How One Restaurateur Transformed America’s Energy Industry (Published 2022) (2024)

If you wanted to tell the story of how the United States became one the world’s largest exporters of fossil fuels, you could start in the Middle Devonian period, around 400 million years ago, when a warm inland sea dense with primitive aquatic organisms covered parts of the northeastern United States and Appalachia; you could explain that as these creatures lived, reproduced and died, their remains settled on the ocean floor and were compressed beneath layers of sedimentary rock, until eventually they transformed into a gas trapped thousands of feet below what is now Pennsylvania.

Or you could start with the murder of Nicole Brown Simpson.

On June 12, 1994, Simpson ate dinner with some family members at an Italian restaurant called Mezzaluna in the Brentwood neighborhood of Los Angeles. Simpson’s mother left her glasses there, so a waiter from the restaurant, Ron Goldman, went to Simpson’s home to return them. Shortly after midnight, Goldman was found dead with Simpson outside her condo. In the aftermath of the murders, reporters and photographers descended on Mezzaluna, followed by buses full of gawking tourists. People walked in to pester employees for details about Simpson’s final evening, even asking waiters what she ordered for her last supper (apparently rigatoni). An owner of the restaurant, a Lebanese American entrepreneur named Charif Souki, was disgusted by the media frenzy — “the morbid curiosity, the lack of taste and decency of people, was pretty astonishing,” he would say later. He decided to sell Mezzaluna and went on to try his hand at something new. After some deliberating, he settled on the oil-and-gas industry.

With a mop of unkempt hair and a penchant for elegant double-breasted suits, Souki didn’t look the part of a Houston wildcatter. He also didn’t know anything about drilling for oil or gas. But he did have a thick Rolodex from his posh Beirut upbringing, his days as an investment banker and his tenure as restaurateur to the stars. Why not raise a little money and give it a try? The infrastructure that moved fossil fuels around and converted them into energy was unfathomably complex, but the people in the business did something relatively simple: They borrowed money, dug up fuel and tried to sell it. That didn’t sound so hard to Souki.

At the turn of the century, growth in the American energy sector had leveled off. Major oil producers like Exxon Mobil and Chevron had staked out the Gulf of Mexico for almost all the oil and natural gas it could yield, and there didn’t seem to be an obvious next place to drill, so there wasn’t much new money flowing in. In fact, some experts and commentators were worried that the United States would struggle to find enough oil and gas to meet rising demand. Buying more oil would be easy enough, because millions of barrels of crude moved all around the world every day on tanker ships, but natural gas was different. The United States was already importing around one-fifth of its annual consumption, mostly from Canada, and the pipelines could carry only so much. Unless the United States could find more gas within its own borders, the price of the fuel would skyrocket.

There is another way to move natural gas around, though. If you cool it down to minus 260 degrees Fahrenheit, it transforms into a liquid. This liquefied natural gas — L.N.G. for short — takes up about one six-hundredth of the space that regular gas does, which means you can load it onto tanker ships and send it across the ocean. The United States had never had much need to import liquefied natural gas before, but Souki figured that rising demand would soon justify the costs. He had already built a small energy company called Cheniere, part of an unsuccessful attempt to find new oil and gas in the Gulf of Mexico, and he decided to put his chips on L.N.G. He called friends from his investment-banking days and pitched them on a solution to America’s energy woes: a gas-processing plant that could “regasify” L.N.G. as it arrived from countries like Qatar, then pump it into domestic pipelines. A lot of people thought he was crazy, but eventually he found the money, and it wasn’t long before he identified a site for the $2 billion facility on a swampy section of the Louisiana-Texas border, not far from a fishing community called Sabine Pass.

The only problem was that he was completely wrong. Around 2007, just as his terminal was nearing completion, a group of energy moguls made a series of breakthroughs in a new method for extracting gas from deep layers of landlocked shale. Hydraulic fracturing, or fracking, had the potential to unlock enough gas to satisfy American energy demand for generations and turn the nation into the world’s largest producer of oil and gas. It also made Souki’s import terminal virtually worthless. In his book “The Frackers,” the reporter Gregory Zuckerman later recounted how Souki looked out at the crowd during the ribbon-cutting ceremony for the Sabine Pass facility only to see his investors and supporters staring at their BlackBerrys. They were watching Cheniere’s stock price plummet in real time.