Baker Hughes 2015 Annual Report Download - page 22

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Changes in and compliance with restrictions or regulations on offshore drilling may adversely affect our business
and operating results and reduce the need for our services in those areas.
Legislation and regulation in the U.S. and other parts of the world of the offshore oil and natural gas industry
may result in substantial increases in costs or delays in drilling or other operations in the Gulf of Mexico and other
parts of the world, oil and natural gas projects becoming potentially non-economic, and a corresponding reduced
demand for our services. If the U.S. or other countries where we operate, enact stricter restrictions on offshore
drilling or further regulate offshore drilling or contracting services operations, higher operating costs could result and
adversely affect our business and operating results.
If the Company were to be involved in a future incident similar to the 2010 Deepwater Horizon accident, the
Company could suffer significant financial losses that could severely impair the Company. Protections available to
the Company through contractual terms and insurance coverage may not be sufficient to protect the Company in
the event we were involved in that type of an incident.
Compliance with, and rulings and litigation in connection with, environmental regulations and the environmental
impacts of our or our customers’ operations may adversely affect our business and operating results.
Our business is impacted by material changes in environmental laws, rulings and litigation. Our expectations
regarding our compliance with environmental laws and our expenditures to comply with environmental laws,
including (without limitation) our capital expenditures for environmental control equipment, are only our forecasts
regarding these matters. These forecasts may be substantially different from actual results, which may be affected
by factors such as: changes in law that impose new restrictions on air emissions, wastewater management, waste
disposal, hydraulic fracturing, or wetland and land use practices; more stringent enforcement of existing
environmental regulations; a change in our allocation or other unexpected, adverse outcomes with respect to sites
where we have been named as a PRP, including (without limitation) Superfund sites; the discovery of other sites
where additional expenditures may be required to comply with environmental legal obligations; and the accidental
discharge of hazardous materials.
International, national, and state governments and agencies continue to evaluate and promulgate legislation
and regulations that are focused on restricting emissions commonly referred to as greenhouse gas (“GHG”)
emissions. In the U.S., the EPA has taken steps to regulate GHG emissions as air pollutants under the Clean Air
Act. The EPA’s Greenhouse Gas Reporting Rule requires monitoring and reporting of GHG emissions from, among
others, certain mobile and stationary GHG emission sources in the oil and natural gas industry, which in turn may
include data from certain of our wellsite equipment and operations. In addition, the U.S. government has proposed
rules setting GHG emission standards for the oil and natural gas industry. We are unable to predict whether the
proposed changes in laws or regulations will ultimately occur or what they will ultimately require, and accordingly,
we are unable to assess the potential financial or operational impact they may have on our business.
Other developments focused on restricting GHG emissions include the United Nations Framework Convention
on Climate Change, which includes the Paris Agreement and the Kyoto Protocol; the European Union Emission
Trading System; the United Kingdom's Carbon Reduction Commitment which affects more than 40 Baker Hughes
facilities; and, in the U.S., the Regional Greenhouse Gas Initiative, the Western Regional Climate Action Initiative,
and various state programs implementing California Assembly Bill 32.
Current or future legislation, regulations and developments may curtail production and demand for
hydrocarbons such as oil and natural gas in areas of the world where our customers operate and thus adversely
affect future demand for our services, which may in turn adversely affect future results of operations.
We may be subject to litigation if another party claims that we have infringed upon its intellectual property rights.
The tools, techniques, methodologies, programs and components we use to provide our services may infringe
upon the intellectual property rights of others. Infringement claims generally result in significant legal and other
costs and may distract management from running our core business. Royalty payments under licenses from third
parties, if available, would increase our costs. Additionally, developing non-infringing technologies would increase
our costs. If a license were not available, we might not be able to continue providing a particular service or product,
which could adversely affect our financial condition, results of operations and cash flows.