Energy Transfer 2010 Annual Report Download - page 23

Costs of planning, designing, constructing and operating pipelines, plants and other facilities must incorporate
compliance with environmental laws and regulations and safety standards. Failure to comply with these laws and
regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of
remedial obligations, the issuance of injunctions and the filing of federally authorized citizen suits. We have
implemented environmental programs and policies designed to reduce potential liability and costs under
applicable environmental laws and regulations.
The clear trend in environmental regulation is to place more restrictions and limitations on activities that may
affect the environment. Changes in environmental laws and regulations that result in more stringent waste
handling, storage, transport, disposal or remediation requirements will increase our cost for performing those
activities, and if those increases are sufficiently large, they could have a material adverse effect on our operations
and financial position. Moreover, risks of process upsets, accidental releases or spills are associated with our
operations, and we cannot guarantee that we will not incur significant costs and liabilities if such upsets, releases
or spills were to occur. In the event of future increases in costs, we may be unable to pass on those increases to
our customers. While we believe that we are in substantial compliance with existing environmental laws and
regulations and that continued compliance with current requirements would not have a material adverse effect on
us, there is no assurance that this trend will continue in the future.
The Comprehensive Environmental Response, Compensation and Liability Act, as amended, also known as
“CERCLA” or “Superfund,” and comparable state laws, impose liability without regard to fault or the legality of
the original conduct on certain classes of persons who are considered to be responsible for the release of a
hazardous substance into the environment. One class of “responsible persons” is the current owners or operators
of contaminated property, even if the contamination arose as a result of historical operations conducted by
previous, unaffiliated occupants of the property. Under CERCLA, “responsible persons” may be subject to joint
and several, strict liability for the costs of cleaning up the hazardous substances that have been released into the
environment, for damages to natural resources, and for the costs of certain health studies. It also is not
uncommon for neighboring landowners and other third parties to file claims for personal injury and property
damage allegedly caused by the release of hazardous substances into the environment. Although “petroleum” is
excluded from the definition of hazardous substance under CERCLA, we generate materials in the course of our
operations that may be regulated as hazardous substances. We also may incur liability under the Resource
Conservation and Recovery Act, also known as “RCRA,” which imposes requirements related to the
management and disposal of solid and hazardous wastes. While there exists an exclusion from the definition of
hazardous wastes for “drilling fluids, produced waters, and other wastes associated with the exploration,
development, or production of crude oil, natural gas or geothermal energy,” in the course of our operations, we
may generate certain types of non-excluded petroleum product wastes as well as ordinary industrial wastes such
as paint wastes, waste solvents, and waste compressor oils that may be regulated as hazardous or solid wastes.
We currently own or lease, and have in the past owned or leased, numerous properties that for many years have
been used for the measurement, gathering, field compression and processing of natural gas and NGLs. Although
we used operating and disposal practices that were standard in the industry at the time, petroleum hydrocarbons
or wastes may have been disposed of or released on or under the properties owned or leased by us, or on or under
other locations where such wastes were taken for disposal. In addition, some of these properties have been
operated by third parties whose treatment and disposal or release of petroleum hydrocarbons and wastes was not
under our control. These properties and the materials disposed or released on them may be subject to CERCLA,
RCRA and analogous state laws. Under such laws, we could be required to remove or remediate previously
disposed wastes or property contamination, or to perform remedial activities to prevent future contamination. A
predecessor company acquired by us in July 2001 had previously received and responded to a request for
information from the United States Environmental Protection Agency (the “EPA”) regarding its potential
contribution to widespread groundwater contamination in San Bernardino, California, known as the Newmark
Groundwater Contamination Superfund site. We have not received any follow-up correspondence from the EPA
on the matter since our acquisition of the predecessor company in 2001. In addition, through our acquisitions of
ongoing businesses, we are currently involved in several remediation projects that have cleanup costs and related
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