Toby Rice is the CEO of EQT, the largest natural gas producer in the U.S. In this episode, Rice talks about how American natural gas can help drive global decarbonization, the lack of sufficient pipeline capacity in the Northeast and why the inability to move methane is costing consumers, the continuing evolution of well drilling and completion, and why hydraulic fracturing is a “miracle technology.” (Recorded June 3, 2022.)
Robert Bryce 0:04
Hi, everyone. Welcome to the power hungry Podcast. I’m Robert Bryce. On this podcast we talk about energy, power, innovation and politics. And I’m pleased to welcome Toby rice. He is the CEO of EQ T Corporation, to the podcast. Toby. Welcome to the podcast.
Toby Rice 0:18
Happy to be here. Thanks.
Robert Bryce 0:21
So I want you guests on this podcast introduce themselves. So you’ve been, you have a number of titles, a number of businesses you’re in. But if you don’t mind, imagine you’ve arrived somewhere you have a minute or so to introduce yourself, please go ahead.
Toby Rice 0:36
Yeah, so my name is Toby rice. I’m currently the President CEO of EQ T. My background real quick, I got started in this, the oil and gas industry back in 2007, started a company with my brothers called rice energy. And I our higher purpose back then was to help make America energy independent. And that was seemingly impossible for a lot of people. You know, fast forward 10 years later, we grew our company rice energy, to a top 10 producer of natural gas in the country, very, very grateful for that success. And we, in 2017, we combined our companies with EQ T, and the combination of rice energy, and EQ T is what created America’s largest natural gas producer. And I stepped back for a year and sort of retired and looked at what I was going to do next in life, and realized I wanted to make an impact. And you know, fortunately, it wasn’t, wasn’t being driven by the money. But when you look at how to make an impact in this world, there’s a lot of ways you can do it. But one thing that was striking to me was the correlation between energy and quality of life. Simply put, the more energy you can give people, the better the quality of life. And so if you want to make an impact, provide the world with cheap, clean, reliable energy. And that’s a way you can make an impact. And so I had an opportunity to join back EQ tea that shareholders asked me to come back and get involved. And July of 2019, I joined rejoined the company as the president and CEO. And I’ve been working on which is a great platform for us to do what we do, which is put more energy into this world. Unfortunately, we’ve been hitting some roadblocks, and because of people’s concerns over climate, you know, pipelines have been canceled, challenged or repurposed over over seven BCF a day of pipelines. It’s about 10% of production in the US, essentially, has been challenged in that’s prevented us from putting more energy to the world. And so, you know, what we’ve been doing is educating the world on some real opportunities that the natural gas industry can play in meeting people’s climate ambitions, while also continuing to make an impact in the world by delivering cheap, reliable, clean energy on a world stage.
Robert Bryce 2:48
Gotcha. So tell me about EQ t, then that’s a good place to start. I want to talk about your various letters and things that you’ve written to the policymakers. But you said EQ T is now the biggest gas producer in the US. So how much are you producing and when is it all in the Marcellus?
Toby Rice 3:05
So EGT is the is an operator, we have all of our operations in Appalachia, we currently produce about six BCF a day of natural gas gross, that’s, that’s a little bit over 5% of the total US gas supply. We’ve got a very large acreage footprint, over one and a half million acres, and that is going to allow us to continue to we have a tremendous inventory that’s gonna allow us to continue to produce this gas and sustain these volumes for decades, and we have a tremendous potential to do even more because of that. We send our gas to all parts of the country, including BCF a day of natural gas that’s going to the Gulf Coast, which will will help support some of the LNG projects that are going on down there. But I’ll tell you right now, Robert, I mean, one of the, you know, we’re sort of in a holding pattern like a lot of other operators across this country, people are running in maintenance modes, just keeping production flat, which is a sustainable operating model, because we cannot outpace demand in that demand has been choked off by having these these pipelines cut off. So the one thing that people need to understand is this industry and ATT included can do a whole heck of a lot more. All we need is more pipelines and LNG facilities to make this happen. And this is really a big focus of mine for this company is to is to help bring these things so that the US oil and gas producer can can do a lot more.
Robert Bryce 4:30
I want to hit on it just follow up on the what you said about one BCF a day of gas flowing from the northeast to the southwest which is I mean, this is truly a remarkable turnaround. Because from since World War Two right little inch big inch pipelines carried hydrocarbons from the Gulf Coast to the northeast, but because of the Marcellus it’s going the other way, which is truly remarkable. Rick’s Mead called Marcellus when he called Prudhoe Bay under Pittsburgh, but this is It put the Marcellus into into some kind of perspective, if you don’t mind because C six BCF is, is an enormous amount. So how much is being produced out of the Marcellus now?
Toby Rice 5:10
So the Marcellus actually produces about a third of us gas productions, about 35 BCF a day us gas supplies about 95 BCF a day to put this in context. You know, EQ t, if we were a country, we’d be the 12th largest producing country in the world. That’s just one company in Appalachia. Now, the Marcellus as a whole, our Appalachia as a whole has more gas reserves than Russia. So it’s an absolute powerhouse in tremendous energy potential here. And this is, you know, people say this is like the Saudi Arabia of energy. It’s absolutely true. I mean, the resource potential here is absolutely tremendous. And but unfortunately, if we can’t get these pipelines, Robert, this resource is the biggest gas field in the world, the Marcellus Shale, might as well be in Russia. Because let
Robert Bryce 6:03
me interrupt you there because you said it clarified resource versus reserves, right, because there’s there’s a critical difference there. Can you walk through that just very quickly, because, yeah, there’s enormous amounts of resource in the world. Right, but not all of its accessible. So how much is risk considered resource, which is what’s there that could be in theory developed versus what? What’s considered reserves? Can you walk through that real quickly?
Toby Rice 6:27
Right, so resource is what is the potential that could be could be recovered? And in that you obviously have to make an assumption on what price of gas that you have to work with just to make sure the product the projects are economic. Right. So that is that is a big pie that’s over 1.7 quads of natural gas. The the reserves is more of a techie is more of a technical term that’s used by the SEC. And that’s, there’s there’s some limits on the reserves there is, you know, what can you actually develop with the price deck that you’re seeing today with a five year horizon, and also making sure that there’s high confidence that the wells you drill are going to receive the get actually produce the gas that you say it’s going to do so? Right, you’re limited to only claiming reserves for wells for opportunities that are close to existing producing wells. But the good thing about shale right now is it’s a blanket reservoir. There’s been a lot of penetrations through this, through this, this shale industry has a very high degree of confidence, that source that we’re claiming, is going to actually translate to reserve. So when people want to understand what the True Potential the Marcellus could be, it’s more appropriate to look at the resource potential. And Robert with a with a $3.75, gas price. And you know, currently spot gas prices are significantly higher than that. The Marcellus Shale has the opportunity to increase natural gas production and incremental 35 BCF a day and be able to do that over a 10 year period of time and hold that ball, hold those lines flat for over 30 years. So
Robert Bryce 8:15
clear. So you’re saying you’re You could double Marcellus could double output if you had sufficient pipeline capacity.
Toby Rice 8:21
That’s exactly what I’m saying. The biggest gas field in the world can be the biggest gas field in the world two times over. And the only thing that needs to make that happen is pipelines. And then also the LNG facilities to create the demand for that for that incremental volumes.
Robert Bryce 8:38
So you told me we ran into each other here in Austin, we both had attending an event and you said something I’d never heard before. And I knew the region was constrained. But you said, EQ T is obviously the biggest player, but other big players in the Marcellus, our Range Resources and Antero. You said, as I recall that none of you are adding more rigs because you can’t move more gas because what was it 95% of the pipeline capacity you have is already spoken for.
Toby Rice 9:04
Yeah, that’s, that’s That’s exactly right. And, you know, here’s here’s the really, this is what really is disappointing for me is to know that natural gas prices in the country, Robert, are over $8.60 for next month, and they’re about a over $8 for the for the average of this year. And then they’re going to be $6 and averaging for calendar year 2023. You know, we can do a lot more to bring some supply to the market to help bring down these prices. But without pipelines, we cannot do that. We sell our gas at a discount here in Appalachia. And here’s a really, here’s a really remarkable fact.
Robert Bryce 9:44
And I’m sorry to interrupt but the discount that’s based on a different different node pricing right or different hub pricing, you’re selling at a discount to say Henry Hub in Louisiana. Can you just briefly explain what you mean there?
Toby Rice 9:56
Yeah, so the the gas price that I talked about when people talk about natural gas price As they’re referring to Henry Hub, that’s sort of the benchmark, then the price you actually receive is regionally dependent. And the discount that you get is called basis. And in Appalachia basis is which the discount is typically anywhere from historically, we used to get a premium for gas, because it was very close to the demand centers of the Northeast, when there wasn’t a lot of supply. Well, now there’s a ton of supply. And we’re actually selling our gas at a discount to Henry up to the tune of negative, you know, 75 cents to negative $1. And here’s, here’s what’s remarkable, Robert, if you look up, look out on the futures just to this winter. Natural gas prices in New England, where their natural gas prices in New England are set to be over $27 per MCF. And during that same period of time, we’re going to be selling our gas here in Appalachia, for price of $7. How can you have that type of discrepancy? It’s, it’s very clearly exactly show illustrates lack of pipelines causing unnecessarily high prices around the country. And New England, unfortunately, has been the biggest proponent of blocking pipeline infrastructure. And it this is why we say these prices that people are paying are completely unnecessary. And with more pipeline infrastructure, we can alleviate these prices, and really help Americans and bring the energy security that they drastically deserve.
Robert Bryce 11:31
I’m recalling from the letter, I hear you, you’ve written several letters that have gotten a lot of attention. And you were profiled in the Wall Street Journal in April about some of the about some of the correspondence. But as I recall, just off the top of my head and one of the letters you said an attack on the oil and gas industry is actually an attack on our customers. But that’s it seems I’m paraphrasing what you’re saying here, but I mean, you’re making that point here about because the industry isn’t able to move its gas customers in New England are paying higher prices, but drastically higher prices, because of this lack of ability to move the molecules Am I Am I reading what you’re saying right here?
Toby Rice 12:05
It’s 100%. Correct. I mean, if people think that they can attack oil and gas, and it’s only going to be felt by the oil and gas producer, wrong, you attack a company, you’re attacking that company’s customers and you attack our pipelines, you prevent our ability to invest to reinvest in drill and bring more supply to the world that’s going to translate to higher prices, like exactly what is going on in the country, and what is going to what is really going to be happening in New England this winter. And, you know, I think people need to understand when when you people call us, you know, the MC trying to make an argument that there’s price going price gouging going on, there’s no price gouging, you know, there was no price gouging, people were able to set the price, oil wouldn’t have gotten negative a year and a half ago, during during COVID, we wouldn’t have had prices be so low that hundreds of energy companies went bankrupt over the last couple of years. Right. So clearly price gouging is not the argument. It’s all about supply and demand. And you know, what’s really frustrating when you hear about a lot of these policies that have come out, it’s it’s all about attacking the oil and gas producer. And all this is doing is is creating a more challenging investment environment for us to look into and these wells that we’re looking at drilling, you know, these are, these are 20 year invest 2030 year investments, we want to make sure that we have, we’re investing into an environment where our product is going to be recognized as being absolutely critical. And by the way, over 80% of the world’s energy comes from hydrocarbons. That’s not going to change anytime soon. So you know that we should have that environment to do that. But without that, you know, we’re not able to reinvest. And just to put put it put this in just to talk about the lack of investment in this country. In 2014. Let’s just look at the total dollars that this industry spends in 2014. Around the world, people spent about $750 billion investing in new wells. In 2021, that number was $350 billion. So it’s been cut in half. Now in the United States, specifically. And this is the one that’s really concerning. Investment in 2014 was about $350 billion. And today, it’s a it’s a little bit over $130 billion. So investments in the US have declined almost 60% 70%. And so we need to recognize so like when people look at energy prices, like clearly the world needs more supply in America needs more supply. And we we would like to see more political signals and policies in place that would help allow this to happen allow allow us to bring more supply into the market but do it sustainably and that’s an incredibly important thing is that we’re making sure that the demand is there before we add the supply.
Robert Bryce 14:56
Well, there’s you’re saying that tell me what I I’ve heard? I guess I’ve heard those numbers before but hearing you repeat them? I mean, if if you’re right, and we’re seeing this dramatic under investment, and yet demand has not changed, I mean, you know, the we’ve seen that because of driving the number of people miles people are driving, it would seem it’s very bullish on potentially on price. But you see that in your own stock price. I was looking at it this morning, the beginning of last year, beginning of 2020. shares were selling for about six, they’re now at $48. I mean, I mean, this is good for you, because you’re a big shareholder. But I mean, you’re surprised about how the value of your own company has been, you know, was hit so hard and now rebounded so quickly. I mean, how do you think about this, given your own position in the company? And you’re an obviously investor? You’ve been in this a long time. Are you surprised by the turnaround that you’ve that has just happened in the last 24? Months?
Toby Rice 15:50
No, not surprised. But I’ll tell you, Robert, I’m not I’m not smiling about it. Because I’ll tell you why. Prices, our stock is up like other other energy companies, stocks are up because energy prices are high, and they’re unnecessarily high. And there’s a lot of this is hurting a lot of American families, they’re struggling to pay their bills. And let’s not forget about the 3 billion people around the world that have less electricity than than runs a fridge. That’s your stat. So like, we’re not we’re not successful, as energy producers right now. Now. There’s a lot of extra,
Robert Bryce 16:23
they’re not successful, because you’re not delivering it at a price that is agreeable to the consumer. Is that what you’re saying?
Toby Rice 16:28
Well, because we were not meeting our potential. I mean, we can do we can do so much more. And I got to have you know, this, I’ll tell you, you know, historically, I mean, this industry has been incredibly volatile. And when pipeline infrastructure gets blocked, and when policies getting put in place that that were strict supply, prices are gonna go up, and you’re gonna see energy companies become more profitable. But you know, that’s not the world I want to live in. I want to live in a world where we have, we’re able to meet demand and provide the cheapest, most reliable, cleanest form of energy. Clearly, the world’s energy is energy short. Clearly, we have a tremendous resource under our feet, where we can do more, and I would trade the extreme volatilities the price swings. For a less volatile world, where we can have a little we can have more sustainable prices, that and have the ability to grow sustainably. That’s the world I want to be in. Because only in that world, we can provide cheaper energy cost to our customers, bring energy security here to America and have be able to bring our energy to the world stage to help lift the world out of energy poverty.
Robert Bryce 17:42
So now if I was I’ll just for the sake of argument, I’d say okay, well, these are all good points. But here’s, you know, here’s Toby rice just talking his book, you know, and, and I’d say that, you know, just how would you respond to that? If I if I put that to you? Oh, you’re talking your book, right? You’re gonna make more money you’re gonna you know, EQ T shareholders. I’m countering that by saying what you think is your purpose. But is does that have any credence? Have you heard that charge before? To you the bed? Oh, it will just talking his book.
Toby Rice 18:13
Yeah, I mean, that’s certainly one of the one of the biases that people put on us. And I think, because of this, I think a lot of people in industry have maybe not smoke spoken up as much. But the reality is this industry and EGT, specifically, we have a higher purpose. And that’s really how we’re going to measure our successes. Are we are we helping to provide energy security to the world? Are we helping addressing climate change? And are we doing that profitably, so that if it’s profitable, it’s absolutely critical, because only a profitable business can be sustainable? Right. And so we are not going to apologize for our profits, because that’s absolutely critical for us. But when we look at what we’re doing, I mean, as the as America’s largest natural gas producer, that’s great. But I look around the world, and you see that there’s a clear need for more energy into this world. And we need to, we need to do more. And so what we’ve done is we’ve stepped back and we’ve looked at, you know, the biggest cause of this, the things that are, are driving the most opposition against what we do is people’s concerns over climate. Right, wrong and different people are scared. And so we needed to take a step back and say, Well, what is the issue? What can we what can we do as industry to provide a solution? And we look around and say, okay, emissions were the biggest emissions in the world and very simple, it’s foreign coal for is the biggest source of emissions on the planet, almost 50% of emissions in the world come from foreign coal. Well, what can we do to fix that? Well, we can use natural gas here in the United States and send that abroad to replace foreign coal. It’s exactly what the leader in driving emissions over the last 15 years has done that leaders the United States, and we’ve dropped emissions But faster than any other country in the world, we’ve lowered our emissions almost a billion tonnes. And how did we do that we did that. Over 60% of those benefits came from replacing coal with natural gas. Now we have the opportunity to do this on a world stage. And this is why we are we are campaigning to unleash us LNG, which is going to be the biggest green initiative on the planet. And we have the capacity and potential to increase LNG exports by over 50 BCF a day incremental to what we’re doing today. That is a four fold increase to what we’re doing today. that would that would bring about an incremental 50% extra energy above ground flowing through the pipelines of America. So you bring massive energy security. And the only thing we need to make that happen, Robert, is more pipelines and more LNG facilities. So you know, the this is the idea that we
Robert Bryce 20:57
Yeah, well, let me let me ask you about that. Because it were the two things when I want to ask you about the leadership issue, and then go back to the pipelines because it’s clear the the anti pipeline activists have been very successful right throughout, particularly in the Northeast. But I’ve watched the industry for a long time, I’ve written about it for a long time. And in looking at the landscape, and I’m not blowing smoke up your dress here, but that you’ve emerged kind of as one of the the highest profile advocates for the oil and gas industry, really, since I would argue the death of Boone Pickens, right. I mean, Pickens was in his era was the one kind of go to guy and I’d say, maybe Harold Hamm with Continental Resources. But here’s the question, Why have so few of the top executives in oil and gas been willing to stand up and be more assertive in the way that you are? Where they’re the way Harold Hamm or Boone Pickens was what? Why have they been cowed? I guess would be the the other way to put the question.
Toby Rice 21:56
I’ll tell you, one of the things that gives me the the confidence to stand up and speak up is we’ve got a great, we’ve got a great solution. And, you know, we looked at this through the angle through the lens of why should we produce more natural gas here in United States, we were the first time industry is putting in an environmental centric argument for why natural gas needs to be there. So we’ve got something really great to talk about. And that’s exactly what we’re doing. And, you know, we’ve got a lot of amazing leaders in this industry. And let me let me tell you something, Robert, I mean, this is the the most concerning thing that I have is in the debate that’s going on about ending fossil fuels is the fact that I think you’re taking, if that happens, the world is taking the biggest the best player off of the field, when it comes to solving this energy transition. Because let me tell you something out of this is really important for people understand, you know, we are in like two races right now the first race is decarbonize the world think unleashing us LNG is going to be the initiative that allows us to do that. And I’d love to talk a little bit more about that. But the other race that we’re in is, you know, we’re in the race to provide the first person that can create cheap, reliable, zero carbon energy. And I don’t care if you’re in renewables or if you’re a nuclear or if you’re in Bio Diesel, oil and gas. If you’re an energy, you’re in this race, and I look at this industry and our leaders and our workforce that we have here. We are the only industry that has gone through an energy transition before and it was in response to a crisis. Let’s not forget, 20 years ago, when the crisis was peak oil, we’re running out of energy, what are we going to do? That was a pending in an economic collapse. That was that was facing us and people were just as scared about that as they weren’t climate change. What did this industry do? We transitioned from developing conventional reservoirs to unconventional reservoirs, and the leadership, the technology, the innovation, the risk taking the application, the scaling of that. To do that hydraulic fracturing, horizontal drilling, we were able to figure out how to bring commercial volumes of oil and gas from a rock that has less permeability than pavement, we were able to crack the code on shale and what happened as a response. United States went from being we’re running out of energy to becoming the leading energy producer in the world. We are an energy powerhouse. These leaders this happened The world needs no, this did not happen. 50 years ago, this happened recently. And the same leaders, the same brains, the same workforce is still here in industry today. And we have the capabilities to do amazing energy transition movements. And now we’ve made energy cheap, we’ve made it reliable. Now we’ve got this industry focused on how are we going to make our energy cleaner and ultimately how are we going to make it as a lower carbon zero carbon solution. I’m betting on this industry and these great people here that are going to be able to figure it out because of our track record and in our abilities to carry the modern world. And what’s really exciting about when you think about unleashing us algae in the world stage, you know, natural gas can be transformed into a zero carbon solution, whether that’s pre combustion by transforming it into blue hydrogen, or blue ammonia, or post combustion with carbon capture and storing co2 Underground, guess who’s got those skill sets? We do? So like, I’m very confident that we’re gonna win this race, because we’ve got such great leaders and people in this industry that that can make it happen.
Robert Bryce 25:37
Well, you mentioned something about the US and it’s something that just pops in my question that pops in my head. So why isn’t shale taken off in other countries? You know, my line is, well, we have the rigs, the rednecks and the REITs. And maybe it’s with a rigs, net rednecks rights and the rocks. Right, but that we have the best geology, geology. Why haven’t other countries been able to replicate the shale revolution?
Toby Rice 25:58
I think it’s I think it’s rigs and roughnecks, and the rocks, I mean,
Robert Bryce 26:05
the we have all we have all those and the rights and the rights to drill, right, the mineral rights. That’s the other key part, right?
Toby Rice 26:11
But I mean, listen, the geology on the shales is not impressive. It’d be foolish to think that this type of potential didn’t exist other plate parts of the world. But what is incredibly hard to replicate is the entrepreneur entrepreneurialism and the Wildcat spirit that took place that was absolutely required to unlock shales. I mean, shale is not a drill a well on the ground and have a massive discovery. Shale is shale was created through decades of failure. And the only way you can crack the code on the shales is to is to add up all those failures, take those best practices, and finally create something that actually makes sense. That’s exactly what happened. So one thing that’s special about the US is we had 1000s of companies risking their dollars trying to crack the code and everybody was learning. You compare that to doing that in a foreign country, where you’ve got maybe one national oil company, or maybe they bring in a major, so they’ve got two or three companies trying to figure this out. You don’t have enough failure, you’re not going to be able to get to the success that you need. But listen, I like to
Robert Bryce 27:21
I like that idea. There’s not enough failure to succeed. And let me interrupt because you’re talking about the shale itself. And you mentioned the Marcellus, she said it’s a blanket reservoir? I haven’t heard that term before. What does that mean?
Toby Rice 27:32
That just means it’s it’s it’s a geologic deposit that is laid down over that’s very extensive, and it will cover you know, entire states.
Robert Bryce 27:43
Well, I see. So that strata that strata covers a big, big territory, I got you okay. It’s not it’s not good. It’s homogeneous across a big area, or not necessarily exactly homogeneous. But it extend the extent of it. I got you. Okay. So what let me ask you about the credit to the people who stopped pipelines, because I can think off the top of my head, you get the, the mountain valley you have northeast supply expansion project. I mean, those are just two off the top of my head. Why of the pipeline opponents and New York State has been one of the most obvious examples of using the Clean Water Act to block pipelines. Why have the pipeline opponents been so successful?
Toby Rice 28:25
They’re very sophisticated. Robert, and I think we have we are we are living in a world where Kancil culture more and more is taking grip. And when people fail to see the full picture of the actions that they’re taking. You know that that’s how we get ourselves in situation. I mean, look at MBP, for example. This is a pipeline project that’s going to that’s going to produce two BCF a day of natural gas to the southeastern part of the United States. Pipeline
Robert Bryce 28:57
protests. Mountain mountain valley pipeline is it’s what it used, the initials are okay, I’m just going
Toby Rice 29:03
by blind. Yeah. Okay. So this is a 300 mile pipeline is going to go from northern West Virginia, into Virginia, and, you know, pipeline protests that you look and say, well, fossil fuels are bad, we need to shut this down. So let’s shut down these pipelines. Well, let’s talk let’s look at the other side of the coin. That pipeline that was gonna bring that natural gas to that part of the country would be able to replace and allow that portion of the country to replace and retire coal fired power generation. And every BCF a day of natural gas that we can put into the world to replace coal will have the environmental impact of saving over 30 million tons of emissions. Okay, that’s, that’s the math. And so
Robert Bryce 29:50
keep that number. If you don’t mind saying that again, I would just want to drive that
Toby Rice 29:53
one one BCF a day of natural gas replacing coal will translate to carbon emission savings of Over 30 million tons. That is the equivalent of electrifying over 6 million vehicles. It’s absolutely massive. And so when you look at this, you look at this pipeline, this pipeline. And people look at this, and you can look at it one way and say, Oh, this is creating emissions, or you could look at it the other lens and say, this pipeline has the capacity to eliminate over 60 million tons of emissions. Now, to put that number in perspective, Robert, the entire carbon capture industry right now how much carbon we capture, and inject underground is about 50 million tons. So this pipeline itself, if it was all replacing coal, which it’s not all going to, would be a tremendous environmental benefit, but you have to look at the full picture of what’s going on. And like, I mean, forget about energy security to the to the residents of this part of the country. I mean, another thing you look at is there, you know, we are, you know, this is industry. And we are we are putting these pipelines in place. And, you know, there are going to be some members of landowners that are going to be impacted. But, you know, it pales in comparison to the number of Americans that are going to be benefited benefited, you know, MVP pipeline is going to serve us over 7 million homes. And so surely, the the number of impacts we have here, big picture, you know, these pipelines are clearly a good a good bet. And definitely, you know, definitely things that we should do. And this is where leadership needs to come in. Because listen, nothing we do is going to be without consequences without risk. But strong leaders need to evaluate the fact that this is going to be better, it’s better than it is going to be worse, and then make that decision. And I think that’s another thing that has been a challenge with canceled culture is it’s very hard to there’s nothing out there that comes without risks or without impacts. But we just need to, it’s even more important for us to understand the benefits. And then when you think about the so what people were missing. And here’s the here’s the crazy thing. This is a really stat that really that really, people really are floored when they here’s one of the biggest misconceptions when it comes to climate, is the fact that what we do here in the United States is what matters. The reality is as we’ve reduced our emissions by over a billion tonnes in the last 15 years, the rest of the world has increased their emissions over 4 billion tonnes. Okay, that wipes out everything we’ve done in the last four times over. So I’ll give you one example like the people that are going to oppose us only shoot us algae, which by the way, is massively, they will get an amazing reaction. I’d love to talk about that. But I haven’t met these people yet. But eventually we’re going to meet somebody that says, hey, I don’t I don’t I oppose more natural gas said, because these people, ultimately they will only want to support zero carbon solutions, like solar and wind. But what people need to understand is, they don’t understand how much energy demand there is in this world. And when solar and wind cannot meet that energy demand, people are going to use coal, right in the last 12 months, coal use around the world has soared and increased emissions over 500 million tons. That’s just in 12 months. Now, to put that in perspective, that is the equivalent that essentially wipes out every single solar, every single solar and wind turbine. We’ve installed here in the United States in the last 15 years, said plainly 12 months of not addressing foreign coal has wiped out every benefit that we’ve every investment we’ve done in solar and wind here in the last 15 years in America. So what was your What was your major?
Robert Bryce 33:42
You know, those are big numbers. And I’m well aware, I just in fact, I just published today a piece on real clear energy that China and India alone by the end of next year will increase their coal production by 700 million tonnes. That’s the coal production which is greater than the an all US coal output. I mean, it just did those two cuts. And that’s just their incremental expansion. So the pipeline opponents just to be clear, you’re saying that their arguments against this are just around climate change, but you’re saying I mean, there’s a point that Alex Epstein has made and I know you’re familiar with it, but they’re not addressing the benefits and where you’re where you’re steering the conversation and pretty effectively I have to give you a credit is saying you’re not looking at the whole picture here you know, the the opponents are not looking at the decarbonisation effects but let’s let’s move on a little bit because I’m curious to learn a little bit more about EQ T’s business I’ve been told by different people different drillers that there’s a direct ratio between the amount of sand you can get into the into the frack job if you have more sand equals more output and in reading up on your experience at EQ t that seems to be what your what your experience is is so is that is it axiomatic the more more sand you can get into the into the wellbore and the more sand you can get into the frack then the better your productivity. Is that true?
Toby Rice 34:57
Yes, there’s a direct correlation between the size of your Rock in the production that you will receive the there also is a direct correlation between the size of your frack and the cost at your wells within your well costs, right? So you need to make sure that the juice is worth the squeeze. And the industry is at a really good place where I think we’ve we’ve, we’ve pushed, we’ve pushed the frack sizes to really maximize the productivity of these wellbores. And now there’s, there’s a very healthy amount of of optimization that’s taking place that we understand what is the optimum frack size, given the costs to maximize the economics of that that we’re doing?
Robert Bryce 35:41
And what is that? Now? What are the lengthier laterals? And how many stages and how many pounds per foot or pounds of sand per stage? Give me the metrics there, if you don’t mind?
Toby Rice 35:50
Yeah, so it’s going to, it’s going to be different in every shale formation, and even different regions in the shale, you’ll have different different things that work that work best. in Appalachia, you know, our fracks, our frack job is between 2020 300 pounds per foot of wellbore. So if you have 1000 to
Robert Bryce 36:11
20, you’re putting a ton of sand in every foot of wellbore.
Toby Rice 36:15
Yeah. So if you have a, if you have 1000 foot of wellbore, you’re going to use a couple million pounds of sand.
Robert Bryce 36:24
And how long? How long are your laterals, then? How long are what is our laterals?
Toby Rice 36:29
Yeah, historically, when we started in industry, you know, laterals, my first lateral I ever drove in Appalachia was 2000 feet. The next one I drove that that I was knocking out of the park with a 4000 foot lateral that was that was big. Now every ladder we drill averages around 15,000 or over 12,500 feet. And the industry has the technical capabilities to drill laterals that are 20,000 feet in length, I mean, think about that we’ve formed we can we can drill down a mile and a half bend that bend that that wellbore sideways, get get horizontal and go flat for over four miles. It’s pretty insane. But it’s testament to the the technical capabilities that this industry has. And that’s really been one of extending laterals, optimizing FRAC size have been the two main components and bringing profitability in and ensuring the best economic optimizing the economics, the wellbore is that we do but there’s still more things that we’re doing. Here’s here’s an amazing thing. Robert, is we do these wells are absolutely massive. So for us, you know, we have we have sites that we’re producing right now that produce enough energy power, you know, 400,000 homes for you assume that so I mean, these these things are super concentrated, super dense. And now you were
Robert Bryce 37:50
talking about the pad a multi well pad or you’re talking about just a single Well, now we’re talking about Yeah, a pat. Yeah. Okay. And, and the drilling pad, I will I’m gonna interrupt because this is one of the other things I’m curious about, how many wells are you putting on a given pad then how many wells are you drilling from one footprint from one individual cleared space, what how and how big are those pads, generally,
Toby Rice 38:10
they could be between eight to six, eight to 16 wells per pad. And we’ll space those wells, say probably do one every 1000 feet. And then so we’ll make sure the walls stay about 1000 foot away from each other, and then we’ll run them as long as we, you know, up to up to 20,000 horizontal feet if we have if we have to leasehold one of the new development styles that we’ve done here at EQ T is set up just going out and drilling, you know, one one pad, drilling, you know, five or six wells at a time, we’ll we’ll pair up you know, four or five pads sequentially. And and we’ll drill you know four or five wells off one pad, move to the next site, which is maybe a mile and a half over and do that and drill those wells. So we’ll go from drilling four or five wells at once off of one pad to drilling 20 to 25 wells off of multiple pads in sequence. We call that combo development. And it’s been a step change in in cost savings largely driven by the operational efficiencies you get because our drilling guys once they figure out I mean they’re steering these wellbores and they need to we’re targeting a you know, a six foot target window. So let me think about the technologies like not only we out there you know measure depths 25,000 feet away. We’re we’re steering this inaccuracy of keeping it within six feet. So it’s absolutely tremendous the technology but that is when once you understand the lay of the land from a geology perspective, your guys can now really open up the drilling speeds we’ve we’ve doubled the drilling the drilling speeds here at EGT.
Robert Bryce 39:49
How many days from from from spreading the well to getting the finishing the drilling?
Toby Rice 39:54
Yeah, the on the horizontal section. We can drill about 5000 feet in a day. And we’ve done we’ve done. We’ve had some days where we’ve hit over two miles in a day. So 10,000 feet in a day. So you do that to drill the horizontal section, you’re talking anywhere from three to four days.
Robert Bryce 40:11
So are you running your own rigs? Are you do you do your own drilling? Or do you contract your drilling?
Toby Rice 40:17
So we contract all pretty much all of our service equipment. And you know, when you think about an operator, what we really are is, you know, glorified contractors, we set the blueprints, we set the plans, and then we organize the equipment
Robert Bryce 40:33
to who does most of the drilling and completion.
Toby Rice 40:36
So we have on the horizontal rigs, we use Patterson completion, we are using a multiple, a few different frack companies. Evolution us well, services are out there for us right now. One of the key things that we’re doing in the oilfield service side of things is we are working one of the major design features that we’re pushing at att is to electrify the oilfield, and that is getting off of diesel based equipment to electric powered equipment that started with our electric FRAC fleets. And so us well services and evolution have been, you know, pioneers in the electric FRAC technology, but you’re seeing that have massive adoption. So I mean, Robert, think about this, you know, we’re fracking our wells with jet engines right now. So we natural gas fired turbines to create the power to power, the electric frack fleets that then we used to hydraulically fracture or Wells. I mean, this technology is came in last few years. And now it’s you’re seeing radical adoption from the industry on this on this front. I mean, it’s just another sign that this industry, just the ability to innovate and evolve in this industry is like, I mean, it’s, it’s absolutely incredible, incredible. So, but let me go
Robert Bryce 41:50
ahead, and we’ll let me ask you about the electric fragment because that I understand some of this, but the gist of it is, okay, just to be clear, if people don’t know the drilling business, EQ T hires Patterson, they drill the borehole and then they hire, then they hire. Another pressure pumper was one of the frack crew that comes in and then completes the well and injects the water in the sand to allow the hydrocarbons to flow back up to the well. But that the key there in terms of the electrification of the pumps, What advantages does that have? Because you’re injecting at very high pressure, the salt and I’m sorry, the water in the sand? Why? Why is the electrification of that pumping equipment? Why is that an advantage?
Toby Rice 42:31
There’s, there’s a number of advantages in a very high level, Robert, I mean, we there’s over 450 different services and service providers that we need to coordinate just just to get one well developed. So that’s just to understand
Robert Bryce 42:43
400 megabit 450. Yeah, and so the sack provide that for the sand with the rope this open the dope, what is the the guys that worked in logistics before but you got the sand provider? You got a caterer? I’m assuming the people who provide the trailers for the man for the man gap. So all of these different these are in that 400? Is that what you’re saying?
Toby Rice 43:05
Yes, that’s right. Okay. So obviously, you know, the frack crew is probably the biggest service where we have the biggest amount of spend the biggest benefits with electric FRAC fleets, there’s a couple things. Number one is the hydraulic horsepower that we that these frack pumps provide a diesel pump traditionally would provide about 2000 horsepower. These electric track pumps can provide 7000 horsepower. And so I mean, they’re almost two and a half times more powerful than than your nutritional. So it’s a step change in power. It’s amazing. Then you get the environmental benefits from you know, burning natural gas versus oil, there’s your evolution and using cleaner energy. For us at EGT. You know, we have eliminated over 25 million gallons of diesel consumption just from just from the move of moving to these electric FRAC fleets. The other thing you
Robert Bryce 44:01
enter the electric facts are using grid power through for that are you generating your own power to run the to run the pumps,
Toby Rice 44:08
were using natural gas to power this jet engine to make the electricity to power the frack bombs.
Robert Bryce 44:13
Okay, so you’re using your will this is the well a friend of mine Chuck Spinney talked about the Pentagon he called it the self licking ice cream cone your your your or what was there was a guy wrote the book on coelicolor He was talking about the virtuous cycle in the coal business that the coal is mining itself so using natural gas to produce the power to drum for more natural gas.
Toby Rice 44:35
Yeah, that’s right.
Robert Bryce 44:37
You’re now creating you it’s not it’s not a continuous or what it was the continuous motion machine or, but you’re creating a system where the system feeds on itself to produce more of the fuel that you’re trying to produce.
Toby Rice 44:50
Yeah, yeah, it’s it’s in and then you look and you say, Well, how much energy we created from this wallboard compared to the amount of you know energy that it took to create it. I mean, it’s absolutely staggering.
Robert Bryce 45:02
Have you done that calculation? Because I’ve been looking at energy invested I’ve been looking at. It’s a good report from at a from Rosenberg and oh, I don’t know, you probably saw that report that came out in February about the energy return on energy invested for different. But yeah, it’d be interesting to see if you if you do those, do those calculations, but I interrupted here again, go ahead.
Toby Rice 45:21
Yeah, somebody could do it at home, you know, it’s about 2000 gallons do a stage a stage is about 200 feet 200 feet, a lateral is about using two and a half Bcf per 1000 feet. Those are the basic numbers for the stats for the gallons of diesel to the amount of energy that will will create for that, for that present a rock. But yeah, it’s so listen, I mean, this is this is why, I mean, here’s a really amazing, I mean, this is why shale is taken off, this is why hydrocarbons part of the world because it is the most effective, efficient, cost effective way that is that we can that we can use to power the world. One of my biggest, you know, one of the things that people should be scratching their heads, you know, sitting home, I talked to a lot of, you know, a lot of people that are, you know, in my generation that are concerned about climate, and one of their things is like, well, oil and gas industry is holding back solar. And when I said, You think that’s what’s holding hold the maximum when you think we really care. What we are, we’re telling you the world is energy short, we need all forms of energy in the world. You know, when you have a when you really have a cheaper, more reliable, cleaner, inert form of energy. And if you can do it sustainably, which is the most important thing, which means it’s got to be profitable, right? Then it explodes on the scene. I mean, just look at how fast when we when we cracked the code on shale. You know, it absolutely exploded and took off. And there were no excuses about why shale wasn’t being what wasn’t taking over the grid Max, when we if we really do have that technology that’s ready to work on a world stage that’s sustainable, it will take off and the adoption will be, you know, self self evident. Over 90 Over 95% of the wells that we drill in the United States now are shale wells. Because we’re so efficient, the process is so efficient.
Robert Bryce 47:14
Do you have any dry wells? I mean, is there is that a thing of the past now,
Toby Rice 47:19
the only dry wells you’re going to have are going to be if you have operational issues where you know, maybe you lose, you get stuck, like when you’re drilling,
Robert Bryce 47:27
lose a drill or something. Something’s happened, you’re talking pipestem or something and they lose the thing in the in lose, they lose the integrity of the will.
Toby Rice 47:36
Yeah. And that that that failure rate is less than 1%.
Robert Bryce 47:40
So what are the biggest challenges then in the drilling aid, because I travel around a fair amount and talk to people are in manufacturing and other businesses and I hear over and over labor shortages. In fact, in Pennsylvania, I was in Pennsylvania talking to a battery manufacturer, they’re short 800 people. So in terms of your business right now, where are you? Are you facing supply? What are your biggest cramps are biggest, biggest challenges in terms of getting the job done? Is it it’s labor shortages? What about sand? tubular steel? Where are you facing the most friction in, in your in your in the logistics of your business?
Toby Rice 48:14
Yeah. And a very high level, this industry, the biggest challenges we face are all above surface. We’ve done the exploration subsurface, we know what we need to do we know the amount of resource we have to get. It’s all sub it’s all surface related issues. Specifically, operationally. Yeah, I mean, labor is a is a big thing. You know, you’re I was driving I was in the field yesterday. And I just remarked thinking, I’ve never seen this many help wanted signs up. That’s anecdotal. But it’s not just this industry. It’s every it’s every, you know, I think business owner, the country is struggling to find talent. And on the
Robert Bryce 48:54
labor side, is it that? You know, because I’ve talked with people in Texas, you know, will Okay, yeah, so this employee, prospective employee may check all the boxes, but can they pass a drug test? Or, you know, are they do they have a felony conviction? Or is there one thing in terms of those labor issues that is stands out? Or is that because it’s bigger friction than others?
Toby Rice 49:15
No, it’s actually just getting people in. Here’s the crazy thing, Robert, because this is what this is what this industry offers. Now, my first job in this industry, I was a forehand on a workover right, which is like bottom of the totem pole. I was making $9 an hour with a $2 Our safety bag. My where was this? This was this is in West Texas back in 2000 2005 2006. In the Permian Basin, the Permian Basin. Yeah, I broke out in West Texas. But here’s here’s what attracted me and this this still exists. You start I mean, obviously the way starting wages now are probably double or double that. But there’s such an awesome opportunity to start, you know, without a college degree. You can start and then your ultimate prize if you if you learn and you work hard. You you build With your knowledge of you can be a company man and a company man in this industry that’s the ultimate price can make over $1,500 a day. And all the there’s so many company men out there that started as that as that entry level job. And
Robert Bryce 50:14
they just to be clear, so the company man is the so EQ T has Patterson or another contractor on the site, the company man is on site to watch the contractors is that do I have this right? Is that the that they’re the supervisor, the company representative saying, Hey, you guys are doing this right or doing this wrong? But that’s the that’s the highest ranking person on the on the rig or on the wellsite? Is that Is that where is that what I do have this right?
Toby Rice 50:38
Yeah, that’s exactly right. There are sort of general contractor on every site making number one job making sure we’re taking safety is being is being taken care of protecting the environment number two, and then making sure that the design is being followed, and then we’re staying on budget and any operational issues. He’s problem solving, communicating back with the office to make sure we stay on track. So I mean, it’s to get labor. I mean, the oilfield a for listen to the oilfield is hiring right now. And it’s amazing opportunity if you want to come in through, you know, without a college education, obviously, you know, with with college education, professional, petroleum engineers, that’s obviously another amazing career path, and all the other disciplines that we have. But yeah, it’s there’s, I mean, I was talking to one of our roughnecks the other the other day. You know, think about this, this is this is the opportunity that this person has, it’s making $18 An hour base pay, he gets to work 87 hours a week. And for that 47 hours is time and a half overtime. So I mean, this person is averaging over $30 An hour can make can work 87 hours a week. I look at that. And I’d be like, as an 18 year old kid, I’d be like, This is amazing. I can make $2,500 a week, like sign me up. But some people look at that and say, you know, oh, man, you got to work 87 hours a week, though. And so like getting people that actually want to work, like there’s a tremendous opportunity for for people that want to join this industry. And I’d say we’ve got amazing training programs here so that, you know, even if you don’t know, I mean, I was a kid from Boston, and was found my I was I was sweeping chimneys one week. And then the next week, I was on a workover rig in West Texas learning learning what the hell this thing was doing. So
Robert Bryce 52:29
I’m sure you didn’t get any, any hazing by the Texas tool pushers out there. I’m sure they tricked you.
Toby Rice 52:38
This was this was this was old school back then. They would never do this today. But I remember when we were tripping pipe they used to sometimes the drill bit would get stuck. So when you break the pipe apart, you know, water would come out. And because it’s it’s, you know, in a wellbore, that’s 15,000 feet deep. It’s hot. It’s hot down there. So that water gets really hot. When they make the connection and they pull that pipe across this guy would put his hand underneath the pipe. And as that water was coming out, he sprayed at me it was like boiling hot water. He’d got boiled lobster boiled lobster, because I was I was from Boston. So that was the funny thing for them to do. Not funny now.
Robert Bryce 53:15
Not funny. Wouldn’t be allowed. Hey, so what do you think about the I’ve been reading up on you. Your dad worked at BlackRock and just from what I understand that was something he helped you get get you and your brothers get started. What does he think of this ESG push now because Blackrock has been in the middle of that? I mean, have you talked to have you talked about that with him? Because my joke on ESG? Is that what is the stand for the ESG? The E stands for emissions in the s&p are silent. Right that this is all about carbon dioxide is your your dad’s history at BlackRock, and we talked about this with him and how he views the ESG push?
Toby Rice 53:53
Well, I think it’s certainly respects that this is this is a thing that that people are going to consider when they’re making investments now, is it? I think with ESG, for for, for me, I mean, my approach is, I think we need to take take a balanced approach on the ESG and not just have it be all about the environment. But listen at a very high level. What is ESG designed to do it’s designed to the ultimate goal is to create companies that can be sustainable and generate profits over the long term. And when you think about it like that we all embrace ESG because we all want to create businesses that are profitable, not just today, but for the long term. And but I think like in anything in life, you need to take a more balanced you need to take a balanced approach and everything you do and once you start prioritizing one thing over that the next I think you’re gonna get unintended consequences like what exactly happened in Europe. You know, Europe big is I’d say probably five years ahead of the United States. It comes to that the ESG mentality and they definitely prioritize the when looking to just energy. What did they do? They pulled out How to prioritize the E over the s which is social, which is called that the energy security. Right. They were they were played, they ripped out their coal and nuclear power generation and replace it with solar and wind, they shut down their drilling in the North Sea. So their production in the North Sea went from 19 BCF a day down to nine BCF a day. So their their gas production was cut was sawed in half. They stopped drilling. And then they banned hydraulic fracturing, which is a miracle technology. So they completely prevented themselves from being like, completely caught off their energy security. And now you find yourselves where they’re at, which is they’re dealing with, you know, military conflict. And so, it, we have to take a more balanced approach, and, and we cannot lose sight of what’s going on over in Europe. Like we’re seeing those same impacts here. Robert, there’s major energy security issues here in the United States. It’s already here, it starts by the first symptom is high prices, we have high energy prices right now. The next thing is inflation. We have massive inflation right now, it’s going to get to a point where economies start shutting down in Europe, you know, they started shutting down fertilizer plants was one of the first things to fall, right, guess what that’s going to translate with the high food prices like so. We see high prices, we see inflation, you know, are we going to see military conflict here in the US? Probably not. But guess what the world is energy short. And if it’s days energy short, you’re going to see more energy conflict around the world. And guess what that impacts the United States, what’s going on in Ukraine right now impacts us. And so the United States needs to be a leader in ESG, and providing energy security to the world and doing something that’s going to help arrest climate. And that is what unleashing us LNG is all about, is putting an incremental 50 BCF a day into the of energy into the world to not only give massive energy security to the United States, because that energy that we’re exporting is a surplus for us here. And it’s going to keep energy prices cheap, remove the volatility, but it’s gonna provide energy security to the world. And it’s also going to replace over 50 BCF a day coal, which is, I mean, it’s going to be the environmental equivalent of electrifying every vehicle in the United States, and putting solar panels on every home in the US, and also doubling us wind capacity. That’s the equivalent of adding 54,000 industrial scale windmills combined. It’s absolutely massive if we can unleash us algae. That’s why we call it the biggest green initiative on the planet. But like we mentioned, the energy security that this is going to bring, think about this world, we’ve got 50% extra energy flowing through our pipelines. Guess what I mean, when when our leaders ask us for more production right now, because of the delay, it takes the cycle time for us to, you know, say, Okay, push out, push the push the button, get the raise, get the people get everything, I go to them and say I can get you your production in 18 months. But if we are in a situation where we have this energy on standby and surplus, when when people ask us for more energy, we can say I’ll get you that energy in 18 hours, it will be that fast. So that’s the energy security will be unprecedented energy security to Americans. And the last thing I’d say is go ahead. Yeah. Now, go ahead.
Robert Bryce 58:19
Well, I just I’m hearing you say this, and I get where you’re going. But I’m also looking at the Biden administration and what they’ve done so far. And they’re what seems to me just to, frankly, kind of an ant, not kind of an anti energy stance. I mean, across the board, I mean, except for wind and solar and for electric vehicles, which is what they talk about all the time. Here’s the question. What’s your take on the way the Biden administration has approached energy whether it’s the the allowing the just ignoring or being silent on the closure of the Palisades nuclear plant in Michigan, in the Indian Point nuclear plant in New York, or digging out the stopping Keystone XL? What what’s your what’s your brief take on what the Biden how the Biden administration is approached energy in general?
Toby Rice 59:06
I think energy transition, energy is a big subject. And it can be very complex. And as I mentioned, the things that we can do to improve the environment. If we’re focusing just only in the United States, people don’t understand that doesn’t matter on a world stage. What we do here in the United States, it doesn’t matter if the only thing that matters is shutting off foreign call. People don’t realize that. I mean, that’s a major point. I mean, Robert, even me, like couple years ago, I had a guy said, Hey, Toby, you know that we’re using more coal around the world than we’ve ever used before. I said no way, because we’ve done a good job and evolving our energy sources to minimize the use of coal. And you say surely that’s happening around the world. It’s not and that that is the one piece that just people don’t understand that stat I told you about For the 12 months, not addressing foreign coal wiping out everything we’ve done the last 15 years. These are very easy points to make that people don’t think about. But here’s the reality. The reality. And this is the other thing, I think the calendar this year and 22, is going to be your where people need to recalibrate their approach towards energy, because right now, we are in an energy shortage, there’s energy, we’re in an energy energy price crisis right now. We’ve got massive inflation going on. And by the way, emissions are soaring. So we’re not achieving anything and nobody’s achieving any goals. With with the current approach, that’s, that’s being taken place to date right now. So I hope that people recognize this and realize that, you know, we have this industry has a solution, unleashing us LNG is going to is going to help the environment, it is going to help the it is going to help energy security here and lower prices. And on top of that, it’s going to be the biggest jobs created this country’s ever seen. And we don’t even talk about this, Robert, but this plan to do this is going to create over 300,000, high paying jobs, just over three, there’ll be $30 billion of wages that this job would require to take. So whether you care about the environment, whether you care about energy security, and low prices here, whether you care about energy security to our allies around the world, or whether you you care about the economy here in the US, you should support unleash us LNG. This administration hasn’t heard this plan until recently. And so it’s gonna take it’s gonna take people’s, take some people some time to really understand and vet the corners of this thing. But this is a reason why we’ve gotten such a positive reaction to date. But it’s a complete 180 from people thinking, let’s just shut down fossil fuels here in the United States. And that’s going to be a good thing for the world. Actually, it’s the opposite. We need to be doing more energy development here in the United States, because it’s the only thing that’s going to allow us to meet our climate, climate objectives. And we get all these nice benefits, like energy security and big job creation here and us. But so let me keep on thinking like that, right?
Robert Bryce 1:02:15
Well, yes, but you make it, you make a convincing argument. And it’s an interesting one. But yeah, I don’t think that that message is getting heard very much in in this administration. Who do you admire in the energy business?
Toby Rice 1:02:27
I mean, there’s, there’s a ton of people.
Robert Bryce 1:02:30
Give me Give me three, give me two or three or four?
Toby Rice 1:02:33
Well, so I think I think Boone was was a big leader. I mean, obviously, George Mitchell, Master innovator. He was big. I mean, Aubrey McClendon, you know, was was a was a pretty big dreamer. And I think he was really a pioneer for a lot of great things. And there were some things that I think there’s there’s also some lessons you can learn from, from Aubrey. And, yeah, I mean, there’s, there’s, there’s a lot of people, but I will tell you this, what’s really amazing is, I don’t think there’s a, there’s a group of people that that that people get less credit for how good they are, like that the hearts that we have here, I mean, people look at the oil and gas industry as people that just care about profits, like when I talk to these guys want to talk to these other CEOs, like they care about energy security, they care about providing jobs, they care about the environment, and they can they care about the American consumer and making sure that we’re we’re delivering energy, you know, as cheap as we can. You know, there’s a lot of heart in this industry that we don’t get credit for. And it’s very consistent across the board. You know, these these, one of the reasons I think that is has really shored up a lot of things is, you know, we went through some really rough times in this industry over the last couple years, like I said, there was hundreds of companies that went bankrupt, like that got rid of a lot of, you know, bad actors, maybe I haven’t met, I haven’t met many of these people. But, you know, these tough times have really, you know, I’d say really purified a lot of the people that are here in this industry, and you’re really dealing with some high class individuals that I’m really excited. And this is this is really this is the exciting part is you know, this compared this on leash us LNG to sort of Pickens, you know, when plan and doing CNG using natural gas to do to do power transportation. The most exciting thing about this plan to unleash us LNG is this is going to be this is going to require everybody in industry to step up and do their part to meet this incremental 50 BCF a day production. And it’s going to require people around the world so everybody in industry is going to play a key role and we’re going to need a lot of teamwork for people to step up and do their part and help us meet this massive budget objective is is the biggest green initiative on the planet. You know, we’re gonna need you know, our leaders in Washington to help us set up these trade agreements with people overseas, because we need to shore up that demand. Before we can actually think about adding supply So this is gonna actually take a total team team effort. And I know that the quality of people that we have here, standing next to me on this thing are going to be great champions for this to help us launch this plan.
Robert Bryce 1:05:12
So just a couple of more things. We’ve been talking for about an hour, and my guest is Toby rice. He’s the CEO of EQ T Corporation, you can find more about him and EQ [email protected]. So you’re, what 40 years old now? Is that right? 40. And you have you got into rice energy with your brothers, Daniel and Derek. I gather that one of them is older and one is younger. The question is, so did you draw straws to determine who gets to be CEO? Because you were partners in this deal? And was was this was an agreement that you were going to be CEO because I have brothers and I’m you know, there’s, you know, we’re we love each other, but we’re also trying to figure well, who’s going to be the leader here? How did you end up with the CEO job and Daniel and Derek with other jobs?
Toby Rice 1:05:53
Well, I got to see a job because I was the first one to get to get in and the company, so I got to pick that I got to pick the CEO. Oh, but listen, when we, from 2007 to 2013, you know, we had, I had the CEO title, but I mean, as a private company, really, it doesn’t really mean much. When we went public in 2014, Danny has a finance, financial backing and, you know, we for made made him the CEO at that point, during our time as a public company from 2014 to 2017. Danny was the CEO. And now now back at EQ T. I’m in that seat now. So yeah, but the good news with us is we all have different disciplines. Danny, finance me Petroleum Engineering. Derek is a geologist, I’d say Derrick probably caught the short straw, because we needed a geologist. And he Fortunately, he likes storytelling and geology is a lot of part about that. And then we got Ryan rice, Who’s the youngest brother, and a lot of not a lot of people know about, but this kid was the, this kid was really special and make in digitizing our business and bringing us next level analytics. And he was really the we were always big data. When Ryan came in, we were like, Oh, we were sort of we weren’t as big data as we thought because Ryan really took us to the next level. And Ryan is a petroleum engineer. And he’s 30 years old. So we’ve got to really, we’re really grateful to have the skill sets that we have with the brothers. But we I think the special thing about us is, you know, we were grateful to be joined by I think people that were experts on their their disciplines in this thing. And we’ve got a great team here at EQ T and couldn’t be happier for the for the group we’ve got.
Robert Bryce 1:07:38
Well, congratulations. I mean, you know, make a family business work and that you can work with your brothers, that’s got to be a rewarding. So just a couple last questions here. Toby, what are you reading these days? You know, I have a big stack of books. I’m always interviewing or reading books, in preparation for interviews and so on. And, you know, I’ve written a few books myself, but what’s on the, what’s on your reading list these days?
Toby Rice 1:07:58
Right now I am reading Epstein’s book. Fossil future? Right? That’s, that’s pretty powerful. I’m also reading another book called the power of purpose. I think that’s the title of it. It’s about higher purpose in an organization. So those are the two those are the two that are on the docket right now.
Robert Bryce 1:08:17
Okay. So last question is when I asked all my guests so what makes you optimistic, what gives you hope for the future?
Toby Rice 1:08:26
I think that we have a tremendous opportunity. I think energy is everything and a root cause a lot of these issues that we have, are due to lack of lack of enough energy in this world. What gives me hope is the potential that the United States has, with energy, what gives me hope is unleashing us LNG. I really think this is going to be a solution to a lot of issues. Whether it’s people addressing people’s concerns about climate or you know, finding a way to pull these 3 billion people out of energy poverty and give them a better quality of life. I’ve never been more excited or driven to make something happen as I am with with unleashing us algae and that’s saying something because we’ve taken on some pretty big initiatives like starting a company with not much like starting an energy business when not much experience you know, when I first started or doing the takeover of EQ t mean, those were both very ambitious things, but I’m more excited about the impact that only showed us onto the world stage can have to make an impact in this world. So that that gives that’s what gives me hope.
Robert Bryce 1:09:31
Good Well, I think we’ll stop there then that’s a good good place to stop my guest Toby rice, from CEO of EQ T Corporation. Thanks a million for being on the power hungry podcast. Thanks, Rob. And thanks to all you in podcast land, tune in for the next episode of On this same podcast channel. Until then, see you