Monday PM August 2nd, 2010
by: Ed Mayberry, August 2, 2010 9:08:00 pm
BP says it will start shoving mud and maybe cement into the blown-out oil well in the Gulf of Mexico on Tuesday in what could be one of the final steps to plug it for good. BP Senior Vice President Kent Wells says that crews will likely start the so-called “static kill” attempt if tests Monday determine the well can withstand the mud. There's no guarantee of success, and engineers still plan to follow it up days later with a similar procedure through relief wells they've been digging for months. But the oil giant's engineers and petroleum experts say it's the clearest path yet to choke the blown-out well and make it even easier for the crews digging the relief well to ensure oil can never again erupt from the mile-deep well.
The government's point man on the Gulf oil spill says several minor leaks have sprung near the blown-out well. Retired Coast Guard Admiral Thad Allen says that engineers are working to repair the leaks and that they will not delay the effort to plug the gusher for good.
Up to 9,000 people will be eligible for money from a $100 million fund set up by BP to help oil workers idled by a federal moratorium on deepwater drilling in the Gulf. That's according to a Louisiana charity picked by BP to run the program. The Baton Rouge Area Foundation, or BRAF, says it will take applications from September 1st to September 30th. The group's head, John Davies, said applications will be graded against each other to determine need, before any dollars are doled out. Grant checks ranging from $3,000 to $30,000--depending on financial hardship--will be mailed in Ooctober. BP announced last month it would pay for aid for rig workers hurt by the six-month drilling moratorium imposed after the April 20th explosion of the Deepwater Horizon.
Fishermen in part of Louisiana's St. Bernard Parish say they think the government reopened their area to fishing too early. Oil still washes up on marshes and protective boom lining the shore, months after a sea-bottom well began gushing crude from the bottom of the Gulf. Chemical dispersants whose long-term effects on sea life are unknown were used by BP to help break up the oil. The Federal Food and Drug Administration says smell tests on dozens of specimens from the area revealed barely traceable amounts of toxins. The tests were done not by chemical analysis, but by scientists trained to detect the smell of oil and dispersant. Fishermen worry they'll lose money even at the perception that their catch could be oily or contain toxic dispersants.
BP's chief operating officer says he would eat fish from the Gulf of Mexico and would let his family eat it, too. Doug Suttles took reporters on a boat tour of beaches and marshes Sunday about 25 miles south of Venice, Louisiana. Some nearby areas reopened to fishing late last week, and some observers have questioned whether it's really safe. Suttles says “they wouldn't open these waters…if it wasn't safe to eat the fish.” He also says he would eat it and “would serve it to my family.” He says he believes Gulf shore residents will still find oil and tar balls washing ashore into the winter.
Congressman Kevin Brady will speak about the Gulf of Mexico drilling moratorium at a meeting this evening at 7 p.m. at the King Street Patriot’s office on Hempstead. Bruce Vincent, chairman of the Independent Petroleum Association of America, is also slated to speak. Congressman Brady says he has asked President Obama to travel to Houston and meet with energy workers in fear of losing their jobs.
BP's plans to drill for oil off Britain's Shetland Isles and the Libyan coast are facing opposition after the company's Gulf oil spill. Environmental campaigners and some European lawmakers are calling for a U.S.-style moratorium on deepwater drilling. Greenpeace says a Gulf-style blow-out off Scotland's coast would wreak havoc on fragile habitats. And Italy's environment minister, Stefania Prestigiacomo, says a moratorium would give Europe time to work out a new strategy for any drilling in the Mediterranean.
An industry trade group says growth in the manufacturing sector weakened in July to the slowest pace this year. The Institute for Supply Management says its manufacturing index slipped to 55.5 in July from 56.2 in June. A reading above 50 indicates growth. Economists polled by Thomson Reuters had forecast a lower reading of 54.1. A swell of production in factories has helped lead the economic recovery as exports increased and companies rebuilt their stocks, which had dwindled during the downturn. ISM's index shows momentum has been slowing since spring as consumer demand lags investment from businesses.
Construction spending edged up in June but all the strength came from the government. Private sector activity in both housing and nonresidential projects fell. The Commerce Department says that construction spending rose 0.1 percent in June. While that was better than the decline economists had forecast, the government sharply revised down its estimate of activity in May to show a drop of one percent rather than the 0.2 percent dip initially reported. The lackluster performance for construction was the latest indicator that the overall economy slowed in the spring, raising worries about the durability of the recovery that began a year ago.
The Treasury Department says businesses have hired 5.6 million workers under a new program that provides tax breaks for hiring unemployed workers. The report, however, does not estimate how many of those jobs would have been added without the tax break. President Barack Obama signed a law in March that exempts businesses hiring people who have been unemployed for at least 60 days from paying the 6.2 percent social security payroll tax through December. Employers get an additional $1,000 credit if new workers stay on the job a full year.
Average retail gasoline prices in Houston remain relatively constant. They’ve fallen 0.1 percent per gallon in the past week, as the national average increased 0.6 cents, according to HoustonGasPrices.com. Houston’s average is around $2.51 per gallon, and the national average is around $2.75.
Federal Reserve Chairman Ben Bernanke suggests the country faces a long road ahead to get back to good economic health. Bernanke says the worst of the financial crisis is behind the nation. He says the economy is growing and that is an improvement after the deepest recession since the 1930s. “But we have a considerable way to go to achieve a full recovery in our economy, and many Americans are still grappling with unemployment, foreclosure and lost savings,” the Fed chief says in remarks prepared for delivery in South Carolina. It marks Bernanke's first public comments since a government report last week showed the recovery lost momentum in the spring.
Former Federal Reserve Chairman Alan Greenspan says he thinks the economy is having a modest recovery, but right now there's a “pause” in that recovery, so it feels like a “quasi-recession.” Greenspan says long-term unemployment is pulling the economy apart even though large banks are doing much better and large companies are in excellent shape. Greenspan predicts that unemployment will remain where it is, hovering around 9.5 percent, for the rest of the year. Cheering the comeback of the stock market, Greenspan tells NBC's Meet the Press that a rising stock market will do more to stimulate the economy than any of the remedies now being discussed.
After easing for four months, the nation's economic stress worsened in June. Rising bankruptcies in the west and foreclosures outside the sunbelt outweighed lower unemployment. That's according to the Associated Press' monthly analysis of conditions around the country. The setback halted a drop in month-to-month stress readings that had begun in February. In May, economic stress had declined from the previous month in 33 states. And in April, stress fell in every state but two. More than two-thirds of the nation's 3,141 counties, and 37 of 50 states, endured more hardship in June than in May.
Is the economy heading for a double dip recession? The odds are that it's not. There's only been one since World War II in the early 1980's. But with 15 million unemployed and growth slowing in the second quarter of the year, some economists fear it could be coming. They're the double dippers--the politicians, economists and analysts who foresee back-to-back recessions. But their warnings could become self-fulfilling prophecy if they frighten enough people into holding tightly onto their wallets. With consumer spending accounting for two-thirds of economic activity, anything that further rattles consumers can undercut recovery hopes. One economist explains the catch, saying some companies aren't willing to hire without more consumer spending, while many consumers aren't ready to spend until there's more hiring.
A Texas-based mortgage lender has agreed to replace its namesake chief executive and pay $4.5 million to settle North Carolina allegations the company pushed home buyers into mortgages they couldn't afford. Attorney General Roy Cooper and the State Banking Commission says that W.R. Starkey Mortgage agreed to a settlement that includes the resignation of chairman and CEO William Starkey, Jr. The Plano company will refund $26,000 to each of the 170 North Carolina families who bought manufactured homes from Phoenix Housing Group. Starkey Mortgage neither admitted nor denied the allegations by state officials, including that its employees faked information about borrowers to boost their credit scores and help them qualify for loans they otherwise wouldn't have gotten.
A study from Stanford University researchers says traditional farming has kept some greenhouse gases out of the atmosphere. Steven Davis is one of the three researchers who wrote the study. Davis says although traditional agriculture isn't perfect, the study found advances in farming have allowed farmers to grow much more food in the same space. That has reduced the need to plow billions of additional acres and thereby prevented the release of billions of tons of greenhouse gases. Farmers like Leon Corzine of Assumption, Illinois, welcome the results. Corzine says he's been saying for years that farmers have become more efficient. But critics like Bill Freese of the Center for Food Safety argue the study is flawed and masks farming's environmental problems.
Local shops nationwide are pulling in thousands of new customers with group coupons online. But the deals can sometimes work too well. Some of the nail salons, restaurants and other shops that have sold the coupons have struggled to handle the surge in clients. The coupons are sent by e-mail and Twitter and require a minimum number of participants to take effect. People might pay $20 for a massage that normally costs $84, for example. Chicago-based Groupon is credited with creating the group discount concept. For Crystal Nail Salon in Chicago, ratings at Web sites like Yelp.com tumbled it struggled to serve up the 5,100 manicure-pedicure combinations sold last month for 65 percent off.