Rice: Unleash LNG To Combat Climate Change, Improve Energy Security
The head of the largest natural gas production company in the country used a recent event in Pittsburgh to advocate strongly for his plan to “Unleash LNG” as a way to address climate change while also increasing energy security around the world.
Toby Rice, the CEO of EQT, which is based in Pittsburgh, told the audience that the plan is “incredibly feasible” but will need the cooperation of regulators to increase natural gas production on a huge scale and get the product to LNG facilities on the East Coast and Gulf Coast to be shipped overseas.
Natural gas can be compressed, liquefied, and shipped to countries that need energy sources. When burned, natural gas has only about half the CO2 emissions of coal, which is often used when other energy sources are not available or are more expensive. The Unleash LNG initiative was announced in March, around the same time as Russia invaded Ukraine and began using the Russian gas supply as a weapon against European countries, and Rice said that “what is going on in Ukraine amplifies the need for energy security.”
Rice made the argument that while the U.S. has lowered greenhouse-gas causing emissions by over 1 million tons, much of it by replacing coal with natural gas for power generation, global emissions are skyrocketing, primarily due to foreign use of coal, which is responsible for more than half of those emissions.
The U.S. recently became the largest LNG exporter in the world, shipping between 10-12 billion cubic feet (bcf) a day to other countries, with demand increasing due to the sharp reduction in Russian supply, but Rice said the U.S. has the potential to increase that supply by 50 bcf a day. “This is the largest green initiative in the world,” he said.
“Exports mean surplus,” Rice said, “and surplus means energy security and lower prices.” He said the U.S. is sitting on a massive amount of natural gas. “The robust production base we have in the U.S. is a geopolitical shield” insulating the country from volatile energy prices seen in Europe and providing “the biggest energy security blanket for us.”
Rice’s plan would add 50 drilling rigs a day to the approximately 700 now operating, and he said 35 bcf of natural gas a day would come from the Appalachian basin.
Calling Unleash LNG an energy transition plan, while work continues to scale up renewable energy sources including hydrogen, Rice said the plan is sustainable and makes financial sense with gas trading at about $6 per bcf, while production costs are about $2.30 per bcf.
“We can finance this ourselves. We’re not asking the government for a dime,” he said. “But we need cooperation to build more pipelines, build more LNG facilities, and do it faster than ever before.”
Pipeline construction has been a major problem for natural gas producers as environmental groups that want to end the use of fossil fuels have focused on challenging state and federal permits in the courts, slowing or stopping a number of projects. Without pipelines, producers can’t get the product to LNG export facilities on the coast. Producers have called on Congress to undertake to permit reform.
“Appalachia is the poster child for pipeline cancellation,” Rice said. “We are the biggest operator sitting on the biggest gasfield in the world and we can’t drill more. That’s crazy.”