EQT Corporation ( EQT Quick Quote EQT - Free Report) brought forward a comprehensive plan to achieve net-zero Scope 1 and 2 greenhouse gas (“GHG”) emissions across its operations by 2025.
The company, which is a leading natural gas producer in the United States, pledged to slash the GHG emission intensity by 70% in just four years. Moreover, it set a climate target to reduce 65% of the company’s methane emission intensity below the 2018 levels by 2025.
EQT clarified that natural gas will remain the basis of its business and it will assume leadership in Environmental, Social, and Governance to help decarbonize the natural gas industry. Notably, the company plans to explore natural gas-based climate solutions, which include responsibly sourced gas (“RSG”), blue hydrogen and carbon offsets.
Although burning natural gas results in fewer emissions, methane released into the atmosphere is a far more potent GHG than carbon dioxide. Hence, the company is increasing its efforts to strengthen its environmental image as natural gas comes under major scrutiny amid the rising concerns over the impacts of climate change.
In 2020, EQT announced a sustainability budget of $75 million, which was meant to be spent over the next five years. This includes an estimated expenditure of $20 million to replace all pneumatic devices by 2023. Notably, the pneumatic devices are claimed to be the largest source of methane emissions in onshore oil and gas production. Hence, the progressive elimination of the devices will be a major advantage of EQT's positioning as a leading RSG producer.
To accomplish the target, the company shifted to electric fracking equipment last year and eliminated more than 23 million gallons of diesel fuel from its operations annually. Moreover, the company plans to use carbon offsets by reforesting land and using agriculture techniques to reduce emissions that it cannot prevent. This would be done on some of the company’s acreage it leased in Appalachia through agreements with landowners.
Although EQT’s comprehensive plan does not include net-zero Scope 3 emissions, it is exploring ways to significantly reduce emissions from the products that the company and others in the industry sell. Notably, natural gas production is usually less carbon-intensive compared to oil extraction, which brings gas explorers like EQT an advantage in setting net-zero goals.
Company Profile & Price Performance
Headquartered in Pittsburgh, PA, EQT is a leading explorer and producer of natural gas, with a primary focus on the Appalachian Basin in Ohio, Pennsylvania and West Virginia.
Shares of the company have underperformed the
industry in the past six months. Its stock has gained 65.1% compared with the industry’s 92.5% growth.
Image Source: Zacks Investment Research Zacks Rank & Stock to Consider
The company currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the energy space are
Suburban Propane Partners, L.P. ( SPH Quick Quote SPH - Free Report) , Continental Resources, Inc. ( CLR Quick Quote CLR - Free Report) and Exxon Mobil Corporation ( XOM Quick Quote XOM - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
Over the past 60 days, the Zacks Consensus Estimate for Suburban Propane’s 2021 earnings has been raised by 23.2%, while that for Continental Resources has increased by 27.5%.
Exxon’s earnings for 2021 are expected to rise 1.4% year over year.
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