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Teresa Cornelison is agitated again.
Except for her, the Quintana Town Council meeting has gone completely silent. Mayor James Norvil is preoccupied with his papers. His wife, a councilwoman, is fixated on some point in distant space. Another councilwoman, who once pushed Cornelison off a barstool, looks vaguely annoyed.
On an island where everyone is polite, Cornelison stands apart. A mother of five and a former beautician, she has an easy chattiness, guileless blue eyes and the soul of a tiger.
Before Cornelison moved from Fort Worth six years ago, Quintana enjoyed a sleepy consensus. Despite its proximity to the massive Dow Chemical plant in Freeport, the island has just 53 year-round residents. Almost everybody got along. Almost everybody was welcome for a drink after council meetings.
Cornelison and her husband, Roger, had moved to Quintana to get away, to be near the water, to relax. But Quintana's clubbiness rubbed her the wrong way.
First, she discovered that the then-mayor's husband, long credited as a civic-minded volunteer, was actually on the city payroll. Major scandal. When she heard that the island's in-crowd had decided to back Norvil as the next mayor, she "decided they couldn't just figure that out on their own," she says. She ran against him. She lost.
She made her point: Quintana suddenly had an opposition party, albeit a one-woman operation.
Now, with Quintana weighing one of the most controversial projects to hit the Gulf Coast in decades, Cornelison is again in the fight. Most of the town's political leaders are ready to allow construction of a liquefied natural gas terminal, take the $1 million being offered annually and assume everything will be okay.
This time, she isn't alone. Communities across the country have risen up to stop such projects, citing serious safety concerns.
The Quintana terminal in particular raises several red flags. A key investor is a close friend and business partner of Neil Bush, brother of the president. Meanwhile, the Texas Department of Transportation appears to have carried out a behind-the-scenes campaign with questionable numbers to build the bridge that makes the terminal possible.
The island is barely one mile wide. The terminal's developer, Houston-based Freeport LNG, wants to put it within a mile of Quintana Beach, which draws thousands of Houston-area sunbathers. The tankers would dock less than 1,200 feet from a county RV park, a restaurant and nearly a dozen homes.
Federal regulators appear ready to approve the project. But scientists believe that an incident at either the docks or the terminal could result in a searing fire. That fire would burn so hot that even people another half-mile away would be blistered in 30 seconds.
One of the homes in the potential fire zone is Cornelison's.
"If you do decide to sign that contract, you need to look out for each of us individuals," Cornelison tells the town council. "This council has them by the balls! Don't let them come in here for pennies and ruin our health and lifestyle. Look out for our safety!"
The councilmembers politely look away. Norvil changes the subject.
Liquefied natural gas, or LNG, is nothing too fancy -- just a chilled, condensed version of the stuff that heats our stoves and houses. Its appeal is its convenience for transport: Cooled to minus 260 degrees, natural gas becomes a liquid that takes up a lot less space.
The gas is harvested overseas, chilled and shipped in giant tankers to special coastal terminals where it is pumped into huge tanks. (Quintana's tanks would be 180 feet tall and hold some 51 billion gallons of gas.) There, the LNG is heated back into a gas and sent into distribution pipelines.
As far as energy sources go, LNG is relatively simple and clean. The problem is that it's extremely dangerous. If it should escape its tanks or burst through a pipe, its temperature would rise rapidly. Liquid would turn to vapor -- and because it's concentrated 600 times, it's incredibly flammable.
The last time an LNG terminal was built in the United States, Jimmy Carter was president. In later years, there wasn't even enough demand for the four terminals in existence. Two were mothballed in the early 1980s.
A spike in natural gas prices in the late '90s changed everything. "There was a projection for increasing demand, and almost a ceiling on domestic production, what with what we can access and get out of the ground," says Mark Stultz, spokesman for the Natural Gas Supply Association. "And that created opportunities for LNG developers to become competitors."
The shuttered terminals reopened, and the others expanded. Still, the buzz grew. Energy companies drew up plans for new terminals from Maine to Baja California. The Federal Energy Regulatory Commission, or FERC, now lists 40 potential proposals. It has received eight applications.
But terminal after terminal has faced intense community opposition. Even though FERC has yet to reject any proposal, numerous projects have been scrapped. California activists stopped projects in Vallejo and Eureka. Even Marathon had to drop its plans for a terminal near Tijuana after the Mexican government announced it was taking the land for "public use" instead.
Neighbors are frightened by the possibility of fire at a terminal: An LNG blaze destroyed virtually one square mile of Cleveland, Ohio, in 1944, killing 128 people and injuring 225.
The energy industry dismisses the fears. Wartime shortages, says ExxonMobil spokesman Bob Davis, led to shoddy construction of the Cleveland terminal. "The facilities we're contemplating for the U.S. are state-of-the-art, with multiple levels of protection," he says. In Japan, 23 terminals function without incident; in the last 30 years, no U.S. terminal has had a serious accident.
But in January, an LNG terminal in Algeria burst into a fire that raged for eight hours; 27 people died and 74 were injured. The accident first was chalked up to a defective boiler and third-world maintenance, but the cause later was determined to be a pipeline leak. And Houston's own Halliburton had signed off on an update of the plant four years ago.
Casi Callaway, an activist who opposed an ExxonMobil terminal planned for Mobile, Alabama, says the Algerian blaze ignited new opposition to the projects. "Before Algeria, the governor said, 'We want a real safety study,' " Callaway says. "After Algeria, most of the community said, 'We don't need a study on Mobile Bay -- we need a study of how far away these things should be.' "
ExxonMobil put its Alabama plans on hold. In March, voters rejected a proposal in Maine, despite a promise of $8 million in annual tax revenue. Even Florida Governor Jeb Bush has suggested that LNG pipelines bound for Florida's Gulf Coast go elsewhere. Many activists now say that the only safe place for terminals is miles offshore.
The energy industry is "stunned," says Bill Powers, an engineer-turned-activist who chairs the Border Power Plant Working Group in San Diego. "All the levers they're accustomed to greasing are falling apart. Now they've got to deal with the people, and they don't know how to do that." Powers has even been invited to speak at industry conferences to offer advice on how to make the projects palatable to communities.
The only project to make it through the permitting process so far is in isolated Hackberry, Louisiana. But several proposals for the Texas coast also have met with little resistance, even those close to cities.
Three proposals are being discussed for Port Arthur and four for Corpus Christi. The only noisy opposition in either area has come from the Paper, Allied-Industrial, Chemical and Energy Workers union. The 40 permanent jobs at each terminal aren't worth the risk, says Joe Drexler, director of special projects for the union.
The union's radio commercials in Mobile got people talking. But its efforts in Texas -- including 4,000 handbills delivered to suburban Corpus Christi and full-page newspaper ads -- have fallen flat, Drexler says.
Then there's Quintana. The Quintana Town Council was immediately receptive to a terminal proposed for island property owned by Port Freeport. If the federal regulators concur, it would be only the second U.S. terminal permitted in 30 years -- and bigger than any current terminal. Freeport LNG, the developer, hopes to break ground this summer, says its president, Charles Reimer.
The $300 million project would cover 50 acres and could expand later. The terminal could be operating by 2007, connecting with existing gas lines via a new nine-mile pipeline.
With the largest petrochemical plant in the country just a few miles away, LNG was an easy sell, Reimer says. "Many of the people here have come to accept that this is what fuels the local economy."
The politicians seem to agree. While Alabama Governor Bob Riley, a Republican, pushed for further safety studies in Mobile, Governor Rick Perry has no comment on any of the Texas LNG projects. His spokeswoman referred the Houston Press to two news releases from Perry's office touting ExxonMobil terminals planned for Corpus Christi and Port Arthur -- then failed to return subsequent calls for comment.
"The whole country is outraged by this situation," says union leader Drexler. "Everyone is concerned and crying out against it -- except in Texas."
Says engineer Powers, who grew up in Austin, "I do love Texans, but they're just a herd of sheep right now."
Freeport LNG couldn't bring its project to Quintana without the new bridge. And the Texas Department of Transportation couldn't have built that bridge without a campaign that focused more on industrial and business interests than on residents of the island community.
Since 1958, Quintana had been connected to the mainland by only a rickety swing bridge atop a pontoon boat. It wasn't high enough for Intercoastal Waterway vessels to pass underneath, so even barges could stop vehicle traffic for 20 minutes on FM 1495.
But residents liked it. It kept out development -- and riffraff. "People thought that with a bridge, it would turn into a boom town," says Greg Upton, a 19-year resident.
"People liked being isolated," says Mayor Norvil.
In 1997, the Texas Department of Transportation decided to change that. The swing bridge needed to be manned 24 hours a day, which was expensive, says spokeswoman Janelle Gbur. She adds, "It was not just an idea that was hatched. The community of Quintana supported it."
When pressed, Gbur explains that her definition of "community" includes more than just Quintana residents. She won't say if that means industrial interests, contending that "we weren't looking for local support for the project, although we certainly had it."
Not so, according to Quintana leaders. Then-mayor Debbie Alongis wrote TxDOT at the time that residents were opposed. They accepted the inconvenience as a fact of island life, Alongis wrote, and they believed a bigger bridge could attract crime to their town.
Despite those views, TxDOT quietly tried to drum up support for a new bridge. According to internal e-mails and memos obtained by the Press, the department also manipulated data to enable the bridge to qualify for funding.
TxDOT rates proposals under an established formula that factors in traffic demands on a bridge and its level of deterioration. Typically, only bridges that score 70 or higher on TxDOT's formula get federal funds, according to memos.
In May 1997, a TxDOT worker e-mailed that Quintana's bridge scored a 50. Project engineer David Kopp promptly told him to "try to run a new score." Kopp's e-mail to him stated, "This is another bridge that the district is applying a lot of pressure to have replaced."
Within the week, another TxDOT inspection of the bridge increased its score to 62. By August, it had jumped to 69, with no apparent explanation. (After the Press examined TxDOT records, Gbur didn't return repeated calls for comment.)
Meanwhile, TxDOT staffers worked to create the support that Gbur says they weren't looking for. Kopp e-mailed TxDOT engineer Larry Heckathorn about getting the backing of local officials. "This support can't look like it has been solicited," Kopp cautioned.
Heckathorn wrote that a Dow executive had recently approached him, and he could talk to others, too. Kopp assented: "It appears that we will need this type of support as additional ammo for our gun." Soon letters arrived from Dow, the county commissioners, the Brazoria County Chamber of Commerce and Port Freeport, the port authority in Freeport.
The state granted the $10.7 million, much of it in federal funds, for the bridge.
And it decided to build big. TxDOT originally put the bridge's daily traffic count at 1,450 vehicles, with one engineer noting that Quintana had little growth potential. Three months later, plans were bumped up to a projected 2,900 daily vehicles, adding $1 million to the cost. In the end, the bridge was built for a load of 3,700 vehicles.
After all, Quintana did have growth possibilities. When community opposition stalled the project in the summer of 2000, Port Freeport director A.J. Reixach wrote TxDOT that port-owned land in Quintana was attracting interest from two companies, "one involved in offshore gas production." Without the bridge, construction equipment couldn't get to the island.
Reixach says he can't remember if he was referring to an LNG terminal. Reimer says his company didn't start negotiations until January 2001.
Regardless, by the time bridge construction started that winter, Port Freeport was in hot negotiations with an influential group exploring sites for an LNG terminal. And Dow, so active in pushing for the bridge, eventually signed on as the first major client for that terminal.
Once the state government had provided the critical infrastructure of the bridge, the stage was set for a high-stakes, well-connected entrepreneur.
Syrian-born businessman Jamal Daniel has started nearly a dozen companies. His $3.3 million mansion off Memorial Drive hosts the occasional charity bash, earning ink in Shelby Hodge's Houston Chronicle society column. He's said to be friends with the rulers of Yemen and Saudi Arabia.
But he's mostly famous for being a friend of the Bushes. Daniel, 45, is on a first-name basis with George H.W. Bush. He's particularly close to first brother Neil Bush. When Neil's daughter, Elite model Lauren Bush, made her debut in Paris, Daniel was there. When Neil married his second wife in March, Daniel hosted the wedding.
When Neil and his ex-wife, Sharon, wanted a Maine retreat near the family pad in Kennebunkport, Daniel bought it for the couple for $380,000, according to Vanity Fair. And, as Neil revealed in his divorce deposition, he's a co-chairman of Daniel's company, Crest Investment, which pays him $60,000 a year to offer Daniel advice.
Daniel himself is adviser to a new firm that started out of the suite of Crest Investment, hoping to win contracts for rebuilding Iraq. The CEO is a Crest vice president; the chairman is Joe Allbaugh, a presidential confidant who headed the Federal Emergency Management Agency.
Daniel did not return calls for comment.
Various profiles credit Daniel with managing extensive family assets, with expertise in big real estate and energy deals. LNG seemed to be a perfect fit.
By April 2000, as the Quintana bridge project was under review, Daniel and his father were in active discussions with Cheniere, a Houston-based exploration and development company about to invest heavily in LNG. In February 2001, Cheniere and the Daniels discussed specific terminal sites, including the Quintana acreage owned by Port Freeport.
Daniel and his partners told Cheniere they needed more time to decide how much they wanted to invest in the venture. But, according to a lawsuit Cheniere would file in Harris County District Court, Daniel's group instead started negotiating on its own with Port Freeport.
Then, while Cheniere was still waiting for Daniel to make up his mind, the port announced it had signed a lease -- with Daniel and his new company, Crest Energy. Cheniere filed a lawsuit against Crest. When the two companies settled in June 2001, their agreement made Crest a "strategic partner" in the Quintana project and provided it with 500,000 shares of Cheniere stock. It gets another 750,000 when the terminal receives an operating permit.
According to documents filed with the SEC, Crest also will get percentage of revenue from the terminal -- with at least $2 million guaranteed annually.
In 2002, the project picked up another key investor: Michael S. Smith of Colorado bought a 60 percent interest in the venture, which was renamed Freeport LNG L.P. Smith had made his money from an energy company he founded and sold two decades later for $410 million.
Like Daniel, Smith is politically connected. He's been a key backer in the campaigns of Senator Ben Nighthorse Campbell of Colorado and has given $72,900 to federal candidates since 1996.
The contributions and political connections have helped LNG terminal developers enjoy a strong alliance with the Bush administration. Our national energy policy resulted from Vice President Dick Cheney's secretive powwow, which Allbaugh, Daniel's future business partner, attended. The policy specifically identifies LNG as a growth industry. And the pending Bush energy bill makes a point of speeding up the permitting process for LNG terminals. It would also weaken states' abilities to block the projects, says Brendan Bell of the Sierra Club.
Energy Secretary Spencer Abraham and the energy regulatory commission both support new terminal construction. In December 2002, FERC loosened long-standing controls on liquefied natural gas prices. Under the new rules, terminal operators could determine their own rates and customers, greatly enhancing potential profits.
The Bush administration's enthusiasm for LNG as an energy source was helping well-connected insiders. But the feds weren't nearly as enthusiastic about issues of terminal safety, especially in one key area: the threat of terrorism.
Jerry and Jeanne Masters bought their Quintana cottage in the aftermath of one of the biggest scandals in the island's history. Jeff Reynolds, who owned the popular restaurant Jeff's on the Jetty, was convicted of murdering a tenant and sentenced to 40 years in prison.
The Masterses, who'd been friendly with the restaurateur, bought his house. Last summer, they purchased a restaurant of their own, a long-neglected spot on the main road. They named it the Quintana Yacht Club and threw their life savings into fixing it up.
In many ways, the couple is the antithesis of the feisty Cornelison. Jerry, a Freeport councilman and pipe fitter at Dow Chemical, is soft-spoken and friendly, with a politician's love of corny puns. Jeanne is more likely to roll her eyes than go into a long rant.
But they've found themselves on the same side of the LNG battle. The Masterses' cottage sits about 600 feet from where the LNG tankers will deposit their precious fluid. And, despite the assurances of the developers, the couple is convinced that puts them right in the burn zone.
Freeport LNG insists that all it needs is a 900-foot buffer between the terminal and the islanders. (Their lead technicians are mostly former Enron workers who handled the company's overseas LNG projects.) Rose Irwin, a 77-year-old widow who emphatically does not want to sell, would be forced to leave the house her husband built. Everyone else, the technicians say, should be just fine.
By federal calculations, they're right. Freeport LNG's application explains that terminals must create "exclusion zones" to separate people from LNG and its fire potential. But the zones are based on a small accident: a single pipe spilling its contents for ten minutes. The feds do not require that the company factor in a tank rupturing or even a bigger spill.
Congress instructed the energy regulatory commission almost three decades ago to develop regulations for putting LNG terminals only in remote spots. The agency never did, says Powers, the San Diego engineer.
"They're still operating as if it's 30 years ago, when the worst-case scenario was a broken pipe," says James A. Fay, a professor emeritus of mechanical engineering at the Massachusetts Institute of Technology. "That presumes the kind of problems with spills of LNG will be small-scale, chronic events -- rather than what everyone believes now is the major issue, and that's terrorism."
Nor do federal regulations take into account a spill from a tanker. Jerry Havens, a professor of chemical engineering, has studied LNG as director of the Chemical Hazards Research Center at the University of Arkansas. He believes the worst threat would be a large release from a ship. A hole in an LNG tanker similar to those terrorists punched into oil tankers in the Middle East could be devastating. "Such LNG releases, onto water, would be uncontained and therefore spread, resulting potentially in very large fires," he wrote in an e-mail to the Press. "The size of such fires might pose dangers to population up to perhaps a mile away under worst case spill conditions."
The experts agree a hole of that size would spill just one-fifth of the contents of an LNG tanker. Havens can't speculate as to what a bigger spill would mean; it's probably not five times as big, he says, but it needs further study.
Fay, who conducted some of the first studies of LNG fires in the 1970s, recently analyzed a project planned for Maine. He found that people within three square miles were at risk of severe burns from a tanker spill. The attacks on tankers in the Persian Gulf, he says, show how easy it is to blow a hole into the side of a ship. "It's a whole new ball game, but FERC hasn't stepped up to the plate. They're still trying to facilitate these permits and get these things built."
In Quintana, several buildings sit within a mile of where the tankers will transfer the LNG: the Masters house, City Hall, the Quintana Yacht Club, the county RV park and its four vacation rentals, a smattering of other houses and the road to Quintana Beach. Tankers would pass within a few hundred feet of a restaurant, a popular fishing spot and the dense village of Surfside Beach just across the jetty.
A three-mile zone would include more houses, another public beach, even more of Surfside and probably parts of the Dow plant.
But the feds believe a 900-foot zone around the terminal is adequate.
Says Elena Ducharme, who fought an LNG project in Vallejo, California, "I don't know a single scientist who would believe that's a safe distance."
Powers, the San Diego engineer, agrees. "That's way too small for a buffer zone."
The original evacuation route for the island was supposed to be the main road through town -- until Cornelison pointed out that it runs right past the terminal. Then developers offered up the beach as a route -- but part of the beach is roped off from cars, and other parts are impassable at high tide. The company's current solution: The Coast Guard will bring in boats to evacuate people.
It might not be such a big deal if it involved only the 50 or so people who live on Quintana. But even Mayor Norvil, who supports the project, estimates that the island draws as many as 5,000 people on holiday weekends.
"It's scary as hell," says Jeanne Masters. She loves the island and her restaurant. But if Freeport LNG made her a good offer, she would sell.
Reimer, the company president, believes a terrorist threat is not realistic. "I don't particularly worry about, personally, LNG tankers being attacked in U.S. ports by terrorists," he says. "We have a good Coast Guard to prevent that."
After 9/11, the Coast Guard shut down the LNG terminal in Boston Harbor, saying it was simply too great a risk. (It reopened one month later.) As former White House terrorism adviser Richard Clarke wrote in his book, Against All Enemies, terrorism officials learned in 2001 that Al Qaeda operatives had come to Boston -- on LNG tankers.
Even before community opposition to LNG terminal plans, no one thought all 40 proposed projects would be built. The U.S. Department of Energy had suggested that seven to nine would be likely by 2007. Even that would raise LNG's share of the domestic natural gas market from about 1 percent to as much as 17 percent.
Says Stultz, of the Natural Gas Supply Association, "Everyone wants to get in and get built before the demand is met and the door is shut." And that gives activists tremendous power: "The longer the delay, the more likelihood that costs increase, and in the end, you may not be able to build the facility."
"There's a limited number of good sites available," adds Michelle Michot Foss, executive director of the University of Houston's Institute for Energy, Law and Enterprise.
Reimer, president of Freeport LNG, says it is no coincidence that the Quintana project is rolling smoothly through the permitting process. "We think we identified the best site along the Texas coastline," he says. "It's on the water. It's near Houston, with its huge demands for natural gas. And the community is supportive. It's generally a very pro-energy area."
In March, Dow signed a 20-year terminal use agreement, committing to ship in and ship out at least 1.8 million tons of LNG each year -- one-third of the terminal's capacity. With that and a two-thirds-capacity commitment from ConocoPhillips, Freeport LNG got a cash infusion and the guarantee of a sold-out terminal, Reimer says.
Mayor Norvil himself is a contractor at Dow. Many residents, including Jerry Masters, work there. "They're not really happy with me," Masters says of his bosses. "If they could find a way to fire my ass, they would."
The only potential obstacles for the Quintana project appear to be two government-commissioned studies. The feds contracted for both only after the explosion in Algeria and after communities in the States began to mobilize against LNG.
In December, the Department of Energy asked its own laboratory for a "comprehensive" review of previous LNG studies. But, as the Mobile Register pointed out, the review failed to take into account the most damning study, an industry-commissioned report examining the potential for disaster in Boston Harbor. (The report remains secret, although the Register has reported that it outlined the possibility of a chain-reaction fire overwhelming an entire tanker.)
So the energy department agreed to expand its review. And in February, FERC hired Houston-based ABS Group to calculate an array of dangerous situations involving LNG tankers, including holes in the ships. That study was due March 31, but FERC has put no deadline on when it might be released to the public.
FERC spokeswoman Tamara Young-Allen says the agency will apply the findings even to terminals already in the application process. "The companies always ask us to act by a certain time, but we aren't necessarily required to meet their directive," she says.
Reimer isn't too worried. "I don't know what makes an LNG tanker more dangerous than any others," he says. "To me this is a homeland-security issue. How many tankers in the United States have been attacked and a five-meter hole put into them? I don't know of any."
Cornelison and her husband, Roger, have decorated their house in "island casual": a fish pillow, wind chimes made out of sea shells, a painting of sailboats cruising past a sunny patio. Their home has been a never-ending project. Roger, who works construction, has added decks, taken out walls and replaced the roof. But from the deck they can see the gulf and feel the breeze; that's enough to make it worthwhile.
Cornelison keeps insisting that Freeport LNG needs to buy everyone out, but she doesn't want to leave. "We looked up and down the coast," she says. "Matagorda is three times as much. I couldn't go to Galveston and buy this -- we'd have neighbors, and we'd be trapped in."
She's trying to rally islanders for a class-action lawsuit. She spent hours lobbying the few members of the town council she thought might be receptive -- oddly enough, one was Karen Summers, who Cornelison claims pushed her off the barstool a few years ago during an argument.
But council easily approved the project earlier this month, and the unanimous decision was hardly a surprise. Gathered after a Saturday-morning roadside trash pickup weeks before the vote, the residents make their feelings clear: They are just fine with LNG.
"We need help financially, as far as the city is concerned," says Richard Slane, genial in his blue jeans and high waders. "We checked it well enough to know with all these refineries around here, anything could happen. I talked to people I know -- they say it's the safest thing."
Washing down their deli sandwiches with cans of Diet Coke, the residents mill around Town Hall. No one seems concerned about the terminal planned for a mile away.
"I think as long as it's done right, it's going to be a great thing," says Greg Upton.
"That's because he works for Dow," says Councilwoman Beth Mohr, laughing.
"We've got it all around us anyway," one woman pipes up.
"That's right," says Upton, a project manager for Dow. "It's already all around us."
As a contractor for Dow, Mayor Norvil explains that he's none too afraid of substances most people would consider dangerous. Nor is he afraid of the opposition. "At council we'll get three or four people usually," he says. "When it's a big issue like LNG, we get six or seven."
Surfside hasn't protested the terminal, despite its proximity. Nor has Brazoria County, which owns the RV park. Nor, indeed, have most of Norvil's constituents. Just a few out-of-towners, Norvil sniffs, and the Audubon Society.
"I've lived in this area all my life," he says. "They haven't turned around and looked at where we're at. We're in the middle of it already." He laughs shortly, then adds, "This is a lot better project than some of them."
With that, Norvil excuses himself. The civic-minded people of Quintana are posing for a picture in front of Town Hall. They stand together with big smiles, their backs to the gulf, their eyes on what is likely to be the home of the first LNG terminal in Texas.
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