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NET Power CEO Danny Rice says a new decarbonizing process could open the way for utilities to produce clean energy from natural gas

Danny Rice helped build one of the largest natural-gas producers in the U.S. and became a billionaire. In his newest venture, he is still betting on natural gas—but this time as part of an unusual process that aims to clean up gas-fired power generation.

Traditional gas power plants spit CO2 out of exhaust stacks, contributing to global warming. NET Power, a company that Rice took public in 2023 in a $1.5 billion SPAC deal, has developed a gas plant with a different process, using the carbon dioxide it produces to spin a turbine and create electricity—a technology it says will eliminate almost all CO2 emissions.

A move toward renewable power sources reinforces the need for natural gas, Rice argues, as wind and solar can’t crank out energy around the clock. NET Power, he says, aims to offer utility companies an affordable way to make the grid carbon-free.

“It’s a whole lot easier, and a whole lot safer, to try to find ways to decarbonize fossil fuels than it is to move away from them,” says Rice, who is NET Power’s chief executive.

The 43-year-old, who lives in Dallas, has taken four energy companies public, and sold two of them for a total of $10 billion, excluding debt. NET Power is backed by heavyweight investors including Houston-based oil giant Occidental Petroleum, which owns about 47% of the company. Rice plans to capitalize on President Biden’s signature climate law, which includes billions of dollars in subsidies for capturing and storing CO2 emissions.

NET Power’s technology has yet to be proven at scale, and the first plants will be much pricier to construct than traditional gas-fired plants.

Still, utilities warn that ballooning power demand from data centers and other industries will require more gas generation to complement renewables.

“We are going to need to address the emissions from gas,” says Dan Bakal, a senior program director at environmental nonprofit Ceres. “If NET Power can deliver a solution that’s cost-effective, there will be a market for it.”

Sporting a stubble, Rice stands out among often gray-haired oil-and-gas tycoons. He says he enjoys staying at home with his two young daughters and doing jigsaw puzzles with his wife. The couple married in 2007 in Las Vegas, two weeks after they met at a Houston country-music bar.

He is quick to highlight unorthodox achievements, such as winning a hot-dog eating competition hosted by Rice Energy, the gas producer he once ran. But his self-deprecating style belies an ambition to remake the world of energy.

“He’s a new generation, and he’s a new kind of cat,” says Maynard Holt, the founder and CEO of energy research and investment firm Veriten, which isn’t invested in NET Power.

Rice’s entrepreneurial bent can be traced back to his mother, who ran food businesses near Boston and raised him and two younger brothers after a divorce. After earning a Bachelor of Science in finance at Bryant University in Rhode Island, Rice worked in Houston as an oil-and-gas analyst, before moving to western Pennsylvania in 2008 to help his two brothers start Rice Energy.

With a $5 million loan from their father, a BlackRock energy-fund manager, the Rices leased land around Pittsburgh and drilled a first well. They were soon drilling for huge volumes of gas and taking the company public, with 33-year-old Danny Rice as CEO. Rice and his brothers worked grueling hours, blowing off steam by riding electric scooters in their Pittsburgh office.

“I’d be telling him, ‘Let’s go celebrate and have a drink,’ and he’d say, ‘No, let’s go work on the next piece,’” says his brother Toby Rice, who was the company’s chief operating officer at the time.

Eventually, Danny convinced his family—including brother Derek Rice, who served as Rice Energy’s executive vice president of exploration—to sell the company. In 2017, they struck a $6.7 billion stock-and-cash deal for a sale to EQT, an Appalachian rival where Toby now serves as CEO after the Rices won control. Danny Rice served on the board of EQT at the time, and still does.

“We essentially became billionaires overnight,” he says.

After a hiatus traveling around the globe with his wife and children, Rice scouted for energy deals. He pitched his brothers on investing in biogas producer Archaea Energy, eventually taking the company public via a $1.1 billion SPAC deal and selling it in 2022 to British oil giant BP for $3.3 billion in cash plus debt.

Hunting for their next venture, Rice and his brothers pondered investments in nuclear, hydrogen and geothermal energy. But while they believe these technologies will be helpful in ushering in a net-zero emissions future, they concluded they couldn’t grow fast enough to meet climate goals.

Natural gas, on the other hand, is produced in huge, cheap volumes in the U.S. every day, Rice says. If the CO2 emissions associated with burning gas to produce electricity could be economically captured, the grid could become greener quicker, he says. That is why he set his sights on NET Power.

Durham, N.C.-based NET Power’s origins date to 2010, when 8 Rivers Capital formed the company to deploy a new technology it invented to clean up gas-fired power generation. Today, natural gas accounts for around 40% of U.S. electricity generation. At the time Rice approached NET Power, Occidental owned about half of the company, and other investors included 8 Rivers and Constellation Energy—all of which are still involved.

NET Power’s patented process consists of burning natural gas along with oxygen to create heat and a mixture of pure CO2 and water that spins a turbine and creates power. Some of the CO2 is reused in the system and the rest is sequestered underground—which means that a plant using the technology will emit virtually no CO2, according to the company.

A traditional gas power plant burns air, mostly made of nitrogen and oxygen, along with natural gas—which is mainly methane—creating a concoction that CO2 can’t easily be scrubbed from.

“These guys were pioneering and proving a new way to generate power,” says Rice, who owns about 5% of NET Power. But the startup lacked the heft needed to make a big dent in power-plant emissions, he says. “You’re sitting on the most important technology in the energy space, and most people don’t know about it.”

In 2022, he approached NET Power with an offer to go public, and convinced Occidental, its largest investor, to bless the deal. The Rices have invested a total of $135 million in NET Power via their family office, which includes Danny, Toby, Derek and a half-brother Ryan.

NET Power operates a small demonstration plant in La Porte, Texas, southeast of Houston. It has synchronized to the state’s electric grid, and is about to start testing specially designed turbine components. Meanwhile, the firm is building a roughly $1 billion commercial power plant in West Texas that is expected to enter operations around 2027.

Rice aims to mostly license NET Power plants to utilities, which would build the facilities and pay the company a fee and royalties to use the technology. In the U.S. alone, Rice sees a market for more than 800 plants, based on the number of aging coal, gas and nuclear plants that will need replacement. Other customers, including energy-hungry tech companies, could also benefit from using the zero-emissions power plant, he says.

NET power has achieved breakthroughs at its demonstration plant, but it remains to be seen whether the company can operate at a commercial scale, says Thomas Meric, an analyst at financial-services firm Janney Montgomery Scott. Another hurdle: convincing the general public that natural gas can be successfully decarbonized. “Acceptance of natural gas as net-zero [fuel] will be a very serious challenge for NET Power,” says Meric.

Price is another unknown. Net-zero electricity might be sold at a premium in certain markets but how substantial that might be is unclear.

Additionally, the company must secure land where CO2 can be sequestered and get permits to inject CO2 underground—potentially big-ticket items. In some cases, the company will need permits to connect to the grid, a step that has slowed down new solar and wind generators.