Randi McCormick just forwarded to me a letter addressed to EOTT, dated 
February 14, 2001  from the US Fish and Wildlife Service approving our 
project "for participation in the Kern Water Bank Compensation Bank," and 
authorizing the Water Bank "to extend their incidental take authority to you 
and your entire project under their Master Permit."  This is, of course, very 
good news.

 The letter notes, however, that we still need to purchase compensation 
acreage both at North Coles Levee and at the Kern Water Bank.  Specifically, 
we must do the following:  (1) contact Cheryl Harding of Kern Water Bank to 
acquire 23.1 acres of compensation credits, and to get included in their 
Master Permit; and (2) get Cheryl Harding a letter from the Coles Levee 
Ecosystem Preserve (Mark Poe of Aera) stating that we have purchased 15.3 
acres of credits for North Coles Levee, or that we have set aside that amount 
from credits we have in the past purchased.

 While I could make these contacts, I do not believe that would be wise 
because -- as Kenny can attest -- our past experience has been that whenever 
a lawyer contacts the Water Bank, it prompts them to automatically get their 
lawyers involved.  And our experience has been that this only slows things 
down -- or worse.

 My suggestion therefore is that one or both of you gentlemen contact Cheryl 
as soon as practical and ask her for (1) proposed contract for acquisition of 
23.1 acres of compensation credits and (2) perperwork to include EOTT (and 
its contractors) in their Master Permit.  She should also be informed that, 
while we have not yet purchased the 15.3 acres of NCL credits, we will by the 
end of this week have a letter of credit posted as security, as allowed under 
our State Take Permit, to cover this amount of acreage.  Ask whether a copy 
of this LC will suffice for her purposes, or whether we will need to have the 
actual acreage purchased.

 As this would remove a major impediment to construction of the new lines, it 
is important that we move on this will all deliberate speed.  Please call me 
if you have any questions, or if you would like otherwise to discuss how to 
approach this issue.  Thanks a lot.

      --ETA