The Shell Puget Sound Refinery is the second largest of four refineries located in Northern Puget Sound in Northwest Washington State. There are two refineries located near Anacortes. The one currently operated by Shell Oil, was originally constructed by the Texas Company in 1958. The refinery was built to supply West Coast markets originally with Canadian crude oil. The refinery was called the Texaco Anacortes Refinery from 1958-1998.

The second refinery in Anacortes was originally constructed under the Shell Oil Company name, located just to the north of the Texaco Refinery. In 1998 when Shell and Texaco created the joint venture called Equilon, regulations prohibited two Shell locations in such close proximity to each other. Tesoro Petroleum bought the original Shell refinery located north of the present Shell refinery. The original Texaco Anacortes refinery became known as the Equilon Refinery from 1998-2002. In March 2002, when Texaco merged with Chevron, Shell Oil Products US acquired full ownership of the Equilon refinery and continues to operate it as the Shell Puget Sound Refinery.

Safety, health and environmental protection are the highest priorities for the refinery. Located in the pristine waters of Northern Puget Sound and at the gateway to the spectacular San Juan Islands, protection of the environment is a primary concern. The refinery won the Shell CEO's Environmental Excellence Award for three years in a row as well as receiving other environmental recognition. Safety is the other top priority and refinery employees have also been recognized for safety performance, winning Gold Awards from the National Petrochemical and Refiners Association.

More than 400 people are directly employed at the refinery. An additional several hundred contractors are also employed on an on-going basis. Employees are represented by PACE, and are very involved in the local Anacortes and Skagit County communities, playing a vital role in making this area a great place to live.

1911 Royal Dutch Shell began their entry into the North American marketplace with a terminal located north of Seattle. The terminal supplied gasoline from refineries in Sumatra and Burma until a Shell refinery was built in Martinez, California in 1914.

1955 Shell Oil built a new 40,000 barrel per day refinery at the north end of March's Point near Anacortes, Washington.

1958 The Texas Company (later Texaco) began operating the new 45,000 barrel per day refinery just south of the three year old Shell refinery. The original investment was $57 million with an annual payroll of $2 million. The refinery was originally called Texaco Puget Sound Works, later Puget Sound Plant.

1974 The Texaco refinery capacity increased to 78,000 barrels of crude per day. Also, $54 million was invested to meet increased demand for high octane unleaded fuels.

Mid-1980s The refinery became the first in the Texaco system to be fully computerized.

1991 March Point Co-Generation facility began operation. The $132 million facility supplies steam to the refinery with increased pollution controls and provides electricity to approximately 100,000 homes.

1998 Environmental performance significantly enhanced with the opening of the new $11 million waste water treatment plant. The refinery won the first of many environmental awards related to this plant's performance.

1998 Shell and Texaco formed Equilon Enterprises and the Texaco refinery, now rated at 145,000 barrels per day, became part of the joint venture. The refinery was renamed Puget Sound Refining Company (PSRC). The original Shell refinery to the north, was sold to Tesoro Petroleum to meet federal regulations. In 2002 Shell Oil Products US assumed 100% ownership of the refinery and it is now known as the Shell Puget Sound Refinery.

2002--2006 Major projects scheduled for completion by 2006 are estimated at $400 to $500 million, including the completion of clean gasoline and clean diesel projects. Many of the projects are aimed at improving the environmental performance, particularly air emissions, and some of these were a result of the company's consent decree with the EPA. Overall result will be a cleaner, more efficient plant, producing a range of clean fuels.

2003 Shell Puget Sound Refinery was recognized by the National Petrochemical and Refiners Association with three prestigious awards, including the Gold Award for outstanding safety performance.

2005 In December 2005, Shell Puget Sound Refinery was certified to the ISO 14001 environmental management standard by a qualified third party certifying firm. This standard places the refinery in the top tier of industrial facilities around the world in environmental management practices.

The Shell Puget Sound Refinery is located 60 miles north of Seattle and about 60 miles south of Vancouver, BC, Canada in picturesque northern Puget Sound. It is one of two refineries and several other heavy industry facilities on March's Point, a peninsula that divides Fidalgo Bay and Padilla Bay and just across from the community of Anacortes, Washington. Adjacent to the refinery is the Swinomish Indian Reservation, an active tribe with deep historic roots in the region.

The refinery owns 835 acres of land, about 40% (or 327 acres) of which is used for refinery operations. The remaining refinery property includes buffer areas, some housing and cattle grazing fields.

The refinery was constructed by The Texas Company (Texaco) in 1958.

At the Shell Puget Sound Refinery in Anacortes, Washington, crude oil from the Alaskan North Slope (Valdez load port) and from Central and Eastern Canada is converted into many useful, practical products that are used everyday. The refinery primarily serves the Pacific Northwest from the Canadian border down to Portland, occasionally south to California.

Shell Puget Sound Refinery Products

• Gasoline: premium, mid-grade and regular
• Aviation turbine fuel (jet fuel)
• Diesel fuel: off-road and highway diesel
• Bunker fuel oil for large ships
• Liquefied petroleum gas (LPG, or propane and butane)
• Petroleum grade coke
• Sulfur

Sustainable Development (SD) is a term widely used throughout the world to describe the balance between continued economic growth, environmental protection and social responsibility.

Shell Oil Products US's goal is to set a real agenda for change to proactively and collectively insure a better quality of life today and for future generations. The task of keeping these seemingly competing objectives of environmental stewardship, business and economic growth, and making our community a better place to live and raise our children is daunting. But it is imperative that we cooperatively work to meet these challenges.

Shell Puget Sound Refinery's agenda for Sustainable Development is focused on environmental protection and enhancement, employee and community safety and health, and contributions of our employees to the quality of life in the Anacortes and greater Skagit Valley community.

At the Shell Puget Sound Refinery, environmental stewardship is a critical part of our Sustainable Development efforts. This is evidenced by the prestigious awards received in the last few years, as well as the on-going efforts that do not normally receive attention.

Awards

• ISO 14001 Certification

In December 2005, Shell PSR completed a process that began in 2003. This certification means that Shell Puget Sound Refinery has been thoroughly evaluated and certified by an external certifying body that PSR meets the international standard for an environmental management system. This provides an objective, and highly qualified, "seal of approval" on the refinery practices aimed at minimizing impacts to the environment.

While certification indicates a completion of the process, in the case of ISO 14001 certification,  it is better understood as a verification of the management systems in place that will generate continuous improvement. This means the process is ongoing, and the work aimed at improving environmental management will go on continuously, with ever improving results.

• Alliance CEO Leadership Award--Three Consecutive Years

Water quality compliance has been virtually 100% since the installation of the wastewater treatment facility. This effort, and other improvements in environmental performance, was recognized by the parent company, Equilon Enterprises LLC, at their Director's meeting. The plant received the 2001 CEO Environmental Leadership Award for having the best compliance record and for setting new benchmarks for cost effectiveness. The CEO Leadership Awards were continued after Equilon was acquired by Shell Oil Products US, and Shell PSR won this prestigious award again in 2002 and 2003.

• EPA Clean Air Excellence Award

The refinery received a "Clean Air Excellence Award" from the federal Environmental Protection Agency at a special ceremony in St. Paul on September 21, 2000. The recognition came after the refinery volunteered for the second summer in a row to refine and market lower vapor pressure gasoline in King, Snohomish, Pierce and Kitsap counties. Although such fuel is more costly to produce, it significantly reduces evaporative and tailpipe emissions under warm weather conditions.

According to PSCAA Executive Director Dennis McLerran, the region had previously come quite close to violating federal smog standards during the summer months. But the refinery's efforts (with other refineries) "helped us keep our clean air status by reducing tailpipe emissions and evaporative emissions from gasoline on a hot day by an estimated 10-15 percent. That's about 15 tons of emissions."

The voluntary agreement to produce low vapor pressure gas, added McLerran, is unique in the nation. "But it had a direct benefit for the entire Puget Sound region," he said, "protecting the health of 3.5 million people and helping to avoid violating the federal air quality standard for ozone."

• PSCAA Clean Air Partner Award

In 1999, Puget Sound Refining Company (the refinery's name under Equilon ownership) was awarded a special "Clean Air Partner Award" by the Puget Sound Clean Air Agency for its commitment to fighting summer smog. The refinery was also nominated for a Governor's Award for Outstanding Achievement in Pollution Prevention. This recognition came after this refinery, along with four other oil refining companies, volunteered to refine and market lower vapor pressure gasoline during the summer of 1999 in King, Snohomish, Pierce and Kitsap counties. The lower vapor pressure gas significantly reduced evaporative and tailpipe emissions by about 15 percent.

• AWB Environmental Excellence Award

PSRC received the Association of Washington Business Environmental Excellence Award for water quality in 1998 after completing an $11 million upgrade to our wastewater treatment capacity. The advanced new facility recycles petroleum hydrocarbons, treats residual wastewater, and exceeds stringent state and federal standards. It helps us reuse water wisely and creatively, and helps keep local waters clean as well.

Continuing Investment

• Sulfur Recovery

In 2000, PSRC expanded its sulfur recovery capacity by 50 percent, at a cost of nearly $13 million. This expansion has the potential to reduce sulfur dioxide emissions by about 1,700 tons a year, and nitrogen oxide emissions by about 500 tons. The Sulfur Recovery Unit allows for recovery and sale of additional sulfur as a valuable byproduct.

• Wet Gas Scrubber, Flare Controls

In March 2001, the alliance companies including Equilon and Puget Sound Refining Company entered into a voluntary agreement with the Environmental Protection Agency relating to plant emissions. As part of that agreement, Shell PSR is investing approximately $50 million in upgraded equipment to reduce emissions from plant processes. The FCCU Wet Gas Scrubber (WGS) Unit is a new unit that will be operational by Dec 31, 2006, and will lower sulfur dioxide and catalyst emissions from the FCCU CO Boiler flue gas. Sulfur dioxide is a major contributor to acid ran, so lowering its emission is important. In addition, Shell PSR provided $500,000 in local funds to assist Skagit County organizations to reduce pollution and improve quality of life. Approximately $250,000 of that fund went to convert Skagit Transit buses to operate on "clean diesel" fuel, reducing emissions from these vehicles.

• Clean Fuels Projects

From 2003 to 2006, Shell Puget Sound Refinery is making some of the most substantial investments in the refinery's history. A large portion of the $400 million in new investment is aimed at enabling the refinery to produce new low sulfur or "clean fuels" to meet EPA regulations. The clean gasoline project was completed in 2004 at a cost of approximately $100 million. The clean diesel project was completed to meet new regulations in mid-2006.

There are no higher priorities for Shell Puget Sound Refinery than to have every employee return home to his or her family safely, and for community health and safety to be protected.

Safety Programs

Shell Puget Sound Refinery has implemented two important safety improvement programs: BEST and TOP. BEST (Behavioral Education for a Safer Today) is a behavioral safety program aimed at helping employees understand how basic attitudes and behaviors can contribute to a safer environment. TOP, which stands for Triangle of Prevention, is a union-led, company-supported safety program aimed at investigation and analysis of incidences to make changes to prevent future incidents.

Safety Awards

Shell Puget Sound Refinery earned three national safety awards presented by the National Petrochemical and Refiners Association (NPRA) in 2002. The NPRA safety awards promote accident prevention in the petroleum refining and petrochemical manufacturing industries, and publicly recognize the excellent record of safety in operations.

Awards received by Shell PSR:

• Safety Achievement Award for two years without a case involving days away from work.
  
• Meritorious Safety Performance Award for achieving a total recordable incident rate of 0.64 for direct refinery employees for calendar year 2002. The recordable incident rate is the number of events per 200,000 workhours according to the criteria set by the Occupational Safety and Health Administration (OSHA).
  
• Gold Award for a 59% reduction in the total recordable incident rate during the calendar year 2002 compared to the average rate over the previous three years.

The Gold Award is presented to companies that achieve a 25% reduction in recordable rates. The nearly 60% reduction achieved by Shell PSR is substantially better than most other facilities receiving this award. Similarly, Shell PSR's incidence rate of 0.64, which earned it the Meritorious Safety Performance Award, is considerably better than the 1.5 rate, which is the minimum for qualifying for this award.

NPRA members represent more than 450 companies, including virtually all US refineries and petrochemical manufacturers. The refinery's safety record has shown steady overall improvement in the last five years.

Shell Puget Sound Refinery believes that contributing to the quality of life of our community is one of our most important obligations and privileges. Our primary contribution comes through the activities of our employees as they volunteer and are actively involved in a large number of community organizations and activities.

Jobs and Economic Impact

• The refinery supplies over 400 "family wage" jobs.
• Add approximately 250 additional contract employees.
• Approximately $35 million total annual payroll.
• This refinery is the single largest taxpayer in Skagit County, paying over $20 million in state and local taxes each year.
• The plant also typically provides over $2 million annually in revenue to the Anacortes Port District.
• Petroleum refining is a high-wage industry, paying its employees in Washington State an average of more than $80,000 per year.
• In 2003, refiners paid contract workers nearly $165 million, an average of $118,296 per worker. Ninety-eight percent of these 393 workers came from within Washington State.
• These jobs have a total employment multiplier of 11.68, which means that each direct refining job generates an additional 10.68 jobs in the state, for a total employment effect of 20,148 jobs resulting from the five refineries.
• Refinery jobs and their income spur additional jobs in upstream industries that supply crude oil, contract labor for plant maintenance and repair, and office supplies and equipment to the refineries.