It has become a given that at least once during a shale gas conference, someone will say “the cure for low gas prices is low gas prices,” and many in the audience will nod.
On Wednesday, it was Toby Rice’s turn to deliver the maxim.
It’s been about three months since Mr. Rice succeeded in ousting the former leadership of Downtown-based oil and gas company EQT Corp. to take over as its CEO.
Since then, the price of natural gas, as measured at the Henry Hub trading point in Louisiana, has fallen by about 15%. (At the regional Appalachian hub, gas has been mostly below $2 per million British thermal units since then.)
And EQT’s stock price declined by nearly 40%, in line with the rest of the oil and gas industry.
At the same time, natural gas production has continued to hit records — nationwide, in Appalachia and in Pennsylvania — further reinforcing the glut that sunk prices.
“We are a victim of our own success,” Mr. Rice said, repeating another adage that inspires mass nodding.
Nevertheless, speaking at the event organized by the Robinson-based trade group the Marcellus Shale Coalition, Mr. Rice didn’t harp on the pricing environment, which the industry expects will compel banks to pull back on funding for oil and gas development this fall.
“Speaking to the economics,” Mr. Rice said, “shale works. How efficient shale development can be has been clouded historically by just massive growth.”
His promise to survive and thrive in a low-price environment is how Mr. Rice convinced shareholders to put him in charge of EQT in the first place.
Now at the helm of the biggest natural gas producer in the nation, Mr. Rice gave few details of how well his plan is working after the completion of the first 100 days, a marker he set for the company to enact quick changes.
During that time, Mr. Rice slashed the number of departments at the company, swapped out senior leadership for former Rice executives and laid off about 23% of the workforce.
He said he’ll give a progress report when EQT reports third-quarter earnings on Halloween.
Instead, there were two themes that emerged from his much-anticipated kickoff of the Shale Insight conference at the David L. Lawrence Convention Center where President Donald Trump was the day’s closing speaker: spreading good news about the oil and gas industry, and spreading American gas abroad.
“The rhetoric that’s going on in the U.S. about fossil fuels — to me it’s been concerning,” Mr. Rice said. “Now people are getting bold enough to say they want to move away from fossil fuels.”
EQT has begun crafting an industry-wide public relations campaign to counteract news coverage in which “the truth often takes a backseat to politics and emotions and opinion,” according to company spokesman Mike Laffin. He encouraged attendees to join in.
Mr. Laffin said the company will keep the focus on the environmental, geopolitical and economic benefits of developing natural gas and “put together a narrative to arm our employees, partners, supporters.”
The industry’s biggest growth opportunity is in natural gas exports, Mr. Rice said. This requires liquefying the gas and shipping it abroad.
He estimated that about 10% of EQT’s gas production ends up being exported. But it could be a lot more.
“It’s going to change the dynamics of world politics, and it’s going to be an important growth driver,” Mr. Rice said.
He said as the country moves to embrace renewable energy, it will need natural gas. One local example is the recently announced plan to cover eight acres of the Pittsburgh International Airport with solar panels, paired with a 20-megawatt gas power plant.
“We need to be realistic,” Mr. Rice said. “In that situation, 90% of the power is going to be produced with natural gas.”
Anya Litvak: alitvak@post-gazette.com or 412-263-1455.
First Published: October 23, 2019, 9:14 p.m.
Updated: October 23, 2019, 10:14 p.m.