BP in New Zealand




Sustainability Report 2004
1    From the managing director
Performance highlights                                                                 3  ...
From the managing director
Welcome to BP New Zealand’s Sustainability Report for 2004.
  BP has been producing these repor...
... from the managing director (continued)
shift towards new fuels and new climate-friendly technologies.
  The companies ...
1
BP – our business
1.1   A sustainable approach to business reporting
1.2   BP at a glance
1.3   Financial performance, t...
1.1   A sustainable approach to business reporting
Reporting on the steps businesses are taking towards sustainability has...
BP – our business




1.2   BP at a glance




BP worldwide Since it was established       lubricants and, more recently, ...
1.3   Financial performance, the BP New Zealand network
In order for a business to promote sustainability, it must itself ...
BP – our business




deregulation in 1988. The industry has        country. BP New Zealand’s involvement    independent d...
1.4   The facts about fuel pricing
Over 2004, the volatile international market for crude oil and refined
fuels drove up t...
BP – our business




Shipping costs New Zealand is at                        International comparison of petrol prices (u...
1.5   Our people
The way we interact with our staff and the communities and
customers we serve is critical to attracting a...
BP – our business




  All major universities nationwide are     Parental leave BP New Zealand              work. Both ma...
1.6   Health and safety performance
BP’s goal across all of its operations in all the countries where it
operates is simpl...
BP – our business




Engine on, lights on Since 2000, it has   While the goal is for there to be no accidents, 2004 showe...
BP heavy vehicle accident summary
                                                           2001         2002            ...
BP – our business




BP Lubricants – setting the HSE              • Hazard perception and hazard               Marsden Po...
1.7   Future Fuels case study
As a 24% shareholder in the New Zealand Refining Company (NZRC),
BP has a strong interest in...
Our BP




2
BP and the environment
2.1   Environmental performance
2.2   Bio-diesel
2.3   Liquified Natural Gas
2.4   Dai...
2.1   Environmental performance
Taking care of the natural environment is a fundamental principle
for BP here and overseas...
BP and the environment




Hydrocarbon vapour released (tonnes)                 BP New Zealand has led the fuels
Year     ...
Year                           Electricity           Emission                      CO2                   CO2
             ...
BP and the environment




electricity is probably the most                     a further 65 retail service stations,     ...
2.2   Bio-diesel
Bio-fuels are non-toxic, renewable and biodegradable fuels typically
derived from vegetable oils or tallo...
BP and the environment




2.3   Liquified Natural Gas
The giant Maui gas field off Taranaki supplies around 80% of
New Ze...
2.4   Dairy Flat: environment case study
In July 2004, BP opened the doors of its $10-million, state-of-the-art
service ce...
BP and the environment




treat effluent. This system treats            now have the ultimate in one-stop          The ul...
3
    BP in society
    3.1   BP in the community
    3.2   BP’s continued support of Surf Life Saving New Zealand
    3.3...
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
BP in New Zealand
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  1. 1. BP in New Zealand Sustainability Report 2004
  2. 2. 1 From the managing director Performance highlights 3 BP – our business 4 A sustainable approach Our BP to business reporting • BP sold 2.19 billion litres of fuel and lubricants. 5 BP at a glance • BP made investments in New Zealand totalling $26 million. 6 Financial performance, the BP New Zealand network • BP made an average return on capital employed of 12%. 8 The facts about fuel pricing • BP directly employed 1,740 people in its company-owned service stations, 10 Our people operations and offices. 12 Health and safety performance 16 Future Fuels case study 17 BP and the environment BP and the environment 18 Environmental performance • BP opened its new Dairy Flat service station with what is believed to be the 22 Bio-diesel largest solar canopy in Australasia and state-of-the-art rainwater collection and 23 Liquid Natural Gas 24 Dairy Flat: environment case study sewage treatment systems. 26 BP in society • BP was nominated as a finalist in the Deloitte/Management Magazine top 27 BP in the community 200 Business Awards for its commitment to sustainability reporting and 29 BP’s continued support of Surf cleaner fuels. Lifesaving New Zealand 30 BP and the world’s toughest • BP’s new office recycling and waste management system reduced Head yacht race Office waste to landfill by 70%, or around six tonnes per annum. 31 Who BP works with • Using a range of heavy vehicles, BP successfully conducted extensive trials 32 Saturn tanks: a new approach to community consultation in New Zealand of bio-diesel made from tallow. 34 URS New Zealand Limited • The accident rate involving light BP vehicles dropped from five in 2003 Verification Statement to just one in 2004. 37 Provide us with your feedback • BP’s lubricant production centre in Auckland marked 14 years of operation without a single injury requiring time away from work. BP in the community • BP made donations to more than 230 community organisations. • BP continues to offer eligible staff three months’ paid parental leave, which is additional to statutory requirements. • BP’s sponsorship support for Surf Life Saving New Zealand entered its 37th year. • At BP service stations around New Zealand, Tsunami Relief Fund collection boxes collected more than $950,000 in donations, in conjunction with an 0900 phone number. BP New Zealand staff donated more than $11,000, BP staff internationally donated US$1.6 million and the BP Group donated US$4.6 million. • BP paid $53.7 million in wages. Unless otherwise stated ‘BP’, ‘We’ and ‘Our’ refer to BP Oil New Zealand Limited. 2 BP in New Zealand
  3. 3. From the managing director Welcome to BP New Zealand’s Sustainability Report for 2004. BP has been producing these reports since 2002 in an ongoing effort to measure and continually improve the company’s performance across all areas of operation – in particular our environmental, our social and our financial performance. It is no longer good enough for companies to remain solely focused on the financial bottom line. Increasingly the public, our customers, want to know that they are supporting a business which not only sells the highest-quality products, but which goes out of its way to protect its staff and the communities and environment in which it operates. Customers are demanding more accountability and transparency from business, and this is a challenge that BP remains committed to meeting. This Report is an example of this commitment in action – it provides an honest look at the key areas of BP’s business and shows what we have done well and what we can do better. This Report also reflects the issues that were of most interest and/or concern to our range of stakeholders over the year. For BP and for the global energy industry, 2004 was a year which threw up a , number of challenges. Record levels of global economic growth, driven particularly by large developing countries such as China, significantly increased the global demand for hydrocarbon fuels and for energy in general. Following such strong economic growth, the increased demand saw prices for crude oil regularly hitting record levels of more than US$50 per barrel. Oil is a commodity which is traded in US dollars on international markets, and a country which doesn’t produce its own oil is at risk of the fluctuations in the international benchmark price. New Zealand has been no exception. Over 2004, the price of a barrel of Brent Crude oil ranged between a low of US$29 and a high of US$52, representing a variance of 80% in just one year. On average, the price of a barrel of oil traded 33% higher in 2004 than in 2003. This Report provides some detail on the factors that determine domestic fuel prices, but a key determinant will always be the international trading price of crude oil. I believe 2004 was a year which heralded a significant international shift in the value of oil-based products. As demand for oil and fuel continues to increase, so too does its value. While the world’s existing oil reserves are still significant, and new discoveries continue to be made, the days of cheap fuel appear now to be behind us. The new challenge for the world’s energy industry is to continue providing the energy that people need, while at the same time preparing for a fundamental
  4. 4. ... from the managing director (continued) shift towards new fuels and new climate-friendly technologies. The companies that lead this transition and invest in new, cleaner energy technologies will be among the most successful companies of this century. BP is already investing heavily in preparing to lead the energy sector into the next generation of fuels. This Report provides an overview of some exciting trials that BP is conducting with renewable bio-fuels in Auckland, profiles environmental initiatives at our new Dairy Flat site and looks at major new investments to enable the production of cleaner fuels. This Report also examines the role that imported Liquified Natural gas (LNG) could play in helping New Zealand make the transition towards cleaner and more sustainable energy generation. And perhaps most importantly, this Report measures the impact of our operations on the natural environment and the contribution that BP makes to the communities and the people we serve. I want to take this opportunity to thank every member of the BP team for making 2004 such a successful and safe year. Many of the challenges that presented themselves in 2004 were also opportunities for us, and I am proud to lead such a capable, talented and committed team in working to make the most of them. Peter Griffiths Managing Director BP Oil New Zealand Limited 11 July 2005
  5. 5. 1 BP – our business 1.1 A sustainable approach to business reporting 1.2 BP at a glance 1.3 Financial performance, the BP New Zealand network 1.4 The facts about fuel pricing 1.5 Our people 1.6 Health and safety performance 1.7 Future Fuels case study Sustainability Report 2004 3
  6. 6. 1.1 A sustainable approach to business reporting Reporting on the steps businesses are taking towards sustainability has become more common as consumers become more discerning about the companies they choose to support. Businesses are fast learning that • How does BP perform in its in or condone corrupt or the manner in which they interact interaction with all of its key unacceptable business practices. with the community and the natural stakeholders including staff, • Fulfil our obligations and environment can have a direct bearing suppliers, government and commitments, treat people on their financial performance. non-government organisations, according to merit and contribution, Customers wanting to buy fuel contractors and customers? refrain from coercion and never for their car, for example, may • How successful is BP in meeting its deliberately do harm to anyone. want to know that the company goals of no accidents and no harm • Act in good faith, use company selling it has worked in partnership to people and what steps is BP assets only for furthering company with the community where the taking to achieve these goals? business and not seek personal product originated, has treated its gain through abuse of position staff well and strives to protect Environmental performance in the company. people and the natural environment • What impact do BP’s operations in the course of its business. have on the New Zealand We expect the same commitments To this end, the advent of environment? from all third parties directly sustainability reporting is a victory • What processes and systems are acting on BP’s behalf. for consumers. in place to help meet BP’s goals Additionally, wherever BP has With an increasingly competitive of no damage to the environment, control or influence, it will: marketplace, consumers can often and how successful are they? • Consult, listen and respond openly buy similar products at similar prices to customers, neighbours and from a range of different suppliers. Financial performance public interest groups. The challenge that BP is embracing • How well has BP performed • Work with others – partners, is to differentiate our products on the financially over 2004? suppliers, competitors and grounds of quality and to continue • What contribution has BP made regulators – to raise the standards to earn the trust of our customers. both to its shareholders and to of the industry. BP is committed to three simple the New Zealand economy? • Openly report on the company’s but important operational goals – health, safety and environment no accidents, no harm to people and BP’s business principles Underpinning (HSE) performance, good and bad. no damage to the environment. This these three areas are principles that • Recognise those who contribute Report measures BP’s performance in govern all of BP’s business operations to improved HSE performance. each of these areas, and against the around the world. In all of our actions issues of most concern, or interest, and our dealings with others, BP to our range of stakeholders. commits to: • Respect the rule of law. Social performance • Promise only what we expect to • What role does BP play in the deliver, make only commitments community and how does the we intend to keep, not knowingly company interact with people? mislead others and not participate 4 BP in New Zealand
  7. 7. BP – our business 1.2 BP at a glance BP worldwide Since it was established lubricants and, more recently, as a BP’s Corporate Responsibility Framework in 1909, BP has grown into one of the convenience retailer. BP New Zealand: In 2004 BP developed a new Corporate world’s largest energy companies. • Employs 1,331 New Zealanders in Responsibility Framework which helps Internationally, BP: 82 company-owned service stations. clarify BP’s relationship with society. • Employs 102,900 people across • Trades through a network of 234 In responding to risks and challenges more than 100 countries. BP-branded service stations which in our business, BP recognises the • Has more than 1.2 million are owned by independent operators need to act responsibly. At its most shareholders. who employ their own staff. fundamental level, this means obeying • Has discovered more oil and gas • Operates 46 Wild Bean Cafés in the law – complying with the numerous reserves than it extracted, for its Connect Service Stations. laws and regulations in each country the 12th consecutive year. • Has grown into one of New Zealand’s where BP operates. It also means • Sold just under seven million leading coffee retailers, by volume. being a progressive operator, behaving barrels of refined fuels per day. • Holds a 25% shareholding in consistently and in accordance with our • Served around 13 million retail Silver Fern Shipping Limited Group values to guide our performance customers every day. – New Zealand’s coastal fuel and our behaviour in respect of people, • Owns or part-owns 23 refineries. shipping company. health, safety, the environment, and • Produces oil or gas in 23 countries. • Holds just under a 24% external relationships. • Has proved reserves of 18.3 billion shareholding in the New Zealand Legal compliance and being a barrels of oil and gas equivalent Refining Company. progressive operator are aspects of (approximately 55% oil, 45% gas). • Operates 16 service stations with what we term ‘responsible operations’. • Produces 2.5 million barrels of crude photovoltaic solar canopies. They lie within our ‘sphere of control’, oil and 8.5 billion cubic feet • Has been a main sponsor of where we control the choices made of natural gas per day. Surf Life Saving New Zealand and are accountable for the outcomes. • Is one of the world’s leading for 37 years. At a further level, being responsible producers of photovoltaic solar cells. • Invested $26 million in New Zealand prompts us to play our part in helping • Is building expertise in the area of in 2004. to solve global challenges that are wind energy and is implementing • Sold 2.19 billion litres of fuel and directly relevant to our long term wind energy projects on BP sites. lubricants (all grades) to retail, business strategy. The difference • Is reducing its carbon emissions. commercial aviation and marine here is that we clearly do not control In 1998, BP set itself the target of customers. outcomes – responsibility is shared reducing its own carbon emissions • Runs a fleet of 55 trucks – 29 leased – so we work with governments, to 1990 levels by 2010. BP achieved by BP 20 of which are owned by , business partners and civil society, this in 2001, nine years earlier than agents, and six others including using our skills and resources to deliver expected. lubricant tankers. better outcomes for society. Our most • Has financial interests in nine fuel obvious example is climate change but BP in New Zealand BP has been terminals around the country. we are also engaged in community operating in New Zealand since 1946 • Supplies aviation fuel to more than projects, especially education, and – primarily as a seller of fuels and 90 locations in New Zealand. in promoting good governance. Sustainability Report 2004 5
  8. 8. 1.3 Financial performance, the BP New Zealand network In order for a business to promote sustainability, it must itself be sustainable on a financial basis. The Turnover, Net Investment and of new investment in 2004. BP’s Turnover Graph (NZ$ million) Historic Cost Net Profit figures net investment in New Zealand 2,000 for 2001–2004 are sourced from in 2004 was $538 million. the company’s published financial statements, audited by Ernst and Job creation BP New Zealand has a 1,750 Young. The Return on Average network of around 330 BP-branded Capital Employed is calculated on service stations across the country. a replacement cost basis. That Currently 82 are owned and measure and the amount of New operated by BP and 234 are 1,500 Capital invested are sourced from privately owned and operated. Of BP’s internal management reports. those privately owned businesses, In order to grow our business, BP is 75 are run by a BP agent. 1,250 continually reinvesting in New Zealand. Over the last five years, BP has Wholesale agreements The oil industry invested $153 million in its business has been through many changes over the 1,000 in New Zealand, with $26 million last 20 years, particularly since 2001 2002 2003 2004 2001 2002 2003 2004 BP New Zealand performance indicators Turnover (NZ$ million) 1,536 1,502 1,739 1,964 Net investment in New Zealand (NZ$ million) 466 455 468 538 Historic cost net profit – after tax (NZ$ million) 17 35 23 54 Return on average capital employed (%) 16 13 15 12 New capital invested during the year (NZ$ million) 47 24 32 26 2001 2002 2003 2004 Number of staff employed Non service station 272 267 251 409 Service station 1,015 1,124 1,268 1,331 Total 1,287 1,391 1,519 1,740 Over 2004 BP paid the following in wages: Wages paid to BP company-owned service station staff (NZ$ million) 26.8 Office staff (including Head Office) and the Auckland Lubricant Production Centre (NZ$ million) 24.5 Contractors, airport staff (NZ$ million) 2.4 Total 53.7 6 BP in New Zealand
  9. 9. BP – our business deregulation in 1988. The industry has country. BP New Zealand’s involvement independent dealers to expand into gone from four different fuel retailing in the supply of wholesale fuel and the convenience market, improving brands to 10; from more than 4,000 lubricants also gives these operators non-fuel income, helping to future- service stations to fewer than 1,400 the confidence of knowing they have proof and protect their businesses. and from small shops to larger a guaranteed quality of supply. Independent dealers are also convenience stores. The g.a.s. offer represents an able to improve their margins BP New Zealand has not been opportunity for BP to grow our through improved buying terms and exempt from these changes – overall fuel volumes while providing better rebates from suppliers. the introduction of our network a strong alternative opportunity With a substantial percentage of of Connect and 2GO stores and the for our smaller independent BP New Zealand’s branded retail fuel commencement of two sizeable operators to grow and survive in an being sold through independently owned wholesale fuel agreements (to other extremely competitive market. outlets, the success of these sites is retail brands) have significantly very important to BP New Zealand’s changed the face of our business. Independent network Independently overall business. The BP 2GO offer BP’s first major wholesale fuel owned BP service stations make up goes a long way towards supporting agreement to another retail brand was three-quarters of the BP branded independent sites through diversification to Foodstuffs, which launched fuel sales network. These service stations must at a time when the fuels market is under the Pak ‘N Save and New World meet BP New Zealand’s standard for highly competitive and there is a great brands. Under this agreement, BP product and service. This ensures that deal of pressure on fuel margins. New Zealand supplies fuel direct to each all our customers receive consistently BP 2GO is a successful modern site and it is sold to the public under the high standards of products and brand, which continues to grow Pak ‘N Save and New World brands. service. Owner-operators have the at a startling rate. More and more At the end of 2004, there were independence of a small business with consumers will be able to grab a 15 Pak ‘N Save fuel outlets and the support and experience of a major coffee, a tasty pie or sandwich and one New World fuel outlet in fuel distributor. their other convenience items while operation around New Zealand. on the go in the very near future. BP has a wholesale fuel agreement Example: BP 2GO™ The BP 2GO offer with the independent service station – a modern convenience store offer network Gasoline Alley Services (g.a.s.) with fuel – has been successfully to supply all of its fuel and lubricants. developed as a concept over the This agreement also provided an option last four years. for a number of BP independently The BP 2GO model is used in owned service stations to transfer independently owned BP sites. to the g.a.s. brand. At the end of 2004, 49 BP 2GO g.a.s. is 100% focused on sites were operational throughout independent owner-operators, and has New Zealand. A further 30 conversions a network of 69 independently owned to 2GO are expected in 2005. and operated service stations around the The BP 2GO offer allows Sustainability Report 2004 7
  10. 10. 1.4 The facts about fuel pricing Over 2004, the volatile international market for crude oil and refined fuels drove up the price at the New Zealand pump. The price of fuel became the most high-profile public issue for BP in New Zealand, and a key concern for our stakeholders and customers. We all drive motor vehicles, or at least nations such as China and India has and European driving seasons, also depend on them for our personal helped push up the international pushes prices up internationally. travel, and we all notice when the price for crude oil by around 80%. Demand for diesel, the main fuel price of fuel increases. 2004 saw the Although surging demand was the for industry and construction, is also price for domestic fuel hit record levels main price driver for crude oil in 2004, strongly tied to international economic as a result of an extremely volatile other events also played a role. Political growth. Over 2004, the price for a international market for crude oil. instability and violence in some OPEC barrel of refined diesel ranged from Given that these higher prices nations, including Iraq, can have obvious US$37 to US$61.40. In April 2005 .55 affect us all, it is important to set impacts on supply, with even the threat the price hit a record US$73.55. out here the factors which, when of disruptions pushing prices up. Over 2004, it became clear that combined, determine how much demand for refined fuels was nearing we all pay to fill up our cars. Tax Government tax is the single the capacity of the world’s refineries biggest component of the price for a to process crude oil. Refineries are Crude oil Crude oil is the base product litre of petrol in New Zealand. Over 2004 multi-billion dollar investments that which, when refined, produces the total average tax collected on a litre take many years to build. When a New Zealand’s three staple fuels of 91 octane petrol was 54.9 cents. On major refinery stops producing fuel – petrol, diesel and jet fuel. A significant 1 April 2005 this increased to 61.4 cents for a period of time the supply of amount of the world’s crude oil, around with the addition of the 5.6 cent per litre refined product dips and the price 40%, is produced from countries increase in Excise Levy (inclusive rises. This happened last year when belonging to the Organisation of the of GST) to fund road building projects. Hurricane Ivan damaged a number Petroleum Exporting Countries, or Over 2004, the average price of refineries in the Gulf of Mexico. OPEC. of a litre of 91 octane unleaded A number of factors including The 11 member nations of fuel was $1.16, and the tax difficulty in attracting investment, OPEC are Iran, Iraq, Kuwait, Saudi on that was 54.33 cents. combined with difficulty in finding Arabia, Venezuela, Qatar, Indonesia, While tax makes up by far the suitable new locations, has resulted Libya, the United Arab Emirates, biggest proportion of the costs in refining capacity growing at a Algeria and Nigeria. The bulk of of fuel it should be noted that, by slower rate than demand for fuel. New Zealand’s crude oil is imported international standards, New Zealand’s from the Middle and Far East. fuel is taxed relatively lightly. The exchange rate Changes in the Crude oil is traded on the exchange rate between the New Zealand international market in US dollars Refined fuels Like crude oil, refined and US dollar have a direct effect on and, like all commodities, is subject fuels are also traded on international the prices we pay for our crude oil and to supply and demand pressures. markets in US dollars. The main factor refined fuels. In 2004, the New Zealand Where there are constraints in that sets the price of refined fuels is dollar strengthened significantly against supply and/or an increase in demand, the price of crude oil, as refineries the US dollar which, given that crude oil the price the market is prepared must pay more for it. and refined fuels are purchased in to pay rises. Over the course of High demand for finished fuels, US dollars, provided New Zealand with 2004, very high demand for crude such as for heating oils in the US some protection against even higher oil from large, rapidly developing winter and for petrol during the US fuel costs. 8 BP in New Zealand
  11. 11. BP – our business Shipping costs New Zealand is at International comparison of petrol prices (unleaded) as at 1 April 2005 (NZ$ per litre) the very end of the global oil supply US chain, meaning it takes longer to get oil to New Zealand, and the cost is Australia consequently greater. Shipping costs New Zealand make up around 3.6% of our fuel pump prices. France Shipping costs in 2004 increased 51%, partly owing to the increased Belgium demand for tankers internationally, Germany as well as changes to European Union regulations which have seen a number Italy of vessels taken off the water earlier UK than expected, thereby reducing the supply of oil-transporting vessels. Netherlands 0.0 0.5 1.0 1.5 2.0 2.5 Average breakdown of a NZ litre of 91 Unleaded in April 2005 Data sourced from Energy Information Administration International. Crude oil prices vs exchange rate over 2004 47.4% 55 0.8 50 0.7 US$/NZ$ Exchange Rate 45.7% 45 0.6 40 0.5 35 3.6% USD/BBL 0.4 3.3% 30 25 0.3 Taxes Crude oil and refining costs 20 0.2 Operating costs, wholesale and retail margin International shipping costs Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Exchange rate Dubai Crude Sustainability Report 2004 9
  12. 12. 1.5 Our people The way we interact with our staff and the communities and customers we serve is critical to attracting and retaining the very best staff and to protecting our biggest asset – our reputation. BP has a number of policies certification process provides a forum The BP graduate programme The and programmes in place to for raising and resolving any issues. BP graduate programme is designed ensure we continue to play a As part of BP’s commitment to to provide tertiary graduates with strong and constructive role in ethical behaviour and transparency, in employment that will give them a New Zealand communities. 2004 BP updated its existing policy broad range of learning experiences, on gifts and entertainment. In the challenges, and opportunities, and Staff satisfaction survey Every two past, all gifts or entertainment costing to provide BP with graduates who years the BP Group internationally more than $150 had to be logged in a have the appropriate skills to progress conducts a staff survey – the BP People register. This has been reduced to $50 through the organisation and become Assurance Survey – to gauge the level for gifts and $150 for business meals. the future leaders of BP. of satisfaction of BP employees and to identify issues that need attention. In 2004, the New Zealand survey showed 74% of BP employees were satisfied in their work, close to the ‘best in class’ result from the whole BP Group of 79%. This is down from 81% in 2003, perhaps owing to an internal change programme within BP. Compliance and Ethics BP has a strong commitment to ethical conduct. We believe ethical conduct is essential to developing strong business relationships built on trust, attracting great people to work for us, and great business performance. BP continues to have an annual certification process, where all team leaders are required to sign a certificate stating they have read, understood and complied with BP’s ethical conduct policy. In 2004, the certification process expanded its scope and required line managers to go beyond this and state the extent to which they had complied with both applicable laws and regulations, as well as BP’s ethical conduct policy. This 10 BP in New Zealand
  13. 13. BP – our business All major universities nationwide are Parental leave BP New Zealand work. Both male and female contacted to attract graduates from a recognises the importance of permanent employees with more range of disciplines for the following employees’ lives outside work and than two years of service are year. Interested graduates apply for encourages a good work-life balance. eligible for the payments. places on the programme and are short- BP offers eligible staff three months’ Upon return to work BP listed for interviews. Eight successful paid parental leave which is additional allows parents flexible working candidates are then brought together to statutory requirements. This leave hours where required. in Wellington for an Assessment Day. is paid upon the employee’s return to BP also provides each new Our full leadership team attends permanent employment with BP in , parent with a home computer, this day, to select the successful four instalments paid after three, six, to enable them to keep up to graduate candidates. The Assessment nine and 12 months of returning to date during parental leave. Day not only allows BP to assess the candidates, it also allows the candidates to determine whether the BP programme is right for them. The graduate programme has been run annually since 2000, attracting hundreds of applicants each year. Of the 14 graduates hired under this programme, 13 are still with the company. Diversity and inclusion BP is committed to diversity and inclusion within the workplace. Our aim is to attract, seek and retain the best talent available – the best men and women, regardless of background, age, religion, ethnic origin, nationality, disability or sexual orientation. All of our employees can and should expect to be treated with dignity and respect, and to succeed on their merits. To help us create an environment where this is possible, BP each year holds workshops on diversity and inclusion, run by John Spooner from the Genesis Consortium in the US. Sustainability Report 2004 11
  14. 14. 1.6 Health and safety performance BP’s goal across all of its operations in all the countries where it operates is simple – no accidents, no harm to people and no damage to the environment. However, while the goal is simple, it requires a huge level of commitment and focus from every member of our team if it is to be advanced. No accidents, no harm to people Injuries, incidents and reporting Engine on, cellphone off International and no damage to the environment All incidents at BP sites are reported research shows that the risks of using BP New Zealand staff worked a total through an international, on-line a cellphone while driving are similar 2.9 million hours in 2004. The work reporting and tracking system. to those of driving while under the often involved the handling of fuels, The system, known as ‘Tr@ction’, influence of alcohol. People talking moving vehicles and heavy equipment. ensures consistent reporting on cellphones while driving are four Every one of our staff, our contractors, and monitoring for all incidents times more likely to be involved in an and our customers has an absolute including near-misses, customer accident involving themselves, their right to expect to go home at the end complaints, loss of production and passengers or a third party. of the day free from harm or injury. environmental incidents, and tracks In 2002, BP prohibited the use of In 2004, an audit report by the investigations into these incidents. cellphones in its company cars at all BP Group into BP New Zealand’s The system allows BP business times and with no exceptions. This health and safety (HSE) performance units to accurately measure their includes hands-free cellphones, as noted that “we have found a own HSE performance and set research shows that these are as culture of commitment to HSE is tangible targets for improvement. risky as hand-held phones. strongly evident in New Zealand” . The following work injury and vehicle BP’s 2002 policy states that if a This section of our Sustainability safety performance information is a car engine is on, all cellphones must Report looks at some policies and small percentage of the data relating be switched off. This policy is now health and safety programmes that BP to BP New Zealand that was collected firmly entrenched across all areas of has pioneered in New Zealand in order in 2004 by the Tr@ction system. the business. Hands-free kits have to continually improve our performance been removed from all company in the area of keeping people safe. cars and are no longer fitted. In 2004, BP shared international 2001 2002 2003 2004 research with the New Zealand Activity Government into the risk of cellphone Days away from work injuries 2 1 2 4 use while driving, in the hope that Days away from work frequency 0.18 0.08 0.16 0.3 a similar policy can be adopted for Restricted injuries 29 29 22 39 all motorists using public roads. Restricted injury frequency 2.6 2.5 1.7 2.76 In 2004, BP New Zealand operated Frequency measures are the number of cases per 200,000 hours worked. a fleet of 55 tanker trucks and 90 light vehicles (cars and vans). This fleet travelled more than 9.6 Keeping our million kilometres last year. workplaces safe The ‘engine on, cellphone off’ policy is an important part of BP’s is a priority. commitment to health and safety in the workplace. BP believes it increases the safety not only of BP employees, but also of members of the public. 12 BP in New Zealand
  15. 15. BP – our business Engine on, lights on Since 2000, it has While the goal is for there to be no accidents, 2004 showed a pleasing been BP New Zealand’s policy that overall improvement from 2003 in the operation of BP vehicles. car headlights should be used at all times, day and night. All company cars BP light vehicle accident summary are wired so that the lights switch on 2001 2002 2003 2004 automatically with the car’s engine. Indicators and limits Many traffic crashes are the result Light vehicle accidents 6 5 5 1 of the failure of a driver to notice Light vehicle accident ratea 4.0 3.3 3.3 0.57 another vehicle. The purpose of Cost of repairs (NZ$) 20,000 6,000 6,670 1,336 daytime running lamps (DRLs) is to Preventable 2 2 2 1 Non-preventable 4 3 3 0 increase the visual contrast of the Injuries reported 0 0 0 0 vehicle from its surrounding a Accident rate = number of accidents per million kms. environment. The US Department of BP light vehicle accidents Transportation has conducted research into the effectiveness of daytime 2001 running lamps (DRLs), and found 2002 that DRLs are associated with a 7% reduction in the risk of non-fatal 2003 crashes. It also found that DRL- 2004 equipped vehicles were 28% less likely to be involved in fatal 0 2 4 6 pedestrian crashes. Number of light vehicle accidents Seven countries require the use of DRLs, including a number of 2001 2002 2003 2004 Scandinavian countries and Canada. Factors contributing to crashes Results of studies from these Too fast for conditions n/a 0 0 0 countries consistently show that the Failed to give way n/a 1 1 1 use of DRLs reduces the number Inattention or attention diverted n/a 4 0 0 of two-vehicle crashes during Road conditions n/a 0 0 0 Driver tired or fell asleep n/a 0 0 0 daylight, dusk and dawn. Vehicle fault n/a 0 0 0 The crash reduction potential of Inexperience n/a 0 0 0 DRLs lies in their ability to attract Weather n/a 0 0 0 attention, especially in the peripheral Following too closely n/a 0 4 0 visual field. Introducing a DRL policy has been a simple step for BP to contribute , to safer roads for our staff and for the public. Sustainability Report 2004 13
  16. 16. BP heavy vehicle accident summary 2001 2002 2003 2004 Indicators Heavy vehicle accidents 5 13 15 6 Heavy vehicle accident ratea 0.49 1.8 2.0 0.73 Preventable 2 7 9 4 Non-preventable 3 6 5 2 Injuries reported 0 0 1 1 a Accident rate = number of accidents per million kms. BP heavy vehicle accident rate 2001 2002 2003 2004 0.0 0.5 1.0 1.5 2.0 Number of heavy vehicle accidents 2001 2002 2003 2004 Factors contributing to crashes Too fast for conditions 2 3 1 2 Failed to give way 2 5 2 0 Inattention or attention diverted 0 0 3 0 BP reported a pleasing reduction Road conditions 0 2 1 2 in heavy vehicle accidents in 2004. Driver tired or fell asleep 0 0 1 1 Vehicle fault 0 1 1 0 Inexperience 0 0 0 0 Weather 0 0 0 0 Following too closely 1 2 0 1 Did not see other party 0 0 6 0 14 BP in New Zealand
  17. 17. BP – our business BP Lubricants – setting the HSE • Hazard perception and hazard Marsden Point Oil Refinery and ports standard In May 2004, BP’s Lubricant action plans. around the country. Production Centre in Auckland marked • Vehicle dynamics. In June 2004, both tankers and their 14 years without a single injury requiring • Risk management. crews each celebrated 1,000 days of time off work. This achievement • Braking, cornering and skidding. operation without a single lost time includes all staff and contractors • Defensive driving. injury – an all-time safety record for Kiwi who have worked at the site. • A practical driving assessment. oil tankers on the New Zealand coast. The Lubricant Production Centre blends and produces lubricants for BP employees driving company HSE forums To ensure health and the New Zealand market. The site cars also have regular health and safety continues to be in the minds employs 28 staff and handles 18 fitness assessments and all BP of BP staff, BP Head Office has run million litres of product per year. staff attend a fatigue management a number of lunchtime meetings with This remarkable health and safety training programme which was guest speakers on a diverse range of achievement is the result of the developed by BP New Zealand with health and safety topics. Centre’s unwavering commitment to the Wellington School of Medicine. safety at all times. In particular, the This programme, which covers In 2004, some of the guest Centre carries out risk assessment how to recognise and manage speakers included: and hazard management exercises, fatigue, has now been adopted • Dr Simon Ryder-Lewis, on the early a comprehensive safety training and by BP internationally. detection and prevention of cancer. induction programme for new staff • Green MP Sue Kedgley, on and contractors, BP-sponsored first BP also has a rigorous screening, genetically modified foods. aid training for all staff and an open training and professional development • Ken Rutherford from the TAB on reporting environment for all health programme for our team of tanker managing risks associated with and safety matters. drivers and aviation refuellers including: gambling. • Medical checks and regular updates. • Chief censor Bill Hastings, on Road safety Road accidents cause • More than 200 hours of in-cab censorship and the role of the office the most deaths across the BP Group training. of film and literature classification in internationally every year. In response, • The NZQA-accredited BP Pro-Driver protecting the public. the company has in place a advanced training programme. • The chief executive of Instep, comprehensive driver safety • Refresher training and assessment. Matthew Beattie, on alcohol and programme to turn this around. • Fatigue management training. drug abuse. All BP office staff who drive, or might • Emergency response training. be required to drive, a vehicle as part of These sessions are always well their work are required to complete an Safety at sea – BP and Silver Fern attended and provoke interesting advanced driving course with Holden Shipping BP holds a 25% shareholding discussion among staff on a Driver Training every two years. in Silver Fern Shipping, which runs two wide range of HSE issues. 180 metre-long coastal oil tankers – the The course covers: Kakariki and the Taiko – between the • Observation techniques. Sustainability Report 2004 15
  18. 18. 1.7 Future Fuels case study As a 24% shareholder in the New Zealand Refining Company (NZRC), BP has a strong interest in the operation of New Zealand’s only refinery at Marsden Point, and in the fuels that it produces. Currently the Marsden Point Refinery confirm Marsden Point as one of the the upgrade docked at Marsden Point. is nearing the completion of a world’s most efficient refineries. The shipment contained 32,000 cubic massive upgrade which will enable it Construction of the new foundations metres, or just under 2,000 tonnes, of to produce a whole new generation for this upgrade began in January 2004 preassembled plant equipment which of cleaner fuels for New Zealand. and the upgrade quickly became one had been constructed and collected New government specifications, of New Zealand’s largest industrial from Japan, Thailand and Indonesia. which take effect from 2006, require construction projects. Over the Simply loading the vessel with that benzene levels in petrol reduce course of 2004, 425 people were all of this equipment took six days from 3% to 1%, and that the sulphur employed on the construction site, from ports in three countries, content in diesel reduces from 500 working a total of 435,000 hours. including a full day to load the new parts per million (ppm) to 50ppm. By The upgrade project team, the reactor. It took five days to unload at 2009, the Refinery will produce diesel NZRC and Occupational Safety Marsden Point. A new road was built with sulphur levels of just 10ppm. and Health (OSH) have formed a between the Refinery and the Port Sulphur occurs in diesel because it is partnership to ensure the safety of to transport the heavy equipment. a component of crude oil. When sulphur all staff on-site for the duration of the This massive project is on budget burns, it forms sulphur dioxide which project. In all of the hours worked and on schedule. In the words of the is harmful to humans. When diesel over 2004 there was just one lost- Refinery’s general manager, Thomas burns, it produces microscopic particles time injury. This injury was sustained Zengerly, the project is “a logistical which can cause cardiovascular and in September and the employee masterpiece” It will allow the Marsden . respiratory problems in some people. returned to work three days later. Point Refinery to begin producing the Benzene is a by-product of the refining The Future Fuels project will, at its next generation of New Zealand’s fuels process which, with prolonged and peak in 2005, employ a maximum of – the cleanest New Zealand has ever concentrated exposure, has been linked 590 staff on-site and more than one produced – from September 2005. to the development of some cancers. million hours will be worked on the The 2006 shift to sulphur content project from beginning to completion. of 50ppm is very significant as it will For every month that the site allow a new generation of vehicles operates safely the project team to be used in New Zealand. These selects the safety contractor of vehicles are fitted with particulate the month. That contractor’s staff filters which prevent the release of then chooses a charity to receive up to 95% of all particles. These a donation from the NZRC. filters can only work with fuel sulphur The upgrade has involved hundreds levels no higher than 50ppm. of engineers and construction workers The ‘Future Fuels’ upgrade will from around the world who have allow the Refinery to produce these custom-built the specialist pieces of fuels to the highest international equipment required for the project. The $180-million Future Fuels quality standards. At a cost of For example, in September 2004 project – bringing New Zealand $180 million it is the biggest upgrade a single shipment containing the bulk the next generation of fuels. to the Refinery in 25 years and will of the plant equipment required for 16 BP in New Zealand
  19. 19. Our BP 2 BP and the environment 2.1 Environmental performance 2.2 Bio-diesel 2.3 Liquified Natural Gas 2.4 Dairy Flat: environment case study Sustainability Report 2004 17
  20. 20. 2.1 Environmental performance Taking care of the natural environment is a fundamental principle for BP here and overseas. Internationally, the BP Group was It also measures the impact of In 2005 the Green Office Strategy the first major oil company to state our operations on the environment will move to considering ways BP can publicly that the risks of climate in 2004, and compares it with reduce its consumption of paper change were serious, and that previous years’ performance. and electricity. precautionary action was justified. We are proud that the public Office waste management system Cutting paper by embracing technology understands and appreciates our In 2004, BP analysed the BP’s relationship with TelstraClear has concern and our efforts regarding environmental impact of its Head contributed to our waste reduction. the environment. Office in Wellington. Monthly phone bills are now provided In 2004, BP was nominated as a Over a two-month period a group on-line rather than on paper. Given the finalist in the Deloitte/Management of BP staff volunteered to collect, sort volume of phone calls made by BP Magazine top 200 Business Awards and weigh waste disposed of from staff, this on-line approach cut BP’s for its commitment to triple bottom Head Office. The results showed that printed bill by 1,000 pages per month line reporting and cleaner fuels. And around 8.5 tonnes of waste was sent in 2004. BP’s market research in 2004 showed to landfill from Head Office each year. The next step is to reduce the paper that New Zealanders believe BP is The BP Green Office Strategy was bill even further, aiming for savings environmentally friendlier than our born. The Strategy is designed to of 2,800 pages per month, or around competitors. reduce the impact of our offices and 35,000 pages of paper per year. We believe that our commitment daily work practices on the to sustainability not only benefits the environment. Emissions to air – hydrocarbon vapours environment, but that it is also good The first, and most controversial Hydrocarbon vapours are produced for business. Increased use of the step in reducing waste was removing by petroleum fuels before they are BP Superwash, which recycles and the office rubbish bins that had been burned. Hydrocarbon vapours can be cleans waste water, is a good example at every desk. These were replaced released from petrol in storage and of this. The innovative BP Superwash with cardboard recycling boxes for while fuel is being transferred. system not only reduces waste water paper waste, and one central rubbish BP tries to minimise the release but it also attracts customers and bin on each floor for non-recyclable of these vapours wherever possible, has saved BP more than $300,000 waste. Paper waste is put into including through the use of floating in water costs as at the end of 2004. locked bins which are removed by a blankets on the new fuel storage The BP New Zealand Superwash document destruction company and tanks constructed at the Port of programme was recognised by the the contents shredded and recycled. Lyttelton (see pages 32-33). The BP Group in 2004 and was awarded The programme quickly became vapour pressure of petrol has also a ‘Helios Award’. part of the office culture. In 2005 been lowered, which will further Our environmental efforts are part a survey showed that Head Office help reduce vapour emissions. of BP’s everyday business. This waste to landfill had been cut by Release of hydrocarbon vapours Report highlights some of those more than 70%, or more than six from BP facilities has steadily environmental initiatives and tonnes per annum, without disrupting decreased in recent years. investments. any office processes or systems. 18 BP in New Zealand
  21. 21. BP and the environment Hydrocarbon vapour released (tonnes) BP New Zealand has led the fuels Year Tonnes industry by making a limited amount 2001 2,036 of lower-sulphur diesel available in 2002 2,004 New Zealand since 2001 – well before 2003 1,923 new government fuel specifications 2004 1,991 came into effect in mid-2004. Hydrocarbon vapours in the above table include: storage of BP petrol and aviation fuel in BP tanks BP introduced lower-sulphur and equity share in tankage, BP total hydrocarbon emissions during truck loading, and BP company- diesel into Christchurch in 2001 as owned service station emissions on delivery to service stations and car fuelling. a contribution towards addressing the area’s smog problems. The following tables show the properties Sulphur oxides The following table records the kilograms of sulphur oxide of BP lower-sulphur diesel against the emissions produced from BP’s fleet industry average, and the reduction of 55 fuel tankers. The significant drop in sulphur emissions BP has achieved in sulphur oxides from BP’s tankers in through pioneering this fuel up until air bp – fuelling aviation 2004 is the result of the shift in fuel 1 July 2004 when lower-sulphur in New Zealand. specifications which required all diesel diesel became the industry norm. sold in New Zealand to have no more than 600ppm sulphur from 1 August Lower-sulphur diesel versus normal diesel until 1 July 2004 2004, and to meet an average sulphur Property Year Lower-sulphur Normal content of no more than 500ppm. diesel diesel This sulphur content in diesel will Sulphur ppm 2002 382 1,600 2003 386 1,712 reduce further to 50ppm in 2006 2004 1Hb 316 1,265 in response to a further tightening of regulations. These regulations Property Year Lower-sulphur Normal are being met by the Future Fuels diesel diesel upgrade at the New Zealand Cetane indexa 2002 56.9 54.0 Refining Company (see page 16). 2003 56.2 53.9 2004 1Hb 54.2 53.2 Sulphur oxide emissions from BP fuel tankers Year Volume of lower-sulphur (kl) Sulphur emissions Year kgs diesel sold saved (tonnes) 2001 5,029 2001 14,400 14.8 2002 3,954 2002 16,400 16.7 2003 4,621 2003 25,000 27.7 2004 2,610 2004 1Hb 13,200 10.5 a Cetane index measures how cleanly the fuel burns – the higher the Cetane index number, the cleaner the fuel burns and the less soot is produced. b Up until August 2004. Sustainability Report 2004 19
  22. 22. Year Electricity Emission CO2 CO2 (MWh) factora emissions emissions (kg CO2 /MWh) based on from road electricity use tankers (tonnes) (tonnes) 2001 19,183 200 3,837 4.48 2002 20,439 178 3,638 8,617 2003 21.668 190.7 4,132 9,341 2004 22,471 190 (est) 4,269 10,086 a Source: MED Energy Data File, July 2004. Emission factor estimate based on previous year, as actual fi gure not available at time of printing. Year Spills > 150 litres Spills> 15,000 litres 2001 6 0 BP operates a network of 16 2002 2 0 service stations with solar 2003 6 0 canopies. 2004 3 1 Energy consumption/carbon farmland in the upper South Island. BP Solar is the third largest dioxide production The table above This incident meant that 17,000 litres manufacturer of photovoltaic illustrates BP New Zealand’s energy of aviation fuel was spilt, a matter solar systems globally. It has four consumption across its Head Office, which BP regards very seriously. As manufacturing facilities globally, located company-owned service stations and a result of this accident a complete in the US, Spain, India and Australia, commercial truck fuelling facilities. investigation was undertaken, with and produces more than 90 megawatts From looking at how New Zealand’s the BP investigation team making of solar products every year. energy is generated, it is possible several recommendations around In 2004, BP Solar announced an to estimate the amount of CO2 vehicle stability, speed approaching aggressive investment and expansion produced through BP’s total electricity corners and driver training, and sharing programme, aiming to double its use. CO2 emissions from BP’s fleet safety lessons learned from the global solar production by 2006. of road tankers are estimated from accident across the whole BP team. BP launched its international solar total fuel used and listed above. In this case the truck and tanker canopy programme in 1999 and were written off, but the driver now has more than 400 sites with Fuel spills BP New Zealand handles was fortunately saved by wearing solar canopies throughout the world. nearly 2.2 billion litres of fuel each year his seat belt, which all BP drivers Sixteen of these are in New Zealand. and endeavours at all times not to spill are required to wear as policy. The solar canopy at the new Dairy a drop of it. Flat Service Centre at Rodney (see Our strong performance in terms BP Solar BP Solar is a standalone pages 24 and 25) is thought to be the of limiting any spillage of fuel was business within the BP Group, largest solar canopy in Australasia. unfortunately marred in 2004 as a dedicated to the development, More than two billion people in the result of a fuel tanker leaving the road marketing and distribution of developing world have no access to and rolling 70 metres down a bank on cutting-edge solar technology. electricity. For these people, solar 20 BP in New Zealand
  23. 23. BP and the environment electricity is probably the most a further 65 retail service stations, BP has been committed to this economical power source. including 26 in the South Island. programme since 1996. Used oil BP will continue to pioneer the use The new formulation for Ultimate collected through the programme of this clean, efficient and renewable has the same maximum of 1% is sent to Holcim New Zealand’s source of energy. benzene and 50ppm sulphur. But Westport site where it is used it will also have enhanced engine to supplement coal as a fuel for BP New Zealand sites with cleaning properties through the use the production of cement. solar canopies of a new additive at significantly The high temperatures Year Number of sites greater dose levels. This will provide (approximately 1,480°C with 2000 1 significantly greater injection gas temperatures of 2,000°C), 2001 11 oxidising conditions and long gas levels than any other BP fuel. 2002 15 BP Ultimate’s new formulation residence times required for cement 2003 15 contains a new carrier fluid to reduce production destroys 99.999% of all 2004 16 combustion chamber deposits, and organic contaminants in used oil. Solar electricity generated from The use of waste oil as an a friction modifier which will mean BP New Zealand’s solar canopies less frictional resistance to the alternative fuel in cement production Year KWh crankshaft. The main benefit though is also reduces the demand for non- 2001 27,142 in improved inlet system cleanliness. renewable resources, and produces 2002 148,573 The new formulation will mean that less carbon dioxide than coal. Each 2003 192,322 2004 191,132 engines in new vehicles will stay clean year the used oil collected nationally Note: Although BP had greater installed solar and, depending on the service history replaces 16,000 tonnes of coal. capacity in 2004, energy generated was down on 2003 as a result of poorer weather. of older vehicles, will provide fuel inlet system cleaning for older cars as well. BP Ultimate BP’s premier 98 octane The new BP Ultimate was unleaded fuel, BP Ultimate, entered launched in conjunction was the New Zealand market late in new BP Ultimate brand. 2000 and was the first high octane When the roll-out of the new fuel readily available to the general Ultimate is complete, BP Ultimate New Zealand motorist. will be available at 107 retail Supply constraints at the time service stations nationwide. limited availability initially to only 32 retail service stations (approximately Commitment to used oil recycling 10% of the BP retail network) in the BP New Zealand’s Lubricants North Island. In 2004, BP Ultimate Performance Unit is a member of the was available at 42 service stations. Used Oil Recovery Programme, an An enhanced version of BP Ultimate initiative to encourage the storage BP Superwash – cleaning the was launched in May 2005 to the and disposal of used oil in an water after cleaning the car. existing network of 42 locations plus environmentally responsible way. Sustainability Report 2004 21
  24. 24. 2.2 Bio-diesel Bio-fuels are non-toxic, renewable and biodegradable fuels typically derived from vegetable oils or tallow. They burn cleanly, reducing the emissions of ultra fine particles from vehicle exhausts which can cause health problems in humans, and of carbon dioxide emissions that contribute to climate change. This makes bio-fuels a particularly BP has found that bio-diesel manufacturers and is, at the same attractive option for use in large blends could, in principle, be used time, suited to the manufacture of cities such as Auckland. in New Zealand provided that the bio-diesel at a reasonable cost. Bio-diesel derived from soybean right quality could be achieved. The second is a commercial oil has been used in the United In 2003, BP learned that one of environment that ensures bio-diesel States for several years and bio- our customers operated a subsidiary can compete economically with diesel made from rapeseed oil and company that was developing a conventional diesel, and the third is an blended with conventional diesel process for making bio-diesel. enthusiasm by fleet managers to use has become an important alternative BP entered into an agreement with bio-diesel blends in their vehicles. fuel in the European Community. them to assist with a laboratory test During 2004, and into 2005, In both North America and programme, followed by vehicle trials. BP has worked closely with the Europe, farmer subsidies and large As at May 2005, two BP road Energy Efficiency and Conservation reductions in excise duties are being tankers have been driven a total of Authority (EECA) and Standards used as incentives to encourage 78,000 kilometres using a blend New Zealand in writing a New Zealand the uptake of these fuels. Some consisting of 80% conventional Standard for bio-diesel. countries have mandatory targets. diesel and 20% bio-diesel. This is BP is also talking with Government For example, the French Government a very high proportion of bio-diesel about how bio-diesel could become has targeted 5% of all diesel used compared with blends used overseas. part of New Zealand’s fuel mix, in France by 2010 to be bio-diesel. Two of BP’s Auckland-based and hence contribute to our Kyoto In New Zealand, the most readily customers are now participating obligations. BP believes there is a available source of bio-diesel is tallow. in this trial and are also using this future for bio-fuels in New Zealand’s New Zealand produces 160,000 blend. Waste Management is using energy future and is conducting the tonnes of tallow each year, most of it in three trucks, Stagecoach in five research and trials to ensure we can which is suitable for conversion to of its buses, and Bio-diesel Oils lead this exciting development. tallow methyl ester (TME), which is Limited in two of its vehicles. a high-quality form of bio-diesel. The trials have shown that care In 2002, the Government set a target must be taken when storing bio-diesel of two petajoules (PJ) of New Zealand’s blends, especially in cold weather, and transport fuels to be manufactured from that the bio-diesel component of any renewable sources by 2012. On current blend must be very pure. All 12 trial levels, this could be achieved through vehicles have performed well and have using 85 million litres of ethanol as a been virtually problem free during the blend with petrol, or 59 million litres spring and summer months of the trial. of bio-diesel as a diesel blend, Three further steps are required or a combination of these options. before bio-diesel becomes a As part of BP’s commitment to commercial reality in New Zealand. A truck from the Waste sustainability, BP has undertaken The first is the setting of a Management fleet – trialling significant research into the application rigorous quality standard that a bio-diesel blend. of bio-fuels in New Zealand. meets the expectations of vehicle 22 BP in New Zealand
  25. 25. BP and the environment 2.3 Liquified Natural Gas The giant Maui gas field off Taranaki supplies around 80% of New Zealand’s total gas requirements. As Maui rapidly approaches the end of its productive life, a large gap is looming between New Zealand’s demand for gas and our ability to meet it through domestic production. This shortfall is unlikely to impact on There are a number of advantages production and distribution of LNG domestic gas consumers who use gas with LNG which make it particularly and is increasingly focusing on how in their homes for heating or cooking. suitable for New Zealand. LNG is a to maximise the use of this cleaner There remains plenty of domestic very pure form of natural gas and is fuel. BP New Zealand is actively gas available for these purposes. the cleanest of all the fossil fuels. investigating the feasibility of this fuel The shortfall, which may hit as early When burned, LNG produces particle in New Zealand and sees real potential as 2008, will be particularly felt in emissions near to zero and emits for a relatively small LNG terminal in the the electricity generation sector. around 70% less CO2 than diesel or upper half of the North Island to supply Currently around 25% of petrol. LNG is particularly clean when gas-fired electricity generation plants. New Zealand’s electricity is generated used for electricity generation. Suitable ports that could be used for by gas-fired power stations. Importantly, there is an abundance the importing of LNG include Marsden Over the last few years, BP has been of natural gas throughout the world Point near Whangarei, or Taranaki. looking at how this energy gap might and the transport of LNG is becoming Importing LNG will provide best be bridged and believes importing increasingly safe and efficient. New Zealand with a low-emission, Liquified Natural Gas (LNG) will play a There are currently around 120 efficient, reliable and safe fuel, critical role in providing New Zealand double-hulled LNG vessels distributing primarily for electricity generation. with a low-emission, reliable fuel this fuel to countries across the world. A small LNG terminal will require – particularly for electricity generation. Since the first commercial shipment some initial investment but will allow LNG is natural gas which is cooled in 1964 there have been more than New Zealand to keep the lights until it becomes a liquid. When reduced 32,000 LNG shipments without a single on without burning more coal. to a liquid form, LNG takes up just incident of LNG being lost through a In doing so, LNG will buy one 600th the volume taken up by gas breach or failure of the ship’s tanks. New Zealand time to make the – a single shipment of LNG equals As a future fuel for New Zealand transition to new, renewable 600 shipments of natural gas. This it is important to consider LNG’s fuels or to discover and bring to massive conversion makes it possible safety record. If LNG were to leak market domestic gas supplies. and cost-effective to move very large – and this is incredibly unlikely – it quantities of gas from producer to would quickly evaporate on contact consumer in custom-built LNG ships. with the warmer air or water. LNG The chilled state of the gas during disperses quickly into the atmosphere transportation means the liquid is leaving no residue and, as such, not pressurised during shipping. there is no environmental clean-up Before the gas is converted to associated with LNG spills to water. liquid, impurities such as oxygen, Because LNG dissipates so carbon dioxide and sulphur are quickly with air it is very difficult removed. When an LNG ship docks at to ignite in the atmosphere. a terminal, the chilled LNG is pumped Importing LNG into New Zealand Shipping of LNG – a safe and ashore and converted back into gas makes sense as it is a good fit for our efficient way to help meet before being delivered into the gas existing gas distribution infrastructure. New Zealand’s energy needs. distribution system for consumption. BP is a global leader in the Sustainability Report 2004 23
  26. 26. 2.4 Dairy Flat: environment case study In July 2004, BP opened the doors of its $10-million, state-of-the-art service centre in Rodney, south of Silverdale. The new motorway service centre is at one place to allow a small pond rainwater from the roof and forecourt located next to the northbound lanes to form and for the flow of water canopy for non-drinking purposes, of State Highway One at Dairy Flat. to slow. This provides a space for removing the need to deliver between The centre took more than a year fish in the stream to rest and to two-three million litres of water to build and is an example of how allow food in the water to reach the per year. construction of a new site, and its stream bottom. This pond is currently In a further effort to reduce ongoing operation, can be sensitive home to a number of ducks. unnecessary use of water, the to its surrounding environment. The site uses around 10,000 litres flow of water in the toilet Transit New Zealand called for of water per day and, as the site is not hand-wash basins automatically tenders for the development of connected to mains water, drinking stops after seven seconds. the service centre five years ago, water is trucked in on a daily basis. A state-of-the-art waste water saying this type of facility was However, the site’s innovative water treatment system has also been an integral part of the National recycling system collects and stores developed at the site to collect and State Highway Strategy. The Dairy Flat site presented a number of challenges, and BP and its engineers needed to develop innovative and environmentally sensitive solutions. The site presented difficulties through its lack of infrastructure (there is no connection to water or sewerage facilities), poor draining soil and a history of the land being flooded. One major challenge was the need to divert a small pastoral stream around the site. Before rerouting the 200 metres of stream, contractors spent two days collecting 119 native, short-finned eels which were rereleased once the diversion was complete. This stream was originally a drainage ditch and, as part of this project, BP set itself the task of making the water flowing through it more natural and conducive to the wildlife that has come to live in it. The stream has been widened 24 BP in New Zealand
  27. 27. BP and the environment treat effluent. This system treats now have the ultimate in one-stop The ultimate service station The Dairy effluent collected from the site to shopping at their convenience. Flat motorway service area includes: the highest standard and the treated Motorists stopping to refuel their • A BP Connect service station with effluent is gradually released into cars can take time out for a great 62 fuel pump nozzles. irrigation beds away from the site. cup of coffee or a meal, buy their • A BP Wild Bean Café. This is a more environmentally groceries, stop in for local information • A BP truck stop. sustainable option than collecting or buy gifts and local crafts. • A Burger King. the effluent and having it treated The new BP centre serves a very • An Autobahn Café. and discharged directly into busy stretch of national highway • Mohair Crafts retail store. waterways or the sea. This system and, through the combination of • A branch of the Rodney Information is regularly monitored and tests services, will benefit both local Centre. show it has no adverse impacts on motorists and visitors to the region. • A children’s playground. the surrounding environment. And it hasn’t cost the earth. • Toilet facilities. The Dairy Flat site has been extensively planted, predominantly with natives, both to tie the site into its rural location and to limit runoff into the surrounding environment. Another pond has been created adjacent to the site to contain the run-off of water from the site, and discharge from the pond is controlled so as to minimise the risk of any surface flooding downstream from the site. An interceptor system has also been built into the forecourt design to prevent any fuel or oil spills from the service station or truck stop entering the environment. BP Dairy Flat reflects BP’s commitment to solar energy, with what is believed to be the largest solar canopy in Australasia. The 640 solar panels cover the entire canopy which, in the six months between June and December 2004, generated 12,709 kilowatt hours of electricity. Locals, and the growing number of tourists travelling through Northland, Sustainability Report 2004 25
  28. 28. 3 BP in society 3.1 BP in the community 3.2 BP’s continued support of Surf Life Saving New Zealand 3.3 BP and the world’s toughest yacht race 3.4 Who BP works with 3.5 Saturn tanks: a new approach to community consultation 26 BP in New Zealand

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