Property, Plant, and Equipment

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Plant, and Equipment [Text Block]

Note 11 – Property, Plant, and Equipment

The following table presents nonregulated and regulated Property, plant, and equipment – net as presented on the Consolidated Balance Sheet for the years ended:

	Estimated Useful Life  (1) (Years)	Depreciation Rates (1) (%)	December 31,
			2020		2019
			(Millions)
Nonregulated:
Natural gas gathering and processing facilities	5 - 40		$	17,813	$	17,593
Construction in progress	Not applicable		289		354
Other	2 - 45		2,658		2,519
Regulated:
Natural gas transmission facilities		1.25 - 7.13	18,688		18,076
Construction in progress	Not applicable	Not applicable	382		586
Other	5 - 45	0.00 - 33.33	2,659		2,382
Total property, plant, and equipment, at cost			42,489		41,510
Accumulated depreciation and amortization			(13,560)		(12,310)
Property, plant, and equipment — net			$	28,929	$	29,200

__________

(1)    Estimated useful life and depreciation rates are presented as of December 31, 2020. Depreciation rates and estimated useful lives for regulated assets are prescribed by the FERC.

Depreciation and amortization expense for Property, plant, and equipment – net was $1.393 billion, $1.390 billion, and $1.392 billion in 2020, 2019, and 2018, respectively.

Regulated Property, plant, and equipment – net includes approximately $507 million and $547 million at December 31, 2020 and 2019, respectively, related to amounts in excess of the original cost of the regulated facilities within our gas pipeline businesses as a result of our prior acquisitions. This amount is being amortized over 40 years using the straight-line amortization method. Current FERC policy does not permit recovery through rates for amounts in excess of original cost of construction.

Asset Retirement Obligations

Our accrued obligations primarily relate to offshore platforms and pipelines, gas transmission pipelines and facilities, gas processing, fractionation, and compression facilities, gas gathering well connections and pipelines, underground storage caverns, and producing wells. At the end of the useful life of each respective asset, we are legally obligated to dismantle offshore platforms and appropriately abandon offshore pipelines, to remove certain components of gas transmission facilities from the ground, to restore land and remove surface equipment at gas processing, fractionation, and compression facilities, to cap certain gathering pipelines at the wellhead connection and remove any related surface equipment, to plug storage caverns and remove any related surface equipment, and to plug producing wells and remove any related surface equipment.

The following table presents the significant changes to our ARO, of which $1.159 billion and $1.117 billion are included in Regulatory liabilities, deferred income, and other with the remaining current portion in Accrued liabilities at December 31, 2020 and 2019, respectively.

	December 31,
	2020		2019
	(Millions)
Balance at beginning of year	$	1,165	$	1,032
Liabilities incurred (1)	37		15
Liabilities settled	(19)		(8)
Accretion expense	65		59
Revisions (2)	(26)		67
Balance at end of year	$	1,222	$	1,165

___________

(1)As a result of the global resolution with Chesapeake in 2020, we recorded $31 million of ARO related to natural gas properties transferred to us. (See Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies.)

(2)Several factors are considered in the annual review process, including inflation rates, current estimates for removal cost, market risk premiums, discount rates, and the estimated remaining useful life of the assets. The 2020 revisions reflect changes in removal cost estimates, increases in the estimated remaining useful life of certain assets, decreases in inflation rates, and decreases in the discount rates used in the annual review process. The 2019 revisions reflect changes in removal cost estimates, decreases in the estimated remaining useful life of certain assets, increases in inflation rates, and decreases in the discount rates used in the annual review process.

The funds Transco collects through a portion of its rates to fund its ARO are deposited into an external trust account dedicated to funding its ARO (ARO Trust). (See Note 18 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.) Under its current rate settlement, Transco’s annual funding obligation is approximately $16 million, with installments to be deposited monthly.