Energy Transfer 2010 Annual Report Download - page 43

The interstate pipelines are subject to laws, regulations and policies governing terms and conditions of service,
which could adversely affect their business and operations.
In addition to rate oversight, the FERC’s regulatory authority extends to many other aspects of the business and
operations of our interstate pipelines, including:
• terms and conditions of service;
• the types of services interstate pipelines may offer their customers;
• construction of new facilities;
• acquisition, extension or abandonment of services or facilities;
• reporting and information posting requirements;
• accounts and records; and
• relationships with affiliated companies involved in all aspects of the natural gas and energy businesses.
Compliance with these requirements can be costly and burdensome. Future changes to laws, regulations and
policies in these areas may impair the ability of our interstate pipelines to compete for business, may impair their
ability to recover costs or may increase the cost and burden of operation.
We must on occasion rely upon rulings by the FERC or other governmental authorities to carry out certain of our
business plans. For example, in order to carry out our plan to construct the Fayetteville Express and Tiger
pipelines we were required to, among other things, file and support before the FERC NGA Section 7(c)
applications for certificates of public convenience and necessity to build, own and operate such facilities. We
cannot guarantee that FERC will authorize construction and operation of any future interstate natural gas
transportation project we might propose. Moreover, there is no guarantee that certificate authority for any future
interstate projects will be granted in a timely manner or will be free from potentially burdensome conditions.
Failure to comply with all applicable FERC-administered statutes, rules, regulations and orders, could bring
substantial penalties and fines. Under the Energy Policy Act of 2005, the FERC has civil penalty authority under
the NGA to impose penalties for current violations of up to $1.0 million per day for each violation. The FERC
possesses similar authority under the NGPA.
Finally, we cannot give any assurance regarding the likely future regulations under which we will operate our
interstate pipelines or the effect such regulation could have on our business, financial condition and results of
operations.
Our business involves hazardous substances and may be adversely affected by environmental regulation.
Our natural gas and propane operations are subject to stringent federal, state, and local laws and regulations that
seek to protect human health and the environment, including those governing the emission or discharge of
materials into the environment. These laws and regulations may require the acquisition of permits for our
operations, result in capital expenditures to manage, limit or prevent emissions, discharges or releases of various
materials from our pipelines, plants and facilities and impose substantial liabilities for pollution resulting from
our operations. Several governmental authorities, such as the EPA, have the power to enforce compliance with
these laws and regulations and the permits issued under them and frequently mandate difficult and costly
remediation measures and other actions. Failure to comply with these laws, regulations and permits may result in
the assessment of significant administrative, civil and criminal penalties, the imposition of remedial obligations,
and the issuance of injunctive relief.
We may incur substantial environmental costs and liabilities because of the underlying risk inherent to our
operations. Certain environmental laws and regulations can provide for joint and several strict liabilities for
cleanup to address discharges or releases of petroleum hydrocarbons or other materials or wastes at sites to which
we may have sent wastes or on, under or from our properties and facilities, many of which have been used for
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