IFRS Foundation

Oil & Gas – Midstream

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Current language: English
Oil & Gas - Midstream industry entities transport or store natural gas, crude oil and refined petroleum products. Midstream natural gas activities involve gathering, transporting and processing natural gas from the wellhead, such as the removal of impurities, production of natural gas liquids, storage, pipeline transport and shipping, liquefaction, or regasification of liquefied natural gas. Midstream oil activities mainly involve transporting crude oil and refined products using pipeline networks, truck and rail, and marine transport on tankers or barges. Entities that operate storage and distribution terminals, as well as those that manufacture and install storage tanks and pipelines, are also part of this industry.

Relevant Issues (5 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for: Oil & Gas – Midstream

GHG Emissions
  • Greenhouse Gas Emissions

    The midstream industry generates significant greenhouse gases and other air emissions from compressor engine exhausts, oil and condensate tank vents, natural gas processing, and fugitive emissions, in addition to emissions from mobile sources. GHG emissions contribute to climate change and create incremental regulatory compliance costs and risks for midstream entities. At the same time, the management of methane fugitive emissions has emerged as a significant operational, reputational and regulatory risk. Financial effects on entities will vary depending on the specific location of operations and prevailing emissions regulations, and they include increased operating or capital expenditures and regulatory or legal penalties. Entities that capture and monetise emissions, or cost-effectively reduce emissions by implementing innovative monitoring and mitigation efforts and fuel efficiency measures, may enjoy substantial financial benefits. Entities can reduce regulatory risks and realise operational efficiencies as regulatory and public concerns about air quality and climate change increase.
Air Quality
  • Air Quality

    Air emissions from midstream entities include hazardous air pollutants, criteria air pollutants, and volatile organic compounds (VOCs), which can have significant, localised human health and environmental impacts.  Of particular concern are sulphur dioxide, nitrogen dioxide, and VOC emissions. The financial impacts on entities from air emissions will vary depending on the specific locations of operations and the prevailing air emissions regulations.  Active management of the issue—through technological and process improvements—could allow entities to limit the impact of regulations in an environment of increasing regulatory and public concerns about air quality. Entities could benefit from operational efficiencies that could lead to a lower cost structure over time.
Ecological Impacts
  • Ecological Impacts

    The storage and transport of crude oil, natural gas, and related products through a vast system of maritime transportation vehicles, pipelines, trains, and trucks presents considerable risk to the environment and to local communities. Leaks, accidental discharges, pipeline rights-of-way, and open easements over ecologically sensitive land could impact ecosystems in several ways, including natural habitat loss and changes in species movement. Regulatory agencies, supported by legislation that protects endangered species and ecologically sensitive areas, require plans to mitigate or remediate negative ecological impacts prior to project approval. Together with regulatory compliance costs, these can require significant capital and operational expenditures. As concerns over ecological impacts grow, entities could face the risk that additional areas are designated as protected areas under new or existing laws. Entities that prevent and proactively manage ecological impacts can avoid project delays, remediation, and litigation liabilities, and gain easier access to new projects and sources of revenue.
Competitive Behavior
  • Competitive Behaviour

    Entities that own natural gas pipelines and storage facilities face numerous and constantly changing regulations from the Federal Energy Regulatory Commission (FERC) in all aspects of their operations, including rates charged, access offered to pipelines, and siting and construction of new facilities. Pipeline entities enjoy a natural monopoly, and FERC regulations ensure that entities do not abuse this position through unfair pricing, discriminatory service, or by other means. Due to concerns about the impacts of oil and gas market distortions on American consumers and businesses, new market manipulation regulations issued by the Federal Trade Commission or the Commodity Futures Trading Commission could also affect the Midstream industry. Entities could be affected by prospective rate changes, compensation payments, or regulatory penalties for violating regulations governing competitive behaviour. Midstream entities face uncertainty in relation to their ability to change the rates charged, which could affect their ability to recover higher costs.
Critical Incident Risk Management
  • Operational Safety, Emergency Preparedness & Response

    Midstream entities operate a vast network of assets that face risks of spills and accidents. Any incident that results in the unintended releases of hydrocarbons could have wide-ranging impacts on the environment, employees, and local communities. As a result of these concerns, new safety regulations related to pipeline and rail operations are emerging. Significant events could create one-time costs from fines and corrective actions and contingent liabilities for remediation or damages in lawsuits. These factors could also erode an entity’s social license to operate. In order to avoid or minimise such risks, investigations of past incidents show that it is extremely important to develop a strong safety culture, and establish a thorough and systematic approach to safety and risk management. This includes emergency preparedness and response and operational integrity across the entity and in relationships with contractors.

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Current Industry: Oil & Gas – Midstream

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