Note 11 – Property, Plant, and Equipment



	Estimated Useful Life (1) (Years)	Depreciation Rates (1) (%)
			December 31,
			2013			2012
			(Millions)
Nonregulated:
Natural gas gathering and processing facilities	5 - 40		$	9,185		$	7,727
Construction in progress	Not applicable		3,123			1,997
Other	3 - 45		1,316			1,103
Regulated:
Natural gas transmission facilities		1.20 - 6.97	10,633			9,963
Construction in progress		Not applicable	273			337
Other		1.35 - 33.33	1,293			1,419
Total property, plant, and equipment, at cost			25,823			22,546
Accumulated depreciation and amortization			(7,613		)	(7,079		)
Property, plant, and equipment — net			$	18,210		$	15,467

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(1)	Estimated useful life and depreciation rates are presented as of December 31, 2013. Depreciation rates for regulated assets are prescribed by the FERC.

Depreciation and amortization expense for Property, plant, and equipment – net was $752 million in 2013, $712 million in 2012, and $658 million in 2011.

Regulated Property, plant, and equipment – net includes approximately $785 million and $825 million at December 31, 2013 and 2012, 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 relate to underground storage caverns, offshore platforms, fractionation and compression facilities, gas gathering well connections and pipelines, and gas transmission facilities. At the end of the useful life of each respective asset, we are legally obligated to plug storage caverns and remove any related surface equipment, to restore land and remove surface equipment at gas processing, fractionation and compression facilities, to dismantle offshore platforms, to cap certain gathering pipelines at the wellhead connection and remove any related surface equipment, and to remove certain components of gas transmission facilities from the ground.

The following table presents the significant changes to our asset retirement obligations (ARO), of which $497 million and $511 million are included in Other noncurrent liabilities with the remaining current portion in Accrued liabilities at December 31, 2013 and 2012, respectively.



	December 31,
	2013			2012
	(Millions)
Beginning balance	$	579		$	573
Liabilities incurred	8			8
Liabilities settled (1)	(31		)	(44		)
Accretion expense	53			43
Revisions (2)	(48		)	(1		)
Ending balance	$	561		$	579

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(1)	For 2013 and 2012, liabilities settled include $25 million and $31 million, respectively, related to the abandonment of certain of Transco’s natural gas storage caverns that are associated with a leak in 2010.

(2)

Several factors are considered in the annual review process, including inflation rates, current estimates for removal cost, discount rates, and the estimated remaining life of the assets. The 2013 revision primarily reflects increases in the estimated remaining useful life of the assets. The 2012 revision primarily reflects a decrease in removal cost estimates. The 2013 and 2012 revisions also include increases of $9 million and $13 million, respectively, related to changes in the timing and method of abandonment on certain of Transco’s natural gas storage caverns that were associated with a leak in 2010.

Transco is entitled to collect in rates the amounts necessary to fund its ARO. All funds received for such retirements are deposited into an external trust account dedicated to funding its ARO (ARO Trust). (See Note 16 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.) Under its current rate settlement, Transco’s annual funding obligation is approximately $36 million, with installments to be deposited monthly.