Gas pipeline executive John G. McMillian left Rep. James D. Santini (D-Nev.) last Wednesday uncertain whether his hard sell against the gas-deregulation bill had made a conversion, but that was before Santini knew of McMillan's connection with the vast natural-gas resources on the North Slope of Alaska.
Whether that was intentional concealment of a vested interest in helping President Carter - who controls what happens to North Slope gas - or an innocent oversight, McMillian's failure to explain that his interests go far beyond the price of natural gas in Santini's state of Nevada has not helped the President's fight against deregulation.
McMillian, the head of Northwest Pipeline, never did mention the North Slope connection to Santini. His message was oddly seductive: Lissten to me, because I am the only pipelineexecutive in the country who is against deregulation of natural-gas prices and for President Carter's severely limited decontrol bill.
The reason McMillian gave was that Canadian gas, which provides about half the natural gas his company pumps and sells in the Northwest - supplying 70 per cent of natural gas for Santini's Nevada - would rise to astronomical prices as deregulation sent American prices soaring. That, said McMillian, would cost Santini's constituents more than they could afford, because not even total deregulation of gas prices would increase supplies. So, vote against the deregulation bill, authored by Rep. Robert Krueger (D-Tex.).
Experts wanting deregulation and backing the Krueger bills acknowledge that Northwest Pipeline does have special problems arising out its heavy reliance on Canadian gas. But they completely disagree with McMillian's warning to Santini that price decontrol will not lead to important new discoveries of natural-gas reserves.
Rather McMillian's lobbying of Santini and the two or three remaining fence-sitters on the House Commerce Committee, with the obvious encouragement of Federal Energy Administrator John F. O'Leary and other energy officials, is perceived by deregulation advocates as a unique case of political ingratiation with Carter, which, in the case of Santini, boomeranged. McMillian not only was a major, $5,000 contributor to Carter's presidential campaign last fall, but has also donated $5,000 to the Democratic National Committee this year. He also contributed $900 last year to the Democratic Finance Committee to help with convention costs.
What bothers politicians, however - particularly Santini - is not that political connection but the fact that McMillian, with his pipeline network in the Northwest, is a major competitor for North Slope gas.
There are three bidders for the right to market North Slope natural gas: El Paso Natural Gas, which wants to liquefy the gas and ship it by tanker to the continental U.S.; the Arctic Group, seven American transmission companies, including some of the nation's giants, that want to bring gas by pipeline to the upper Midwest; and Alcan Pipeline Co., a wholly owned subsidiary of McMillian Northwest Pipeline, which with three Canadian companies would pipe gas into the Northwest.
The Federal Power Commission deadlocked at 2 to 2 last spring in choosing between the bidders. The decision is now up to President Carter, with the multibillion-dollar ruling due by Dec. 1.
No one expects Jimmy Carter to make any snap decisions on how to market at least 40 trillion cubic feet of estimated natural-gas reserves on the North Slope. Certainly, no politician suspects that if McMillian had succeeded in converting Santini - or simply showed a good-faith effort to help his President in a major legislative battle - the North Slope gas would necessarily flow toward him.
But as Santini told us, McMillian's pitch was "disturbing" because he was the only pipeline official to take Carter's side in the struggle over deregulation.
"That mystified me completely," Santini told us. "In candor, this [the North Slope-Carter connecction] should have been revealed."
Santini might well have voted for Krueger's gas deregulation bill anyway, but now he is virtually certain to. Indeed, if Carter loses this key vote in the House Commerce Committee, now in the final mark-up stage of the bill, overkill by lobbyists on the anti-deregulation side may get part of the blame in the most fiercely lobbied legislation in the Carter administration.