Wednesday August 31st, 2005
by: Ed Mayberry, August 31, 2005 12:08:00 am
Energy Secretary Samuel Bodman says the government will tap the Strategic Petroleum Reserve to help keep oil flowing after Hurricane Katrina. The administration also moved to temporarily ease some pollution standards on gasoline and diesel fuel to avert shortages. Bodman announced the decision involving the reserves during a television interview on CNBC. The move is intended to supply those refineries still operating, taking the place of shipments from tankers or offshore oil platforms affected by the damaging storm. The stockpile consists of nearly 700 million barrels of oil kept in underground salt caverns along the Texas and Louisiana Gulf Coast. Two storage sites are near Freeport and two are in southern Louisiana. Production of natural gas and crude oil remains disrupted by the shutdown of a key terminal off Louisiana's coast and by the loss of electricity in the region. Prices at the gasoline pump have already risen sharply in many areas.
Crude oil prices fell in jittery trading today after the U. S. government said it would loan oil to refiners struggling in the wake of Hurricane Katrina. The oil from the Strategic Petroleum Reserve aim to keep production of gasoline and other fuels steady. But wholesale and retail gasoline prices leaped higher nationwide. Some of the knottiest issues still to be resolved will be restoring electricity to Gulf Coast pipelines and refineries. Those facilities are also suffering from flooding that could very well have left critical electric motors submerged. Industry analysts say it'll be days before a full assessment of the damage can be done.
The governors of Louisiana and Texas agreed today to a plan that would move some 23,000 Hurricane Katrina refugees from the New Orleans Superdome to Houston's Astrodome. Governor Rick Perry says he and Louisiana Governor Kathleen Blanco worked out the details in a telephone call today. Governor Perry also says Florida has made an urgent request for a two-week supply of gasoline because of a pipeline disruption caused by Katrina.
Perry says the transfer of gasoline will not lead to any disruptions of the Texas fuel supply, and the state will monitor emissions to make sure they fall within acceptable parameters. Perry says government agencies are responding now, but private help will be needed next.
The Federal Emergency Management has provided 475 buses for the transfer of Superdome evacuees. The Astrodome's schedule has been cleared through December for housing evacuees. Red Cross workers have begun transforming what was once known as the eighth wonder of the world--into temporary housing. Cots and blankets are being set up on the Astrodome floor. Other areas of the stadium are being configured to accommodate refugees with varying needs, including a nursery. Stadium managers are working to get televisions and find programming to allow people to keep up with the latest news about flooded New Orleans. Texas also is looking at possibly using the Ford Center in Beaumont for some long-term housing for other hurricane refugees from Louisiana.
The American Petroleum Institute is still assessing the damage caused by Hurricane Katrina to oil platforms, refineries and pipelines in the Gulf of Mexico. The institute's chief economist, John Felmy, says nine refineries are not operating in the Northern Gulf Region. He adds that crude oil, gasoline and natural gas pipelines are also down as companies check the damage caused by the storm. Institute president Red Cavaney estimates that it will take a week to come up with a solid damage estimate. As for repairs, Cavaney says the first step is to get the water out of the refinery and pipeline sites before power can be restored. He adds that Katrina "created much more havoc'' to the oil production system than other recent hurricanes.
Companies scrambled planes and helicopters to get an aerial view of their assets. They began escorting some previously evacuated workers back to offshore facilities to inspect rigs and underwater pipes. Some producers found that a rig or platform had disappeared or drifted, while others reported that damage appeared minimal. The owner of a runaway oil drilling platform that beached at Alabama's Dauphin Island says Hurricane Katrina blew it more than 60 miles from its original location. Houston-based contract driller Diamond Offshore Drilling says no one was aboard the rig when the hurricane broke it loose early Monday from a site 12 miles off the Louisiana coast. That site is about 66 miles southwest of Dauphin Island. Aerial photographs yesterday showed the huge Ocean Warwick rig stuck in sand in shallow waters on the sparsely populated west end of the island. Diamond Offshore says it hasn't been immediately able to get people to the rig to assess the damage. Dauphin Island is a vacation and weekend retreat off the Mobile County coast. Its population is usually about 1,200 people, but it was mostly deserted during the hurricane.
Katrina forced scores more flight cancellations involving New Orleans and other southern cities as airlines juggled their schedules around one of the worst storms on record. The New Orleans airport has reopened to allow humanitarian flights in and out during daylight hours, but officials are unsure when commercial service will resume. Houston-based Continental Airlines and its Continental Express commuter canceled 40 flights today and the same for tomorrow in and out of New Orleans and Gulfport. Hurricane-related disruptions also continued to have an impact far more worrisome for U. S. carriers than added costs and lost revenue from the flight turmoil: oil prices that spiked to record highs over $70.
Chiquita will shift some of its banana imports to its Freeport, Texas and Port Everglades, Florida facilities. That's after Hurricane Katrina severely damaged its port at Gulfport, Mississippi. The company says more imports of bananas and other fresh fruits and vegetables will run through its Texas and Florida facilities while it determines the extent of the damage in Mississippi. The Cincinnati-based company says all 20 of its employees in Gulfport are accounted for. The Gulfport port handled approximately 25 percent of the company's banana imports to the U. S. last year. Chiquita has five ports in America.
The first former Enron executive convicted by a jury of crimes in the company's 2001 collapse has become federal inmate. Dan O. Boyle's a former mid-level Enron finance executive. He reported to the federal low-security prison for men in Beaumont yesterday to begin serving a three-year, ten-month term. A federal jury in Houston found the 48-year-old former executive guilty of conspiracy, fraud and lying to congressional investigators about his role in a sham deal that inflated Enron profits. Jurors determined after a six-week trial that the Houston-based energy company's sale to the investment firm was a disguised loan. They determined that Enron wanted it to pump up earnings as it neared collapse.
Halliburton has agreed to accept mediation to settle workplace disputes. The agreement was announced jointly by the Houston-based energy services and construction company and the U. S. Equal Employment Opportunity Commission. Under the deal, discrimination charges against Halliburton will be sent to EEOC's mediation unit instead of an investigation. Halliburton joins a trend that has seen 90 other companies enter into mediation agreements. The EEOC says more than 72,000 cases have been handled through mediation since 1999. It says 70 percent were settled in about half the normal time for investigations.
The University of Texas at Austin has a new college--to be called the John A. and Katherine G. Jackson School of Geosciences. UT today announced the Texas Higher Education Coordinating Board approved its recommendation to establish the school as a separate unit at the college level. The new unit combines the Department of Geological Sciences, the Institute for Geophysics and the Bureau of Economic Geology. The three units will begin reporting to Dean William Fisher tomorrow. He will serve as the school's inaugural dean while the university conducts a national search for his replacement. The school was created as a result of a $25 million endowment by Dallas oilman and 1940 UT geology grad John A. Jackson. He later donated to the school the rest of his estate, valued at about $232 million.
Fine jewelry retailer Zale said that earnings fell nearly 41 percent. The company says that's due to disappointing results at its flagship Zales Jewelers chain in the May-July period. The company plans to close 30 to 35 of its upscale Bailey Banks & Biddle stores after the holidays. Chief executive Mary L. Forte suggested that even more Bailey Banks & Biddle stores could be closed as leases expire, eventually reducing the chain to about half its current size.