Friday PM May 14th, 2010

BP continues effort to plug leak in Gulf of Mexico…Chevron cutting 570 jobs in Houston…Internal Revenue Service to host weekend nationwide Open House to help small businesses and individuals solve tax problems…

For a spill now nearly half the size of Exxon Valdez, it's hard to pin down where the oil from the Deepwater Horizon disaster has gone. A picture can be drawn from a publicly available model called the Automated Data Inquiry for Oil Spills. The model shows that about 35 percent of a hypothetical 4.8 million gallon spill of light Louisiana crude oil released in conditions similar to those found in the Gulf now would evaporate. It also shows that between 50 percent and 60 percent of the oil would remain in or on the water and the rest would be dispersed in the ocean. Ed Overton, a Louisiana State University chemist analyzing the spill, says he thinks most of the oil is floating within a foot of the surface.

Louisiana wildlife officials say workers have found huge tar balls littering the beach at Port Fourchon, some of them eight inches across. Laura DeSlatte, a spokeswoman for the Louisiana Department of Wildlife and Fisheries, says that the glossy globs of oil were found along the entire beach at Port Fourchon. Workers from her department have not yet seen so much oil washed up anywhere else. A news release said that biologists found about 25 nickel-sized tar balls per square foot from the beach's southwestern end to its midpoint. They also found more than a dozen tar balls on the banks of Belle Pass, a few hundred yards north of the waterway's mouth.

Authorities are testing suspected "tar balls" found on Mississippi shores to see if they came from the oil spill in the Gulf of Mexico. Dan Turner, a spokesman for Governor Haley Barbour, says "very sparsely scattered, small tar balls" were found in recent days on the beaches of West Ship Island, Horn Island, Pass Christian and Long Beach. Turner said the substance may have came from controlled burns on the oil gushing from the site of the April 20th rig explosion. A small piece of boom with an "oily substance" also was found on the Mississippi coast. Turner said authorities are trying to determine where it came from and if it had oil on it from the spill. Tar balls also have turned up in Alabama.

Florida is preparing for the worst, although there's no indication that oil is heading to its beaches at this time. Officials are using this time for preparation, according to On-Scene Coordinator Timyn Rice.

"We have people out in the field collecting water samples, sediment samples, air samples, biological samples, in order to establish some baseline information that's current for out entire area. So if our shoreline is impacted, we're really in a good position to be able to respond, clean up, conduct damage assessments and work towards restoration if that becomes necessary. But again, I want to reiterate that there are no current or projected impacts in our area."

BP's latest plan to plug the gushing oil pipe in the Gulf of Mexico includes robots, a small tube and a stopper. If all goes well, a stopper will be put in place today to fill the gap between a six-inch tube and the jagged, 21-inch pipe to keep oil from leaking into the sea. Undersea robots were trying to thread the tube into the jagged pipe yesterday. BP officials say the plan is for the tube to siphon the crude to a tanker a mile above, on the surface. An explosion on April 20th destroyed the well's rig, killed 11 workers and set off the catastrophic spill. Since then more than four million gallons of crude have found their way into the Gulf of Mexico. The slick they've formed is more than the size of Delaware and Rhode Island combined.

The White House is asking Congress to approve $10 million for potential litigation costs arising from the oil spill in the Gulf of Mexico. It's part of a larger legislative package the administration sent to Capitol Hill this week including help for fishermen and a proposal to raise limits on how much BP might have to pay for economic damages from the spill. A letter from the Office of Management and Budget to Congressional leaders says the $10 million would help the Justice Department pay unspecified litigation costs the administration might not be able to recover from BP or from an emergency cleanup fund. The White House wants to make BP pay all costs, but the request is the latest indication that some burden may fall on taxpayers.


An environmental group challenging Shell Oil's plans to drill exploratory wells off Alaska's coast calls a federal appeals court decision disappointing, given the catastrophic Gulf of Mexico spill. A federal appeals court in Portland, Oregon ruled that the federal government met its obligations to consider the potential threat to wildlife and the risk for disaster before it approved the project. Environmental groups say oil companies are increasing risk by going for deep water oil. And they contend Shell would be ill-equipped to deal with a spill similar to BP's in Arctic waters. A Shell spokesman says the exploration plan has concluded that a large oil spill would be rare.


Chevron is cutting 570 jobs in Houston and 925 jobs in San Francisco. About 620 jobs are being eliminated at Chevron's San Ramon, California, headquarters. It's part of a previously-announced reorganization of its refining and marketing operations.


Officials say the fire at a small San Antonio refinery last week appears to have been an accident, but the cause remains under investigation. San Antonio Fire Chief Charles Hood says all signs point to accidental ignition of the fire that began when a tanker truck blew up at the Age Refining facility. The fire destroyed three loading tanks filled with jet fuel, gasoline and other petroleum products, but it threatened to spread throughout the site until firefighters successfully cut off the fuel supply. Hood says the department's response went "by the book," but the incident will be used for further training. The one person critically injured in the blast remains hospitalized in critical condition.


Growth in retail sales slowed sharply in April as consumers eased up their spending after a busy March. The Commerce Department says retail sales rose 0.4 percent last month, better than the 0.2 percent increase economists had expected but far below the 2.1 percent surge in March. Excluding autos, retail sales were up 0.4 percent, matching expectations. The overall gain marked the seventh straight monthly increase, offering hope that consumer spending will keep supporting the economy in the months ahead.


Businesses boosted their inventories for a third straight month in March, a further sign that they are gaining confidence in the strength of the recovery. The Commerce Department says that businesses increased inventories by 0.4 percent in March, matching expectations. Total business sales rose 2.3 percent, the best showing in four months and the sixth straight gain in sales. The hope is that sustained increases in demand will encourage businesses to step up orders and restock depleted shelves, giving a boost to factories and prompting them to rehire workers.


Industrial production logged a stronger-than-expected 0.8 percent gain in April, more evidence that manufacturing is playing a leading role in powering the economic recovery. The Federal Reserve says the increase in output at the nation's factories, mines and utilities marked an improvement from the 0.2 percent rise in March. The performance of the industrial sector in April was even stronger than the 0.6 percent gain that economists were predicting. Factories--the single biggest slice of industrial activity--ratcheted up production by a brisk one percent for the second straight month. Gains were broad-based.


The Austin City Council has voted to cut business and travel ties with Arizona to protest the state's new law targeting illegal immigrants. A unanimous council vote adopted the resolution proposed by council member Mike Martinez. The Austin American-Statesman reports the resolution calls for an end to all city business travel to Arizona. Exceptions are travel for police investigations, providing humanitarian aid or to protect Austin residents' health and safety. Council member Bill Spelman is a co-sponsor of the resolution. He says this will not mean "a dramatic shift in the city's policies." City Controller Diana Thomas says Austin has no contracts with nor investments in the state of Arizona. Also, 48 city employees took 20 business trips to Arizona over the past year at a cost of $47,908.


Four former Continental Airlines pilots are suing the Houston-based air carrier, claiming it's not calculating retirement benefits correctly. Pension benefits had been calculated as a percentage of a pilot's salary for the 60 months prior to retirement. But the suit claims the airline counted leaves as interruptions and used a previous 60-month period to calculate payouts.


The National Federation of Independent Business is joining a federal lawsuit against the health care overhaul filed in Florida by 20 state attorneys general and governors. The nation's most influential small business lobby is joining a court challenge that argues that Americans cannot be required under the constitution to obtain insurance coverage. All but one of the state attorneys general are Republicans, and the case coincides with an election year. With 350,000 members, the NFIB boasts a far-reaching network of local activists. One of its pillars of the new health care law is the requirement, effective in 2014, that most Americans carry health insurance. The Obama administration argues that the coverage requirements rest on a solid constitutional foundation: the power of Congress to regulate interstate commerce.


The Senate has voted to force big banks to reduce fees for debit card transactions and permit merchants to offer customer discounts if they use cash, checks or debit cards for purchases. The Senate voted 64-33 to include the fee requirement in a package of new financial rules the Senate is considering to ward off a repeat of the financial crisis. The vote was a major defeat for banks, which lobbied heavily against it. But the measure obtained heavy bipartisan support and surpassed a 60-vote threshold for passage. The measure from Senator Richard Durbin of Illinois would force credit card companies to charge businesses less for debit card transactions than credit card payments.

The Senate is moving to end the ability of financial institutions to choose the credit rating agencies that rate their investment products. The measure the Senate voted in favor of would shake up how Wall Street assesses risks. The Senate also has voted to end the government's reliance on ratings agencies as a standard for determining credit worthiness. The measure if even more drastic and could force financial institutions to vouch for their own offerings. The success of the back-to-back votes appeared to catch Senate Banking Committee Chairman Christopher Dodd of Connecticut by surprise. The two measures were attached as amendments to a broader package of financial rules the Senate is considering to as a response to the 2008 financial crisis.


Wineries nationwide are worried a bill before Congress could roll back gains they've made in shipping wine directly to consumers. The bill would reinforce states' rights to regulate alcohol sales and make it harder to sue to overturn state alcohol laws. Wholesale distributors proposed the bill, saying it will keep wine from minors, limit alcohol consumption and ensure states control sales. But wineries and wine drinkers say it could prevent consumers from buying wine from wineries and having it shipped to their homes. A grass-roots group supporting the wine industry set up a Website to fight the bill. More than 12,000 people have gone to the site--freethegrapes.org--and sent letters to Congress opposing the bill.


U.S. retail sales of video games fell 26 percent in April from a year earlier, to $766.2 million. There were few game launches in April. Market researcher NPD group said hardware sales plunged 37 percent to $249.3 million in April compared with the same month last year. Software sales dropped 22 percent to $398.5 million, NPD says. It says sales for the year through the end of April were down 11 percent compared with the same four-month period last year. Though not as big as the Christmas holiday season, Easter does give game sales a lift, says Jesse Divnich, an analyst with Electronic Entertainment Design and Research.


Carlson Hotels is opening its 13th Park Inn property—the Park Inn Houston North Hotel and Conference Center, near George Bush Intercontinental Airport. J.D. Power and Associates rated Park Inn number one in 2009 in Europe for guest satisfaction in the mid-scale segment.


The Internal Revenue Service is hosting a special nationwide Open House tomorrow to help small businesses and individuals solve tax problems. IRS locations are equipped to handle notices and payments, return preparation, audits and other issues. At the March 27th event, 88 percent of taxpayers who came in for help had their issues resolved the same day.


Bio photo of Ed Mayberry

Ed Mayberry

Local Anchor, All Things Considered

Ed Mayberry has worked in radio since 1971, with many of those years spent on the rock 'n' roll disc jockey side of the business...