We may be subject to physical and financial risk associated with climate change. As a result, we are looking for opportunities to further reduce emissions through strategic programs and initiatives.

EMISSIONS AND CLIMATE CHANGE

Through assessing climate risks and opportunities in relation to our business, we’ve identified greenhouse gas (GHG) emissions as a material area of focus.

In addition to developing and maintaining an emissions inventory according to current rules issued by the Environmental Protection Agency (EPA), our environmental and climate change actions focus on lowering the effect of our operations on the environment, including:

  • Improving the efficiency of our various pipelines, natural gas processing facilities and NGL fractionation facilities.
  • Evaluating opportunities and implementing, where necessary or practical, developing technologies for emissions control and the capture and transportation
    of carbon dioxide to prevent it from reaching the atmosphere.
  • In addition, many of our compressor station facilities are designed and operated with electric-driven compression units, which greatly reduce the potential emission from these facilities, including GHG emissions.

Physical and Financial Risk

Our customers’ energy needs vary with weather conditions, primarily temperature and humidity. For residential customers, heating and cooling represent their largest energy use. To the extent weather conditions may be affected by climate change, customers’ energy use could increase or decrease depending on the duration and magnitude of any changes. Increased energy use due to weather changes may require us to invest in more pipelines and other infrastructure to serve increased demand.

A decrease in energy use due to weather changes may affect our financial condition, through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions.

Weather conditions outside of our operating territory could also have an impact on our revenues. Severe weather impacts our operating territories primarily through hurricanes, thunderstorms, tornados and snow or ice storms. To the extent the frequency of extreme weather events increases, this could increase our cost of providing service. We may not be able to pass on the higher costs to our customers or recover all costs related to mitigating these physical risks.

To the extent financial markets view climate change and emissions of GHGs as a financial risk, this could affect negatively our ability to access capital markets or cause us to receive less favorable terms and conditions in future financings.

Our business could be affected by the potential for lawsuits against GHG emitters, based on links drawn between GHG emissions and climate change.

 

The CDP is an international organization that works with shareholders and corporations to disclose carbon emissions of voluntarily participating companies.

 

In 2014, ONEOK introduced the Agency Reportable Environmental Event Rate (AREER), an internal environmental metric that promotes continued reduction of releases and emission events reportable to a state or federal agency. AREER performance is an element of the short-term incentive program for all ONEOK employees.

Our 2018 reported AREER of 1.05 was better than the target of 1.11 and improved for the fifth consecutive year. We continue to set challenging but achievable targets to reduce the number of AREER events and our environmental impacts. We continue to look for ways to improve energy efficiency and manage our carbon emissions across our operating footprint, including implementing innovative technologies and undertaking projects to manage our operating emissions. Our 2019 AREER target is 0.95.

 

AREER is defined as the total number of releases and excess emission events that trigger a federal, state or local environmental reporting requirement (with some exceptions to account for events outside our control, planned maintenance and disparities in reporting requirements across our operations) per 200,000 work hours.

Continuing to build infrastructure to meet customer needs

ONEOK is the largest operator of midstream infrastructure in the Williston Basin, where we have significantly grown our natural gas gathering and processing presence over the past 10 years through the construction of new processing plants, compressor stations and gathering pipelines. We remain committed to serving our customers in this critical region, as further evidenced by the construction of the Demicks Lake I and Demicks Lake II plants, as well as the expansion of our Bear Creek plant, which will increase our processing capacity in the region by a combined 600 MMcf/d following their expected completion in the fourth quarter 2019, first quarter 2020 and first quarter 2021, respectively.

In addition, the southern section of the Elk Creek Pipeline that extends from the Powder River Basin in eastern Wyoming to ONEOK’s existing Mid-Continent NGL facilities was completed earlier in 2019 and is providing needed NGL transportation capacity to producers in the region. The remaining northern section is expected to be completed by the end of 2019.

These projects will play a critical role in helping to reduce natural gas currently flaring in North Dakota. We continue to work proactively with crude oil and natural gas producers in this area to forecast locations where midstream infrastructure may support additional natural gas capture and reduce flaring.

METHANE AND GHG REDUCTION PRACTICES AND TECHNOLOGIES

We use various minimization techniques to reduce emissions. These include minimizing blowdowns of compressors, installation of vapor recovery units (VRUs) on condensate tanks and at compression sites, flare installation and rod packing replacement programs.

We consistently look for ways to improve operating efficiency across our footprint, including identifying opportunities for consolidation and decommissioning of equipment. In 2018, ONEOK Field Services decommissioned four compressor units in Oklahoma, resulting in a reduction of associated emissions and potential future repair costs. Through these optimization projects, ONEOK Field Services reduced GHG emissions by 18,874 tons (CO2e) and combined criteria pollutants by 719 tons in 2018.

In southwest Kansas, we were able to shut down 19 compressor units in 2018 and save nearly 370 million cubic feet per day of fuel with little to no loss of volumes on our system.

Our use of various technology supports these efforts. This includes occasional use of optical gas imaging (OGI) cameras that rapidly scan large areas and pinpoint leaks in real time, which enables the fast detection of carbon emissions. For example, ONEOK uses OGI cameras during certain facility commissioning to identify leaks before startup, as part of our voluntary leak detection program and during routine repairs. Additionally, we use ultrasonic technology during facility commissioning to identify leaks before startup.

Photoionization detectors (PIDs) and flame ionization detectors (FIDs) also are used at a number of facilities, generally in conjunction with OGI cameras, to help detect the presence of a variety of gases—mainly volatile organic compounds.

Reducing Emissions Through Increased Vapor Recovery

We installed VRUs at several compressor stations across our Williston Basin operations designed to capture and route excess tank vapors to the compressor station. Though VRUs are not always required to comply with environmental permits, it is an accepted practice to achieve emissions reductions and cost effectiveness. By maximizing online time of stations and plants, we’re supporting reduced flaring in the region.

Greenhouse Gas Emissions

Based on 2018 EPA GHG reporting threshold levels, we reported emissions1 of approximately 63.9 million metric tons of carbon dioxide equivalents (CO2e)2.

 

As a midstream service provider, ONEOK gathers, transports, processes and stores hydrocarbon products and delivers those products into the marketplace.

The above chart represents scope 1, 2 and 3 emissions.

Scope 1 emissions are those that result from operating our midstream assets in order to provide services to our customers. Such operations include: natural gas combustion from running compressor engines and process heaters, plus methane and carbon dioxide that escape from operating equipment and venting and other processes common to natural gas systems. Our 2018 total facility-direct emissions were 3.2 million metric tons of CO2e.

Scope 2 emissions are indirect GHG emissions that occur from energy consumption, where the energy is generated by another entity. Examples are emissions associated with the generation of purchased electricity, steam, heat or cooling consumed. These emissions physically occur at the utility where the energy is being generated and would be considered scope 1 or direct emissions for the utility. Our 2018 scope 2 emissions were 2.6 million metric tons of CO2e.

The portions of scope 3 emissions reported would result from the complete combustion or oxidation of NGL products that ONEOK delivered to customers. These emissions are calculated using the annual volume of each fractionated product and multiplying it by an emission factor. Products covered under the rule are ethane, propane, butane, isobutane and natural gasoline. These emissions physically occur at customer facilities and would be considered scope 1 or direct emissions for the customer. Our 2018 total emissions supplied to customers were 58.1 million metric tons of CO2e.

The above chart represents the individual constituents of ONEOK’s scope 1 emissions. Scope 1 emissions include emissions that result from the combustion of fuel and methane and emissions vented to the atmosphere. Emission sources that vent to the atmosphere include fugitive components (valves, connectors, open-ended lines, flanges, relief valves and meters), compressors, acid gas treatment systems, blowdown vent stacks, dehydrator vents and storage tanks. The main source of scope 1 GHG emissions is from the combustion of natural gas from running compressor engines and process heaters.

Other emissions reported in 2018 include:

Criteria Pollutants: As part of our commitment to environmental sustainability and transparency, below are emissions data for nitrous oxides (NOx), sulfur oxides (SOx), hazardous air pollutants (HAPs) particulate matter-10 (PM10) and volatile organic compounds (VOCs) for all facilities required to report air emission inventories.

 2015201620172018
NOx10.811.410.79.6
SOx0.30.30.20.3
HAPs0.6780.5300.4290.429
PM100.3020.3160.1820.309
VOCs4.84.04.14.7

Reported in tons per year

esh
metrics

SAFETY STATISTICS20142015201620172018
Number of Employee Recordable Injuries31515231611
Number of Employee Recordable Illnesses420234
Total Injury Rate0.730.640.960.660.43
Total Illness Rate0.100.080.120.15
Number of DART Incidents5571883
DART Incident Rate0.240.30.750.330.12
Employee Fatalities00000
Total Recordable Incident Rate60.830.641.050.780.58
Number of Preventable Vehicle Incidents74141333029
Preventable Vehicle Incident Rate81.721.551.221.121.11
Large Projects Contractor
Safety Statistics
20172018
Number of Total Recordable Incidents134
Number of DART Incidents08
DART Incident Rate00.3
Total Recordable Incident Rate0.451.3
Near Misses91185
Good Catches10106503
Hours Worked~445,000~5,227,000

1 ONEOK’s operations do not result in the emitting of ozone-depleting substances into the atmosphere.

2 Carbon dioxide equivalent (CO2e) is a metric used to compare the emissions from various GHGs based on their global-warming potential. It is determined by multiplying the tons of a specific GHG by its associated global-warming potential.

3 Total number of work-related deaths and work-related injuries that result in one or more of the following: loss of consciousness, medically prescribed restriction of work or motion, transfer to another job, requirement of medical treatment beyond first-aid and away-from-work cases as defined by the Occupational Safety and Health Administration (OSHA).

4 Total number of work-related illnesses (e.g., carpal tunnel syndrome, hearing standard threshold shifts, chemical exposure, etc.) that result in one or more of the following: loss of consciousness, medically prescribed restriction of work or motion, transfer to another job, requirement of medical treatment beyond first-aid and away-from-work cases as defined by OSHA.

5 Days away, restricted or transferred incidents (DART) – Total number of lost workday injuries and illnesses as defined by OSHA. A lost workday is one in which (1) the employee is prevented from returning to work, (2) the employee is assigned to another job on a temporary basis, (3) the employee works less than full time or (4) the employee is not able to perform all job duties.

6 Total OSHA-recordable injuries and illnesses multiplied by 200,000 and divided by total employee work hours.

7 A preventable incident is one in which the driver failed to do everything reasonable to avoid the incident and could include: backing, hitting a fixed object, running into a vehicle ahead, striking a pedestrian, misjudging available clearance, not driving at a speed consistent with the existing conditions of the road, weather, traffic or sight distance.

8 Preventable Vehicle Incident Rate (PVIR) is the preventable vehicle incidents per 1 million miles driven.

9 Near Miss is defined as an unplanned event that did not result in injury, illness or damage, but had the potential to do so.

10 Good Catch is defined as the observation, and ultimately the recording, of a potential event.

11 An environmentally beneficial project undertaken voluntarily in exchange for mitigation of a portion of a penalty agreed to in settlement of issues of noncompliance or alleged noncompliance.

12 Total number of releases and excess emission events that trigger a federal, state or local environmental reporting requirement.

13 Agency Reportable Environmental Event Rate (AREER) is defined as the total number of releases and excess emission events that trigger a federal, state or local environmental-reporting requirement (with some exceptions to account for events outside our control, planned maintenance and disparity in reporting requirements across our operations) per 200,000 work-hours. In 2016, ONEOK modified the AREER to divide by work-hours instead of the number of capacity units, which was an asset-based denominator. This modification resulted in the metric being more consistent with other industry metrics such as the Total Recordable Incident Rate (TRIR) as defined by OSHA. The 2014 and 2015 AREER reported in this report differ from previous reports due to the modification.

14 Emissions reported according to Subpart C and Subpart W – General Stationary Fuel Combustion Sources and Petroleum and Natural Gas Systems, part of the Mandatory Greenhouse Gas Reporting Rule. Under Subpart C, direct emitting sources are stationary fuel combustion, sources including equipment or machinery that combusts fuel. Subpart W, a rule applied in 2011, requires us to report methane and CO2 that escapes from operating equipment, venting and other processes common to natural gas systems. On Oct 22, 2015, the EPA revised Subpart W to include two new industry segments for reporting year 2016. The revision adds emissions from inshore petroleum and natural gas gathering and boosting segment and transmission pipeline blowdowns. Facilities that emit 25,000 metric tons or more per year of GHGs under Subparts C and W combined are required to report under these rules.

15 Emissions reported according to Subpart NN – Suppliers of Natural Gas & Natural Gas Liquids, part of the Mandatory Greenhouse Gas Reporting Rule. Suppliers of certain products that would result in GHG emissions if released, combusted or oxidized are required to report under this rule. This calculation includes emission equivalents of NGLs fractionated.