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EQT CEO Raises Concerns Over Proposed Carbon Capture Regulations

EQT Corporation EQT CEO Toby Rice expressed enthusiasm about the current trends in the natural gas market but voiced concerns over proposed regulatory changes by the Biden administration that could potentially hinder U.S. energy growth. Speaking in an interview with CNBC on Monday, Rice highlighted the potential impact of new regulations that would mandate carbon capture technology for more than 90% of coal and natural gas facilities by 2032.

The Biden administration is proposing new regulations that would require more than 90% of coal and natural gas facilities to implement carbon capture technology by 2032. Rice warned that these regulations could significantly increase power prices, potentially doubling or tripling them. He believes such measures could "sabotage" the United States' ability to meet its power demand and energy needs, posing a threat to economic stability and growth.

Despite these regulatory concerns, Rice remains optimistic about the natural gas market. He noted that the market is currently oversupplied, but recent activity and weather forecasts predicting a hotter-than-normal season have contributed to a rally in prices. Over the past few weeks, the front-month natural gas prices have increased more than $0.50, which indicates a more constructive market outlook.

Rice also pointed out the increasing demand for power driven by the AI boom. He estimated that the United States could witness a 75 GW increase in power generation needs to support the growing demands of AI and tech companies. This surge in demand could significantly boost the market share for natural gas, highlighting its critical role in the future energy landscape.

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While EQT faces potential challenges from proposed federal regulations, the current market trends and increasing demand for natural gas offer a promising outlook. CEO Toby Rice remains hopeful that natural gas will play a pivotal role in meeting the United States' future energy needs despite the looming regulatory hurdles.

Zacks Rank & Key Picks

Currently, EQT carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company SM, Marathon Petroleum Corporation MPC and Sunoco LP SUN. While SM Energy and Marathon Petroleum sport a Zacks Rank #1 (Strong Buy), Sunoco carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy is set to expand its oil-centered operations in the coming years with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments can create long-term value for shareholders.

The Zacks Consensus Estimate for SM’s 2024 earnings per share (EPS) is pegged at $6.60. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Marathon Petroleum's acquisition of Andeavor has expanded its foothold in the Permian Basin, creating an enviable retail and marketing portfolio. MPC’s emphasis on operational excellence, safety, and environmental responsibility, coupled with investments in low-carbon initiatives, positions it well for sustainable growth and continued value creation for shareholders.

The Zacks Consensus Estimate for MPC’s 2024 EPS is pegged at $19.53. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing over 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $5.07 and $4.47, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

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