Energy Transfer 2010 Annual Report Download - page 165

time of their acquisition. In all cases, remediation operations have been or will be undertaken by others, and
in all six cases, HOLP obtained indemnification rights for expenses associated with any remediation from
the former owners or related entities. We have not been named as a potentially responsible party at any of
these sites, nor have our operations contributed to the environmental issues at these sites. Accordingly, no
amounts have been recorded in our December 31, 2010 or 2009 consolidated balance sheets. Based on
information currently available to us, such projects are not expected to have a material adverse effect on our
financial condition or results of operations.
By March 2013, the Texas Commission on Environmental Quality is required to develop another plan to
address the recent change in the ozone standard from 0.08 parts per million, or parts per million (“ppm”), to
0.075 ppm and the EPA, recently proposed lowering the standard even further, to somewhere in between
0.06 and 0.07 ppm. These efforts may result in the adoption of new regulations that may require additional
nitrogen oxide emissions reductions.
Our pipeline operations are subject to regulation by the U.S. Department of Transportation (“DOT”) under
the Pipeline Hazardous Materials Safety Administration (“PHMSA”), pursuant to which the PHMSA has
established requirements relating to the design, installation, testing, construction, operation, replacement and
management of pipeline facilities. Moreover, the PHMSA, through the Office of Pipeline Safety, has
promulgated a rule requiring pipeline operators to develop integrity management programs to
comprehensively evaluate their pipelines, and take measures to protect pipeline segments located in what
the rule refers to as “high consequence areas.” Activities under these integrity management programs
involve the performance of internal pipeline inspections, pressure testing or other effective means to assess
the integrity of these regulated pipeline segments, and the regulations require prompt action to address
integrity issues raised by the assessment and analysis. For the years ended December 31, 2010, 2009 and
2008, $13.3 million, $31.4 million and $23.3 million, respectively, of capital costs and $15.4 million, $18.5
million and $13.1 million, respectively, of operating and maintenance costs have been incurred for pipeline
integrity testing. Integrity testing and assessment of all of these assets will continue, and the potential exists
that results of such testing and assessment could cause us to incur even greater capital and operating
expenditures for repairs or upgrades deemed necessary to ensure the continued safe and reliable operation of
its pipelines.
Our operations are also subject to the requirements of the federal Occupational Safety and Health Act
(“OSHA”), and comparable state laws that regulate the protection of the health and safety of employees. In
addition, OSHA’s hazardous communication standard requires that information be maintained about
hazardous materials used or produced in our operations and that this information be provided to employees,
state and local government authorities and citizens. We believe that our operations are in substantial
compliance with the OSHA requirements, including general industry standards, record keeping
requirements, and monitoring of occupational exposure to regulated substances.
National Fire Protection Association Pamphlets No. 54 and No. 58, which establish rules and procedures
governing the safe handling of propane, or comparable regulations, have been adopted as the industry
standard in all of the states in which we operate. In some states, these laws are administered by state
agencies, and in others, they are administered on a municipal level. With respect to the transportation of
propane by truck, we are subject to regulations governing the transportation of hazardous materials under
the Federal Motor Carrier Safety Act, administered by the DOT. We conduct ongoing training programs to
help ensure that our operations are in compliance with applicable regulations. We believe that the
procedures currently in effect at all of our facilities for the handling, storage and distribution of propane are
consistent with industry standards and are in substantial compliance with applicable laws and regulations.
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