environmental
Climate and
GHG Emissions

Why It Matters to Us

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Explanation of the material topic and its Boundary

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We recognize that climate change is the preeminent sustainability issue affecting all industries today, and in particular, companies like EQT. While the effects on the planet and economy continue to become more apparent, increased scrutiny on climate change management by stakeholders, in combination with rapidly changing regulations, has brought this topic to the forefront. The impacts of climate change also have the potential to affect us financially. Increased adverse weather events could affect our ability to operate on schedule, impact service providers and increase the difficulty of complying with regulations directed at mitigating weather events, such as run-off restrictions and operations in severe heat. In addition, as investors continue to focus on climate change management and mitigation, our access to capital funding could be impacted if we are unable to articulate and execute our sustainable development strategy. Furthermore, the debate on the makeup of the energy mix of the future has significant environmental, social and economic ramifications for the United States, and will influence the future demand for, and consequently the price of, natural gas. We seek to remain informed on climate change science and we are committed to understanding and proactively responding to the risks and opportunities posed by climate change on our business.

At EQT, we believe that natural gas plays a critical role in the energy mix of the future as we seek to mitigate the impacts of climate change. As a result of the shale revolution, the United States has transitioned from being a net importer to a net exporter of liquefied natural gas (LNG), while at the same time reducing domestic carbon dioxide (CO2) emissions to their lowest levels in a generation, principally a result of power plants switching from coal to gas. As we focus on the future, our goal is to maximize the positioning of natural gas through exemplary, responsible operations.

As the largest natural gas producer in the United States, methane emissions are of particular importance to us. While natural gas produces significantly less CO2 when compared with other fossil fuels — up to 50% less than coal and 20-30% less than oil, according to the U.S. Energy Information Administration — methane emissions are of particular concern to our stakeholders. The Appalachian Basin has the lowest methane intensity of any oil and natural gas basin in the country, and at EQT, our methane intensity is significantly below the 2025 target set by the ONE Future Coalition, a group of 26 natural gas companies working together to voluntarily reduce methane emissions across the natural gas value chain to 1% (or less) by 2025. We maintain strong management systems to effectively drive down our emissions and lessen our impact and we maintain and monitor best management practices to minimize greenhouse gas (GHG) emissions while making improvements to reduce our climate impact. However, our new Board of Directors and leadership are pushing us to do more. Within our operations, not only did we transition to a combo-development strategy — which we believe will result in a similar step-change in environmental performance as has been seen in operational efficiency — we recently transitioned to using only electric hydraulic fracturing (frac) fleets in our completions processes. We are pursuing multiple other initiatives to improve our environmental impact and look forward to sharing those in the future.

As an effectively new company given our recent change in leadership and operational strategy, we are not yet at a place where we are able to outline meaningful goals pertaining to our environmental impact. Per above, our methane intensity is significantly below the 2025 goal established by ONE Future. However, our goal is not just to meet standards established by our industry, but rather establish aggressive goals designed to continuously improve our performance. At this stage, we are collecting data to establish the baseline of the new EQT’s performance, and we are firmly committed to setting meaningful environmental goals in the future.

For more information about climate-related risks, see pages 17-18 in our 2019 Form 10-K.

What We Are Doing

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The management approach and its components

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Our Scope 1 (i.e., direct) GHG emissions primarily originate from our operations and fleet transportation. Fuel combustion and natural gas-driven pneumatic equipment are the largest contributors to our Scope 1 GHG emissions, and we therefore dedicate resources to improving these processes and equipment. Our focus on implementing innovative technologies, best management practices and aligned policies over the past several years has directly resulted in decreased methane emissions intensity year over year.

We outline our environmental guidelines and data tracking expectations in our Environmental, Health and Safety (EHS) Management System. While we have not historically tracked Scope 2 (i.e., indirect from purchased energy) or Scope 3 (i.e., other indirect) GHG emissions, we participate in the ONE Future Coalition (ONE Future), which aims to reduce emissions from the entire natural gas supply chain.

Governance

Our Environmental and Production teams work collaboratively to explore and/or implement new technologies and to collect and report emissions data. Our Vice President, Environmental, Health and Safety, reports GHG emissions and reduction initiatives to the Public Policy and Corporate Responsibility (PPCR) Committee of the Board of Directors at least once each quarter. The PPCR Committee provides comments and feedback on our GHG management and emissions reduction program. In addition, the PPCR Committee discusses EHS issues — which can include air and climate matters — on a regular basis.

Our Environmental, Social and Governance (ESG) Committee, of which our Vice President, Environmental, Health and Safety, is a member, meets biweekly to, among other things, discuss our strategy pertaining to climate change, associated impacts and opportunities to reduce our impact.

Reducing Methane and Other Emissions

SASB EM-EP-110a.3
Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets

SASB EM-EP-110a.3

Our operational GHG air emissions depend greatly on the type and amount of field activity being conducted at any given time, and vary on an annual basis. We review our Scope 1 GHG emissions inventory on a source-by-source basis to determine areas of opportunity and to monitor our overall impact. We outline our approach for each source below. Our primary emissions reduction activities include:

  • Strategic site design
  • Leak Detection and Repair Program
  • Preventing venting and flaring
  • Preventing releases during well unloading
  • Using glycol pumps on dehydration units

We regularly review technologies to see if they can cost-effectively reduce our emissions in the short term (read more about this process in Technological Innovation).

We also actively participate with ONE Future and The Environmental Partnership, both of which seek to improve the oil and gas industry’s environmental performance. Utilizing a science-based approach, ONE Future, a collaborative group of natural gas companies, has set a target methane emissions leakage rate for the industry at or below 1% and below 0.28% for the production sector by 2025. We significantly outperform both of the ONE Future methane intensity targets, as shown below.

Methane Intensity
 

EQT Methane Intensity[1]

ONE Future Production Sector Methane Intensity Target

2017

0.15%

0.28%

2018

0.06%

2019

 0.06%

Through The Environmental Partnership, we collaborate with other oil and gas companies to evaluate best management practices for reducing emissions. Resources provided by The Environmental Partnership include programs designed to reduce methane emissions and volatile organic compounds using proven cost-effective technologies.

EQT’s methane intensity is approximately 78% lower than the 2025 target set by ONE Future for the production sector

Site Design

We use pneumatic level switches and liquid level controllers to set thresholds and control motor valves for managing fluid in vessels such as separators, scrubbers and contact towers. For example, we operate thousands of pneumatic controllers and level switches that regulate gas/liquid separation volumes or activate shutdowns when high or low liquid levels occur.

Air, natural gas, electricity or other supply media can power pneumatic controllers and level switches. As sufficient compressed air and electricity are difficult to obtain at most production facilities, natural gas is typically used to power the pneumatic devices. The U.S. Environmental Protection Agency (EPA) classifies natural gas pneumatic controllers and level switches into three categories: continuous high-bleed, continuous low-bleed and intermittent bleed. High-bleed pneumatic controllers are significant sources of methane emissions when compared to low or intermittent bleed controllers.[2]

Replacement of a high-bleed controller with a low-bleed or intermittent-bleed controller results in a reduction of GHG emissions by 96% and 64% respectively.[3] We do not currently operate any high-bleed pneumatic controllers. Approximately 90% of our methane emissions in 2019 were attributable to the operation of our production facilities. We have transitioned to the use of low-bleed and intermittent-bleed pneumatic controllers in our production facilities to reduce our methane emissions and we are currently evaluating new technologies that could further decrease our emission levels in the future.

Leak Detection and Repair Program

One of the most significant investments we have made to reduce emissions releases has been our investment in Leak Detection and Repair (LDAR) surveys. Going above and beyond compliance with robust state and federal requirements on air emissions, our LDAR program involves:

  • Utilization of optical gas imaging (OGI) technology at all compressor stations, dehydration facilities and unconventional sites for conducting LDAR surveys ranging from monthly to annually, depending on the facility;
  • An internal team of EQT employees who have completed a three-day training consisting of classroom and onsite experience with OGI experts, certified to operate gas detection cameras;
  • Use of three types of OGI cameras, all verified by the manufacturer to meet the EPA’s LDAR requirements under the EPA's New Source Performance Standards for the Oil and Natural Gas Industry;
  • Annual auditory, visual and olfactory (AVO) inspections for each of our conventional wells;
  • Quarterly mechanical integrity assessments (MIAs) for our conventional wells in Pennsylvania, and quarterly visits to conventional wells with storage vessels in West Virginia to perform inspections for gas leaks;
  • Remote gas detection monitors inside the gas processing units (GPU) of our unconventional wells that monitor for leaks in real time and that automatically alert EQT’s gas control center in order to assign a specialist to conduct an inspection;
  • Leak repairs conducted as soon as reasonably possible; and
  • Re-surveying of all leak repairs with an OGI camera to confirm that the repair was successful.

Our standard practice exceeds state and federal requirements related to leak repair procedures, and we are upgrading our management system to track leak repairs at our sites. In 2019, no repairs were delayed beyond the applicable regulatory limits, and more than 85% of all leaks detected in production operations were repaired immediately. As such, our LDAR surveys in 2019 enhanced our ability to identify and fix leaks, which has resulted in overall emissions improvements.

Leak Detection and Repair Metrics4

 

2018

2019

TOTAL OPTICAL GAS IMAGING SURVEYS

924

977

TOTAL LEAKING COMPONENTS

1,025

1,058

Components repaired immediately

951

911

Components repaired within 15 days

74

146

Venting/Flaring Practices

We operate conventional wells, unconventional sites, compressor stations, dehydration facilities and meter sites, and use a green completions program to reduce our volume of flared-gas. Green completions technology transfers the natural gas at the wellhead to a separator immediately after well completion as opposed to flaring or venting the gas. As a result of our utilization of green completions technology, we did not vent or flare any gas during our completions operations during 2019. To minimize flaring at condensate wells, we utilize varying methods of emissions minimization options including the design of closed-vent systems with low-pressure separators, vapor recovery systems and vapor destruction systems.

During the production phase of a well, our flaring and venting practices differ based on the amount of condensate and oil produced. Generally, the industry considers a “dry gas” site as a site that produces water, methane and ethane but not significant natural gas liquids (NGLs), condensate or oils. A site that consistently produces natural gas in addition to condensate and/or oil is considered a “wet gas” site. Dry gas sites generally have significantly less emissions when compared to wet gas sites and require less emissions control.

We leverage best management practices for the installation of pilot-operated valves and latch-down hatches on closed-vent systems, necessitating the installation of low-pressure separators with vapor recovery systems during periods of high production. The valves, hatches and additional separators have significantly improved sealing, reduced leaks and led us to standardize the installation of latch-down hatches on all new installations. We conduct monthly LDAR inspections on these closed vent systems and condensate sites.

Well Unloading

As a natural gas well ages, “liquid loading” occurs as liquids — primarily water — accumulate in the wellbore of the well. These liquids create back pressure that restricts or stops the flow of gas. To restore productivity, multiple approaches can be used to unload the fluid from the wellbore; the simplest is to flow the well to a lower pressure environment, such as an atmospheric tank. As part of our ongoing efforts to minimize emissions, we follow guidance from The Environmental Partnership to reduce methane emissions from well unloading.

If a well only produces through production casing, we install tubing to reduce flow area, allowing the produced gas from the well to efficiently unload the fluid. We install well tubing on an accelerated schedule to limit the amount of venting that occurs from well unloading activities, reducing the amount of methane emissions. We are further able to minimize tank venting by using automated plunger lift equipment in wells with tubing. Where this is not possible, it may be necessary to utilize a swab rig to mechanically remove fluids from a well to restore flow. For unconventional wells, we have personnel on site while unloading wells. Additionally, we follow the industry best practice of installing plunger lifts one to three years into a well’s life. Each of these methods achieves liquid removal without releasing emissions directly into the atmosphere.[5]

Dehydration Units

To reduce methane emissions during production operations, we use glycol pumps rather than natural gas pneumatic pumps on existing dehydration systems to transfer bulk glycol. These pumps only emit gas embedded within the glycol and do not need to be powered by natural gas pressure, resulting in lower methane emissions. Additionally, to further minimize emissions, our standard protocol is to install condensers on new dehydration regenerator still columns. These units condense volatile liquid organics out of the gas and vapor streams collecting marketable NGLs and minimizing odors and emissions. The resulting emissions are sent to a vapor destruction unit.

Electrifying Our Frac Fleet

As described in Air Quality, we began electrifying our hydraulic fracturing (frac) fleet in late 2019, switching from diesel to onsite natural gas to power a portion of our completions turbines. The implementation of these next-generation electric frac fleets has decreased our consumption of diesel fuel by approximately 16 million gallons, as of October 2020. The electrification of our frac fleet will further decrease our emissions in the future due to the corresponding reduction in vehicle use which would otherwise be needed to deliver diesel fuel to our well pads.

Transportation

We have operations in multiple states, requiring us to rely on trucks and other fleet vehicles for the transportation of workers and materials to job sites. EQT vehicles drive millions of miles annually, and we actively pursue efficient, cleaner-burning alternatives to carbon rich fuels, such as compressed natural gas (CNG), for our vehicles. In 2019, in connection with a focus on centralized development in the core of our operational footprint, we reduced our fleet size by approximately 100 trucks, utilizing newer, fuel-efficient technology-enabled vehicles to further reduce total vehicle miles and associated emissions.

1 Methane intensity is calculated as methane emitted divided by methane produced.

2 Source: 40 CFR 98 Subpart W - Table W-1A 

3 Source: https://www.law.cornell.edu/cfr/text/40/appendix-Table_W-1A_to_subpart_W_of_part_98

4 Metrics only include optical gas imaging survey data.

5 https://www.ourenergypolicy.org/wp-content/uploads/2014/04/epa-liquids-unloading.pdf

 

How We Are Doing

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Explanation of the material topic and its Boundary

SASB EM-EP-110a.1
Gross global Scope 1 emissions, percentage methane, percentage covered under emissions-limiting regulations

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Direct (Scope 1) GHG emissions

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Amount of gross global Scope 1 emissions from: (1) flared hydrocarbons, (2) other combustion, (3) process emissions, (4) other vented emissions, and (5) fugitive emissions

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GHG emissions intensity

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Reduction of GHG emissions

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SASB EM-EP-110a.1
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SASB EM-EP-110a.2
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We monitor and report on air emissions from our operations as required by state and federal regulations. We gather operational data and calculate emissions annually to comply with each state’s emissions inventory requirements where we have operations. For sources subject to the EPA’s Greenhouse Gas Reporting Program, we submit reports to the EPA, where they are validated electronically. We are not subject to any GHG emissions-limiting regulations, and seek continuous improvement capabilities in areas that provide the most opportunity for GHG reductions.

Scope 1 GHG Emissions (metric tons CO2e)1

Scope 1 GHG Emissions (Metric Tons CO2e)*
Target
1.25 Million
1 Million
750,000
500,000
250,000
0

426,768

301,503

124,684

581

 

950,484

369,085

580,665

734

 

865,312

428,183

436,182

947

 

664,316

181,060

482,942

314

 
2016201720182019
Carbon Dioxide (CO2) emissions
Methane (CH4) emissions
Nitrous Oxide (N2O) emissions

Although our overall Scope 1 GHG emissions decreased in 2019, our methane emissions (comprising 73% of our total GHG emissions) increased slightly due to a higher number of pneumatic devices in service, a change in gas analysis used to calculate emissions and an increased number of unloading events.

Scope 1 Emissions Sources (metric tons CO2e)2

Accounting Metric

2018

2019

Flared hydrocarbons

0

0

Other combustion[3]

423,428

165,990

Process emissions[4]

23,046

31,523

Other vented emissions[5]

389,700

454,636

Fugitive emissions[6]

23,200

6,816

GHG Emissions Intensity7

 

2015

2016

2017

2018

2019

GHG emissions intensity (metric tons CO2e/Bcfe)

755.89

341.25

861.78

582.18

440.56

Methane emissions intensity (metric tons CO2e/Bcfe)

263

232

680.42

293

320

1 EQT is potentially subject to the methodologies for reporting GHG emissions under Subpart C (General Stationary Fuel Combustion) and Subpart W (Petroleum and Natural Gas Systems) of the EPA Greenhouse Gas Reporting Program. Emissions are calculated utilizing EPA guidelines under CFR Part 98. Under this Rule, Hydrofluorocarbons, Perfluorinated chemicals, Sulfur hexafluoride and Nitrogen trifluoride are not expected to be emitted in this sector. We have restated 2018 data based on EPA recommendations.

2 SASB does not include a category for completions with and without fracturing. In 2019, EQT recorded Scope 1 emissions in these categories of 5,351 metric tons CO2e. In 2018, these two categories totaled 6,938 metric tons CO2e.

3 Other combustion includes the generation of electricity and heat, and the production and processing of oil and gas. This would include diesel, gasoline and natural gas combusted in engines or heaters. However, it does not include mobile sources such as fleet vehicles used by EQT personnel. We have restated the 2018 total based on EPA recommendations.

4 Process emissions originate from EQT’s dehydrators, as designed.

5 Other vented emissions include natural gas-driven pneumatic devices and pumps, well liquid unloading operations, atmospheric tanks and reciprocating compressor venting. We have reinstated the 2018 total to include reciprocating compressor venting.

6 Fugitive emissions include equipment leak surveys and population count emissions.

7 These GHG emissions intensities include CO2, CH4 and N2O from Scope 1.

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