president’s messageWe at <strong>ARC</strong> Energy Trust are committed to communicating openly with our stakeholders to givetransparency to our business, operations, and our <strong>corporate</strong> philosophy.The evolution of <strong>ARC</strong>, as with any business, started with the basic concept of creating value forour investors. Much of our initial energy was spent on progressing <strong>ARC</strong> from a new company in 1996to a successful business today. But there is a lot more to <strong>ARC</strong> than our solid financial andoperating performance.We believe it is important to communicate our core beliefs and initiatives on the environment, healthand safety, community interaction, and our involvement in the Canadian economy. This CorporateResponsibility report is <strong>ARC</strong>’s first publication to directly speak to these issues.Although this is the first time that we are compiling our <strong>corporate</strong> <strong>responsibility</strong> information andphilosophy into a formal document, <strong>ARC</strong> has built its operations on a strong base of ethics since ourinception. We at <strong>ARC</strong> have always placed high value on:• Safety of our workplace• Protection of the environment in which we operate• <strong>Our</strong> social <strong>responsibility</strong> to communities in which we operate• Setting high operating standards for our company and our employees• Being a leader within our peer group• Delivering long-term, continued value to our investors• <strong>Our</strong> core beliefs that comprise our <strong>corporate</strong> cultureThis report summarizes our successes, and highlights areas in which we commit to improve. <strong>ARC</strong> hasalways strived to be forward-looking and we believe that our employees and all of our stakeholders areinterested in non-financial information on a company with whom they work, invest, and interact.We at <strong>ARC</strong> Energy Trust are committed to communicating openly with ourstakeholders to give transparency to our business, operations, and our<strong>corporate</strong> philosophy.The evolution of <strong>ARC</strong>, as with any business, started with the basic conceptof creating value for our investors. Much of our initial energy was spent onprogressing <strong>ARC</strong> from a new company in 1996 to a successful business today.There is a lot more to <strong>ARC</strong> than our solid financial and operating performance.42Corporate Responsibility
EnvironmentWe operate in an industry that affects the land, air, and water. Extracting fossil fuels requires the use of large machinery and the buildingof infrastructure in previously undeveloped areas, and often disturbs wildlife and vegetation. <strong>Our</strong> processes release emissions such asgreenhouse gases and sulphur dioxide into the atmosphere. We use water and other resources during operations.Since <strong>ARC</strong> is made up of people who have a vested interest in keeping our environment safe and healthy for future generations, we striveto minimize environmental impacts during our operations to the extent reasonably and economically feasible. Once we are finishedworking in an area, we reduce our environmental footprint through reclamation activities. <strong>Our</strong> commitment to being a leader in ourindustry means proactively meeting or exceeding regulations to protect the environment and working with a cooperative spirit with publicagencies in this regard.Through our participation in public reporting initiatives such as the Canadian Association of Petroleum Producer’s Stewardship Initiative,the Canadian GHG Challenge Registry, and the Carbon Disclosure Project, we gain access to information on best practices by others andcan make continual improvements to our programs. A leading ethical fund company issued a report in 2007 where it ranked all energycompanies on their environmental disclosure. <strong>ARC</strong> was the only trust that made it in the top ten rankings, amongst some of the leadingenergy companies in Canada. In 2007, <strong>ARC</strong> was included in the Jantzi Social Index in recognition for our commitment to the environment,community involvement, employee relations, human rights and <strong>corporate</strong> governance.Sustainable environmental practices are very much front and center in the news. Companies are encouraged by various advocacy andinvestor groups to take action. We are one of the few oil and gas operators who have a cash funded abandonment and reclamation fund.<strong>ARC</strong> actually has two reclamation funds – an unrestricted fund that is used for most of <strong>ARC</strong>’s reclamation projects and a restricted fundthat is specifically targeted for reclamation activities in our Redwater field in Alberta. This field is important to us as it will form a basisfor future greenhouse gas management projects, however, when <strong>ARC</strong> purchased Redwater, we assumed substantial reclamationobligations. Each quarter we withhold a portion of cash flow and fund <strong>ARC</strong>’s two reclamation funds. In 2007, we contributed $12 millioninto the funds. <strong>Our</strong> reclamation funds ensure that future stakeholders are not left carrying the entire financial burden of reclamation.An area of interest to <strong>ARC</strong> is carbon dioxide (CO 2) injection into mature reservoirs. This process has been around for over 30 years and isused as a means to recover additional resources. As an added benefit, this process allows CO 2that would normally be emitted into theatmosphere to be safely sequestered below the ground. With Redwater, <strong>ARC</strong> has one of Canada’s largest fields that may be suitable forsequestering unwanted CO 2from large emitters such as upgraders and refineries. Additionally, this practice helps to extract incrementaloil from mature fields, making more efficient use of already developed fields. It will be a few more years before we have commerciallyviable CO 2projects in Alberta. It will take legislation, and cooperation between emitters and end-users of CO 2before the requiredinfrastructure is in place for larger scale projects. We are conducting a CO 2enhanced oil recovery pilot project at Redwater in 2008 todetermine the commercial viability of a full scale CO 2injection project.Health and SafetyProtecting the health and safety of employees, contractors, and the public is paramount. <strong>ARC</strong> spends a significant amount of time on itshealth and safety programs. Whenever <strong>ARC</strong> purchases new properties, health and safety obligations are key considerations. <strong>Our</strong> healthand safety programs are proactive and include educating our employees and contractors in safe working practices. Maintaining a stronghealth and safety record is challenging in today’s environment – especially on the contractor side – with increasing activity levels in theindustry and much of the workforce less experienced than in the past. In spite of these challenges, <strong>ARC</strong> has consistently lowered our LostTime Injury frequency to a level better than the industry average. We track and strive to improve our recordable injuries as a leadingindicator of possible lost time accidents, and have initiated reporting near-misses so that we have a high level of awareness as to whatactivities could potentially result in injury. With no lost time accidents for employees in eleven of our twelve years of operations, we takepride in our performance, but every injury, no matter how minor, results in action.Corporate Responsibility5
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