Sunoco 2011 Annual Report Download - page 36

system was to fail or experience unscheduled downtime for any reason, even if only for a short period, our
operations and financial results could be affected adversely. Our systems could be damaged or interrupted by a
security breach, fire, flood, power loss, telecommunications failure or similar event. We have a formal disaster
recovery plan in place, but this plan may not entirely prevent delays or other complications that could arise from
an information systems failure. Our business interruption insurance may not compensate us adequately for losses
that may occur.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 3. LEGAL PROCEEDINGS
Various lawsuits and governmental proceedings arising in the ordinary course of business are pending
against the Company, as well as the lawsuits and proceedings discussed below:
Administrative Proceedings
The U. S. Occupational Safety and Health Administration (“OSHA”) announced a National Emphasis
Program under which it is inspecting domestic oil refinery locations. OSHA conducted inspections at Sunoco,
Inc. (R&M)’s formerly owned and operated Toledo refinery for a six-month period commencing in November
2007, at the Eagle Point refinery for a six-month period commencing in June 2008 and at the Marcus Hook
refinery for a six-month period commencing in January 2009. The inspections focused on the OSHA Process
Safety Management requirements. The inspections resulted in the issuance of citations in excess of $100
thousand. In October 2009, a settlement was reached with regard to the Toledo inspection, with Sunoco paying
$270 thousand. In November 2011, a settlement was reached with regard to the Marcus Hook inspection, with
Sunoco paying $160 thousand. Sunoco has formally contested the Eagle Point citation and is in settlement
negotiations with OSHA. OSHA conducted an additional inspection at the Toledo refinery beginning in April
2009. The inspection resulted in the issuance of a citation in September 2009 in excess of $100 thousand. Sunoco
has formally contested the citation and is engaged in settlement discussions with OSHA. (See also the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.)
In April 2010, Sunoco, Inc. (R&M) received a stipulated penalty demand in an amount exceeding $100
thousand from the U.S. Environmental Protection Agency (“EPA”), Region V, under a global Clean Air Act
Consent Decree. The penalty demand relates to four alleged acid gas flaring events at Sunoco, Inc. (R&M)’s
Toledo refinery between December 2006 and January 2010, as well as findings noted in a third-party audit of that
facility. Sunoco, Inc. (R&M) remitted $14 thousand in penalty payment and disputed the remaining amount.
Sunoco, Inc. (R&M) met with the EPA in July 2010 to discuss potential resolution and the matter remains
pending. (See also the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.)
In July 2010, Sunoco, Inc. (R&M) received a proposed penalty assessment from Philadelphia Air
Management Services (“AMS”) in an amount exceeding $100 thousand, intended to resolve outstanding alleged
violations of Title V permit requirements and/or state and/or federal air regulations at Sunoco’s Philadelphia
refinery. In September 2010, Sunoco met with AMS to discuss potential resolution and the matter remains
pending. (See also the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.)
In August 2010, the Pennsylvania Department of Environmental Protection (“PADEP”) issued a penalty
assessment in excess of $100 thousand alleging that Sunoco did not undertake certain actions related to the
identification or sampling of groundwater contamination at a retail service station location during the period from
February 2007 to October 2009. Sunoco intends to defend itself with regard to these allegations. (See also the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.)
28