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Illustration: Rebecca Zisser / Axios

America's natural gas industry is riding a political and economic wave it hopes can go all over the world. Much like surfing, it's not easy and won't last forever. Just ask Charif Souki.

Why we can learn from him: Souki, founder of Tellurian Inc., a new Houston-based natural-gas company, is considered a pioneer among his peers and embodies much of the sector's ebbs and flows. "We're riding the wave now if we can figure out how to do it," Souki told me in an interview in the firm's new Washington, D.C. office.

The big picture: The 64-year-old is on the leading edge of an industry going through growing pains as it seeks to stitch together a global market and cement its place as the world's dominant energy source despite economic and environmental concerns.

Flashback:

  • In 1996 Souki founded Cheniere Energy, which in 2012 was the first company to gain federal approval to export U.S. liquified natural gas, coined LNG. He had earlier bet on importing the fuel, shortly before the U.S. shale gas boom.
  • Souki was pushed out of Cheniere in 2015 over a disagreement with his board, led by activist investor Carl Icahn, about strategy. (Souki wanted more aggressive, others didn't.)
  • A few months later he co-founded Tellurian, which means "of the Earth."
Tellurian co-founder Charif Souki in his company's new DC offices late 2017. Photo: Amy Harder / Axios

The wave's easier part: politics

Getting political support is the easier part right now in Washington. President Trump is making natural-gas exports a cornerstone of his energy agenda and his default environmental policy because the fuel is cleaner than coal and oil. The Obama administration more quietly supported gas for similar reasons.

"The only difference between the two administrations is one brags about it and one didn't," said Souki, whose firm opened its D.C. office shortly before Thanksgiving.

The wave's harder parts: economics and environmental

It's a goldilocks problem. Companies want high enough prices to make money, but if it's too high, demand goes down. Many analysts predict a glut of natural gas through the early 2020s, which is one reason the industry is working to increase demand around the world.

"I don't really want to have $15 prices again and everybody screaming and demand disappearing," Souki said. "I would much prefer something that is less volatile and more predictable so we can evolve into a business model that's financeable."

Growing pains

Natural-gas markets are transforming from separate regional systems to a global one. Liquefying gas, whose default state is invisible, enables it to be shipped all over the world. Today's market is a messy mix of set contracts of varying lengths and one-off purchases like how oil is traded.

"How you price a contract today is in question," Souki said. "It's very hard to get a buyer and a seller who want to do business together to agree on a pricing mechanism."

Tellurian is working to build an export terminal in Louisiana backed by its own gas resources and pipelines that allows partners to gain equity, a business model it hopes can ensure cheaper prices than competitors. It's projected to begin operating early 2023.

The company is talking to dozens of potential partners, including Saudi Aramco, Saudi Arabia's state-owned oil firm and Chinese and Japanese companies, according to a person familiar with the matter. A Tellurian spokesman declined to comment on commercial discussions.

Environmental concerns

Natural gas emits far less carbon emissions and other air pollutants than coal or oil. But its primary component — methane — is another powerful greenhouse gas that companies sometimes emit when producing and transporting gas.

Souki dismisses concerns about methane emissions, but he also supports a $40 carbon tax.

"I'm a very simple man. You have a problem, address it, and the best way to address it is put a cost on what the issue is," Souki said. "In the short-term, gas will benefit because it's better than coal."

The Trump administration doesn't think it needs to address climate change. Souki isn't pushing it.

"We have a place where our interests converge, which is fine," Souki said. "I want to export LNG and they're in agreement this would be a good thing. Let's leave it at that."

Meg Gentle, Tellurian's president and CEO, told me in another interview last year the company's long-term plans may go beyond gas.

"For now, we're completely focused on building a global gas business, but for a 20-year horizon, our priority is to provide clean energy," Gentle said. "As the different environmentally friendly technologies are further developed, will we be able to play a role in that? I'd be enthusiastic to say yes."

"She's much younger than me," Souki said when I relayed that comment. "If I was a younger man today, I would be thinking, 'where are the energy sources of the future?' "

Souki turns 65 next week.

Go deeper

UN poll: Most see climate change as global emergency amid pandemic

Swedish climate activist Greta Thunberg (C) fronts a Fridays For Future protest at the Swedish Parliament in Stockholm in September. Photo: Jonathan Nacksrtrand/AFP via Getty Images

64% of people from around the world say climate change is a global emergency, a United Nations poll published Wednesday finds.

Why it matters: It's biggest global survey on climate change ever conducted, with some 1.2 million participants from 50 countries — including the U.S. where 65% of those surveyed view climate change as an emergency.

Collins helps contractor before pro-Susan PAC gets donation

Sen. Susan Collins during her reelection campaign. Photo: Scott Eisen/Getty Images

A PAC backing Sen. Susan Collins in her high-stakes reelection campaign received $150,000 from an entity linked to the wife of a defense contractor whose firm Collins helped land a federal contract, new public records show.

Why it matters: The executive, Martin Kao of Honolulu, leaned heavily on his political connections to boost his business, federal prosecutors say in an ongoing criminal case against him. The donation linked to Kao was veiled until last week.

How cutting GOP corporate cash could backfire

Illustration: Aïda Amer/Axios

Companies pulling back on political donations, particularly to members of Congress who voted against certifying President Biden's election win, could inadvertently push Republicans to embrace their party's rightward fringe.

Why it matters: Scores of corporate PACs have paused, scaled back or entirely abandoned their political giving programs. While designed to distance those companies from events that coincided with this month's deadly siege on the U.S. Capitol, research suggests the moves could actually empower the far-right.