Salena Zito: ‘Shalennial’ natural gas CEO busts expectations

CARNEGIE, Pa. — The last place you’d expect to find the office of the CEO of EQT — the largest natural gas producer in the country — is in a walk-up above a liquor store in this working-class post-industrial town, and yet that is exactly where Toby Rice makes it happen.

Located on Main Street in a former karate studio, the one-floor mostly wide-open office space is filled with a life-size Iron Man, an equally life-sized gorilla stuffed animal sitting on a park bench, some great neon artwork, a dozen or so young people mostly standing at their desks — and Rice, who has just walked out of his office to take a seat in the lobby.

Behind him are five color splashed portraits of titans of industry and innovation: Andrew Carnegie, Nikola Tesla, Cornelius Vanderbilt, John D. Rockefeller and J.P. Morgan.

Mr. Rice explains: “I look at these and say, hey, how can we decarbonize these industries? Certainly, obviously, natural gas can be used and create electricity. We can do more of that. Steel, converting our natural gas into hydrogen to help make blue steel…” Mr. Rice proceeds to riff on how natural gas can help many industries — railroads, banks and others — move more quickly toward “zero carbon electricity.”

“Obviously, we’re changing a lot in the gas game, just doing what we’re doing here; on the manufacturing side of things, providing a more reliable grid is going to help power electric vehicles. These electric vehicles are using electricity, which is generated over 40% with natural gas here in the United States.”

Which explains why Elon Musk, the CEO of the premier electric car manufacturer, tweeted last week: “Hate to say it, but we need to increase oil & gas output immediately. Extraordinary times demand extraordinary measures.”

In short, all industries — including the electric vehicle industry — need natural gas. Everything from food to lipstick to computer chips to cell phones to medical instruments require natural gas either to power their creation and transportation, or as a raw material itself.

Mr. Rice, who just turned 40, got to his position by an unusual path. Filled with a youthful heart set on playing professional baseball, he dejectedly went back home to Boston when he wasn’t picked in the draft. He decided he wasn’t interested in sitting in a lab using his chemistry degree, so, naturally, he became a chimney sweep.

“I had to pay the bills until I figured things out, so I was sweeping chimneys; one bad day on a roof that involved a fight with a raccoon that nearly caused me to fall to the ground and I started to rethink my decision,” Mr. Rice explained.

He called his father for advice. His father told him about new developments in the gas business: “The conversation lasted ten minutes; he told me there was a healthy amount of risk, it was big competitive, and it seemed like modern day treasure hunting to me.”

Within weeks, Mr. Rice moved to Texas and got his first job in the business as a floor hand. “In this industry that’s sort of bottom of the totem pole,” he said. “Making nine dollars an hour with a two-dollar-an-hour safety fine.”

Mr. Rice kept working, pushing brooms while attending grad school, where he earned a master’s degree in petroleum engineering. “Studied for a year straight, slept every other night trying to get caught up; I figured out what hydraulic fracturing was, figured out what unconventional reservoirs were, then developed some new technology that increased production,” he said.

He would go on to start his own hydraulic fracturing consulting company, which grew to become Rice Energy. His three brothers joined him, and they moved the company to Western Pennsylvania in 2010. Nine years later he merged the company with EQT, which eventually led to a hostile takeover and Mr. Rice as the CEO of a gas company whose history dates back to the five men hanging on his office walls.

Mr. Rice prefers to run the company not from the skyscraper in Downtown Pittsburgh but from this Carnegie walk-up, which employees call “Dojo” — a nod to the former occupants — and which has “Shalennial” on the front door, a mashup of his generation and his industry.

Mr. Rice’s employees — those not in the field at the wells — work from home, and everyone seems to like it like that.

In short, this is not your father’s C-Suite — nor is this how most imagine the fossil fuel industry to be run.

Mr. Rice will be the first to admit that the industry has not done a good enough job at telling its story, or at pushing back on often ill-founded conventional wisdom.

The issues facing the industry are a lot more complex than the sound bites out of Washington let on. The truth is more nuanced, and more unexpected.

Mr. Rice is a gas industry CEO who talks about when his company will be net zero on carbon emissions.

The industry’s greatest challenge, he said, isn’t being able to supply the country or the world with the energy they need: The challenge is politics and the influence it has not just on news coverage of the industry, but also on how the industry is portrayed in Hollywood. All of this impacts how it’s viewed in academia, social media and the wider culture.

Mr. Rice said he’s been ready to replace the supply of gas from Russia long before Vladimir Putin attacked Ukraine; the problem is pipeline infrastructure: “Without more pipelines, we can’t send gas where it is needed most.”

He explains that political opposition to building pipelines — often driven by the politics of climate change — prevents, or at least slows, the industry from helping Europe, and the U.S. from ending its reliance on places like Russia, Iran and Venezuela.

But that contradiction between gas infrastructure and care for the environment, he suggests, makes less and less sense these days.

Mr. Rice unveiled a plan two weeks ago that he said would supply Europe and the rest of the world with liquified natural gas, which would also displace coal and decrease carbon emissions worldwide.

He says EQT will achieve net zero operations by 2025: “That is 33 months away. We’re not talking about 2050 or 2070 — We’re talking about literally 33 months from now. And if we can do that here as America’s largest natural gas producer, other people around the industry can do it.”

This isn’t your father’s C-Suite — nor is it your traditional climate activist’s carbon emitter.

North Side native Salena Zito is a national political reporter for The Washington Examiner, a New York Post columnist and co-author of “The Great Revolt.”

Publication: Post-Gazette
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