Bernard J. Kennedy started his business career as a lawyer for a stodgy natural gas utility.
In a little more than a week, he'll be ending it as the chief executive of a broad-based energy company.
When you consider that he did that without ever changing companies, you get a pretty good sense of what Kennedy's legacy is from the 43 years he spent working at National Fuel Gas.
Of course, Kennedy had a lot of help. National Fuel, which can trace its origins back to John D. Rockefeller's Standard Oil Co., started to branch out into new businesses under former chief executive Louis R. Reif after the oil price shocks of the early 1970s.
But the process continued under Kennedy, who aggressively expanded National Fuel's presence in the oil and natural gas drilling business to the point where it now is the biggest part of the company, as measured by net assets, and contributes about 40 percent of the firm's profits.
In short, National Fuel is nothing like the company it was after the first energy crisis ended in 1974, when it had its utility business and not much else.
But by then, the Western New York economy was beginning its long slide and National Fuel's top executives came to the conclusion that it was time to branch out, moving the company into new parts of the energy business and reducing its dependence on its declining local market.
In other words, they saw it was going to be hard to sell more natural gas in its home market, when the steel plants were closing, unemployment was soaring and people were moving away.
"You can't force growth," Kennedy says. "Our growth has been, by necessity, outside our demographic area, outside Western New York and Pennsylvania."
So National Fuel built up a business that would store gas in abandoned wells and other underground formations until it was needed. The company built up a pipeline business to move natural gas along the Northeast.
And by the time Kennedy succeeded Reif as chief executive in 1988, the company had begun to dabble in the oil and gas drilling business -- a development that Kennedy now sees as a watershed in National Fuel's evolution.
"It took us out of a kind of provincial existence and made us an energy company," he says.
"With Lou Reif, they transformed the company," says Philip C. Ackerman, National Fuel's president who will succeed Kennedy as chief executive officer on Oct. 1.
Once Kennedy took over, National Fuel went full bore into the oil and gas drilling business, first focusing on wells in the Gulf of Mexico and, in the last few years, building up a stable of oil and gas fields in western Canada and California through a series of acquisitions as the national economy enjoyed a decade of uninterrupted growth during the 1990s.
"It afforded us an opportunity to pick up companies here and there and add to our business," Kennedy says.
National Fuel also had the good fortune of simply being in the right place. To bring natural gas from the energy fields in the Southwest, big pipelines have to run up along the Appalachian mountains and, as luck would have it for National Fuel, most of them are on the western side of the mountains.
Once the Appalachians get up into north-central Pennsylvania, the peaks flatten out a bit, which makes it easier for pipelines to make a hard right and head east, into the big natural gas markets along the East Coast. And the place where many of those pipelines converge just happens to be around Ellisburg and Leidy, Pa., smack dab in the middle of National Fuel's service territory.
National Fuel is trying to capitalize on that prime location. The company is part of a group that wants to build the Independence Pipeline, a 400-mile pipeline from Ohio to the Leidy hub, although that project has been slowed by stiff opposition from residents.
Geography also puts National Fuel's pipeline business in a good position to capitalize on the growing flow of natural gas from western Canada. The company and TransCanada PipeLines Ltd. earlier this month proposed building a 215-mile pipeline that would bring natural gas from southwestern Ontario through Western New York to the Ellisburg-Leidy hub.
If all the forecasts predicting a surge in demand for natural gas along the East Coast come true, National Fuel will be poised to cash in. And even if it doesn't, the pipeline business still should be a steady base for National Fuel because much of the natural gas that makes it to Northeast still has to pass through its backyard.
"There's going to continue to be a demand for what we provide in that area," Ackerman says. "That's going to enable us to survive . . The challenge is to make National Fuel bigger and stronger and able to provide better service to our customers."
Ackerman also sees it as National Fuel's best chance of remaining independent in a consolidating energy industry. "Our job is to run this company better than anyone thinks they can," he says. "As long as we are maximizing the value of this company, we'll be in a good position to remain independent."
To do that, National Fuel has been keeping its work force lean. Over the last 17 years, the company has trimmed its work force in Western New York and Pennsylvania by more than 40 percent, in large part by offering 11 different early retirement incentives to its workers. Yet it still is one of the region's biggest employers, with 477 workers at its downtown offices and 1,434 throughout Western New York, says Julie Coppola Cox, a company spokeswoman.
National Fuel's name still pops up occasionally in takeover speculation, though. "We have had several negotiations and offers to acquire the company," Kennedy says. "We've been successful in convincing the board that we had a better opportunity to grow the company itself."
And grow it has. National Fuel's assets now are about 18 times what they were when Kennedy joined the company in 1958. By 1986, the diversification strategy had created a more balanced company, although National Fuel's utility operations still accounted for nearly 54 percent of its assets.
But today, it's a much different picture. The oil and gas drilling business, which was less than 15 percent of the company's assets in 1986, now is the biggest part of National Fuel's operations. The utility business has shrunk to about a third of National Fuel's total assets, while the pipeline and storage operations account for about 20 percent. The company also has district heating businesses in the Czech Republic, acquired during the 1990s, that provides an international flavor and almost 7 percent of the firm's assets.
Ackerman can see the day coming when that mix changes even more. He's tantalized by the developing technology for fuel cells and microturbines, which eventually could allow homeowners and businesses to generate their own electricity, using natural gas, of course. And he'd like to see National Fuel do more than just supply the gas.
"I think we'll get into the business of providing those type of services," he says. "There will be plenty of opportunities for us when a winning technology emerges."
But that's the future. As Kennedy enters his last week as National Fuel's CEO, he can't help but reflect on the past.
"I never thought I'd have the opportunity to lead a New York Stock Exchange company," he says.
"A lot of high-fliers come and go, but we're still here and expanding," Kennedy says. "My only regret is that we didn't grow the company even more. I have three children who left Western New York for opportunities elsewhere."
And in that, Bernie Kennedy is far from alone.