In the high-stakes corporate poker game of Big Energy, a longshot gambler named John G. McMillian has cornered a choice piece of the action and set off lively speculation about how he pulled it off.
A loyal and generous supporter of Jimmy Carter, friend of Vice President Mondale and Carter aide Robert Strauss, McMillian two years ago got the government to award him the franchise on a mammoth project.
It is the Alaska natural gas pipeline, potentially the largest privately financed project in world history.
Until last summer, the project seemed, as one economic writer put it, no more than an impossible "pipe dream."
But then President Carter is his energy message called it a top national priority, and at the same time some forbidding regulatory barriers fell.
The pipeline carries a price tag of $15 billion and climbing, but the administration contends it is worth it, one sure way to reduce the country's dependence on foreign energy.
Carrying natural gas from Prudhoe Bay and Alaska's North Slope across Canada to the lower 45 states, the pipeline could provide American customers with up to 13 percent of the total gas supply, advocates say.
McMillian is leading an effort by major U.S. and Canadian gas transmission companies to raise the money.
Theories vary on how much McMillian's political connections have helped him. As he says, with a smile, "I'm sure it didn't hurt."
Certainly his Democratic leanings and his personal shoe-lether activism set him apart from the run of energy exectives and especially pipeline executives.
In any case, people naturally focus on those ties as they attempt to explain how a relatively small, young outfit like McMillian's Northwest Energy Co., based in Salt Lake City, Utah, got in out in front on the project, winning out over two Goliaths in the field.
With steely eyes and a clipper mustache, McMillian, 52, father of four with another on the way, looks something like the man who comes to foreclose on orphans. He speaks in an ominously quiet voice. In the movies, he would play the smoothie who corrupted Joan Crawford.
He grew up in the West Texas oil patch.
Now, his is a world of boardroom power struggles, sleek and high-stakes stock duels, lawsuits, coalitions forming and dissolving. He zips back and forth across the continent in a corporate Jet Star. He smokes his black cigars. He skis with pierre Elliott Trudeau, former prime minister of Canada.
"He plays the role of the big operator, but he works like a dog," says one associate.
McMillian's exploits, often referred to as swashbuckling, are near-legendary in some energy circles, and he is widely referred to as one tough SOB.
Consider his career: he started out as a roughneck on the rigs, got a degree in petroleum engineering, co-founded a few energy companies.
People laughed when he invested years in a court fight against an energy giant. El Paso Natural Gas. But he came away with a big chunk of his adversary, a new company.
He once again confounded skeptics when he used that company as a base from which to talk the government into putting him at the head of this new pipeline project, even though he does not have nearly as much money as his more-established competitors.
McMillian's allies insist his impressive connections would have been useless without certain other elements, including fortuitous circumstances and most of all -- McMillian's most notable trait -- the relentless tenacity of a snapping turtle.
Both his friends and adversaries agree he often behaves like "a bull in a china shop," as one put it, and "swings a two-by-four (figuratively) to get his message across."
He has provoked violent hostility in some members of Congress and most recently with the state of Alaska. For instance, he reportedly sent a letter to Carter complaining that Alaska was not being supportive enough of his project and asking the president to do something. The Alaskans cried "blackmail."
But, said one source familiar with the incident, "They seem to have patched it up. McMillian has a remarkable recovery rate."
McMillian acknowledges, too, that he and Rep. John Dingell (D-Mich.), chairman of the House subcommittee on energy and power, were "very unfriendly" at one point because of differences on energy proposals. But he thinks they are on good terms now, Dingell could not be reached for comment.
McMillian seems untroubled by the speculation about his political influence. On the contrary, says one longtime associate, "People think he got everything because he knows Strauss, and supports Carter. Well John loves that. He loves to think he's right in the center of the power structure."
Strauss, Carter's respected utility man who currently is serving as campaign chairman, calls McMillian "my kind of guy."
A lifelong "good Democrat," in 1972 McMillian stood virtually alone in support of George McGovern in his home base, Republican Midland, Tex., Strauss noted.
"An early supporter of Carter, McMillian has lobbied for a number of the president's programs, including the Panama Canal treaties, as well as the energy program. He was one of the major corporate financiers for the White House dinner Carter held for Menachem Begin and Anwar Sadat.
Strauss and McMillian, with their wives, dine together often in Washington.
Strauss added, however, that McMillian has "never asked me for any political favors . . . I expect the reason I have influence in this town is that I've never used it in improper ways."
Jerome Hass, a Cornell University professor and consultant to the Department of Energy (DOE) serving as a go-between for parties on the pipeline project, says, "I am not personally aware of any political pressures other than the kind you'd expect from anyone under the circumstances."
But, he added, "I am also aware that John McMillian does have an impressive capability to get messages delivered to the White House and certain members of Congress."
One reason McMillian's approach shook up some people was that he brought his "roughneck, wildcatting oil man mentality" into the regulated pipeline industry where executives had a "utility mentality," and did not deal in risk, according to one informed source.
Congress legitimized his approach by passing an act, in an effort to end red tape and hasten action on such a project, which for the first time made that regulatory process subject to political rather than judicial review.
McMillian was a man who had dickered for contracts with a military junta in Ecuador, and spent time in New Guinea, up a river on a drilling projected where "one or two of the people working on his rig had been arrested for having eaten somebody from another tribe," according to one of his associates.
McMillian made a name for himself, and demonstrated his stubborn qualities, by emerging victorious after the smoke cleared in the historic, 16-year-long antitrust court case against El Paso Natural Gas. His prize was Northwest Energy Co.
McMillian hung on for half a decade through disappointments and delays, desertion by allies and a drain on his finances.
"When the smart money had walked away, he was financing me out of his own pocket and exhorting me by phone from Australia -- at 3 a.m. my time -- to hang tough on these total long shots," said Salt Lake city attorney David Watkiss, now a director of McMillian's company.
McMillian's involvement in the marathon case was as a financial under dog but, according to writer Richard A. Fineberg in an artical about the case the others in the winning coalition agreed to let the company which spun off from El Paso because it had been "McMillian's personal determination in the case" which won the day.
With Northwest Energy as a platform, McMillian jumped right into the Alaska pipeline fray.
At a point when he was still only peripherally involved in it, McMillian said he happened to read an environmental assessment of the project prepared by the Federal Power Commission (now Federal Energy Regulatory Commission) and concluded the proposed routes were not politically feasible. The environmental interests would fight them. So he filed an alternative proposal following an existing highway.
That is his technique, according to Rush Moody, a friend and also a McMillian lawyer, a member of Strauss' old law firm. "John believes in getting to know the people who make policy and figuring out where they're taking the country," he said.In this case, "He recognized where [policy] was headed. That's why his route ended up being selected."
The selection of McMillian was up to the president, after a deadlock by the FPC, and subject to congressional approval.
Some sources contend McMillian "testified with his fingers crossed," or overpromised, about his ability to get the project financed without government assistance, in order to get congressional approval. One of these sources represents one of the major oil companies which are wrestling with McMillian and the government for control of the pipeline project.
Others discount such charges.
While they have benefited from recent government decisions, McMillian and his supporters point out that key decisions affecting the success of his bid on the pipeline were made in Canada, not the United States, and before the Carter administration took office.
"He didn't sell me [on his pipeline proposal] because of who he was," said former senator Frank Moss of Utah, whose campaign had drawn McMillian's support in the past. His proposal "just looked good to me."
The pipeline project now is running a gauntlet of multilayered regulatory review in the United States and Canada, possible construction problems and what one government financial specialist called "the granddaddy of all financing" efforts.
Among other things, the project has a unique provision which assures most investors a certain rate of return, but requires that those with an equity interest be penalized for any cost overruns.
McMillian and Department of Energy sources said they feel strongly that the oil companies who will benefit from the sale of the North Slope gas -- Exxon, Atlantic Richfield, British Petroleum and Standard Oil (Ohio) -- should help finance the pipeline that will carry it.
Proposals are flying back and forth over how much control and rate of return the big oil producers will get in exchange. The oil companies have proposed that they take 40 percent equity and get a veto over any decisions, McMillian and DOE sources said.
McMillian wants to keep control but get the oil companies with their billions, to assume most of the cost overrun risks and make the package attractive to more investors.
He contends the pipeline industry can build a pipeline better than big oil companies and refers frequently to "their past mistakes" and "the awesome heritage that the oil companies left us with in the tremendous cost overruns on the Alaskan oil pipeline."
McMillian "makes a lot of people unhappy," said a spokesman for one of the oil producers involved in the negotiations. "I don't admire his style. oBut I admire his ability to succeed without any apparent misconduct . . . He doesn't have to be liked."