Tuesday PM March 9th, 2010
by: Ed Mayberry, March 9, 2010 9:03:00 pm
Police in New Orleans say the body of a missing Texas oil executive has been pulled from the Mississippi River. Bob Young of the New Orleans police department says police believe Douglas Schantz drowned accidentally. The 54-year-old president of Houston-based Sequent Energy Management had been missing since early Friday. He was in town to give Tulane University a $25,000 gift during a reception Thursday. A colleague who was with him says that after the dinner they went to Bourbon Street around midnight. Police say Schantz left a bar around 2 a.m. Searching through videos from businesses in the French Quarter, police were able to trace Schantz to the dock for the riverboat Natchez. They say he had been drinking and seemed disoriented. Young says Schantz had all of his credit cards and jewelry and foul play is not suspected.
In the minutes before an 800-foot tanker collided with a tugboat pushing two barges off the Gulf Coast in January, causing the worst oil spill in Texas in 15 years, the pilots of the vessels tell dispatchers they are aware of one another, and one tries to slow down upon entering a narrow waterway. The Coast Guard and the National Transportation and Safety Board began a formal hearing into the circumstances of the collision that caused 462,000 gallons of crude oil to spill into the waters off of Port Arthur. The audio played at the hearing shows the pilots thought they would be able to pass one another, and bantered back and forth. But Captain Pallava Shukla says his ship failed to recover in time from winds that pushed the ship west of where it needed to be.
Continental Airlines plans to cancel flights rather than risk stiff fines under new federal rules designed to punish carriers for delaying passengers. CEO Jeff Smisek says that the airline will cancel flights that might be delayed three hours. Under a federal rule taking effect next month, airlines can be fined up to $27,500 per passenger if planes are delayed three hours and passengers can't get off. Smisek says long delays are rare, and mostly caused by an outdated air traffic control system that the government has failed to upgrade.
U.S. airlines have their best January in four years, when it comes to arriving on time. The Transportation Department said that the airlines averaged a 78.7 percent on-time arrival rate in January. Among the biggest airlines, United had the best record, with 84.4 percent of its flights arriving on-time, which the government defines as being within 15 minutes of their scheduled arrival. The worst on-time results were for regional carriers American Eagle, Comair and Pinnacle. The Transportation Department says only two flights were stuck on the tarmac for four hours or more in January, an improvement from a year ago.
Energy Secretary Steven Chu says the Department of Energy is investing $154 million in a Texas clean coal project in Thompson, Texas, with Houston-based NRG Energy. Captured CO² from the capture and sequestration project can be used to help recover oil from a nearby field. Chu spoke at the 29th annual CERA Week, underway at the Hilton Americas downtown, organized by HIS Cambridge Energy Research Associates. Five days of panels and lectures are featuring top energy executives, policy makers and analysts.
Also speaking at CERA Week, Saudi Aramco CEO and President Khalid Al-Falih is calling on the oil industry to increase investments to keep up with world demand. Aramco is investing $90 billion in five years, with much of that in natural gas exploration, production and processing.
St. Petersburg-based Gazprom Neft says Russian taxes are hindering ventures with international oil companies, thwarting expansion. Gasprom Neft is the oil arm of Russia's gas export monopoly. The company's head of business development, Alexander Pankratov, told CERA Week conference attendees that the Finance Ministry is considering reinstating duties on oil fields in eastern Siberia after Russia ran its first budget deficit in a decade last year.
Job openings rose sharply earlier this year, a sign that employers might be preparing to step up hiring. The number of openings in January rose about 7.6 percent, to 2.7 million, compared with December, the Labor Department said. And the job openings rate climbed to 2.1 percent, the highest in nearly a year. That rate measures available jobs as a percentage of total employment. There are now about 5.5 unemployed people, on average, competing for each opening. That's still far more than the 1.7 people who were competing for each opening when the recession began. But it's down from just over 6 people per opening in December 2009. The gradually brightening jobs picture corresponds to what many job search Web sites are reporting.
Chevron says it will cut 2,000 jobs this year and will continue reducing its work force through 2011. The nation's second largest oil producer revealed the cuts as it outlined corporate strategy and major capital projects in a meeting with financial analysts in New York. California-based Chevron says its oil refining market conditions will be difficult for the next several years, so it plans to reduce costs and capital spending, improve efficiency and simplify its organization. Chevron also says it will concentrate its refining business in its North American and Asia-Pacific markets where it has the greatest competitive strength. CEO John Watson says in a statement that Chevron is poised for another decade of growth. The company expects to shift its portfolio toward natural gas and Asia.
The Energy Department still expects pump prices to climb past $3 per gallon as more motorists hit the road in the spring and summer seasons. The Energy Information Administration says for the full year, it sees a national average price of $2.84 per gallon, up from an average price of $2.35 per gallon in 2009. The EIA expects oil prices to average above $80 per barrel this spring, rising to an average of about $82 per barrel by the end of the year and to $85 per barrel by the end of 2011.
First the recalls, now the lawsuits. At least 89 class-action suits have been filed by Toyota owners who claim that massive safety recalls are causing the value of their vehicles to plummet. The suits could cost the automaker $3 billion or more. The figures don't include potential payouts for wrongful death and injury lawsuits, which could reach in the tens of millions each. One law professor says class-action suits "are more scary for Toyota" than injury cases. Tom Baker of the University of Pennsylvania says, "a super-big injury case would be $20 million. But he says there could be millions of individual car owners who could be owed $1,000 each.
An Arizona company that promised to protect consumers from identity theft has agreed to pay $12 million to settle false advertising claims brought by the Federal Trade Commission and 35 states. Tempe, Arizona-based Lifelock has heavily advertised its $10 per month fraud protection service for several years, promising that it was a "proven solution" that would protect consumers from fraud. Its president, Todd Davis, is famous for plastering his social security number on Lifelock ads to show how safe he feels from identity theft. A class action lawsuit said the ads seem to offer absolute protection against identity theft, and another suit says the $1 million guarantee covers only defects in Lifelock services and not actual ID theft. Lifelock agreed to pay $11 million in restitution to customers and $1 million to pay for the investigation. The FTC and the Arizona Attorney General's Office says Lifelock has agreed to stop saying it protects against all types of identity theft. The credit reporting agency Experian alleges that Lifelock doesn't give consumers any more protection for its $10 monthly fee than they can get for free on their own.
The Better Business Bureau says it saw a nearly ten percent rise in complaints last year. And the banking industry saw the biggest jump in unhappy customers. Complaints about banks spiked 42 percent to nearly 30,000 in 2009. That made banks the third most complained about industry, after cell phones and cable- and satellite-TV providers. It was the second year in a row that the banking industry saw a big jump in complaints. Complaints about banks rose 15 percent in 2008.
NASA's space shuttle manager says it wouldn't be hard to add more shuttle flights. The real question is money. Program Manager John Shannon said it costs $200 million a month to keep the fleet flying. Right now, the space shuttles are supposed to retire this fall. Four more missions are planned. Some in Congress, though, are pushing for additional flights. Last month, Ppresident Barack Obama killed NASA's Constellation program, which would have created a shuttle successor. Shannon says NASA already has a fuel tank and set of boosters for one additional flight. He says getting other shuttle parts would not be a problem.
Major business groups say President Barack Obama's health care overhaul is a job killer, and they're launching a multimillion-dollar ad campaign to take that message to voters. The U.S. Chamber of Commerce, the National Association of Manufacturers, and groups ranging from contractors to retailers said the Democratic health care bills would raise their expenses, while failing to control health care costs. Advertisements will start airing nationwide Wednesday on cable television and shift in a few days to 17 states, targeting moderate and conservative Democrats whose votes are critical to passing the bill in the House. The campaign is estimated to cost between $4 million and $10 million, with the insurance industry paying part of the cost.
Legislation to give additional months of unemployment benefits to people who have been out of a job for more than half a year has won key GOP support that means it will soon pass the Senate. The sweeping bill also would prevent doctors from absorbing a crippling cut in Medicare payments and extends health insurance subsidies for the unemployed through December. Eight Republicans voted with Democrats to defeat a GOP filibuster of the measure. The bill also extends a variety of tax breaks for businesses and individuals that are popular with Senators in both parties. The $66 billion cost of providing the extended unemployment checks is added directly to a budget deficit expected to hit $1.6 trillion this year.
The Internal Revenue Service is giving agents more flexibility to work with taxpayers who have seen their incomes drop during the recession. IRS Commissioner Doug Shulman said that the agency is loosening its rules for negotiating tax settlements for less than the amount owed. The agency also plans to start opening some local offices on Saturdays, beginning March 27th, to give taxpayers more opportunities to resolve their tax debts. The IRS expects to process 138 million individual tax returns this year. Most will qualify for refunds, but with the economy shedding more than eight million jobs since the start of the recession, many taxpayers will be unable to make timely payments.
Texas Lottery commissioners are again taking up the question of whether there was a conflict of interest between a company that consulted for the state while working for the lottery's main vendor, Gtech. For two months questions have lingered over whether there was any improper information sharing between Gtech and Gartner. So far, lottery officials say they see no impropriety. But competitor companies say Texas should start all over with its bidding to eliminate even the appearance of a conflict. Gartner was helping Texas write the bid specifications for its upcoming lottery contract. Meanwhile, Gartner also was doing work for Gtech, which plans to bid again for Texas' business.
The West Virginia Department of Education has awarded a contract to a Texas company to improve its food service operations at schools across the state. Houston-based Cybersoft Technologies said that its Primero software suite will be implemented on a centralized state database. The software will help school cashiers determine when a meal is served whether the student has special nutritional or medical needs, or is eligible for the free and reduced price meal program. It also will allow the transfer of students' eligibility for free and reduce price meals when they move to another county. State Office of Child Nutrition Executive Director Richard Goff says the software will simplify management of food service operations.
Interest rates are moving in a narrow range in the bond market after the treasury had another well-received auction of new bonds. The government reported higher demand for its sale of $40 billion in three-year notes. That soothed investors' ongoing uneasiness about the continuing flow of new bonds into the market. The yield on the ten-year Treasury note that matures in February 2020 is down to 3.71 percent from 3.72 percent late Monday. Its price is up 2/32nd to 99 9/32nd. The ten-year yield is a benchmark for many consumer loans.
Samsung and Panasonic will start selling 3-D TVs in U.S. stores this week. This inaugurates what all TV makers hope is the era of 3-D viewing in the living room. Samsung Electronics is announcing that it is selling two 3-D sets, combined with the required glasses and 3-D Blu-Ray players. The packages start at about $3,000. Panasonic has said it will sell its first 3-D set Wednesday. For now there isn't much 3-D programming to watch on these TVs. Samsung is including a 3-D copy of Monsters vs. Aliens on Blu-Ray discs with its packages.
Volunteer attorneys are providing advice on tax issues this evening until nine, in the Houston Bar Association's annual "Tax-a-Thon." It's a call-in at 713-759-1133.