Energy Transfer 2015 Annual Report Download - page 35

Table of Contents
In summary, total future costs for environmental remediation activities will depend upon, among other things, the identification of any additional sites, the
determination of the extent of the contamination at each site, the timing and nature of required remedial actions, the nature of operations at each site, the
technology available and needed to meet the various existing legal requirements, the nature and terms of cost-sharing arrangements with other potentially
responsible parties, the availability of insurance coverage, the nature and extent of future environmental laws and regulations, inflation rates, terms of
consent agreements or remediation permits with regulatory agencies and the determination of the Partnership’s liability at the sites, if any, in light of the
number, participation level and financial viability of the other parties. The recognition of additional losses, if and when they were to occur, would likely
extend over many years, but management can provide no assurance that it would be over many years. If changes in environmental laws or regulations occur
or the assumptions used to estimate losses at multiple sites are adjusted, such changes could materially and adversely impact multiple facilities, formerly
owned facilities and third-party sites at the same time. As a result, from time to time, significant charges against income for environmental remediation may
occur. And while management does not believe that any such charges would have a material adverse impact on the Partnership’s consolidated financial
position, it can provide no assurance.
Transwestern conducts soil and groundwater remediation at a number of its facilities. Some of the cleanup activities include remediation of several
compressor sites on the Transwestern system for contamination by PCBs, and the costs of this work are not eligible for recovery in rates. The total accrued
future estimated cost of remediation activities expected to continue through 2025 is $7 million, which is included in the total environmental accruals
mentioned above. Transwestern received FERC approval for rate recovery of projected soil and groundwater remediation costs not related to PCBs effective
April 1, 2007. Transwestern, as part of ongoing arrangements with customers, continues to incur costs associated with containing and removing potential
PCB contamination. Future costs cannot be reasonably estimated because remediation activities are undertaken as potential claims are made by customers
and former customers. Such future costs are not expected to have a material impact on our financial position, results of operations or cash flows, but
management can provide no assurance.
 Our operations are subject to the federal Clean Air Act, as amended, and comparable state laws and regulations. These laws and regulations
regulate emissions of air pollutants from various industrial sources, including our processing plants, and also impose various monitoring and reporting
requirements. Such laws and regulations may require that we obtain pre-approval for the construction or modification of certain projects or facilities, such as
our processing plants and compression facilities, expected to produce air emissions or to result in the increase of existing air emissions, that we obtain and
strictly comply with air permits containing various emissions and operational limitations, or that we utilize specific emission control technologies to limit
emissions. We will incur capital expenditures in the future for air pollution control equipment in connection with obtaining and maintaining operating
permits and approvals for air emissions. In addition, our processing plants, pipelines and compression 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.
Historically, our costs for compliance with existing Clean Air Act and comparable state law requirements have not had a material adverse effect on our results
of operations; however, there can be no assurance that such costs will not be material in the future. The EPA and state agencies are often considering,
proposing or finalizing new regulations that could impact our existing operations and the costs and timing of new infrastructure development. For example,
in October 2015, the EPA published a final rule under the Clean Air Act, lowering the National Ambient Air Quality Standard (“NAAQS”) for ground-level
ozone to 70 parts per billion for the 8-hour primary and secondary ozone standards. The EPA anticipates designating new non-attainment areas by October 1,
2017, and requiring states to revise implementation plans by October 1, 2020, with compliance dates anticipated between 2021 and 2037 determined by the
degree of non-attainment. Compliance with this or other new regulations could, among other things, require installation of new emission controls on some of
our equipment, result in longer permitting timelines, and significantly increase our capital expenditures and operating costs, which could adversely impact
our business.
   The Federal Water Pollution Control Act of 1972, as amended, also known as Clean Water Act and comparable state laws impose
restrictions and strict controls regarding the discharge of pollutants, including hydrocarbon-bearing wastes, into state waters and waters of the United States.
Pursuant to the Clean Water Act and similar state laws, a National Pollutant Discharge Elimination System, 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. The Clean Water Act also prohibits the discharge of dredge and
fill material in regulated waters, including wetlands, unless authorized by permit. In May 2015, the EPA issued a final rule that attempts to clarify the federal
jurisdictional reach over waters of the United States but this rule has been stayed nationwide by the U.S. Sixth Circuit Court of Appeals as that appellate court
and numerous district courts ponder lawsuits opposing implementation of the rule. To the extent the rule expands the scope of the CWA’s jurisdiction, we
could face increased costs and delays with respect to obtaining permits for dredge and fill activities in wetland areas.
Our operations can result in the discharge of regulated substances, including NGLs, crude oil or other products. The Clean Water Act, as amended by
the federal Oil Pollution Act of 1990, as amended, (“OPA”), and comparable state laws impose restrictions
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