Barefoot in the Park

If Houston's first civic distinction is as "the energy capital of the world," its second is perhaps equally enviable: a 1,466-acre park of woodland trails that is almost twice as large as New York's Central Park. Geologists have long suspected that Houston's Memorial Park sits on a pool of oil and gas, and now the city wants to tap it. The scheme has naturally aroused the Audubon Society and the Sierra Club, but their distress pales beside that of the city's oil establishment. The oilmen are upset not because the city plans to drill in Memorial Park but because of the way Houston's mayor, Fred Hofheinz, is going about it.

The land for the park was sold to the city in the 1920s and 1930s by the estate of former Texas Governor James S. Hogg. There was one proviso: if the land was ever used for other than "park purposes," it would revert to the estate. To sidestep that restriction, the Governor's daughter, Ima Hogg, signed over the estate's drilling rights shortly before her death last year to an old friend, George R. Brown, president of Brownco Inc., a Houston-based drilling company.

Mental Difficulty. Brownco proposed to undertake the drilling under the ground rules that have made the oil industry, and Houston, for that matter, what it is today. The company would sink exploratory wells at its own risk and turn over a royalty payment of up to 35% of the value of any strike, to be divided equally between the city and the Hogg estate. If, as the city fathers hope, there is oil and gas in the ground worth $50-$60 million, Houston would thus benefit from a large windfall. As Brownco and the city saw it, the exploratory wells could be drilled on a slant from the park's maintenance area without appreciable danger to flora and fauna. As for the proviso forbidding commercial development, the city's lawyers were satisfied that since a handsome slice of revenues from any producing well would be earmarked for park improvements, this would nicely satisfy the test that the land be used for "park purposes."

Presumably all would have been well except that the more he thought about it, the more strongly Mayor Hofheinz felt that the city was getting the short end of the spoils. As a result, Brownco withdrew its proposal last month, and Houston's city council flabbergasted the oil community by deciding to launch a court action to claim oil and gas rights in the park for the city. Fumed a lawyer for a major oil company: "It's a government takeover, pure and simple."

Although the city has yet to file its suit, Mayor Hofheinz is scouting for a company willing to do the drilling on a "public interest basis" and turn over all royalties to the city as a charitable contribution. So far he has had no takers, and many oilmen suspect that the whole incident is a bit of political grandstanding by the mayor, and that no drilling will ever be done. As a Brownco lawyer tartly puts it: "Anyone who turns down a 35% royalty offer is going to be suspect in the oil industry of having some mental difficulty."

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