High Power Bills to Drive Energy Development, EQT Says

(Bloomberg) -- Anger over rising energy costs will eventually force states to allow more natural gas infrastructure to be built in the US, according to one of the nation’s largest producers of the fuel. 

“We’ve never produced more energy than we’re producing now, but Americans’ energy bills are up over 35%,” EQT Corp. Chief Executive Officer Toby Rice said Thursday at BloombergNEF’s Barrel of Tomorrow in the Age of AI summit in Houston. “That’s the catalyst that’s going to get people asking questions.”

Rice and other panelists including Chris James, founder and chief investment officer of investment firm Engine No. 1 LP, and Cynthia Hansen, head of gas transmission and midstream at Enbridge Inc., see developing more infrastructure, particularly natural gas, as the way to bring down utility bills as well as meet demand from data centers supporting artificial intelligence.

States such as Pennsylvania, Ohio, Louisiana and Texas are well positioned to add more gas infrastructure as interest from data center developers increases because of abundant supply and friendly regulatory environment, Hansen said. “It’s your supply as well as your permitting and your ability to build out,” Hansen added.

In the short term, low prices stand to squeeze some gas producers as they try to meet demand growth from liquefied natural gas exports and AI power loads and build more infrastructure. 

“In the US, we believe the marginal producer is going to need around $3.50 gas price to break even,” Rice said. To generate a 10% return on enterprise value, “marginal cost of supply is going to need gas between $4 to $5 to justify the activity that’s coming out here,” Rice added.

(Corrects description of investment firm Engine No. 1 in the third paragraph.)

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