Richard Smalley, R.I.P.

richard smalley.jpgWorld-renowed Rice University chemistry, physics and astronomy professor, Richard E. Smalley, died today at the age of 62. The Chronicle’s Eric Berger provides an excellent obituary of Professor Smalley, who was one of the best of Houston’s numerous fine scientists. Among his numerous awards, Professor Smalley won the 1996 Nobel Prize in Chemistry.
Eric’s obituary passes along a fine anecdote about Professor Smalley’s Nobel award banquet that had been passed around Houston professional and business circles for years:

The chairman of Rice’s board of governors at the time [that Smalley was awarded the Nobel], William Barnett, recalled Smalley agonizing over whom to give the 10 tickets he had received for the awards banquet in Sweden. Barnett said Smalley gave two to his son, Chad, who later told his father he was bringing his mom, one of Smalley’s ex-wives. Smalley had three.
“I think his reaction was, ‘Oh lord, now I’ve got to ask the other one,'” Barnett said. “The Swedes were so taken with this, the joke going around the banquet was that they were going to tell Rick, if they had only known this in advance, they would have awarded him the peace prize as well.”

“Mom, look what I found while playing down at the bayou!”

alligator.jpgAmong the interesting aspects about living in the Houston area are the interesting things that one can find near one of the area’s many bayous in residential areas within or near Houston’s inner loop:

A contractor hired by the Texas Parks & Wildlife Department captured a 9-foot-long, 275-pound male alligator Thursday near Greens Bayou just outside Houston.
“He was removed without incident,” said Capt. Albert Lynch, a state game warden in Harris County, “but as many alligators as I’ve moved over the years, they usually do put up quite a fight.”
The alligator was caught right off Interstate 10 near the intersection of Normandy, in a flood-detention canal near Greens Bayou, . . .

Oil and gas markets react to Rita

rig offshore2.jpgWhoa, Nellie! Oil prices surged yesterday in anticipation of Hurricane Rita plowing through the Gulf of Mexico as OPEC ministers meeting in Vienna conceded they have no real means to cool red-hot petroleum markets that have become roiled by successive hurricanes in the extensive Gulf of Mexico production region.
The price of U.S. benchmark crude-oil futures for October delivery shot up $4.39 a barrel on the New York Mercantile Exchange and settled at $67.39. That was the highest one-day rise in nominal terms since Nymex began trading oil futures in 1983. Moreover, the storm’s approach is slowing down efforts to fix Gulf production infrastructure that was damaged by Hurricane Katrina. The U.S. Mineral Management Service reported yesterday that 44% of the daily output of oil and natural gas remained off-line from the earlier storm.
Folks, hang on to your hat because it’s going to be one wild ride this week in the oil and gas markets.

We don’t really need this

Rita.gifRita.jpgTropical Storm Rita is preparing to enter the Gulf of Mexico, and current predictions have it headed toward the Texas Gulf Coast by the end of the week. This is not good news, particularly for the oil and gas industry’s Gulf operations, which have stablized at reduced production levels in the wake of Hurricane Katrina, but are producing at far below usual levels. Here is a download of a handy map of oil and gas interests in the Gulf of Mexico.
With gasoline inventories still low and a substantial portion of Gulf of Mexico oil and gas production remaining shut-in, another hurricane in the Gulf is not what the doctor ordered for the economy. This EIA Daily Report from this past Friday reflects just how precarious oil and gas production is in the Gulf at the present time. If Rita strengthens as expected over the warm waters of the Gulf, then we could experience a real double whammy of damage to Gulf oil and gas production, not to speak to the usual damage to the Texas Gulf Coast that results from such a storm. Hat tip to Calculated Risk for the links to the map and the EIA report.
Update: The latest National Hurricane Center projection has the storm headed straight for the West Beach of Galveston Island. Batten down the hatches!

Markets at work

gasoline pump.jpgA funny thing happened in response to the recent run-up in gasoline prices resulting from Hurricane Katrina — demand for gasoline dropped dramatically.
Clear Thinkers favorite James Hamilton puts it all into perspective.

One of the benefits of takeover battles

Six Flags Astroworld.gifFinancially-strapped Six Flags, Inc. — the subject of an ongoing takeover battleannounced yesterday that it would close Houston’s AstroWorld theme park at the end of October and that it had engaged Cushman & Wakefield to market the valuable 109-acre site just south of the Reliant Park complex for sale.
The 37 year old theme park is overdue for finally being put to rest. AstroWorld was not originally a Six Flags Park, so it was not as well-planned as most other Six Flags Parks. Moreover, the park was landlocked from expansion and had poor relations with Harris County with regard to parking issues at adjacent Reliant Park. Consequently, Six Flags minimized capital expenditures at the park, which turned it into a decaying mess over the past several years. Thankfully, the value of the land is finally prompting Six Flags to put the underperforming park out of its misery.

Spellman and McGilbra sentenced

City of Houston logo6.gifAlmost overlooked in the Hurricane Katrina news is this Chronicle article regarding the sentencings of two former Houston officials — Lee Brown Administration chief of staff Oliver Spellman and building services director Monique McGilbra — who entered into plea bargains in connection with their testimony for the prosecution in the criminal trial of Cleveland entreprenuer Nate Gray. Both Mr. Spellman and Ms. McGilbra admitted that they accepted cash and gifts from Mr. Gray in connection with his attempts to gain their influence in approving him for lucrative city contracts.
Last Friday, Ms. McGilbra received a three-year sentence in the criminal case against here in Cleveland, Ohio, and she received a concurrent two and a half year sentence earlier this week on a related criminal case against her here. Mr. Spellman received probation and a $10,000 fine last Friday in Cleveland for taking a $2,000 bribe from Mr. Gray.
Earlier posts on the Gray trial and the related investigation of Brown Administration officials are here, here, here, here and here.

DeGabrielle is the choice for U.S. Attorney

DOJTX.JPGFirst Assistant U.S. Attorney Don DeGabrielle — the favored candidate of most of Houston’s criminal defense bar — was recommended to President Bush today by Texas Senators Kay Bailey Hutchison and John Cornyn to become the next U.S. Attorney for the Southern District of Texas. Mr. DeGabrielle will replace his former boss, Michael Shelby, who resigned in June to join Houston-based Fulbright & Jaworski’s white collar crime section.Chuck Rosenberg, a former chief of staff to U.S. Deputy Attorney General James Comey, has been the interim U.S. Attorney since Mr. Shelby’s resignation.
Inasmuch as Mr. DeGabrielle has been with the local U.S. Attorney’s office since 1986, he is well-known to the local criminal defense bar that has become somewhat frustrated with the revolving door nature of the U.S. Attorney’s job in Houston over the past decade. Given the misconduct of the Enron Task Force in a number of high-profile Enron-related criminal cases over the past year, a huge sigh of relief could be heard from Houston’s criminal defense bar when Mr. DeGabrielle was recommended instead of one of the prosecutors off of the Task Force, at least one of whom was known to have applied for the position. Mr. DeGabrielle and the rest of the local U.S. Attorney’s office recused themselves at the outset of the criminal investigation into Enron, which led to the creation of the Enron Task Force in the first place.
Meanwhile, Senators Hutchison and Cornyn also recommended to President Bush that Fulbright & Jaworski partner and well-known local maritime lawyer Gray Miller replace U.S. District Judge Ewing Werlein Jr., who is scheduled to take senior status at the end of this year.

“Slime in the Ice Machine” Online

restaurant.jpgThe City of Houston webpage now provides this online search tool for reviewing current health department reports on Houston restaurants and other eating establishments. It’s sort of like an online version of Marvin Zindler‘s “Slime in the Ice Machine” local television segments.
As an aside, after watching one of Marvin’s slime machine reports while on his first evening visiting Houston several years ago, a London solicitor asked me the following question in that quintessentially understated manner shared by many British lawyers:

“To what parallel universe have I been transferred?”

Some of the online reports are quite interesting. For example, as a result of this one, my wife and daughters are going to be avoiding an inexplicably popular restaurant in the Galleria.

Mayor White, hard-knuckled real estate speculator

mayorwhite2004.jpgWho would have thought when Bill White was elected that he would be spending a good amount of his time as Houston’s mayor threatening to foreclose on downtown hotel properties?
Anne Linehan over at blogHouston.net reviews the entire sordid tale.
Note to Mayor White — before you have the City foreclose its second lien on either of those hotel properties, please check to see whether either of them is generating enough revenue to pay operating expenses, much less debt service on the first lien indebtedness. Hotel properties “eat” money, and if the current owners are at least contributing enough to subsidize negative cash flows to operations, considering an alternative to foreclosure could save the City a ton of money. Sometimes you get more than you wish for when driving a hard bargain.