Carefully managing greenhouse gas (GHG) emissions, including methane, from operations; promoting energy conservation; and addressing current and potential regulations related to GHG emissions and the potential impacts of the changing climate on EQT’s operations.
Why Managing It Matters
As the effects of climate change on our planet become more apparent, and the potential for regulation and the demand for lower-carbon energy sources increase, EQT remains informed and committed to being proactive about climate change science. Quantifying and managing our GHG emissions not only protects the environment, it also reduces regulatory risk. EQT’s ability to find ways to reduce energy consumption and emissions in the office, on the job site and on the road has a positive impact on the environment, our employees and our bottom line.
It is our responsibility to provide cleaner energy alternatives. While natural gas produces significantly less carbon dioxide when compared with other fossil fuels — up to 50% less than coal and 20-30% less than oil, according to the Union of Concerned Scientists — methane leakage from natural gas infrastructure across the industry remains a contributor to climate change. Methane is 84 times more potent than CO2 as a GHG, and is therefore a management priority for EQT. We maintain and monitor best management practices to minimize GHG emissions while making improvements to reduce our climate impact.
EQT’s energy consumption and GHG emissions originate from three sources — facilities, operations and fleet transportation. We drive continuous improvement and seek innovative ways to conserve energy, reduce emissions and minimize our environmental footprint. Direct (Scope 1) GHG emissions result from sources owned or controlled by EQT. The majority of Scope 1 emissions originate from fuel combustion and natural gas-driven pneumatic equipment. EQT does not track energy indirect (Scope 2) GHG emissions. We report GHG emissions and reduction initiatives to the Public Policy and Corporate Responsibility Committee of the board of directors. The committee provides comments and feedback on our GHG management and emission reduction program. In addition, the Public Policy and Corporate Responsibility Committee discusses environmental, health and safety issues — which can include air and climate — on a regular basis.
Current legislative and regulatory measures to address climate change and GHG emissions are in various phases of discussion or implementation. EQT keeps abreast of these measures to remain compliant and understand how they may affect our operations.
In 2018, the company began to develop a climate change policy to articulate EQT’s position regarding climate change and to memorialize EQT’s philosophy with respect to mitigating operational impact. The policy will also be used as a lens against which we will evaluate proposed and pending climate regulation. Development of the policy has been put on hold to allow the current management team the opportunity to provide input. For more information about climate-related risks, see page 29 in our 2018 Form 10-K.
We regularly track energy consumption in EQT’s owned and leased facilities. More than half of EQT’s total energy consumption is derived from the use of purchased electricity, which powers lighting, cooling, computers, audio/video and other support equipment. EQT’s facilities use electricity primarily generated by coal, natural gas and nuclear power. We compared the 2017 and 2018 usage totals for offices that remained with EQT post-separation in November 2018. In 2018, our total energy consumption across facilities was 26,391 GJ, as compared to 24,825 in 2017. Our energy usage in 2018 totaled 17,156 GJ and was primarily generated by natural gas. The occupancy levels of our EQT facilities increased from 2017 to 2018 as buildings became more occupied. The heating/cooling degree days also increased in our operating regions with the heating degree days rising an average of 12% and the cooling degree days rising an average of 18%. Despite the higher occupancy levels in 2018 and the increase in degree days, our energy usage only increased by 6% from 2017 to 2018.
We work to improve energy efficiency at our leased facilities through preventive maintenance and equipment upgrades, such as motion sensor lighting, energy-efficiency fixtures, temperature controls and daily power down of phone displays. At owned facilities, we seek to increase efficiencies by making capital improvements to permanent building controls, such as boilers, thermostats and lighting systems.
|Electricity consumption (GJ)||16,467||17,156|
|Heating consumption (GJ)||8,358||9,235|
|TOTAL ENERGY CONSUMPTION (GJ)||24,825||26,391|
Methane and Other GHG Emissions Reduction
EQT’s 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. According to a National Academy of Sciences 2012 study, natural gas would be the most effective fossil fuel for reducing GHG emissions when compared to gasoline, diesel and coal, if less than 1% of gross production of methane was lost between production and distribution. EQT is active in a number of partnerships seeking to reduce emissions in the oil and gas industry.
For instance, in 2018, EQT joined the ONE Future Coalition (ONE Future), a group of natural gas companies working together to use a science-based approach to reduce methane emissions across the industry’s supply chain.
In connection with ONE Future, EQT is working to reduce methane emissions and learn how we might improve our own processes. Among other things, ONE Future focuses on bringing industry emissions below the 1% leakage rate. EQT is currently meeting the sector-level target and, as a whole, ONE Future has shown that the industry can achieve leakage rates below 1%.
|eqt methane intensity*||one future intensity production sector target|
EQT is also a participant in The Environmental Partnership, a group of U.S. oil and gas companies committed to continuously improving the industry’s environmental performance. The Environmental Partnership provides programs designed to reduce emissions of methane and volatile organic compounds using proven cost-effective technologies. Specific to shale development in the Appalachian Basin, EQT leverages the Center for Responsible Shale Development’s performance standards related to air and climate performance. For more information, see the 2018 ONE Future report.
EQT uses 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, EQT operates 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 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 controllers1.
According to the Code of Federal Regulations, replacement of a high-bleed controller with a low-bleed or intermittent bleed controller results in a GHG emissions reduction of 96% and 64% respectively2. EQT currently does not operate any high bleed pneumatic controllers. Consistent with the theme of continuous operational improvement, EQT is now evaluating the potential to replace its intermittent and low-bleed pneumatic controllers with electric or air-driven controllers.
EQT also utilizes solar and fuel cell technologies, which further reduce our overall GHG emissions. We use solar technology to generate power on some wellpads and capture natural gas from the field to power fuel cells at a few sites, generating on-site energy. We do not currently track the amount of energy produced by these means.
Leak Detection and Repair Program
EQT's facilities operate in compliance with federal standards and permit requirements in each state where we operate. EQT’s primary operations are in Pennsylvania, West Virginia and Ohio, where robust air emission regulations cover the oil and gas sector. EQT uses an internal team of certified camera operators to perform Leak Detection and Repair (LDAR) surveys utilizing optical gas imaging (OGI) technology at all compressor stations, dehydration facilities and unconventional wellpads.
A small team of EQT employees has been trained by OGI experts and certified to operate gas detection cameras. EQT uses three types of OGI cameras, which are all verified by the manufacturer to meet the Environmental Protection Agency's (EPA) LDAR requirements under the EPA's New Source Performance Standards for the Oil and Natural Gas Industry. The training consists of a three-day course that includes both classroom and onsite experience. The course objectives are to explain the regulatory framework for OGI, demonstrate proper operation of the cameras, explain the basics of thermal science and illustrate the nuances of using the specialized technology. At the end of 2018, nine EQT employees had been trained and certified in optical gas imaging.
Depending on the facility, the frequency of EQT’s LDAR surveys can range from monthly to annually. Our well operators perform auditory, visual and olfactory (AVO) inspections annually for each of our conventional wells. Additionally, we perform quarterly mechanical integrity inspections (MIAs) for our conventional wells in Pennsylvania, during which leaks can be identified.
In West Virginia, we visit conventional wells with storage vessels at least quarterly. At that time, well operators perform inspections for gas leaks.
As an additional leak detection measure on our unconventional wells, EQT has remote gas detection monitors inside the gas processing units (GPU) that monitor for leaks in real time. If a leak is detected by the remote gas detection monitors, an alert is sent to EQT's gas control center, which then assigns a specialist to conduct an inspection. Any confirmed leak is repaired as soon as practical. If a safety concern is present, repairs are completed as quickly as possible after the conditions are deemed safe. All leak repairs are re-surveyed with an OGI camera to confirm that the repair was successful. Unless deemed an emergency or hazardous situation, EQT’s standard practice is to repair all minor leaks immediately and all other leaks within 15 days. EQT's 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 wellpads.
In 2018, no repairs were delayed beyond the applicable regulatory limits, and more than 90% of all leaks detected in production operations were repaired immediately.
|TOTAL OPTICAL GAS IMAGING SURVEYS||924|
|Estimated components surveyed†||2,250,000|
|TOTAL LEAKING COMPONENTS||1,025|
|Components repaired immediately||951|
|Components repaired within 15 days||74|
†Estimate based upon the number of wellpads surveyed and 40 CFR 98 Subpart W component count estimates.
EQT operates conventional wells, unconventional wellpads, compressor stations, dehydration facilities and meter sites. Since 2015, EQT has used a green completions program to reduce the 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. During 2018, all wells completed utilized green completions technology. 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.
TOTAL AMOUNT OF GAS FLARED AND VENTED BY THE COMPANY DURING COMPLETIONS ACTIVITIES (THOUSANDS OF METRIC TONS)
During the production phase of a well, EQT’s 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, 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 control.
Since 2016, EQT has implemented 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. EQT has 22 low pressure separators and vapor recovery systems and has installed 253 pilot-operated valves and latch-down hatches. The valves, hatches and additional separators have significantly improved sealing and reduced leaks. EQT conducts monthly LDAR inspections on these closed vent systems and condensate wellpads.
As a natural gas well ages, “liquid loading” occurs as liquids — primarily water — accumulate in the wellbores of the wells. These liquids create back pressure that restricts or stops the flow of gas. To restore productivity, multiple approaches can unload the fluid from the wellbore; the most simplistic is to flow the well to a lower pressure environment, such as an atmospheric tank. As part of our ongoing efforts to minimize emissions, EQT follows guidance from The Environmental Partnership to reduce methane emissions from well unloading.
If a well only produces through production casing, EQT installs tubing to reduce flow area to allow the gas to efficiently unload the fluid. EQT installs 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, EQT has personnel on site while unloading wells and will continue to do so. Additionally, EQT follows industry best practice to install plunger lifts one to three years into a well’s life. Each of these methods achieve liquid removal without releasing emissions directly to the atmosphere3.
To reduce methane emissions, EQT uses glycol pumps rather than natural gas pneumatics 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, it is our standard protocol to install condensers on new dehydration regenerator still columns. These units condense volatile liquid organics out of the gas and vapor streams collecting marketable natural gas liquids, minimizing odors and emissions, and sending the resulting emissions to a vapor destruction unit.
EQT has operations in multiple states requiring us to rely upon 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). During the fourth quarter of 2018, we also began to evaluate the possibility of reducing the size of our fleet.
Evaluating Our Approach
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. EQT is not subject to any GHG emissions-limiting regulations. We seek continuous improvement capabilities in areas that provide the most opportunity for GHG reductions.
*All data exclude midstream operations. 2018 data includes Rice Drilling B, LLC, and Rice Drilling D, LLC. EQT is potentially subject to the methodologies for reporting GHG emissions under Subpart C (Stationary Fuel Combustion) and Subpart W (Petroleum and Natural Gas Systems) of the U.S. EPA Greenhouse Gas Reporting Program. Emissions are calculated utilizing U.S. EPA guidelines under 40 CFR Part 98 Subpart W.
|Other vented emissions‡||389,413|
|EQT Production GHG emissions intensity (metric tons CO2e/Bcfe)||755.89||341.25||861.78||582.18|
|EQT Production methane emissions intensity (metric tons CO2e/Bcfe)||263||232||680.42||293|
As EQT strives to continuously improve our operating systems and equipment to reduce GHG emissions and increase overall efficiency, we will continue collaborating with ONE Future, CRSD and the Environmental Partnership. As part of these efforts, we will continue sharing best practices with other ONE Future program participants and, where appropriate, use this information to improve performance.
While EQT is confident in our current climate strategy, we understand we must continue to anticipate potential climate change impacts and new regulations, and prepare for future compliance challenges. EQT utilizes both internal inspections and third-party audits for compliance with regulatory and voluntary programs. We voluntarily conducted a leak detection and repair audit in 2018, the results of which informed improvements to our operations.
For more information on our processes, see the Technological Innovation section of this report.
140 CFR 98 Subpart W - Table W-1A – In some cases, the high-bleed controller could be removed without a replacement controller.
3Oil and Natural Gas Sector Liquids Unloading Processes, April 2014, https://www.ourenergypolicy.org/wp-content/uploads/2014/04/epa-liquids-unloading.pdf