The U.S. and Europe are “still one event away” from another energy event, according to Toby Rice, president and CEO of 5.5 Bcf/d gas producer EQT Corp.

“I’m more excited about us fully unleashing [U.S. natural gas potential] today than I was a year ago,” Rice said at a Sept. 15 University of Texas symposium hosted at the Kay Bailey Hutchison Energy Center.

“Unfortunately, I was optimistic that we were going to be able to be proactive to do this in a calm environment,” he added.

Currently, U.S. gas delivered to Europe is sub-$20 and sub-$4 domestically. “European storage is full. The United States’ storage is full.”

But “we're sort of sitting in the eye of the storm and people need to be reminded: We are in the eye of the storm. Nothing's changed. Our ecosystem is still maxed out. We still don't have [deliverability] flexibility. We’re still one event away from it happening.”

Such events will “be the wake-up calls,” he said.

The U.S. gas industry will deliver solutions. “But we hope we can push people to continue to take advantage of the opportunity to calm down.”

Adding more wind and solar to the U.S. power grid “is not a problem,” he added. But it has to be backed up with reliability, such as natural gas, which works 24/7.

“I mean just look at this last summer,” Rice said.

Record temperatures struck the U.S. South and Southwest. In Texas, the state grid operator, ERCOT, issued calls for voluntary consumption curtailment with a frequency that inspired memes, such as “ERCOT says, ‘Don’t do laundry until December.’”

Rice said, “We're focused on solar panels and windmills. We need to focus on [natural gas power generation] because that is the backup. At the end of the day, the quality of the grid is based on the quality of the [reliability].

“Right now, natural gas is the workhorse that needs to get a little bit more attention.”

Adding gas-storage capacity

More U.S. gas-storage capacity could shore up U.S. energy security and the industry’s ability to respond quickly to crises. A new project—Trinity Gas Storage that will inject 24 Bcf in a depleted gas field in East Texas—was announced by a private developer Sept. 8.

Could more storage be built? “The missing piece of the puzzle is ‘Give us the reason to create that surplus,’” Rice said.

More U.S. LNG capacity has to be added to underwrite the cost of drilling more gas wells and building more infrastructure.

“I would say that volatility is going to be a dominant theme in natural gas until we get our act together and get more infrastructure built,” he said.

Altogether, it would support the cost of building more gas-fired peak-power plants for emergency scenarios. “That’s how we really ramp up renewables [as part of the grid].”

East Coast LNG

EQT has supported adding more LNG export capacity on the East Coast adjacent to the Appalachian Basin, which currently produces 35 Bcf/d and could produce more than 60 Bcf/d with enough takeaway capacity and demand.

“Think about it,” Rice said. “The biggest gas field in the world, the Marcellus, is doing about 35 a day. We’re saying we could double it. We need the infrastructure to make that happen.”

And where the infrastructure needs to be “is real simple: … How about putting the infrastructure next to where the production is?”

The U.S. Gulf Coast is currently exporting up to 14 Bcf/d. An additional 35 Bcf/d of export capacity is underway and will begin to come online next year through 2027.

“There are a lot of projects there, which is great to see. I haven't given a hope on [adding more] East Coast LNG [too],” he said.

“We believe that we can put natural gas in the doorstep of Europe for $12 [per MMBtu] and that would [be] a $4 gas price here in this country.

“Would the world be excited about $12 natural gas? I think so: $12 natural gas is the energy equivalent [of] $70 oil. You can build some pretty amazing economies off $70 oil.”

Energy-transition ‘oxygen’

In 2022, though, Europe was spending more than $35/MMBtu for natural gas. Typically, it spends $200 billion a year on energy; in 2022, it spent $1 trillion.

“We’re hearing them complain about how the United States is sucking a lot of the [energy] transition ‘oxygen’ over to the United States with the [Inflation Reduction Act]. Guess what: If you [in Europe] had your energy security, you could have funded over two IRA’s. That's how important your energy security is.”

An additional 10 Bcf/d of East Coast LNG-export capacity would backfill what Europe had been receiving from Russia, he said. “We think we can get a facility like that built for $60 billion. Is that a lot of money? Yes, it's a lot of money.

“But compared to [Europe’s] risk of overspending $800 billion and the fact that you're going to get energy that's equivalent to $70 oil, that's the opportunity that we have in front of us.”

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