Environmental and
Operational Sustainability

Comprehensive Environmental Strategy Supports a Lower Carbon Future

Modernizing our natural gas distribution and transmission system is a component of fulfilling our vision of becoming the safest provider of natural gas services. Modernization not only enhances safety and reliability, but it also reduces emissions.

Natural gas is essential for meeting the nation’s energy demands and advancing a lower carbon economy to achieve our nation’s climate goals. Carbon dioxide (CO2) emissions from residences using natural gas for space heating, water heating, cooking, and clothes drying are approximately 22 percent lower than those attributable to an all-electric home.[1]

Recognizing our continued role as a vital component of the country’s long-term sustainable energy future, in fiscal year 2021, Atmos Energy developed a comprehensive environmental strategy focused on reducing Scope 1, 2, and 3 emissions (as defined by the Greenhouse Gas Protocol) and other environmental impacts from our operations, fleet, facilities, gas supply, and customer end-use.

We are implementing operating practices and solutions to reduce carbon from our operations through:

  • Ongoing system modernization work
  • Reducing third party damage to our system
  • Improving monitoring and measuring of methane emissions
  • Evaluating and implementing innovative technologies
  • Investing in research and development

It’s great to work for a company that takes pride in reducing emissions to the atmosphere.

Ken W., Engineer 2

Sustainability Commitments and Governance

Our leadership provides structured accountability to successfully achieve our vision to operate safely and reliably, now and into the future. The Corporate Responsibility, Sustainability, and Safety (CRS&S) Committee of the Board of Directors provides oversight of Atmos Energy’s operational sustainability practices and procedures. The CRS&S Committee is committed to:

  • Strategically invest in the enhancement of our environmental and operational sustainability
  • Monitor current and emerging political and social action, public policy, and environmental issues that may affect business operations, material financial performance, or public image of the company
  • Consider policies for sustainable growth strategies to create value consistent with long-term preservation and enhancement of the company’s financial, environmental, and social capital

Our Management Committee oversees a team of senior leaders who are responsible for implementing our environmental strategy.

Task Force on Climate-Related Financial Disclosures (TCFD)

Atmos Energy supports the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and has committed to work toward implementation. In fiscal year 2021, we initiated a deliberate, enterprise-wide approach towards implementing TCFD recommendations over time and began incorporating elements of this framework into our corporate responsibility reporting under the oversight of our CRS&S Committee. Continued implementation of this reporting framework underscores our commitment towards adopting meaningful sustainability practices and reporting capabilities.

Environmental Management

Our Vice President, Pipeline Safety provides strategic direction and plan oversight of our operational sustainability, environmental, and compliance efforts. In fiscal year 2021, we hired a Director of Environmental Practices to further support our ongoing environmental stewardship programs. Our Operating Divisions are led by Corporate Officers (Division Presidents), who are responsible for the execution of our environmental strategy in their operating areas. Operating Division employees steward day-to-day compliance with applicable regulations, support the implementation of environmental initiatives, and provide feedback on ways to improve our processes. We also require that all contractors be knowledgeable of and comply with all applicable federal, state, and local environmental requirements.

Atmos Energy employees adhere to all applicable environmental laws and regulations, related corporate policies, and procedures and to the requirements, limitations, and conditions of all environmental permits. As described in our Code of Conduct, Atmos Energy is committed to:

  • Minimizing the release of any environmentally damaging substance
  • Minimizing the creation of waste
  • Disposing of all waste through safe methods
  • Employing safe technologies and operating procedures
  • Being prepared to respond appropriately to accidents and emergencies

This commitment is part of how we work to improve our operations every day to achieve our vision of being the safest provider of natural gas services.

In fiscal year 2021, under the direction of our Vice President, Pipeline Safety, Atmos Energy established a cross-functional Emissions Reduction Team comprised of representatives from the safety, operations, technical services, engineering, environmental, compliance, legal, and business process and change management groups of our business to support the company’s operating divisions in executing the strategy. This team:

  • Reviews and enhances operational environmental practices to further detect, monitor, and reduce emissions from our storage and compression facilities, transmission operations, and distribution operations
  • Confirms that the operational enhancements and emissions reductions strategies align with the company’s vision, values, and culture and satisfy the company’s environmental commitments
  • Reports to the Management Committee and the CRS&S Committee on matters pertaining to the goals, activities, and achievements of the team

Greenhouse Gas Reduction Initiatives

Atmos Energy has a comprehensive environmental strategy focused on reducing Scope 1, 2, and 3 emissions (as defined by the Greenhouse Gas Protocol) and other environmental impacts from our operations, fleet, facilities, gas supply, and customer end-use. We are implementing operating practices and solutions to reduce carbon from our operations through:

  • Ongoing system modernization work
  • Reducing third party damage to our system
  • Improving monitoring and measuring of methane emissions
  • Evaluating and implementing innovative technologies
  • Investing in research and development

We also support lower carbon operations through collaboration with our legislators, regulators, customers, and suppliers.

Reducing LDC Methane Emissions From Mains and Services by 50% From 2017 to 2035

Atmos Energy is working towards a goal to reduce methane emissions from its natural gas distribution system mains and services by 50 percent from 2017 to 2035, and we are on track to meet that goal. Through the end of calendar year (CY) 2020, we have achieved an approximate 10 percent reduction, and through fiscal year 2021, we furthered that reduction to approximately 20 percent.

50%
45
0

38.6

 

34.8

 

19.3

 
CY2017CY2020CY2035
(Projected)
estimated methane emissions, thousand metric tons

Additionally, to better measure improvements in our system’s environmental performance, we have voluntarily participated in the American Gas Association’s and Edison Electric Institute’s Natural Gas Sustainability Initiative since its inception in 2017. Our involvement has helped us more effectively calculate our methane emissions intensity factor, which has decreased almost 20 percent in the last four years. The chart below illustrates this downward trend.

Methane Intensity[a] (%)
1.0%
0.8%
0.6%
0.4%
0.2%
0%

0.61%

0.565%

0.042%

 

0.53%

0.473%

0.052%

 

0.50%

0.467%

0.029%

 

0.49%

0.461%

0.029%

 
2017201820192020
Distribution[b]
Transmission & Storage[c]

[a] Estimated and reported on a calendar year basis per the American Gas Association and Edison Electric Institute’s Natural Gas Sustainability Initiative (NGSI) Version 1 Protocol. Natural Gas ESG / Sustainability | American Gas Association (aga.org)

[b] Includes methane leak sources estimated per EPA GHG Mandatory Reporting Rule Subpart W, 40 CFR §98.232(i)(1-6). Combustion sources are excluded. CO2 is excluded.

[c] Includes methane leak sources estimated per EPA GHG Mandatory Reporting Rule Subpart W, 40 CFR §98.232(e)(1-8), (f)(1-8), and (m). Combustion sources are excluded. CO2 and N2O are excluded.

Atmos Energy also voluntarily participates in several federal and industry programs focusing on the continual improvement of methane emissions reduction efforts, including the EPA Methane Challenge, ONE Future Coalition, and Low Carbon Resources Initiative (LCRI). Our involvement provides an additional degree of accountability for accurately monitoring and reporting on our environmental performance.

EPA Methane Challenge

In support of our efforts to reduce methane emissions, we became a founding member of the Environmental Protection Agency’s (EPA) Natural Gas STAR Methane Challenge Program. This voluntary partnership publicly monitors and recognizes oil and natural gas companies that are making commitments to reduce methane emissions in their operations. As part of this program, Atmos Energy set a goal to replace cast iron and unprotected steel mains at an annual rate of 1.5 percent. We have performed, and expect to continue to perform, above our stated goal.

Distribution Mains – Cast Iron and Unprotected Steel
(% replacement rate[a])
8%
7%
6%
5%
4%
3%
2%
1%
0%

 

 

 

 

 
20172018201920202021
EPA Published Replacement Rate (%)
Replacement Rate Submitted to EPA (%)
Estimated Replacement Rate (%)
Target Rate (%)

[a] Replacement rates are estimated based upon Atmos Energy’s Gas Distribution Annual Reports submitted to the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA), in accordance with 49 CFR Parts 191 and 195.7. The 2021 Estimated Replacement Rate is based upon actual and estimated replacements.

ONE Future Coalition

In 2020, Atmos Energy joined Our Nation’s Energy Future Coalition (ONE Future), a voluntary alliance of leading companies from across the natural gas supply chain focused on technology and policy solutions to drive continual improvement in the reduction of methane emissions. Joining ONE Future includes a commitment to measuring, reporting, and tracking key emissions in accordance with ONE Future protocols, reflecting our continued commitment to sustainable practices in our natural gas distribution, pipeline, and storage operations. ONE Future members work together to voluntarily reduce methane emissions across the natural gas value chain to 1 percent (or less) by 2025. In calendar year 2020, members of ONE Future achieved a methane intensity rate of 0.424 percent, beating the goal by 58 percent while safely and reliably delivering natural gas to customers.[1]

Low Carbon Resources Initiative

Consistent with our principle of focusing on the future, Atmos Energy has invested in the Low Carbon Resources Initiative (LCRI), a collaborative initiative driven by the Electric Power Research Institute and the Gas Technology Institute. LCRI is specifically targeting advances in the production, distribution, and application of low-carbon, alternative energy carriers and the cross-cutting technologies that enable their integration at scale. These energy carriers—which include hydrogen, ammonia, synthetic fuels, and biofuels—are needed to enable affordable pathways to achieve deep carbon reductions across the energy economy. The LCRI is focused on technologies that can be developed and deployed beyond 2030 to support the achievement of a net zero emission economy by 2050.

GHG Emissions Data

We monitor and report greenhouse gas (GHG) emissions in accordance with the EPA Greenhouse Gas Reporting Rule, codified in 40 Code of Federal Regulations Part 98, which requires reporting of GHG data and other relevant information from large sources in the United States. We classify our EPA-reported GHG emissions into three primary categories:

  • Distribution - 40 CFR 98 Subpart W, Scope 1
  • Transmission - 40 CFR 98 Subpart C and Subpart W, Scope 1
  • Customer End Use - 40 CFR 98 Subpart NN, Scope 3

Subparts C and W require reporting of Scope 1 GHG emissions from combustion and from petroleum and natural gas systems, respectively, for facilities that emit 25,000 metric tons or more of CO2e per year. Subpart NN requires reporting of Scope 3 customer end use emissions from all local natural gas distribution companies that physically deliver at least 460 million standard cubic feet of natural gas to customers and operate within a single state. Emissions generated by customer end use of our natural gas product comprise a significant portion of our Scope 3 and total GHG emissions.

The chart below summarizes our total estimated EPA-reportable GHG emissions by category over the last 5 years. As shown, Scope 3 emissions comprise the largest share of our carbon footprint, with approximately 94% of our total reported emissions deriving from customer end use since 2016. We report further breakdowns of our reported emissions in tables at the end of this section.

Total Estimated EPA-Reportable GHG Emissions (MT CO2e)
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000

20,166,615

18,957,253

1,048,552

160,810

 

19,479,172

18,221,973

1,047,018

210,181

 

23,454,023

22,162,879

1,020,590

270,554

 

23,609,151

22,338,819

1,002,467

267,865

 

21,542,376

20,347,277

945,342

249,757

 
20162017201820192020
Customer End Use (Scope 3)
Distribution (Scope 1)
Transmission (Scope 1)

Several factors influence our annual GHG emissions totals, including the expansion of our distribution system, fluctuations in customer end use, and our ongoing system modernization efforts. The general increase in our total reported emissions since 2016 is mainly due to customer growth and system expansion to meet rising customer demand.

Transmission System GHG Emissions[a]

  Total GHG Emissions (MT CO2e) Methane Emissions (MT CH4)
Subpart/Reporting Entity 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
40 CFR 98 Subpart C[b] (Scope 1)
Central Compressor Station[c] - 4,387 11,259 8,855 7,969 - 0.08 0.21 0.17 0.15
Cooper Compressor Station[c] - 6,012 8,077 11,615 11,837 - 0.10 0.16 0.22 0.22
Groesbeck Compressor Station[d] - - - 32,971 36,076 - - - 0.62 0.68
Howard Compressor Station 41,594 47,658 40,478 57,696 65,332 0.77 0.89 0.76 1.10 1.23
Maryneal Compressor Station[d] - - - 36,504 35,690 - - - 0.69 0.67
Total 41,594 58,057 59,814 147,641 156,905 0.77 1.07 1.13 2.80 2.95
40 CFR 98 Subpart W[e] (Scope 1)
Atmos Pipeline—Texas 115,794 146,756 204,568 112,132 84,078 4,619.69 5,854.97 8,161.42 4,473.61 3,354.35
Central Compressor Station[c] - 758 1,033 2,458 2,660 - 30.31 41.28 98.20 106.27
Cooper Compressor Station[c] - 1,349 1,116 1,158 2,179 - 53.92 44.59 46.26 87.08
Groesbeck Compressor Station[d] - - - 1,100 1,468 - - - 43.94 58.66
Howard Compressor Station 3,492 3,260 4,023 2,524 1,743 136.63 128.01 160.75 100.86 69.66
Maryneal Compressor Station[d] - - - 852 723 - - - 34.06 28.87
Total 119,216 152,124 210,740 120,224 92,852 4,756.32 6,067.21 8,408.04 4,796.93 3,704.89
Transmission Total Emissions 160,810 210,181 270,554 267,865 249,757 4,757.09 6,068.28 8,409.17 4,799.73 3,707.84

[a] As estimated and reported to the U.S. Environmental Protection Agency in accordance with 40 CFR Part 98, Subparts C and W.

[b] Emissions from the combustion of natural gas in our stationary fuel combustion sources are calculated in accordance with 40 CFR Part 98, Subpart C, equation C-1, using the volume of fuel fired, default heating value, and fuel-specific emission factors, per §98.33.

[c] Atmos Energy acquired this facility in calendar year 2017.

[d] These facilities were below the reporting threshold of 25,000 MT CO2e for calendar years 2016–2018.

[e] Emissions from transmission system operations are calculated in accordance with 40 CFR 98 Part W, using operating data, measurements, leak survey data, and population counts per §98.236(b, i, k, and n-r).

Distribution System GHG Emissions[a]

  Total GHG Emissions (MT CO2e) Methane Emissions (MT CH4)
Subpart/Reporting Entity 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
40 CFR 98 Subpart W (Scope 1)
Colorado 24,580 19,464 17,805 17,943 17,503 982.03 777.63 711.35 716.84 699.26
Kansas 16,324 22,789 22,122 23,138 24,108 652.18 910.45 883.80 924.39 963.16
Kentucky 28,053 30,600 27,370 27,025 25,479 1,120.77 1,222.53 1,093.49 1,079.70 1,017.93
Louisiana 49,070 49,684 51,350 51,809 50,207 1,960.42 1,984.95 2,051.51 2,069.86 2,005.87
Mississippi 59,779 54,417 50,848 47,282 47,971 2,388.29 2,174.07 2,031.45 1,889.02 1,916.51
Tennessee 21,456 19,006 17,402 17,259 17,577 857.20 759.31 695.24 689.51 702.22
Texas 846,638 845,425 831,021 815,357 759,835 33,824.73 33,776.30 33,200.81 32,575.00 30,356.81
Virginia 2,652 5,633 2,673 2,656 2,663 105.96 225.06 106.80 106.10 106.38
Total 1,048,552 1,047,018 1,020,590 1,002,467 945,342 41,891.58 41,830.30 40,774.45 40,050.42 37,768.14
Mains and Services Only 989,250 965,819 944,690 913,999 870,572 39,522.38 38,586.25 37,742.12 36,515.93 34,780.97

[a] As estimated and reported to the U.S. Environmental Protection Agency in accordance with 40 CFR Part 98, Subpart W.

Customer End Use GHG Emissions[a]

  Total GHG Emissions (MT CO2e)
Subpart/Reporting Entity 2016 2017 2018 2019 2020
40 CFR 98 Subpart NN[b] (Scope 3)
Colorado 784,692 778,985 810,451 882,564 847,382
Kansas 922,141 916,588 1,108,591 1,123,925 1,063,096
Kentucky 1,644,110 1,607,237 1,794,183 1,689,002 1,605,128
Louisiana 1,342,788 1,368,561 1,670,323 1,652,123 1,493,260
Mississippi 1,569,380 1,234,931 1,759,322 1,710,260 1,582,817
Tennessee 1,150,066 1,132,776 1,238,954 1,244,215 1,192,469
Texas 11,166,887 10,846,621 13,406,356 13,548,219 12,236,319
Virginia 377,189 336,274 374,699 488,511 326,806
Total 18,957,253 18,221,973 22,162,879 22,338,819 20,347,277

[a] As estimated and reported to the U.S. Environmental Protection Agency in accordance with 40 CFR Part 98, Subpart NN.

[b] Emissions from the combustion of natural gas supplied by our distribution systems are calculated in accordance with 40 CFR Part 98, Subpart NN, using the volume of gas delivered and fuel-specific emission factors, per §98.403(b).

Non-GHG Criteria Air Pollutants

At Atmos Energy, we monitor and estimate non-GHG criteria air pollutant emissions in accordance with applicable federal and state requirements and report those emissions for facilities that trigger the respective thresholds or are otherwise requested by the state regulatory agency. The following table summarizes our estimated and reported non-GHG criteria air pollutant emissions.

Criteria Air Pollutant  2016 2017 2018 2019 2020
Carbon Monoxide (CO) 86.36 105.43 138.15 87.39 87.72
Oxides of Nitrogen (NOx) 126.06 134.76 143.51 109.26 115.37
Particulate Matter (PM) 7.17 7.44 9.97 9.09 10.65
Sulfur Dioxide (SO2) 0.48 0.54 0.69 0.73 0.75
Volatile Organic Compounds (VOC) 61.01 63.78 71.97 44.72 50.18

The leading source of criteria air pollutant emissions at our facilities is combustion of natural gas in our compressor engines and turbines. We utilize control technologies such as oxidation catalyst, nonselective catalytic reduction, and Low-NOx combustion to reduce CO, NOx, and VOC emissions, and we conduct periodic air emissions testing that meets or exceeds applicable requirements to measure emissions and verify that control technologies are working properly.

System Modernization

Pipeline Replacement

As part of our vision to be the safest provider of natural gas services, Atmos Energy is committed to modernizing our infrastructure by replacing unprotected steel pipe, vintage plastics, and other materials. These replacements improve the safety and reliability of our infrastructure, as well as reduce methane emissions.

 

Including investments in new technology, Atmos Energy allocates more than 85 percent of its capital spending to enhance the safety and reliability of its distribution and transportation systems, delivering efficient and affordable energy to its customers and communities. System modernization efforts include pipe replacement programs and leak repair prioritization, which further contribute to the company’s commitment to protect and preserve the environment.

In fiscal year 2021, we replaced nearly 1,100 miles of distribution and transmission pipe (~1.4 percent of our total system) and approximately 38,000 steel service lines (~4.8 percent reduction). We eliminated all remaining cast iron pipe in calendar year 2021. Over the next five years, we plan to replace between 5,000 and 6,000 miles of distribution and transmission pipe and between 100,000 and 150,000 steel service lines, resulting in a 15 to 20 percent reduction in methane emissions.[1] To determine the schedule for pipeline replacements, we use a risk-based prioritization model that considers factors like the pipe’s age, location, material, leak history, environmental factors, and more. This modernization will greatly contribute to reduced emission rates across our operations.

Distribution Pipe Replacement Rate
(miles of pipe per fiscal year)
1000
800
600
400
200
0

295

148

147

 

346

198

148

 

374

213

161

 

470

328

142

 

477

336

141

 

518

375

143

 

735

430

305

 

770

453

317

 

736

443

293

 

933

556

377

 

850

500

350

 
201220132014201520162017201820192020202122E-26E
Bare Steel, Cast Iron[a], Vintage Plastics
Other Risk-Based Materials

[a] All remaining cast-iron pipe was eliminated in calendar year 2021.

Transmission Miles Replacement Rate
(miles of pipe per fiscal year)
160
140
120
100
80
60
40
20
0

50

 

50

 

96

 

105

 

103

 

144

 

155

 

120

 

109

 

140

 

130

 
201220132014201520162017201820192020202122E-26E

Since 2012, we have replaced over 7,700 miles of distribution and transmission pipe.[2] As of December 31, 2020, we had approximately 6,700 miles of unprotected steel, which represents approximately 9 percent of our distribution pipeline.[3] All remaining cast-iron pipe was replaced in calendar year 2021.

[1] This reduction estimate is included in our goal to reduce methane emissions from our distribution system mains and service by 50% by 2035 from 2017.

[2] Estimated on a fiscal year basis.

[3] Estimated based upon 2020 Initial DOT Report.

Advanced Leak Detection

Atmos Energy surveys our 77,620 miles of distribution and transmission pipelines at rates and frequencies that meet and often exceed state and federal guidelines. In many of our more densely populated areas, transmission pipelines are visually surveyed twice per month and incorporate the use of aircraft, where appropriate, to look for oxygen-starved vegetation, right-of-way encroachment, erosion, landslides, and possible security threats. Our Mississippi and West Texas Divisions use aircraft to leak survey annually. Our Atmos Pipeline—Texas and Mid-Tex Divisions use aircraft to leak survey twice per year. Technicians leak survey all pipeline road crossings quarterly using the appropriate leak survey equipment. Atmos Energy also completes annual visual vegetation and leak surveys on all transmission pipelines using highly trained technicians that perform patrols.

Distribution mains located outside of business districts are surveyed at least as often as prescribed by federal and state regulations (with the maximum being five years) using the various technologies. For distribution pipelines located within business districts, a survey is required and completed at least annually. Our Mid-Tex and West Texas Divisions, both located in Texas, contain over 95 percent of our unprotected steel distribution pipe inventory. In these jurisdictions, we leak survey at intervals that are more frequent than the federal requirements. We survey coated steel pipe at least once every three years and bare steel at least once every two years. In Kansas, coated steel pipe and plastic pipe are surveyed at least once every three years, and bare steel is surveyed at least annually. For our other jurisdictions, we leak survey at least as often as state regulations prescribe. However, we evaluate performing leak surveys in accordance with the more stringent regulations of other states in our footprint.

At our compressor stations subject to the New Source Performance Standards in Title 40 Code of Federal Regulations Part 60, Subpart OOOOa, leak surveys are conducted quarterly using a Forward-Looking Infrared Camera (FLIR). Any detected leaks are repaired or logged for repair within 30 days of detection, or as soon as repair parts can be obtained. Repairs requiring a unit shutdown may be scheduled for the next scheduled shutdown for maintenance. Any component found to be leaking is checked using a soap and water test or FLIR camera within 30 days after it has been repaired. Annual reports summarizing the results of all leak surveys are submitted to state regulatory authorities.

Using Advanced Technologies

Our team applies innovative and state-of-the-art technology for leak detection, monitoring, and leak repair prioritization to enhance safety and to protect the environment. We regularly review advances in technology as they are brought into the market to determine if they will provide increased value to our leak detection and monitoring efforts.

One example is our Advanced Mobile Leak Detection (AMLD) technology that uses Cavity Ring-Down Spectroscopy (CRDS). The CRDS is 1,000 times more sensitive than legacy technologies. Atmos Energy operates 12 Advanced Mobile Leak Detection technology units in operations in our Texas and Louisiana distribution divisions. We are adding new units in Colorado and in Mississippi in 2022.

Additional technologies we use to detect leaks include:

  • Remote Methane Leak Detection (laser-based gas detector—RMLD)
  • Flame Ionization Detector (FID)
  • Combustible Gas Indicator (CGI)
  • Optical Methane Detector (OMD)
  • Forward-Looking Infrared Camera (FLIR)
  • Ultrasonic Gas Leak Detection (UGLD)
  • Gas Cloud Imaging Camera (GCI)

To conduct inspections and surveys of buried and above ground natural gas distribution and transmission pipelines and facilities, we use any combination of portable CRDS, FLIR, RMLD, FID, OMD, and CGI equipment utilizing mobile vehicles (aircraft or automobiles) and technicians (on foot). The equipment used is dependent upon several different criteria, including but not limited to safety, weather, instrument capabilities, location, application, and operating experience. We will continue to evaluate and expand the use of advanced leak detection technologies across the enterprise to increase the safety and reliability of our system and reduce methane leaks.

To monitor storage and compression facilities, Atmos Energy uses a variety of fixed and portable cameras and equipment to conduct inspections. In fiscal year 2021, we installed a GCI camera at our Tri-Cities storage and compression facility. The GCI camera pans and zooms to all areas of the site, providing 24/7 coverage. GCI technology uses imaging coupled with machine learning analytics to also determine the shape of a gas plume, which measures the concentration of a leak. Each gas has a unique emission or absorption signature in the long-wave infrared spectrum, known as the fingerprint region, which makes it possible for the GCI camera to differentiate between them. Its powerful imaging engine analyzes hyperspectral data from every pixel at a rate of 60 times per second to identify more than 50 gases, capturing a gas leak on video in the form of a visual cloud and illustrating the size and direction that the plume is moving. In fiscal year 2022, we plan to install similar technology at our other Atmos Pipeline—Texas storage facilities.

At our Lake Dallas storage and compression facility, we piloted UGLD technology that utilizes ultra-sensitive acoustic sensors to continuously monitor areas for ultrasound generated from the release of pressurized gas, and we installed FLIR cameras at our wellheads to continuously monitor for leaks. These technologies provide immediate leak warnings, enabling a rapid response and providing both safety and environmental benefits. We have initiated a plan to install similar systems at our other storage and compression facilities beginning in fiscal year 2022.

Best Practices to Reduce Venting

Recompression

We minimize methane emissions while conducting pipeline maintenance or replacement by using a variety of technologies, including utilization and drawdown via gas control, recompression, technologies that capture and transport natural gas into another pipeline, and flaring. In fiscal year 2021, we achieved a 98 percent carbon dioxide equivalent (CO2e) emissions reduction through our piloted recompression technologies on transmission and distribution pipeline projects, combined with flaring of residual methane, and avoided the venting of ~34 MMcf of gas (equivalent to over 15,000 metric tons of CO2e). We developed practices to utilize recompression technologies beginning in fiscal year 2022.

Zero Emissions Vacuum and Compressor (ZEVAC) Technology in Haltom City, Texas

Ken W., an Engineer 2 in our Mid-Tex Division provides a view into one of the relocations projects completed in 2021 using innovative ZEVAC (Zero Emission Vacuum and Compressor) technology. ZEVAC is used to extract gas from a pipeline being depressurized and then compress the gas back up to pipeline pressure so that it can reenter the system instead of venting to the atmosphere. See more about the project here.

Reduced Emissions Hydrostatic Testing Practices

As part of our commitment to reduce methane emissions, our APT and Mid-Tex Divisions recently completed five hydrostatic pipe testing projects using technology to avoid releasing natural gas into the atmosphere or flaring natural gas. After the gas is removed from the pipe and injected into the alternate Atmos Energy facility, any pipe anomalies or previous pipe repairs like weld sleeves and pipe clamps are cut out and replaced with new pipe. Then the pipe is filled with water and hydrostatically tested for a minimum of 8 hours, ensuring the pipe can safely and reliably carry natural gas. Each of the five projects requires at least a month to complete, including 7 to 10 days when natural gas is off the system in the section of pipe being tested.

These five hydro projects were a major win-win; this process is environmentally friendly and financially viable. We are greatly reducing the amount of natural gas that would be released into the atmosphere and the amount of natural gas lost, because it is transferred to another Atmos Energy facility. For these five projects, we transferred over 14,000 MCF into alternative pipe.

Terry T., Compliance Manager

Pneumatic Devices

One key focus area within our carbon reduction strategy is the pneumatic devices used in our distribution, transmission, and storage and compression operations. Most pneumatic devices are powered by natural gas, where electrical power or compressed air is not available, and are designed to vent, either intermittently or continuously. Continuous high-bleed devices are the greatest contributor to pneumatic device emissions. To minimize these emissions, we made a commitment to use bleed-free or low-bleed devices on all new and replacement natural gas pneumatic devices, unless a safety or functional need requires otherwise.

Additionally, in fiscal year 2021, Atmos Energy completed a comprehensive review of our inventory of over 4,000 pneumatic devices. In fiscal year 2022, we are initiating a program to replace high-bleed natural gas-driven pneumatic devices.

Compressor Packing Vent Monitoring

Reciprocating compressors are operationally necessary within the natural gas industry. Compressor rod packing systems leak small amounts of methane under normal operating conditions, and the leak rate increases with operating time. Atmos Energy has installed packing vent monitoring systems on 70 percent of our Atmos Pipeline—Texas reciprocating compression units to predict when maintenance is required to maintain a tight seal. This practice not only reduces methane emissions but also extends equipment life spans and improves operational efficiency. We anticipate the completion of our planned Atmos Pipeline—Texas packing vent monitoring system installations in fiscal year 2022.

Improving Fleet Energy Efficiency

Atmos Energy’s fleet of over 3,900 vehicles, ranging in size from SUV to heavy-duty truck, is a focus area of our comprehensive environmental and carbon reduction strategy. For operational sustainability, we maintain our fleet with resilience and flexibility in mind, and we rely upon proven technologies when pursuing more energy efficient fleet options. In fiscal year 2021, we developed a strategy to convert our fleet to more carbon-efficient vehicles as part of our normal replacement cycle and to use advanced technologies to improve fleet efficiency. This strategy will lead to greater fleet diversification and efficiency and will lower overall emissions.

Starting in fiscal year 2022, Atmos Energy is executing the fleet transition to incorporate more energy efficient technologies, such as compressed natural gas (CNG) and hybrid electric-gas (for SUVs and passenger trucks) vehicles. To support the fleet, we will be installing strategically located CNG refueling stations in Texas in fiscal year 2022.

Biodiversity and Land Use

Atmos Energy recognizes the value of nature, and we work to reduce our environmental impact in the areas where we operate. Before beginning a project, we conduct a comprehensive environmental review to understand our potential impact on water resources, state- and federal-listed species, habitat, and cultural resources. When a project is finished, we strive to leave the smallest possible footprint.

Atmos Energy’s greatest land use is associated with our pipelines. During project planning, Atmos Energy works to avoid or minimize environmental impacts by modifying the construction method (e.g., boring or horizontal directional drilling), location, timing, and/or scope. These planning efforts are made in accordance with applicable federal, state, and local laws and regulations, along with input from stakeholder regulatory agencies,[1] as appropriate based upon the project location and scope. When impacts to wetlands cannot be avoided, we mitigate project impacts by purchasing credits from wetland mitigation banks, in accordance with U.S. Army Corps of Engineers regulations and guidance.

In fiscal year 2021, during the early phases of a prominent transmission pipeline project in Texas, it was discovered that the project had the potential to disturb a bald eagle’s nest in a planned right-of-way (ROW). Although the bald eagle is no longer listed under the Endangered Species Act, it is protected under the Bald and Golden Eagle Protection Act (Eagle Act) and the Migratory Bird Treaty Act. To avoid disturbing the nest, we created an 800-foot buffer, using orange construction fencing and signs stating, “Environmentally Sensitive Area - Access Prohibited,” in English and Spanish. We also delayed construction in this section of the project for four months, until the nesting season ended, after which we used horizontal directional drilling to bore under the section of ROW containing the trees and nesting area to avoid disturbing the nest. To date, no indication of disturbance has occurred.

For construction projects with stormwater plans, sensitive habitat, or cultural resources, Atmos Energy provides oversight of the project during construction, monitoring environmental factors such as:

  • Sensitive habitat areas, including nesting sites
  • Cultural resources
  • Wetlands and water bodies
  • Proper handling of any spills
  • Stormwater pollution prevention
  • Restoration

Following completion of construction, Atmos Energy works to minimize our footprint, returning affected areas to their previous state, including restoration and seeding. Where possible, Atmos Energy revegetates the project area by planting native grass seeds, which provide habitat and erosion control. When appropriate, and with landowner approval, Atmos Energy uses a pollinator-specific seed mix to promote increased biodiversity value in the project area. Seed mixes are determined for each project location based upon guidance from the Natural Resources Conservation Service (NRCS) for that region. In early fiscal year 2022, Atmos Energy will plant ~425 acres of pollinator seed mix in designated areas on transmission pipeline ROWs to support pollinator restoration and to increase biodiversity value in the project areas.

Fish Habitat – Kentucky/Mid-States Division

Since 2015, employees in Kentucky have partnered with the Kentucky Department of Fish and Wildlife Resources to provide discarded piping for fish “trees” in lakes and reservoirs throughout the state. These artificial fish habitats are structures that provide shelter and sustain freshwater fish, providing places where they can spawn, feed, hide, and grow to maturity. Last year, the department used more than 21,000 feet of Atmos Energy pipe that would normally have been thrown away. Polyethylene pipe, ranging from ½-inch to 6-inch in diameter, was used to construct more than 900 fish habitat attractors.

After a fish “tree” is lowered into the water, GPS points are logged. Kentucky Fish and Wildlife’s web site features a page dedicated to lakes with fish attractors. It includes links to interactive maps for about 40 lakes across Kentucky. Each map displays the locations and includes the coordinates of these structures.

[1] Stakeholder federal agencies include U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service, and U.S. Environmental Protection Agency.

Facilities

Atmos Energy works to reduce our Scope 2 GHG emissions by improving the energy efficiency of our facilities and utilizing alternative energy sources. In order to facilitate this objective, we commenced a process in late fiscal year 2021 to enhance our monitoring of electricity consumption across all facilities. This system will enable us to more accurately assess our Scope 2 emissions from electricity usage and to identify additional opportunities to enhance efficiencies and reduce emissions.

Sustainable Facility Design

We have designed and built 15 LEED-certified[1] buildings with two more planned for completion in fiscal year 2022. Due to the sustainable design of our buildings, we have reduced our environmental footprint by approximately 541 metric tons of carbon dioxide, 4,868 grams of sulfur dioxide and 2,372 grams of nitrous oxide per year. Additionally, we estimate that our LEED-certified buildings reduce water usage by about 50 to 60 percent annually. Learn more about our LEED-certified buildings at our website.

Alternative Energy Sourcing

We currently source approximately 7.5 percent of total purchased electricity from renewables. Additionally, we installed our first onsite solar panels at our Fort Worth and Haslet offices and are evaluating other facilities for solar installation.

In late fiscal year 2021 we commenced installation of our first natural gas-powered fuel cell at one of our Dallas, Texas facilities. Fuel cells are efficient and reliable devices that generate electricity through an electrochemical reaction instead of combustion,[2] making them a more sustainable source of power. This unit was activated in early fiscal year 2022 and is expected to produce natural gas-driven, sustainable, low carbon power equivalent to approximately 25 percent of our Texas usage. Looking forward, we are evaluating installation of additional onsite generation (fuel cells and/or solar) at other Atmos Energy facilities, and we plan to utilize renewable natural gas in the fuel cell(s), further reducing our facility-related carbon emissions.

[1] LEED (Leadership in Energy and Environmental Design) certification is a globally recognized symbol of sustainability achievement and leadership, providing standards for “green” buildings. https://www.usgbc.org/leed

Gas Supply

Renewable Gas Supply

Renewable natural gas (RNG) is an affordable and reliable waste-derived fuel being used to fuel homes, businesses, and even vehicles. RNG lowers overall GHG emissions and is 100 percent compatible with existing natural gas supply. Most of the potential renewable gas resources come from the following feedstocks: landfill gas, animal manure, water resource recovery facilities, food waste, agricultural residues, forestry/forest product residues, energy crops, renewable electricity, and municipal solid waste.

RNG Transported
(Annual Bcf)
10
9
8
7
6
5
4
3
2
1
0

2.9

 

3.2

 

3.4

 

4.4

 

4.8

 

6.0

 

~8.0

 
2015201620172018201920202021

According to the EPA, municipal solid waste landfills are the third largest source of human-related methane emissions in the United States. Landfill gas producers capture and convert the emissions from landfills into a renewable energy source, thus preventing methane from migrating into the atmosphere.

RNG Coalition

In 2020, Atmos Energy joined the Coalition for Renewable Natural Gas (RNG Coalition), a non-profit organization dedicated to the sustainable development, deployment, and utilization of RNG as a key component and partial solution to addressing global climate change. The RNG Coalition’s Sustainable Methane Abatement & Recycling Timeline (SMART) is an initiative to capture and control methane produced from the 43,000+ aggregated organic waste sites in North America by 2050, achieving meaningful benchmarks by 2025, 2030, and 2040.

Energy Efficiency for Customers

Energy Efficiency Programs

The largest source of GHG emissions associated with our business is the end-use combustion of our natural gas product (Scope 3 emissions). Energy efficiency programs are the most impactful opportunity to reduce emissions, while maintaining customer choice, lowering energy bills, and reducing overall energy consumption. Based on an American Gas Foundation study, GHG emissions from U.S. residential natural gas use could be reduced by as much as 40 percent from 2020 to 2050 through the use of energy efficient emerging natural gas technologies, at about 10 percent of the cost of electrification.

At Atmos Energy, we continue to work on reducing our Scope 3 GHG emissions through energy efficiency programs that help our customers conserve energy, save money, and reduce their environmental impact. We currently offer conservation and energy efficiency programs in Louisiana, Mississippi, Colorado, and Mid-Tex divisions, with Louisiana being the latest authority to approve the program in early 2022. These programs, which are marketed as SmartChoice Rebates, provide financial incentives to purchase high-efficiency natural gas equipment and smart thermostats and install home weatherization upgrades, in addition to providing free energy-saving devices.

 

47,500
residential and commercial customers participated in energy efficiency programs

 

1.39
million therms of natural gas conserved

 

8,117
tons of CO2 emissions avoided annually

We are educating and encouraging all our customers on how to save money and lower emissions. We provide tips to reduce energy use and make available state resources for low-income home weatherization on our website, monthly bills, and social media channels.

Atmos Energy has partnered with Habitat for Humanity for 20 years to provide affordable housing and in September 2021, we completed the construction of our first Zero Net Energy (ZNE) home. The ZNE home uses high-efficiency natural gas appliances, rooftop solar panels, and innovative weatherization to produce more energy than it consumes at a very affordable cost for the homeowner. Learn more about this project here. This project and two more ZNE homes under construction in Texas demonstrate the role and value of natural gas in helping customers reduce their carbon footprint at home in an affordable manner while Fueling Safe and Thriving Communities. Similar projects are planned for other states.

E-Bill is Convenient and Green

Our customers are helping us make even more of a difference in environmental stewardship. Since the inception of our Electronic Billing (E-Bill) program, more than 48 percent of Atmos Energy customers have signed up for E-Bill. Additionally, electronic methods of payment such as bank draft, credit and debit card, and other forms of online banking have increased to 79 percent of payments received.

E-Bill has saved more than 15,000 trees, which equates to approximately 240 acres of forest land.

HIGHLIGHT STORY
Zero Emissions Vacuum and Compressor (ZEVAC) Technology in Haltom City, Texas

Atmos Energy is committed to reducing our carbon emissions from pipeline maintenance, including venting and flaring. In fiscal year 2021, we piloted and implemented technologies to capture and reinject natural gas when possible, including this pilot project that began in March 2021.

Haltom City, which is five miles northeast of Fort Worth, is upgrading its water drainage infrastructure, which requires lowering about 1,500 feet of a 16-inch steel high pressure distribution natural gas feeder line that supports Atmos Energy’s system in north Tarrant County. The Atmos Energy pipe could not be moved to another location because of limited right-of-way and existing utilities in the area.

To keep gas flowing to customers, a temporary 8-inch pipe was used to bypass the section of the 16-inch line in conflict. The gas from the isolated 16-inch line was injected into the system via a ZEVAC (Zero Emissions Vacuum and Compressor) machine. This compressor unit reduced gas at 385 pounds of pressure to 3 pounds of pressure from the isolated 16-inch pipe and injected it into the system.

The three-foot by five-foot ZEVAC unit is a pneumatic-powered vacuum on one side that suctions natural gas from pipe that needs to be depressurized. The other side of the ZEVAC unit compresses the gas back up to pipeline operating pressure and reinserts it into nearby transmission or distribution piping. The gas stays in the pipe and out of the atmosphere.

Engineer Ken Washington, who facilitated the project with Field Construction Coordinator Michael Scott, saw first-hand how the ZEVAC worked. Even though the pilot is a short-length piping project, Washington believes ZEVAC could be viable as a continued solution for reducing system emissions.

“As Atmos Energy continues to grow and develop, we are always preparing for the future,” he said. “One avenue we are evaluating is reducing the amount of gas released into the atmosphere. The ZEVAC machine showed us that we can successfully relocate and abandon gas pipelines without venting, which is beneficial for the environment and for Atmos Energy. The ZEVAC machine could be very viable in reducing emissions on future pipe replacement projects.”

HIGHLIGHT STORY
Fish Habitat – Kentucky/Mid-States Division

For more than five years, employees in Kentucky have partnered with the Kentucky Department of Fish and Wildlife Resources to provide discarded piping for fish “trees” in lakes and reservoirs throughout the state. These artificial fish habitats are structures that provide shelter and sustain freshwater fish, providing places where they can spawn, feed, hide, and grow to maturity. Last year, the department used more than 21,000 feet of Atmos Energy pipe that would normally have been thrown away. Polyethylene pipe, ranging from ½-inch to 6-inch in diameter, was used to construct more than 900 fish habitat attractors.

“In 2020, we placed fish habitat structures in lakes in Daviess, Edmonson, Grayson, and Ohio counties,” Northwest District Fisheries Biologist Jeremy Shiflet said. “And we have big plans for 2021, with another 171 structures totaling more than 10,000 feet of pipe already constructed. And that is just within our Northwest District. The Southwest District has been getting pipe in Bowling Green and the Western District has stayed in contact with Paducah and Princeton.”

After a fish “tree” is lowered into the water, GPS points are logged. Kentucky Fish and Wildlife’s web site features a page dedicated to lakes with fish attractors. It includes links to interactive maps for about 40 lakes across Kentucky. Each map displays the locations and includes the coordinates of these structures.

In constructing fish habitat “trees”, a large-width pipe forms the “trunk,” which can be anywhere from 6 to 8 feet tall. To attach smaller “limbs” to the trunk, a hole saw is used to drill small openings up and down the trunk. Shiflet’s crew uses pegs made from small-diameter gas pipe to hold the “limbs” in place. The 20-by-20-inch base is made from a wooden frame reinforced with rebar and filled with concrete. After the concrete sets, the base weighs approximately 120 pounds. Several “trees” are then placed on a trailer and hauled to a state-owned or state-managed lake, where they are loaded onto a work boat for deployment.

“Through this partnership, we are able to repurpose material that would otherwise be discarded, to create quality fish habitat in Kentucky,” Shiflet added. “It’s a win-win all around.”

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