STRATUS CONSULTING

Scientific Evidence in the Aguinda et al. v. Chevron Case

Douglas BeltmanStratus Consulting

Boulder, CO

STRATUS CONSULTING

Outline

Texaco’s operations in Ecuador– History– Data on contamination

Chevron’s false claims that Petroecuador is responsible for the contamination Texaco’s ineffective “cleanup”Environmental damages estimatesChevron defense positions re: the scientific evidence against them

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Texaco’s Oilfield Operations in Ecuador

Texaco drilled and operated 356 oil wells and built 22 production stations from 1967 to 1990Petroecuador took over operations in 1990; Texaco out of consortium in 1992

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Wells Opened and Operated by Texaco

0

10

20

30

40

50

60

1967

1968

1969

1970

1971

1972

1973

1974

1975

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1989

1990

Year

Num

ber o

f wel

ls

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Texaco Operations

River Station

Crude

Esmeraldas

Well

Well

WellWell

WellWell

Well

Gas

Producedwater

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Primary Sources of Contamination from Texaco’s Operations

916 unlined, abandoned pits with wastes from wells (based on aerial photo analysis)

Photo credit:L. Dematteis

STRATUS CONSULTINGCourtesy of M. Pallares

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A Texaco oil well after drilling is completed. Oil pits are clearly visible.

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Oil roads and wellpads opened the area to development. This photo shows a school located adjacent to a Texaco well and pit

Courtesy of M. Pallares

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Pits

Used for disposal of well drilling, development, and production wastes– Unrecovered oil – Drilling muds – Chemicals used to develop the wells

(acids, biocides)

One of Texaco’s oil pits (photo taken in 2008)

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Texaco Pits Constructed without linersConstructed with built-in overflow pipesUsed for permanent disposal

One of Texaco’s oil pits (photo taken in 2008)

STRATUS CONSULTING Courtesy of M. Pallares

Schematic showing environmental pathways by which Texaco’s pits cause contamination

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Pit Usage in the U.S.

“Reserve” pits common in the past, and still in useRegulations and industry guidance going back to the 1940s:– Must be designed to prevent contamination of

groundwater, surface water (usually lined, but not always depending on usage and site conditions)

– Used for temporary storage only (weeks to a few months)

– Tanks used instead of pits where possibleIn Ecuador, Texaco built pits designed to contaminate (no liners, overflow pipes directly to streams) and left them as permanent waste sites

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1962 Guide from American Petroleum Institute Showing Industry Standard

Figure from API document

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Produced Water

Texaco audits show that they discharged ~18 billion gallons from 1972-1990 into streams and rivers

Photo credit:M. Pallares

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Oilfield Produced Water

Produced water occurs underground with oil and has to be separated from the oil at the surfaceTypically contains salts from the host rock and hydrocarbons from the oil and any chemicals injected into the well to aid in production

Pipes formerly used by Texaco to discharge produced water at one of its 22 processing stations (now used for stormwater discharge)

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Produced Water

Petroecuador began reinjecting produced water soon after it took over operations 1990; now all is reinjectedData from Texaco’s time show that the produced water was toxic to aquatic life and contained high levels of petroleum hydrocarbons

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Oilfield Produced Water

U.S. regulations for onshore discharge of produced water date back to the 1920sSince the 1920s, produced water is typicallyreinjected or treated to standards

Texaco dumped all of their produced water directly into rainforest rivers and streams used by local residents for drinking, bathing, washing clothes, etc.

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Oil (TPH) in Produced Water Discharged by Texaco to Streams and Rivers

TPH in Agua de Formacion

0

5

10

15

20

25

30

Agu

aric

o

Ata

cpi

AV

GA

uga

cent

ral

Aug

a S

ur

Con

onac

o

Lago

Nor

te

Sac

haC

entra

lS

acha

Nor

te N

o.1

Sac

haN

orte

No.

2

Sac

ha S

ur

Shu

shuf

indi

Cen

tral

Shu

shuf

indi

Nor

teS

hush

ufin

diS

urS

hush

ufin

diS

ur O

este

Yuc

a

Yuc

a

TPH

(mg/

L)

Ecuador limites: 0.325 mg/L TPH

Data source: Fugro-McClelland, 1992, which one of Texaco’s own audits of their operations in Ecuador

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BTEX in Texaco Produced Water Discharged to Streams and Rivers

0

500

1000

1500

2000

2500

3000

Sacha Central Shushufindi N Shushufindi S

Con

cent

ratio

n (u

g/L)

Benzene Toluene Ethylbenzene Xylenes

Data source: Jocknick et al., 1994

EPA benzenestandard: 5 ug/L

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Other Sources of Contamination

Oil spills from pipelinesTexaco’s audits: Texaco never had any spill detection or response programs in their ~25 years of operation

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Other Sources of Contamination

Oil poured on roads

Photo credit:L. Dematteis, M. Pallares

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Other Sources of Contamination

Air pollution from open burning of pits, flaring

Photo credit:M. Pallares

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Data on Contamination

“Historical” studies (prior to trial)Data collected as part of the trial– Judicial inspections (plaintiffs, Chevron)– Cabrera and his team

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Investigations conducted in the Napo Concession prior to the trial Study author Conducted on behalf of Study dates What was sampled Reference HBT AGRA Chevron-Texaco and

Petroecuador 1992-1993 Soil, surface water,

produced water HBT AGRA, 1993

Fugro-McClelland Chevron-Texaco and Petroecuador

1964-1990 Crude oil, produced water, surface water, groundwater

Fugro-McClelland West, 1992

Centro para Derechos

Economicós y Sociales 1994 Surface water, produced water

Jochnick et al., 1994

Woodward-Clyde International

Chevron-Texaco 1995-1998 Soil, water in pits Woodward-Clyde International, 2000

Ministry of Energy and Mines, Ecuador

Petroecuador; Controller of the State of Ecuador

1997-2001 Produced water, soils, water in pits

Contralaria General del Estado, 2003

Instituto de Epidemiología y Salud Communitaria “Manuel Amunárriz”

Instituto de Epidemiologia y Salud Communitaria “Manuel Amunarriz”

1999 Surface water San Sebastián et al., 2002

Instituto de Epidemiología y Salud Communitaria “Manuel Amunírriz”

Instituto de Epidemiologia y Salud Communitaria “Manuel Amunarriz”

1999 Surface water San Sebastián et al., 2005

Laboratorio de Suelos, Aguas, Plantas y Balanceados

Colegio Fisco-Misional Técnico Agropecuario Padre Miguel Gamboa

2000 Surface water, groundwater, sediment

Laboratorio de Suelos, Aguas, Plantas y Balanceados, 2000

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Sites Sampled During the Trial(out of 356 wells, 22 stations)

934945Total

12111Stations

814834Wells

TotalCourt Expert (2007)

Judicial Inspections

(2003-6)

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Judicial Inspections

Soils, sediment, groundwater, surface waterPetroleum (TPH), components of petroleum, metals~64,000 analyses total

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Number of Samples

Matrix Plaintiffs Chevron Total Soil 351 838 1,189 Watera 103 328 431 Crude 4 12 16 Otherb 0 28 28 Total 458 1,206 1,664 a. includes surface water, groundwater, and production water. b. includes asphalt, leachate, and quality control samples.

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TPH in Soil

Ecuador standard: 1,000 mg/kg TPHUS standard:– Regulated by State, standards vary– Recent shift toward regulation of BTEX

and away from TPH– 100 mg/kg TPH common standard in the

past

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TPH in Soil

97%99%Total(93 sampled)

92%92%Stations (12 sampled)

98%100%Wells(81 sampled)

% sites with TPH > 1,000

mg/kg

% sites with TPH > 100

mg/kg

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TPH in Soil

TPH

(ppm

)

100

1000

10000

100000

1000000

EcuadorianLaw

Maximum TPH sampled at each site

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Chevron collected samples only from locations away from the pits to show no contamination. This was typical of their sampling approach during the trial.

The Plaintiffs’ (or Demandantes) data document the extremely high petroleum contamination at the site. The units are mg/kg, or ppm, and 400,000 mg/kg = 40% oil.

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TPH in Groundwater

32%104Court Expert (Cabrera)

1%192Chevron

59%39Demandantes

% > 0.325 mg/L TPH

No. samples

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Petroecuador or Texaco?

Petroecuador took over operations in 1990The plaintiffs’ case is based only on sites built by Texaco, not any built by Petroecuador– ~25% of the sites operated by Texaco only

Most well site contamination occurred during drilling and initial development, not ongoing production -once production started, all material was sent directly to processing stations in a closed systemPetroecuador improvements over Texaco– Produced water reinjection– Oil spill detection and response– Well waste handling

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TPH in Soil

98%100%Texaco, then Petroecuador

96%100%Texaco only

% sites with TPH > 1,000

mg/kg

% sites with TPH > 100

mg/kg

Well built by Texaco, then operated by:

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Texaco Pit Cleanup in the 1990s

Chevron claims that they spent $40 million on a “cleanup”in the 1990sThe “cleanup” was ineffective:– They “touched” only 16% of their pits; e.g., they declared

pits with water being used by local communities (drinking water, fish farms) as not requiring cleanup, without confirmatory sampling

– High/meaningless cleanup standard• 1,000 mg/L TCLP (which is orders of magnitude higher

than the solubility limit of oil in the TCLP leaching solution)

– Poor confirmatory sampling• Data from the trial consistently show higher

contamination than in their cleanup “confirmatory”sampling

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TPH in Soil

97%100%No

98%100%Yes

% sites with TPH > 1,000

mg/kg

% sites with TPH > 100

mg/kg

Well site built and “remediated”by Texaco?

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Table 1. Texpet cleanup pits with TPH concentrations greater than 5,000 ppm.

Field name Well Pit

numberIn

RAPa No further

actionb Remediation

completec Maximum TPH (ppm)

Source for maximum TPH Well operated by

Aguarico Aguarico 8 Pit 1 Yes No Yes 8,183 Examen Pericial Texaco Aguarico Aguarico 9 Pit 1 Yes Yes No 13,947 Examen Pericial Texaco-Petroecuador Aguarico Aguarico 10 Pit 1 Yes Yes No 17,544 Examen Pericial Texaco-Petroecuador Aguarico Aguarico 10 Pit 3 Yes Yes No 8,181 Examen Pericial Texaco-Petroecuador Atacapi Atacapi 5 Pit 1 Yes No Yes 21,976 Examen Pericial Texaco Auca Auca Sur 1 Pit 2 Yes Yes No 40,102 Examen Pericial Texaco-Petroecuador Auca Auca Sur 1 Pit 3 Yes Yes No 29,979 Examen Pericial Texaco-Petroecuador Guanta Guanta 4 Pit 1 Yes No Yes 5,510 Examen Pericial Texaco-Petroecuador Lago Agrio Lago Agrio 1 Pit 1 Yes Yes No 21,521 Examen Pericial Texaco-Petroecuador Lago Agrio Lago Agrio 5 Pit 1 Yes No Yes 8,830 Examen Pericial Texaco Lago Agrio Lago Agrio 5 Pit 2 Yes Yes No 20,923 Examen Pericial Texaco Lago Agrio Lago Agrio 16 Pit 1 Yes Yes No 175,095 Texaco Texaco-Petroecuador Parahuacu Parahuacu 3 Pit 1 Yes No Yes 2,065 Examen Pericial Texaco Ron Ron 1 Pit 1 Yes No Yes 9,632 Examen Pericial Texaco Sacha Sacha 18 Pit 1 Yes Yes No 41,306 Examen Pericial Texaco-Petroecuador Sacha Sacha 18 Pit 2 Yes No Yes 35,380 Examen Pericial Texaco-Petroecuador Sacha Sacha 21 Pit 2 Yes No Yes 17,000 Texaco Texaco-Petroecuador Sacha Sacha 51 Pit 4 Yes No Yes 7,200 Texaco Texaco-Petroecuador Sacha Sacha 51 Pit 5 Yes Yes No 63,000 Texaco Texaco-Petroecuador Sacha Sacha 53 Pit 1 Yes No Yes 7,430 Demandantes Texaco-Petroecuador Sacha Sacha 57 Pit 2 Yes No Yes 8,100 Texaco Texaco Sacha Sacha 65 Pit 1 Yes No Yes 32,444 Demandantes Texaco-Petroecuador Sacha Sacha 85 Pit 1 Yes Yes No 20,000 Texaco Texaco-Petroecuador Sacha Sacha 94 Pit 1 Yes No Yes 5,600 Texaco Texaco Sacha Sacha 94 Pit 2 Yes No Yes 8,700 Texaco Texaco Shushufindi Shushufindi 7 Pit 1 Yes No Yes 5,334 Demandantes Texaco-Petroecuador Shushufindi Shushufindi 7 Pit 2 Yes No Yes 12,715 Demandantes Texaco-Petroecuador Shushufindi Shushufindi 8 Pit 1 Yes Yes No 7,350 Demandantes Texaco-Petroecuador Shushufindi Shushufindi 13 Pit 1 Yes No Yes 7,415 Demandantes Texaco-Petroecuador Shushufindi Shushufindi 13 Pit 3 Yes Yes No 27,001 Demandantes Texaco-Petroecuador Shushufindi Shushufindi 21 Pit 1 Yes No Yes 16 033 Demandantes Texaco-Petroecuador

This table shows examples of the contamination remaining at pits “cleaned” by Texaco, regardless of data source. “No further action” means Texaco decided during cleanup that no cleanup was required (e.g., pits were being used by local communities)

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Court Expert Report on Environmental Damages

The Ecuadorian Court appointed an expert to prepare an estimate of environmental damages caused by TexacoPer court authorization, he considered and relied in part on materials prepared by Stratus Consulting (and many others)He issued two reports, the second updating the damages estimates of the first

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Environmental Damages in the Court Expert Reports

$0.9 to $1.7B

$0.9 to $1.7B

Rainforest habitat impacts$375M$375MOil field infrastructure$430M$430MIndigenous impacts$428M$428MDrinking water system$480M$480MHealthcare system$3.2B-Groundwater remediation$2.7B$1.7BSoil remediation

Nov 2008

March 2008

Category

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Environmental Damages in the Court Expert Reports

$18.1-$18.9B$7.2-$8.0BTotal w/o unjust enrichment

$26.5-$27.3B$15.5-$16.3BTotal

$8.4B$8.3BUnjust enrichment$9.5B$2.9BCancer deathsNov 2008March 2008Category

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Environmental Damages Quantified by Plaintiff Experts

Plaintiffs submitted a separate environmental damages report prepared by:Douglas Allen, who has 25 years of experience as an environmental consultant working in soil and groundwater remediationDr. Lawrence Barnthouse, one of the nation's leaders in ecological risk assessment and a Fellow at the American Association for the Advancement of ScienceCarlos Emilio Picone, a medical doctor certified in critical care medicine and Chiefof the Pulmonary Section at Sibley Memorial Hospital in Washington, D.C.Jonathan S. Shefftz, a financial economist from Harvard who has performed economic modeling on theories of unjust enrichment for the U.S. Environmental Protection Agency and the U.S. Department of EnergyDr. Daniel L. Rourke, who has extensive experience applying advanced statistical techniques to solve complex litigation problems; andDr. Robert Paolo Scardina, a civil and environmental engineer and member of the faculty at the Virginia Polytechnic Institute.

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Environmental Damages Quantified by Plaintiff Experts

Identified the damage categories as used in the court expert’s report as being appropriateTotal damages estimate: up to $113 billion

[Chevron was requested by the court to submit their own damages estimates, but they refused to, and now criticize the process as unfair]

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Number of Cancer Cases per Family

Source: Examen Pericial, Annex L, 2008

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

<250 m 250 m – 500 m 500 m – 2 km Over 2 km

Distance family lives from oil well

% o

f Fam

iliesOne cancer case Two or more cases

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Cancer Rates in Women

Source: Hurtig and San Sebastian, 1992

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Chevron Positions re: Scientific Evidence

They deny that there is contamination by claiming:– Plaintiff data and court expert data are unreliable– Chevron data show no/little contamination (but see

earlier slide about their sampling approach)They say that any contamination is going away on its own and doesn’t require cleanup (but sites left untouched for 20 years remain highly contaminated)They say there is no proof of cause-effect for any individual in the area with cancer (ignoring the epidemiological studies)They make personal attacks on the scientists working for the Plaintiffs

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Conclusions

There is overwhelming scientific evidence that Texaco operated the oilfield with few or no environmental controls, and that their operations caused massive environmental contamination that persists todayBoth a court-appointed expert and a group of highly respected experts hired by the plaintiffs estimate the environmental damages at up to many tens of billions of dollarsChevron’s defense strategy is to ignore most of the scientific evidence, publicize false or misleading information, and make personal attacks