The energy industry is finally recognizing that more renewable resources will not deter demand growth for natural gas anytime soon, the chief executives of major US natural gas and LNG producers said today.
Two years ago, renewables were the principle talking point of the energy industry, said Michael Smith, chief executive of Freeport LNG, at the CERAWeek by S&P Global conference in Houston, Texas.
"That has completely changed," Smith said. "There is a recognition within the industry that the energy transition is not going to be using natural gas just as a bridge fuel."
That recognition comes from growing overseas demand for US LNG, the desire by countries to convert coal-fired power generation to gas-fired generation, and more recently, booming power demand by planned data centers to run artificial intelligence software, said Toby Rice, chief executive of EQT, the second-largest US gas producer by volume.
But despite growing demand, environmental and local opposition to the construction of new US interstate gas pipelines poses a challenge to the industry's ability to produce and transport enough gas to fulfill that demand, Rice said.
"The biggest challenge that's facing our industry is this pipeline cancellation movement," Rice said.
Construction of interstate gas pipelines in the US has become difficult in recent years as environmentalists and landowners pressure state governments to withhold air and water quality permits needed for those projects. Rice's controversial 2 Bcf/d (57mn m³/d) Mountain Valley Pipeline (MVP), which connects gas fields in West Virginia with markets 300 miles away in Virginia, is the only major greenfield interstate gas pipeline project in the eastern US that has overcome legal opposition in recent years. It was allowed to bypass federal permitting hurdles through an agreement in 2023 between former President Joe Biden and Republicans to raise the limit on the federal debt, provoking outrage from environmental groups and some Democrats.
The pipeline began service in June 2024, six years behind schedule and with a price tag of $7.85bn, compared to an original estimate of $3.5bn.
MVP "is a piece of infrastructure that they said was not needed", even though the pipeline was operating at maximum capacity this winter, Rice said. "Everybody should be incredibly concerned that it takes an act of Congress to get a pipeline built in this country."
