Energy Transfer 2012 Annual Report Download - page 38

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widely expected that facilities required to obtain PSD permits for their greenhouse gas emissions will be required to also reduce
those emissions according to “best available control technology” standards for greenhouse gases, which are currently being
developed on a case-by-case basis. Any regulatory or permitting obligation that limits emissions of greenhouse gases could require
us to incur costs to reduce or sequester emissions of greenhouse gases associated with our operations and also could adversely
affect demand for the natural gas and other hydrocarbon products that we transport, process, or otherwise handle in connection
with our services.
In addition, on October 30, 2009, the EPA published a final rule requiring the reporting of greenhouse gas emissions from specified
large greenhouse gas sources in the United States on an annual basis, beginning in 2011 for emissions occurring after January 1,
2010. On November 30, 2010, the EPA revised its greenhouse gas reporting rule to include onshore oil and natural gas production,
processing, transmission, storage and distribution facilities. Under the new rules, reporting of greenhouse gas emissions from such
facilities, including many of our facilities, is required on an annual basis, with reporting that began in 2012 for emissions occurring
in 2011.
Various pieces of legislation to reduce emissions of, or to create cap and trade programs for, greenhouse gases have been proposed
by the U.S. Congress over the past several years, but no proposal has yet passed. More than one-third of the states have already
taken legal measures to reduce emissions of greenhouse gases, primarily through the planned development of greenhouse gas
emission inventories and/or regional greenhouse gas cap and trade programs. The passage of legislation that limits emissions of
greenhouse gases from our equipment and operations could require us to incur costs to reduce the greenhouse gas emissions from
our own operations, and it could also adversely affect demand for our transportation, storage and processing services.
Some have suggested that one consequence of climate change could be increased severity of extreme weather, such as increased
hurricanes and floods. If such effects were to occur, our operations could be adversely affected in various ways, including damages
to our facilities from powerful winds or rising waters, or increased costs for insurance. Another possible consequence of climate
change is increased volatility in seasonal temperatures. The market for our NGLs and natural gas is generally improved by periods
of colder weather and impaired by periods of warmer weather, so any changes in climate could affect the market for the fuels that
we produce. Despite the use of the term “global warming” as a shorthand for climate change, some studies indicate that climate
change could cause some areas to experience temperatures substantially colder than their historical averages. As a result, it is
difficult to predict how the market for our products could be affected by increased temperature volatility, although if there is an
overall trend of warmer temperatures, it would be expected to have an adverse effect on our business.
Employee Health and Safety. We are subject to the requirements of the federal OSHA and comparable state laws that regulate the
protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that information
be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state
and local government authorities and citizens. We believe that our operations are in substantial compliance with the OSHA
requirements including general industry standards, recordkeeping requirements, and monitoring of occupational exposure to
regulated substances.
Safety Regulations. Those pipelines through which we transport mixed NGLs (exclusively to other NGL pipelines) are subject to
regulation by the DOT, under the HLPSA, relating to the design, installation, testing, construction, operation, replacement and
management of pipeline facilities. The HLPSA requires any entity that owns or operates liquids pipelines to comply with the
regulations under the HLPSA, to permit access to and allow copying of records and to submit certain reports and provide other
information as required by the Secretary of Transportation. We believe our liquids pipelines are in substantial compliance with
applicable HLPSA requirements. The DOT is continually proposing new pipeline safety rules that may impact our businesses and
increase our operating costs.
Our interstate, intrastate and certain of our gathering pipelines are also are subject to regulation by the DOT under the NGPSA,
which covers natural gas, crude oil, carbon dioxide, NGLs and petroleum products pipelines, and under the Pipeline Safety
Improvement Act of 2002, as amended. Pursuant to these authorities, the DOT has established a series of rules that require pipeline
operators to develop and implement “integrity management programs” for natural gas pipelines located in areas where the
consequences of potential pipeline accidents pose the greatest risk to people and their property. Similar rules are also in place for
operators of hazardous liquid pipelines. The DOT's integrity management rules establish requirements relating to the design,
installation, testing, construction, operation, inspection, replacement and management of pipeline facilities. We believe that our
pipeline operations are in substantial compliance with applicable NGPSA requirements.
The DOT enacted new control room management regulations as directed by the Pipeline Inspection, Protection, Enforcement and
Safety Act of 2006. The rules require operators of hazardous liquids pipelines, gas pipelines and LNG facilities with at least one
control room to develop and implement written control room management procedures. We believe we are in substantial compliance
with the new rules as of the required compliance date of August 1, 2011.
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