Seems like in the mid 1970s, no name was mentioned more often on the Austin News than Oscar Wyatt and LoVaca Gathering.
Below is an excerpt from a much longer article about Austin’s Energy woes.(The full link at the bottom)
Natural Gas Shortages –
Ironically, one of the most instrumental people to inspire Austin’s renowned energy-efficiency programs was a colorful and somewhat ruthless oil and gas magnate named Oscar Wyatt. Though he had a noble side to him – a rags-to-riches tycoon, who at various times in his life acted as a selfless patriot – during the 1970s, he became one of the most reviled businessmen in Texas.
Wyatt was raised in poverty by a single mother. As a teenager he became a crop duster to make money, which served as preparation for his transition to a (decorated and twice-wounded) fighter pilot in W.W.II. Surviving the war, he earned a degree in mechanical engineering and bootstrapped an oil supply business into a large pipeline and brokering network for natural gas. In the early 1960s, his LoVaca Gathering Company cornered the market for much of Central and South Texas by signing long-term contracts for cheap fuel. His clients included Austin’s electric utility, San Antonio’s larger public electric and gas utilities, and the Lower Colorado River Authority (LCRA).
Between 1929 and 1979, Austin’s electric generation relied on natural gas as its main fuel source. In 1962, Austin signed a 20-year contract with LoVaca Gathering Company for low-cost natural gas at the rate of 20¢ per MCF (thousand cubic feet). (This is the equivalent of $1.60/MCF in 2016 dollars. The average cost of gas used for electrical generation in Texas between 2006-2015 was $5.49/MCF in 2016 dollars.)3
Unfortunately for all concerned, Wyatt did not retain all the long-term supply contracts he needed to honor his agreements. This came to a reckoning during the harsh winter of 1972/73, when it snowed in Austin 3 times. A gas shortage occurred throughout LoVaca’s service area. Among other things, the shortage delayed the opening of the University of Texas at Austin for 2 weeks, and rate shock began to infect the city.
The average monthly bill for Austin’s residential electricity went up 36% between 1973 and 1974.4 It went up 66% between 1973 and 1975, while per customer consumption decreased 18%. Almost all of this was caused by increased fuel costs, which went up 404% between 1973 and 1975.
Austin now had to buy replacement gas at more expensive prices. And when gas could not be had at any price, the utility had to switch its gas power plants to back-up fuel oil, which was even more expensive. At one point, in April of 1973, Austin’s utility came within hours of rolling brownouts that would have been needed just to divert enough power to supply the City hospital. A rushed delivery of fuel oil arrived just a few hours before this would have occurred.
As harsh as this period was for Austin, it paled compared to what happened in Crystal City, a small poor city in South Texas that could not afford to pay for gas it was contractually promised at lower cost.5 On September 23, 1977, after Crystal City had accrued a considerable debt for unpaid fuel increases, LoVaca cut the town’s entire supply off. A 2015 survey showed that almost four decades later, natural gas service to the majority of the city had never been restored, and 94% of its homes relied on electricity or propane for their heating.6
A massive lawsuit was filed against LoVaca, which was litigated for several years. In 1979, the company avoided bankruptcy through a settlement.7 LoVaca would be spun-off from Wyatt’s other holdings to a company called Valero that was totally unassociated with him. Wyatt’s larger company would explore for more gas and sell it to Valero at a discount, which would be distributed to the former customers for a number of years. In addition, a trust consisting of 13% of Valero’s stock would be awarded, and sold over a 7-year period to lower bills.
There was a joke at the time of the settlement that went “Valer is Spanish for ‘value.’ I don’t know what the zero behind it stands for.” While the settlement was not worthless, it did not account for most of the lost money. In Austin, the annual discount was calculated to be 2.5 to 3% on the average bill for an 8-year period.8 Meanwhile, Wyatt successfully expanded into oil refining and trading and became wealthier.
Many observers believe that even if LoVaca had honored its promises, it would have just pushed off inevitable gas cost increases until the 1980s when the contracts expired. However, the gas shortage occurred in sync with the first world Energy Crisis, and this magnified the effect on Austin.
https://environmentaldirectory.info/the-early-history-of-austins-clean-energy-movement/
Oscar Wyatt
Angora Chronicles 