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Washington Post
19-05-2025
- Business
- Washington Post
I have seen the future of AI. It's in Western Pennsylvania.
The region's energy and know-how powered the Industrial Revolution. It's following the same playbook now. Salena Zito is a columnist for the Washington Examiner. CARNEGIE, Pa. — Toby Rice's second-floor office in this middle-class town named after famed industrialist Andrew Carnegie, who made the region the center of American industry nearly 150 years ago, is so unassuming that you would never imagine it's also where the chief executive of the largest independent natural gas producer in the United States hangs his hat. At street level next to a liquor store, the door to this former karate studio reads 'Shallenial,' marking the only hint that you might be in the right place. Climb the narrow steps and the space opens up to an office unlike any you'll probably ever see: There's a seven-foot statue of a gorilla in the corner (gorillas are a theme, even getting the Warhol treatment in one art piece), several neon signs including ones that read 'Bold Moves Only' and 'Profits & Purpose,' and among the drafting tables — foosball. Oversize 'Don't Tread on Me' and American flags are also prominent. Silk-screen paintings of Carnegie and other American industrialists face Rice as he pulls up a mid-century turquoise chair and takes a seat. At EQT Corp., the country's largest independent natural gas producer, business is good — and it's about to get better thanks to a surging local industry that needs all the Appalachian energy it can get: Artificial intelligence. 'I mean the size of this thing, it's crazy,' Rice says. 'We are hearing estimates for power demand for AI that's anywhere [from] 50 to 75 gigawatts of power, which is the equivalent of the power needed to power 10 to 15 New York Cities.' Toby Rice, the CEO of Pittsburgh-based EQT Corp., at his office in Carnegie, Pennsylvania, on April 28. (Justin Merriman/For The Washington Post) Some of the artwork that hangs in Toby Rice's office. (Justin Merriman/For The Washington Post) Exactly 47 miles due east, we find Shawn Steffee, the business manager for Boilermakers Local 154, who is standing across the road from what used to be Pennsylvania's largest coal-fired power plant, the Homer City Generating Station. Towering behind him is a lush, green mountain of ash from the former coal burner, which is now in the middle of a bustling transformation to natural gas to power an adjacent AI data center. EQT is expected to be one of several natural gas providers in the running to support the project. 'I've said this once, and I'll say it again: I don't know a damn thing about AI, but the boilermakers and the building trades know how to build power plants, whether it's nuclear, gas or coal,' Steffee says. Map of Pennsylvania locating Carnegie and Homer City Titusville Detail PENNSYLVANIA Philadelphia 50 miles Homer City Pittsburgh PENNSYLVANIA Carnegie 79 20 miles 70 NEW YORK Titusville PENNSYLVANIA OHIO Detail Philadelphia NEW JERSEY MD. 50 miles W. VA. Homer City Pittsburgh PENNSYLVANIA Carnegie 79 10 miles 70 20 miles PENNSYLVANIA Homer City Pittsburgh OHIO Carnegie Titusville PENNSYLVANIA 79 Detail 70 Between Homer City and Carnegie lies the city of Pittsburgh, where Joanna Doven's brand-new Bakery Square office sits along the city's newly minted AI Avenue, a stone's throw from the University of Pittsburgh and Carnegie Mellon University. Both institutions are known for producing some of the brightest minds in the country when it comes to artificial intelligence: Carnegie Mellon was home to the first AI computer program in 1956 and is the top-ranked university in the field today; Pitt has drawn acclaim for its medical and biomedical breakthroughs utilizing AI. Several years ago, Doven recognized that Western Pennsylvania, with Pittsburgh at its heart, was poised to be the center of the AI revolution. Local politicians were often dismissive of anything that had to do with natural gas, but to Doven, the connection was obvious between the anchors of research and innovation coming from Pitt and Carnegie Mellon and the abundance of resources nearby to power it. So, she started the AI Strike Team, a group of leaders she assembled from industry, academia, health care and the trade unions to work together to position the region to lead the AI revolution; and she located it right here in Pittsburgh's 'Tech Alley.' 'Our roots here are building hard things — from steel to robotics — and they perfectly match the demands of this moment,' Doven says. The coming AI boom Western Pennsylvania is at the core of America's next Industrial Revolution, and is driven by the same mix of energy, grit and expertise that made it the center of the first one. We've been here before. When Edwin Drake discovered oil 100 miles north of Pittsburgh in Titusville in 1859, it was a moment that changed the country's trajectory from a primarily agrarian society and transformed it to an industrial one fueled by the oil boom that began the modern petroleum industry. Before Drake's discovery, the country was reliant on whale oil and coal, and it led to the world's first oil-production companies. Think John D. Rockefeller and Standard Oil. That, in turn, led to demand for new machinery and tools, which then led to a boom in steel and iron industries, which then spawned other industries, transportation systems, technologies and factories. It marked a period of rapid change that spurred the growth of towns and cities throughout the country. Story continues below advertisement Advertisement Last month in Homer City, the smokestacks of the generating facility were brought down, and all believed that hope was lost for the little village and the surrounding Indiana County. A week later, the newly formed Homer City Redevelopment announced the plant would be redeveloped into a $10 billion artificial intelligence and data center with a massive on-site natural-gas-fired power plant that would rank as one the largest capital projects in Pennsylvania history. Today, the shovel-ready project is already humming. There are projected to be more than 10,000 construction jobs along with 1,000 direct and indirect jobs permanently on the site or serving it — jobs that include scientists, engineers, artificial-intelligence managers, physicists and chemists, all the classic foundations of the American workforce. Steam rises from the Homer City Generating Station on May 9, 2017. The plant ceased operations on June 2023, and was recently demolished. (Justin Merriman/For The Washington Post) The Homer City Generating Station, once Pennsylvania's largest coal-fired power plant, on April 29. (Justin Merriman/For The Washington Post) A truck passes through Homer City, Pennsylvania, this month on its way to the generating station to haul away rubble from the facility's demolition. (Justin Merriman/For The Washington Post) The site will have seven natural-gas-powered turbines that will provide 4.5 gigawatts of power to drive the energy needs of AI hyperscale data centers on the new campus. That power will come from the Marcellus Shale. The AI intellect will come from the universities. And though conventional wisdom would have you think these projects would come from Silicon Valley, they will instead come from the rolling hills of Appalachia. We are in another Drake moment — only this time Rockefeller and Carnegie aren't leading the revolution, it's Rice, Steffee and Doven, the innovators, leaders and artisans who will go down in history as being at the heart of it. The undrafted baseball player Toby Rice was going to play baseball in the major leagues. The Massachusetts native believed it so much he said it was basically what he went to college for. 'I was at Rollins College in Orlando, Florida, where our team went to the College World Series, which was a big event in my life,' he says of his season as captain when he and his teammates reeled off an impressive 20-game winning streak. When draft day for Major League Baseball came, he was pumped for the start of his professional career — until it ended with him not getting picked. 'I was shocked. Nobody else in my family was,' he deadpans. Story continues below advertisement Advertisement Rice returned home to Massachusetts without a game plan, so he started sweeping chimneys. 'I woke up every day waiting to figure out what's next in my life,' he recalls. 'And then one day after getting in a fight with a raccoon, I almost lost my life.' Rice went to his father for advice. The elder Rice suggested the oil and gas industry. His only association with oil at the time was Saudi Arabia; he was intrigued by the romanticism of 'modern day treasure hunting' for energy at home in America. So, he went to Texas. Shale had not yet been discovered in Western Pennsylvania. He started at the bottom of the totem pole in what he calls his second 'dirty job' — wrenching rods and pulling tubing on an oil rig as a 'roughneck' for $9 an hour, plus a $2 bonus for following safety guidelines. Toby Rice in Carnegie, Pennsylvania, on April 28. (Justin Merriman/For The Washington Post) He did that for a few months and then decided to enroll at Texas A&M for the university's petroleum engineering program for hydraulic fracturing, a degree he never finished. He dropped out, so eager to start his own business that he couldn't wait for graduation. At 24, he was the founder of Rice Energy. Story continues below advertisement Advertisement His trajectory in the industry is now legendary in business circles, but it was not meteoric. There was a lot of sweat along the way — he left Texas for Appalachia, and slowly grew Rice Energy from a no-name company to a top 10 producer of natural gas in the country. In 2017, it merged with EQT to create America's largest independent natural gas producer. After a successful proxy takeover less than two years later, Rice was named president and chief executive of EQT. His initial rise was fueled by the broader transition to natural gas, which displaced dirtier coal-burning plants. Rice takes special pride in his product's low methane intensity. The next chapter is being written now, as the U.S. looks to win a war for AI dominance with China that could determine the next century of geopolitics. A train engine is seen near Homer City, Pennsylvania, on April 29. (Justin Merriman/For The Washington Post) Power lines stretch along a quiet road near the former Homer City Generating Station on May 6. (Justin Merriman/For The Washington Post) 'This is the biggest gas field in the world. This is the biggest energy source,' Rice says. 'Pittsburgh has powered, has been the ground zero, for the industrial revolutions that have taken place in this country. This AI revolution that's taking place — no different.' Rice said we haven't even begun to talk about how important AI is and our own energy source when it comes to national security, warfare and health care; it isn't just making funny memes on our phones and pictures. The industry's biggest challenge to meeting demand, he says, is climate-related opposition to natural gas, like a movement in neighboring New York to veto pipelines from crossing state lines. 'We're going to do everything we can to make sure they have all the energy they need to meet their AI aspirations,' Rice says. 'But we should still have the ability to build more infrastructure here.' Story continues below advertisement Advertisement Fisherman, hunter, boilermaker, energy provider For 54 years here along the ridges overlooking Homer City, the towering stacks of the generating station marked the largest employer in this idyllic little village of about 1,800 filled with winding roads, a tidy business district and century-old homes. However, since the closing of the plant a few years ago, some businesses have left — a sign of the economic disruption that can happen when industry pulls out of a small town. Pretty much everyone worked in or adjacent to the plant. Its iconic presence on top of this mountain was a landmark that could be seen from miles around by travelers and residents. Shawn Steffee knows the woods that surround the plant like the back of his hand. He has hiked here, hunted turkey here and spent his childhood here running through the woods with his pals until they couldn't catch their breath. 'Best white-tailed deer hunting in the state is right here,' he says. 'You used to go up to the guard shack over there and they would give you a permit and you could hunt most of the entire property around the power plant during buck season.' Shawn Steffee is a lifelong resident of Homer City, a member of the Boilermakers Local 154 in Pittsburgh and vice president of the North Central Pennsylvania Building and Construction Trades Council. (Justin Merriman/For The Washington Post) Steffee looks as though he spent his high school days as a linebacker. He has the voice of Johnny Cash, but his superpower is that of a boilermaker, a trade essential to natural gas power generation. A born-and-bred Homer City kid, Steffee is the business manager for Boilermakers Local 154. Not only did he work at the plant, he also made his home here, as have several generations of his family. His children and grandchildren all attended local schools; he coached the high school football team and gave back to the community tenfold. When they decommissioned the plant two years ago, a sense of doom set in. 'I felt like it was pretty much the end of town,' he recalls. 'If nothing came, they would've never been able to sustain that kind of loss on taxes. Now, can you imagine thousands and thousands of construction workers coming to this every day for what, four to six years? The money that will come in will have people stopping at your gas stations, your local stores, churches and barber shops. It brings back hope.' The stress of uncertainty, however, is ever-present; the population decline has taken a toll. A fallen sign on a building in downtown Homer City, which has only about 1,800 people and is about 60 miles east of Pittsburgh. (Justin Merriman/For The Washington Post) A faded sign featuring a photo of the high school football team hangs in the window of a shuttered business along South Main Street in Homer City, Pennsylvania, on May 6. (Justin Merriman/For The Washington Post) Joe Kosmack cuts Jim Cutshall's hair at his barbershop in Homer City on May 6. Kosmack, born and raised in Homer City, has operated his business for 17 years. When asked about the planned $10 billion data center to be built in his town, Kosmack said, 'It's gonna go in somewhere. If we can do it here, let's do it.' (Justin Merriman/For The Washington Post) 'When I graduated from Homer City High School there were 150 in my graduating class; when my son graduated in 2013, 54,' he says. 'This town and every little town around here where people worked in the industry or around have been stripped of their dignity every time a business closes.' Steffee looks across the road at the plant with pride as he watches the work already being done to start the new facility. 'Here's the great thing about this: This is going to be powered by PA Gas,' he says. 'PA workers are going to build that building. It's a win-win for the state of Pennsylvania. It's a win-win for Indiana County.' Story continues below advertisement Advertisement The Accidental AI energy bunny Of the three, Joanna Doven — slim, glamorous and looking 15 years younger than her age — is the one up to her armpits in technology. She is the 40-year-old daughter of a college-educated Cuban immigrant mother who fled her home country during the revolution, eventually settled here and married the son of a steelworker. Doven's office is right beside Google's Pittsburgh headquarters. There is a robot art gallery on the first floor of her building. Everyone around her is young — either working in the AI industry or an intern from Carnegie Mellon or Pitt just bursting to start their own companies once they graduate. Doven is the accidental industry leader. She cut her chops in 2006 as a very young press secretary for an equally very young mayor of Pittsburgh, Luke Ravenstahl. She parlayed the relationships she built in the business, foundation and academia communities to start her own public affairs firm more than 10 years ago. A Democrat, she grew frustrated as she watched leadership in the local party move away from working with the business community and trade unions and toward far-left national politics. She wanted to do something to get involved, 'because things were so out of control with where the direction and the region was going.' Joanna Doven, the executive director of the AI Strike Team, in Pittsburgh on May 7. (Justin Merriman/For The Washington Post) So, she ran for an at-large county council seat two years ago, to try to help guide the region back to a more pragmatic approach. Doven didn't win — but the mother of three said it taught her something valuable: 'If we just wait around for someone in power to figure things out, we will miss our opportunity to be a major player in this moment.' Hence, the AI Strike Team was born. Doven's key insight: Whereas Silicon Valley could once grow an industry by rearranging ones and zeros alone, the burgeoning AI era required more than smart coders and a business plan. 'Unlike past tech waves, today's AI revolution demands physical resources: resilient energy supplies, scalable infrastructure, deep pools of technical talent, and the ability to build and deploy at industrial scale,' she says. 'And that is where Pittsburgh stands apart.' Story continues below advertisement Advertisement And capital investment shows that, says Doven. 'In 2024, venture investment in defense and health-care AI grew over 30 percent year over year — two sectors where Pittsburgh already has legacy expertise and emerging unicorns,' she says. Boosting growth even further is the federal government's emphasis on outpacing China on AI, an early focus of the Trump administration. Doven calls this moment an obligation for the region to meet. 'Just as Pennsylvania steel once helped defeat tyranny and fuel American prosperity, today's challenge is to build the AI technologies the world needs — rooted in our energy, labor, data and ingenuity,' she says. The conditions are there — but they won't win the global competition on their own. The future economy, she says, will be defined by states and regions that can seize the opportunity, play the long game and marshal their resources toward a shared goal. 'Those that lean into AI innovation will grow jobs and industries,' Doven says. 'Those that lean out will lose them.'
CNBC
25-04-2025
- Business
- CNBC
Volatility is a really important theme for natural gas, says EQT President and CEO Toby Rice
Volatility is a really important theme for natural gas, says EQT President and CEO Toby Rice President and CEO Toby Rice joins 'Mad Money' host Jim Cramer to talk quarterly results, the energy sector and more.
Reuters
23-04-2025
- Business
- Reuters
EQT plans to spend less while producing more US natgas in 2025
April 23 (Reuters) - U.S. energy company EQT (EQT.N), opens new tab, the country's second-biggest natural gas producer, plans to reduce capital spending but produce more energy in 2025, while rival Range Resources (RRC.N), opens new tab said it would hold expenditures and output relatively steady from 2024. The companies released their spending plans late Tuesday alongside first quarter earnings statements. With U.S. gas prices forecast to rise in 2025, firms are expected to pull record amounts of gas out of the ground this year. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. EQT said it planned to spend $1.950 billion-$2.070 billion on maintenance capital in 2025 and produce about 6.03-6.30 billion cubic feet of gas equivalent per day (bcfed). That compares with spending of around $2.266 billion in capital in 2024 to produce an average of 6.10 bcfed. EQT CEO Toby Rice attributed the forecast for higher production and lower spending to strong well performance, efficiency gains and synergies from the company's purchase of Equitrans Midstream in 2024. "This underscores the tremendous momentum we're experiencing at EQT and we see no signs of slowing down as we look ahead," Rice said in the earnings release. In its prior 2025 outlook, released in February with fourth-quarter results, the company said it expected to spend $1.950 billion-$2.120 billion and produce about 5.96-6.23 bcfed. Separately, EQT said it agreed to spend about $1.8 billion to acquire upstream and midstream assets from Olympus Energy in Southwest Pennsylvania with net production of about 500 million cubic feet per day. EQT expects to close the Olympus transaction in the third quarter of 2025 and did not include the impact of the pending acquisition in its 2025 guidance. RANGE RESOURCES OUTLOOK STEADY Range Resources, another big U.S. gas producer, said it planned capital expenditures of $650 million-$690 million in 2025 to produce about 2.2 bcfed. The forecast was unchanged from a spending and production outlook Range released in February. In 2024, Range spent about $654 million in capital and produced around 2.18 bcfed. Range also said it was collaborating with Liberty Energy (LBRT.N), opens new tab and Imperial Land to supply gas to a proposed power generation facility in Washington County, Pennsylvania. "The proposed power facility is expected to serve as a catalyst for attracting data centers and industrial operations seeking long-term, reliable, efficient energy solutions," Range said in its earnings release. Other big U.S. gas producers, including the nation's biggest, Expand Energy (EXE.O), opens new tab, will report earnings in coming weeks.
Reuters
12-03-2025
- Business
- Reuters
CERAWEEK AI, LNG demand to keep US natgas use at record highs but bottlenecks threaten
HOUSTON, March 12 - U.S. natural gas use is set to continue hitting record highs due to soaring liquefied natural gas (LNG) demand and power consumption from data centers, executives said at a conference this week, while also warning a lack of infrastructure could hurt the industry. The U.S. is the world's largest gas producer and is expected to produce some 105.2 billion cubic feet per day (bcfd) this year, according to U.S. government data. Demand has already hit a record nearly each year since 2010, but some markets in the U.S. have been hampered by lack of available pipeline space. Pipeline capacity has not caught up with production after a series of project cancellations over the last eight years, according to Toby Rice, CEO of EQT (EQT.N), opens new tab, the No. 2 U.S. gas producer. This has contributed to a 35% rise in electricity costs for U.S. consumers in the last four years, he said. "We have the gas, we just don't have the pipelines to get it to places, so now you see a situation where it doesn't matter how much we produce," Rice said in an interview on the sidelines of the conference. "Energy bills are still going up as political forces have overridden market forces." EQT's 300-mile (483-km) Mountain Valley pipeline, which transports up to 2 bcfd of gas from West Virginia to Virginia, ran at full capacity last winter, Rice said. The project was slated to cost $3.5 billion, but ultimately costs totaled $8 billion following eight years of delays, Rice said. Moving gas from the Permian basin in Texas and New Mexico and other shale regions in the Northeast U.S. or Midcontinent for LNG exports requires significant pipeline investment, said Pierce Norton, president and CEO of pipeline company, ONEOK (OKE.N), opens new tab. "That requires a lot of pipe to get it down here," he said, referring to the U.S. Gulf Coast. LNG DEMAND, DATA CENTERS The U.S. Energy Information Administration (EIA) projected total gas consumption, including exports, would rise from a record 102.3 bcfd in 2024 to 105.5 bcfd in 2025, and 107.6 bcfd in 2026. Booming LNG exports should remain the biggest source of gas demand growth in coming years, according to a federal energy outlook. U.S. LNG exports have hit record highs every year since 2016 when the first major LNG export facility in the U.S. lower 48 states came online. Freeport LNG's plant in Texas is running its pipe infrastructure at full capacity, its CEO, Michael Smith, said at the conference. The U.S. became the world's biggest LNG supplier in 2023, surpassing Australia and Qatar. With plants currently under construction, U.S. LNG capacity will almost double from around 13.8 bcfd in 2024 to 24.7 bcfd in 2028. The industry has also received a boost from U.S. President Donald Trump, who in January lifted a moratorium on new LNG export plant permits imposed by his predecessor. Surging demand from power-hungry data centers that are fueling a boom in artificial intelligence is also expected to push up demand for natural gas. The world's largest renewable energy producer NextEra Energy (NEE.N), opens new tab expects a 55% jump in power demand over the next 20 years versus the prior two decades, CEO John Ketchum said, with some 17% of that demand growth expected to come from the boom in AI. Benchmark Henry Hub natural gas futures hit their highest since December 2022 at $4.49 per million British thermal units on Monday, having settled below $4 per million British thermal units every day last year and most of 2023, according to data from LSEG.
