Sunoco 2009 Annual Report Download - page 27

are in various stages of review, discussion or implementation. These include federal and state actions to
develop programs for the reduction of GHG emissions as well as proposals that would create a cap and
trade system that would require us to purchase carbon emission allowances for emissions at our
manufacturing facilities and emissions caused by the use of the fuels that we sell. In addition, during
2009, the EPA indicated that it intends to regulate carbon dioxide emissions. While it is currently not
possible to predict the impact, if any, that these issues will have on us or the industry in general, they
could result in increases in costs to operate and maintain our facilities, as well as capital outlays for
new emission control equipment at these facilities. In addition, regulations limiting GHG emissions or
carbon content of products, which target specific industries such as petroleum refining or chemical or
coke manufacturing could adversely affect our ability to conduct our business and also may reduce
demand for our products.
•National Ambient Air Quality Standards: National Ambient Air Quality Standards for ozone and fine
particles promulgated by the EPA have resulted in identification of non-attainment areas throughout
the country, including Texas, Pennsylvania, Ohio, New Jersey and West Virginia, where we operate
facilities. Areas designated as “moderate” non-attainment, including Philadelphia and Houston, would
be required to meet the ozone requirements by 2010, before currently mandated federal control
programs take effect. In January 2009, the EPA issued a finding that the Philadelphia and Houston
State Implementation Plans, or SIPs, failed to demonstrate attainment by the 2010 deadline. This
finding is expected to result in more stringent offset requirements, and could result in other negative
consequences. Regulatory programs, when established to implement the EPA’s air quality standards,
could have an impact on us and our operations. While the potential financial impact cannot be
reasonably estimated until the EPA promulgates regulatory programs to attain the standards, and the
states, as necessary, develop and implement revised SIPs to respond to the new regulations, it is
possible that the new regulations will result in increased costs to us.
•Natural resource damages: Certain federal and state government regulators have sought compensation
from companies like us for natural resource damages as an adjunct to remediation programs. Because
we are involved in a number of remediation sites, a substantial increase in natural resource damage
claims could result in substantially increased costs to us.
We also are subject to liabilities resulting from our current and past operations, including legal and
administrative proceedings related to product liability, leaks from pipelines and underground storage tanks,
premises-liability claims, allegations of exposures of third parties to toxic substances and general environmental
claims.
Compliance with current and future environmental laws and regulations likely will require us to make
significant expenditures, increasing the overall cost of operating our businesses, including capital costs to
construct, maintain and upgrade equipment and facilities. To the extent these expenditures are not ultimately
reflected in the prices of our products or services, our operating results would be adversely affected. Our failure
to comply with these laws and regulations could also result in substantial fines or penalties against us or orders
that could limit our operations and have a material adverse effect on our business or results of operations.
Product liability claims and litigation could adversely affect our business and results of operations.
Product liability is a significant commercial risk. Substantial damage awards have been made in certain
jurisdictions against manufacturers and resellers based upon claims for injuries caused by the use of or exposure
to various products. Failure of our products to meet required specifications could result in product liability claims
from our shippers and customers and we may be required to change or modify our product specifications, which
can be costly and time consuming. There can be no assurance that product liability claims against us would not
have a material adverse effect on our business or results of operations.
Along with other refiners, manufacturers and sellers of gasoline, we are a defendant in numerous lawsuits
which allege MTBE contamination in groundwater. Plaintiffs, who include water purveyors and municipalities
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