Energy Transfer 2012 Annual Report Download - page 37

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facilities are subject to increasingly stringent regulations, including regulations that require the installation of control technology
or the implementation of work practices to control hazardous air pollutants. Moreover, the Clean Air Act requires an operating
permit for major sources of emissions and this requirement applies to some of our facilities. We believe that our operations are in
substantial compliance with the federal Clean Air Act and comparable state laws. The EPA and state agencies are continually
proposing and finalizing new rules and regulations that could impact our existing operations and the costs and timing of new
infrastructure development. Specifically, EPA has recently finalized new source performance standards (NSPS) for the oil and gas
source category. New Subpart OOOO expands the NSPS oil and gas source category to include all segments of the oil and gas
industry. It imposes new controls for emissions of volatile organic compounds (VOCs) on well completions, pneumatic devices,
compressors, storage vessels and equipment leaks. In addition, EPA has also recently finalized revisions to Subparts HH and HHH
that will further reduce emissions of hazardous air pollutants from storage tanks and tri-ethylene glycol dehydrators at major
sources. These new regulations will increase our cost of compliance. Petitions have been filed in the court of appeals for review
and reconsideration of the new rules, but we cannot predict the outcome of those proceedings.
On October 19, 2010, the EPA adopted new national emission standards for hazardous air pollutants for existing stationary spark
ignition reciprocating internal combustion engines that are either located at area sources of hazardous air pollutant emissions or
that have a site rating of less than or equal to 500 brake horsepower and are located at major sources of hazardous air pollutant
emissions. All engines subject to these “Quad Z” regulations are required to comply by October 19, 2013. Many of our facilities,
including our leased compressors are impacted by these new rules. We will incur increased costs to bring engines into compliance
with the new emission requirements, but we do not expect these costs to be material.
Clean Water Act. The Clean Water Act and comparable state laws impose restrictions and strict controls regarding the discharge
of pollutants, including hydrocarbon-bearing wastes, into waters of the United States. Pursuant to the Clean Water Act and similar
state laws, a NPDES, or state permit, or both, must be obtained to discharge pollutants into federal and state waters. In addition,
the Clean Water Act and comparable state laws require that individual permits or coverage under general permits be obtained by
subject facilities for discharges of storm water runoff. We believe that we are in substantial compliance with Clean Water Act
permitting requirements as well as the conditions imposed thereunder, and that our continued compliance with such existing permit
conditions will not have a material adverse effect on our business, financial condition or results of operations.
Spills. Our operations can result in the discharge of regulated substances, including NGLs, crude oil or refined products. The
Federal Water Pollution Control Act of 1972, also known as the Clean Water Act, and comparable state laws impose restrictions
and strict controls regarding the discharge of regulated substances into state waters or waters of the United States. The Oil Pollution
Act subjects owners of covered facilities to strict joint and potentially unlimited liability for removal costs and other consequences
of a release of oil, where the release is into navigable waters, along shorelines or in the exclusive economic zone of the United
States. Spill prevention control and countermeasure requirements of the Clean Water Act and some state laws require that
containment dikes and similar structures be installed to help prevent the impact on navigable waters in the event of a release. The
Office of Pipeline Safety of the DOT, the EPA, or various state regulatory agencies, has approved our oil spill emergency response
plans, and our management believes we are in substantial compliance with these laws.
In addition, some states maintain groundwater protection programs that require permits for discharges or operations that may
impact groundwater conditions. Our management believes that compliance with existing permits and compliance with foreseeable
new permit requirements will not have a material adverse effect on our results of operations, financial position or expected cash
flows.
Endangered Species Act. The Endangered Species Act restricts activities that may affect endangered or threatened species or their
habitat. We may operate in areas that are currently designated as a habitat for endangered or threatened species, the discovery of
previously unidentified endangered species, or the designation of additional species as endangered or threatened, which could
cause us to incur additional costs, to develop habitat conservation plans, to become subject to expansion or operating restrictions,
or bans in the affected areas.
Climate Change. On December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other
greenhouse gases present an endangerment to public health and the environment because emissions of such gases are, according
to the EPA, contributing to warming of the Earth's atmosphere and other climatic changes. These findings allow the EPA to adopt
and implement regulations that would restrict emissions of greenhouse gases under existing provisions of the federal Clean Air
Act. Accordingly, the EPA adopted two sets of regulations addressing greenhouse gas emissions under the Clean Air Act. The first
limits emissions of greenhouse gases from motor vehicles beginning with the 2012 model year. The EPA has asserted that these
final motor vehicle greenhouse gas emission standards trigger Clean Air Act construction and operating permit requirements for
stationary sources, commencing when the motor vehicle standards took effect on January 2, 2011. On June 3, 2010, the EPA
published its final rule to address the permitting of greenhouse gas emissions from stationary sources under the Prevention of
Significant Deterioration (“PSD”) and Title V permitting programs. This rule “tailors” these permitting programs to apply to certain
stationary sources of greenhouse gas emissions in a multi-step process, with the largest sources first subject to permitting. It is
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