November 7, 2001 


Mr. Jim Prentice
Enron Methanol Company/EOTT

Dear Jim:


Enron Global Markets (Emissions) is pleased to offer the following proposals for your consideration.  The first proposal is for an outright purchase of all TNRCC certified allowances or credits and the second option calls for an outright purchase of all VOC credits and a revenue share on any future sales of NOx credits or allowances.  

Due to the regulatory risk, illiquidity, and general market uncertainty I am unable to provide a time frame, guaranteed price or assurance of success in monetizing the NOx credits or allowances under scenario B.  Additionally, the most likely liquidation scenario involves a time frame of three to five years.      

In order to simplify record keeping and minimize accounting and contractual issues it is my strong desire to keep this as a straight sale and finalize the deal under option A.     

I look forward to discussing this proposal with you in greater detail.  If you should have any questions or require additional information, please phone me at 713-853-3810.


Sincerely,

Trevor Woods
Enron Emissions Services