A company formed by former Rice Energy executives to focus on the energy transition sector has jumped into the renewable natural gas industry.
Rice Acquisition Corp., headed by Daniel Rice IV, the former Rice Energy CEO, announced it is combining with Aria Energy and Southpointe-based Archaea Energy to create the industry-leading renewable natural gas (RNG) platform, a press release stated. The new company, which will be known as Archaea Energy, will capture methane, a potent greenhouse gas that is a byproduct of decomposition in landfills, and convert that landfill gas (LFG) into zero-carbon renewable natural gas using carbon sequestration and green hydrogen projects it is developing.
Rice Acquisition Corp. is a special purpose acquisition company (SPAC) formed in 2020. A SPAC is a company with no commercial operations that is formed strictly to raise capital through an initial public offering of stock for the purpose of acquiring an existing company, according to Investopedia. Rice raised approximately $238 million in its IPO.
Rice is acquiring Aria for $680 million and Archaea for $347 million. It has attracted an additional $300 million in new capital from institutional investors.
Gas from landfills contributes to global warming if vented into the atmosphere. Archaea Energy “is tackling one of the world’s most important climate problems. U.S. landfills are expected to grow from approximately 8 billion tons of waste in place in 2020 to 13 billion tons by 2050, which is expected to increase LFG emissions from 1.9 billion cubic feet per day in 2020 to 1.8 Bcf/d in 2050,” the press release states. Capturing the emissions, which consist of about 50 percent methane and 35 percent carbon dioxide, would “have the same environmental effect as electrifying 75 percent of U.S. passenger vehicles.”
The Rice name should be familiar to those living in Southwestern Pennsylvania. Brothers Toby, Derek and Daniel Rice IV grew Rice Energy from a start-up into a leader in shale gas development, before selling it to EQT in 2017. After a proxy battle Toby Rice took over as CEO of EQT in 2019, and Daniel is an EQT board member.