Energy Transfer 2012 Annual Report Download - page 35

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We also generate both hazardous and nonhazardous wastes that are subject to requirements of the federal RCRA, and comparable
state statutes. We are not currently required to comply with a substantial portion of the RCRA requirements at many of our facilities
because the minimal quantities of hazardous wastes generated there make us subject to less stringent management standards. From
time to time, the EPA has considered the adoption of stricter handling, storage and disposal standards for nonhazardous wastes,
including crude oil and natural gas wastes. It is possible that some wastes generated by us that are currently classified as
nonhazardous may in the future be designated as “hazardous wastes,” resulting in the wastes being subject to more rigorous and
costly disposal requirements, or that the full complement of RCRA standards could be applied to facilities that generate lesser
amounts of hazardous waste. Changes in applicable regulations may result in a material increase in our capital expenditures or
plant operating and maintenance expense.
We currently own or lease sites that have been used over the years by prior owners and by us for various activities related to
gathering, processing, storage and transmission of natural gas, NGLs, crude oil and refined products. Solid waste disposal practices
within the oil and gas industry have improved over the years with the passage and implementation of various environmental laws
and regulations. Nevertheless, some hydrocarbons and wastes have been disposed of or released on or under various sites during
the operating history of those facilities that are now owned or leased by us. Notwithstanding the possibility that these dispositions
may have occurred during the ownership of these assets by others, these sites may be subject to CERCLA, RCRA and comparable
state laws. Under these laws, we could be required to remove or remediate previously disposed wastes (including wastes disposed
of or released by prior owners or operators) or contamination (including soil and groundwater contamination) or to prevent the
migration of contamination.
A predecessor company acquired by us in July 2001 had previously received and responded to a request for information from the
United States Environmental Protection Agency (the “EPA”) regarding its potential contribution to widespread groundwater
contamination in San Bernardino, California, known as the Newmark Groundwater Contamination Superfund site. We have not
received any follow-up correspondence from the EPA on the matter since our acquisition of the predecessor company in 2001. In
addition, through our acquisitions of ongoing businesses, we are currently involved in several remediation projects that have
cleanup costs and related liabilities.
As of December 31, 2012 and 2011, accruals of $211 million and $14 million, respectively, were recorded in our consolidated
balance sheets as accrued and other current liabilities and other non-current liabilities to cover estimated material environmental
liabilities including certain matters assumed in connection with our acquisition of the HPL System, the Transwestern acquisition,
potential environmental liabilities for three sites that were formerly owned by Titan or its predecessors, the predecessor owner's
share of certain environmental liabilities of ETC OLP. The accrual also includes amounts related to Sunoco.
Sunoco is subject to extensive and frequently changing federal, state and local laws and regulations, including, but not limited to,
those relating to the discharge of materials into the environment or that otherwise relate to the protection of the environment, waste
management and the characteristics and composition of fuels. These laws and regulations require environmental assessment and/
or remediation efforts at many of Sunoco’s facilities and at formerly owned or third-party sites. Sunoco’s accrual for environmental
remediation activities amounted to $163 million at December 31, 2012. These legacy sites that are subject to environmental
assessments include formerly owned terminals and other logistics assets, retail sites that Sunoco no longer operates, closed and/
or sold refineries and other formerly owned sites. Following the signing of the merger agreement between ETP and Sunoco,
Sunoco suspended their efforts to establish this environmental fund so that ETP could determine whether it wanted to pursue this
project. At this time, no determinations have been made whether to establish this environmental fund.
Sunoco’s accrual for environmental remediation activities reflects anticipated work at identified sites where an assessment has
indicated that cleanup costs are probable and reasonably estimable. The accrual is undiscounted and is based on currently available
information, estimated timing of remedial actions and related inflation assumptions, existing technology and presently enacted
laws and regulations. It is often extremely difficult to develop reasonable estimates of future site remediation costs due to changing
regulations, changing technologies and their associated costs, and changes in the economic environment. Engineering studies,
historical experience and other factors are used to identify and evaluate remediation alternatives and their related costs in
determining the estimated accruals for environmental remediation activities. Losses attributable to unasserted claims are also
reflected in the accruals to the extent they are probable of occurrence and reasonably estimable.
Under various environmental laws, including the Resource Conservation and Recovery Act (“RCRA”) (which relates to solid and
hazardous waste treatment, storage and disposal), Sunoco has initiated corrective remedial action at its facilities, formerly owned
facilities and third-party sites. At the Company’s major manufacturing facilities, Sunoco has consistently assumed continued
industrial use and a containment/remediation strategy focused on eliminating unacceptable risks to human health or the
environment. The remediation accruals for these sites reflect that strategy. Accruals include amounts to prevent off-site migration
and to contain the impact on the facility property, as well as to address known, discrete areas requiring remediation within the
plants. Activities include closure of RCRA solid waste management units, recovery of hydrocarbons, handling of impacted soil,
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