Episode summary
How Natural Gas Drillers Are Scaling Up To Meet AI Energy Demand | Bloomberg Businessweek
Bloomberg Businessweek Daily
· · 11 min · Hosts: Carol Massar, Tim Stenovec · Guests: Toby Rice
Summary
EQT’s Toby Rice argued that the company’s $12.8 billion all-stock purchase of Range Resources is meant to make EQT the biggest U.S. natural gas producer and strengthen its position as demand rises from AI and power generation. He said the deal expands EQT’s asset base, improves its scale, and helps it supply what he called the most affordable, reliable, and cleanest energy to customers.
Rice framed permit reform as the key policy issue after the midterm elections. He said politics should not determine energy outcomes and argued that faster permitting would let market forces work, expand infrastructure, and help lower electricity bills, especially as data centers and other AI infrastructure increase power demand.
On demand, Rice said EQT sees calls that could support more than 25 BCF a day of natural gas demand in Appalachia, with about half tied to power generation. He said current project timing suggests the real buildout starts around 2028, so producers are trying to secure positions now. He also said EQT’s low-cost structure lets it break even below $2 gas, reducing downside risk while keeping upside exposure.
Key takeaways
- Toby Rice said EQT’s $12.8 billion Range Resources acquisition is aimed at making EQT America’s “undisputed natural gas champion.”
- Rice said EQT sees demand calls for over 25 BCF a day in Appalachia, though he expects only part of that to be built.
- Rice argued permit reform would let market forces expand energy supply and help lower U.S. electricity bills.
- Rice said EQT can break even below $2 natural gas, which he said reduces downside risk for investors.
- Rice said the biggest AI-related gas demand will likely begin showing up in 2028 and beyond.
Notable quotes
“this really is going to position EQT as America's undisputed natural gas champion”
“We need permit reform to take place. That's why we're here in DC. We've been talking about this for the last 5 years”
“We have a cost structure now that can break even with a natural gas price below $2”
How the episode opens
Bloomberg Audio Studios podcasts radio news. — You're listening to Bloomberg Business Week with Carol Masser and Tim Stenc on Bloomberg Radio. — Let's talk about natural gas. Futures ended higher for a third consecutive session. Forecast shifted to show colder weather across the eastern US later this month.
Colder outlooks of course indicate higher demand for the furnace fuel as the winter heating season gets underway. Yeah, we're feeling it. It's starting to get a little bit chillier here, certainly in the New York City metro area. Toby Rice is president and CEO of EQT, the nearly $ 32 billion market cap vert vertically integrated energy company. Um, delighted to have him back with us. Toby, good to have you here with Tim and me.
Hey, Toby's down in DC, usually here in the studio. We're glad to have you wherever you are, Toby. Listen, a lot has changed since we spoke to you back in September. Just a couple of weeks ago, you agreed to buy rival shell driller Range Resources, an all stock deal for 12.8 8 billion. It'll create the largest US natural gas producer. What are you hoping to do with this big transaction?
We're incredibly excited about the opportunity to bolt on Range's highquality asset base to EQT's fantastic natural gas platform that we built. You know, this really is going to position EQT as America's undisputed natural gas champion. And what this is going to allow us to do, it's going to allow us to continue to provide the most affordable, most reliable, cleanest energy to our customers.
And when you step back and you look at this massive demand setup there is for natural gas, whether you're talking about providing energy security to the world or powering this AI revolution that's taking place, EQT is going to be positioned to deliver the energy that America needs to to run.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai energy demand
- natural gas drilling
- energy infrastructure
- industry outlook
- midterm election aftermath
Companies and tickers mentioned
- EQT
- EQT
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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