Upload
berniece-mccoy
View
220
Download
1
Tags:
Embed Size (px)
Citation preview
1965 1970 1975 1980 1985 1990 1995 2000
15
10
5
0
Yearly Inflation Rate - 1960 to 2001Yearly Inflation Rate - 1960 to 2001
1960
Oil Price “Shocks” 1973-1974
Oil Price “Shocks” 1979-1980 Consumer Price Index
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
3.2%
5.7%
4.4%
9.1%
5.8%6.5%
7.6%
11.3%
13.5%Inflation Over TimeInflation Over Time
1979 Ford Mustang1979 Ford Mustang1974 Ford Mustang1974 Ford Mustang1974 Ford Mustang1971 Ford Mustang
OIL PRICE “SHOCKS”OIL PRICE “SHOCKS”
6.2%
11%
OIL PRICE “SHOCKS”OIL PRICE “SHOCKS”
$1.32
$2,700 $3,500 $5,012
$1.39 $1.50
$42,500 $47,432 $73,327
25¢ 28¢ 40¢
Natural
Gas 91¢
Natural
Gas $1.13
Natural
Gas $2.31
19711971 19741974 19791979
(5.3%)
(12%)
(24%)
(13.6%)
(60%)
(154%)
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
5.7%
19701970
ARCO diversifies into coal. Core
sampling showed Powder River Basin, in Wyoming, to be a
strong resource
ARCOARCO
SPSSPS
SPS decides to build an electric generation plant
(Harrington Station) using coal vs.
natural gas
Powder River Basin
Harrington Station
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 1980198019731973
Powder River Basin
Harrington Station
ARCOARCO
SPSSPS
Original Harrington Agreement
$2.00 per ton
3.2%
5.7%
4.4%
19731973
Original Harrington Agreement
Show Document
$2.00/ton$2.00/ton
$2.00 per ton
___ yr. Contract
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 1980198019731973
Original Harrington Agreement
$2.00 per ton
SPSSPS
ARCOARCO
3.2%
5.7%
4.4% SPS begins construction of
Harrington Station
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 1980198019731973
Original Harrington Agreement
$2.00 per ton
SPSSPS
ARCOARCO
OIL PRICE “SHOCKS”
3.2%
5.7%
4.4%
6.2%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 1980198019741974
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
OIL PRICE “SHOCKS”
SPS creates TUCO, a
wholly owned subsidiary
6.2%
3.2%
5.7%
4.4%
TUCOTUCO
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 1980198019741974
ARCO and SPS/TUCO reopen negotiations regarding Harrington Agreement
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”ARCO’s new core
samples show lower quality
Sierra Club Litigation begins
ARCO recognizes
• Skyrocketing inflation
• Sierra Club lawsuit
• New regulations
• Lower coal quality
11%
3.2%
5.7%
4.4%
TUCOTUCO
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 1980198019751975
ARCO proposes frequent contract price reopeners to SPS/TUCO
NEGOTIATIONSNEGOTIATIONSOriginal
Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
XX SPS/TUCO SPS/TUCO rejects offerrejects offer
TUCOTUCO
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
19751975
TUCOTUCO
NEGOTIATIONSNEGOTIATIONS
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
19761976
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
TUCOTUCO
NEGOTIATIONSNEGOTIATIONS
Injunction prohibits mining on Federal land
19761976
Revised Harrington Agreement
Show Document
$2.698/ton$2.698/ton
$2.698 per ton
___ yr. Contract
19761976
State Agreement
Show Document
$6.50/ton$6.50/ton
$6.50 per ton
___ yr. Contract
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
NEGOTIATIONSNEGOTIATIONS
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19761976
5.8%
TUCOTUCO
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19771977
5.8%
Tolk Agreement
$7.50 per ton
TUCOTUCO
Powder River Basin
Harrington StationTolk Station
NEGOTIATIONSNEGOTIATIONS
19771977
Tolk Agreement
Show Document
$7.50/ton$7.50/ton
$7.50 per ton
___ yr. Contract
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19771977
5.8%
Tolk Agreement
$7.50 per ton
6.5%
ARCO starts delivering coal to TUCO from State land
TUCOTUCO
NEGOTIATIONSNEGOTIATIONS
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19781978
5.8%6.5%
Tolk Agreement
$7.50 per ton
7.6%
TUCOTUCO
STATESTATE
NEGOTIATIONSNEGOTIATIONS
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
TUCOTUCO
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19791979
5.8%6.5%
Tolk Agreement
$7.50 per ton
7.6%
SPS sells TUCO to Cabot Corporation
TUCO TUCO (Cabot)(Cabot)
STATESTATE
NEGOTIATIONSNEGOTIATIONS
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
TUCOTUCO
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19791979
5.8%6.5%
Tolk Agreement
$7.50 per ton
7.6%
TUCO TUCO (Cabot)(Cabot)
11.3%
OIL PRICE “SHOCKS”
STATESTATE
NEGOTIATIONSNEGOTIATIONS
9.1%
19701970 19711971 19721972 19731973 19741974 19751975 19761976 19771977 19781978 19791979 19801980
Original Harrington Agreement
$2.00 per ton
ARCOARCO
SPSSPS
TUCOTUCO
6.2%
OIL PRICE “SHOCKS”
11%
3.2%
5.7%
4.4%
Sierra Club
Revised Harrington Agreement
$2.698 per ton
State Agreement
$6.50 per ton
19801980
5.8%6.5%
Tolk Agreement
$7.50 per ton
7.6%
TUCO TUCO (Cabot)(Cabot)
11.3%
OIL PRICE “SHOCKS”
13.5%
STATESTATE
NEGOTIATIONSNEGOTIATIONS
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
19821982
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
ARCO starts delivering coal to TUCO under Tolk Agreement
Sierra Club Litigation resolved
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
19821982
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
6.2%Letter of Agreement -
Labor and Fringe Benefits adjusted by
indices
Letter of Agreement
Labor & Fringe
Benefits
TOLKTOLK
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
19831983
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
ARCO starts delivering coal to TUCO under Revised Harrington Agreement
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
TOLKTOLK
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
19851985
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO & TUCO negotiate and agree on price reduction to
Tolk Agreement
ARCO Pays ARCO Pays $300 Million$300 Million
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
19851985
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO Pays ARCO Pays $300 Million$300 Million
3.6%
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO Pays ARCO Pays $300 Million$300 Million
3.6%
1.9%
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO Pays ARCO Pays $300 Million$300 Million
3.6%
1.9%
3.6%
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO Pays ARCO Pays $300 Million$300 Million
3.6%
1.9%
3.6%4.1%
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO Pays ARCO Pays $300 Million$300 Million
3.6%
1.9%
3.6%4.1%
4.8%
TOLKTOLK R. HAR.R. HAR.
19801980 19811981 19821982 19831983 19841984 19851985 19861986 19871987 19881988 19891989 19901990
Sierra Club
TUCO TUCO (Cabot)(Cabot)
13.5%
ARCOARCO
10.3%
Tolk Agreement
$7.50 per ton
Letter of Agreement
Labor & Fringe
Benefits
6.2%
3.2%
4.3%
ARCO Pays ARCO Pays $300 Million$300 Million
3.6%
1.9%
3.6%4.1%
4.8%5.4%
TOLKTOLK R. HAR.R. HAR.
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 19901990
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 19901990
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 19901990
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0%
___? Million Tons of coal delivered between 1977 and 1993
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 1990199019931993
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0%
TUCO refuses full deliveries of coal from ARCO
XX
ARCO sues TUCO for
reneging on contract
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 1990199019931993
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
3.0%
4.2%
ARCO sues TUCO for
reneging on contract
Court Judgement in favor of ARCO - Contract Enforced
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
XX
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 1990199019931993
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 2000200019941994
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
TUCO attends Jay Roman
seminar
Jay Roman Seminar
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 2000200019941994
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
TUCO sues ARCO- “Pricing Claims”
TUCO TUCO sues sues
ARCOARCOCourt orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 2000200019941994
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
2.6%
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
2.6% 2.8%
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
2.6% 2.8% 2.9%
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
2.6% 2.8% 2.9%
19971997
Revised Harrington Agreement
$2.698 per ton
Revised Harrington Agreement
ends
TOLKTOLK
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
2.6% 2.8% 2.9%
19971997
Revised Harrington Agreement
$2.698 per ton
2.3%
TOLKTOLK
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%2.6% 2.8% 2.9%
Revised Harrington Agreement
$2.698 per ton
2.3%1.6%
TOLKTOLK
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%2.6% 2.8% 2.9%
Revised Harrington Agreement
$2.698 per ton
2.3%1.6%
2.2%
TOLKTOLK
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 19991999 20002000
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
5.4%
4.2%
3.0% 3.0%
Jay Roman Seminar
2.6% 2.8% 2.9%
Revised Harrington Agreement
$2.698 per ton
2.3%1.6%
2.2%
3.4%
TOLKTOLK
Court orders Court orders TUCO to pay TUCO to pay $20 Million $20 Million to ARCOto ARCO
TUCO TUCO sues sues
ARCOARCO
20002000 20012001 20022002 20032003 20042004 20052005 20062006 20072007 20082008 20092009 20102010
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
3.4%
20002000 20012001 20022002 20032003 20042004 20052005 20062006 20072007 20082008 20092009 20102010
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
3.4%2.8%
20002000 20012001 20022002 20032003 20042004 20052005 20062006 20072007 20082008 20092009 20102010
TUCO TUCO (Cabot)(Cabot)
ARCOARCO
3.4%2.8%
TUCO asserts “True Up”
theory