Friday July 8th, 2005

Lea Fastow leaves halfway house…Houston energy investor Matthew Simmons suspects Saudi Arabia’s oil production will soon reach apex…Texas gasoline prices remain near record levels for another week… Lea Fastow is no longer federal inmate number 20290-179. The wife of former Enron finance chief Andrew Fastow went home early today after she was released from a […]

Lea Fastow leaves halfway house…Houston energy investor Matthew Simmons suspects Saudi Arabia’s oil production will soon reach apex…Texas gasoline prices remain near record levels for another week…

Lea Fastow is no longer federal inmate number 20290-179. The wife of former Enron finance chief Andrew Fastow went home early today after she was released from a Houston halfway house. That ends her year-long prison term for failing to declare her husband’s illegal kickbacks as income. She made no comment to reporters as she was driven away in a van with her husband and sister. The real estate and grocery heiress had been in the facility since June 7th after serving most of her sentence at a federal lockup in downtown Houston. She now faces a year of federal supervision that includes regular visits with a parole officer and monitoring of travel and living conditions. Andrew Fastow pleaded guilty in January 2004 to two counts of conspiracy. He admitted to orchestrating schemes to hide Enron debt and inflate profits while pocketing millions of dollars. He’s agreed to serve the maximum ten-year sentence. The couple also forfeited or relinquished their rights to nearly $30 million in cash and property, including a vacation home in Vermont.

Houston energy industry insider Matthew Simmons suspects that Saudi Arabia’s oil production will soon reach an apex. His book Twilight in the Desert: The Coming Saudi Oil shock and the World Economy is based on 235 readily-available technical papers written by Saudi Aramco geologists.

Matthew Simmons audio 1

Simmons heads Simmons & Company International, an independent investment bank specializing in the energy industry.

Matthew Simmons audio 2

Simmons says it’s time to get serious about planning for the future and the way we use energy.

Matthew Simmons audio 3

Simmons says almost 90 percent of Saudi production comes from six giant fields–all discovered before 1967, and all having produced at capacity or near capacity for four decades. As for oil company statements at shareholder meetings that reserves are plentiful…

Matthew Simmons audio 4

Simmons says all Saudi claims about reserves exist behind a veil of secrecy. He says since the Saudi government took control of Aramco after four decades of co-ownership with a consortium of major oil companies, it has never released field-by-field figures for its oil production.

Texas gasoline prices remain near record levels for another week–despite declines in some markets. The weekly AAA Texas gas price survey released today finds the average price of regular unleaded self-serve virtually unchanged at almost $2.13 per gallon. That’s about a nickel short of the record price and up about 31 cents from last year. But the auto club says this week’s terrorist bombing in London and possible Gulf Coast refinery disruptions from the approach of Hurricane Dennis leave the price outlook murky. AAA Texas spokeswoman Carol Thorp says oil industry analysts don’t yet know what effect those events will have on refinery production–if any. However, she said prices could drop if security concerns cause travelers to scrap late-summer vacation plans. Houston is averaging about $2.12 a gallon–up almost a penny from last week. The cheapest prices remain in the Corpus Christi area, where they averaged about $2.04 a gallon–down four cents from last week. The costliest pump prices continue to be in the Dallas area, where they average almost $2.16 per gallon–virtually unchanged from last week. The national average held steady at $2.22 per gallon.

Major airlines, including Houston-based Continental, are revising their ticketing policies for flights to New Orleans, parts of Florida and other areas that could wind up in the path of Hurricane Dennis. They’re waiving rules and restrictions regarding standard change fees, minimum stay and Saturday night-stay requirements. The changes apply to customers ticketed for travel tomorrow through Monday. Customers with unused tickets for travel within this time period may also reschedule their travel between the same origin and destination without a change fee. Other airlines announcing these policy changes are American, Delta, United and U. S. Airways.

The heart of the nation’s petrochemical industry would be more vulnerable to terrorist attack if 15 F-16 fighter jets are eliminated from Houston’s Ellington Field. That’s the view put forth by Houston Mayor Bill White. He joined U. S. House Majority Leader Tom Delay and others yesterday in a last-minute plea to the Federal Base-Closing Commission to keep Ellington’s 147th Air National Guard intact. The Pentagon has proposed retiring the F-16s and closing the Army National Guard Reserve Center at the field where President Bush was based during the Vietnam war. White says the proposal doesn’t adequately address the Air Guard wing’s homeland security functions. He urged Base Realignment and Closure Commissioner James V. Hansen to expand–not reduce–the military resources available at Ellington.

Houston-based Sterling Bancshares is acquiring Prestonwood Bancshares and its subsidiary Oaks Banks & Trust, according to the Houston Business Journal. Oaks and Prestonwood have five offices in Dallas, and the acquisition doubles Sterling’s presence in Dallas.

The U. S. International Trade Commission has ended its probe of alleged infringement of some Ciena Corporation patents by Nortel Networks and Flextronics International. The Canadian-based telecom equipment maker Nortel says the move follows a preliminary injunction issued recently by a federal judge in Marshall. It bars rival Ciena from taking part in or pursuing the ITC action. It also requires Ciena to seek termination of the ITC investigation. Nortel earlier this year denied Ciena’s allegations of patent infringement and filed counterclaims asserting that the Maryland-based company is infringing on 13 U. S. patents owned by Nortel. Nortel said it’s seeking damages and an injunction prohibiting Ciena from shipping products that violate those patents. The matter is set for trial in June 2006. In 2004, Flextronics acquired some of Nortel’s electronic manufacturing operations.

An international group has certified a $500,000,000 water rights lawsuit against Mexico to proceed to an arbitration panel. The lawsuit by south Texas farmers and irrigation districts centers on a long-standing water dispute. A three-member arbitration panel will be chosen within two months to hear the suit certified by the World Bank’s International Center for Settlement Investment Disputes on July 1st. The suit was filed in August by 17 Texas irrigation districts, 29 independent water rights holders and the North Alamo Water Supply Corporation. The plaintiffs claim they have suffered economic losses because of Mexico’s failure to live up to its end of a 1944 water-sharing treaty with the United States. The treaty dictates that Mexico and the United States share water from the Rio Grande and Colorado River. But Mexico began falling behind on its releases of Rio Grande water as a drought set in 12 years ago. By 2002, south Texas farmers were struggling. An agreement reached in March called for Mexico to eliminate its water debt by September 30th.

Union members say the strike by 1,500 union workers at six Asarco copper-mining facilities is over unfair labor practices and not contract disputes. One of the facilities is a copper refinery in Amarillo. Nearly 300 hourly workers were on the payroll at the Amarillo facility, and some 250 belong to unions. An unfair labor practice strike deals with violations that occur before, during or after contract negotiations. If substantiated, such labor violations can require an employer not only to return to the bargaining table but also to guarantee that striking workers can’t be replaced. Union negotiators have accused the company of failing to bargain in good faith, asserting violations of fair labor practices.

The independent oil refiner Alon USA Energy has announced terms for an initial public offering of stock worth as much as $136 million. A filing with federal regulators says the IPO consists of 8.5 million shares for $14 to $16 each. The Dallas-based company plans to list its shares on the New York Stock Exchange under the symbol “ALJ.” Alon USA refines and markets petroleum products mainly in the southwestern and south central United States. In May, it said it planned to sell up to $125 million in common stock in an initial public offering, but gave no details. The company owns and operates a sour crude oil refinery in Big Spring and owns and leases pipelines and terminals. It also operates 7-11 convenience stores in west Texas and New Mexico and is a major producer of asphalt.

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