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America’s Big Natural-Gas Footprint Is About to Get Even Bigger
Drillers are looking ahead to new export hubs and easier regulations under the coming Trump presidency
By David Uberti, WSJ
Dec. 26, 2024 5:30 am ET
Toby Rice, who leads one of America’s largest natural-gas producers, says the “Drill, Baby, Drill” mantra that resurfaced during the presidential campaign is passé. Now, it is all about “Build, Baby, Build.”
Natural-gas investors are looking ahead to potential growth after a year in which historically low prices dinged profits and drilling plans. At the same time, the Biden administration questioned the benefits of making the U.S. liquefied-natural-gas-export machine—the world’s biggest—even bigger.
As climate advocates have increasingly warned of planet-warming emissions, President Biden has ramped up environmental rules and directed unprecedented sums into clean energy, rarely discussing record oil-and-gas output.
Now, with President-elect Donald Trump set to take office, climate concerns are out. New LNG hubs are slated to come online. The White House-in-waiting has promised to fast-track future infrastructure that could help gas companies funnel fuel to new buyers at home or abroad—potentially locking in another era of development.
“Political force has overwhelmed market forces,” said Rice, chief executive of Pittsburgh-based EQT, which produces gobs of gas in the Marcellus Shale stretching across Appalachia. “Let market forces work.”
The U.S. natural-gas market has been constrained in recent years by public aversion to new pipelines and an arduous permitting process that Washington has tried and failed to overhaul. Rice, who recently visited Capitol Hill to talk up natural gas, says this Congress could be different.
But Wall Street is betting that more immediate change under Trump will be better prospects for future LNG facilities, where skyscraper-size tankers load up on supercooled supplies en route to power plants and factories abroad.
Already the world’s largest LNG exporter, the U.S. is set to debut projects that are expected to begin to ship gas in earnest next year, with more scheduled to open by 2028. Trump has pledged to support additional projects beyond then.
Biden’s Energy Department warned this month that “unfettered exports” would boost global emissions, increase market volatility and push up domestic wholesale prices 31% by 2050. But some other analysts, as well as Rice, dispute the ultimate cost impact on households.
“When you say prices are going up, well, that’s because we’ve had historic low natural-gas prices,” said Rice, whose company was among those that curbed drilling in response to languishing prices over the past two years.
For an industry with a long history of overdrilling into painful busts, the longer-term threat now might be overbuilding export facilities in the face of a potential global glut. Energy Secretary Jennifer Granholm warned in a statement on her agency’s study that projects “that have already been approved will be more than sufficient to meet global demand for U.S. LNG for decades to come.”
Rice doesn’t buy it. In his view, American LNG is well-suited to replace the Russian gas that Europe still imports. Ditto for the record-setting amounts of coal still burned to power China, India and the rest of the world.
“We still have global emissions that are skyrocketing,” Rice said, adding that his recent meetings in Washington suggested an evolution in thinking on energy. “People are reassessing how we got here, and the conclusion they’re going to get to is we need to build more of everything.”
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