Energy Transfer 2015 Annual Report Download - page 218

Table of Contents
To the extent estimable, expected remediation costs are included in the amounts recorded for environmental matters in our consolidated balance sheets.
In some circumstances, future costs cannot be reasonably estimated because remediation activities are undertaken as claims are made by customers and
former customers. To the extent that an environmental remediation obligation is recorded by a subsidiary that applies regulatory accounting policies,
amounts that are expected to be recoverable through tariffs or rates are recorded as regulatory assets on our consolidated balance sheets.
The table below reflects the amounts of accrued liabilities recorded in our consolidated balance sheets related to environmental matters that are
considered to be probable and reasonably estimable. Currently, we are not able to estimate possible losses or a range of possible losses in excess of
amounts accrued. Except for matters discussed above, we do not have any material environmental matters assessed as reasonably possible that would
require disclosure in our consolidated financial statements.
December 31,
2015
2014
Current $ 41
$ 41
Non-current 326
360
Total environmental liabilities $ 367
$ 401
In 2013, we established a wholly-owned captive insurance company to bear certain risks associated with environmental obligations related to certain
sites that are no longer operating. The premiums paid to the captive insurance company include estimates for environmental claims that have been
incurred but not reported, based on an actuarially determined fully developed claims expense estimate. In such cases, we accrue losses attributable to
unasserted claims based on the discounted estimates that are used to develop the premiums paid to the captive insurance company.
During the years ended December 31, 2015 and 2014, the Partnership had $38 million and $48 million, respectively, of expenditures related to
environmental cleanup programs.
On December 2, 2010, Sunoco, Inc. entered an Asset Sale and Purchase Agreement to sell the Toledo Refinery to Toledo Refining Company LLC (TRC)
wherein Sunoco, Inc. retained certain liabilities associated with the pre-Closing time period. On January 2, 2013, USEPA issued a Finding of Violation
(FOV) to TRC and, on September 30, 2013, EPA issued an NOV/FOV to TRC alleging Clean Air Act violations. To date, EPA has not issued an FOV or
NOV/FOV to Sunoco, Inc. directly but some of EPA’s claims relate to the time period that Sunoco, Inc. operated the refinery. Specifically, EPA has
claimed that the refinery flares were not operated in a manner consistent with good air pollution control practice for minimizing emissions and/or in
conformance with their design, and that Sunoco, Inc. submitted semi-annual compliance reports in 2010 and 2011 and EPA that failed to include all of
the information required by the regulations. EPA has proposed penalties in excess of $200,000 to resolve the allegations and discussions continue
between the parties. The timing or outcome of this matter cannot be reasonably determined at this time, however, we do not expect there to be a material
impact to its results of operations, cash flows or financial position.
Our pipeline operations are subject to regulation by the U.S. Department of Transportation under the PHMSA, pursuant to which the PHMSA has
established requirements relating to the design, installation, testing, construction, operation, replacement and management of pipeline facilities.
Moreover, the PHMSA, through the Office of Pipeline Safety, has promulgated a rule requiring pipeline operators to develop integrity management
programs to comprehensively evaluate their pipelines, and take measures to protect pipeline segments located in what the rule refers to as “high
consequence areas.” Activities under these integrity management programs involve the performance of internal pipeline inspections, pressure testing or
other effective means to assess the integrity of these regulated pipeline segments, and the regulations require prompt action to address integrity issues
raised by the assessment and analysis. Integrity testing and assessment of all of these assets will continue, and the potential exists that results of such
testing and assessment could cause us to incur future capital and operating expenditures for repairs or upgrades deemed necessary to ensure the
continued safe and reliable operation of our pipelines; however, no estimate can be made at this time of the likely range of such expenditures.
Our operations are also subject to the requirements of the OSHA, and comparable state laws that regulate the protection of the health and safety of
employees. In addition, OSHA’s hazardous communication standard requires that information be maintained about hazardous materials used or produced
in our operations and that this information be provided to employees, state and local government authorities and citizens. We believe that past costs for
OSHA required activities, including general industry standards, record keeping requirements, and monitoring of occupational exposure to regulated
substances have not had a material adverse effect on our results of operations but there is no assurance that such costs will not be material in the future.
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