Tuesday PM December 14th, 2010
by: Ed Mayberry, December 14, 2010 11:12:00 pm
Environmental groups have filed a lawsuit against ExxonMobil, accusing the largest oil refinery in the U.S. of violating the federal Clean Air Act thousands of times. The Associated Press reported in July that Sierra Club and Environment Texas had served the plant with a 60-day notice of its intent to sue, as it's required to do under federal law. The lawsuit has now been filed in federal court in Houston. The lawsuit accuses the ExxonMobil refinery in Baytown of releasing eight million pounds of illegal pollution in the past five years. ExxonMobil denied the allegations and said it would fight the lawsuit. Sierra Club and Environment Texas recently reached multi-million dollar settlements with Shell and Chevron Phillips after filing similar suits against their Texas refineries.
Texas environmental regulators have awarded air permits to the Omaha developer of a cleaner coal-fired power plant, allowing construction to begin on a West Texas facility. The Texas Commission on Environmental Quality unanimously voted to give air permits to the Tenaska Trailblazer Energy Center in Sweetwater, Texas. Omaha-based Tenaska has said the 600 megawatt power plant will use new technology to recover up to 90 percent of its carbon dioxide emissions. The emissions will be sold to oil companies that will then pipe it underground to help recover oil. Carbon dioxide emissions from coal-fired power plants are believed to contribute to global warming. The Texas Carbon Capture and Storage Association says the facility will make the state a leader in carbon capture and storage technology.
Retail sales rose for a fifth straight month in November, as the biggest jump in department store sales in two years gave the holiday shopping season a strong start. The Commerce Department says retail sales increased 0.8 percent last month. That came after a 1.7 percent gain in October, which was propelled by a huge increase in auto sales. Auto sales retreated a bit in November. But excluding autos, sales rose 1.2 percent--the best showing since last March. Department store sales jumped 2.8 percent, the strongest advance in two years.
Inventories held by U.S. businesses rose for a tenth consecutive month in October as companies saw sales increase by the largest amount in seven months. The Commerce Department says business inventories increased 0.7 percent in October after a revised 1.3 percent rise in September. October sales jumped 1.4 percent, the biggest advance since a 2.5 percent rise in March. Continued strong gains in inventories and sales are viewed as encouraging signs. Rebuilding of stocks has played a major role in helping the economy recover from the deep recession that ended last year.
Wholesale prices outside the volatile food and energy categories rose modestly last month due to a large increase in the cost of new cars. But there was little sign of inflation in the report, which showed that the weak economy is keeping prices in check. The Labor Department says that the producer price index, which measures price changes before they reach the consumer, rose by 0.8 percent in November. Most of that rise was driven by a sharp increase in energy prices, particularly a 4.7 percent rise in the cost of gasoline. Excluding the volatile food and energy categories, so-called “core” producer prices rose by only 0.3 percent. In the past year, the core index has increased by only 1.2 percent, the smallest 12-month change since June.
Top corporate executives expect to hire more workers and spend more on their companies over the next six months. A survey from Business Roundtable, an association of CEOs of big U.S. companies, shows 45 percent of executives say they expect their companies to add more workers. That's the highest percentage who have said they planned to add jobs since the survey began in late 2002. It shows nearly six in ten CEOs expect to bump up capital spending, another signal of confidence in the economy, while 80 percent expect sales growth. The survey was conducted from November 8th to December 3rd, before the White House and Republican leaders cut a deal on extending tax cuts that economists think will help propel the economy.
The Senate would provide $8 billion in new loan guarantees for nuclear power plant construction under a large omnibus year-end spending bill. That's a bit more than the $7 billion the House approved last week--but far less than the $36 billion President Barack Obama requested in his budget. The bill includes $4 billion in loan guarantees for fossil fuels and $405 million in credit subsidy funding for renewable energy projects. And it would spend about $7 billion on the nuclear weapons program. Overall, the bill would provide $34.5 billion for the Energy Department, the Interior Department's water programs, and the Army Corps of Engineers. The bill would restore funding for 172 Corps projects in 41 states that Obama's budget proposed canceling.
The number two Senate Democrat says he believes the overwhelming margin by which the Senate advanced legislation maintaining Bush era tax cuts means the legislation finally will clear Congress, likely by Christmas. Assistant Democratic Leader Dick Durbin of Illinois tells CBS' The Early Show that the 83-15 tally by which the measure cleared a major procedural vote will help facilitate its passage in the House as well, where Democratic opposition has been more fierce. Durbin said “I think the House takes notice” of a lopsided Senate vote and predicted the bill would be “done by Christmas.” Durbin also said he understands opposition to the bill from liberal Democrats outraged over substantial relief given the wealthy in estate tax provisions. He said, “in the spirit of the season, it does say 'God bless Tiny Tim and Donald Trump.''' President Barack Obama has pleaded with Congress to clear the legislation after he worked out a compromise with Republicans, saying it’s badly needed to give a boost to middle class taxpayers and the economy.
A Congressional watchdog says the Obama administration's central foreclosure-prevention effort won't reach its original goals, and the government should come up with clear, measurable objectives for the two-year-old program. The Congressional Oversight Panel says it's nearly impossible for overseers and the public to determine whether the program is a success because the Treasury Department has failed to properly analyze it. The main Obama plan was designed to help people in financial trouble by lowering their monthly mortgage payments. The panel notes that Treasury's original goal of preventing three to four million foreclosures has been reduced several times.
The Federal Reserve says it will maintain the pace of its $600 billion Treasury bond-buying program because a slowly improving economy with high unemployment still needs the support. Fed policymakers say they'll continue to monitor the bond-buying program. They're leaving open the option of buying more bonds if the economy weakens, or less if it strengthens more than expected. The bond purchases are intended to lower long-term interest rates, lift stock prices and encourage higher spending. Critics contend that the program would do little to help the economy and could hurt it by unleashing inflation and speculative buying in assets like stocks. A broad tax-cut plan is emerging in Congress and is easing pressure on the Fed to stimulate growth through its bond purchases.
BP says it has agreed to sell most of its exploration and production assets in Pakistan to Hong Kong-based investment group United Energy Group. BP says that UEG will pay $775 million in cash for nine producing and exploration blocks in Sindh Province and four offshore exploration blocks in the Arabian Sea. The deal is expected to be completed in the first half of 2011. The sale is part of BP's program to divest up to $30 billion of assets by the end of next year to help pay for the Gulf of Mexico oil spill. Before the Pakistan deal, the London-based company had sales agreements would around $21 billion.
The International Air Transport Association says airlines will see net profits of $15.1 billion in 2010 due to a better-than-expected economic recovery and strong growth in Asia. In September, IATA had predicted an $8.9 billion industry profit this year. IATA Chief Economist Brian Pearce says “2011 is going to be a much more challenging period” as heavy debts and added taxes weigh on consumer travel spending in North America and Europe. The Geneva-based group representing some 230 international airlines forecasts net profits of $9.1 billion for the industry in 2011. IATA Chief Executive Giovanni Bisignani told a news conference that profit margins remain low and pose a threat to the industry in case of another economic shock.
Helicopters may be the last defense for Florida growers trying to save crops from deadly frost. The choppers are brought in to hover low over green bean and sweet corn fields to force warmer air downward. A few degrees difference can help prevent plant damage. An 11-day freeze in January wiped out many crops, from corn to kumquats. Florida is the largest winter producer of sweet corn in the U.S. It costs about $2,500 an hour to fly one helicopter over the crops. But the stakes are high. The value of production of sweet corn from Florida was $227 million last year. The flights are also risky. Last week, three helicopters crashed within a matter of hours in South Florida during missions to protect crops from the cold. All three pilots survived.