Material submitted for the record-June 26, 1975—Continued
Oversight and Investigations Subcommittee, Committee on Inter-
state and Foreign Commerce-Continued
Letter dated August 7, 1975, with attachments, from Theodore L.
Lytle, Jr., and John M. Sipple, Jr., attorneys, Bureau of
Competition, Federal Trade Commission, to Chairman Moss
responding to the June 26, 1975, memorandum from Wayne
Thompson and Frederick Cornelius, Federal Power Com-
mission
Material submitted for the record-June 27, 1975:
Cities Service Oil Co., interoffice letter dated June 24, 1975, from
Richard Walling to Don Oliver, re review of workover rigs South
Brazos A-76....
Oversight and Investigations Subcommittee, Committee on Inter-
state and Foreign Commerce:
Article entitled, "Energy Report/Congress Nears Showdown on
Proposal To Decontrol Gas Prices," from the National Journal
Reports, May 25, 1974..
Exhibit A-Subcommittee subpena to Cities Service, dated
May 8, 1975.............
Exhibit B-Memorandum dated February 5, 1974, from Garret
Davis to John Heck.. -.
Exhibit C-Letter dated April 16, 1974, from Cities Service to
co-owners Getty, Skelly, and Sun Oil Co., and letter dated
April 19, 1974, from Transco to Cities Service...
Exhibit D-Memorandum dated May 31, 1974, from Walling to
Oliver re caliper survey.
Exhibit E-Memorandum dated June 18, 1974, from Oliver
to Murphy re initial analysis of A-76 workover program---
Exhibit F-Memorandum dated June 27, 1974, from Oliver to
Murphy with attached tubing table, re A-76 workover pro-
Exhibit G-Letter dated June 28, 1974, from Cities Service to
co-owners Getty, Skelly, and Sun Oil Co...
Exhibit H-Letter dated July 19, 1974, from Cities Service to co-
owners Getty, Skelly, and Sun Oil Co....
Exhibit I-Memorandum re owners' meeting of July 24, 1974,
memorandum dated July 26, 1974, re same meeting, letter dated
July 26, 1974, from Cities Service to co-owners Getty, Skelly,
and Sun Oil Co...
Exhibit J-Memorandum re owners' meeting of August 21, 1974.
Exhibit K-Memorandum re owners' meeting of October 15, 1974.
Exhibit L-Letter dated May 19, 1975, from R. H. Ellison,
Jr., vice president, Progress Marine, Inc., attention Mr.
Smethurst with attached letter dated June 26, 1974, from Mr.
Redford, Dresser Offshore Services, Inc., to Mr. Higginbotham,
Placid Oil Co., re Dresser 51 to workover Placid Oil Co.'s well
in Ship Shoal Block 204-"A" Platform.......
Exhibit M-Letter dated January 25, 1975, from J. E. Conventon
assistant to vice president, gas supply, to Cities Service Oil
Co. re Brazos Area Block A-76 Field, Offshore Matagorda
County, Tex., with attachment; chronological summary of
Transco activities in connection with Cities Service-work-
over program Brazos' Area Block A-76, Offshore Matagorda
County, Tex..
Exhibit N-Flight log of Petroleum Helicopters, Inc., for June
25, 1974.
Exhibit O-Letter dated May 20, 1975, from Paul Vernon to Mr.
Rabbe re request for brochure of Progress Marine, Inc., Plat-
from Workover Rigs...
Exhibit P-Correspondence between Transco and Cities Service
in May 1975 re gas deliveries to Transco___
Exhibit Q-Letter dated February 13, 1975, from Transco to its
customers re current projection comparing gas available with
system firm sales requirements and the resulting deficiency. -
Exhibit R-Flight log from Petroleum Helicopters, Inc., for
July 26, 1974, re Mr. Huthnance's visit to platform...
Material submitted for the record-June 26, 1975-Continued
Oversight and Investigations Subcommittee, Committee on Inter-
state and Foreign Commerce-Continued
Exhibit S-Purchase order dated April 2, 1974, reflecting the
purchase of 9,400 feet of 3.5-inch tubing from Bethlehem Steel
Co., for use at Eugene Island Block 257...
Exhibits T-1 thru T-11-Purchase order dated May 31, 1974
(with 10 attachments), reflecting the purchase of 30,000 feet
of new 2%-inch tubing from Vinson Supply Co. in Tulsa..
Exhibit U-Undated letter from Cities Service to Getty, Skelly,
and Sun, from Jack R. Place, with attachment entitled, "Sup-
plemental Authority for Expenditure,' re approval to use in
Well A-5 certain premium priced 2%-inch tubing.
Exhibit V-Purchase order dated July 12, 1974, reflecting pur-
chase of 12,000 feet of 3 1⁄2-inch tubing from Bethlehem Steel...
Exhibit W-Memorandum dated January 13, 1975, from Bob
G. Murphy to Jack R. Place recounting Mr. Murphy's
recollection of Mr. Braun's visit to Cities Service..
Exhibit X-Letter dated February 11, 1975, from Kinley Caliper
Co. in Houston to Cities Service forwarding to Cities Service a
transcript of a telephone conversation between Mr. Braun and
a Kinley representative_-_
Statement of Paul Vernon, Progress Marine, Inc., dated July 1,
1975, re Rig 51 and platform 76-A..
Exhibit Y-6 communications reflecting that three support
companies who conduct business with Cities Service obtained
prior clearance from Cities Service before giving information to
the subcommittee staff about the A-76 workover..
Material submitted for the record-July 14, 1975:
Federal Power Commission:
Letter dated July 10, 1975, from Chairman Nassikas to Chairman
Moss forwarding the "Bureau of Natural Gas Analysis of the
Federal Trade Commission's Bureau of Competition Allegations
Concerning the AGA Reserve Reporting System".
Letter dated July 11, 1975, from Chairman Nassikas to Chairman
Moss, in further response to Chairman Moss' letter of July 7,
1975, with enclosed "Data List" and "Analysis and Evaluation
of Basic Data" used by the Commission relating to natural gas
supply and decontrol of the price of natural gas; also informa-
tion regarding attorneys' manual requested by Chairman
Moss-
Memorandum dated March 4, 1975, from Richard A. Azzaro, Kim
Martin Clark, Commission staff counsels, to Drexel D. Journey,
General Counsel, re memorandum survey outlining the various
statutory techniques by which Congress has applied criminal
and civil sanctions to administrative agency work.
Memorandum dated July 14, 1975, from Solicitor to General
Counsel re data for Moss Subcommittee with attached report
of all pending and closed district court cases, pending court of
appeals cases, and pending Supreme Court cases..
Memorandum dated July 15, 1975, from Acting Comptroller to
General Counsel, re request for information regarding adminis-
trative and operating manuals..
Memorandum dated July 17, 1975, from Frank C. Allen, Chief,
Bureau of Natural Gas, to Drexel D. Journey, General Counsel,
re BNG comments on FTC-BOC exhibit D..
Memorandum dated July 17, 1975, from Frank C. Allen, Chief,
Bureau of Natural Gas, to Drexel D. Journey, General Counsel,
re Transco's participation in a proposal to import LNG from
Algeria.
Memorandum dated July 18, 1975, from Frank C. Allen, Chief,
Bureau of Natural Gas, to Drexel D. Journey, General Counsel,
re intrastate prices of natural gas (to supplement table 2, page 7,
Chairman's prepared statement)_.
Notations from Commission minutes relative to items referred to
the Attorney General .......
Prepared statement of Hon. John N. Nassikas, Chairman, FPC,
with an appendix A attached..
Material submitted for the record-July 14, 1975-Continued
Oversight and Investigations Subcommittee, Interstate and Foreign
Commerce Committee:
Article from the Oil and Gas Journal, June 23, 1975, entitled,
"Leasing ebbs, but drilling to hold high in U.S. gulf".
Memorandum dated February 19, 1975, from George P. Lewnes,
Assistant General Counsel, FPC, to Frank Allen, Chief, Bureau
of Natural Gas, FPC, re investigation of Transcontinental Gas
Pipe Line Corp., docket No. RP 75-51....
Public Service Commission of the State of New York v. Federal
Power Commission, from Federal Reporter, 2d series, pp. 338-
355_____
Material submitted for the record-July 21, 1975:
Breckinridge, Hon. John B., a Representative in Congress from the
State of Kentucky, statement---
Federal Power Commission:
Letter dated August 1, 1975, from Chairman Nassikas, to Chair-
man Moss re comments on feasibility of evaluating the reserves
relating to 900 offshore leases, and comments on Rodney E.
Stevenson's statement of July 21, 1975, regarding the National
Gas Reserves Study_
Memorandum dated July 25, 1975, from Frank Allen, Chief,
Bureau of Natural Gas, FPC, to General Counsel re internal
questionnaire. -
Memorandum dated July 25, 1975, from Frank Allen, Chief,
Bureau of Natural Gas, FPC to General Counsel re well data..
Memorandum dated July 25, 1975, from Kenneth F. Plumb,
Secretary FPC, to General Counsel re letter from Rodman
Corp. rejecting the FPC certificates which were issued in
docket No. C173-694----
Motion of Commission staff for order requiring certain respond-
ents to comply with economic data request.
Oversight and Investigations Subcommittee, Interstate and Foreign
Commerce Committee:
"Analysis of Salient Issues Regarding the Estimation of Proved
Oil and Gas Reserve Figures," Energy Research, Inc....
Letter date August 7, 1975, from Dr. Paul J. Root, H. Zinder &
Associates, Inc., consultants, to Chairman Moss re technical
procedures used in NGRS and the frailties of past criticisms
of the study...
Memorandum dated June 19, 1975, from Richard Frandsen, FPC
staff counsel, to Haskell Wald, Chief, Office of Economics, re
certain producer and pipeline respondents, docket No. RI75-
112...
Memorandum dated June 20, 1975, from Haskell P. Wald, Chief,
Office of Economics, FPC, to Richard Frandsen, Commission
staff counsel, re OEC participation in "Behind the Pipe" inves-
tigation, docket No. RI75-112.
Memorandum dated July 2, 1975, from Drexel D. Journey,
General Counsel, FPC, to Haskell P. Wald, Chief, Office of
Economics, re certain producer and pipeline respondents,
docket No. RI75-112 forwarding a July 1, 1975, memorandum
from Frandsen and Koves to Mr. Journey.
Memorandum dated July 3, 1975, from Haskell P. Wald, Chief,
Office of Economics, FPC, to Drexel D. Journey, General
Counsel, re "Behind the Pipe" proceeding, docket No. RI75-
112__
Memorandum dated July 7, 1975, from Richard A. Frandsen
and Scott E. Koves, FPC staff counsel, to Drexel D. Journey,
General Counsel, re certain producer and pipeline respondents,
docket No. RI75-112__.
Net income of leading manufacturing corporations (from National
City Bank study of April 1975)___
Stevenson, Rodney E., Ph. D., adjunct assistant professor, Michigan
State University, attachments to prepared statement:
Table 1-Stratification of NGRS sample.
Table 2-Size distribution_..
Table 3-Age distribution_.
Table 4-Age distribution of NGRS-AGA disparities, offshore
Louisiana..
ORGANIZATIONS REPRESENTED AT HEARINGS
Murphy, Bob G., manager of production, Gulf of Mexico Region, Houston, Tex.
Oliver, Don, production operations manager, Gulf of Mexico Region, Houston, Tex.
Settles, Wayne, regional petroleum engineer, Houston, Tex.
Smith, Russell H., assistant general counsel, Tulsa, Okla.
Federal Power Commission:
Allen, Francis C., Chief, Bureau of Natural Gas.
Baker, Frank E., geologist, Planning and Development Division, Bureau of Natural Gas.
Boyd, Ellis R., Head, Planning and Special Projects Section, Bureau of Natural Gas.
Braun, William D., staff attorney, Office of the General Counsel.
Cornelius, Frederick D., Chief, Systems Operations Division, Bureau of Natural Gas.
Douglas, J. Paul, Assistant to the Chairman.
Drennan, Lorin H., Chief, Office of Accounting and Finance.
Frandsen, Richard A., trial attorney, Office of General Counsel.
Gavin, Emmett J., Assistant to the Chairman.
Herbert, Bill, industry economist, Planning and Development Division, Bureau of Natural Gas.
Johnson, Ralph A., industry economist, Office of Economics.
Journey, Drexel D., General Counsel.
Koves, Scott E., trial attorney, Office of General Counsel.
Lewnes, George P., Assistant General Counsel.
MacGregor, Stephen, attorney, Office of General Counsel.
Monroe, William L., mathematical statistician, Planning and Development Division, Bureau of Natural Gas.
Nassikas, Hon. John N., Chairman.
Perdue, Robert W., Deputy General Counsel.
Smith, Don S., Vice (hairman.
Solters, Joseph J., assistant to the Chief, Bureau of Natural Gas.
Springer, William L., Commissioner.
Thorell, Russell D., Deputy Chief, Bureau of Natural Gas.
Wald, Haskell P., Chief, Office of Economics.
Webb, William L., Director, Office of Public Information.
Welland, Philip, attorney, Office of General Counsel.
Wright, Lundy R., Chief, Pipeline and Producer Rates Division, Bureau of Natural Gas.
Zareski, Gordon K., Chief, Planning and Development Division, Bureau of Natural Gas.
Federal Trade Commission:
Anderson, Kenneth C., Assistant Director, Bureau of Competition.
Lytle, Theodore, Jr., Áttorney, Bureau of Competition.
Mulholland, Joseph P., Economist.
Salop, Joanne, Economist.
Sipple, John, Attorney, Bureau of Competition.
Mitchell Energy Corp., Houston, Tex.:
Penn, Homer J., counsel.
Walker, Sidney T., vice president of continental operations.
Mitchell Energy Offshore Corp., Marion Tebbs, petroleum engineer.
Progress Marine, Inc., Lafayette, La., Paul Vernon, operations manager.
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,
COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,
The subcommittee met at 9:30 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. John E. Moss, chairman, presiding.
Mr. Moss. The subcommittee will be in order.
On June 13, the subcommittee examined delays by Mitchell Energy Corp. in bringing gas on line from High Island block 22-L. After a full hearing, the matter was referred to the Justice Department to determine whether there should be criminal prosecution for perjury and obstruction of justice in sworn testimony before the FPC last March.
Today, we will be examining management decisions by Cities Service which resulted in commencing a 4-month workover on a highvolume producing field in September and extending it into the winter months, when uninterrupted gas supplies are more critical, rather than starting it during the spring and summer of 1974. The wells in question are located in South Brazos block A-76 in the Gulf of Mexico.
Serious corrosion problems were confirmed by Cities Service in March 1974. A-76 was shut down for the workover on August 30, 1974, and the workover was not completed until January 20, 1975. This platform was the fourth largest in the Transco system, supplying Transco with a daily average of 85-90 million cubic feet-3 percent of Transco's total needs after a 20-percent curtailment.
Since A-76 is such a high volume producing field, the loss of gas to Transco during the critical winter months was a significant add-on in Transco's systemwide curtailment of 35 percent.
This subcommittee is making a legislative oversight inquiry. The jurisdiction of this subcommittee arises by virtue of House rules X and XI of the 94th Congress.
The first witness will be Mr. Benjamin M. Smethurst, special assistant, subcommittee staff.
Mr. Smethurst, do you solemnly swear that the testimony you are about to give this subcommittee shall be the truth, the whole truth, and nothing but the truth so help you God?
Mr. Moss. Identify yourself for the record. ( 807 )
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