ASSET RETIREMENT OBLIGATIONS

12 Months Ended

Dec. 31, 2016

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

ASSET RETIREMENT OBLIGATIONS:

The Company’s recorded asset retirement obligations are primarily related to owned natural gas storage wells and offshore lines and platforms.  At the end of the useful life of these underlying assets, the Company is legally or contractually required to abandon in place or remove the asset. An ARO is required to be recorded when a legal obligation to retire an asset exists and such obligation can be reasonably estimated.  Although a number of other onshore assets in the Company’s system are subject to agreements or regulations that give rise to an ARO upon the Company’s discontinued use of these assets, AROs were not recorded because these assets have an indeterminate removal or abandonment date given the expected continued use of the assets with proper maintenance or replacement.

Individual component assets have been and will continue to be replaced, but the pipeline system will continue in operation as long as supply and demand for natural gas exists. Based on the widespread use of natural gas in industrial and power generation activities, management expects supply and demand to exist for the foreseeable future.  The Company has in place a rigorous repair and maintenance program that keeps the pipeline system in good working order. Therefore, although some of the individual assets may be replaced, the pipeline system itself will remain intact indefinitely.

The Company had recorded AROs related to (i) retiring natural gas storage wells, (ii) retiring offshore platforms and lines and (iii) removing asbestos. Long-lived assets related to AROs aggregated $14 million and $18 million as of December 31, 2016 and 2015, respectively, and were reflected as plant, property and equipment on our balance sheet. In addition, the Company had $13 million and $6 million legally restricted for the purpose of settling AROs that was reflected as other non-current assets as of December 31, 2016 and 2015, respectively.

The following table is a reconciliation of the carrying amount of the ARO liability reflected as liabilities on our balance sheet for the periods presented.  Changes in assumptions regarding the timing, amount, and probabilities associated with the expected cash flows, as well as the difference in actual versus estimated costs, will result in a change in the amount of the liability recognized.

	Years Ended December 31,
	2016			2015			2014
Beginning balance	$	58		$	58		$	55
Revisions	—			—			3
Settled	(7		)	(3		)	(3		)
Disposals	—			—			—
Accretion expense	3			3			3
Ending balance	$	54		$	58		$	58