• enjoining the operations of facilities deemed in non-compliance with permits issued pursuant to such
environmental laws and regulations; and
• regulating changes to the operations of facilities deemed in non-compliance with permits issued
pursuant to such environmental laws and regulations.
Failure to comply with these laws and regulations may trigger a variety of administrative, civil and
criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial
requirements and the issuance of orders enjoining future operations. Certain environmental statutes impose
strict joint and several liability for costs required to clean up and restore sites where hazardous substances have
been disposed or otherwise released. Moreover, it 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 substances or
other waste products into the environment.
The trend in environmental regulation is to place more restrictions and limitations on activities that may
affect the environment. Thus, there can be no assurance as to the amount or timing of future expenditures for
environmental compliance or remediation, and actual future expenditures may be different from the amounts we
currently anticipate. We try to anticipate future regulatory requirements that might be imposed and plan
accordingly to remain in compliance with changing environmental laws and regulations and to minimize the
costs of such compliance. For instance, we or the entities in which we own an interest inspect the pipelines
regularly using equipment rented from third party suppliers. Third parties also assist us in interpreting the
results of the inspections. We also actively participate in industry groups that help formulate recommendations
for addressing existing or future regulations.
We do not believe that compliance with federal, state or local environmental laws and regulations will
have a material adverse effect on our business, financial position or results of operations. Below is a discussion
of the more significant environmental laws and regulations that relate to our business and with which
compliance may have a material adverse effect on our capital expenditures, earnings or competitive position.
Air Emissions, Global Warming and Climate Change
Our operations are subject to the federal Clean Air Act of 1963, as amended and comparable state laws and
regulations. These laws and regulations regulate emissions of air pollutants from various industrial sources,
including our processing plants and compressor stations, and also impose various monitoring and reporting
requirements. Such laws and regulations may require that we obtain pre-approval for the construction or
modification of certain projects or facilities expected to produce or significantly increase air emissions, obtain
and strictly comply with air permits containing various emissions and operational limitations, and utilize
specific emission control technologies to limit emissions. In response to studies suggesting that emissions of
carbon dioxide and certain other gases often referred to as “greenhouse gases,” or GHGs, may be contributing
to warming of the Earth’s atmosphere, the U.S. Congress continues to consider climate change-related
legislation to regulate GHG emissions. In addition, 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. Depending on the particular program or jurisdiction,
we could be required to purchase and surrender allowances, either for GHG emissions resulting from our
operations (
e.g.
, compressor units) or from combustion of fuels (
e.g.
, oil or natural gas) we process. Also,
following the EPA’s finding that GHGs “endanger” public health and welfare the EPA adopted two sets of
regulations that restrict emissions of GHGs under existing provisions of the federal Clean Air Act, including
one that requires a reduction in emissions of GHGs from motor vehicles and another that regulates GHG
emissions from certain large stationary sources under the Clean Air Act Prevention of Significant Deterioration
(“PSD”) and Title V permitting programs. In addition, EPA expanded its existing GHG emissions reporting rule
to include onshore oil and natural gas processing, transmission, storage, and distribution activities, beginning in
2012 for emissions occurring in 2011. In part, these programs could require our facilities to meet “best
available control technology” standards for greenhouse gases, which may be established by state authorities or
the EPA on a case-by-case basis. In November 2010, the EPA issued guidance materials on defining best
available control technology for greenhouse gases. Litigation challenging the EPA’s endangerment finding and
its related regulatory enactments is pending before the DC Circuit. These EPA regulations as well as other
possible new federal or state laws or regulations imposing more stringent air quality standards for hazardous air
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