational Excellence Strategic Plan and through the Business Plans of each of Caltex’s businesses. These rolling three year plans were endorsed by the Board in December 2004.

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Caltex Environment, Health, Safety and Community Report 2004

Update on Caltex’s Performance
In 2004, the company had its best safety year on record with improvements in the key areas of the Total Treated Injury Frequency Rate (TTIFR) and vehicle accidents. This has moved Caltex further towards world-class performance for safety but is still short of the goal of zero incidents and a strongly developed safety culture focusing on prevention. The TTIFR fell 20%. The total number of tanker truck and motor vehicle fell 21%. The total number of product spills fell 15%. Injury rate
40 TTIFR/million hours worked 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004

The Total Treated Injury Frequency Rate (TTIFR) for employees and contractors across Caltex fell from 15 to 12 injuries per million hours worked from 2003 to 2004. While a pleasing improvement, this is still short of the 2004 target of 11, and well short of Caltex’s goal of zero workplace injuries.

Motor vehicle and tanker truck accidents
70 No. of motor vehicle accidents 60 50 40 30 20 10 0

The number of motor vehicle accidents fell from 64 to 55 from 2003 to 2004, and the number of tanker truck accidents fell from 34 to 22.

2000

2001

2002

2003

2004

60 No. of tanker truck accidents 50 40 30 20 10 0

Caltex continued the Drive to Survive safe driving program in 2004 with around 300 Caltex employees now having completed training.

2000

2001

2002

2003

2004

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Caltex Environment, Health, Safety and Community Report 2004

Spills and releases
300

250

Number of spillls

200

150

100

In 2004 there were six major spills*, an increase of 2 over 2003. There were 208 minor spills compared to 248 in 2003.

50

0 2000 2001 2002 Minor spills Major spills 2003 2004

*Caltex defines a major spill as an accidental or unplanned spill or release that is of a volume sufficient to
cause actual or likely harm to human health and/or damage to the environment; or has caused significant disturbance to the community, or is a spill to land or water of 8,000 litres or more.

Fires
45 40 35 30 Number of fires 25 20 15 10 5 0 2000 2001 2002 Minor fires Major fires 2003 2004

In 2004 there was one major fire* and 38 minor fires. This exceeds the target of zero major fires.

* A major fire is defined as one that causes >$2000 damage

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Caltex Environment, Health, Safety and Community Report 2004

Compliance with environmental obligations
20 18 No. of licence exceedences 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004

A total of 14 pollution control licences were held by companies in the Caltex Australia Group in 2004 for two refineries and 11 terminals. Licence conditions were exceeded on 15 occasions in 2004, which required notification and reporting to government environmental authorities.

Four infringement notices for breaches of significant environmental regulation were received by Caltex in 2004 and one in 2005, for incidents occurring in 2004: • Caltex Refineries (NSW) Pty Ltd received a penalty infringement notice for $1,500 following the removal from site and incorrect disposal of a hazardous waste skip by a contractor Caltex Refineries (Qld) Pty Ltd received a penalty infringement notice of $600 for the release of hydrocarbon from a pipeline at Lytton refinery Caltex Australia Petroleum Pty Ltd received a penalty infringement notice for $1,500 when old contaminated water was released from a blocked stormwater line into an open stormwater trench at a Sydney service station, and Caltex Refineries (NSW) Pty Ltd received a penalty notice for $1,500 following the release of effluent with high phenol levels at Yena Gap, Kurnell. Caltex Refineries (NSW) Pty Ltd received a penalty notice for $1,500 following the release of a small amount of fuel oil from a tundish on the Kurnell wharf

• •

• •

Caltex is committed to achieving 100% compliance and all breaches of environmental regulations have been thoroughly investigated by management. This challenge becomes greater every year with regulators setting tougher goals for industry to meet.

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Caltex Environment, Health, Safety and Community Report 2004 Water consumption In early 2004, the Kurnell refinery joined Sydney Water’s Every Drop Counts water conservation program. The Kurnell refinery is Sydney Water’s third largest water user using approximately six megalitres of water per day to generate the 350 tonnes of steam required around the site each hour. Air emissions Emissions emanating from the Kurnell and Lytton refineries are due to the combustion of fuels (fuel oil, natural gas and fuel gas) in furnaces and boilers, and some process emissions such as deposits of coke in crackers and reformers. The key pollutants associated with the operation of the refineries include oxides of sulfur and nitrogen, carbon dioxide, carbon monoxide, particulate matter and volatile organic compounds. Emissions of these substances are monitored and the results reported to state environmental agencies. Emissions of non methane volatile organic compounds are released also from the natural evaporation of petroleum products during their storage and transfer. Fugitive emissions of volatile organic compounds escape from storage tanks and from pipework (valves and flanges) and equipment (pumps and compressors) within facilities. Caltex has provided data on air emissions to Environment Australia for inclusion in the National Pollution Inventory (NPI) since the inception of this program. These data, summarised in the following table, are available at the NPI website at www.npi.gov.au.

Table Air emissions from Kurnell and Lytton refineries1 Kurnell Refinery Emission to air (kg) 2002/03 2003/04 Benzene 12,000 18,000 Carbon monoxide 360,000 360,000 Oxides of nitrogen 1,700,000 1,700,000 Sulfur dioxide 3,300,000 3,600,000 Particulate matter (10 micron) 120,000 170,000 Total volatile organic 2,500,000 2,800,000 compounds
1

Lytton Refinery 2002/03 2003/04 4,400 5,100 1,900,000 2,700,000 1,200,000 810,000 980,000 2,900,000 260,000 280,000 570,000 570,000

These data are estimated emissions calculated for inclusion in the NPI using techniques that have been approved by the Australian state and territory environment agencies. Environment Australia has noted that the accuracy of these estimates will vary according to the techniques used. Furthermore comparative analysis of the data may be misleading because jurisdictions may have used different approved estimation techniques.

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Caltex Environment, Health, Safety and Community Report 2004 Community complaints Both Kurnell and Lytton refineries operate 24 hour environmental hotline services allowing community members to register their concerns at any time. Kurnell refinery community complaints
Annual Kurnell Refineries related community complaints
180

160

140

120

Number of calls

100

80

60 40

20

0

1998

1999

2000 Odours Noise

2001 Fallout Water

2002 Air Misc

2003

2004

The number of calls to the Kurnell refineries environmental hotline was slightly higher in 2004 compared to previous years. The majority of these calls related to two incidents – - On 13 January, a release of catalyst from one of the catalytic crackers resulted in 44 complaints about particulate fallout, and - On 17 October, overfilling a tank such that foul condensate was released to the tank bund resulted in 34 complaints about odour from the site. Lytton refinery community complaints Of the 28 calls to the Lytton refinery environmental hotline in 2004, 24 related to odour emissions. Eight of these odour complaints were received in November and were related to increased flaring during this period as a result of a planned shutdown for inspection and maintenance of the Lytton alkylation plant.
Annual Lytton Refinery related community complaints
90

80

70 60

Number of calls

50

40

30 20

10

0

1998

1999

2000 Noise

2001 Odour Water

2002 Air

2003

2004

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Caltex Environment, Health, Safety and Community Report 2004

Energy consumption and greenhouse gas emissions Emissions of greenhouse gases in 2004 were 2,172kt CO2 equivalent which is 2.3% higher than in 2003. The increase was due mainly to the increase in production at Caltex’s refineries. This is reflected in the Energy Intensity Index for the refineries which was 4% lower in 2004 compared to 2003, and the refinery emissions per tonne of throughput which also fell 4% over this period.

2180 2170 2160

kt CO2-equivalent

2150 2140 2130 2120 2110 2100 2090

2000

2001

2002

2003

2004

2004 marked the seventh year that Caltex has participated in the Australian Government’s Greenhouse Challenge Program. We completed a further five greenhouse gas abatement initiatives in 2004 including: • • • the number of main boilers in service at Kurnell refinery was reduced during periods of lower steam demand the layout of piping at the Banksmeadow Terminal was optimised to improve pumping efficiency to the vapour recovery unit the main boiler preheater performance at Kurnell refinery was improved.

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Caltex Environment, Health, Safety and Community Report 2004

Caltex energy consumption and greenhouse gas emissions 2002 to 2004. Energy consumption (GJ x 1000) 2002 Electricity Natural gas at Kurnell refinery furnaces Fuel oil at Kurnell and Lytton refinery furnaces Fuel gas at Kurnell and Lytton refinery furnaces Coke at Kurnell and Lytton refineries Flares at Kurnell and Lytton refineries Transport (automotive diesel fuel) Other emissions3 TOTAL
1

Greenhouse gas emissions (tonnes of CO2-e x1000)1

2003 1,429 3,041 1,372 16,530 6,878 1,060 221
Not applicable

2004 1,519 3,168 1,648 17,162 7,360 1,725 235

2002 423 129 78 733 658 80 20 18

2003 427 155 91 7402 598 52 15 17 2,095

2004 452 162 108 6942 641 79 16 17 2,173

1,147 2,518 1,204 16,979 7,627 748 292
Not applicable

31,697

30,550

32,817

2,135

the conversion factor used is based on a weighted average of the conversion factors applicable in relevant Australian states 2 conversion factor for Qld changed from 0.0377 to 0.0299 3 other emissions comprise non-methane volatile organic compounds and CH4.

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