Environmental and
Operational Sustainability

Comprehensive Environmental Strategy Supports a Lower Carbon Future

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

Natural gas is essential for meeting the nation’s energy demands and achieving 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% 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 2022, Atmos Energy continued to execute our 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.

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 oversees Atmos Energy’s operational sustainability practices and procedures. The CRS&S Committee is committed to the following:

  • Investing strategically in the enhancement of our environmental and operational sustainability
  • Monitoring 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
  • Considering 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 is comprised of five senior leaders responsible for the execution of company strategy as approved by the Board. The Committee meets regularly to actively monitor safety, operational and financial performance, compliance with policies, procedures, and ethical business practices, and implement strategy as directed by the Board.

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.

Fiscal year 2022 was the second in a multi-year program to implement TCFD recommendations. This past year, a team of senior leaders completed a materiality assessment process with input from internal and external stakeholders to enhance our understanding of current and potential ESG impacts. In identifying material topics across our enterprise, the team focused on those that align with our vision, principles, purpose, strategy, and geographic footprint. We also prioritized topics affecting customers, employees, communities, regulatory agencies, and other stakeholders in our operating regions. This assessment will support the continued implementation of meaningful sustainability practices and reporting capabilities.

Environmental Management

Our Vice President of Pipeline Safety provides strategic direction and plan oversight of our operational sustainability, environmental and compliance efforts. Our Director of Environmental Practices supports this effort, assisting with ongoing environmental stewardship programs. Our Division Presidents (who are also Corporate Officers) lead our operating divisions and 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.

Under the direction of our Vice President of Pipeline Safety, a cross-functional Emissions Reduction Team supported the Company’s operating divisions in executing the strategy in fiscal year 2022. The team is comprised of representatives from the safety, operations, technical services, engineering, environmental, compliance, legal, and business process and change management groups of our business, and its accomplishments included:

  • Supporting sustainable system modernization and emission reduction efforts, including:
    • Eliminating cast iron pipe from our systems
    • Replacing nearly 900 miles of pipe and approximately 24,500 steel services lines
    • Replacing over existing 200 high-bleed pneumatic devices with low- or no-bleed devices
    • Commencing a multi-year fleet conversion program towards gas/electric hybrid and compressed natural gas (CNG), including supporting infrastructure
    • Evaluating instrument air systems for storage and compression facilities
    • Continuing execution of our renewable natural gas (RNG) strategy
    • Developing and implementing our Smart Choice Carbon Offset Tariff
  • Developing and implementing plans to enhance our emissions monitoring systems, including:
    • Installing Gas Cloud Imaging monitoring systems at our APT storage and compression facilities
    • Developing a plan and began installation of advanced monitoring technologies at our other storage & compression facilities
    • Implementing an enterprise-wide electric utility bill processing system to support Scope 2 emissions quantification and monitoring
    • Implementing practices to monitor the effectiveness of our emissions reduction initiatives
  • Meeting periodically to review emissions reduction initiatives and confirm alignment with Atmos Energy’s vision, strategy, and culture
  • Reporting to the Management Committee and the CRS&S Committee on matters pertaining to the team's goals, activities, and achievements

Greenhouse Gas Reduction Initiatives

Atmos Energy’s comprehensive environmental strategy focuses 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
  • 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% from 2017 to 2035, as reported to the EPA in accordance with 40 CFR 98 Subpart W. This goal reflects the environmental benefit associated with system modernization efforts through the replacement of higher emitting pipeline materials with lower emitting pipe materials. As of calendar year end (CYE) 2022, we have achieved an approximate 20% reduction from CY2017[a].

[a] Restated to reflect supplemental pipe material and emissions inventory reports submitted to DOT PHMSA and EPA for the Colorado and Texas distribution systems.

50%
30
0

25.8[a]

 

20.7

 

12.9[a]

 
CY2017CY2022CY2035
(Projected)
estimated methane emissions, thousand metric tons

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 approximately 36% since 2017. The chart below illustrates this downward trend.

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

0.44%

0.39%

0.04%

 

0.37%

0.32%

0.05%

 

0.34%

0.31%

0.03%

 

0.34%

0.31%

0.03%

 

0.30%

0.29%

0.01%

 

0.28%

0.27%

0.01%

 
2017[b]2018[b]2019[b]2020[b]20212022
Distribution[c]
Transmission & Storage[d]

[a] Determined 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] Restated to reflect supplemental pipe material and emissions inventory reports submitted to DOT PHMSA and EPA for the Colorado and Texas distribution systems.

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

[d] 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.

EPA Methane Challenge

In support of our efforts to reduce methane emissions, in 2016, 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 making commitments to reduce methane emissions in their operations. In calendar year 2022, Atmos Energy extended our partnership with EPA’s Methane Challenge program to 2026 and increased our commitments to reduce methane emissions. In calendar years 2022—2026, we plan to replace at least 2% of unprotected steel mains in our distribution system, compared to a 2021 baseline. We also committed to replacing our unprotected steel service lines when replacing or rehabilitating their associated mains. Additionally, for our transmission and underground storage facilities, we committed to install continuous low-bleed or zero emission pneumatic controllers, unless there is a functional need to do otherwise.

ONE Future Coalition

In 2020, Atmos Energy has been a member of Our Nation’s Energy Future Coalition (ONE Future) since 2020. Our participation in ONE Future reflects our continued commitment to sustainable practices in our natural gas distribution, pipeline, and storage operations. ONE Future is a voluntary alliance of leading companies from across the natural gas supply chain focused on technology and policy solutions to drive continual improvement in reducing methane emissions.

ONE Future members work together to voluntarily reduce methane emissions across the natural gas value chain to 1% or less by 2025. Members also commit to measuring, reporting, and tracking key emissions in accordance with ONE Future protocols. In calendar year 2021, the most recent year where data is available, ONE Future members achieved a methane intensity rate of 0.462%, meaning members were 99.5% efficient in delivering energy from the source to end-use. This efficiency exceeds ONE Future’s goal by approximately 54% while safely and reliably delivering natural gas to customers.[1]

Atmos Energy participates in the Transmissions & Storage segment and the Distribution segment. These two ONE Future segments achieved a combined methane intensity of 0.202% against a goal of 0.526%, exceeding the goal by more than 60%.

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 specifically targets 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.

GTI Veritas

In 2022, Atmos Energy joined the Veritas Initiative, a methane emission measurement and verification initiative led by GTI Energy. Through the Veritas Initiative, dozens of industry, research, and environmental stakeholders collaborated in a transparent, science-based methane measurement protocol development process. The goal was to develop open-source technical protocols that provide companies and countries with a consistent approach to measuring and verifying methane emissions - enabling a credible, consistent, verifiable, and transparent methodology.

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. 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

19,156,648

18,221,973

724,494

210,181

 

23,111,445

22,162,879

678,012

270,554

 

23,275,516

22,338,819

668,832

267,865

 

21,226,530

20,347,277

629,496

249,757

 

21,415,802

206,60977

592,300

162,525

 

23,160,568

22,402,900

602,899

154,769

 
2017[a]2018[a]2019[a]2020[a]20212022
Customer End Use (Scope 3)
Distribution (Scope 1)
Transmission (Scope 1)

[a] Restated to reflect supplemental pipe material and emissions inventory reports submitted to DOT PHMSA and EPA for the Colorado and Texas distribution systems.


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 2017 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 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022
40 CFR 98 Subpart C[b] (Scope 1)
Central Compressor Station[c] 11,259 8,855 7,969 - - 0.21 0.17 0.15 - -
Cooper Compressor Station[c] 8,077 11,615 11,837 - - 0.16 0.22 0.22 - -
Groesbeck Compressor Station[d] - 32,971 36,076 34,136 30,753 - 0.62 0.68 0.64 0.58
Howard Compressor Station 40,478 57,696 65,332 64,106 59,911 0.76 1.10 1.23 1.21 1.12
Maryneal Compressor Station[d] - 36,504 35,690 31,426 32,943 - 0.69 0.67 0.59 0.62
Total 59,814 147,641 156,905 129,668 123,607 1.13 2.80 2.95 2.44 2.32
40 CFR 98 Subpart W[e] (Scope 1)
Atmos Pipeline—Texas 204,568 112,132 84,078 27,231 21,465 8,161.42 4,473.61 3,354.35 1,086.40 856.37
Central Compressor Station[c] 1,033 2,458 2,660 - - 41.28 98.20 106.27 - -
Cooper Compressor Station[c] 1,116 1,158 2,179 - - 44.59 46.26 87.08 - -
Groesbeck Compressor Station[d] - 1,100 1,468 2,418 2,287 - 43.94 58.66 96.61 91.38
Howard Compressor Station 4,023 2,524 1,743 2,694 6,620 160.75 100.86 69.66 107.64 264.53
Maryneal Compressor Station[d] - 852 723 513 790 - 34.06 28.87 20.51 31.55
Total 210,740 120,224 92,852 32,857 31,162 8,408.04 4,796.93 3,704.89 1,311.2 1,243.8
Transmission Total Emissions 270,554 267,865 249,757 162,525 154,769 8,409.17 4,799.73 3,707.84 1,313.6 1,246.2

[a] As 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 these facilities in CY2017. Each facility emitted less than the reporting threshold of 25,000 MT/yr CO2e for 5 consecutive years and discontinued reporting in CY2021.

[d] These facilities emitted less than the reporting threshold of 25,000 MT CO2e in calendar year 2018.

[e] Emissions from transmission system operations are calculated in accordance with 40 CFR 98 Subpart 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 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 
40 CFR 98 Subpart W[b] (Scope 1)
Colorado 24,624[c] 24,759[c] 24,340[c] 22,833 23,800 983.76[c] 989.18[c] 972.41[c] 912.22 950.84
Kansas 22,122 23,138 24,108 23,303 23,232 883.80 924.39 963.16 930.99 928.17
Kentucky 27,370 27,025 25,479 24,440 23,443 1,093.49 1,079.70 1,017.93 976.41 936.60
Louisiana 51,350 51,809 50,207 50,292 58,355 2,051.51 2,069.86 2,005.87 2,009.26 2,151.61
Mississippi 50,848 47,282 47,971 56,268 65,173 2,031.45 1,889.02 1,916.51 2,248.01 2,603.79
Tennessee 17,402 17,259 17,577 17,833 18,081 695.24 689.51 702.22 712.45 722.38
Texas 481,623[c] 474,905[c] 437,153[c] 394,677 388,144 19,241.76[c] 18,973.31[c] 17,465.05[c] 15,768.09 15,507.07
Virginia 2,673 2,656 2,663 2,654 2,670 106.80 106.10 106.38 106.05 106.69
Total 678,011[c] 668,832[c] 629,496[c] 592,300 602,899 27,087.8[c] 26,721.1[c] 25,149.5[c] 23,663.5 23,907.2
Mains and Services Only 602,110[c] 580,364[c] 554,727[c] 516,864 467,823 24,055.5[c] 23,186.6[c] 22,162.4[c] 20,649.7 20,707.6

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

[b] Emissions from Natural Gas Distribution Systems are calculated in accordance with 40 CFR Part 98, Subpart W, using leak surveys, conducted on a five-year cycle, and population counts, per §98.232, §98.236(q and r).

[c] Restated to reflect supplemental pipe material and emissions inventory reports submitted to DOT PHMSA and EPA for the Colorado and Texas distribution systems.

Customer End Use GHG Emissions[a]

  Total GHG Emissions (MT CO2e)
Subpart/Reporting Entity 2018 2019 2020 2021 2022
40 CFR 98 Subpart NN[b] (Scope 3)
Colorado 810,451 882,564 847,382 839,876 914,469
Kansas 1,108,591 1,123,925 1,063,096 1,072,532 1,194,159
Kentucky 1,794,183 1,689,002 1,605,128 1,640,692 1,769,431
Louisiana 1,670,323 1,652,123 1,493,260 1,483,247 1,646,606
Mississippi 1,759,322 1,710,260 1,582,817 1,648,876 1,753,945
Tennessee 1,238,954 1,244,215 1,192,469 1,220,450 1,311,642
Texas 13,406,356 13,548,219 12,236,319 12,430,902 13,459,109
Virginia 374,699 488,511 326,806 324,403 353,539
Total 22,162,879 22,338,819 20,347,277 20,660,977 22,402,900

[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  2018 2019 2020 2021 2022
Carbon Monoxide (CO) 138.15 87.39 87.72 105.57 89.31
Oxides of Nitrogen (NOx) 143.51 109.26 115.37 115.93 128.04
Particulate Matter (PM) 9.97 9.09 10.65 12.16 9.69
Sulfur Dioxide (SO2) 0.69 0.73 0.75 0.74 0.65
Volatile Organic Compounds (VOC) 71.97 44.72 50.18 54.25 48.72

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 natural gas distribution, transmission, and underground storage systems. As well as our business and our processes. These projects and initiatives improve the safety and reliability of our infrastructure, reduce methane emissions, and improve our customer service and efficiency.

 

Including investments in new technology, Atmos Energy allocates more than 88% 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 2022, we replaced nearly 900 miles of distribution and transmission pipe (~1.1% of our total system) and approximately 24,500 steel service lines (~3.5% reduction). Over the next five years, we plan to replace between 4,000 and 5,000 miles of distribution and transmission pipe and between 120,000 and 170,000 steel service lines.[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

 

715

366

349

 

850

450

400

 
2012201320142015201620172018201920202021202223E-27E
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

 

158

 

130

 
2012201320142015201620172018201920202021202222E-26E

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 protect the environment. We regularly review technological advances 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 our Texas and Louisiana distribution divisions.We added new units in Colorado and Mississippi in 2022, and a new unit in Tennessee in 2023.

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 2022, we completed the installation of GCI cameras at all our APT storage and compression facilities. The GCI camera pans and zooms to all areas of the site, providing 24/7 coverage. GCI technology also uses imaging coupled with machine learning analytics to 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.

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. In fiscal year 2022, we began a multi-year process to install similar detection and monitoring systems at our other storage and compression facilities.

Recompression

In fiscal year 2022, we implemented practices to reduce venting associated with pipeline maintenance activities by using drawdown via gas control and recompression technologies that capture and transport natural gas into another pipeline. In fiscal year 2022, these practices enabled 67 projects to achieve over 90% savings, capturing approximately 294 MMcf of gas, which is equivalent to over 132,000 metric tons of CO2e when compared to venting.

Pneumatic Devices

One key focus area within our carbon reduction strategy is the pneumatic devices used in distribution, transmission, storage, and compression operations. Most pneumatic devices are powered by natural gas, where electrical power or compressed air is unavailable, and are designed to vent intermittently or continuously. Continuous high-bleed devices are the greatest contributor to pneumatic device emissions. To minimize these emissions, we committed 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.

[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.

Improving Fleet Energy Efficiency

Atmos Energy’s fleet of over 3,900 vehicles, ranging in size from sport utility vehicles (SUVs) to heavy-duty trucks, 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 multi-year strategy to convert our fleet to hybrid-electric gas vehicles for our service and other light-duty vehicles and to compressed natural gas for our heavy-duty vehicles as part of our normal replacement cycle. This strategy will lead to greater fleet diversification and efficiency and reduce overall emissions. 

In fiscal year 2022, we began transitioning our fleet to incorporate more efficient technologies, such as CNG and hybrid electric gas (for SUVs and passenger trucks) vehicles. In fiscal year 2022, we took delivery of hybrid-light duty trucks for the first time. We commissioned our first CNG refueling station in Texas to support the fleet in late calendar year 2022. In fiscal year 2023, we expect to commission a second CNG refueling station and anticipate expanding these operations in fiscal year 2024 as a key part of our overall fleet emissions reduction strategy.

Biodiversity and Land Use

Atmos Energy recognizes the value of protecting the natural environment, and we work to minimize our 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. We strive to leave the smallest possible footprint when a project is finished.

Atmos Energy’s greatest land use is associated with our underground pipeline networks. We work to avoid or minimize impacts during project planning by modifying our construction method (e.g., boring or horizontal directional drilling), location, timing, and/or scope based on our environmental review. 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.

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 waterbodies
  • 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, we revegetate 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 on guidance from the Natural Resources Conservation Service (NRCS) for that region.

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

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. In fiscal year 2022, this project received a Conservation Certification® from the Wildlife Habitat Council. The Fish Habitats recently won the Southern Gas Association's 2023 Environmental, Social & Governance Award!

Texas Trees Foundation

On November 11, Atmos Energy employees and their families volunteered at the 2022 Branching Out tree-planting, an event at William Blair, Jr. Park in South Dallas that was co-sponsored by the Texas Trees Foundation and Dallas Parks & Recreation. Atmos Energy’s partnership with the Texas Tree Foundation was further highlighted in 2022 when we partnered with the City of Fort Worth on the city’s announcement of an Urban Forestry Master Plan. Atmos Energy’s sponsorship helps identify priority planting and preservation areas, reassess the citywide tree canopy, and make recommendations to the Urban Forestry Ordinance.

Our partnership with the Texas Trees Foundation and the City of Fort Worth aligns with Atmos Energy’s commitment to fueling safe and thriving communities by investing in a safe and healthy environment for all. We are committed to helping the City of Fort Worth thrive and create a strategic roadmap for sustainable and safe forestry management, and we are honored to help sponsor the development of this historic urban forest plan.

Chris Felan, Vice President Rates and Regulatory Affairs

In March, Atmos Energy sponsored Tennessee Tree Day, an annual event organized by the Tennessee Environmental Council. This year, 149 volunteer pick-up sites distributed more than 100,000 trees to 8,200 participants, and more than 20,000 volunteers planted them statewide.

We are proud to partner with Tennessee Environmental Council to enhance our neighborhoods, and this partnership is another illustration of our commitment to improving the quality of life in the communities we call home.

Christina Christiansen, Manager of Public Affairs

Facilities

Atmos Energy works to reduce its Scope 2 GHG emissions by improving the energy efficiency of our facilities and utilizing alternative energy sources. To facilitate this objective, we implemented a process during fiscal year 2022 to enhance our monitoring of electricity consumption across all facilities. This system will enable us to assess our Scope 2 emissions from electricity usage more accurately 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 three more certifications currently pending and two more buildings under development. The sustainable design of these buildings helps us avoid annual emissions of approximately 843 metric tons of carbon dioxide, 6.9 kg of sulfur dioxide, and 3.2 kg of nitrous oxide. Additionally, we estimate that our LEED-certified buildings reduce water usage by about 50 to 60% annually.

Alternative Energy Sourcing

We currently source approximately 5% of total purchased electricity from renewables. Additionally, we installed our first onsite solar panels at our Fort Worth and Haslet offices. We are in the process of evaluating other facilities for solar installation.

In fiscal year 2022, we installed 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 power source. We anticipate the unit will replace approximately 15% of our Texas electrical usage with natural gas-driven, sustainable, low-carbon power. Looking forward, we are evaluating the installation of additional onsite generation (fuel cells and/or solar) at other Atmos Energy facilities. 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

RNG is an affordable and reliable waste-derived fuel used to fuel homes, businesses, and even vehicles. RNG lowers overall GHG emissions and is 100% 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

 

6.5

 

7.5

 
20152016201720182019202020212022

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.

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% from 2020 to 2050 through the use of energy efficient emerging natural gas technologies, at about 10% 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 are marketed as SmartChoice Rebates and provide financial incentives to purchase high-efficiency natural gas equipment and smart thermostats, install home weatherization upgrades, in addition to providing free energy-saving devices.

 

57,149
residential and commercial customers participated in energy efficiency programs

 

1.98
million therms of natural gas conserved

 

11,625
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.

Achieving Zero Net Energy with Natural Gas

Atmos Energy partnered with Lubbock Habitat for Humanity to construct three Zero Net Energy homes during a 12-day Blitz Build that began on Labor Day weekend. This one-of-a-kind homebuilding event was made possible by hundreds of volunteers including more than 50 Atmos Energy employees.

Zero Net Energy (ZNE) homes are designed to produce as much energy as they consume at an affordable cost to the homeowner, through the use of high-efficiency Energy Star natural gas appliances, rooftop solar panels, and high-performance building materials. In fiscal year 2021, we completed our first ZNE home project in Colorado. The momentum from that exciting project continued in fiscal year 2022, with the completion of six new ZNE homes in Texas, Mississippi, and Kentucky.

These ZNE projects are part of a 20-year partnership with Habitat for Humanity to provide affordable, energy-efficient housing. The families that received these homes now enjoy energy-efficient homes with the value and comfort of natural gas with significantly reduced greenhouse gas emissions and more affordable energy bills.

Our partnership with Habitat for Humanity to design and build these homes has been particularly gratifying because it demonstrates that zero net energy is achievable with natural gas—in real homes that are benefiting real homeowners.

Darwin Stamport, Vice President of Marketing, Mid-Tex Division

In addition to the eight completed ZNE homes across our service footprint, four homes are in the design or construction phase in Kansas, Louisiana, Tennessee, and Virginia, further demonstrating the important role of natural gas in our lower carbon energy future while showcasing our commitment to Fueling Safe and Thriving Communities.

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 50% of Atmos Energy customers have signed up for E-Bill. Additionally, electronic payment methods such as bank draft, credit and debit cards, and other forms of online banking have increased to 79% of payments received. Overall, E-Bill has saved more than 16,330 trees, which equates to approximately 240 acres of forestland.

HIGHLIGHT STORY
Colorado Commercial Custom Energy Efficiency Incentive Program Eaton School District

Four years ago, voters in Eaton, Colorado approved a $128 million construction bond to build a new high school and remodel the elementary and middle schools. Recognizing this as an opportunity to reduce GHG emissions and save on the cost and use of natural gas, the Eaton School District designed all three buildings to incorporate advanced energy efficiency measures. The school district also leveraged Atmos Energy’s incentive program for energy-efficient construction, which provided incentives totaling $48,500 to complete the three projects.

The new high school was built from the ground up, which represented the best opportunity to incorporate innovative solutions like high-efficiency boilers and hot water equipment, advanced boiler controls, demand-controlled ventilation, and destratification fans. Meanwhile, the existing Eaton Middle School and Eaton High School were retrofitted to serve as the town’s new elementary and middle schools, respectively. Those projects included updating the buildings’ heating systems and installing destratification fans in their gymnasiums to improve occupant comfort and prevent heat loss through the roof.

The three projects are estimated to reduce annual GHG emissions by 462 metric tons of carbon dioxide, 8.7 kg of methane, and 0.9 kg of nitrogen oxide. Just as importantly, the Eaton School District expects to save more than 87,000 therms per year in natural gas usage, which equates to annual savings of over $150,000 on their natural gas bill.

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