In the United States, the benefits of the shale revolution have been meaningful, especially in West Virginia. For example, the production of oil and natural gas supported approximately 40,000 jobs, provided $2.6 billion in labor income and added $5.9 billion in value to West Virginia in 2019.
As one of the biggest operators in the state, EQT invested $27.6 million in infrastructure, generated over $252 million in tax revenue and our foundation gave more than $3.6 million last year to support local communities.
These enhancements to quality of life are a result of the increased supply of reliable, affordable energy and are not unique to West Virginia. Higher energy consumption leads to an enhanced quality of life and longer life expectancy — a concept firmly embedded in the Paris Agreement, as it recognizes that the effects of energy policies will be felt profoundly by the billions of global citizens living in an energy deficit.
Natural gas represents a critical component of the domestic and global energy supply mix of the future. One of the most significant benefits of natural gas has been its effect on greenhouse gas emissions. According to the U.S. Energy Information Administration, since 2007, energy-related domestic carbon dioxide emissions have declined at an average pace of 1.3% per year — largely because of the large-scale replacement of coal-fired power plants and increased use of natural gas and renewables.
The United States is fortunate to be among the minority of countries that have an abundance of exportable energy resources like natural gas that can be used to replace the consumption of higher-emissions-intensive energy sources globally. And, data show that natural gas produced in Appalachia is the lowest carbon-intensive and methane-intensive production in the country.
For example, emissions from Appalachian natural gas producers are, in many instances, materially lower than foreign supply sources — including less than half that of Russia — and substantially lower than emissions from coal. This represents meaningful opportunities for the United States and, more specifically, high natural gas-producing states like West Virginia, to influence climate change on a global level. And local companies like EQT are driving real change in the climate and energy space.
Last week, EQT announced targets to achieve net-zero emissions by or before 2025, reducing greenhouse gas-emissions intensity by approximately 70% and methane-emissions intensity by approximately 65%. These targets are industry-leading, and position EQT to be one of the first — if not the first — major producers globally to achieve net zero.
But this is not the finish line. Given its proximity to low-emissions natural gas and a difficult-to-decarbonize industry, the region is poised to play a leading role in the future global energy ecosystem. And that is why EQT has announced plans to invest tens of millions of dollars in proven technologies and promising innovations, such as blue hydrogen and carbon capture and storage.
Natural gas is not “big oil.” Unlike foreign and integrated oil and natural gas companies, independent companies like EQT depend on sound energy policies that support our ambitions to leverage technology and innovation to meet our toughest challenges. As we seek a fundamental reshaping of our energy ecosystem, the energy industry needs to be sustainable, not selectively defunded.
Any changes to federal tax policy that punitively target the industry, such as changes to current tax policy on intangible drilling costs, will only undermine our efforts, limiting investable capital in innovation and emissions detection and capture technologies, while driving up energy prices.
Much of the great work we have done to invest in this region’s economy and our country’s environmental leadership has been influenced by our ability to recover our drilling costs consistent with longstanding federal tax policy. Eliminating intangible drilling costs would be a step back.
Our ability to provide good-paying jobs, invest in local communities and drive the low-carbon energy transition with innovation and technology investments would be put at risk, if the current tax policy on drilling costs is changed.
The natural gas industry is important to West Virginia. Intangible drilling costs are important to our industry. And our industry’s success is vital to the United States leading the global low-carbon energy transition.