Continuing on about Diversified Energy, after the House Committee letter winds up its grievances, it moves to the information request to which a response was required by January 3, 2024. There are nine categories of information sought:
- Documents demonstrating how the company’s “Smarter Asset Management” program is implemented and its effects;
- Details concerning and supporting the company’s statement that Diversified Energy employees visit wells once a month on average;
- Whether the company “use[s] continuous methane monitoring systems or devices to detect methane leaks from its wells, gathering lines, transportation infrastructure, compressor stations, or any other production, transportation, or storage infrastructure owned or operated by the company?” If so, additional information is requested;
- An explanation of the standards Diversified Energy follows for plugging unproductive wells and cleaning up well sites, and whether methane leak monitoring is conducted after plugging;
- The analysis that Diversified Energy conducted to estimate its Scope 1 methane emissions in the company’s 2022 Sustainability Report;
- For the approximately 9,800 surveyed wells that Diversified Energy found to have detectable methane emissions, information about the surveys and methane monitoring conducted;
- A detailed description of Diversified Energy’s analysis and recalculation of the environmental liabilities acquired in the CNX Resources transaction;
- Production, maintenance, and emissions information for marginal wells acquired from EQT Corporation in July 2018; and
- A detailed description of the methodology used to estimate the remediation costs of wells covered by the West Virginia Department of Environmental Protection contracts with your subsidiary, Next LVL Energy.
This is no small information request and in some ways goes beyond the well closure plan requirements in section 60.5397b(l) of the new methane rule. We’ll continue to monitor this matter, but other exploration/production companies should take this inquiry as a warning, a potential roadmap for upcoming well closure plan disclosure, and another indicator that U.S. regulators are increasingly scrutinizing unregulated/voluntary climate reporting.
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Disclaimer: I do not directly own stock in any companies discussed above.
Photo credit: Timon – stock.adobe.com
