Energy Transfer 2015 Annual Report Download - page 57

Table of Contents
The new legislation and any new regulations could significantly increase the cost of derivative contracts, materially alter the terms of derivative contracts,
reduce the availability of derivatives to protect against risks we encounter, or reduce our ability to monetize or restructure existing derivative contracts. If we
reduce our use of derivatives as a result of the legislation and regulations, our results of operations may become more volatile and our cash flows may be less
predictable. Finally, if we fail to comply with applicable laws, rules or regulations, we may be subject to fines, cease-and-desist orders, civil and criminal
penalties or other sanctions.
A natural disaster, catastrophe or other event could result in severe personal injury, property damage and environmental damage, which could curtail our
operations and otherwise materially adversely affect our cash flow and, accordingly, affect the market price of our Common Units.
Some of our operations involve risks of personal injury, property damage and environmental damage, which could curtail our operations and otherwise
materially adversely affect our cash flow. For example, natural gas facilities operate at high pressures, sometimes in excess of 1,100 pounds per square inch.
Virtually all of our operations are exposed to potential natural disasters, including hurricanes, tornadoes, storms, floods and/or earthquakes.
If one or more facilities that are owned by us, or that deliver natural gas or other products to us, are damaged by severe weather or any other disaster, accident,
catastrophe or event, our operations could be significantly interrupted. Similar interruptions could result from damage to production or other facilities that
supply our facilities or other stoppages arising from factors beyond our control. These interruptions might involve significant damage to people, property or
the environment, and repairs might take from a week or less for a minor incident to six months or more for a major interruption. Any event that interrupts the
revenues generated by our operations, or which causes us to make significant expenditures not covered by insurance, could reduce our cash available for
paying distributions to our Unitholders and, accordingly, adversely affect the market price of our Common Units.
As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially, and in some instances, certain insurance
may become unavailable or available only for reduced amounts of coverage. As a result, we may not be able to renew existing insurance policies or procure
other desirable insurance on commercially reasonable terms, if at all. If we were to incur a significant liability for which we were not fully insured, it could
have a material adverse effect on our financial position and results of operations. In addition, the proceeds of any such insurance may not be paid in a timely
manner and may be insufficient if such an event were to occur.
Terrorist attacks aimed at our facilities could adversely affect our business, results of operations, cash flows and financial condition.
The United States government has issued warnings that energy assets, including our nation’s pipeline infrastructure, may be the future target of terrorist
organizations. Some of our facilities are subject to standards and procedures required by the Chemical Facility Anti-Terrorism Standards. We believe we are
in compliance with all material requirements; however, such compliance may not prevent a terrorist attack from causing material damage to our facilities or
pipelines. Any such terrorist attack on our facilities or pipelines, those of our customers, or in some cases, those of other pipelines could have a material
adverse effect on our business, financial condition and results of operations.
Additional deepwater drilling laws and regulations, delays in the processing and approval of drilling permits and exploration, development, oil spill-
response and decommissioning plans, and other related developments may have a material adverse effect on our business, financial condition, or results of
operations.
In response to the Deepwater Horizon incident and resulting oil spill in the United States Gulf of Mexico in 2010, the federal Bureau of Ocean Energy
Management (“BOEM”) and the federal Bureau of Safety and Environmental Enforcement (“BSEE”), each agencies of the U.S. Department of the Interior,
have imposed more stringent permitting procedures and regulatory safety and performance requirements for new wells to be drilled in federal waters.
Compliance with these more stringent regulatory restrictions together with any uncertainties or inconsistencies in current decisions and rulings by
governmental agencies, delays in the processing and approval of drilling permits or exploration, development, oil spill-response and decommissioning plans,
and possible additional regulatory initiatives could adversely affect or delay new drilling and ongoing development efforts. In addition, new regulatory
initiatives may be adopted or enforced by the BOEM and/or the BSEE in the future that could result in additional delays, restrictions, or obligations with
respect to oil and natural-gas exploration and production operations conducted offshore by certain of our customers. For example, in September 2015, the
BOEM issued draft guidance that would bolster supplemental bonding procedures for the decommissioning of offshore wells, platforms, pipelines, and other
facilities. The BOEM is expected to issue the draft guidance in the form of a final Notice to Lessees and Operators by no later than mid-2016. These recent or
any new rules, regulations, or legal initiatives could delay or disrupt our customers operations, increase the risk of expired leases due to the time required to
develop new technology, result in increased supplemental bonding and costs, limit activities in certain areas, or cause our customers’ to incur penalties, or
shut-in production or lease cancellation. Also, if material spill events similar to the Deepwater Horizon incident were to occur in the future, the United States
or other countries could elect to again issue directives
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