Energy Transfer 2010 Annual Report Download - page 44

industrial activities for a number of years, even if such discharges were caused by our predecessors. Private
parties, including the owners of properties through which our gathering systems pass or facilities where our
petroleum hydrocarbons or wastes are taken for reclamation or disposal may also have the right to pursue legal
actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and
regulations, personal injury or property damage. The total accrued future estimated cost of remediation activities
relating to our Transwestern pipeline operations expected to continue through 2025 was $8.2 million as of
December 31, 2010.
Changes in environmental laws and regulations occur frequently, and any such changes that result in more
stringent and costly waste handling, emission standards, or storage, transport, disposal or remediation
requirements could have a material adverse effect on our operations or financial position. For example, the EPA
in 2008 lowered the federal ozone standard from 0.08 ppm to 0.075 ppm, requiring the environmental agencies in
states with areas that do not currently meet this standard to adopt new rules between to further reduce NOx and
other ozone precursor emissions. The EPA recently proposed to lower the standard even further, to somewhere
between 0.06 and 0.07 ppm. We have previously been able to satisfy the more stringent NOx emission reduction
requirements that affect our compressor units in ozone non-attainment areas at reasonable cost, but there is no
guarantee that the changes we may have to make in the future to meet the new ozone standard or other evolving
standards will not require us to incur costs that could be material to our operations.
Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in
increased operating costs and reduced demand for the natural gas and other hydrocarbon products that we
transport, store or otherwise handle in connection with our transportation, storage, and midstream services.
In December 2009, the EPA determined that emissions of carbon dioxide, methane and other “greenhouse gases”
present an endangerment to public health and the environment because emissions of such gases are, according to
the EPA, contributing to warming of the earth’s atmosphere and other climatic changes. Based on these findings,
the EPA has begun adopting and implementing regulations to restrict emissions of greenhouse gases under
existing provisions of the federal Clean Air Act. The EPA recently adopted two sets of rules regulating
greenhouse gas emissions under the Clean Air Act, one of which requires a reduction in emissions of greenhouse
gases from motor vehicles and the other of which regulates emissions of greenhouse gases from certain large
stationary sources, effective January 2, 2011. The EPA’s rules relating to emissions of greenhouse gases from
large stationary sources of emissions are currently subject to a number of legal challenges, but the federal courts
have thus far declined to issue any injunctions to prevent EPA from implementing, or requiring state
environmental agencies to implement, the rules.
In addition, the United States Congress has from time to time considered adopting legislation to reduce emissions
of greenhouse gases and almost one-half of the states have already taken legal measures to reduce emissions of
greenhouse gases primarily through the planned development of greenhouse gas emission inventories and/or
regional greenhouse gas cap and trade programs. Most of these cap and trade programs work by requiring major
sources of emissions, such as electric power plants, or major producers of fuels, such as refineries and gas
processing plants, to acquire and surrender emission allowances. The number of allowances available for
purchase is reduced each year in an effort to achieve the overall greenhouse gas emission reduction goal.
The adoption of legislation or regulatory programs to reduce emissions of greenhouse gases could require us to
incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire
emissions allowances or comply with new regulatory or reporting requirements. Any such legislation or
regulatory programs could also increase the cost of consuming, and thereby reduce demand for, natural gas or
NGLs. Consequently, legislation and regulatory programs to reduce emissions of greenhouse gases could have an
adverse effect on our business, financial condition and results of operations.
Some have suggested that one consequence of climate change could be increased severity of extreme weather,
such as increased hurricanes and floods. If such effects were to occur, our operations could be adversely affected
in various ways, including damages to our facilities from powerful winds or rising waters, or increased costs for
42