Sunoco 2013 Annual Report Download - page 16

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Our customers are also subject to, and similarly affected by, environmental regulations. 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 companies to purchase carbon emission allowances for emissions at manufacturing facilities and emissions
caused by the use of the fuels sold. In addition, the Environmental Protection Agency ("EPA") indicated that it intends to
regulate carbon dioxide emissions. As a result of these regulations, our customers could be required to make significant capital
expenditures, operate refineries at reduced levels, and pay significant penalties. It is uncertain what our customers' responses to
these emerging issues will be. Those responses could reduce throughput in our pipelines and terminals, and impact our cash
flows and ability to make distributions or satisfy debt obligations.
Hazardous Substances and Waste
In the course of ordinary operations, we may generate waste that falls within the Comprehensive Environmental
Response, Compensation, and Liability Act's ("CERCLA") and also known as Superfund, definition of a "hazardous substance"
and, as a result, we may be jointly and severally liable under CERCLA for all or part of the costs required to clean up sites at
which these hazardous substances have been released into the environment. Costs for any such remedial actions, as well as any
related claims, could have a material adverse effect on our maintenance capital expenditures and operating expenses to the
extent not all are covered by the indemnity from Sunoco. For more information, please see "Environmental Remediation."
We also generate solid wastes, including hazardous wastes that are subject to the requirements of the Federal Resource
Conservation and Recovery Act ("RCRA"), and comparable state statutes. We are not currently required to comply with a
substantial portion of the RCRA requirements because our operations generate minimal quantities of hazardous wastes.
However, it is possible that additional wastes, which could include wastes currently generated during our operating activities,
will in the future be designated as "hazardous wastes." Hazardous wastes are subject to more rigorous and costly disposal
requirements than non-hazardous wastes. Any changes in the regulations could have a material adverse effect on our
maintenance capital expenditures and operating expenses.
We currently own or lease properties where hydrocarbons are being or have been handled for many years. These
properties and wastes disposed thereon may be subject to CERCLA, RCRA, and comparable state laws. Under these laws, we
could be required to remove or remediate previously disposed wastes (including wastes disposed of or released by prior owners
or operators), to clean up contaminated property (including contaminated groundwater), or to perform remedial operations to
prevent future contamination.
We have not been identified by any state or federal agency as a potentially responsible party in connection with the
transport and/or disposal of any waste products to third-party disposal sites.
Water
Our operations can result in the discharge of regulated substances, including crude oil, refined products or NGLs. The
Federal Water Pollution Control Act of 1972, also known as the Clean Water Act, and comparable state laws impose restrictions
and strict controls regarding the discharge of regulated substances into state waters or waters of the United States. Where
applicable, our facilities have the required discharge permits.
The Oil Pollution Act subjects owners of covered facilities to strict joint and potentially unlimited liability for removal
costs and other consequences of a release of oil, where the release is into navigable waters, along shorelines or in the exclusive
economic zone of the United States. Spill prevention control and countermeasure requirements of the Clean Water Act and
some state laws require that containment dikes and similar structures be installed to help prevent the impact on navigable
waters in the event of a release. The Department of Transportation Pipeline Hazardous Materials Administration, the EPA, or
various state regulatory agencies, have approved our oil spill emergency response plans, and our management believes we are
in substantial compliance with these laws.
In addition, some states maintain groundwater protection programs that require permits for discharges or operations that
may impact groundwater conditions. Our management believes that compliance with existing permits and compliance with
foreseeable new permit requirements will not have a material adverse effect on our results of operations, financial position or
expected cash flows.
Environmental Remediation
Contamination resulting from releases of refined products and crude oil is not unusual within the petroleum pipeline
industry. Historic releases along our pipelines, gathering systems, and terminals as a result of past operations have resulted in
impacts to the environment, including soil and groundwater. Site conditions, including soil and groundwater, are being
evaluated at a number of properties where operations may have resulted in releases of hydrocarbons and other wastes. Sunoco
has agreed to indemnify us from environmental and toxic tort liabilities related to the assets contributed to the extent such
liabilities existed or arose from operation of these assets prior to the closing of the February 2002 IPO and are asserted within