Amy Parsons: Hi. I’m Amy Parsons, president of Colorado State University, and host of The Next 150 podcast. We have so many remarkable people in our community, and this is where we’re going to hear their stories. We’re going to get their perspective on CSU’s next 150 years, and gather their very best advice for today’s CSU students. Let’s get started, Rams.

Well, welcome everyone. Thank you for joining us for our next episode of The Next 150. I am so excited and so honored to have this very special guest with us today, Michael Smith, a truly extraordinary entrepreneur, energy innovator, philanthropist, proud CSU alum, and the founder and CEO of Freeport LNG. Michael’s story is one of vision, persistence, integrity, and bold leadership from his early days studying at CSU and working right here in Fort Collins, to becoming one of the most respected figures in the global energy industry. His journey is captivating and inspiring, and as the founder of Freeport LNG he built one of the largest liquefied natural gas export companies in the world, a company that has reshaped the global energy landscape and demonstrated how ingenuity and American ingenuity can power economies and drive progress around the world.

But beyond his extraordinary business success, Michael is deeply committed to giving back. He and his family have made transformational impacts on education, conservation, the arts and communities, including right here at CSU, where his support has opened doors for countless students and advanced our mission in remarkable ways, including establishing scholarships for students in the College of Business, College of Natural Sciences, and the Warner College of Natural Resources, and made possible the Michael Smith Natural Resources Building, and the Iris and Michael Smith Alumni Center, and invested in areas like the Flint Animal Cancer Center.

Michael, thank you for being here back on campus today, spending some time with me, with our leadership, and especially with our students, where you’re about to give a guest lecture to many hundreds of students in our Lory Student Center. It’s so important for us to make sure that our students hear directly from you and your story, so thank you for spending some time with us today.

Michael Smith: It’s my pleasure.

Amy Parsons: So, you’re back on campus. It’s been really a pleasure for me to get to know you over the last few years personally. Understand your journey. I’ve had the privilege of visiting your plant. The Freeport LNG, which is one of the most remarkable things I’ve ever seen, just the scope and scale of it is absolutely incredible. Talk to us, maybe give us a little sneak preview of what you’re going to be doing today on campus and sharing with our students in the guest lecture and the demonstration.

Michael Smith: Thank you. And thank you for that glowing introduction. Well, today I have the opportunity to speak to more than just the scholars that I speak to every year. And I thought that what I talk about is adapting to the changes that they’ll see that can lead to their success and which has led to my success. And I’m not talking about the technological changes, which I’ll bring up just briefly, that we’re all seeing. And who knows where we’re going to be in five, 10, 20, 30 years. I’m talking about the changes that occurred through my business career, having started in real estate, going into oil and gas exploration production. Right here in Fort Collins I based that company drilling wells on the front range, and then in a global liquified natural gas import business, and then turning into an export business. There are so many different changes I had to do to be successful, and I’m hoping that my personal experiences and how I handled those experiences and faced the challenges, that I can impart on them some of what I’ve done, and it could help them thinking in the future.

Amy Parsons: Well, and what’s so inspiring to our students too is that you got your start right here at CSU as a student, started working here in Fort Collins. But you came from New York. Talk to us about how you made that journey from New York to Fort Collins, Colorado, in the ’70s.

Michael Smith: Well, that was pure fate, because I had no idea what I wanted to do when I was applying to colleges. I had a deep love for the oceans and thought maybe I was going to go to the University of Miami in Florida and study oceanography, because I was an avid scuba diver, and I loved animals, and I applied to a couple of schools that had veterinary programs. And the winter of my senior year, I went skiing for the very first time in New England. And when I came back from my ski trip, my first acceptance was from CSU. And I didn’t even have to come see the university. I was going. I was done. So, that’s literally how I got to CSU over all the other schools. But I didn’t stay in the veterinary program for more than a single quarter. We were in the quarter system my first two years.

Amy Parsons: Did it meet your expectations when you got to Colorado, when you got to Fort Collins?

Michael Smith: Well, not initially. Coming from New York and someone who hung out in Madison Square Garden and went to the — lots of different things in a big city, it was pretty small.

Amy Parsons: Yeah.

Michael Smith: It’s small now. You can’t imagine how small Fort Collins was in 1973, but I loved it.

Amy Parsons: Yeah. Well, we’re so fortunate that you got that acceptance from CSU at the right time. I’ll consider ourselves lucky for that. Do you consider yourself lucky, as well? Things like that happen in your life that send you in a direction that maybe you didn’t expect?

Michael Smith: Yeah. Yeah, no. I mean, I’ve been very fortunate in my life and in business. People have talked to me, sometimes talking about how lucky I am because of this thing and that thing. And my feeling about luck in business is very simple. You work your tail off to put yourself in a position to get lucky. But that’s just the beginning. You have to recognize the opportunity, that there’s something lucky out there, and you got to go seize that opportunity. And then you have to execute on it. I mean, I was presented an idea in Freeport, that I knew nothing about the LNG business, but I was convinced the United States needed to get a lot of natural gas, the price was going to go up. When the light bulb went off, okay, I got lucky that I was presented that opportunity. Then I had to recognize it, and then I had to take action on it. And lastly, I had to execute.

When I talked to the students today, that could have gone bad many different ways, because I never could have raised the money. I couldn’t have got approved by the government. I could have done it wrong. I could have hired the wrong … There’s so many things that had to go right, you have to execute. So yes, I was very lucky that that happened, and lucky that I picked CSU, because I wouldn’t have found out about the first oil well drilled in Colorado. Maybe I would be doing something in the oceans. Who knows?

Amy Parsons: Well, you started out studying, what? Chemistry, then you pivoted to…

Michael Smith: Yeah, so I didn’t have a… Nothing I’ve done is traditional. I came here for veterinary science and immediately realized it wasn’t for me. I was very good in math and sciences, and I pivoted to being pre-med. Fifty years ago doctors probably made more money than almost anybody else. And I just, quite frankly, I was into the money, hands down. And in my junior year, I realized I’m going to be a doctor for the very wrong reasons. Doctors shouldn’t be there for the money. They should be there for what they’re doing for their patients.

And at that point I was kind of lost, didn’t know what I wanted to do, looked down and saw my credits and say, “Well, the straightest path to my degree was get a chemistry degree.” I love chemistry and I worked in… 500-level biochemistry, was a sophomore. I worked for Dr. Fahrney, who you knew, in the biochemistry department for two years, two summers. So, I loved it, and that’s how I went… I ended up in chemistry, but I knew I wasn’t going to be a chemist. I wanted to be a businessman and make a lot of money somehow, some way.

Amy Parsons: So, you had the entrepreneurial bug even then, as an undergraduate student, thinking…

Michael Smith: All my life.

Amy Parsons: “Where can I go? Where can I start the business? What’s next?”

Michael Smith: Yeah. I mean, just like I said, I was going to be a doctor for the wrong reason. My father was a successful businessman growing up with nothing from the depression and initially everyone thought I’d go into my father’s company and I was like, “No, I always knew I wasn’t going to my father’s company. I was going to do it on my own.” Whatever it was, I had to do it on my own.

Amy Parsons: Yeah. You’ve mentioned the term pivot a couple of times. I mean, one of the most remarkable things about your journey is the big pivot that you made from thinking that you were importing to exporting. Can you just talk a little bit about that, because it’s just such a remarkable example, students can learn so much from that…

Michael Smith: Sure.

Amy Parsons: … big pivot.

Michael Smith: Just to go back 30 seconds, because most of the audience won’t know this. The LNG, liquefied natural gas, is just natural gas methane that is drilled anywhere in the world, but in the United States you drill it, and at room temperature it’s a gas. At minus 600 degrees Fahrenheit it becomes a liquid. It shrinks 600 times from a beach ball to the size of a ping pong ball or a golf ball. If you’re going to transport the natural gas from countries who have too much and can’t use it to countries that may not have it, like Japan that has no natural resources and they wanted a cleaner alternative than burning dirty coal, because they’re the ones who started the industry, you put it on ships and send it to Japan. Well, you can fit a lot more golf balls or ping pong balls than you can beach balls, okay?

So, there’s two aspects. You got to have a facility that makes the LNG and shrinks it and turns it from gas to a liquid. It doesn’t like doing that. It’s very hard to do that. You need a lot of refrigeration. Our facility, export facility, is one of the largest refrigerators in the entire world. I mean, our facility goes from where we’re talking about all the way to the foothills, and that’s how big it is. And it’s mostly refrigeration and cleaning up the gas, so it’s pure when we go to refrigerate it. Then you take it to Japan, South Korea, Europe, the ships have to come in, you just unload it and you warm it up and it expands 600 times. You put it in pipelines and it goes to people’s houses, to factories, to power plants. So, that’s the business.

Now, in my case the big pivot is I built a facility when the United States was only producing about 48, 49 BCF a day, and about 23% of it was coming from the Gulf of Mexico where I had previously drilled. We couldn’t get any larger and we were paying more for our natural gas than anywhere in the world. People wanted to come and I was the first to build a terminal in 25 years to import LNG. Well, while we were building it over the three years they found shale gas. And the United States now had the biggest amount of natural gas in the world. And instead of U.S. being the best place, no one wanted to come there. Now, we don’t have the time to explain. I still had a successful business. My customers still were paying me. We had nice profits, but I had this facility that now wasn’t being used.

And one of my competitors who were in dire financial straits came up with the idea, he’s going to build an export facility, use part of that equipment that he had already and build this massive plant that’s 15 times what he already built, and we followed suit. It was a huge pivot. I mean, we went from a billion dollar facility to a $14 billion facility. And quite frankly, no one in the industry thought Michael Smith had any chance to do it, nobody. The lenders, my partners, the contractors who I couldn’t find one who would even do the business, everyone turned it down, except for one. So yeah, it was a big pivot.

Amy Parsons: It’s a big pivot. It’s a remarkable story. And it’s really astonishing to see in real life. I feel so fortunate that I’ve been able to go down there and tour the facility. It’s absolutely incredible.

Michael Smith: We were serial number one as an independent individual trying to build this, both, in the import it’s called regasification, I call it regas. We’re the first in regas and we’re still the only independently owned non-public export facility in the world. There’s about 50 of them in the world, seven or eight of them in the United States. Yeah, that’s pretty…

Amy Parsons: Where do you see the industry going from here as you look forward?

Michael Smith: Well, we need more natural gas for the world. I mean, we are growing our renewables, our solar, our wind very, very rapidly, but I know people don’t like to hear this, it’s still only 3% of all of the energy usage in the world. So, it’s going to take decades for that or new technology to get off of fossil fuels. Our facility is a replacement for dirty coal. So, sorry for the people up in Wyoming, it’s a coal state. Yeah, you’re born there, but…

Amy Parsons: I was actually born in Colorado, but I grew up there, I came back.

Michael Smith: Okay. Okay. Yeah, so the… Yeah, what’s the name? Yeah, we don’t like those Cowboys.

Amy Parsons: That’s right.

Michael Smith: I remember those games.

Amy Parsons: The Border War is a real thing.

Michael Smith: So, where I see it is that we are the logical fuel until there is enough of alternatives that can get us off of fossil fuels. The U.S. outlawed the burning of coal for power plants in 2010. President Obama did that, who was very environmentally conscious. If you look at a chart, you will see since then the U.S. production of CO2 has been going down and down. And I know everyone’s concerned about the climate, they should be, but CO2 output in the United States, it’s the lowest it’s been in 30 years, and that is primarily switching from natural gas from coal.

So, I see it as a growing business. There is over a billion people in the world who don’t have electricity. They want a piece of what we have. And then you have geopolitically, Russia was the main supply of natural gas for Europe after the war that’s started. That’s been shut off. Matter of fact, Freeport right now, we are supplying 65% of our gas is now going to Europe. It used to be before the war about 25-30%. And we are supplying, our little company, $4 billion company, but our little company is now supplying more than 10% of the gas that Europe lost from Russia. It’s pretty cool.

Amy Parsons: That’s amazing, yeah.

Michael Smith: Pretty cool.

Amy Parsons: What do you think are some common misconceptions or what people in the U.S. don’t understand about LNG and its role, and like you said, the sustainability aspects of the business?

Michael Smith: Well, there are environmentalists who are against it. They don’t want to see any drilling in the United States. If we don’t drill in the United States, it doesn’t mean gas and oil isn’t going to be used by somebody else in another country. And then it’s going to be drilled in a country that doesn’t have any of our environmental regulations. It’s completely upside down thinking, it’s a global environment. We got to get off of coal. Gas is the only way we’re going to do that until technology and enough solar…there’s not enough solar to make it work.

I went to a seminar for a MIT professor who was telling me, was saying, “Look, if we put enough wind turbines around the world to provide enough and supply all the electricity in the world so we don’t raise the temperature three degrees in the world, because we get off carbon fuels, when a wind goes through a turbine and moves the windmill, it has less wind on the other side. You will reduce the wind around the world so much that the temperatures on the globe will go up five degrees.” I mean, so you can’t do one of everything. We need contributions from the cleanest sources. And maybe it’ll be hydrogen, maybe it’ll be fusion and we won’t need it, but until then it’s important for us and our company to drill. We are producing two and a half BCF day. That represents just under 2.5% of the U.S. production of 106 PCF a day to fill our facility with gas. That takes about 35,000 to 40,000 oil field workers every day. So, we are a huge employment source.

In Freeport, Texas, where our facility is, now the assessment for their real-estate taxes is zero for the first time ever since they started Texas. I mean, we just give back so much. I’m like the second or third-largest taxpayer in our region for the schools. Our tax bill will be over $100 million in three years. So, what do I say to people who are against it? Just do the math. I mean, we are just so important for our local economy, for the U.S. economy, and for the world and geopolitically that the facts are the facts.

Amy Parsons: Well, you mentioned giving back in there. Let’s talk a little bit about your own personal philosophy of giving back, because you’ve been such a generous philanthropist, and your wife, Iris. You give to a lot of different things. One of the questions we have from one of our students today is, what is your philosophy around philanthropy? What do you look for when you decide where to give back and where to invest at Colorado State University, but also in general?

Michael Smith: Well, first, we’re completely dedicated to trying to do as much as we can in philanthropy. We’re very, very fortunate. Obviously, my success is quite startling, it’s not what I expected. And certainly when I was coming to CSU. And maybe 20 years ago I didn’t expect it, 10 years ago I was hoping it, 30 years ago I definitely didn’t even expect it. So, it’s incumbent on me and Iris to give back, and I think it should be incumbent on anyone who’s super successful. And then I think anyone who’s moderately successful, whatever level you are at. The government can’t do it all, okay? And we all got ahead because of certain reasons, and CSU had a major impact in my career. I would never have been this successful in the energy business without the sciences and math and physics I learned here. And just learning problem solving that I learned by going to college.

So, we’re focused on health. We’re very, very large supporters of National Jewish Health in Denver, the number one respiratory hospital in the world. It’s been voted that for 26 straight years. There are patients from about 50 different countries coming every year. We’re very involved with every community we live in around the country. We support the hospitals. We’re very involved with a lot of different, very sad, difficult diseases for research, from Parkinson’s and cancer and heart disease and others. We’re very involved with the arts, and then because those are passions of ours. And then CSU, because that’s one of my great passions and Iris is 100% supportive, because she is so supportive of education and children and breaking the cycle of not having education and getting ahead. And that we picked CSU, because that’s my university in that, but she is totally on board for that.

Amy Parsons: And also our mission at CSU, we’re a land-grant institution, so we’re uniquely committed to access, right? And getting students that opportunity to come to CSU, graduate with a high quality four-year degree and go on to do amazing things in their fields. So, we love that we’re aligned with you in that and that we are committed to access, right? And getting those students, especially first-generation students, first in their family to go to college, into CSU and graduating. And you’ve been a great partner to us in that. And I personally think there’s no better place to invest money than in the students than in the promise of students being able to have those opportunities and come in. And so, thank you for investing directly in the students and not just with investing in scholarships, but like today with your time. So, they get to hear your story directly and hopefully see that inspiration, see themselves in your story of coming right here from CSU. That’s really important.

Michael Smith: Well, thank you. I love it, that’s why I come back every year. But one of the greatest moments I’ve had with philanthropy, was the first year after we made our largest donation, we had, I think 60 new Smith Scholars here on campus. And we had a luncheon and most of them came out. My children came with Iris and I, and they got to meet them. And they heard countless students telling my daughters how they were… the majority were first-generation in their family to go to college. They told them the majority either would not have the money to go to school, or would have been saddled with debt and worked two, three jobs to get through school. And my kids were crying. And they couldn’t have been more proud of their parents. I mean, to me that was easy. Maybe if we would have had that a few years earlier I would have made the donation earlier.

Amy Parsons: We know what we hear from the students too is that it just doesn’t allow them financially to go to college. For them, they know that someone believes in them.

Michael Smith: And that’s nice.

Amy Parsons: And they graduate at higher rates, they persist, because they know that someone is taking a chance on them. Somebody believes in their potential.

Michael Smith: Well, I meet them. I’ve read their resumes before they went to school. I’m amazed at the quality of the kids, and what a crime if that group of young students didn’t get a chance to go to school. Education is the number one thing that changes the entire future of an entire family. It breaks the cycle of poverty or of living in whatever socioeconomic level you are kind of stuck in. It’s so hard to get out of that grouping, unless you have education to take you to the next level. And that’s why we insisted that the funding was kind of in a group. There was a lot of money available for people that had absolutely no money, and there’s monies available either through the parents or other programs at a certain higher level. I don’t remember the numbers. We picked a sweet spot where your predecessor, Tony Frank, said, “We don’t have money for these students in this area.” And we said, “Bingo, that’s what we want to do.”

Amy Parsons: That’s amazing. Well, we’ll be talking with some of those students here in just a little while. One thing that I want the students to really focus on about you and your journey too, Michael, and your generosity back to CSU is just who you are as a leader. And so, I guess I want to ask how your leadership style maybe developed and changed from when you started here at CSU to where you are now? And what are those things about your leadership that you think that today’s students can really grab ahold of and emulate as they go on their own journeys?

Michael Smith: Well, it’s interesting that you said from when I started to now, because when I first started out I was very hands-on operationally. And maybe I was in everybody’s hair, but on everything. And I found out along the way, I’m really not that great of an operator on the day-to-day stuff, and our company did much better when I pulled back from that and got reports and questioned things, instead of getting into the weeds, like I really was the person to lead that. We’re now a very big company and we have incredible talent, which would have been one of my number one recommendations for young entrepreneurs. Hire the smartest people. You do not have to be the smartest people, you have to have the smartest people. And your job is to figure out which parts of their advice you’re going to take and not take.

But what my leadership skill that I run Freeport is that I have a great president, CFO, COO, and a great group of additional senior VPs, and I delegate. I let them do their business and then report to me. And we spend a lot of time together discussing what we’ve achieved, what goals we have, how we’re not getting goals. And I spend most of my time thinking about ways to make the company better, how we can look at, they do too, but I’m looking at growth opportunities, I’m looking at the more, at this stage, visionary side. But I mean, I’ve been in business for over 40 years, this company since 2002. There was a time where I was in Houston for five days a week, because I never lived in Houston, and still working Saturday and Sundays, I don’t have to do that. So, when you’re asking now, I’m fortunate to be able to delegate.

Amy Parsons: Yeah. And to be able to do fun things in sports and music and entertainment and other things…

Michael Smith: Absolutely, absolutely.

Amy Parsons: …which is always fun to talk with you about. And that’s great advice for anyone in business, I think, right? To understand your lane, who to hire, how to delegate. I mean, those are lessons that we need to learn early, I think, in any business operation.

Michael Smith: You’ll only go as far as your team can go, unless you want to have a mom and pop operation. Only one person could do so much, right?

Amy Parsons: Yeah. Well, we’re going to be asking you today when you talk with the students some advice for students, for our young students just starting out, maybe for your Smith Scholars, for your students who were just here. Maybe what is some advice that you wish you had when you first started here at CSU?

Michael Smith: Well, what I’ve… Every year I get asked similar kind of questions. You only have four years or less or more, depending on your track at the university. What I tell the students is number one, get as much out of your education part. Do your work and have fun. It’s the only four years of your life you’re going to do this. And follow your passion.

It’s very challenging for an 18 year old who goes to school, you got to pick a major. And the major is supposed to be what you’re going to do for the rest of your life. I don’t think that’s very realistic. And for those who haven’t picked their major or picked a major and walk around sophomore, junior, even seniors still not understanding what they want to do, it’s okay. I had, as I said, unconventional career. I didn’t know what I wanted to do, but I loved math and I love science, and I enjoyed chemistry and I took those courses. I knew I wasn’t going to be a chemist. I didn’t know a thing about oil and gas. Matter of fact, I remember going up, hitchhiking up from Vail up I-25 and got picked up by a geology student. And back 50 years ago there were all these pumping wells along I-25 from the Dacono Exit to, what is that place called? Johnson’s Corner?

Amy Parsons: Yes, yeah.

Michael Smith: Is it still there?

Amy Parsons: Yeah, sure.

Michael Smith: Okay, so Johnson’s Corner. There are the pumping wells. I thought they were water wells, okay? I knew nothing about oil and gas, but what I learned is I learned how to problem solve, I learned about the industry. So, when you’re going to school, if you’re in liberal arts, it’s fine, you have a passion. But you should be thinking, “Unless I want to be a teacher, how am I going to make a living?” So think about, is there some electives in something else that could be an avenue for a future job? But I think you should be following your passion and studying and having fun. And don’t stress. Kids today are too stressed out about the future, and they have to know everything. You don’t have to know anything. Let it come to you. And like I said, you have to adapt to the changes, which is what I’m going to speak about in about an hour and a half.

Amy Parsons: That’s great. And I love your advice, putting yourself in the position to be lucky, to take advantage of what comes. That’s great.

Michael Smith: Yeah. And whether that’s the right job opportunity that you weren’t thinking about, but I kind of know that stuff. And then there’s another thing my dad taught me, he said, we’re baseball fans and it’s World Series time. So, he always said to me, “You can’t get a hit if you don’t come to bat.” Which means, you have to be willing to… Don’t be afraid if someone’s going to say no, ask. In business, you can’t get the customer to say yes and buy something if you don’t ask.

I will tell you, he actually told me this on the kitchen table. It wasn’t about business, it was about dating. He said, “Don’t be afraid to ask the girl out.”

Amy Parsons: You miss all the shots you don’t take.

Michael Smith: If you don’t ask, she can’t say yes. But that’s the point is that it’s the opportunity. You see something that you have a chance and you could get lucky on that. So, enjoy your four years, do your work, and follow your passion are the three things that I think can lead to great success.

And for those of you who got your mojo, you know exactly what you’re, you’ll even… God bless you. I wasn’t one of those. And I don’t know if you’re the majority or the minority, but even you, whatever business you’re going to be in, that business is going to change. It is not going to be the same. You have got to be adaptable to how it changes. I’m not talking about technology. It’s going to change. The businesses that existed 20 years ago, a third, a quarter of them, they’re not even here anymore. 50 years ago, don’t even… You have to look them up on ChatGPT to find out what we used to do things. So, the same thing’s going to happen even faster in the next 50. So, be prepared for a changing world.

Amy Parsons: And have fun along the way.

Michael Smith: And have fun along the way.

Amy Parsons: Yeah, that’s great advice. Well, that’s a great place to end. Thank you again for your time and this fascinating conversation. And thanks again for just being a great Ram and being a role model to our students and in what you do every day and your willingness to come back and give back and invest in our students. It just means the world to us at CSU. I should call you Dr. Smith, as well. You had an honorary doctorate from CSU. We’re just so proud of you.

Michael Smith: And you guys are the only time I ever hear this doctor stuff.

Amy Parsons: We’re going to keep doing it. It’s fun. All right. Well, thanks, Michael.

Michael Smith: Appreciate it. Appreciate it.

Amy Parsons: Let’s go on to the lecture.

Michael Smith: Oh, thank you. Look forward to it.

Amy Parsons: All right. Thank you.

Michael Smith: Thank you.

Amy Parsons: Thank you.

Thank you for listening. I’m Amy Parsons, president of Colorado State University, and you’re listening to CSU’s The Next 150, where we explore what comes next for CSU by chatting with change makers who are already leading the charge and shaping our next 150 years. I’m gathering their very best advice for today’s CSU students. Stay tuned to wherever you get podcasts for our next outstanding conversation. Go Rams.