PITTSBURGH—Like most Appalachian operators, Range Resources sees the oncoming demand growth for the Marcellus and Utica shales. But the energy industry has a lot of work to do on an old problem—infrastructure—to take full advantage of the future.
The White House brought a lot of optimism when President Trump publicly endorsed the long-stalled Constitution Pipeline project. But Range CEO Dennis said basin operators need another level of egress.
“New infrastructure has to come into play … The Constitution is just really one piece, one tooth on the gear,” Degner said. “And I think we’re going to need a lot more infrastructure to think about how to meet the lofty projections by the tech sector, or whether it’s just meeting the demand for everyday people who are flipping the switches on.”
Degner spoke on driving sustainable growth during Hart Energy’s DUG Appalachia Conference & Expo on Aug. 27. Range Resources played a pivotal role in the Marcellus Shale, taking lessons learned from the Barnett play in Texas to Pennsylvania in the mid-2000s and opening up the play for exploitation.
Now, the company sees a surging demand for regional power that will likely drive up natural gas production.
The CEO noted the PJM Interconnection Auction in July. The PJM is a regional power transmission organization covering many of the Mid-Atlantic states and stretches west to Ohio and Kentucky.
On July 22, the organization auctioned its grid’s base residual capacity for 2026 and 2027. Prices came in at the federal government’s cap level, $329.17 per megawatt-day, over the grid’s entire footprint. The price was a $60 increase over last year’s auction, according to PJM Interconnection.
“That’s telling of where power demand is going, and how important it’s going to be to play a role in infrastructure, and supplying natural gas to those facilities,” Degner said, adding that besides growing grid demand, there’s an onslaught coming for behind-the-meter power projects at AI data centers and the growing demand for LNG.
Range Resources has estimated increased natural gas demand of 4 Bcf/d to 7 Bcf/d for the Appalachian region.
The hardest-to-read sector demand comes from AI data centers. Degner said he leaned into believing the market will broadly adopt the developing technology, making a strong return on the investment.
He compared AI to cell phones. “There was a point in time that if you saw someone using a cell phone, you were probably watching the old show Dallas, and it was J.R. Ewing with a cell phone in his car,” he said.
For the immediate future, Degner said LNG exports would continue to drive demand. About 80% of Range’s natural gas leaves the Appalachian Basin, with 50% going to the Gulf Coast thanks to the company planning ahead when the industry was kicking off in the mid-2010s.
Lately, Range has been focused on moving more gas to the Midwest and into Canada’s Dawn Hub.
“Now, here we are with 17 Bcf a day,” Degner said. “By the time we get to the end of the decade, that's roughly going to almost double.”