Strategy

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Climate Change Strategy

Natural Gas and a Lower-Carbon Future

We recognize that climate change affects all industries, particularly the natural gas sector. Furthermore, the makeup of the future energy mix has significant environmental, social, and economic ramifications and will influence the future demand for — and price of — natural gas. We are committed to staying informed on climate science to understand both impact materiality (how we affect climate change) and business materiality (how climate change affects our business).

Both the impacts of climate change and the prevailing views on how to optimally curb its impacts can meaningfully affect our ability to operate. Increased frequency and severity of adverse weather events, such as storms, floods, droughts, and other extreme climatic events, could cause physical damage to our assets; temporarily or permanently displace our employees and service providers; affect the availability of water and sand necessary for our drilling and completions operations; and otherwise affect our ability to operate on schedule. In addition, the impacts of climate change also have the potential to affect us financially. Changes to federal, state, and local climate-focused laws and regulations could prohibit, inhibit, or increase the costs for us to drill for, produce, and transport natural gas. Changes in consumer tastes and continued focus on climate change management and mitigation could result in decreased demand for natural gas and thereby reduce the price we receive for our products and transmission and storage services. Furthermore, our access to capital funds could be restricted if we are unable to articulate and execute our climate change strategy. Please see Risk Management for more information.

CO₂ Emissions Change by Country: 2010 vs 2023 (Million MT CO₂)^[5]

During this same general period, the United States transitioned from a net importer to a net global exporter of natural gas.^[6] The U.S. export of natural gas is critically important to address climate change. The United States is one of a handful of countries in the world with abundant, economically recoverable natural gas. In the absence of affordable, reliable natural gas, countries will turn to coal. While global coal consumption plummeted at the height of the COVID-19 pandemic, it rebounded in the wake of western sanctions on Russia and the 2022 sabotage of the Nord Stream pipeline, ultimately climbing to a new all-time high in 2024.

There is no realistic option to achieve a 1.5-degree scenario — absent a rapid, significant reversal of this trend.^[7] The global community recognized this hurdle with the first-ever Global Stocktake, which was presented at the 28th United Nations Climate Change Conference (COP28). The Global Stocktake outlines collective action against climate change, calling for “accelerating efforts toward the phase-down of unabated coal power.” To achieve this phase-down, the Global Stocktake^[8] calls for a tripling of renewables by 2030; an acceleration of nuclear and carbon capture, utilization, and storage (CCUS); and recognizes that transitional fuels [a politically palatable pseudonym for natural gas] can play a role in facilitating the energy transition while ensuring energy security. Thus, the Global Stocktake contemplates that we need more renewables, more nuclear, more natural gas, and more CCUS to even get on the path to a 1.5-degree goal. 

A 2024 study^[9] by Electric Power Research Institute (EPRI) and GTI Energy modeled strategies to achieve economy-wide, net-zero emissions in the United States by 2050. The study assessed five scenarios considering a range of technology-sensitivity cases, as well as various drivers reflecting recent developments, including evolving policy incentives, regulations, and emerging trends in data center electricity. While all five scenarios achieved the desired goal of a net-zero economy, the “limited technology” pathway, which includes advancements in nuclear, electrolysis, and bioenergy with minimal natural gas usage and no carbon capture, results in an incremental annual cost per household of approximately $4,000 as compared to the “optimal technology” scenario in which natural gas has a continued share of energy consumption with advancements in carbon capture, storage, and transportation. To put this into context, an incremental annual cost of $4,000 per household would have the impact of shifting about 3.5%, or 4.5 million more U.S. households into poverty.^[10]

Outside our borders, the global per capita gross domestic product (GDP) for 2023 was approximately $13,200, and the per capita GDPs of China and India were approximately $12,610 and $2,480, respectively.^[11] If we take the costs projected for achieving a net-zero economy in the United States under the five scenario types, it follows that an affordable, sustainable global transition must rely heavily on low-cost natural gas.

We believe natural gas will continue to play a key role in the impact of energy on social equity locally, nationally, and internationally. Our operations are concentrated in mostly rural areas of Pennsylvania, Ohio, and West Virginia — areas historically characterized as lower socioeconomic regions. Responsible development of natural gas has led to an infusion of a significant amount of capital in our operating areas, both to landowners and the broader communities, and has served as an engine to improve the quality of life in these regions; please see Economic and Societal Impact for more information. Our operations can positively affect disadvantaged socioeconomic groups in the United States with low-cost clean energy, job opportunities, tax revenue generation, and royalty payments to landowners.

Accelerating the Lower‑Carbon Transition

The Beliefs that Drive Us

We recognize the risks and opportunities that climate change poses to our business and have developed a strategy for how we can best address both transition and physical risks. This strategy is underpinned by our values; represents the short-, medium-, and long-term opportunities for our organization; and is built on three foundational beliefs, detailed below.

Belief 1: Natural gas is critical to accelerating a sustainable pathway to a lower-carbon future and achieving global climate goals.

Natural gas is a critical commodity to facilitate the growth of renewables as part of our power supply, domestically and internationally. Among sources of continuous and reliable power, natural gas leads in its combination of accessibility, lower environmental impact, and exportability. As the United States develops the technology necessary to scale renewable power, the volatility of demand within the power sector on non-renewable power will only increase — and natural gas serves as a necessary fuel source to fill the gaps caused by demand. Through 2050, the long-term outlook from the U.S. EIA is that petroleum and natural gas will remain the most consumed source of energy in the United States as renewables continue to be added to the grid.^[1] Furthermore, rapid replacement of coal-fired power generation with natural gas-fired power generation around the world represents the most accessible and significant step to meaningfully accelerate our pathway to global decarbonization.

Domestically, renewable energy rapidly increases its impact on energy production. The benefits of increased renewable energy sources can be seen through the reduction in the electricity production share held by coal, which is the highest GHG-intensive component of the U.S. electricity generation mix. However, the ability and pace at which the United States can replace coal-fired power generation with renewables will be challenged in areas where replacement is most needed, due to their low renewable power potential.

U.S. Solar and Coal Resource Availability^[2]

Outside of the United States, much of the world still has an energy mix roughly equivalent to that of the United States in 2005. Total global energy-related CO₂ emissions reached a new all-time-high in 2023, with reports indicating that coal accounted for more than 65% of that increase.^[3] As natural gas has played the leading role in emissions reduction seen within the United States, so too should it play that role at the international level today.

Even if the United States achieved net-zero emissions today, the world would still be on a trajectory to miss its climate goals, in large part because of the significant global consumption of coal. As the largest producer of natural gas in the world,^[4] the United States must accept its responsibility to provide natural gas to coal-reliant countries to assist them with their necessary carbon reduction efforts.

Belief 2: Natural gas — particularly Appalachian natural gas — will differentiate itself from other hydrocarbons as the optimal source for reliable, affordable, and responsibly sourced energy.

As the debate about the energy future plays out, we believe greater differentiation will occur between hydrocarbons and producers of hydrocarbons. We also believe there will be greater differentiation between natural gas-focused and oil-focused companies. While the production methods are similar, the consumption of oil-based products and the relevant pathways to decarbonize effectively differ compared to natural-gas based products.

Much like how we see natural gas different from oil and coal, we also see specific natural gas sources different from others. Production of domestic natural gas — particularly natural gas produced in Appalachia, such as in the Marcellus and Utica basin — has emissions intensities lower than other domestic and foreign supply sources.^[5] As a result, natural gas companies, particularly those operating in Appalachia, have a meaningful cost advantage for achieving net-zero emissions.

As principal end use differs between natural gas (power) and oil (transportation), the trajectories and cost-benefit analysis of natural gas and oil differ as well. Moreover, the primary pathways to accelerating the lower-carbon transition of one product’s end use (transportation) are through increased usage of the other’s (power for vehicle electrification and hydrogen-based transportation). As such, we believe that as the energy transition debate evolves and the focus on potential solutions shifts from supply to consumption, the traditional grouping of oil and natural gas companies will diverge.

Belief 3: U.S. natural gas has the unique potential to be the largest green initiative on the planet.

Since 2005, the United States has become a world leader in emissions reductions, predominantly through the implementation of gas-fired power in place of coal-fired power generation. Between 2010 and 2023, the United States reduced its carbon emissions by nearly 900 million MT^[6] with coal-to-gas substitution as a significant portion of U.S. emissions reductions.

Despite the United States’ efforts, global coal consumption climbed to a new, all-time high in 2024, according to the International Energy Agency (IEA). Two countries, China and India, account for the majority of global coal consumption, with China alone accounting for more than 50% of global coal demand.^[7]

Natural gas power generation has unique attributes that make it an optimal alternative to coal power generation, including the following:

• Natural gas power plants provide baseload energy, which complements intermittent energy sources like wind and solar;
• Natural gas plants run more efficiently than coal plants (approximately one natural gas plant can replace two coal plants);^[8]
• Natural gas emits 60% less carbon than a comparable amount of coal;^[9]
• Natural gas has a lower emissions intensity compared to oil and coal; and
• Natural gas is relatively affordable compared to other fossil fuels and renewable sources.

We believe that the replacement of international coal with U.S. natural gas should be our primary focus in global emissions reduction. If we were to quadruple U.S. liquefied natural gas (LNG) capacity to 55 billion cubic feet of natural gas (Bcf) per day^[10] by 2030, we believe we could reduce international carbon emissions by an incremental 1.1 billion MT per year — a 60% reduction in global carbon emissions.

The emissions reduction impact of an unleashed U.S. LNG scenario would have a combined effect equal to the following:

• Electrifying every U.S. passenger vehicle;
• Powering every home in America with rooftop solar and backup battery packs; and
• Adding 54,000 industrial-scale windmills, doubling U.S. wind capacity. 

Coal to Natural Gas Switching

Additionally, as U.S. LNG is unleashed from the basin, U.S. citizens that own land resources with natural gas production capacity would be paid for this initiative in the form of tax revenues and annual royalties.

What We Are Doing

[1] Source: “EIA projects U.S. energy consumption will grow through 2050, driven by economic growth,” EIA (2022): https://www.eia.gov/pressroom/releases/press496.php.

[2] Source: Hitachi ABB Power Grids. Data as of March 20, 2023.

[3] Source: “CO₂ Emissions in 2023,” IEA (2024): https://iea.blob.core.windows.net/assets/33e2badc-b839-4c18-84ce-f6387b3c008f/CO2Emissionsin2023.pdf; Source shows 2023 total global energy-related CO₂ emissions as 37.4 Gt.

[4] Source: “World Energy Outlook 2024,” IEA (2024): https://www.iea.org/reports/world-energy-outlook-2024. License: CC BY 4.0 (report); CC BY NC SA 4.0.

[5] Source: “Benchmarking Methane and Other GHG Emissions of Oil & Natural Gas Production in the United States,” Ceres (2024): https://www.ceres.org/resources/reports/benchmarking-methane-and-other-greenhouse-gas-emissions-2024?gad_source=1&gclid=Cj0KCQjwkN--BhDkARIsAD_mnIpSECMUml4UWdwmn0KvQoX1oYiPLOLIF2nMJ5fEjvMMX6Hdd7pxOxwaAijXEALw_wcB. 

[6] Source: “World Energy Outlook 2024,” IEA (2024): https://www.iea.org/reports/world-energy-outlook-2024, License: CC BY 4.0 (report); CC BY NC SA 4.0.

[7] Source: “Coal 2024,” IEA (2024): https://www.iea.org/reports/coal-2024, License: CC BY 4.0. 

[8] “Carbon Dioxide Coefficients,” EIA (2024): https://www.eia.gov/environment/emissions/co2_vol_mass.php; “Table 8.1 Average Operating Heat Rate for Selected Energy Sources,” EIA (2024): https://www.eia.gov/electricity/annual/html/epa_08_01.html. 

[9] “Carbon Dioxide Coefficients,” EIA (2024): https://www.eia.gov/environment/emissions/co2_vol_mass.php; “Table 8.1 Average Operating Heat Rate for Selected Energy Sources,” EIA (2024): https://www.eia.gov/electricity/annual/html/epa_08_01.html.

[10] Including current capacity, capacity under construction, and future new capacity.

What We Are Doing

Governance

We maintain a management-led ESG Committee, which bears the primary responsibility to identify and manage applicable climate-related risks and opportunities. Our ESG Committee also oversees the development and implementation of initiatives, processes, policies, and disclosures that pertain to climate risks and opportunities. In 2025, we refreshed the membership of the ESG Committee to include an expanded group of senior leaders from across the organization. The Committee continues to be chaired by our Chief Legal and Policy Officer. We also established new cross-functional subcommittees to monitor, implement, and recommend appropriate ESG initiatives for review and approval by our ESG Committee.

The Corporate Governance Committee and the Public Policy and Corporate Responsibility (PPCR) Committee of our Board of Directors (Board) routinely evaluate and provide oversight, guidance, and perspective on our climate risks and initiatives including our emissions reduction targets. Our Chief Legal and Policy Officer and our Vice President of Environmental, Health, and Safety (EHS) provide quarterly updates on our climate initiatives to the PPCR Committee and annual updates to our Corporate Governance Committee. In response to such updates, the PPCR Committee and the Corporate Governance Committee provide comments and feedback on our climate risk management and emissions reduction initiatives and targets, which are relayed to our ESG Committee.

Our Environmental, Production, Midstream, New Ventures, Finance, and Business Information Technology teams work collaboratively to explore and implement innovative technologies to collect, report, forecast, and reduce our operational emissions and manage our other climate risks in line with initiatives established by our ESG Committee. Oversight of these initiatives is managed through our digital work environment and monitored by our ESG Committee. For additional information on our Board committees, compensation programs, and ESG oversight, see Corporate Governance.

Risk Management

Our Enterprise Risk Committee, which is chaired by our Chief Legal and Policy Officer and includes other members of senior management, oversees identification and management of corporate-level risks using the COSO Enterprise Risk Management Framework. To align our focus on our primary business risks, our Enterprise Risk Committee surveys senior leaders annually to assess our most significant, or “Tier 1,” enterprise risks. Company leaders provide input of the risk’s likelihood and impact, among other factors, which we then use to calculate an overall risk score and weighting. Based on this survey, our Enterprise Risk Committee creates a list of our top risks and assigns an executive risk owner to each one. A risk card is prepared to outline the overall risk criteria, key risk drivers, and mitigation initiatives for each Tier 1 risk. These Tier 1 risks are presented to our Board on an annual basis. Our Enterprise Risk Committee also conducts periodic follow-up assessments to evaluate the current state of risks and identify new or more effective measures for mitigation. Further, new and emerging risks are monitored and escalated to the level of a Tier 1 enterprise risk as needed.

Our Enterprise Risk Committee monitors climate change as a Tier 1 risk. However, the primary responsibility for identification and management of climate-related risks has been delegated to our ESG Committee.

Our operations teams use models and forecasts to assess the impact of our identified risks. Assessing the impact of our identified risks includes financial modeling and commodity forecasting. For climate change specifically, we consider risks to our business including accessibility of water for our operations and demand for natural gas, renewables, and other energy sources. We also use various carbon-pricing projections based on the Regional GHG Initiative and the California Carbon Credit Exchange to model different carbon-pricing scenarios and the corresponding impacts on our operations and financial profile. For more information on how recent legislation and regulation may impact EQT, see “Climate Change and Regulation of Methane and Other Greenhouse Gas Emissions” in our 2024 Form 10-K.

Environmental