While some in the business while away their days
at conferences and in policy discussions dreaming about the future of the
global energy industry, El Paso Energy President and CEO William Wise is
living it.
Following the seemingly seamless merger with Tenneco
Energy, Wise now finds himself at the head of the nation's only coast-to-coast
pipeline system (from Bakersfield to Boston, as they like to say) with an
annual throughput representing more than 20 percent of U.S. consumption
and a market so happy it cant seem to push stock prices up far enough fast
enough. Not bad for a guy who, by his own telling, was walking his company
through the valley of death just two years ago.
When it went public in 1992, spinning off from
Burlington Resources, El Paso resembled something of a waif from a Dickens
novel. It had no marketing company, no E&P, no significant gathering outside
of the San Juan basin, no presence outside of West Texas, and a contract
situation in California that wasn't the best," Wise says, as something
of an understatement.
In fact, the floor of the valley came in 1995 when
El Paso's major contract with PG&E was not renewed. The markets were eyeing
the situation and wondering how the fledgling regional gas pipeline company,
with homegrown William Wise at the helm, would cope.
Through their various incarnations, El Paso and
Tenneco have had a long relationship with one another. The companies had
been from time to time more or less fiercely competitive, but, Wise said,
there was a grudging admiration. "I always recognized the Tennessee
franchise as one of the premiere pipeline franchises in the country,"
he says, and so kept an eye on Tenneco's restructuring moves. When the announcement
came that Tenneco Energy was for sale, our management team looked at it
and decided that it was a once-in-a-lifetime corporate opportunity and that
we needed to stretch and do whatever we possibly could to try and make it
work.
Another issue was a set of long-term transportation
contracts on Tenneco's Tennessee Gas Pipeline that were set to expire in
the year 2000. Again, El Paso had just dealt with this very problem in California.
In addition, Wise was convinced that the market dynamics in the Northeast
favored use of the Tennessee system. The major gas supplies for the foreseeable
future lie in Canada and the deep Gulf, Wise reasoned. The customers in
the Northeast want access to both, and the best way to have access to the
Gulf and to Canadian gas through Chicago is through Tennesse. Apparently,
he was right.
He keeps his company's organizational chart flat
El Paso does not have a COO and keeps the operation running efficiently
through a push-down style of management. Wise places a high value on creativity
and good judgment, qualities he finds really important when you've got so
many changes going on in the business. You've got to really be able to take
a set of circumstances that maybe haven't existed before and sort of fashion
a path of where you're going to go.
For the near future, he sees the company staying
in energy. He's not interested in merchant banking and he's not even convinced
El Paso should get into the retail business. Wise keeps in mind that more
than half of all the big loads in the U.S. are attached to the El Paso system.
So as we're developing BTU availability, whether it's electrons or gas,
we'll be serving those big guys. That's our game. Its wholesale, big direct
industrial to other power generators that are physically attached to our
pipeline system. And thanks to the Tenneco merger, our pipeline goes to
where they all are. |