The Federal Power Commission has ordered Texaco, Inc., to stop taking massive amounts of natural gas from public lands in the Gulf of Mexico for consumption by its refinery at Port Arthur, Tex.
The Washington Post reported March 16 that the company, without the FPC's knowledge or approval, had been burning enough of the gas in a year to heat 523,000 homes.
On the same day, Texaco denounced the allegation as "inacrruate" and "false," saying that its deliveries of the gas to Port Arthur "has been a matter of public record" at the FPC since 1964.
In that year, the agency issued a certificate authorizing Texaco's Sabine Pipe Line subsidiary to transport supplies uncommitted to interstate customers from reserves in Vermillion Parish (County), La., to the refinery.
Capitol Hill Sources told a reporter that the certificate didn't disclose an intention by Texaco to take gas from the public domain for the refinery.
The company also said at the time that the FPC had reviewed the certificate in 1965 and has received annual "descriptive reports" from the company since 1966. But it acknowledged to the reporters did not list quantities of gas taken from federal lands.
Texaco was ordered by the commission on March 17 to show cause why it should not immediately halt deliveries from the offshore Louisiana Tiger Shoal Field, which is entirely in the federal domain, and from the Lighthouse Point Field, which is partially in federal land.
At the same time, the agency ordered Texaco to address the question of whether transporting the gas across state lines for private use violates the Natural Gas Act of 1938.
The commission also has been inquiring into whether other major gas producers may have engaged in practices similar to Texaco's.
After considering Texaco's responses, the FPC, in a little-noted action during a two-day meeting last week, ordered the company and Sabine to stop taking gas from the federal domain for the refinery. An agency sopkesman said the order will be effective "unless or until" Texaco gets commission approval to resume the operations.
The commission is expected to formalize the action this week. Sources said that two of the three commissioners voted for the order. The third, who was out of the city, reportedly is considering whether to join them.
Texaco is expected to seek a rehearing and, if that fails, to challenge the FPC in the courts. A company spokesman said he has not seen the order, which, he contended, would be inconsistent with agency policies and precedents.
Texaco said in March that the Port Arthur refinery has burned natural gas since 1980 and that converting it to oil or other energy sources would take four to eight years. The refinery supplies the East Coast with much of its gasoline, heating oil and other fuels, the company said.
In March, Capitol Hill sources told a reporter that the commission was surprised when Texaco, in a March 8 reply to an inquiry initiated by the House Commerce Subcommittee on Energy and Power, reported that it was burning 55 per cent of the gas from Tiger Shoal and Lighthouse Point at Port Arthur.
The Texaco reply said the company had met all FPC requirements in moving gas "from Texaco-owned fields and the state of Louisiana and contiguous offshore waters to Texaco's Port Arthur plants."
Texaco interpreted "contiguous" to include Tiger Shoal and Lighthouse Point. But the congressional sources said they understood the word to apply to offshore fields within the state boundaries of Louisiana. And they expressed doubt that the government, particularly in a period of severe shortages, would approve a policy allowing a producer to take immense quantities of natural gas from public lands for itself.