COP » Topics » Item 1. LEGAL PROCEEDINGS

This excerpt taken from the COP 10-K filed Feb 23, 2007.

Legal Proceedings

Our legal department applies its knowledge, experience, and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us.  Our process facilitates the early evaluation and quantification of potential exposures in individual cases.  This process also enables us to track those cases which have been scheduled for trial, as well as the pace of settlement discussions in individual matters.  Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal department believes that there is only a remote likelihood that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our financial statements.

This excerpt taken from the COP 10-Q filed Nov 2, 2006.

Item 1.  LEGAL PROCEEDINGS

The following is a description of reportable legal proceedings including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment for this reporting period.  The following proceedings include those matters that arose during the third quarter of 2006 and any material developments with respect to those matters previously reported in ConocoPhillips’ 2005 Form 10-K or first or second quarter 2006 Forms 10-Q.  While it is not possible to accurately predict the final outcome of these pending proceedings, if any one or more of such proceedings were decided adversely to ConocoPhillips, we expect there would be no material effect on our consolidated financial position.  Nevertheless, such proceedings are reported pursuant to the U.S. Securities and Exchange Commission’s regulations.

Matters Previously Reported

In July and August 2005, the South Coast Air Quality Management District (SCAQMD) performed inspections at our Los Angeles refinery in Wilmington and Carson, California, focusing on our leak detection and repair program for fugitive emissions as required under SCAQMD rules.  As a result of these inspections, the SCAQMD alleged that we violated certain rules related to the leak detection and repair program. The company has settled these matters and paid a civil penalty of $2,252,000 and $300,000 in emissions fees.

On October 19, 2005, the Bay Area Air Quality Management District (BAAQMD) notified us of their intent to seek civil penalties in the amount of $108,000 for 18 alleged violations of various BAAQMD regulations at our Rodeo facility and carbon plant located in the San Francisco area that occurred between February 2005 and July 2005.  We reached agreement with BAAQMD to settle this matter for $96,000 and concluded the settlement in October 2006.

On November 22, 2005, the BAAQMD entered into a compliance and enforcement agreement with our Rodeo facility located in the San Francisco area to coordinate enforcement of BAAQMD leak detection and repair (LDAR) requirements with the federal program as provided in the ConocoPhillips Consent Decree with the United States Environmental Protection Agency (U.S. District Court for the Southern District of Texas, Civil Action No. H-05-0258).  The Consent Decree required, among other things, that the Rodeo facility perform certain third-party audits of the LDAR program to identify noncompliance.  The BAAQMD agreed to a schedule of penalties for noncompliance found during LDAR audits with a maximum cap of $100,000.  In the first quarter of 2006, the Rodeo facility performed certain LDAR audits, and found certain noncompliance items.  We reached an agreement with BAAQMD to settle this matter for $100,000 and concluded the settlement in October 2006.

The U.S. Coast Guard and Washington State Department of Ecology investigated the possible sources of an oil spill in Puget Sound.  In November 2004, the U.S. Attorney and the U.S. Coast Guard offices in Seattle, Washington, issued subpoenas to Polar Tankers, Inc., a subsidiary of ConocoPhillips Company, for records related to the vessel Polar Texas.  On December 23, 2004, the governor of the state of Washington and the U.S. Coast Guard publicly announced that they believed the Polar Texas was the source of the spill.  The company fully cooperated with the investigations.  The U.S. Attorney’s Office in Seattle declined prosecution of the company.  Polar Tankers, ConocoPhillips and the state of Washington settled the matter, with payment of civil penalties in the amount of $540,000.  Additionally, the company has agreed to pay the federal government $2.2 million to cover the cost of the spill clean-up, and $80,000 in civil penalties.  The settlement did not include any admission of liability.  The company and the authorities remain in active settlement negotiations around other remaining items.

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On June 30, 2006, the Texas Commission on Environmental Quality (TCEQ) issued a Notice of Enforcement (NOE) to ConocoPhillips’ Sweeny refinery. The NOE alleges that stack tests performed on the Sweeny Unit 3 Fluid Catalytic Cracking Regenerator showed noncompliance with the requirements of a TCEQ permit and federal air toxics (MACT) regulations. We have been informed by the TCEQ that they intend to combine this NOE with two others relating to alleged technical stack testing deficiencies and an excess emission event.  On September 4, 2006, we resolved this matter with a payment penalty of $91,808.

New Matter

In September 2006, the San Luis Obispo Air Pollution Control District (SLOAPCD) issued a demand to settle four Notices of Violation (NOVs) issued between May and August 2006 with respect to our Santa Maria facility, a part of our San Francisco area refinery.  The NOVs allege we:  exceeded green coke feed limit on 17 separate days; failed to timely submit a second quarter 2006 report; failed to sample and analyze certain air emissions; and exceeded carbon plant pressure limits for three days.  SLOAPCD’s initial monetary demand is $143,000 to settle all four NOVs.  We are working with SLOAPCD to resolve this matter.

This excerpt taken from the COP 10-Q filed Aug 3, 2006.

Item 1. LEGAL PROCEEDINGS

 

The following is a description of reportable legal proceedings including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment for this reporting period. The following proceedings include those matters that arose during the second quarter of 2006 and any material developments with respect to those matters previously reported in ConocoPhillips’ 2005 Form 10-K or first-quarter 2006 Form 10-Q. While it is not possible to accurately predict the final outcome of these pending proceedings, if any one or more of such proceedings were decided adversely to ConocoPhillips, we expect there would be no material effect on our consolidated financial position. Nevertheless, such proceedings are reported pursuant to the U.S. Securities and Exchange Commission’s regulations.

 

On June 30, 2006, the Texas Commission on Environmental Quality (TCEQ) issued a Notice of Enforcement (NOE) to ConocoPhillips’ Sweeny refinery. The NOE alleges that stack tests performed on the Sweeny Unit 3 Fluid Catalytic Cracking Regenerator showed noncompliance with the requirements of a TCEQ permit and federal air toxics (MACT) regulations. We have been informed by the TCEQ that they intend to combine this NOE with two others relating to alleged technical stack testing deficiencies and an excess emission event. No proposed penalty assessment or order for these combined events has been presented by the TCEQ. We expect to work with the TCEQ to resolve this matter.

 

The Bay Area Air Quality Management District (BAAQMD) has notified us of its intent to seek civil penalties for several pending Notices of Violation (NOV) issued between August 2005 and July 2006 alleging violations of various BAAQMD regulations at the Rodeo facility of our San Francisco refinery. The BAAQMD has not yet specified a penalty for these alleged violations. However, we are currently assessing these allegations and expect to work with the BAAQMD toward a resolution of these NOV.

 

This excerpt taken from the COP 10-Q filed May 4, 2006.

Item 1. LEGAL PROCEEDINGS

 

The following is a description of reportable legal proceedings including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment for this reporting period.  The following proceedings include those matters that arose during the first quarter of 2006 and any material developments with respect to those matters previously reported in ConocoPhillips’ 2005 Form 10-K.  While it is not possible to accurately predict the final outcome of these pending proceedings, if any one or more of such proceedings were decided adversely to ConocoPhillips, we expect there would be no material effect on our consolidated financial position.  Nevertheless, such proceedings are reported pursuant to the U.S. Securities and Exchange Commission’s regulations.

 

On March 28, 2006, the Texas Commission on Environmental Quality (TCEQ) issued a revised draft agreed order relating to alleged air quality and solid waste violations at our Borger refinery. The order addresses several categories of air quality violations including emission events, violation of permit conditions, and failure to pay emission fees, and a single solid waste violation for improper classification and disposal of waste. The order proposes a penalty of $160,406. We are currently evaluating the proposed order and anticipate working with TCEQ to resolve the matter.

 

On December 16, 2005, our Bayway refinery experienced a hydrocarbon spill to the Rahway River and Arthur Kill. As a result of this spill, we received a draft Order on Consent (Order) from the state of New York, and are also negotiating similar settlements with the state of New Jersey and the federal government. The New York Order proposes a civil penalty of $50,000 in addition to a supplemental environmental project anticipated to be valued at approximately $50,000. We are currently working with all jurisdictions toward a final resolution of this matter.

 

On November 22, 2005, the Bay Area Air Quality Management District (BAAQMD) entered into a compliance and enforcement agreement with our Rodeo facility located in the San Francisco area to coordinate enforcement of BAAQMD leak detection and repair (LDAR) requirements with the federal program as provided in the ConocoPhillips Consent Decree with the United States Environmental Protection Agency (U.S. District Court for the Southern District of Texas, Civil Action No. H-05-0258). The Consent Decree required, among other things, that the Rodeo facility perform certain third-party audits of the LDAR program to identify noncompliance. The BAAQMD agreed to a schedule of penalties for noncompliance found during LDAR audits. In the first quarter of 2006, the Rodeo facility performed certain LDAR audits, and found certain noncompliance items. BAAQMD has proposed a $100,000 civil penalty to resolve this noncompliance. We anticipate working with BAAQMD toward a resolution of this matter.

 

On December 17, 2002, the U.S. Department of Justice (DOJ) notified ConocoPhillips of various alleged violations of the National Pollutant Discharge Elimination System permit for the Sweeny refinery.  DOJ asserts that these alleged violations occurred at various times during the period from January 1997 through July 2002.  A consent decree was lodged with the U.S. District Court for the Southern District of Texas, Houston Division on October 4, 2004, proposing a civil penalty of $610,000 and a Supplemental Environmental Project (SEP) valued at approximately $90,000.  Under the SEP, ConocoPhillips donated approximately 128 acres of land it owned near the Sweeny refinery to the U.S. Fish and Wildlife Service for inclusion in the San Bernard National Wildlife Refuge.  The consent decree was entered by the court, all penalties were paid, and the land donation SEP has been successfully completed.

 

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This excerpt taken from the COP 10-K filed Feb 27, 2006.
Item 3.        LEGAL PROCEEDINGS

 

The following is a description of reportable legal proceedings, including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment for this reporting period.  The following proceedings include those matters that arose during the fourth quarter of 2005 and those matters previously reported in ConocoPhillips’ 2004 Form 10-K and our first-, second- and third-quarter 2005 Form 10-Qs that have not been resolved.  While it is not possible to accurately predict the final outcome of these pending proceedings, if any one or more of such proceeding was decided adversely to ConocoPhillips, there would be no material effect on our consolidated financial position.  Nevertheless, such proceedings are reported pursuant to the U.S. Securities and Exchange Commission’s regulations.

 

In December 2005, the Texas Commission on Environmental Quality (TCEQ) proposed an administrative penalty of $120,132 for alleged violations of the Texas Clean Air Act at the Borger refinery.  The allegations relate to unexcused emission events, reporting and recordkeeping requirements, leak detection and repair, flare outages, and deviation reporting.  We expect to work with the TCEQ to resolve this matter.

 

On October 19, 2005, the Bay Area Air Quality Management District (BAAQMD) notified us of their intent to seek civil penalties in the amount of $108,000 for 18 alleged violations of various BAAQMD regulations at our Rodeo facility and carbon plant located in the San Francisco area that occurred between February 2005 and July 2005.  We are currently assessing these allegations and expect to work with the BAAQMD toward a resolution of this matter.

 

On October 11, 2005, the ConocoPhillips Pipe Line Company received a Notice of Probable Violation and Proposed Civil Penalty from the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (DOT) alleging violation of DOT’s Integrity Management Program and proposing penalties in the amount of $200,000.  We responded to these allegations and expect to work with the DOT toward a resolution of this matter.

 

In July and August 2005, the South Coast Air Quality Management District (SCAQMD) performed inspections at our Los Angeles refinery in Wilmington and Carson, California, focusing on our leak detection and repair program for fugitive emissions as required under SCAQMD rules.  The SCAQMD has informed us that they believe, as a result of these inspections, we violated certain rules related to the leak detection and repair program.  We are currently working with the SCAQMD to resolve this matter.

 

In June 2005, the SCAQMD notified us of their intent to seek civil penalties in the amount of $401,000 for 18 alleged violations of various SCAQMD regulations at our Los Angeles refinery in Wilmington and Carson, California, and one of our tank facilities in Torrance, California.  On October 27 and December 5, 2005, we entered into several settlements with the SCAQMD to resolve all the alleged violations.  We paid a total civil penalty of $360,850 to the SCAQMD.

 

In March 2005, ConocoPhillips Pipe Line Company received a Notice of Probable Violation and Proposed Civil Penalty from DOT alleging violation of DOT operation and safety regulations at certain facilities in Kansas, Missouri, Illinois, Indiana, Wyoming and Nebraska and proposing penalties in the amount of $184,500.  We are currently assessing these allegations and expect to work with the DOT toward a resolution of this matter.

 

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From December 2004 to January 2005, the Rodeo facility experienced some exceedances of its wastewater daily-permitted-limit for copper under the National Pollutant Discharge Elimination System (NPDES) program, as administered by the San Francisco Bay Region Regional Water Quality Control Board (Water Board).  The Rodeo facility self-reported the exceedances.  In November 2005, we agreed with the Water Board staff to resolve these and other alleged NPDES exceedances for a civil penalty of $48,000 and supplemental environmental projects valued at $63,000.  The Water Board finalized the settlement as proposed.

 

In December 2004, the Puget Sound Clean Air Agency (PSCAA) notified us of their intent to seek civil penalties in the amount of $203,000 for alleged violations of various PSCAA regulations at our Tacoma Terminal in the state of Washington.  We resolved this matter with the payment of civil penalties to the PSCAA in the amount of $46,000 and recognizing facility improvement credits in the amount of $115,000.

 

The U.S. Coast Guard and Washington State Department of Ecology are investigating the possible sources of an alleged oil spill in Puget Sound.  In November 2004, the U.S. Attorney and the U.S. Coast Guard offices in Seattle, Washington, issued subpoenas to Polar Tankers, Inc., a subsidiary of ConocoPhillips Company, for records related to the vessel Polar Texas.  On December 23, 2004, the governor of the state of Washington and the U.S. Coast Guard publicly announced that they believed the Polar Texas was the source of the alleged spill.  Based on everything presently known by us, we do not believe that we are the source of the alleged spill.  We are fully cooperating with the governmental authorities.

 

In August 2004, Polar Tankers self-reported to the U.S. Coast Guard that a company employee had disclosed to management potential environmental violations onboard the vessel Polar Alaska.  The potential violations related to allegations that certain actions may have resulted in one or more wastewater streams being discharged potentially having concentrations of oil exceeding an applicable regulatory limit of 15 parts per million.  On September 1, 2004, the United States Attorney’s office in Anchorage issued a subpoena to ConocoPhillips Company and Polar Tankers for records relating to the company’s report of potential violations.  We are fully cooperating with the governmental authorities.

 

In July 2004, Polar Tankers notified the U.S. Coast Guard of possible environmental violations onboard the vessel Polar Discovery.  On June 29, 2005, the U.S. Attorney’s office in Anchorage issued a subpoena to Polar Tankers for records regarding the possible environmental violations onboard that vessel. We are fully cooperating with the governmental authorities in their investigation.

 

In August of 2003, EPA Region 6 issued a Show Cause Order alleging violations of the Clean Water Act at the Borger refinery.  The alleged violations relate primarily to discharges of selenium and reported exceedances of permit limits for whole effluent toxicity.  We met with the EPA staff on several occasions to discuss the allegations.  We believe the EPA staff is evaluating the information presented at the meetings.  The EPA has not yet proposed a penalty amount.

 

On December 17, 2002, the U.S. Department of Justice (DOJ) notified ConocoPhillips of various alleged violations of the NPDES permit for the Sweeny refinery.  DOJ asserts that these alleged violations occurred at various times during the period from January 1997 through July 2002.  A consent decree was lodged with the U.S. District Court for the Southern District of Texas, Houston Division on October 4, 2004, proposing a civil penalty of $610,000 and a Supplemental Environmental Project (SEP) valued at approximately $90,000.  Under the SEP, ConocoPhillips will donate approximately 128 acres of land it owns near the Sweeny refinery to the U.S. Fish and Wildlife Service for inclusion in the San Bernard National Wildlife Refuge.  We await the court’s approval and entry of the consent decree.

 

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On July 15, 2002, the United States filed a Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) cost recovery action against Conoco Inc. and seven other defendants alleging that the United States had incurred unreimbursed response costs at the Lowry Superfund Site located in Arapahoe County, Colorado.  The United States seeks recovery of approximately $12.3 million in past response costs and a declaratory judgment for future CERCLA response cost liability.  The defendants filed counterclaims seeking declaratory relief that certain response actions taken by the government were inconsistent with the National Contingency Plan.  The matter has been resolved and the defendants, including ConocoPhillips, signed a Consent Decree and Settlement Agreement, which has been approved by the court.

 

This excerpt taken from the COP 10-Q filed Nov 2, 2005.

Item 1.  LEGAL PROCEEDINGS

 

The following is a description of reportable legal proceedings including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment for this reporting period.  The following proceedings include those matters that arose during the third quarter of 2005 and any material developments with respect to those matters previously reported in ConocoPhillips’ 2004 Form 10-K and 2005 first-quarter and second-quarter Forms 10-Q.  While it is not possible to accurately predict the final outcome of these pending proceedings, if any one or more of such proceedings were decided adversely to ConocoPhillips, we expect there would be no material effect on our consolidated financial position.  Nevertheless, such proceedings are reported pursuant to the U.S. Securities and Exchange Commission’s regulations.

 

In July and August 2005, the South Coast Air Quality Management District (SCAQMD) performed inspections at our Los Angeles Refinery in Wilmington, and Carson, California, focusing on our leak detection and repair program for fugitive emissions as required under SCAQMD rules. The SCAQMD has informed us that they believe, as a result of these inspections, we violated certain rules related to the leak detection and repair program.  We are currently working with the SCAQMD to resolve this matter.

 

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