Sunoco 2010 Annual Report Download - page 29

The occurrence of any of these risks could directly or indirectly affect the Partnership’s, as well as our,
financial condition, results of operations and cash flows as the Partnership is a consolidated subsidiary.
Additionally, these risks could affect the Partnership’s ability to continue operations, which could affect its
ability to serve our logistics network needs. For additional information about the Partnership, see “Logistics” in
Business and Properties (Items 1 and 2).
We are subject to numerous environmental laws and regulations that require substantial expenditures and
affect the way we operate, which could affect our business, future operating results or financial position in a
materially adverse way.
We are subject to extensive federal, state and local laws and regulations, including those relating to the
protection of the environment, waste management, discharge of hazardous materials, and the characteristics and
composition of refined products. Certain of these laws and regulations also impose obligations to conduct
assessment or remediation efforts at our facilities as well as at formerly owned properties or third-party sites
where we have taken wastes for disposal. Environmental laws and regulations may impose liability on us for the
conduct of third parties, or for actions that complied with applicable requirements when taken, regardless of
negligence or fault. Environmental laws and regulations are subject to frequent change, and often become more
stringent over time. Of particular significance to us are:
•Greenhouse gas emissions: Through the operation of our refineries, chemical plants, marketing facilities,
coke plants and coal mines, our operations emit greenhouse gases, or GHG, including carbon dioxide.
There are various legislative and regulatory measures to address monitoring, reporting or restriction of
GHG emissions that are in various stages of review, discussion or implementation. These include federal
and state actions to develop programs for the reduction of GHG emissions as well as proposals that would
create a cap and trade system that would require us to purchase carbon emission allowances for emissions
at our manufacturing facilities and emissions caused by the use of the fuels that we sell. In response to
findings that emissions of GHGs present an endangerment to public heath and the environment, the EPA
has adopted regulations under existing provisions of the federal Clean Air Act that require a reduction in
emissions of GHGs from motor vehicles and also may trigger construction and operating permit review
for GHG emissions from certain stationary sources. The EPA has asserted that the final motor vehicle
GHG emission standards triggered Prevention of Significant Deterioration, or PSD, and Title V permit
requirements for stationary sources, commencing when the motor vehicle standards took effect on
January 2, 2011. The EPA has published its final rule to address the permitting of GHG emissions from
stationary sources under the PSD and Title V permitting programs, pursuant to which these permitting
programs have been “tailored” to apply to certain stationary sources of GHG emissions in a multi-step
process, with the largest sources first subject to permitting. It is anticipated that facilities required to
obtain PSD permits for their GHG emissions also will be required to reduce those emissions according to
“best available control technology” standards for GHG that have yet to be developed. These EPA
rulemakings could adversely affect our operations and restrict or delay our ability to obtain air permits for
new or modified facilities. In addition, the EPA published a final rule in October 2009 requiring the
reporting of GHG emissions from specified large GHG emission sources in the United States, including
petroleum refineries, on an annual basis beginning in 2011 for emissions occurring after January 1, 2010.
Moreover, the United States Congress has from time to time considered adopting legislation to reduce
emissions of GHGs and almost one-half of the states have already taken legal measures to reduce
emissions of GHGs primarily through the planned development of GHG emission inventories and/or
regional GHG 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 petroleum
refineries, to acquire and surrender emission allowances. The number of allowances available for
purchase is reduced each year in an effort to achieve the overall GHG emission reduction goal. The
adoption of any legislation or regulations that requires reporting of GHGs or otherwise limits emissions of
GHGs from our equipment and operations could require us to incur costs to reduce emissions of GHGs
associated with our operations or could adversely affect demand for the refined petroleum products or
chemicals that we produce and market.
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