Natural gas has always been the overlooked little brother to crude oil that drives the fossil fuel industry dating back to the famed Drake Well in 1859 in Pennsylvania, which launched the U.S. oil and gas industry.
The dynamics have changed now—especially in the heart of the gassy Marcellus Shale in Pennsylvania. Gas demand is beginning to boom thanks to the electricity feeding frenzy from data centers, skyrocketing liquefied natural gas (LNG) exports, and the ongoing retirements of aging coal plants being replaced by relatively cleaner-burning gas.
Many of the nation’s top gas producers, including Expand Energy, EQT, Range Resources, and Antero Resources, all have major Appalachian footprints and market cap values that have spiked by 25% to 75% the past 12 months.
“With the resource-rich potential in this [Marcellus] basin and the growing demand component for AI and data centers and power, it really is setting us up well to help shape this AI revolution that’s going to take place here in the United States,” Range Resources CEO and President Dennis Degner told Fortune.
A decade ago, the gas industry’s fortunes focused on seasonality and how cold each winter would prove, Degner said. “Now we’re talking about power and data centers and LNG essentially doubling over the next few years. Those are all big, diverse demand components that really get us excited about the durability of our business model.”
The Appalachian region—primarily the Marcellus and Utica shale plays in Pennsylvania, West Virginia, and Ohio—produces just over one-third of the nation’s gas—and very little oil—with proximity to Virginia’s growing Data Center Alley and, now, more AI infrastructure expected within Appalachia.
After a couple of decades during which U.S. power demand remained relatively stagnant, domestic electricity consumption is expected to surge by 25% from 2023 to 2035 and roughly 60% from 2023 to 2050, driven largely by AI and data centers, according to the International Energy Agency.
Likewise, record-high LNG exports will roughly double by 2030. Based on new construction underway or greenlit along the U.S. Gulf Coast, LNG exports are expected to rise from 15 billion cubic feet per day in 2024 to at least 30 billion daily by the end of 2030.
“It’s really night and day when you look at the gas names versus the oil names,” said Gabriele Sorbara, energy analyst at Siebert Williams Shank & Co. “The fundamentals for gas are very strong. You’re going to have massive tailwinds.”
Appalachia’s tech boom
Antero chairman and CEO Paul Rady said in his earnings statement that the industry now expects natural gas demand to soar 25% by 2030, led by LNG growth and then by data center power thirst.
That’s an astonishing jump for a U.S. sector that pumps out 107 billion cubic feet of gas per day—already double the amount since the nation’s shale gas boom kicked off 20 years ago.
The top gas producers are all exceeding their production estimates this year with goals to continue ramping up for at least the next two or three years. But they’re doing it without huge spending hikes because of the operational efficiencies gained through drilling and completing wells.
Range Resources, for instance, aims to grow its production 20% by the end of 2027. But Range is doing it while only operating two drilling rigs. For comparison, Big Oil giant and leading Permian Basin producer Exxon Mobilhas at least 35 rigs operating in the huge West Texas oil basin.
“These [Marcellus] wells are just massive,” Sorbara said.
Instead, the question marks focus on the exact extent of demand growth, the timing, and the gas pricing, making gas players relatively conservative when it comes to ramping up production, building new pipelines, and inking fixed-pricing deals with data center developers.
For instance, since mid-June, natural gas prices and stock values have slumped a bit because of milder weather and rising gas storage levels. But that’s not slowing the bullishness.
Range sends about half of its Pennsylvania gas toward the U.S. Gulf Coast and LNG exports but, because of pipeline constraints, additional growth is almost all coming from regional data center demand.
In July, Trump touted $92 billion in energy and AI investments in Pennsylvania from hyperscalers, power generators and more. Range, for instance, has a new partnership with Imperial Land industrial park developer in Pennsylvania to fuel new gas-fired power generation for data centers.
Pennsylvania’s Homer City complex will soon become the nation’s largest gas-fired power plant. The massive 1.9 coal plant east of Pittsburgh is being converted to natural gas with up to 4.5 gigawatts of power capacity to serve a sprawling data center campus.
The largest Marcellus gas producer, EQT, recently inked deals to provide gas to Homer City and to Pennsylvania’s planned Shippingport Power Station, also being converted from coal. And EQT is providing pipelines services to fuel planned gas plants in West Virginia in the heart of coal country.
“The cluster effect of these AI data centers and these ecosystems will only continue to build on themselves,” EQT CEO Toby Rice said in his earnings call. “As momentum grows in our operational footprint, we think the opportunity could get larger.
“One of the reasons why people are selecting this region to build their data centers is because they’re building on top of a lot of gas infrastructure,” he added.
There may be a current bottleneck on gas turbines for building power plants, but manufacturing is ramping up and most of the hyperscalers’ projects are a few years from coming online.
The nation’s top natural gas producer is little-known Expand Energy because it was formed just 10 months ago through the combination of Chesapeake Energy and Southwestern Energy. Expand has huge presences in both Appalachia and northern Louisiana’s gassy Haynesville Shale near the LNG hubs.
“It’s a pretty exciting time for natural gas,” said Expand CEO Nick Dell’Osso in the second-quarter earnings call. “You have people recognizing the value that gas plays in the economy, the efficiency that gas creates for the growth in power demand, which is all tied to our growing economy fueled by the innovation associated with AI.”
The gas players are increasingly confident they’re not going to boom and bust. The Marcellus has ample reserves for decades so long as they don’t overproduce.
“We can do this for decades to come, and now you’re talking about a [data center] demand component that’s coming that’s heavily dependent on reliability, repeatability, and the [gas] inventory,” Range’s Degner told Fortune. Of course, Range thrives on all three, he emphasized.
A federal judge on Friday gave the Justice Department permission to release transcripts of a grand jury investigation into Jeffrey Epstein’s abuse of underage girls in Florida — a case that ultimately ended without any federal charges being filed against the millionaire sex offender.
U.S. District Judge Rodney Smith said a recently passed federal law ordering the release of records related to Epstein overrode the usual rules about grand jury secrecy.
The law signed in November by President Donald Trump compels the Justice Department, FBI and federal prosecutors to release later this month the vast troves of material they have amassed during investigations into Epstein that date back at least two decades.
Friday’s court ruling dealt with the earliest known federal inquiry.
In 2005, police in Palm Beach, Florida, where Epstein had a mansion, began interviewing teenage girls who told of being hired to give the financier sexualized massages. The FBI later joined the investigation.
Federal prosecutors in Florida prepared an indictment in 2007, but Epstein’s lawyers attacked the credibility of his accusers publicly while secretly negotiating a plea bargain that would let him avoid serious jail time.
In 2008, Epstein pleaded guilty to relatively minor state charges of soliciting prostitution from someone under age 18. He served most of his 18-month sentence in a work release program that let him spend his days in his office.
The U.S. attorney in Miami at the time, Alex Acosta, agreed not to prosecute Epstein on federal charges — a decision that outraged Epstein’s accusers. After the Miami Herald reexamined the unusual plea bargain in a series of stories in 2018, public outrage over Epstein’s light sentence led to Acosta’s resignation as Trump’s labor secretary.
A Justice Department report in 2020 found that Acosta exercised “poor judgment” in handling the investigation, but it also said he did not engage in professional misconduct.
A different federal prosecutor, in New York, brought a sex trafficking indictment against Epstein in 2019, mirroring some of the same allegations involving underage girls that had been the subject of the aborted investigation. Epstein killed himself while awaiting trial. His longtime confidant and ex-girlfriend, Ghislaine Maxwell, was then tried on similar charges, convicted and sentenced in 2022 to 20 years in prison.
Transcripts of the grand jury proceedings from the aborted federal case in Florida could shed more light on federal prosecutors’ decision not to go forward with it. Records related to state grand jury proceedings have already been made public.
When the documents will be released is unknown. The Justice Department asked the court to unseal them so they could be released with other records required to be disclosed under the Epstein Files Transparency Act. The Justice Department hasn’t set a timetable for when it plans to start releasing information, but the law set a deadline of Dec. 19.
The law also allows the Justice Department to withhold files that it says could jeopardize an active federal investigation. Files can also be withheld if they’re found to be classified or if they pertain to national defense or foreign policy.
One of the federal prosecutors on the Florida case did not answer a phone call Friday and the other declined to answer questions.
A judge had previously declined to release the grand jury records, citing the usual rules about grand jury secrecy, but Smith said the new federal law allowed public disclosure.
The Justice Department has separate requests pending for the release of grand jury records related to the sex trafficking cases against Epstein and Maxwell in New York. The judges in those matters have said they plan to rule expeditiously.
Mexico’s anti-money laundering office has frozen the bank accounts of the Mexican co-owner of Miss Universe as part of an investigation into drugs, fuel and arms trafficking, an official said Friday.
The country’s Financial Intelligence Unit, which oversees the fight against money laundering, froze Mexican businessman Raúl Rocha Cantú’s bank accounts in Mexico, a federal official told The Associated Press on condition of anonymity because he was not authorized to comment on the investigation.
The action against Rocha Cantú adds to mounting controversies for the Miss Universe organization. Last week, a court in Thailand issued an arrest warrant for the Thai co-owner of the Miss Universe Organization in connection with a fraud case and this year’s competition — won by Miss Mexico Fatima Bosch — faced allegations of rigging.
The Miss Universe organization did not immediately respond to an email from The Associated Press seeking comment about the allegations against Rocha Cantú.
Mexico’s federal prosecutors said last week that Rocha Cantú has been under investigation since November 2024 for alleged organized crime activity, including drug and arms trafficking, as well as fuel theft. Last month, a federal judge issued 13 arrest warrants for some of those involved in the case, including the Mexican businessman, whose company Legacy Holding Group USA owns 50% of the Miss Universe shares.
The organization’s other 50% belongs to JKN Global Group Public Co. Ltd., a company owned by Jakkaphong “Anne” Jakrajutatip.
A Thai court last week issued an arrest warrant for Jakrajutatip who was released on bail in 2023 on the fraud case. She failed to appear as required in a Bangkok court on Nov. 25. Since she did not notify the court about her absence, she was deemed to be a flight risk, according to a statement from the Bangkok South District Court.
The court rescheduled her hearing for Dec. 26.
Rocha Cantú was also a part owner of the Casino Royale in the northern Mexican city of Monterrey, when it was attacked in 2011 by a group of gunmen who entered it, doused gasoline and set it on fire, killing 52 people.
Baltazar Saucedo Estrada, who was charged with planning the attack, was sentenced in July to 135 years in prison.
European Union regulators on Friday fined X, Elon Musk’s social media platform, 120 million euros ($140 million) for breaches of the bloc’s digital regulations, in a move that risks rekindling tensions with Washington over free speech.
The European Commission issued its decision following an investigation it opened two years ago into X under the 27-nation bloc’s Digital Services Act, also known as the DSA.
It’s the first time that the EU has issued a so-called non-compliance decision since rolling out the DSA. The sweeping rulebook requires platforms to take more responsibility for protecting European users and cleaning up harmful or illegal content and products on their sites, under threat of hefty fines.
The Commission, the bloc’s executive arm, said it was punishing X because of three different breaches of the DSA’s transparency requirements. The decision could rile President Donald Trump, whose administration has lashed out at digital regulations, complained that Brussels was targeting U.S. tech companies and vowed to retaliate.
U.S. Secretary of State Marco Rubio posted on his X account that the Commission’s fine was akin to an attack on the American people. Musk later agreed with Rubio’s sentiment.
“The European Commission’s $140 million fine isn’t just an attack on @X, it’s an attack on all American tech platforms and the American people by foreign governments,” Rubio wrote. “The days of censoring Americans online are over.”
Vice President JD Vance, posting on X ahead of the decision, accused the Commission of seeking to fine X “for not engaging in censorship.”
“The EU should be supporting free speech not attacking American companies over garbage,” he wrote.
Officials denied the rules were intended to muzzle Big Tech companies. The Commission is “not targeting anyone, not targeting any company, not targeting any jurisdictions based on their color or their country of origin,” spokesman Thomas Regnier told a regular briefing in Brussels. “Absolutely not. This is based on a process, democratic process.”
X did not respond immediately to an email request for comment.
EU regulators had already outlined their accusations in mid-2024 when they released preliminary findings of their investigation into X.
Regulators said X’s blue checkmarks broke the rules because on “deceptive design practices” and could expose users to scams and manipulation.
Before Musk acquired X, when it was previously known as Twitter, the checkmarks mirrored verification badges common on social media and were largely reserved for celebrities, politicians and other influential accounts, such as Beyonce, Pope Francis, writer Neil Gaiman and rapper Lil Nas X.
After he bought it in 2022, the site started issuing the badges to anyone who wanted to pay $8 per month.
That means X does not meaningfully verify who’s behind the account, “making it difficult for users to judge the authenticity of accounts and content they engage with,” the Commission said in its announcement.
X also fell short of the transparency requirements for its ad database, regulators said.
Platforms in the EU are required to provide a database of all the digital advertisements they have carried, with details such as who paid for them and the intended audience, to help researches detect scams, fake ads and coordinated influence campaigns. But X’s database, the Commission said, is undermined by design features and access barriers such as “excessive delays in processing.”
Regulators also said X also puts up “unnecessary barriers” for researchers trying to access public data, which stymies research into systemic risks that European users face.
“Deceiving users with blue checkmarks, obscuring information on ads and shutting out researchers have no place online in the EU. The DSA protects users,” Henna Virkkunen, the EU’s executive vice-president for tech sovereignty, security and democracy, said in a prepared statement.
The Commission also wrapped up a separate DSA case Friday involving TikTok’s ad database after the video-sharing platform promised to make changes to ensure full transparency.
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AP Writer Lorne Cook in Brussels contributed to this report.
Politics8 years ago