A Deal for the Inches

With a great sigh of relief, the War Assets Administration last week got rid of the tangled problem of the Big and Little Big Inches. For the whopping sum of $143.1 million WAA sold the pipelines (subject to Department of Justice approval) to the Texas Eastern Transmission Co., a new company of Natural Gasman E. Holley Poe and four associates.

The bid, high among the ten submitted, was only $2.7 million less than the Government spent to build the lines. It was $33 million more than the favored bid last November when WAA Boss Robert M. Littlejohn turned down all bids because they were too low (TIME, Dec. 2). However, bidders thought then that they would probably be required to use the lines only for oil, which made them much less valuable.

Texas Eastern will get the 2,815-mile pipeline system about May 1--when the temporary lease, hastily granted Tennessee Gas and Transmission Co. during the last coal strike, expires. Tennessee Gas has been sending some gas through the lines, merely by pumping it into the pipes and "letting it drift" to the north.

Texas Eastern expects to spend from $38 million to $61 million (depending on the area served) for compressors, connecting lines, etc. to convert the oil lines into full-scale gas carriers. By the middle of next year it hopes to be transporting 425,000,000 cubic feet of gas daily (equal to about 16,000 tons of coal) to the Eastern seaboard.

Piping gas from Texas to the East has long been a dream of Gasman Poe, 52. Born in Pawnee, Okla., Poe got into the Texas gas & oil business as a young man, became boss of the southwest natural gas properties of the Utilities Power & Light Corp. During World War II he was director of the natural gas division of the Petroleum Administration for War. Since then he has been a natural gas consultant. As president of Texas Eastern, Poe will have as working partners a potent team: Everette Lee DeGolyer, probably the nation's top petroleum geologist and a backer of the Saturday Review of Literature, and Houston's energetic Brown brothers, George R., who is Texas Eastern's chairman, and Herman (oil, shipbuilding construction) and Charles I. Francis, Houston oil lawyer.

Texas Eastern, which plans to pay off the U.S. in nine months, will start off with a $4 million loan from Manhattan's Manufacturers" Trust Co. It expects to raise the rest of its cash with a security issue to be handled by Dillon Read & Co. If all works well, Texas Eastern might extend the lines into New England (present northernmost terminal: Linden, N.J.).

Texas Eastern may run into trouble. As bait for new industries, many Texans would prefer to keep Texas gas in Texas. So would coal-rich Pennsylvania, along with mine operators and the United Mine Workers. But Texas Eastern thinks that the Eastern consumers can speak loudly enough to drown out these objectors.

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