Chapter 10The Steady Side
It’s a Great Time to be in the Gas Business,” John Jennrich editorialized in a 1996 column in Natural Gas Week. Supply abundance was “nearly a given.” Pipeline adequacy was a nonissue. Wholesale gas marketing (the subject of chapter 11) was being rationalized. Enron was in the middle of all this success.
Enron’s interstate pipelines were modernizing and expanding, which allowed earnings to increase despite federal rate ceilings and rate discounting. Costs were being significantly pared, specifically, and new capacity backed by firm transportation revenue was coming online. Stan Horton led this effort, and he would continue to lead the interstates, profitably and without incident, for the rest of Enron’s solvent life.
Forrest Hoglund’s Enron Oil & Gas (EOG) was pacing the upstream independents with strong, growing earnings and cash flow, making a successful transition from its tax-credit-driven business in the early 1990s to tax-neutral, low-cost production. By more than replacing its proved reserves year after year, EOG became the definition of a sustainable company. EOG was “the real cash cow: even in bad times,” as noted at Enron’s 1995 management conference.
Hoglund, his reign dating from 1987, would find his heir in Mark Papa. It was Papa who would lead EOG’s complete divorce from Enron in 1999, the year Hoglund retired, and successfully run the company until his own retirement in 2013.
Gas liquids were in transition. Some assets were sold, others ...
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