Energy Transfer 2012 Annual Report Download - page 46

38
• actions taken by natural gas and oil producing nations;
• instability or other events affecting natural gas and oil producing nations;
• the impact of weather and other events of nature on the demand for natural gas, NGLs and oil;
• the availability of storage, terminal and transportation systems, and refining, processing and treating facilities;
• the price, availability and marketing of competitive fuels;
• the demand for electricity;
• the cost of capital needed to maintain or increase production levels and to construct and expand facilities
• the impact of energy conservation and fuel efficiency efforts; and
• the extent of governmental regulation, taxation, fees and duties.
In the past, the prices of natural gas, NGLs and oil have been extremely volatile, and we expect this volatility to continue. For
example, during the year ended December 31, 2012, the NYMEX natural gas settlement price for the prompt month contract
ranged from a high of $3.70 per MMBtu to a low of $2.04 per MMBtu. A composite of the Mont Belvieu average NGLs price
based upon our average NGLs composition during our year ended December 31, 2012 ranged from a high of approximately $1.23
per gallon to a low of approximately $0.75 per gallon. Oil spot prices at Cushing, Oklahoma during the year ended December 31,
2012 ranged from a high of approximately $109.39 per barrel to a low of approximately $77.72 per barrel.
Any loss of business from existing customers or our inability to attract new customers due to a decline in demand for natural gas,
NGLs, or oil could have a material adverse effect on our revenues and results of operations. In addition, significant price fluctuations
for natural gas, NGL and oil commodities could materially affect our profitability.
We are affected by competition from other midstream, transportation, terminalling and storage and retail marketing companies.
We experience competition in all of our business segments. With respect to our midstream operations, we compete for both natural
gas supplies and customers for our services. Our competitors include major integrated oil companies, interstate and intrastate
pipelines and companies that gather, compress, treat, process, transport, store and market natural gas.
Our natural gas and NGL transportation pipelines and storage facilities compete with other interstate and intrastate pipeline
companies and storage providers in the transportation and storage of natural gas. The principal elements of competition among
pipelines are rates, terms of service, access to sources of supply and the flexibility and reliability of service. Natural gas and NGLs
also competes with other forms of energy, including electricity, coal, fuel oils and renewable or alternative energy. Competition
among fuels and energy supplies is primarily based on price; however, non-price factors, including governmental regulation,
environmental impacts, efficiency. ease of use and handling, and the availability of subsidies and tax benefits also affects competitive
outcomes.
In markets served by our NGL pipelines, we compete with other pipeline companies and barge, rail and truck fleet operations.
We also face competition with other storage and fractionation facilities based on fees charged and the ability to receive, distribute
and/or fractionate the customer's products.
Our crude oil and refined petroleum products pipelines and face significant competition from other pipelines for large volume
shipments. These operations also face competition from trucks for incremental and marginal volumes in the areas we served.
Further, our crude and refined product terminals compete with terminals owned by integrated petroleum companies, refining and
marketing companies, independent terminal companies and distribution companies with marketing and trading operations.
We also face strong competition in the market for the sale of retail gasoline and merchandise. Our competitors include service
stations operated by fully integrated major oil companies and other well-recognized national or regional retail outlets, often selling
gasoline or merchandise at aggressively competitive prices. The actions of our retail marketing competitors, including the impact
of imports, could lead to lower prices or reduced margins for the products we sell, which could have an adverse effect on our
business or results of operations.
We may be unable to retain or replace existing midstream, transportation, terminalling and storage customers or volumes due
to declining demand or increased competition in oil, natural gas and NGL markets, which would reduce our revenues and
limit our future profitability.
The retention or replacement of existing customers and the volume of services that we provide at rates sufficient to maintain or
increase current revenues and cash flows depends on a number of factors beyond our control, including the price of, and demand
for oil, natural gas, and NGLs in the markets we serve and competition from other service providers.
Table of Contents