Environmental Protection Storm

Before the aftermath of the "November 13th "event in CNPC Jilin
Petrochemical Company Ltd. was over (CCR2005, No. 33), the
excess discharge of cadmium-containing waste water made by
Guangdong Shaoguan Smelter during the equipment overhaul caused
cadmium pollution in some sections of the Beijiang River. There
was only one month between these two pollution events.
   According to statistics, from the Songhua River event to
April 2006, 76 environmental pollution cases related to water
happened in China, being more than the total in 2005 and there
was one case every other day on average. Most cases took place
in petrochemical firms along rivers. The situation has aroused
great concern of relevant departments of the state. The State
Environmental Protection Administration triggered a nationwide
dynamic "environmental protection storm" at the beginning of
2006.

Nationwide check

"The check is mainly intended to effectively remove or reduce
the hidden environmental safety risks," said an official from
the State Environmental Protection Administration. On February
7th, 2006 the State Environmental Protection Administration
made a check on environmental risks in 127 petrochemical
construction projects close to environment-sensitive areas with
a total investment of RMB450 billion.
   In this movement the State Environmental Administration has
selected 20 large projects for the check. Large petrochemical
companies such as CNPC Lanzhou Petrochemical Company Ltd.,
Sinopec Yangzi Petrochemical Company Ltd. and Sinopec Yizheng
Chemical Fiber Co., Ltd. all appear in the list. These 20
projects include both new projects and expansion projects and
both major petrochemical projects such as oil refining and
ethylene units and hot chemical projects such as methanol and
polycarbonate units. They have strong representation in
construction mode, product portfolio and production process.
   "They are selected mainly because they are located in very
sensitive areas," a deputy director of the State Environmental
Protection Administration explains. "Twelve of them are related
to the Yangtze River and the Yellow River systems. Others are
related to water bodies with treatment priority such as the Three
Gorges Reservoir, the Lake Dian and the Tai Lake and important
coastal areas such as the Dalian Bay, the Jiaozhou Bay, the
Hangzhou Bay, the North Bay and the Pearl River Mouth."
    After more than two months' work, the State Environmental
Protection Administration announced the findings of the
intermediate check in early April 2006. The result was not
optimistic. All the 20 projects have safety and environmental
protection problems and 12 of them have major hidden environment
risks.
    These heavy industry firms close to big rivers are becoming
major pollution sources to water resources in China. "More than
70% of rivers and lakes in China have different degrees of
pollution," pointed out by another deputy director of the State
Environmental Protection Administration. "Drinking water for a
population of over 300 million is not safe and drinking water
for a population of 190 million contains excess hazardous
substances."
    According to a deputy chief engineer from China Academy of
Safety Science and Technology, "the irrational industrial
planning and distribution has aggravated accident hazards. The
irrational industrial distribution often makes a common
accident in a particular chemical plant threaten the safety of
a city and a river."

Dangerous distribution

The hydrogen peroxide workshop in Longxing Chemical Co., Ltd.
located in Longquan, Zhejiang province had an explosion on June
15th, causing 2 missing and 1 seriously injured. The explosion
took place less than 100 meters from the water source of the Ou
River. The Ou River is the second largest river in Zhejiang
province and goes across Lishui and Wenzhou. Local environmental
protection departments say that no pollution is caused to nearby
water and air, but there is only a 100m distance between the
pollution source and the water source and people naturally feel
worried.
     At least 2 thousand chemical companies in China are located
in residential areas or upstream of urban drinking water sources.
Hazards of petrochemical companies to the safety and environment
of big river systems caused by their irrational distribution are
prominent.
    According to experts, China has great "congenital" hidden
environment risks caused by the irrational distribution of
petrochemical firms. Some petrochemical industry zones are
located in upstream of urban water sources or close to
residential areas, posing a threat to social production and life
safety. Besides, "acquired" environment risks caused by the
irrational distribution are also developing. Some localities
disregard environmental conditions of resources and are vying
each other in constructing and expanding petrochemical industry
zones. Numerous large and small petrochemical industry zones and
hazardous chemical terminals are arrayed along major rivers in
some areas.
   Some experts, however, think that an evaluation on risks
caused by the irrational distribution should be conducted from
a historical point of view. As is known to all, the petroleum
and chemical industry in China started in the 1950s. Due to
restrictions in national conditions and realities, the optimal
industrial distribution was only a remote wishful thinking at
that time. People of that generation were immersed in the
enthusiasm to "do everything big and fast" for their country.
   As a matter of fact, the distribution of the petrochemical
industry in coastal and riverside areas is also a major global
trend. For example, there are eye-catching examples such as the
Mexico Gulf of the United States, Ulsan of Korea and the Arabian
Gulf of Saudi Arabia. It is also determined by the economics and
features of the petrochemical industry itself. As an expert
rightly points out, "the petrochemical industry needs to rely
on ports for transportation and requires a great deal of water.
If it is not located in coastal areas, should it be put in
deserts?"
   These sayings all have their own reasons. The problem,
however, is that the scattered distribution has evolved into a
fatal issue. As the petrochemical industry can greatly promote
the local economy, many local governments have been unable to
get rid of their narrow concepts of development and performance
for long years. As a result, numerous petrochemical units have
to pay high costs for safety and environmental protection and
are faced with huge challenges of pollution control.

"June 30th ultimatum"

"Once environment risks caused by the irrational distribution
are formed, no solution can be found in a short period of time,"
said experts. "As costs involved in relocation are very large,
only some passive remedial measures can be adopted."
   Inadequacy of preventive mechanisms in the petrochemical
industry has also become a huge pressure for the next-step
reformation. According to experts, root causes for such
inadequacy include the following:
     (a)