During a period of growth and acquisition, subsidiaries of El Paso inherited many assets which are on sites that are subject to environmental remediation. These sites include retail gas stations, textile mills, gas processing facilities, terminals, refineries, and mineral mines. As the current or former owner of these sites, we take the responsibility of clean up and revitalization very seriously.

The requirements for cleaning up these sites vary greatly depending on the type and magnitude of the contamination, local geology, and state and federal regulations. El Paso started tracking the environmental liability turnover ratio (ELTR) to help demonstrate our commitment to quality management and reporting accuracy of our environmental liabilities. The ELTR is a performance metric investors can use to gauge a company’s ability to estimate and manage risk, defined as a company’s reported non-ARO¹ environmental liabilities divided by its annual expenditures for settling such liabilities. The downward trend since 2004 shows that El Paso is committed to resolving environmental liabilities while avoiding new ones. It also shows that we strive to accurately assess and report clean up costs before a project begins so that the information we share with our shareholders is as accurate as possible.

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¹ asset retirement obligation