Tuesday PM September 2nd, 2008
by: Ed Mayberry, September 2, 2008 1:09:03 pm
Thousands of southeast Texans who fled from Hurricane Gustav are returning home today. The once-mighty storm only skirted Texas — sprinkling rain along the eastern edges of the state — and some people wondered why they had to evacuate. But southeast Texas officials defended their decisions to order evacuations from Jefferson, Orange and Hardin Counties, which were in the predicted path of Gustav. The storm reached Category 4 intensity before weakening as it made landfall Monday some 200 miles east of Texas. The order for the three counties about 100 miles east of Houston was lifted at 6 a.m., according to Jefferson County Emergency Management Office spokeswoman Ocie Crosser in Beaumont. That means evacuees sheltered inland may return to their southeast Texas homes.
Hurricane Gustav may have spared New Orleans, but other parts of Cajun country have been devastated. In the low-lying parishes across Louisiana's southeastern and central coast, homes have been destroyed and areas flooded. Governor Bobby Jindal says he's received reports of widespread damage across three parishes — Terrebonne, LaFourche and St. Mary — near where the eye of the storm hit. Helicopter crews are expected to search the area for anyone injured or killed. Jefferson Parish residents are not allowed back until businesses and first responders are prepared. St. Tammany officials are urging Southshore residents returning to not travel through St. Tammany until further notice because of lack of services and infrastructure. Orleans Parish residents will not be allowed to return until at least Wednesday. A decision on allowing St. Charles Parish residents to return is expected Wednesday afternoon. Terrebonne Parish residents may not be allowed back home until noon on Friday. There are still major power outages and trees blocking roads. Officials have set up checkpoints around New Orleans, where the National Guard and state police will stop people who are not authorized to return. The city is not expected to reopen until Thursday at the earliest.
Oil companies, rig owners and refiners spread out across the Gulf Coast today, looking for damage from Hurricane Gustav. Companies implemented their employee check-in systems to ensure all staff have been accounted for after the hurricane. Shell Oil has contacted more than 90 per cent of its operators. Shell says its production remains shut-in across the Gulf of Mexico, and its Houma-to-Houston crude oil pipeline remains shut in. Some companies are already putting equipment and people back in place to resume operations. The Minerals Management Service says early reports from drillers and oil and natural gas producers are very promising. Preliminary indications were that Gustav caused little damage to onshore and offshore facilities, although the full impact likely won't be known for a couple of days. Companies had shut down 100 per cent of Gulf oil production and 95.4 per cent of natural gas output by Monday. Workers from 100 rigs and 626 production platforms evacuated. Now, many companies are flying over offshore sites in airplanes and helicopters, checking for any obvious damage. One major unknown remains: the fate of the Louisiana Offshore Oil Port, which shut down over the weekend. Gustav appeared to roll directly over the facility, which handles about 12 per cent of the nation's crude imports and is tied by pipeline to about half the nation's refining capacity. Any prolonged closure of Loop, as it's called, could severely disrupt crude imports and their shipment to refineries. ConocoPhillips said remote monitoring of its Magnolia production platform about 165 miles off the Louisiana coast indicated it had not sustained significant damage.
Valero Energy, ExxonMobil and Shell Oil halted or reduced output at several major refineries in Texas and Louisiana. Those facilities, once given the all-clear, could take as long as two weeks to return to full production. Shell says its Motiva Norco refinery maintains some power and apparently sustained minimal damage. Motiva’s Convent refinery remains without power, as does Shell’s Chemical Geismar facility. The Gulf Coast is home to 42 per cent of the nation’s refining capacity. Oil prices plunged to the lowest level in five months, falling to near $100 a barrel. The national average for regular gasoline is at $3.69 per gallon, according to AAA.
President Bush is getting in a plug for increasing domestic oil production in the wake of Hurricane Gustav. The president says while it's too early to assess damage to oil facilities off the Gulf Coast, the storm should prompt Congress to okay more domestic oil development. Bush said at the White House that lawmakers must understand that--in his words–“we need more domestic energy, not less.” The president is keeping a hands-on profile in the aftermath of the hurricane, in contrast to the government's poor response to Katrina. He met in the Roosevelt Room with Vice President Cheney and about 20 advisers, including the Secretaries of Interior, Transportation and Energy.
Power outages from Hurricane Gustav continue to grow with Entergy now saying it has the second largest number of outages in the company's 95-year history. That trails only the devastation wrought by Katrina three years ago. There are also worries about the fishing industry. One Louisiana fisherman watching television reports in an Alabama hotel lobby says he's afraid salt water from the Gulf could wipe out the delicate oyster beds he's counting on for a livelihood this fall. He spent $100,000 rebuilding his 47-foot fishing boat after Katrina, and says it'll be “a week or two” before he'll be able to tell.
Hurricane Gustav may trigger insurance claims as high as $10 billion, including damage to oil facilities. That's according to risk management firms that issued preliminary estimates a day after the storm struck Louisiana. Gustav's force paled in comparison to Hurricane Katrina, which cost insurers $41 billion. Retailers began restocking their shelves in anticipation of the region's cleanup effort. Insurance industry analysts warn that computerized data on insurance losses may understate actual costs. That's because they don't include damage to uninsured property or destruction caused by actions excluded from some policies, such as flooding. Total losses won't be known for months.
Lowe's has begun the cleanup process, assessing damaged stores and locating employees--many of whom evacuated before Hurricane Gustav made landfall Monday. The home improvement chain said 29 stores in Louisiana, Mississippi and Texas were closed Tuesday as teams of workers assessed the damage inside. Chris Ahern, a spokeswoman for the Mooresville, N.C.-based home improvement chain, says some of the stores, which closed because of mandatory evacuations in the area, would reopen later in the day. Meanwhile, dozens of trucks full of supplies that had been stationed in the region were moving along highways Tuesday morning, bringing extra supplies of tarps, roofing supplies cleanup products and other material to the region as the massive cleanup begins.
Google is releasing a Web browser to compete with Internet Explorer and Firefox. Microsoft recently launched its new version of Internet Explorer 8. The free open-sourced Google Chrome is said to be better suited for displaying the more dynamic and interactive content now on the Web. The software will feature tabs that go above the window, not below the address bar. The location bar will support auto-complete functions and will suggest Web pages you’ve previously visited. There will be a privacy mode allowing surfing without saving personal history. The browser will constantly download up-to-date information about Web sites with malicious code.
Comcast will start limiting the amount of data its Internet customers can send and receive each month to 250 gigabytes, starting October 1st. Customers will exceed the limit and are among the heaviest users twice within six months will be suspended from service for a year. Comcast says typical customers use between two and three gigabytes each month. To reach that level, you’d have to send 50 million e-mails, download 62,500 songs or 125 standard-definition movies. Or upload 25,000 high-resolution digital photos.
BP its U.S. unit plans to buy a 25 per cent stake in Chesapeake Energy's Fayetteville shale assets in Arkansas for $1.9 billion. BP said that a letter of intent has been signed for the deal. That comes just a month after Houston-based BP America bought Chesapeake's Arkoma basin Woodford shale assets in Oklahoma for $1.7 billion. Oklahoma City-based Chesapeake plans to continue acquiring leasehold in the Fayetteville shale play in east Texas. BP will have the right to a 25 percent participation in any such additional leasehold.
A gauge of the nation's manufacturing sector contracted in August. The Institute for Supply Management says its closely-watched manufacturing index fell to 49.9, down one-tenth of a percent from July. A reading below 50 indicates contraction. The snapshot has been hovering near 50 this year, indicating flat activity. The group's inflation index hit a six-month low. For the first time in months, there were more items on the list of falling commodities costs, including corn, fuel oil, natural gas and copper.
The Commerce Department says the nation's construction spending fell more than expected in July. Housing activity narrowed to the lowest level in seven years, while nonresidential activity dropped for the first time in seven months. The six-tenths-of-a-per cent decline in spending was double the decrease that analysts had been expecting. As for housing activity, it dipped for a 16th straight month to the lowest level since March 2001, the start of the last recession. There is concern that nonresidential building will weaken further in the months to come as banks, hurt by large losses on mortgage loans, tighten lending for those projects.
American Airlines has asked regulators for permission to delay its launch of new nonstop service between Chicago and Beijing for one year. Fort Worth-based American cites the high price of jet fuel and other obstacles. The nation's largest carrier filed its request Friday with the Transportation Department, making it the latest in a line of U.S. carriers seeking to delay China service. The Chicago-Beijing flights were scheduled to begin next April 9th. American is asking the Feds to begin the flights instead on April 4th, 2010. U.S. airlines are expected to post multibillion-dollar losses this year as they battle high fuel prices and a weakening U.S. economy. American already flies between Chicago and Shanghai. The carrier last year won the rights to add the Chicago-Beijing route.
South Korea's top financial regulator said it may fine Dallas private equity firm Lone Star Funds. The Financial Services Commission is considering punishing Lone Star for not filing documents to prove its qualifications to remain a major shareholder in Korea Exchange Bank. If fined, the fund could face an order to sell its stake in the South Korean lender. That's because receiving a fine constitutes a “flaw” in its qualification to remain a major shareholder under Korean banking law. The watchdog says it asked Lone Star to submit documents for its regular review of the firm's shareholder qualification, but the fund missed the August 31st deadline. Still, the FSC said it would continue to try to get Lone Star to submit the documents. Lone Star had no immediate comment.
Iraq has approved a $3 billion deal with China to develop the Al-Ahdab oil field. It's the first Saddam-era oil deal to be honored by the new Iraqi government. It initially was canceled after the 2003 invasion. A government statement says the cabinet approved the deal on Tuesday. It was signed last week in China. Under the contract, China National Petroleum will develop the field for 20 years. It's expected to produce up to 25,000 barrels a day after three years, and eventually reach 125,000 barrels per day. The field is in Wasit Province, about 99 miles southeast of Baghdad.