Plaintiffs' Myths, Distortions and Fabrications
For more than 13 years, attorneys and activists have pursued lawsuits against Texaco
and Chevron claiming that a subsidiary, Texaco Petroleum Company (Texpet), is responsible
for health and environmental impacts from oil operations in Ecuador over more than
16 years ago. In the process they have waged an ongoing misinformation campaign in
which facts are twisted and scientific data ignored. The motivation behind this campaign
is clear: without any factual or legal merit to back their claims, plaintiffs' attorneys
and the activist groups who support them are attempting to circumvent the judicial
process and force a settlement by attacking Chevron's reputation and integrity.
At the same time, plaintiffs' attorneys are doing a grave disservice to their clients
by refusing to pursue any claims against the proper party, state-owned oil company
Petroecuador. As the exclusive owner and operator of the oil fields for over 15 years,
Petroecuador has not only failed to honor its legal obligations to remediate oil field
sites, but its disastrous record of pollution and environmental mismanagement over
these many years is a fact that plaintiffs' attorneys choose to ignore.
The deliberate distortions, fabrications and misrepresentations promoted by plaintiffs'
attorneys and the activists who support them are numerous. But while these individuals
seem to show little regard for the truth, the public, the media, Chevron's shareholders
and the courts deserve to know the truth. Chevron provides here a factual rebuttal
to the array of myths, distortions and fabrications promoted by the plaintiffs' attorneys.
THE "BIG LIES"
1. Legitimacy of Scientific Evidence of Judicial Inspections
Plaintiffs' attorneys have claimed that all of the evidence from the judicial inspections
(from both sides) shows clear proof of contamination and levels of carcinogens exceeding
legal limits. Chevron has found that evidence from the judicial inspections demonstrates
that remedial actions previously conducted by Texpet were effective and that the areas
inspected present no significant health risk from oil to local residents.
Since it can be difficult to make sense of or to judge what can be very complex
technical information, an examination of the manner in which the two sides collect
and analyze data is worthwhile.
Plaintiffs' attorneys have accused Chevron of creating a smokescreen by our challenge
to the legitimacy of their technical reports from the inspections. If a smokescreen
were to exist, it would be that created by the plaintiffs, in their deliberate and
sustained effort to prevent the Court from inspecting the laboratory they use to analyze
the water and soil samples collected at the inspections.
Plaintiffs' attorneys and the lab operators have on six separate occasions blocked
an Ecuadorian judge from inspecting their lab in order to verify technical competency.
If they were so confident in the strength of their findings, why would they want to
prevent the court, and the public, from knowing more about the lab they use? What
are they trying to hide?
Prior to the beginning of the judicial inspections in August 2004, the two parties
negotiated a sampling and analytical plan to guide the inspections and ensure a valid
"apples to apples" comparison of data. The agreed-upon protocols were submitted to
the court which then ordered the two parties to adhere to them. However, the plaintiffs'
immediately decided to ignore them and have carried out their sampling, analysis and
reporting in a manner contrary to the protocols and the court order, and contrary
to internationally accepted standards of scientific discovery.
To ensure scientifically valid results, Chevron analyzes and reports every sample
it collects, as required by the Court. Plaintiffs' reports on the judicial inspection,
however, are neither complete nor accurate. Many of their reports are so scientifically
unsound they would never be allowed in a U.S. court.
Specifically:
- Plaintiffs' technicians failed to test 201 out of 648 samples, meaning that almost
a third of their samples are inexplicably missing – a violation of basic internationally
accepted guidelines for such scientific investigation;
- Plaintiffs have violated court orders to test all field samples and report all
laboratory results, deliberately withholding relevant evidence;
- The laboratory analyzing plaintiffs' samples is unqualified to perform analyses
for either hydrocarbons or metals;
- Appropriate chain of custody procedures designed to ensure that samples haven't
been compromised or contaminated haven't been followed; and
- Quality assurance/quality control procedures have been ignored by plaintiffs,
calling into question the quality of the lab work.
Further, Chevron's experts' reports are far more comprehensive – analyzing
1242 samples, compared to the plaintiffs' 447.
Plaintiffs' attorneys have also submitted fewer technical reports than Chevron
because they have either failed to respond to Court demands to provide proof that
laboratory samples needed for their analysis were compromised, or missed court-ordered
deadlines for the delivery of reports. In other instances, technical experts nominated
by the plaintiffs to conduct sampling and analysis have either quit or been dismissed.
Plaintiff's attorneys have even submitted technical reports written by experts who
have never even been to the site.
While Plaintiffs' attorneys continually claim to identify samples that exceed allowable
levels of oil related components, they deliberately fail to mention that they take
most samples from sites still in use by Petroecuador, the current operator, and from
areas outside those remediated by Texpet. Seventy-six percent of plaintiffs' soil
samples were taken from areas outside of the agreed-upon scope of Texpet's remediation
in areas known to be Petroecuador's responsibility, and yet they persist in blaming
Texpet for any contaminants found.
2. Produced Water ≠ Toxic Waste
One of the plaintiffs' attorneys' most-repeated claims is that "Produced water
contains some of the most toxic and dangerous chemicals known to man." and that Texpet
illegally dumped 18 billion gallons of toxic waste into the rainforest, equating it
to an environmental disaster 30 times greater that the Exxon Valdez spill.
Produced water is not considered "toxic waste" in the United States nor in any
other part of the world. Rather, it is the brackish water that is trapped within the
geologic formations that contain crude oil and brought to the surface during oil production.
Surprisingly, the plaintiffs have never once analyzed any produced water
for BTEX – some of the potentially harmful elements they refer to – as
part of the judicial inspection process in order to substantiate their allegations.
Plaintiffs did analyze two produced water samples for PAHs (other harmful elements
that the plaintiffs refer to) and found that they were not detected in produced water.
Further, in a lie of omission, the plaintiffs' attorneys fail to mention that,
consistent with Ecuador regulations of the time and with industry practices still
in use in many places in the world today, Texpet separated out the crude oil and treated
the produced water before safely discharging it into the environment. Because it was
water rather than pure crude oil that was discharged, comparisons to the Exxon Valdez
are nothing more than lies designed to mislead the public and the court.
To put the facts into further perspective, the average annual volume of produced
water discharged by Texpet in Ecuador is equivalent to 1.7% of the total volume of
water discharged onshore in the United States in 19851.
Accepting for the sake of argument that injection is now seen as a preferred method
of managing produced water in Ecuador, it is ironic to note that Petroecuador has
discharged more produced water in the Oriente in the last 16 years than Texpet did
throughout its entire operations in Ecuador. Petroecuador has discharged more than
12 billion gallons of produced water since 1992.
3. Urban Legend: Remediation Will Cost at Least $6 Billion
The plaintiffs have made much of their claim that remediation costs could exceed
$6 billion.
While all the credible scientific evidence presented to the court so far suggests
that the remediation program carried out by Texpet was effective (and thus no further
remediation is necessary in the areas that were the responsibility of Texpet), if
one were to accept for the sake of discussion that further remediation was necessary,
it is absurd to suggest that the cost could be $6 billion or greater.
The originator of that estimate, Mr. Russell, made a cursory examination of a small
handful of sites and did not consider the fact that Petroecuador has operated the
fields exclusively for the past 16 years.
Further, the $6 billion figure appears nowhere in the original complaint. It is
simply a wild claim designed for propaganda purposes, and is based on soil remediation
estimates that are more than 80 times higher than those presented by plaintiffs' own
judicial experts in their reports. The estimate also includes several billion dollars
for treating non-existent water contamination.
Finally, plaintiffs' attorneys have never proved the extent of the alleged contamination,
nor have they ever provided any accounting of the areas included in the estimate,
the sizes of the areas considered, volumes of soil to be remediated, or credible evidence
proving that the alleged contamination was in fact caused by any former activity of
Texpet in order to justify the suggested cleanup cost.
To insert some reality into the equation, Petroecuador has admitted its responsibility
to remediate 264 of the 430 pits in the former consortium areas2.
Petroecuador has already remediated 15 pits in sites operated by the former consortium,
with an average remediation cost of $80,000 per pit3.
4. Petroecuador's Responsibility
Petroecuador, the state-owned oil company, has owned and operated the oil fields
for more than 15 years, but the plaintiffs' attorneys nevertheless blame Chevron and
Texpet for all oil-related problems in the region.
However, Petroecuador has not only neglected to fulfill its obligation to remediate
its majority share of consortium sites under a 1995 agreement with Texpet and the
Government, but as sole owner and operator of the oil fields for more than 15 years,
has a well-documented history of environmental neglect and substandard operations
that are responsible for the condition of the concession area today.
Petroecuador's failure to remediate its fair share of sites is well known. According
to the Energy Minister Manuel Muñoz, Director of National Environmental Protection
Management, Ministry of Energy, in an appearance before Congress on May 10, 2006:
"To some extent, Texaco conducted the remediation of the pits under the company's
responsibility, which was 33% of the total. For over 30 years Petroecuador has done
absolutely nothing to remediate those pits under its responsibility."
On October 5, 2006, Petroecuador published a special supplement in the country's
leading newspaper, El Comercio, acknowledging its intent to finally fulfill
its contractual responsibility to remediate its majority share of oilfield sites:
"Through a 1995 agreement between the Ecuadorian State and Texaco, the company started
an Environmental Remediation plan in order to correct the effects of its operations
by remediating 165 pits. The State-owned Petroecuador, through its subsidiary Petroproduccion,
continues with the cleanup of the remaining 264 pits which (due to the agreement's
provisions dividing responsibility for the cleanup) were not treated by Texaco."
Petroecuador's poor environmental performance is equally clear: According to the
company's own data, the company has been responsible for a total of 801 spills between
1990 (when they assumed control of the concession area) and 2004, with a total spill
volume of 1,874,922 gallons. Larger spill volumes have also been reported in the press.
According to El Universo4, Petroecuador admitted
to 325 oil spills between 2003 and 2004 that impacted 2.1 million square meters, and
newspapers in Ecuador have reported cumulative Petroecuador oil spill volumes as being
greater than 3.2 million gallons of crude oil from 1990-2005.
Primarily, these spills have been due to sabotage, operational neglect, failure
to maintain systems, human error and other factors that have nothing to do
with the type of technology employed. Ecuador's Energy Ministry Director Muñoz confirmed
this when he stated:
"Pipelines face a very serious problem and so do fluid transmission systems both
for oil and derivates, which have entered a state of obsolescence; largely due to
the fact there is no adequate budget to replace them. This is one of the largest
sources of contamination."5
Nevertheless, despite Petroecuador's clear acknowledgement of responsibility and
the substantial evidence of the company's poor environmental record, plaintiffs' attorneys
have pursued their suit against Chevron. In short, plaintiff's attorneys continue
to solely target Chevron not because it is the proper target, but because it is the
most convenient one and has the deepest pockets.
5. The Question of Fraud
In perhaps the most outrageous charge, and one which is designed solely to bring
political pressure on the company to settle, the plaintiffs' attorneys and their allies
have alleged that Chevron is the subject of an ongoing criminal investigation of fraud
in Ecuador, and that Chevron is facing an investigation by the Securities and Exchange
Commission in the U.S.
However, in separate actions in Quito and in New York, officials within the government
of Ecuador have acknowledged that there is no evidence of fraud on the part of Chevron,
Texaco Petroleum Company (Texpet) or any of their employees in relation to a remediation
program carried out by the company between 1995 and 1998, nor evidence to support
any criminal investigation against the company regarding the remediation. These acknowledgements
contradict repeated claims by plaintiffs' attorneys and activist groups that a criminal
investigation of fraud was underway in Ecuador against representatives of Chevron
and Texpet.
In a sworn deposition in September, 2006, Attorney General Borja admitted that
he has neither facts nor evidence of fraud related to Texpet's remediation program.
Additionally (and separately), the Prosecutor General of Ecuador concluded that
fraud allegations made by the Comptroller General had no merit, and did not warrant
a criminal investigation.
Notwithstanding these public facts, the plaintiffs' attorneys and the activist
groups continue to perpetuate this myth. Moreover, the fact that Attorney General
Borja, aware of these facts, would nevertheless send a letter to the U.S. Attorney
General raising the issue of fraud suggests that there is some relationship between
the plaintiffs and the Attorney General that is curious and troubling. The very idea
that the Attorney General of Ecuador, after testifying under oath that he has no knowledge
of fraud, would then ask the U.S. Attorney General to conduct an investigation of
fraud in a country outside the jurisdiction of the U.S. is absurd on its face.
With regard to the issue of an SEC investigation, again this is a baseless charge.
While the SEC did ask Chevron for information on the Ecuador matter as well as a number
of other unrelated matters (information which Chevron provided in full), we don't
know of any ongoing investigation regarding Texpet's activities in Ecuador.
6. The Question of Health
The plaintiffs have alleged that Texpet's operations have caused serious health
problems for the population of the region, including cancer. They have also dismissed
Chevron's claim about the more likely causes of health problems in the region.
The truth is that there is no credible scientific evidence
linking health concerns to Texpet's former oil operations. Plaintiffs' lawyers cite
various "studies" to support their claims, yet those studies are flawed, and provide
no conclusive proof for the existence of elevated health risks in the area or for
the claim that reported health effects can be related in any way to exposure to petroleum.
Some of the world's leading epidemiologists and medical and scientific experts
have reviewed the studies used by the plaintiffs to support their claims and each
expert independently concluded that they are flawed, biased and inconclusive. The
studies' own authors acknowledge that they do not establish a causal link, and that
there are many other non-oil related factors known to have caused health problems
in the region.
Plaintiffs rely largely on the writings of Dr. Miguel San Sebastian, whose work
cites as references the very same activist groups that are supporting the litigation,
and whose reports do not provide evidence that diseases were caused by petroleum
despite what plaintiffs allege. A number of independent epidemiologists and experts
on tropical health issues have refuted the claims of Dr. San Sebastian and the plaintiffs.
In testimony provided to the Court, Dr. Michael Kelsh, an epidemiologist and adjunct
professor at the University of California Los Angeles (UCLA), reported:
"Dr. San Sebastian's studies are not the type of studies that can provide information
about disease causation, a point he acknowledges in many of his published studies...Given
the many serious limitations, namely the lack of specific exposure information,
the potential inaccuracies in disease assessment, and other potential causes of
disease that are not evaluated, the studies conducted among communities in the Oriente
region do not provide evidence of excess disease caused by activities associated
with petroleum facilities and materials."6
Further, two world-renowned epidemiologists, Drs. Felix Arellano and Ken Rothman,
concluded,
"As a body of data, these reports collectively contain little material information
about the relation between oil development in the Ecuadorian Amazon region and cancer
among residents of that region."7
"There is a notable absence of balanced criticism that one would expect to find
in a reasoned scientific assessment... These authors have not even mentioned any
alternative theories to explain the differences that they report, making it seem
that their role is closer to that of advocate than that of a skeptical scientist...
Their arguments in favor of a causal interpretation are weak... The most striking
problem with this paper is that the authors have completely neglected consideration
of competing explanations for their data..."8
Dr. Felix Arellano further notes that the excess cancer incidence reported by Dr.
San Sebastian for the town of San Carlos is incorrect. In his original study Dr. San
Sebastian underestimated the actual population of the town since he did not use government
of Ecuador census data, making his estimated cancer rates appear to be above expected
rates, when in fact they are not.
"When we tried to replicate the results of the San Carlos study we found that there
was an underestimation of the population of San Carlos by Dr. San Sebastian and
his collaborators. The use of Census data in the calculation doesn't reveal any
excess risk in the region of San Carlos."9
The plaintiffs refuse to acknowledge what many physicians, epidemiologists and
health organizations conclude: That the health conditions in the Oriente region are
likely the result of the widespread poverty, malnutrition, insufficient access to
medical care and a lack of water treatment and sanitation systems.
While plaintiffs' attorneys should be representing their clients' best interest,
the truth is far different. In one of the more telling examples of how their interests
diverge from those of their clients, plaintiffs' attorneys discount evidence that
water sources in the Oriente are contaminated by microbiological contaminants unrelated
to oil production.
Bacterial contamination from human or animal waste was found in 90% of drinking
water samples indicating widespread microbial contamination of the water sources.
While dangerously high levels of bacteria-related contamination may not be the source
of all of illnesses reported in the area, analyzing water samples for these contaminants
is consistent with good public health practice. Guidance from the World Health Organization
states further that:
"The potential health consequences of microbial contamination are such that its
control must always be of paramount importance and must never be compromised."10
Plaintiffs' focus on alleged hydrocarbon contamination instead of the real causes
of illness in the Oriente is a deliberate tactic to mislead the court and the public.
In demonstration of their disregard for their clients' wellbeing, plaintiffs deem
the problem "irrelevant" and seek no redress for a problem that could – and
should – be remedied by the appropriate parties.
7. The Question of Genocide
In an effort to attract the support of human rights groups, plaintiffs' attorneys
and the activists who support them have claimed that the impact on the indigenous
cultures amounts to genocide.
However, there is absolutely no basis for the plaintiffs' attorneys' claims of
genocide. In fact, Ecuador government census data and all peer-reviewed published
population data agree that the population of the six indigenous groups identified
by plaintiffs has either increased or remained stable since Texpet began operations
in Ecuador11. For example, demographic studies presented
by Dr. Eduardo Bedoya (a Ph.D. in Anthropology from New York University who has consulted
for the ILO, CARE-Perú, WINROCK Corporation, the World Bank, and the IUCN) indicate
that the Cofán – far from "facing extinction," has more than tripled from about
300 inhabitants in 196012 to 1,044 in the official government
of Ecuador census of 200113.
It is true that the Cofán population experienced a massive decline, long before
oil was discovered in Ecuador, due to Western-borne diseases. Yet plaintiffs' attorneys
conceal the well documented fact that this drop began when missionaries arrived in
the Oriente hundreds of years ago, bringing foreign diseases with them14.
The Cofán nearly did go extinct in 1923 when a measles outbreak killed over half of
the remaining population, leaving only a few hundred Cofán alive15.
8. Texaco Earnings in Ecuador
Plaintiffs' attorneys continuously make the ridiculous charge that the company
enjoyed $30 billion in earnings from its involvement in the consortium.
As best as we can determine, they arrive at that figure by assigning to Texpet
all of the profits generated by the consortium during the period of Texpet's
involvement. In fact, fully 95% of the profits went to the Government of Ecuador in
the form of royalties, income taxes and market subsidies. Specifically, of the approximately
$25 billion dollars generated by the consortium, $24.5 billion went to the State,
and about $490 million went to Texpet, the minority stakeholder. These are figures
that have been validated by the records of the Central Bank.
JUDICIAL INSPECTION RESULTS
9. Plaintiffs' Fiction: "Of the 35 inspected
sites whose results have been reported to the court, 100% demonstrate significant
amounts of life threatening toxins, some thousands of times above the maximum amounts
permitted by Ecuadorian and U.S. law."
FACT: While Plaintiffs' attorneys continually claim to identify
samples that exceed allowable levels of oil-related components, they deliberately
fail to mention that they take most samples from sites still in use by Petroecuador,
the current operator, and from areas outside those remediated by Texpet. Seventy-six
percent of plaintiffs' soil samples were taken from areas outside of the
agreed-upon scope of Texpet's remediation in areas known to be Petroecuador's responsibility,
and yet they persist in blaming Texpet for not having remediated those areas.
Specifically, soil samples collected from sites that plaintiffs' attorneys repeatedly
point to (Lago Agrio-02, Lago Agrio-06, Sacha-65, Shushufindi-18) were collected from
areas that clearly were not included in Texpet's remediation program and thus were
then, and remain now, the sole responsibility of Petroecuador, the state-owned oil
company. It is absurd to claim that Chevron is responsible for areas not included
in Texpet's remediation program and that it neither owns nor controls.
Nevertheless, at 42 sites inspected, Chevron has collected 198 samples from areas
that were previously remediated by Texpet, and more than 99% of these (197/198) confirm
that the remediation was effective and complied with the closure requirements set
by the Government of Ecuador and Petroecuador under their 1995 Agreement with Texpet.
None of these samples contained unsafe levels of potentially harmful
petroleum compounds (e.g., Benzene, Polycyclic Aromatic Hydrocarbon (PAHs) or heavy
metals). This evidence confirms that the areas remediated by Texpet pose no significant
oil-related threat to public health.
10. Plaintiffs' Fiction: "Chevron's...
water samples taken for court-ordered inspections violate Ecuadorian and U.S. norms
designed to protect public health."
FACT: Greater than 99% of all Chevron water samples taken directly
from drinking water sources meet safe drinking water limits for petroleum compounds
as defined by Ecuador Decree 2144 (which governed Texpet's remediation), United States
Environmental Protection Agency (USEPA) Maximum Contaminant Levels, and World Health
Organization (WHO) Guidelines for Drinking Water Quality.
In contrast to the 166 drinking water samples taken by Chevron, plaintiffs' experts
collected and analyzed only 46 water samples, of which only 16 were from drinking
water sources.
11. Plaintiffs' Fiction: "In several
Chevron well sites, lab results report shockingly high levels of toxic heavy metals
such as barium and cadmium."... "If the high levels of poisonous heavy metals found
at Chevron's well sites truly occurred naturally, then...the land would simply be
uninhabitable and there would be no need for environmental regulations anywhere in
the world."
FACT: Plaintiffs' attorneys are either knowingly deceptive in
their statement, or ignorant of basic geological science. The fact is, the levels
of metals found in soils at the sites investigated are consistent with naturally occurring
levels typically seen in the U.S., Ecuador and worldwide.
All soils contain heavy metals since soils are formed through the influence of
percolating water and bacteria on weathered rock that naturally contains such trace
constituents as cadmium (Cd), copper (Cu), lead (Pb), zinc (Zn), nickel (Ni), chromium
(Cr), and barium (Ba). Since the makeup of any soil depends generally on the elemental
composition of the parent rock (which can vary depending on location and is impacted
by a variety of other factors including climate), evaluating whether a soil may be
contaminated with heavy metals requires a thorough understanding of whether the concentrations
detected in the soil reflect naturally occurring (i.e., background) levels.
Although plaintiffs' attorneys allege that "shockingly high levels of barium" are
the result of Texpet operations, the fact is that barium sulfate, the chemical form
of barium used by Texpet in drilling fluids and at petroleum exploration sites generally,
is a naturally occurring mineral. Barium sulfate is extremely insoluble and the "USEPA
has concluded that barium sulfate cannot reasonably be anticipated to cause acute
or chronic toxicity in humans or adverse effects in the environment16.
The U.S. Department of Health and Human Services Agency for Toxic Substances and Disease
Registry agrees17. Barium sulfate is sometimes deliberately
ingested by patients (a "barium milkshake") upon doctor's orders so that x-rays can
be taken of the gastrointestinal tract.
What plaintiffs' attorneys point to as the "EPA standard for barium" of 82 mg/kg,
is in fact a generic soil screening level for protection of groundwater from
soluble forms of barium, which is not relevant to the barium sulfate found
at oil field sites. This standard falls below natural barium levels reported by the
U.S Geological Survey (up to 5,000 mg/kg barium in surface soils), and as such, is
not useful for environmental management purposes even in the U.S.18
With respect to cadmium, the background concentration of naturally-occurring cadmium
in soil as reported in the literature and by Chevron, shows that background levels
in Ecuador are consistent with those observed in other parts of the world. Nevertheless,
plaintiffs' attorneys erroneously claim that these levels are the result of Texaco
operations.
Of 749 soil samples that were analyzed for cadmium, only one exceeded
the background concentration: a single sample at Sacha-18 contained 4.1 mg/kg cadmium,
which is well below the 8 to 78 mg/kg level that is considered safe under oilfield
regulations in the U.S. and Venezuela.
12. Plaintiffs' Fiction: "Chevron refuses
to test its samples for the most carcinogenic toxins and does not test for the deadly
chemical chromium 6, found by Plaintiffs in dangerously large quantities"
FACT: Plaintiffs' attorneys' assertions are wrong. Chevron has
analyzed 306 soil samples for chromium 6 – 29 more than plaintiffs – and
found that 96% of them did not contain any chromium 6. The highest concentration found
in any soils sample was 0.13 mg/kg which is less than one-tenth of one percent
of typical cleanup levels in the U.S. and is not considered a harmful level. The fact
is, plaintiffs do not analyze for chromium 6. Instead, they analyze for total chromium
and erroneously report the data as chromium 6. One of their own experts (Suarez) has
publicly admitted making this mistake19.
JUDICIAL INSPECTION PROCEDURES
13. Plaintiffs' Fiction: "Chevron scientists
now engage in a very sophisticated site analysis of each pit to deceive the court
as to the extent of the contamination. Chevron scientists typically map out a contaminated
site and choreograph a deceptive plan days before the judge arrives for a judicial
inspection, and use several sampling techniques designed specifically to deceive the
courts as to the extent of the contamination."
FACT: Plaintiffs' attorneys just don't know enough to recognize
good science when they see it. In order to ensure the accuracy of results found during
the judicial inspection, Chevron scientists do follow a carefully designed plan for
sampling and testing, which is in complete accord with the court-ordered Sampling
Plan, Analysis Plan and Terms of Reference which were developed jointly by Chevron
and plaintiff's technical experts, signed by both parties, and submitted to, accepted
and ordered by the court. Unfortunately, despite agreeing to this plan and subsequent
court orders, plaintiffs' attorneys have never followed it, and employ poor practices
and bad science that result in their continually submitting unverifiable and unreliable
data in their reports.
Chevron's sampling and analytical techniques and the "deceptive sampling" allegations
contained in the "Maest Report" promoted by plaintiffs were reviewed by an independent
panel of environmental site assessment and remediation professors/experts, which concluded:
"Based on our review of Chevron's Sampling and Analysis Program, we have found it
to be well designed and executed to meet the stated goals (i.e., assess remediation
compliance and risks to human health at the time of the Judicial Inspection) and
certainly consistent with international practice. Additionally, we have found that
the program is one that was jointly developed and carried out with full involvement
by the Plaintiffs and mutual oversight. Our review of Maest et al.'s criticism of
Chevron's sampling and analysis has found that their serious allegations are baseless.
Thus, Chevron's Sampling and Analysis Program appears adequate for the agreed-upon
purposes of the Judicial Inspection process. It appears Maest et al. did not do
a complete review of the program and that they were apparently not fully aware of
international practices and standards as applied to oil field cleanup."20
14. Plaintiffs' Fiction: "...Chevron
misuses the EPA's Soil Screening Level Values (SSL) by failing to follow the strict
multi-step process it requires to claim the toxins being found pose no threat."
FACT: Chevron experts have conducted health risk assessments at
every Judicial Inspection site. These assessments follow
risk assessment guidance provided by the USEPA and used in developing Soil Screening
Levels. An independent expert review of Chevron's sampling and analysis methods21 submitted to the court concluded that:
"...The Judicial Inspection assessment program, as originally planned and now being
implemented, is appropriate to address the above goals (i.e., assess remediation
compliance and risks to human health at the time of the Judicial Inspection)."
15. Plaintiffs' Fiction: "5,000 ppm TPH...a
figure 50 times more permissive than the US standard of the time."
FACT: While plaintiffs have tried to claim that the USEPA has
a TPH standard of 100 ppm in soil, no such regulation, limit or guideline has
ever existed. Steve Rock, of the USEPA National Risk Management
Laboratory, said in a letter to Chevron:
"It is important to remember that the USEPA has not set a national regulatory limit
or guideline for total petroleum hydrocarbons (TPH) in soil. EPA regional staff
and individual state regulators have developed risk-based cleanup goals for many
contaminants or sets of contaminants such as polyaromatic hydrocarbons (PAHs) or
specific individual hydrocarbons (e.g. benzene) for individual sites."22
Myron Knudson, a Senior Policy Advisor in USEPA Region 6 has stated:
"EPA has not established any soil standard for the remediation of Total Petroleum
Hydrocarbons. We also don't have any screening levels for TPH for Region 6 of the
U.S. Environmental Protection Agency."23
16. Plaintiffs' Fiction: "...325,000
parts per million – an astounding 3,250 times higher than permitted in California."
FACT: While plaintiffs' attorneys claim that the results
exceed USEPA and California standards for total petroleum hydrocarbons (TPH) in soil,
the facts prove otherwise. The USEPA affirms that there are no national regulatory
limits or guidelines for total petroleum hydrocarbons (TPH) in soil,24 and the California State Water Resources Control Board
states that "there are no standard statewide cleanup levels for contaminants in
soil because such determinations need to be made on a site specific basis."25
17. Plaintiffs' Fiction: "[Chevron]...cite[s]
an obscure regulation in Louisiana that applies only in strictly industrial areas
where there is no possibility of surface water contamination, where people do not
live, and where oil pits like those Chevron built in Ecuador have concrete liners."
FACT: Far from being an "obscure rule," Louisiana Statewide Order
No. 29-B26 is the law governing the closure of all oilfield
pits in Louisiana. Chevron experts use this and other regulations from oil producing
states when evaluating sites during the judicial inspection to ensure that results
are measured against the most appropriate standards in use worldwide at the time of
the remediation program.
According to Carroll Wascom, a former Louisiana regulator:
"29-B is applicable to all oilfield pits, including unlined drilling (reserve) pits,
which have been used throughout the State of Louisiana for decades. Reserve pits
are still used by many oil and gas companies to store fresh water or oil base drilling
muds. The closure standards of 29-B apply in all cases...Current standards are protective
of groundwater."27
Further, contrary to plaintiffs' assertions, "there are no current or past
requirements of Statewide Order No. 29-B that any oilfield pit be lined with concrete."
Activist groups supporting the plaintiffs claim that Louisiana has a 140 ppm TPH limit
for soil, but provide no regulation or reference for this claim. However, the only
TPH regulation that applies to pit remediation and closure in the state of Louisiana
is Statewide Order no. 29-B which is currently set at 10,000 mg/kg (ppm).
18. Plaintiffs' Fiction: "Chevron insists
that the Lago court adopt the astonishingly high standard of 10,000 ppm for TPH."
FACT: Although plaintiffs' attorney Alberto Wray tried to convince
the Court to evaluate Texpet's remediation according to regulations enacted well after
Texpet's remediation was completed, Nueva Loja Superior Court President Efrañn Novillo
ordered the experts to evaluate the remediation according to international standards
of the time.28
In compliance with the judge's order, Chevron reviewed all pertinent U.S. and South
American regulations governing pit remediation regulations in place during the time
of Texpet's remediation and found 10,000 ppm for TPH in soil to be the most appropriate
guide. Nevertheless, the remediation action limit agreed upon for Texpet's remediation
(5,000 mg/kg TPH) was more stringent than the pertinent U.S. and South America regulations
at the time.
REMEDIATION
19. Plaintiffs' Fiction: "Texpet's remediation
was part of a choreographed fraud that involved bulldozing dirt over a small number
of waste pits without first removing toxins."
FACT: Nothing could be farther from the truth. The Government
of Ecuador and Petroecuador certified that every one of the pits remediated by Texpet
was completed in accordance with all local and international regulations. Photographic
evidence chronicling the 8-step process used to remove or treat oil prior to its extraction,
remediation work, lab records and government certification have been filed with the
court for all of the sites remediated by Texpet. Recent test results from 42 sites
investigated confirm that Texpet's remediation was effective and that previously remediated
pits pose no health risk to the people of the region.
20. Plaintiffs' Fiction: "Chevron paid
less than 1% of the cost of a "real" clean-up.
FACT: These inflated and false allegations reveal the desperation
of Plaintiffs' attorneys. The truth is that HBT-Agra, an independent consultant selected
by the government of Ecuador, originally estimated that the clean-up should be approximately
$13 million29. Texpet ended up spending far more than
that amount, with $40 million spent in an effective remediation program.
In addition, the company made significant and appropriate contributions to the
local community by helping to build sewage and clean water systems, schools and medical
dispensaries; providing support for indigenous groups, and both providing and installing
advanced water re-injection technology.
21. Plaintiffs' Fiction: "Chevron abandoned
roughly 1,000 open-air waste pits..."
FACT: Chevron did not abandon 1,000 pits. Many of the pits originally
constructed in Ecuador remain in use by Petroecuador, others were remediated by Texpet,
and Petroecuador agreed to take responsibility for their share of the remaining pits.
Additionally, it is important to note that the use of open-air, unlined earthen
pits to store drilling fluids was a standard oil industry practice in both the United
States and Latin America during the time of the Petroecuador-Texpet concession. For
example, in the U.S. state of Louisiana, 81,933 open-air, earthen, unlined pits were
constructed between 1970 and 1985.
According to the USEPA, in 1984 there were 125,000 open pits in the United States,
of which 97.6% did not have synthetic liners. Only 2.4% were lined with synthetic
material; 27% had natural liners (clay, much like in Ecuador), and all the others
were not lined30.
The existence of earthen pits continues to be prevalent throughout Latin America
today. In Argentina, for example, it has been reported that there are more than 24,000
oilfield pits31. In Venezuela, PDVSA reported in 2001
that they had in previous years constructed 12,366 earthen pits without synthetic
lining32.
22. Plaintiffs' Fiction: "In 1939, Texas
outlawed open-air toxic waste pits of the type Chevron built in Ecuador throughout
the 1970s and 1980s."
FACT: Texas did not ban waste pits, the use of drilling mud pits,
or saltwater pits in 1939. On the contrary, the purpose of the 1939 Order in question
was to protect and conserve crude oil and to prevent waste of petroleum products.
The Railroad Regulatory Commission of Texas (RRC), the regulatory body that oversees
oil and gas exploration and production in the state, continued to allow the use of
pits for many different types of materials and wastes during the time when Texpet
operated in Ecuador33. In fact, a 1983 report to the
Governor of Texas and state legislature states that 4,276 permits for unlined pits
were active as of August 31, 1982, under the RRC's regulatory authority34.
23. Plaintiffs' Fiction: "Waste pits
will contaminate the Amazon environment for centuries"
FACT: In September 2006, Dr. Carlos Molano and Dr. Kirk O'Reilly
presented a scientific paper35 at the 8th Latin-American
Congress on Groundwater Hydrology in Asunción, Paraguay, that clearly shows it is
impossible for hydrocarbons from either remediated or un-remediated pits
at well sites in the Oriente to contaminate groundwater either now or in the future.
24. Plaintiffs' Fiction: "Chevron deliberately
used an inappropriate test to conceal the true extent of the toxic contamination."
FACT: The simple fact is that plaintiffs' attorneys are wrong
about the closure criteria that were applied to the Texpet remediation, and wrong
about the validity of the procedure they are referring to – the Toxicity Characteristic
Leaching Procedure (TCLP) – as an appropriate test.
As the primary method used for evaluating the potential leachability (ability to
pass through in liquid form) of waste materials in the United States,36
the TCLP test was specified for use in the original Remedial Action Plan (RAP) governing
Texpet's remediation as required by the Government of Ecuador, and is still authorized
today for use in Ecuador under existing regulations. It is an analytical test developed
to protect potential drinking water sources by predicting the leachability of organic
and inorganic toxicants from a waste material to groundwater. Similar test methods
are used extensively in Canada, Europe, and Asia37 and
in other South American countries, including Venezuela38.
Furthermore, the USEPA themselves utilized the TCLP test to assess the risk of leaching
from old earthen pits in a 1987 report to Congress39.
According to Texpet's agreement with the Republic of Ecuador, prior to March 1997
the sole remediation standard, for leachability was a 1000 mg/L TPH (Total Petroleum
Hydrocarbon)-TCLP criterion, designed to ensure that any petroleum material remaining
in place would not move through the soils and contaminate underlying groundwater.
After March 1997, this criterion was supplemented with a 5000 ppm total soil TPH measurement.
While the agreed upon 1995 Remedial Action Plan (RAP) remediation objective was
1,000 mg/L, the highest concentration observed during the Judicial Site Inspections
is 1.91 mg/L.
In Ecuador, the environmental regulations in place today, Decree 1215 (Reglamento
Sustitutivo al Reglamento Ambiental para Operaciones Hidrocarburñferas RAOH 1215),
still requires an analysis of TPH-TCLP to determine if drilling muds exceed the permissible
limits for hydrocarbons. Therefore, TCLP is a requirement in Ecuador even today, and
it is based on USEPA SW-846 method 1311.
25. Plaintiffs' Fiction: "Ecuador law
currently prohibits TPH in the soil at amounts greater than 1,000 ppm"
FACT: Current Ecuadorian laws governing such matters do not prohibit
TPH at concentrations greater than 1,000 ppm except in designated national parks.
Current Ecuador regulations allow up to 4,000 ppm for industrial areas and 2,500 ppm
for agricultural areas.
26. Plaintiffs' Fiction: "Chevron failed
to include the following in its remediation plan:
— Cleanup of groundwater or rivers
— Compensation to local residents
— Installation of re-injection wells
— Consultation with indigenous groups about their needs"
FACT: Plaintiffs' attorneys both fail to acknowledge the very
real contributions Texpet made to Ecuador as part of its remediation agreement, and
infer that it should be responsible for cleanup that was either unnecessary, or for
which Petroecuador assumed responsibility.
As part of its remediation agreement, Texpet built and installed three produced
water re-injection systems and donated equipment for Petroecuador's installation of
ten other produced water re-injection systems (which Petroecuador has since failed
to maintain). Texpet also provided two, $1 million funds to support socioeconomic
projects and the construction of schools and adjacent medical facilities, which were
developed in consultation with local representatives and community leaders. In addition,
Texpet provided approximately US $3.6 million dollars to four municipalities in the
area to assist in the construction of potable water and sewage projects. In total,
Texpet spent $40 million dollars to remediate the sites and support improvement projects
for the local community.
PRODUCED WATER
27. Plaintiffs' Fiction: Chevron dumped
30 times more crude than was spilled during the Exxon Valdez disaster based on a claim
that "approximately 2% of such produced water is crude oil."
FACT: While plaintiffs' attorneys try their best to extrapolate
the data, the fact is they can offer no credible data to support their claim. Even
their own test results from the judicial inspections prove them wrong: The plaintiff's
technicians analyzed 3 produced water samples for TPH during the Judicial Inspections
and even using their inappropriate analytical method which overestimates TPH levels,
they reported levels of 0.1 (Aguarico station, EAG-AWT-AF1), 1.6 (LA-Norte Station,
LAN-TAN-RE-AF), and 24 (SSF-Sur, SSF-SUR-JI-PWU) mg oil per liter of water, rather
than the 2% or 20,000 mg oil per liter of water that they claim is present.
28. Plaintiffs' Fiction: "In Ecuador,
the dumping of produced water violated a variety of laws dating to 1921..."
FACT: Plaintiffs' attorneys are wrong. The discharge of produced
water is still permissible under Ecuadorian law today; however since 1992 (Acuerdo
Ministerial No. 621, 1992) produced water must meet certain water quality parameters
before discharging. Chevron has not been able to verify whether Petroecuador has met
these limits prior to discharging produced water.
29. Plaintiffs' Fiction: "The dumping
of produced water was outlawed in the oil-friendly state of Louisiana in 1942."
FACT: Onshore discharge of produced water was a practice still
in use in Louisiana and throughout the United States in the 1970's and 1980s40.
Plaintiffs' attorneys cite a 1942 Louisiana regulation that was never enforced
and was in fact deleted from Louisiana regulations in 194341.
Previously, plaintiffs' attorneys and the activists who support them alleged that
the discharge of produced water was outlawed in Texas in 1919. They have since ceased
doing so – apparently after realizing that no such regulation from 1919 exists.
HEALTH ISSUES
30. Plaintiffs' Fiction: "Dozens of prominent
scientists from 17 countries recently signed an open letter criticizing Chevron's
lack of scientific integrity in Ecuador."
FACT: Regardless of what the plaintiffs' attorneys would like
this letter to represent, the fact is that its authors do not dispute the broad consensus,
reached independently by established experts in the field of epidemiology and tropical
medicine, that the health studies used by plaintiffs are flawed, biased and inconclusive.
Equally important, the open letter does not address the more plausible causes of health
problems in the Oriente region of Ecuador.
31. Plaintiffs' Fiction: "The U.S. government
links TPH exposure to cancer, reproductive problems, nervous system damage, immune
system impairment, and a host of other health problems."
FACT: TPH is not linked to cancer, only specific hydrocarbons
are considered carcinogenic. The U.S. Agency for Toxic Substances and Disease Registry
(the agency quoted by plaintiffs' attorneys) makes it very clear that:
"TPH is a mixture of many different compounds" and that some of these can be toxic.
With respect to potential carcinogenic effects, ATSDR notes that "...one TPH compound
(benzene) is carcinogenic to humans," while " other TPH compounds (benzo(a)pyrene
and gasoline) are probably and possibly carcinogenic to humans."42
Chevron has analyzed every soil and water sample specifically for potentially harmful
elements within TPH – notably benzene and benzo(a)pyrene – and found them
to be at safe levels in greater than 99% of drinking water samples and in every soil
sample collected from Texpet remediated areas. In fact, benzene has not been detected
in any soil sample collected from a pit remediated by Texpet. In addition,
all PAHs in remediated pits are at safe levels.
However, while plaintiffs originally tested for benzene and benzo(a)pyrene during
site investigations, they have stopped analyzing for benzene in soil or water and
have stopped using analytical methods that would allow them to get accurate information
for benzo(a)pyrene and other PAHs. Thus there is no way that plaintiffs can accurately
evaluate the potential health risks posed by these chemicals.
32. Plaintiffs' Fiction: "Chevron has
not conducted even a single health evaluation in the area."
FACT: On the contrary, Chevron has conducted a health risk assessment
at every Judicial Inspection site and included the results in expert reports submitted
to the court. In these assessments, the experts have evaluated the potential health
impacts of local residents' exposures to the levels of chemicals found in water and
soil, consistent with U.S. and international guidance. The results of these health
risk assessments demonstrate that current drinking water and soils that were previously
remediated by Texpet do not present a significant oil-related health threat to local
residents. This conclusion is the same as that reached by the Court's settling experts
in their independent evaluation of the data collected for Sacha-53, as presented in
the only report from these experts issued to date43.
LEGAL & MISCELLANEOUS ISSUES
33. Plaintiffs' Fiction: "The contractual
clean-up standard negotiated by Chevron...- 5,000 parts per million (ppm) for Total
Petroleum Hydrocarbons (TPHs) – is five times higher than allowed by current
Ecuadorian law, and 50 to 500 times higher than applicable standards then in effect
in the U.S."
FACT:
- There are no national standards regulating TPHs because the USEPA has not established
TPH limits or guidelines for soil
- Standards used to evaluate the samples are absolutely consistent with local Ecuadorian
regulations when Texpet conducted the remediation
When Texpet conducted its remediation between 1995-1998, it did so in accordance
with existing Ecuadorian law governing safe oilfield operations (Executive Decree
2982), as well as with the terms agreed upon with the government of Ecuador and Petroecuador.
That was why the government of Ecuador and Petroecuador released Texpet from all future
liability and responsibility in a 1998 agreement.
- Decrees 1215 and 3516, which plaintiffs' attorneys cite in their reports as the
legal threshold for analyzing the judicial inspection technical data, were not even
enacted until 2001 and 2003, respectively – at least three years after Texpet
completed its remediation program and 11 years after it ceased operating
the oil fields.
The bottom line is that it defies both common sense and the law to hold a party
accountable for regulations and compliance parameters that did not exist at the time.
34. Plaintiffs' Fiction: "Chevron contaminated
Ecuador deliberately to save an estimated $1 to $3 per barrel, or up to $4.5 billion
total.
FACT: First, Texaco's total net profits from the operations of
its subsidiary in Ecuador amounted to approximately $490 million. Second, the inference
made by plaintiffs' attorneys that Texpet discharged produced water instead of re-injecting
it as a money-saving measure ignores two very important facts: this method of managing
produced water was not only common practice throughout Ecuador, but Latin America
and the U.S. during that time; and it was the approach mandated by Petroecuador, the
majority owner of the consortium and the party responsible for all operating decisions.
The discharge of produced water is still an accepted practice today, with 787 million
barrels discharged onshore worldwide in 200344.
35. Plaintiffs' Fiction: "Chevron's counsel
used false pretenses to cancel a judicial inspection"
FACT: The postponement of the Guanta inspection until a later
date was ordered by the Court upon the presentation of military and police reports
that described a potential kidnap threat targeting Chevron and Court representatives.
Any allegations made by the plaintiffs' attorneys and supporters that Chevron has
interfered with or in any way manipulated the evidence or reports by the Ecuadorian
military with respect to the safety conditions that prompted the Court to declare
the postponement of the Guanta station judicial inspection are false and defamatory.
The decision to suspend the Guanta inspection was made by the Court and the Court
alone. As explained in Nueva Loja Superior Court President Efrañn Novillo's order,
his ruling is based on the government's own information, and was done strictly out
of concern for the safety of the people, including the Court's personnel and experts,
and the security of Petroecuador's production station itself, which is considered
a State asset.
The fact is, Chevron had originally called for the inspection so that it could
demonstrate the effectiveness of Texpet's remediation program, as well as Petroecuador's
record of negligence and operational mismanagement.
36. Plaintiffs' Fiction: "...[I]t is
irrefutable that Chevron lawyers with close ties to Ecuadorian military officials
have tried to corrupt the trial process and suspend a critical judicial inspection.
It is also irrefutable that there has been harassment of the plaintiffs' legal team,
in several cases by self-identified members of the Ecuadorian military. This intimidation
has included death threats, an attempted kidnapping, wire tapping, video surveillance
and the theft of legal files."
FACT: Plaintiffs' lawyers provide absolutely no evidence to support
their allegations about the manner in which Chevron is acting in this trial. To suggest
that Chevron in any way has any association with alleged acts to intimidate plaintiffs'
attorneys or others is both baseless and repugnant.
To the contrary, Chevron has consistently insisted that the judicial process proceed
in a fair and transparent manner, and that the safety of all participants is of paramount
importance.
37. Plaintiffs' Fiction: "[Chevron] invented
an "arbitration" claim against Ecuador's government and then pressed its claims in
the same U.S. federal court that it had considered incapable of hearing the case years
earlier."
FACT: Chevron didn't "invent" its claim; the company's rights
are spelled out in a Joint Operating Agreement that regulated the relationship between
Petroecuador, Gulf and Texpet requiring Petroecuador to fulfill its obligation to
indemnify Texpet and its successors for any and all claims arising from Texpet's role
as operator and minority owner in the former consortium with Petroecuador. Because
Petroecuador never honored its clear obligations, Chevron is rightfully seeking redress
of its claim.