A CEO's quest to make LNG a climate policy
EQT Corporation boss Toby Rice, whose company is the largest U.S. natural gas producer, hopes to win support for a gigantic expansion of exports to displace carbon-spewing coal plants abroad.
- "This is the biggest green initiative on the planet, hands down, full stop," he tells Axios in an interview Friday.
State of play: Rice, whose company's production is in Appalachia, has been busy promoting the proposal since March.
- One takeaway is that Rice says he's a realist. "People really don't understand how much energy is being used around the world, and when zero-carbon solutions like solar and wind cannot meet that demand, people around the world, they're going to use coal," he said.
- He points to rising coal-fired power generation and growing global emissions, even as renewables have soared. "We cannot just be looking at the ideal Nirvana solution."
And leaks of planet-warming methane in gas production and transport are a major problem.
Here are a few more takeaways:
EQT is getting an audience. Rice attended a mid-May meeting between Energy Secretary Jennifer Granholm and execs with American Exploration & Production Council members.
- LNG's potential to displace coal abroad was among the topics.
- "We've seen an increase dialogue with the administration, which is really amazing," Rice said, adding there's been "support and engagement" in Congress.
He wants help with permits, not money. "We've got to be able to build pipelines and LNG facilities faster than we've ever done it before. That's why we need the political support," he said, noting the proposal does not envision on public financing.
There are leaps of faith here too. Rice touts EQT's efforts to curb emissions, but industry-wide performance is uneven.
- Another problem is the potential that new pipelines and other infrastructure will lock in higher use for many decades. But Rice calls pipelines flexible.
- "We can be smart about the infrastructure that we build, and we can make sure that we build this pipeline infrastructure that is ready for the next transition in energy, which is making sure these pipelines are hydrogen-ready."
- The plan also promotes carbon capture taking hold in the power sector in the future.
By the numbers: A pitch deck unveiled in March calls for quadrupling U.S. LNG export capacity by 2030 to reach 55 billion cubic feet per day, alongside a 50% rise in domestic gas production.
The deck, which has been shared with the Biden administration, argues U.S. gas could replace around one-third of global coal use by 2030.
The role of renewables
Rice said renewables are not capable of being reliable energy providers. He cited their intermittency and the soaring costs of raw materials.
Driving the news: Instead, he pitched building more natural gas "peaker" power plants domestically that would kick in when the grid becomes strained.
Zoom in: Peaker plants are an environmental justice issue as many are located in poorer neighborhoods and are associated with higher burdens of pollution-related illnesses.
Between the lines: Rice's main goal is to use LNG to displace coal use abroad, but policymakers have different ideas of how to target coal.
The U.S. is part of a coalition of countries and institutions working to decarbonize South Africa's coal-dependent electricity sector, and there is talk of an upcoming rollout of a similar approach to Southeast Asia.
What he's saying: “People think that renewables are ready to carry the world. They're not,” Rice said.
- “The point is, the supply chains, the workforce, all of that to move us to a renewables-only future does not exist today. It's arguable if it's going to exist in the next 50 years,” Rice said.
Yes, but: In many areas, solar and wind power can be a cheaper source of electricity than natural gas.
- The Biden administration and private sector are pouring billions into developing renewable electricity sources as well as modernizing the electric grid to overcome intermittency challenges.
- Rice's proposal also runs counter to climate studies showing that dramatic cuts in fossil fuels, including natural gas, must occur in the near term to avert climate change's most damaging consequences.