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Inventory, Linefill and Long-term Inventory
12 Months Ended
Dec. 31, 2022
Inventory Disclosure [Abstract]  
Inventory, Linefill and Long-term Inventory Inventory, Linefill and Long-term Inventory
Inventory, including long-term inventory, primarily consists of crude oil and NGL in pipelines, storage facilities and railcars that are valued at the lower of cost or net realizable value, with cost determined using an average cost method within specific inventory pools. At the end of each reporting period, we assess the carrying value of our inventory and make any adjustments necessary to reduce the carrying value to the applicable net realizable value. Any resulting adjustments are a component of “Purchases and related costs” on our accompanying Consolidated Statements of Operations. No adjustments were recorded during the years ended December 31, 2022 or 2021. During the year ended December 31, 2020, we recorded charges of $233 million (of which $40 million was associated with our long-term inventory) related to the write down of our crude oil and NGL inventory due to declines in prices. A portion of these inventory valuation adjustments was offset by the recognition of gains on derivative instruments being utilized to hedge future sales of our crude oil and NGL inventory. Such gains were recorded to “Product sales revenues” in our accompanying Consolidated Statements of Operations. See Note 13 for discussion of our derivative and risk management activities.

Linefill in assets we own is recorded at historical cost and consists of crude oil and NGL. We classify as linefill (i) our proportionate share of barrels used to fill a pipeline that we own such that when an incremental barrel is pumped into or enters a pipeline it forces product out at another location and (ii) barrels that represent the minimum working requirements in tanks and caverns that we own. Linefill carrying amounts are reviewed for impairment in accordance with FASB guidance with respect to accounting for the impairment or disposal of long-lived assets. Carrying amounts that are not expected to be recoverable through future cash flows are written down to estimated fair value. See Note 6 for further discussion regarding impairment of long-lived assets. During 2022, 2021 and 2020, we did not recognize any material impairments of linefill.

Minimum working inventory requirements in third-party assets and other working inventory in our assets that are needed for our commercial operations are included within specific inventory pools in inventory (a current asset) in determining the average cost of operating inventory. At the end of each period, we reclassify the inventory not expected to be liquidated within the succeeding twelve months out of “Inventory,” at the average cost of the applicable inventory pools, and into “Long-term inventory,” which is reflected as a separate line item under “Other assets” on our Consolidated Balance Sheets.
Inventory, linefill and long-term inventory consisted of the following (barrels in thousands and carrying value in millions):

December 31, 2022December 31, 2021
VolumesUnit of
Measure
Carrying
Value
Price/
Unit (1)
VolumesUnit of
Measure
Carrying
Value
Price/
Unit (1)
Inventory
Crude oil6,713 barrels$452 $67.33 8,041 barrels$544 $67.65 
NGL7,285 barrels270 $37.06 6,982 barrels234 $33.51 
OtherN/AN/AN/AN/A
Inventory subtotal729 783 
Linefill
Crude oil15,480 barrels906 $58.53 15,199 barrels862 $56.71 
NGL1,876 barrels55 $29.32 1,633 barrels45 $27.56 
Linefill subtotal961 907 
Long-term inventory
Crude oil3,102 barrels246 $79.30 2,973 barrels209 $70.30 
NGL1,066 barrels38 $35.65 1,135 barrels44 $38.77 
Long-term inventory subtotal284 253 
Total$1,974 $1,943 
(1)Price per unit of measure is comprised of a weighted average associated with various grades, qualities and locations. Accordingly, these prices may not coincide with any published benchmarks for such products.