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Our Vision and Strategy
Appalachia First

Produce it here. Use it here—first.

Read more about Our Vision and Strategy
Our strategic vision embraces innovation and harnesses the talent, resources, and opportunities of Appalachia to transform our region, nation, and the world—all while lowering emissions and providing more affordable energy.

This vision is pro-growth, pro-market, and most importantly, pro-people of this great region. Appalachia First is focused on leveraging our local natural gas resources to generate broad socio-economic benefits for the residents of this region first and expanding outward. Our aim is to liberate downstream economic opportunities, create family sustaining jobs, and empower new vertical markets to truly make a Tangible, Impactful, and Local difference.

Some companies focus on using our resources to displace fuels overseas, and we agree that exporting low-cost, lower emissions Appalachian natural gas around the world can be a great thing if done in proper sequence. But priorities and timing matter—and the priorities of CNX have always been, and always will be, Appalachia First.

As one of the largest, most efficient, and environmentally sustainable sources of natural gas in the world, Appalachia has the tools to become the epicenter for skilled labor creation while lowering regional, national, and global carbon emissions. For nearly 160 years, CNX has been at the forefront of Appalachia’s energy and economic evolution.

CNX is leading the industry in natural gas development and emerging low-emission ventures, and we have embraced our role as an innovator driving the region’s socioeconomic revitalization through local talent, homegrown energy, and breakthrough technologies.

Drawing on the unique attributes of our region and our business, our Tangible, Impactful, and Local vision is actionable now, and can only happen in Appalachia.

Bolster all economic sectors through lower cost, lower emission, and locally produced natural gas.

Develop and deploy new innovative technologies to enhance natural gas and product derivatives for vertical market growth, while lowering GHG impacts.

Invest in these solutions right here in Appalachia.

Transform hard-to-abate sectors by displacing higher emitting fuels with locally produced natural gas.

as a community partner
highest median annual compensation
90% local contractors, Mentorship Academy focused on undeserved communities to fill CNX talent pipeline Read more about the Mentorship Academy
invested in local communities in last decade; committed additional $30 million in future investments
CNX is developing unique, proprietary technology for vertical and horizontal business growth
A Truly Appalachia First Vision

The CNX vision includes a robust strategy of using local production to displace foreign oil, build new industries, and revitalize the Appalachian region.

CNX Sustainable Business Model
Grounded in our Appalachia First vision and supported by our Core Values, CNX’s Sustainable Business Model (SBM) and initiatives position us as a leader in the environmental, social and governance aspects of the energy industry.

Our legacy of innovation and forward-thinking has kept us ahead of the curve on crucial issues in our sector, region, and world. Sustainability is central to our superior value creation strategy and our methodical focus on prudent capital allocation. Our strategy is to foster an SBM that applies the nonreplicable advantages of our stacked pay acreage development, integrated midstream assets, and innovative New Technologies business segment that lead to a business with low methane intensity, low cost operations, and the generation of regular and substantial free cash flow (FCF). We then prioritize injecting that FCF back into our business through investments in our people and our assets, investments in our communities, and returning capital to our shareholders and debtholders.

TCFD Reporting and Scenario Analysis
The Task Force on Climate-Related Financial Disclosures (TCFD) recommends the use of scenario analysis to better understand how businesses might perform under different climate-related conditions. CNX reviewed our strategy under the three most relevant climate scenarios provided by the International Energy Agency (IEA) and endorsed by TCFD.

The Task Force on Climate-Related Financial Disclosures (TCFD) recommends the use of scenario analysis to better understand how businesses might perform under different climate-related conditions. CNX reviewed our strategy under the three most relevant climate scenarios provided by the International Energy Agency (IEA) and endorsed by TCFD.

The Stated Policies Scenario (STEPS) explores how the energy system evolves if the current policies are retained. These include the latest policy measures adopted by governments around the world, such as the Inflation Reduction Act in the United States, but do not assume that aspirational or economy-wide targets are met unless they are backed up with detail on how they are to be achieved.

The Announced Pledges Scenario (APS) assumes that government targets are achieved on time and in full, whether they relate to climate change, energy systems or national pledges in other areas such as energy access.

The Net Zero Emissions by 2050 Scenario (NZE) works back from specific goals—the main one being to cap global warming to 1.5 degrees Celsius—and inserts assumptions as to how they can be achieved.

Strategy – Sustainability/Resilience

Globally there is a growing concern over climate change with a key focus on greenhouse gas (GHG) emissions. At CNX we actively manage our business to reduce GHG emissions See more in the GHG section.

Natural gas is the most cost-effective and fastest solution to meaningful nearterm GHG reductions while maintaining energy reliability. Over the last 30 years, methane emissions in the US have seen a significant decrease.

Over the same period of time, natural gas production has increased enormously. Natural gas has displaced oil and coal in the energy mix—and this has had a positive impact on emissions. This displacement trend is expected to continue.

Demand for natural gas remains strong though 2050 in the IEA STEPS scenario, with less robust (although still sizeable) demand in the APS and NZE scenarios.

There is a stark difference between the environmental impacts of production in countries with high environmental standards and those which lack standards entirely. Considering the world’s demand for oil, natural gas, and associated products, it is far better for the environment if that demand is met by production in countries with high environmental standards, like the US.

We produce natural gas in the lowest methane intensity region in the United States.

With the lowest GHG intensity, significant opportunity exists for Appalachian and CNX’s low carbonintensive natural gas to displace higher GHG intense fossil fuel products, to displace natural gas from higher GHG intense producers, and to utilize our natural gas for production of low-emission derivative products such as hydrogen.

Coupled with our low production costs, we are in a very resilient, advantageous position with regard to fulfillment of future projected demand. To review this strategic moat, we compared our low production costs with IEA’s forecasted natural gas prices under the STEPS, APS, and NZE scenarios.

Holding our cash production cost constant—despite our expectation that costs will decrease as we adopt new technologies and implement efficiencies as have been experienced over the past 20+ years of shale development— we are below the IEAs forecasted natural gas prices in each scenario by a sizeable margin through 2050.

We further tested our sustainability by comparing our fully burdened cash costs (which include corporate costs such as general and administrative expenses and interest expense), as well as our fully burdened cash costs plus finding and development costs (including midstream and water).

In each of these scenarios, due to our ability to generate significant recurring free cash flow, we have the potential to repay all outstanding debt and drastically reduce share count or return cash to shareholders. As a result, our future dependence on capital markets declines and our intrinsic value per share grows even in these constrained gas demand scenarios.

Identifying potential climate-related risks and opportunities help inform our internal risk assessment, strategy development, and decision-making processes. The strategic responses outlined for the climate scenarios highlight management’s focus on a singular strategy that does not require abrupt shifts to respond to the differences in the scenario assumptions. Substantial demand for natural gas, and our track record of successfully adapting in response to new business opportunities, give us confidence in the effectiveness of our strategy.

Key climate-related risks and opportunities are the same for each of the scenarios but vary in terms of speed and severity of impact. They are summarized below.

Key climate-related risks and opportunities are the same for each of the scenarios but vary in terms of speed and severity of impact. They are summarized below.
  • Climate policies delay and cancel a growing portfolio of natural gas pipeline projects, limiting natural gas demand growth and spiking prices.
  • Demand destruction of natural gas via government policies may negatively impact cash flows and create risk of stranded assets.
  • Financial institution efforts to reduce exposure to oil and gas entities may result in declining availability of debt instruments. Divestment of domestic energy holdings by large institutional investors may reduce industry access to capital.
  • Increasing market concentration of foreign sources of minerals and supply chains for renewables increases geopolitical insecurity.
  • Increased electrification of all sectors of the economy makes the grid more unstable and less reliable, as recently seen in California and Texas.
  • Critical supply chain disruptions and energy/general inflation affect availability and costs for products such as steel tubing and casing.
  • Coal and oil use drop dramatically due to natural gas displacement and reduced investment flows, increasing baseload gas demand growth.
  • The low-cost, efficient low-carbon intensive producers continue to profitably serve natural gas demand.
  • Proprietary company technology offers opportunity to grow a new business segment focused on providing solutions to methane abatement for various industries.
  • Unique carbon attributes of company methane capture and abatement assets and processes provide opportunity to improve financial performance and participate in growth markets.
  • Demand grows for the use of our low carbon intensity feedstocks and innovative derivative products in transportation fuels and other markets created by our New Technologies business unit.
  • Accurate and legitimate accounting of Scope 1-3 emissions for wind and solar energy production demonstrate that natural gas is a low-emission energy resource, particularly from Appalachia.
  • Growing appreciation and market for US originated seaborne LNG as countries desire to quickly improve energy security and improve carbon footprint.
  • Scalability and intermittency challenges of renewables improve prospects for natural gas within energy portfolios, economies, and grids, as baseload demand grows.
  • eduction of hydrocarbon demand from renewable electric generation, energy storage and commercial electrification applications (e.g., electric vehicles), technological breakthroughs in those fields, and the interrelated economic impacts.
  • Increasing electrification of key sectors of the economy.
  • Commercial opportunities developed to reduce fugitive emissions, abate methane, and capture and sequester carbon.
  • Electrification of key sectors of the economy allows increased role for natural gas in powering the grid and development of shared infrastructure for potential hydrogen integration over the longer term.
  • Demand grows for the use of our low-carbon intensive innovative products resulting in vertical market integration into transportation fuels.
  • Negative perceptions and opinions impact social license to operate.
  • Objective science and math assessing carbon emissions is subsumed by ideology which is translated into policy.
  • Ill-informed policy creates energy scarcity and inflation, with blame falsely assigned to domestic energy.
  • Recent crises in Europe, and in Texas and California, coupled with inflation demonstrate the risks of getting energy policy wrong.
  • These events provide an opportunity to highlight natural gas’ reliability, security, domestic abundance, global mobility, high energy density, and critical role in energy future.
  • Reinforcing the ethical and moral duty for industry leaders to advocate for domestic energy realities and to constructively engage in public discourse.
Physical Risks
  • Shifts in natural disturbance regimes from acute weather like heatwaves, cold waves, water stress, and wildfires.
  • Grid failures impact manufacturing processes and reliability.
  • Limited impacts in Appalachia with moderate uncertainty around the cascading impacts to biodiversity across future horizons.

CNX believes that the climate scenario response strategies outlined are appropriately crafted to help mitigate the risks related to energy security in energy transitions that are outlined by the IEA in the World Energy Outlook 2022. More importantly, these risks highlight the opportunity for CNX and the natural gas industry to play a leading role in preventing disorderly change by providing low-carbon intensity energy to displace more carbon intensive fuels and through infrastructure and technology investments that can address these future risks that threaten our common goals.

CNX has taken steps to reshape itself to meet ever changing market conditions and will continue to do so. Our efforts not only reduce GHG emissions, but also use our unique asset base and core competencies to develop new low-carbon intensity business opportunities, ensuring that this resilience and sustainability will continue to expand in the years to come.

Build Your Own Sustainability Report

For additional details on our 2022 reporting topics and performance, please download the full report, or build your own customized version.