Author Topic: Natural Gas Market Chaos Continues as Texas Governor Bans Producers From Selling Outside State  (Read 3371 times)

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Offline IsailedawayfromFR

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EnvironMENTALists believe they can do exactly that.
The wackos do.

I happen to be an environmentalist too.  Because I like clean water and breathing fresh air.
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Offline thackney

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I do not dispute that people who own or produce minerals should be free to do with them what they wish, with reservations.

Obvious reservations are selling them to terrorists or doing something else illegally with them.  Or undertaking operations deemed unsafe or hazardous to individuals, like a pollutant that can kill people. 

One other reservation that is important in the state of Texas:  These minerals are found here, in this state, and produced from this state, and must adhere to conditions imposed by this state.  There is not a country on the face of the earth which allows anybody in that country to mine and sell resources with impunity.

And since it is a Texas-sourced resource, this state has obligations to fulfill for its citizens first and foremost.  Free marketing of resources produced in Texas which diminishes the welfare of Texas citizens, such as selling gas to interstate markets when intrastate markets are starving for gas, is one of those obligations.  This state must protect its citizens from others making a buck off their misfortune.  And that is an absolute.

We will have to greatly disagree on this.  The US has prospered greatly in the energy industries primarily because the individual can purchase and produce minerals for their profit.  State Owned minerals always lag.  Only when the resource is massive can they be significantly successful.
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Offline IsailedawayfromFR

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We will have to greatly disagree on this.  The US has prospered greatly in the energy industries primarily because the individual can purchase and produce minerals for their profit.  State Owned minerals always lag.  Only when the resource is massive can they be significantly successful.
You ae waaaaaay off when you believe I said minerals should be state owned.

Care to point me to a country where the minerals can be extracted by anybody and no government interference whatsoever?

It is called fantasy land.

« Last Edit: February 19, 2021, 03:01:35 am by IsailedawayfromFR »
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Offline thackney

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You ae waaaaaay off when you believe I said minerals should be state owned.

I did not mean to imply that.  I was trying to point out the primary reason for the US success in this was they are NOT state own.  Less government involvement is always better.

Quote
Care to point me to a country where the minerals can be extracted by anybody and no government interference whatsoever?

It is called fantasy land.

None at all.  We are the best there is.  I want to see it stay that way.  I do not want to see more government controls.
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Offline Cyber Liberty

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The wackos do.

I happen to be an environmentalist too.  Because I like clean water and breathing fresh air.

I agree, hence my emphasis on "MENTAL."  :tongue2:
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Offline IsailedawayfromFR

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I did not mean to imply that.  I was trying to point out the primary reason for the US success in this was they are NOT state own.  Less government involvement is always better.

None at all.  We are the best there is.  I want to see it stay that way.  I do not want to see more government controls.
I agree.  We need to minimize governmental interference recognizing we cannot erase it.

And my priority with accepting any governmental controls are first, my state, second, my country, and none for any other.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline HoustonSam

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I will fall on the side of taking care of your own first, especially in an emergency. We have two major dams right here in the valley, and should have no problems getting power. And DIDN'T until governor Rasciot (R) changed state law to offer that power to the grid first, driving the cost of local power up by double. Which put the aluminum plant out of business too, btw.

Well friend @roamer_1 I have to disagree with you on this one; the natural gas in question never belonged to the state to begin with, it belonged to the owner of the mineral rights (I think, @thackney can correct me); I don't see how the state can legitimately interfere in the free decision of owners to dispose of their property as they see fit within existing contract law.  Only if those mineral rights were sold to the state should the state be able to determine where the natural gas is sold, and even then existing contracts should be honored.  So while I tend to like Greg Abbott, I have to conclude he's wrong on this one and has succumbed to politics of the moment.

Regarding your specific counter-example, I believe one could argue that hydroelectric power was never privately owned because neither water nor dam was ever privately owned, and the state in fact *can* make the decisions about how that hydroelectric power is sold.  But this actually reinforces the authority of your governor to make that decision, although he might have chosen poorly.
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Offline IsailedawayfromFR

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Well friend @roamer_1 I have to disagree with you on this one; the natural gas in question never belonged to the state to begin with, it belonged to the owner of the mineral rights (I think, @thackney can correct me); I don't see how the state can legitimately interfere in the free decision of owners to dispose of their property as they see fit within existing contract law.  Only if those mineral rights were sold to the state should the state be able to determine where the natural gas is sold, and even then existing contracts should be honored.  So while I tend to like Greg Abbott, I have to conclude he's wrong on this one and has succumbed to politics of the moment.

Regarding your specific counter-example, I believe one could argue that hydroelectric power was never privately owned because neither water nor dam was ever privately owned, and the state in fact *can* make the decisions about how that hydroelectric power is sold.  But this actually reinforces the authority of your governor to make that decision, although he might have chosen poorly.
I respectively submit you are confusing right of ownership with the right of a regulatory authority to administer restrictions that benefit the public interest.

No country on the face of the earth will permit any individual, company or another country to indiscriminately produce minerals in it.  Nada.

A public benefit might be to control the release of pollutants that could kill or injure others, or it could be like the Railroad Commission placing restrictions on the amount of production that can be made from wells to conserve resources or to prevent waste.  These qualifications in Texas have been in place for many decades.

If this state has an existential emergency which requires immediate additional resources, then it is certainly within the prerogative of that state to conduct emergency rules to mitigate harm to citizens.  There is really not a more important reason for the state authority to exist in the first place than to administer aid to its citizens when required.

Obviously we desire freedoms as much as possible.  But to permit short term profiting at the expense of a person's well being seems morally corrupt.
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Offline LegalAmerican

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Natural Gas Market Chaos Continues as Texas Governor Bans Producers From Selling Outside State
https://www.naturalgasintel.com/natural-gas-market-chaos-continues-as-texas-governor-bans-producers-from-selling-outside-state/
February 17, 2021

The fallout of the prolonged Arctic freeze that’s draped over the central United States and into Texas is still unfolding, with a temporary ban on gas exports out of the Lone Star State the latest development in the ongoing crisis.

Hours before the surprising announcement, steep decreases in production and large swings in demand fueled Nymex gas futures prices for a second day. Facing what potentially could be the largest storage withdrawal of the winter so far, the March Nymex natural gas futures contract settled Wednesday at $3.219, up 9.0 cents from Tuesday’s close. April picked up 4.9 cents to $3.032.

Action in the cash markets remained volatile midweek as Oklahoma added another digit to next-day prices, while prices in other parts of the country also started to tack on more meaningful gains than in recent days. However, other areas tumbled in dramatic fashion, helping to send NGI’s Spot Gas National Avg. down $40.135 to $40.625.

The energy crisis in Texas is far from contained, with additional prolonged power outages implemented across the state early Wednesday as temperatures remained not far above freezing. The state’s electric grid operator, the Electric Reliability Council of Texas, said some 185 generating units have tripped offline for one reason or another amid the unprecedented freeze. Until more generation comes back online, power restoration efforts would be hampered....

I agree with him.  He is governor of Texas.  No where else.  You take care of home...first.  This reminds me of the Ant and grasshopper story.  Maybe some grasshoppers didn't prepare for their states? 
I am so happy live in the SW. 

Offline Smokin Joe

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thackney complains:
"Why does Abbott get to tell a South Texas Gas company they cannot fulfill the contracts to supply gas to Florida because West Texas Gas companies do not do enough to protect their wells and gas plants against cold weather?"

Frankly a good move by Abbott. It should be politically popular as well.

When your state is literally starving for natural gas, you DO NOT permit producers to sell and export it OUT-of-state.

You keep it "in-house" and "take care of your own" first.

That's called... old-fashioned common sense.

Addendum:
When the emergency is over, then (of course) restore "the status quo".
But when Texans are freezin' because the fuel that would keep them warm and keep the lights on is being "exported out of state", NOT to do what Abbott is trying to do is... well, it's just plain nuts...
Like I have been saying, the next Holdomor will be over Energy, not food. It just hasn't come from Washington...yet.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

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Offline Smokin Joe

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People tend to forget there were two periods of massive lines to get gas in the 70's.  In '73 it was the war over Israel and the Arab oil embargo, but there was another time of gas lines, in the late 70's when Carter really screwed up the oil economy with his commie price controls.  Nixon was bad that way too, but not just oil.  Remember his "price freezes?"  They devastated the economy, not to mention "Whip Inflation Now!" by Ford.  As if waving a pom-pon and wearing a button would chase that icky inflation away.


I remember people turning their WIN buttons upside down and saying "Not In My time"...I rode the Oil boom of the late '70s/early 80s into a career doing wellsite geology, and now, geosteering horizontal wells (yes, it's going to be back in 2 months, if all goes well).
« Last Edit: February 19, 2021, 04:31:00 am by Smokin Joe »
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline Smokin Joe

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I still do not understand the belief that minerals, or any of its products, belong to others to dictate how they are used and not to the people that bought the mineral rights, paid the money to produce them, paid the money to get them ready for market.

Do you think you have a right to dictate what the farmer does with his topsoil because you live within the political borders?
That dictum would be fascism, by definition. The private entities "own" the industry, but the Government controls the production and output.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline Smokin Joe

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They all went to Bureaucrat University.  That's were they drill and bash all the common sense out of the pupils.
When their pupils are unresponsive, they have succeeded...the pupil's pupils, that is...
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline roamer_1

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Well friend @roamer_1 I have to disagree with you on this one; the natural gas in question never belonged to the state to begin with, it belonged to the owner of the mineral rights (I think, @thackney can correct me); I don't see how the state can legitimately interfere in the free decision of owners to dispose of their property as they see fit within existing contract law.  Only if those mineral rights were sold to the state should the state be able to determine where the natural gas is sold, and even then existing contracts should be honored.  So while I tend to like Greg Abbott, I have to conclude he's wrong on this one and has succumbed to politics of the moment.


Well @HoustonSam I ain't welded to it - certainly so in normal circumstances. But in extraordinary circumstances, under emergency conditions... well that can be another whole thing. That the contracts are more important than the pipelines going empty to the point of freezing people dying, Well that just ain't right.

However, I am not discounting the responsibility of the individual either. I have already expressed the thought that every household is the first defense, that utilities are ultimately unreliable. They do go down and the individual is inevitably the bag-holder at that point in time. Still, reliance upon those systems inherently means they need to be robust, and the gas companies, not even mentioning the government, should rightly not leave all those folks hanging over contracts. Contracts can be modified after the fact, and regulations can be eased, Especially in the condition of such misery.

And finally, a flaw in your thinking, in that the mineral rights FIRST belong to the people, not the state, and not the purchaser of those rights. It would not be hard to insist, in the face of an emergency, that ALL contracts, sales and rights are contingent upon a reserved right of the people retained in such cases... Very similar to how AK provides a kickback to the people on all mineral sales, though my intent is to merely meet the requirements necessary to keep local pipelines full first, rather than a reimbursement upon sale, as AK does.

This is not thinking that is foreign in the West.

Quote
Regarding your specific counter-example, I believe one could argue that hydroelectric power was never privately owned because neither water nor dam was ever privately owned, and the state in fact *can* make the decisions about how that hydroelectric power is sold.  But this actually reinforces the authority of your governor to make that decision, although he might have chosen poorly.

Right, but again, the state provided originally, in getting the dams approved, that the people would retain a benefit from allowing the dams in the first place. It is the peoples' resources, not the state's. And unlike your condition, it was ongoing, the people receiving the benefit of low power costs as that benefit.

In your case, I am speaking more to emergencies, and how resources are allotted because of 'acts of God'.
« Last Edit: February 19, 2021, 04:51:36 am by roamer_1 »

Offline Smokin Joe

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I agree with him.  He is governor of Texas.  No where else.  You take care of home...first.  This reminds me of the Ant and grasshopper story.  Maybe some grasshoppers didn't prepare for their states? 
I am so happy live in the SW.
Only problem is, some of those grasshoppers who did not adequately prepare for the weather were in his state, too. Our Governor requested that we conserve energy (to help keep the grid up for the States far South of us in that grid unit), but it is not a requirement. When it hit -28 degrees, car engine heaters were being plugged in all over the State that were not ordinarily required for gasoline engines using synthetic motor oils at warmer temperatures (around zero)--but it helps even those when it is warmer (up to about 30 above). Diesels need to run no. 1 or a subzero blend (of No.1 and No 2), because No.2 diesel will gel and leave the truck stranded or inoperable until warmed and the fuel replaced. Here, however, Natural Gas is directly used as a heating fuel, and electricity needed to make that forced air system work. The alternative is broken pipes and dead people.
While many of us in older homes can 'get by' using fireplaces and sleeping in one room (we have done it), it is not the best alternative, especially in a home with copper plumbing.
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline roamer_1

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And finally, a flaw in your thinking, in that the mineral rights FIRST belong to the people, not the state, and not the purchaser of those rights. It would not be hard to insist, in the face of an emergency, that ALL contracts, sales and rights are contingent upon a reserved right of the people retained in such cases... Very similar to how AK provides a kickback to the people on all mineral sales, though my intent is to merely meet the requirements necessary to keep local pipelines full first, rather than a reimbursement upon sale, as AK does.

This is not thinking that is foreign in the West.

[...]

In your case, I am speaking more to emergencies, and how resources are allotted because of 'acts of God'.

@HoustonSam

Addendum:
Understand, I am not speaking of free NG, or price fixing, But only that local pipelines own a reserved right of the people to be kept full first, at full market price, in the case of a declared state emergency.

This is a simple addition to mineral sales laws, and a paragraph or two of boilerplate in downstream sales contracts, to indemnify downstream sellers in the case of such an emergency... In most cases, that would not cause much of a problem except bumping completion of a delivery or partial delivery a reasonable time. Businesses deal with such as this all the time.

Offline GtHawk

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It ain't interstate commerce until it crosses state lines.  So Abbott is protecting state resources and Texas citizens.

No one cares about Califorina's problems.
@Sled Dog @RetBobbyMI
California hasn't a damn thing to do with the problems facing the Americans and others in Texas during this emergency, find a anew Bogeyman.
Oh and have you noticed all the members that live in California saying nobody cares about Texas? Yeah me neither, only small people forget that we are all Americans in a crisis and politics have no place in an emergency.....................unless of course you are a democrat.

Offline Smokin Joe

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@HoustonSam

Addendum:
Understand, I am not speaking of free NG, or price fixing, But only that local pipelines own a reserved right of the people to be kept full first, at full market price, in the case of a declared state emergency.

This is a simple addition to mineral sales laws, and a paragraph or two of boilerplate in downstream sales contracts, to indemnify downstream sellers in the case of such an emergency... In most cases, that would not cause much of a problem except bumping completion of a delivery or partial delivery a reasonable time. Businesses deal with such as this all the time.
I think you may be referring to "Force Majeure" clauses, which are inherent in most contracts promising delivery. (Funny that the 'dictionary' wanted to correct "Majeure" to "manure", but anyway, that may apply in this instance. Declaration of an "emergency" (what isn't, nowadays), or "crisis" may well enhance that invocation.

How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline Smokin Joe

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@Sled Dog @RetBobbyMI
California hasn't a damn thing to do with the problems facing the Americans and others in Texas during this emergency, find a anew Bogeyman.
Oh and have you noticed all the members that live in California saying nobody cares about Texas? Yeah me neither, only small people forget that we are all Americans in a crisis and politics have no place in an emergency.....................unless of course you are a democrat.
Folks who live in climates where temperatures below freezing are the winter norm, and subzero temps aren't unusual have trouble understanding the plight of folks who live in warmer climes. I grew up further South, and yep, folks down that way are doubtless suffering right now. No one likes being miserable, and I hope y'all find a solution soon. Dependence on sources which are unreliable in practice hasn't helped the situation, and hopefully that will be looked at with an open mind and a minimum of "green politics". The planet has been here a long time, and it is the survival of humans which should concern us all first (regardless, the planet will be just fine, and a little more CO2 might be in order, for the folks who believe CO2 warms things up).
How God must weep at humans' folly! Stand fast! God knows what he is doing!
Seventeen Techniques for Truth Suppression

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

C S Lewis

Offline roamer_1

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I think you may be referring to "Force Majeure" clauses, which are inherent in most contracts promising delivery. (Funny that the 'dictionary' wanted to correct "Majeure" to "manure", but anyway, that may apply in this instance. Declaration of an "emergency" (what isn't, nowadays), or "crisis" may well enhance that invocation.

Yes, but if the current contracts do not contain the language, it won't help this time. I don't expect businesses to incur injury or liability. Especially without recompense... But adding such language to both the sale, and downstream contracts would be a big help next time.

Offline thackney

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Well friend @roamer_1 I have to disagree with you on this one; the natural gas in question never belonged to the state to begin with, it belonged to the owner of the mineral rights (I think, @thackney can correct me); I don't see how the state can legitimately interfere in the free decision of owners to dispose of their property as they see fit within existing contract law.  Only if those mineral rights were sold to the state should the state be able to determine where the natural gas is sold, and even then existing contracts should be honored.  So while I tend to like Greg Abbott, I have to conclude he's wrong on this one and has succumbed to politics of the moment...

Absolutely @HoustonSam

I am done arguing on this topic with the people that want to take the private property because others planned so poorly.
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Offline roamer_1

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Absolutely @HoustonSam

I am done arguing on this topic with the people that want to take the private property because others planned so poorly.

What I propose is not 'taking' anything.

Offline Sled Dog

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thackney complains:
"Why does Abbott get to tell a South Texas Gas company they cannot fulfill the contracts to supply gas to Florida because West Texas Gas companies do not do enough to protect their wells and gas plants against cold weather?"

Frankly a good move by Abbott. It should be politically popular as well.

When your state is literally starving for natural gas, you DO NOT permit producers to sell and export it OUT-of-state.

You keep it "in-house" and "take care of your own" first.

That's called... old-fashioned common sense.

Addendum:
When the emergency is over, then (of course) restore "the status quo".
But when Texans are freezin' because the fuel that would keep them warm and keep the lights on is being "exported out of state", NOT to do what Abbott is trying to do is... well, it's just plain nuts...

The state doesn't own the gas.

There's that.

And shall we talk about the poor planning by the governor and the legislature to allow the growing dependence on intermittent energy sources such as sunshine and wind without properly analyzing the consequences when those sources cease to function?

And now Abbott wants to steal someone else's property in a grand-stand move to cover his own incompetent ass?
The GOP is not the party leadership.  The GOP is the party MEMBERSHIP.   The members need to kick the leaders out if they leaders are going the wrong way.  No coddling allowed.

Offline Sled Dog

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It ain't interstate commerce until it crosses state lines.  So Abbott is protecting state resources and Texas citizens.

No one cares about Califorina's problems.

Hello?

The gas company is selling their property across state lines.  That makes it interstate.

The government attempting to usurper those property rights violates interstate commerce already in progress.   

The gas companies have contracts to deliver, ya dig?
The GOP is not the party leadership.  The GOP is the party MEMBERSHIP.   The members need to kick the leaders out if they leaders are going the wrong way.  No coddling allowed.

Offline thackney

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The state doesn't own the gas.

There's that.

And shall we talk about the poor planning by the governor and the legislature to allow the growing dependence on intermittent energy sources such as sunshine and wind without properly analyzing the consequences when those sources cease to function?

And now Abbott wants to steal someone else's property in a grand-stand move to cover his own incompetent ass?

If all those wind turbine were Natural Gas Plants, our loss of power would have been worse.  We did not have enough gas to run the ones that would run.
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