Accrued Closure Costs and ARO
|12 Months Ended|
Dec. 31, 2017
|Asset Retirement Obligation Disclosure [Abstract]|
|Accrued Closure Costs and ARO||
ACCRUED CLOSURE COSTS AND ARO
Accrued closure costs represent our estimated environmental liability to clean up our fixed-based regulated facilities as required by our permits, in the event of closure. Changes to reported closure liabilities for the years ended December 31, 2017 and 2016, were as follows:
As a result of the Company’s decision to close our M&EC subsidiary, the Company recorded an additional $1,400,000 and $1,626,000 in closure liabilities in 2017 and 2016, respectively, due to changes in estimated closure costs (see “Note 3 – M&EC Facility” for further information of these additional closure liabilities recorded). The Company also recorded an additional $1,257,000 in closure liabilities in 2017 for its DSSI subsidiary due to changes in estimated closure costs. Additionally, the Company increased the closure liabilities for its PFNWR subsidiary in the amount of approximately $707,000 during 2016 resulting from a change in estimated closure costs.
In 2017, the Company had spending of approximately $1,872,000 and $165,000 in closure related activities for the M&EC and PFNWR subsidiaries, respectively. In 2016, the Company had spending of approximately $283,000 and $410,000 in closure related activities for the M&EC and PFNWR subsidiaries, respectively. The spending at our PFNWR facility for years 2017 and 2016 was made in connection with the closure of certain processing unit/equipment.
At December 31, 2017, M&EC’s closure liabilities totaled approximately $2,791,000 with the entire amount classified as current. At December 31, 2016, total accrued closure liabilities for our M&EC subsidiary totaled approximately $3,058,000 of which $2,177,000 were recorded as current liabilities.
The reported closure asset or ARO, is reported as a component of “Net Property and equipment” in the Consolidated Balance Sheet at December 31, 2017 and 2016 with the following activity for the years ended December 31, 2017 and 2016:
The impairment of ARO for 2017 resulted from the impairment of M&EC’s remaining tangible assets recorded in the third quarter of 2017 (See “Note 3 – M&EC Facility”). The adjustment made to ARO for 2017 was due to the increase in closure liabilities recorded for the DSSI subsidiary as discussed above. The adjustments made to ARO for 2016 were due to the increases in closure liabilities recorded for the PFNWR and M&EC subsidiaries as discussed above.
The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.
Reference 1: http://www.xbrl.org/2003/role/presentationRef