Friday PM March 19th, 2010
by: Ed Mayberry, March 20, 2010 1:03:09 am
Motorists are paying the highest prices for gas since October 2008. Retail gasoline prices rose on an expected increase in demand and as more expensive spring and summer blends of gasoline make their way to the pumps. The nationwide average hit about $2.80 a gallon. Prices have now jumped 19 cents in the past month, and are 88 cents higher than year-ago levels. The Energy Department and many industry experts expect prices to top $3 this spring. Oil prices drifted below $82 a barrel today in Asia, pulling back from a month-long rally that was fueled by mostly positive news about the U.S. economy.
Retail gasoline prices rose for a fourth week in a row in Texas and nationwide. The weekly AAA Texas gasoline price survey shows the average price of regular unleaded rose four cents to $2.68 per gallon this week. Nationally, the price rose three cents to $2.80 per gallon. The cheapest gasoline in the survey is in San Antonio, where it rose two cents to $2.62 per gallon. The most expensive gas is in El Paso, where the price rose a penny to $2.73 per gallon.
The FAA tells a Senate hearing that the private sector will fill the gap left by the shuttle program, but there's fierce opposition from members of the Texas delegation. Representatives Gene Green, Pete Olson, Sheila Jackson-Lee, Kevin Brady, John Culberson, Al Green, Ted Poe and Michael McCaul joined in Washington to express their support for NASA's Constellation program, which would be killed under the President's 2011 budget. That could affect America's ability to send humans into space and put thousands of jobs at Johnson Space Center and across the nation in jeopardy. Mayor Annise Parker also testified, saying she's not confident that jobs will come back quickly, if at all."The idea that we would end the shuttle program and leave a vacuum is very disturbing."
NASA's budget is waiting Congressional approval, as Florida and Texas lawmakers try to rally support to save the shuttle program.
The Hotel Alden has been acquired by Northwood Investors. The 97-room boutique hotel is located downtown on Prairie. Northwood Investors is a privately-held real estate investment advisor founded in 2006 by John Kukral, the former President and CEO of Blackstone Real Estate Advisors.
The chairman and CEO of Dallas-based Blockbuster says requirements in regulatory papers demand mentioning the possibility of Chapter 11 bankruptcy, and they did so last year, too. But Jim Keyes says Blockbuster worked out last year's debts, and will this year, too."I'm 100 percent confident that we will work out a solution. Blockbuster needs to survive. It serves a very important role in our society, to our consumers. The current challenge in our balance sheet is fixable."
Blockbuster is also getting into the kiosk business, like Redbox, installing some 10,000 of them by the end of the year. They'll also have a USB port to download movies onto thumb drives for watching on a plane or at home. Keyes says Blockbuster is also offering a movie mail business, like Netflix."With the advantage of customers being able to bring those movies back and exchange them in store. It's an added level of convenience. And then finally, adding to our complement, we have our digital download capabilities through Blockbuster On Demand--very different product offering from Netflix."
Keyes says Blockbuster has movies well before they are available to mail-based competitors.
Call them the final four: the four large cities that have made it through the great recession with the smallest increases in unemployment. Minneapolis, Buffalo, Oklahoma City and Rochester, New York, don't have much else in common. But a government report shows they've had the smallest increases in joblessness over the past two years among cities with at least one million people. None of the four relies on heavy manufacturing industries, such as autos or steel, which have been hit hard by the downturn. And all have avoided the extremes of the housing boom and bust that devastated much of California, Florida and Nevada. Overall, unemployment rose in nearly all 372 metro areas in January, the Labor Department said, because the weak recovery hasn't spurred much hiring.
Texas schools are prepping for what could be the biggest change in college assistance programs since Congress created them in the 1960s. Changes proposed in Washington would mean federally guaranteed student loans only offered by the government, ending a role for banks and other for-profit lenders who charge fees. The Austin American-Statesman reports that Texas universities are joining thousands across the country abandoning the bank-based system. The University of Texas this week announced it is cutting the program under which students borrow from private lenders. UT is opting for the U.S. Department of Education's William D. Ford Federal Direct Loan Program. Students, starting this summer, will borrow directly from the government. Texas A&M also is making the switch. Texas State University has offered the direct loan program since 1994.
Continental Airlines has reached a tentative agreement on a new four-year labor contract with dispatchers in the Transport Workers Union. The TWU is expected to hold a ratification vote in the coming weeks.
Boeing will speed up production plans for its 777 and 747 models in anticipation of greater demand from commercial airlines in a couple of years. The aircraft maker, based in Chicago, says it will increase production of its fuel-efficient 777 wide-body in mid-2011 to seven airplanes per month from five. The ramp-up was originally planned early 2012. Production of the latest version of Boeing's iconic 747 will increase to two airplanes per month from 1.5 in mid-2012. The production increase had been scheduled for mid-2013. Boeing sees the airline industry recovering this year, followed by a return to profitability in 2011. That should lead to demand for new aircraft in 2012 and beyond, the company says.
The cruise industry is rebounding, but not for the companies who build the giant ships. Executives from major shipyards said this week in Miami they're not getting enough orders for new ships to keep busy. If things don't pick up, they fear losing contractors and skilled workers, or even going under. The business of building cruise ships is highly specialized. Just three companies in Europe construct the vast majority of the world's fleet, all bound primarily for American companies. Cruise bookings and prices are up, but operators still aren't ready to order many new ships. Only one European yard has work scheduled past 2012. Builders say new ships will become more expensive and harder to make in the future if they can't retain employees and suppliers through this tough time.
The Environmental Protection Agency says it will study potential human health and water quality threats from an oil and natural gas drilling technique that injects massive amounts of water, sand and chemicals underground. Hydraulic fracturing, also known as fracking, has become widespread and unlocked extensive natural gas reserves, but the technique has raised concerns about environmental damage. EPA says that its $1.9 million study, expected to be done by 2012, will look at the industry's affect on groundwater, surface water, human health and the environment more generally. Drillers say the practice is safe, but concerns have mounted that unregulated fracking will taint drinking water, siphon off too much surface, deplete aquifers and produce briny wastewater that can kill fish.
Royal Dutch Shell says it has made a significant discovery of oil 25,000 feet below the surface in the Gulf of Mexico. The company says the deposits were found at the Appomattox Prospect in the Mississippi Canyon of the Gulf, an area where other rich deposits were discovered last year. Shell says it found oil at 25,077 feet (7,217 meters), then drilled an appraisal sidetrack and found more at 25,950 feet (7,910 meters). Shell operates and holds an 80 percent working interest in the prospect, with the Canadian-based Nexen holding the remaining 20 percent.
A Nigerian military spokesman says an oil facility in oil-rich southern Nigeria has been damaged by an attack. Lieutenant Colonel Timothy Antigha says the facility in Buguma was damaged by thieves. But a statement from the Joint Revolutionary Council claimed its fighters launched an assault early Friday on a facility that connects several crude oil storage fields. Antigha dismissed the militant attack claims. Even claims of attacks can affect global crude oil prices. A Nigeria-based Royal Dutch Shell spokesman said he could not immediately confirm the attack reports. Militants in the troubled Niger Delta have attacked pipelines, kidnapped petroleum company employees and fought government troops since January 2006.
Homeowners who are making their payments on time but are on the verge of default are finding a hidden whammy in the government's loan modification program. Once they apply, the mortgage company notifies the three big credit bureaus, which may reduce their credit scores up to 100 points. That makes it harder to get a loan, and may also make it tougher to get a job. Eileen Anderson of a housing counseling group on Long Island, New York, asks "why should people's credit be hurt even worse when they're trying to do the right thing?" But the credit rating industry defends the practice. A spokesman for a trade group says people who sign up for loan modifications wouldn't be asking for help unless they were having severe money troubles.
The U.S. military is growing increasingly concerned that proposed wind farms can disrupt or block radar designed to detect threats and protect America's skies, a problem that is stalling the alternative energy projects around the country. A top U.S. general told Congress that federal agencies need to work better together on a formal vetting process for the wind projects to prevent them from being built where they will interfere with radar defenses.
The head of the Federal Deposit Insurance Corporation says loopholes need to be filled in new senate legislation to ensure an end to the disastrous "too-big-to-fail" approach that brought the government rushing in to bail out big banks in the financial crisis. FDIC Chairman Sheila Bair says her agency has concerns about parts of the Senate bill unveiled this week, which "seem to allow the potential for backdoor bailouts" through the powers of the Federal Reserve. The bill would create a powerful Financial Stability Oversight Council to monitor the health of the financial sector and prevent firms from becoming "too big to fail." It could place big, interconnected financial institutions under the Fed's supervision.
As organic foods continue to grow in popularity, there are increasing calls for tighter federal monitoring of the industry. According to an internal Department of Agriculture investigation, the agency has failed to enforce penalties against some who have falsely marketed foods as organic. A report by the USDA's inspector general says the agency needs to step up enforcement against those who sell products under the "USDA organic" label but do not meet government standards to do so. The report says the department has made improvements in maintaining the integrity of the organic program in recent years, but needs to better handle complaints about potential violators. Oversight of the organic program has become more important and more closely scrutinized as the industry has exploded in popularity over the last decade, growing 14 to 21 percent annually with sales of $24.6 billion in 2008.
Federal regulators are seeking public comment on a petition by cable, satellite and phone companies that want new government rules to give them more clout in negotiations with TV broadcasters over programming. The move by the Federal Communications Commission follows a series of disputes over the fees that cable companies pay broadcasters to transmit their signals. The most recent breakdown in negotiations caused cablevision subscribers to miss the first 15 minutes of the Oscars when the ABC station in New York pulled its signal from the cable system. Among the companies seeking new FCC rules are Cablevision Systems, Time Warner Cable, DirecTV and Dish Network.
One of the most popular Web sites that let people post opinions about restaurants, shops and local services is being sued by several small businesses. These businesses claim that the site Yelp pressured them to advertise in exchange for getting negative reviews squashed. Since late February, at least three lawsuits seeking class action status have been filed against the site by a dozen companies. They complain that reviews on Yelp are manipulated depending on which companies advertise on the site and which ones do not. Yelp denies the claims and says the businesses that are suing don't understand how Yelp works. Yelp says some reviews might come and go because it relies on an automated program to weigh reviews and filter out ones that might be untrustworthy.
Another time, another hurricane led to plans for a massive dike to protect Galveston and Bolivar Peninsula from future deadly storms. The 1900 hurricane that walloped Galveston claimed at least 6,000 lives in the deadliest natural disaster in U.S. history. A 1902 blueprint, discovered at the Galveston District Clerk's Office weeks after 2008's Hurricane Ike, outlined a sprawling dike proposal that never became a reality. The Houston Chronicle reports that the nearly century-old plan would have put Galveston behind a seawall that extended to the bay side of the island. A Galveston seawall built in 1904, and extended several times, covers about 10 miles. Ike swamped parts of the city and left more than three dozen people dead in southeast Texas. The post-Ike proposal, from Texas A&M-Galveston Professor William Merrell, features a 55-mile barrier, 17 feet high, to be built along the Gulf Coast.
A free tax event is set for Saturday from 10 a.m. to 2 p.m. at St. Cyril's Catholic Church on Westheimer, organized by State Representative Kristi Thibaut, State Senator Rodney Ellis and the Neighborhood Tax Centers. A similar event is planned for March 27th at Alief Community Center on Bellaire. Families earning $50,000 or less or singles earning $30,000 or less are qualified to receive free assistance, which includes tax preparation by IRS-certified tax preparers.
The number of rigs actively exploring for oil and natural gas in the U.S. increased by 20 this week to 1,427. Houston-based Baker Hughes says that 939 rigs were exploring for natural gas and 474 for oil. Fourteen were listed as miscellaneous. A year ago this week, the rig count stood at 1,085. Texas gained five rigs. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom, and it fell to a record low of 488 in 1999.