Energy Transfer 2015 Annual Report Download - page 33

Table of Contents
the cleanup of contamination. Noncompliance with such laws and regulations, or incidents resulting in environmental releases, could cause us to incur
substantial costs, penalties, fines and criminal sanctions, third party claims for personal injury or property damage, capital expenditures to retrofit or upgrade
our facilities and programs, or curtailment or cancellation of operations. As with the industry generally, compliance with existing and anticipated
environmental laws and regulations increases our overall cost of doing business, including our cost of planning, constructing and operating our plants,
pipelines and other facilities. As a result of these laws and regulation, our construction and operation costs include capital, operating and maintenance cost
items necessary to maintain or upgrade our equipment and facilities.
We have implemented procedures designed to ensure that governmental environmental approvals for both existing operations and those under construction
are updated as circumstances require. Historically, our environmental compliance costs have not had a material adverse effect on our business, results of
operations or financial condition; however, there can be no assurance that such costs will not be material in the future. For example, we cannot be certain,
however, that identification of presently unidentified conditions, more rigorous enforcement by regulatory agencies, enactment of more stringent
environmental laws and regulations or unanticipated events will not arise in the future and give rise to environmental liabilities that could have a material
adverse effect on our business, financial condition or results of operations.
     To a large extent, the environmental laws and regulations affecting our operations relate to the release of
hazardous substances and waste materials into soils, groundwater and surface water and include measures to prevent, minimize or remediate contamination of
the environment. These laws and regulations generally regulate the generation, storage, treatment, transportation and disposal of hazardous substances and
waste materials and may require investigatory and remedial actions at sites where such material has been released or disposed. For example, the
Comprehensive Environmental Response, Compensation and Liability Act, as amended, (“CERCLA”), also known as the “Superfund” law, and comparable
state laws, impose liability without regard to fault or the legality of the original conduct on certain classes of persons that contributed to a release of a
“hazardous substance” into the environment. These persons include the owner and operator of the site where a release occurred and companies that disposed
or arranged for the disposal of the hazardous substance that has been released into the environment. Under CERCLA, these persons may be subject to strict,
joint and several liability, without regard to fault, for, among other things, the costs of investigating and remediating the hazardous substances that have been
released into the environment, for damages to natural resources and for the costs of certain health studies. CERCLA and comparable state law also authorize
the federal EPA, its state counterparts, and, in some instances, third parties to take actions in response to threats to the public health or the environment and to
seek to recover from the responsible classes of persons the costs they incur. It is not uncommon for neighboring landowners and other third parties to file
claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment. Although
“petroleum” as well as natural gas and NGLs are excluded from CERCLA’s definition of a “hazardous substance,” in the course of our ordinary operations we
generate wastes that may fall within that definition or that may be subject to other waste disposal laws and regulations. We may be responsible under
CERCLA or state laws for all or part of the costs required to clean up sites at which such substances or wastes have been disposed.
We also generate both hazardous and nonhazardous wastes that are subject to requirements of the federal Resource Conservation and Recovery Act, as
amended, (“RCRA”), and comparable state statutes. We are not currently required to comply with a substantial portion of the RCRA hazardous waste
requirements at many of our facilities because the minimal quantities of hazardous wastes generated there make us subject to less stringent non-hazardous
management standards. From time to time, the EPA has considered on third parties have petitioned the agency on the adoption of stricter handling, storage
and disposal standards for nonhazardous wastes, including certain wastes associated with the exploration, development and production of crude oil and
natural gas. For example, in August 2015, several non-governmental organizations filed notice of intent to sue the EPA under RCRA for, among other things,
the agency’s alleged failure to reconsider whether such RCRA exclusion for oilfield exploration, development and production wastes should continue to
apply. 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 such as these examples 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 lessees and by us for various activities related to gathering, processing,
storage and transmission of natural gas, NGLs, crude oil and products. 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
otherwise 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 releases may have occurred during the ownership or operation 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.
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