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00:00Big topic here, of course, the Iran war sending energy prices that's surging around the world.
00:05However, gas prices, different, insulated in some way.
00:09So as a U.S. natural gas producer, is there any way this war is affecting your finances?
00:15Yeah, so there's a couple of dynamics that are at play.
00:18Number one, the situation in Iran is showcasing the value of American energy independence when it comes to natural gas,
00:25where we saw international prices rise over $10 in MCF, natural gas prices here domestically only rose 10 cents.
00:33So this year, where international prices are close to $20, Americans are going to be enjoying natural gas prices in
00:40the $4 range.
00:41That's a five times cost advantage.
00:43That's the power of American energy, and that's why our energy independence is so critical and why we need to
00:49cherish and invest in that.
00:50How do you prepare, though, for more possible disruptions because of what's happening in the Middle East?
00:56Yes.
00:57Number one, it's rightly so putting the focus on the cost effectiveness of the energy we produce,
01:03but specifically the reliability of the energy that we produce.
01:07That's why producing energy in America is one of the most reliable forms of energy in the world, specifically on
01:13the LNG front.
01:13We've been making this case for years that American LNG is the most reliable form of energy in the world,
01:20one, because it's being produced and supplied in a part of the country that is safe,
01:25and number two, it's backed by the world's strongest military.
01:29So you're seeing the value of the reliability of U.S. LNG on the world stage,
01:33and this is going to be critical for the world to continue to meet their energy needs.
01:36Energy Secretary Chris Wright just spoke here.
01:39We're curious what conversations you are having with the administration right now.
01:43It's all about affordability.
01:45It's all about reliability.
01:46It's about transforming our energy independence into energy dominance.
01:51And what energy dominance means, that means America is prepared to win the AI race.
01:56That means America is prepared to provide energy security to our allies,
01:59where their energy security around the world has been crippled from what Russia has done
02:04to what's happening right now in Iran.
02:05And so this is a really critical time.
02:08It's never been more important time for us to produce energy in this country than right now.
02:12It's also never been more difficult.
02:14And a lot of the conversations that we're having in D.C. is about fixing that last part.
02:19And to make it easier for us to get energy built in this country,
02:21we need to get serious about permit reform.
02:23And that needs to be a focus in D.C. to enable the greatest industry in the world,
02:28American energy industry, to do what we do,
02:31and that's keep energy cost-effective, reliable, and clean.
02:34You know, you touched on affordability.
02:36It's something we're hearing a lot about right now.
02:38How about electricity bills?
02:40What are your conversations like with the administration about that?
02:43That has been a big catalyst, as American energy bills are up over 35% since 2020.
02:49What's important for Americans to know is your energy bills were going up before Iran.
02:53They were going up before AI, and people started talking about these data centers.
02:57This is something that has started from, really started in 2020, and bills are up.
03:01And that's across the board.
03:02But specifically on electricity is really a catalyst that everybody's looking at right now.
03:07And when we diagnose this issue to solve this issue of lowering electricity prices, it's very simple.
03:14The reason why we find ourselves in this situation is because we've blocked, canceled, and imposed many pipelines
03:20that the market forces have said are critical and needed.
03:23And those pipelines have been blocked and shut down.
03:26Demand has not stopped.
03:27Demand has continued to grow.
03:28And when you have lower supply, demand high, that's when prices go.
03:32And New England is a poster child of where this has gone badly.
03:35But the solution is very simple.
03:37Build more pipeline infrastructure, energy, bring our low-cost energy resource, natural gas,
03:42to the doorstep of New England, and electricity prices will drop significantly.
03:46Well, you think there should be more pipelines.
03:48In the meantime, while there isn't, what's the solution?
03:51The solution is they're going to do everything they can to keep the lights on.
03:54And let's look at what happened in Winter Storm Fern.
03:55New England was burning 40% of their electricity was coming from oil, okay, burning trash.
04:02This is the type of desperation moves where they saw their energy bills during this winter period.
04:07Natural gas prices spiked to almost $150 at MCF.
04:11And what's remarkable about this is we were selling gas next door for a price of $6, okay?
04:16So people need to understand that these energy issues are completely self-inflicted.
04:20They're completely corrected, and we have the solution here domestically,
04:24and people in New England need to know that they're paying the highest energy natural gas prices in the world,
04:29and they're sitting next to the biggest gas field in the world in Marcellus
04:33that can pipe basically energy for a cost of less than $30 per barrel equivalent into that region.
04:39That will lower prices.
04:40You touched a little on AI and data centers.
04:42Of course, you are based in Pittsburgh.
04:44I want to talk to you about people really want to get into these deals.
04:49Are there deals available for you for data centers?
04:51What are you pursuing?
04:53And then how do you square that with energy prices?
04:55So this is another major demand catalyst for the United States.
04:59The power demand it's going to take to continue to electrify this country,
05:03we're going to need over 100 gigawatts of power generation.
05:06To put that in perspective for just how big a deal that is,
05:08we need to build an equivalent of electric equipment that would power 20 New York cities.
05:14That's what it's going to take to make this happen.
05:16We think Pittsburgh is going to be a great place for this to happen.
05:19Because of this pipeline cancellation movement that's taking place in this country,
05:23people are realizing if it's hard to build a pipeline,
05:25why not just move my power-intensive equipment to the region where the supply is there?
05:31The natural gas is located in the Pittsburgh region.
05:34This is why we see over 30 gigawatts of potential data center opportunities within this footprint.
05:39And we're very confident that Pittsburgh has, and southwestern Appalachia in general,
05:44has all the ingredients you need to make AI happen.
05:47This is where industry lives, industry is cherished.
05:51And look at the track record in Appalachia, where 10 years ago, 15 years ago,
05:56Appalachia was producing maybe two BCF a day of natural gas.
05:59It's now transformed into the largest producing gas field in the world.
06:03That's what this region can produce when we have the demand catalyst, which is showing up right now.
06:09Curious, though, how do you handle the not-in-my-backyard?
06:12If, you know, there's concern, okay, my energy prices are going to go up because we're getting these data centers.
06:19Yeah, the not-in-my-backyard has been a big issue that's prevented energy infrastructure from getting built.
06:26This is why permit reform is going to be needed because, at the end of the day, the debate on
06:32energy,
06:33one thing that everybody agrees on, everybody wants lower-cost energy bills.
06:37Everybody wants more reliable energy.
06:39Everybody wants cleaner energy.
06:41And what's so important about natural gas is the fact that we can shrink the footprint,
06:45and we have an opportunity now to build new power generation behind the meter to meet the energy needs of
06:52these data centers,
06:53and we have the ability to plug excess power and put that back in the grid to bring relief.
06:58If we build more, Americans will pay less.
07:01The key is to attract these data centers to get that demand,
07:04which gives us that opportunity to put low-cost electricity back into the markets that need it.
07:09And PJM, this grid, desperately needs this.
07:13The market signals are screaming for more reliable energy.
07:16The capacity auctions have gone for nine times the price they have in the past.
07:20So this is needed.
07:21The market is screaming for more energy.
07:23And I think this dynamic of overbuilding for the power needs for the data centers
07:27and putting that excess into the grid is a really great recipe for lowering energy bills for Americans.
07:32There's been a lot of talk from you and other large gas producers
07:35about trying to sign more direct-to-consumer natural gas.
07:38What's driven this transition across the country?
07:41It's a reflection on where value creation is starting in energy.
07:45You know, 20 years ago when the shale boom was taking place,
07:48the value creation opportunity started on the upstream side.
07:51Where can I find the geology?
07:53Where can I do the exploration well?
07:55Where can I get more land?
07:56Where can I grow production?
07:57Where can I lower my well costs?
07:59The value creation was on the upstream side.
08:01Now, in a more mature industry, the value creation is starting on the downstream side of things.
08:06Where's the LNG facility?
08:07Where's the data center?
08:08Where's the power generation?
08:10That's where it's starting.
08:11That's not where the value is being ultimately captured.
08:14We believe that we have an ability now with our midstream business to connect to these world-class demand opportunities
08:22and connect them to a world-class upstream business.
08:24And so we're connecting the dots, and that's how we're going to create a tremendous amount of value for our
08:28shareholders.
08:29Before I let you go, any updates on the Homer City Redevelopment Project?
08:32That is a great example of exactly what needs to take place to help lower Americans' energy bills and allow
08:40America to win the AI race.
08:42The Homer City Project is a mega project, over four gigawatts of power.
08:46That's almost the size of enough power to power New York City.
08:49So this is a massive scale.
08:51And it's at the home of a former coal facility, and that means that we're going to build more natural
08:56gas,
08:57and we can preserve those electric connections that were used for coal to go back to the grid,
09:01that those power generation can be built to feed the data center and have those connections to supply excess electricity
09:07back to the grid
09:08and help lower energy prices.
09:10So it's a really great example, but these are billion-dollar projects.
09:14They take a lot of time.
09:15And when you're working at this scale, we're talking at tens of billions of dollars.
09:18Details matter, and it's just going to take a little bit of time to make sure all those details get
09:22put in place.
09:23But one thing is for sure, and this is our role in this whole equation, as America's natural gas champion,
09:28EQT,
09:29our role is to make sure our tech companies have all the energy they need to run full throttle,
09:32and we are excited about supplying gas to that facility.
09:35Any changes to the timeline?
09:37The timelines, I think, continue to move to the right a little bit.
09:42And, again, it's just the dynamics of putting all these big projects together.
09:45It just takes a little bit of time.
09:47Appreciate you.
09:48Thanks so much for being with us, Covey.
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