Thursday September 1st, 2005
by: Ed Mayberry, September 1, 2005 5:09:00 am
Gas prices are surging across the country, and some people are reportedly having trouble finding gasoline at all. Fuel supplies have been significantly disrupted by Hurricane Katrina, after the storm crippled refineries and oil rigs that provide one-third of the nation's gas supply. The storm shut down fuel pipelines and delayed deliveries. Bill Weatherspoon, executive director of the North Carolina Petroleum Council, says there's no gas shortage, but there is a delivery problem. Consumers are feeling the effects right away. Overnight, gas prices jumped by more than 50 cents a gallon in Ohio, 40 cents a gallon in Georgia and 30 cents a gallon in Maine. Houston gas prices are ranging from $2.41 to $3.36 a gallon. Gas stations from Phoenix to Milwaukee are experiencing shortages. One oil expert says he's worried about possible gas rationing. This, despite the government's decision to open the Strategic Petroleum Reserve to help make up for shortages caused by the storm.
Even before Katrina hit, a new survey shows Americans were expressing increased concern about rising gasoline prices. The Consumer Federation of America says a survey done last week found nearly three-quarters of those questioned were highly concerned about gasoline prices over the next five years. The survey suggests a higher level of concern since a similar survey was done in February. Back then, about 65 percent expressed such a level of concern. Not surprisingly, the anxiety was higher in households with less than $25,000-a-year in income. With growing dependence on imported oil, the group says more than half of Americans express great concern about dependency on Middle Eastern oil over the next five years. That was also higher than reported earlier this year.
The Port of Houston Authority expects that some cargo shipments originally destined for other southern ports may be redirected through Houston. The PHA has been receiving inquiries from various carriers, but so far not many ships have been diverted to Houston. Port chairman Jim Edmonds says it will be a while before ports in Louisiana, Alabama and Mississippi are back up for business.
Cargoes originally destined for New Orleans, Gulfport and Pascagoula are now being redirected to other ports.
Edmonds says the Port of Houston has warehouse space to accommodate short-term growth.
Vessel traffic is not being diverted to Houston from the Alabama State Port Authority's facilities in Mobile, however. Those facilities sustained minimal damage.
Oil and gas companies are stepping up efforts to reach hundreds of employees who remain unaccounted for days after Hurricane Katrina slammed the Gulf of Mexico. Companies want their workers to call hotlines posted on company Web sites or, at the very least, get word to supervisors through someone that they're safe. Companies also want to let workers know about housing and other assistance available to them, should they need it. Shell Oil plans to keep workers on the payroll with benefits--whether they report to work or not--and offer assistance such as a housing allowance, interest free loans and cash. San Antonio-based Valero Energy also plans to provide assistance, "financial or otherwise.'' Exxon Mobil says it established a hotline for displaced employees to call. New Orleans-based Energy Partners is moving its entire headquarters to Houston, as owners of Houston-area office buildings draw up programs to provide commercial space to tenants for a limited period.
El Paso Corporation says it has nearly completed the process of re-staffing and inspecting its production facilities along the Gulf Coast, with initial inspections indicating minimal damage. Cal Dive International also says its facilities experienced no significant damage. But Apache Corporation says it lost eight of its production platforms during the hurricane. The Houston Exploration Company says all six of its rigs in the Gulf will be operational in the next three to four days. Noble says it lost one production platform in the storm. Marathon Oil says production at its Garyville, Louisiana refinery and two offshore oil and gas production platforms offshore remain shut-in. The refinery was not flooded during the storm, and although power has been restored, the refinery is dependent upon restoration of other utilities.
It's usually the United States that's helping others. Now it's on the receiving end. Some two dozen countries have offered post-hurricane assistance. That includes Venezuela, which has been a target of frequent criticism by the Bush administration. Venezuela's Citgo Petroleum Corporation pledged a $1 million donation. A State Department spokesman says "no offer that can help alleviate the suffering of the people in the afflicted area will be refused.'' U. S. embassies abroad are hearing offers of boats, aircraft, tents, blankets, generators, cash assistance and medical teams.
The Houston Apartment Association is creating a database on its Web site that will include information on apartment availabilities and specials for victims of the hurricane. Some apartment owners are waiving deposits, offering month-to-month leases, giving free rent or taking delayed payments to accommodate those who will receive financial assistance.
More crews are pouring into Louisiana to try to restore electricity following Hurricane Katrina. TXU Electric Delivery today reports the second wave of personnel being dispatched brings its total number of relief employees and contractors to 770. TXU crews will assist Central Louisiana Electric Company in the Slidell/Covington area. The Dallas-based company says those workers will include line and pole setting crews and engineering designers. TXU says plans are in the works to establish a "small TXU city'' in Covington for its own people, so the crews can be self-sufficient. The options include possibly setting up a tent, with laundry, sleeping areas and a water supply. The company also has about 100 trucks and other vehicles in the area.
Houston Texans owner Bob McNair says he'll will match up to $1 million in donations made to Hurricane Katrina relief during tonight's pre-season game against Tampa Bay. All donations will go to the American Red Cross as part of the Texans Care campaign. During tonight's game, people can make donations by calling 866-GO-TEXANS or on the team's Web site. Reliant Energy has already pledged $500,000 to the cause, and Texans vice chairman Philip Burguieres has said he will give $250,000.
Valero Energy Corporation says it's completed a previously announced merger with Premcor Incorporated to make Valero North America's largest oil refiner. Valero paid $6.9 billion and assumed $1.5 billion in debt in exchange for ownership of four refineries. With the acquisition, Valero now has 18 refineries. Two of them sat in the path of Hurricane Katrina, which surged through the Gulf Coast on Monday. The company's St. Charles refinery in Norco, Louisiana is shut down and will be for up to two weeks. Its Krotz Springs, Louisiana refinery is operating at minimum capacity.
A French judge has issued an international arrest warrant for Continental Airlines welder John Taylor in connection with the 2000 Concorde crash near Paris that killed 113. Taylor is wanted for questioning about a titanium ally strip that fell off a Continental jet that took off from Charles de Gaulle Airport shortly before, apparently causing one of the Concorde's tires to burst, sending fragments that punctured the supersonic jet's fuel tanks.
Seven-Eleven Incorporated said today a board committee will review 7-11 Japan's cash-tender offer to buy up 7-11 shares it doesn't already own. The Dallas-based convenience-store chain says it expects the panel to advise shareholders on or before September 19th of its view of the $1.2 billion offer. Seven-Eleven Japan already owns a controlling stake in 7-11 Incorporated. Today, it announced the cash tender for the 27 percent stake it doesn't already own. Seven-Eleven Japan says it hopes to take the world's largest convenience store chain private. Seven-Eleven Japan is Japan's largest convenience store operator with more than 10,000 locations. Seven-Eleven Incorporated operates or franchises approximately 5,800 7-11 stores in the United states and Canada.
Dallas-based clothing maker Haggar announced today that it's being sold. It says a final agreement has been reached for it to be acquired by Infinity Associates, Perseus and Symphony Holdings Limited for about $212 million. Haggar shareholders will get $29 in cash for each Haggar common share. Haggar shares closed on the NASDAQ exchange yesterday at $23.14 per share. Haggar President Frank Bracken says in a company statement issued today that Haggar will continue business as usual after the closing of the deal. Haggar chairman and CEO J.M. Haggar III says the acquisition will enable the company to speed up its global sourcing strategy and strengthen its marketing power.
Pioneer Natural Resources announced today that it'll buy back $1 billion of its stock and raise its dividend 20 percent. But the Dallas area-based independent oil and gas driller also says it'll stop its exploration in the deepwater Gulf of Mexico. The share buyback program would represent about 15 percent of Pioneer's market value. It says it'll pay for the shares through borrowing and the sale of assets, including properties in the Gulf of Mexico and southern Argentina. It'll also cut its exploration budget from 30 percent of total capital to between 15 percent and 20 percent. Company officials say the moves would focus their portfolio on onshore drilling in North America and result in more consistent production. Pioneer had entered deepwater gulf exploration in 1998.
Spirit Airlines in January will begin service at Dallas-Fort Worth International Airport. The low-fare carrier will offer nonstop service to Fort Lauderdale-Hollywood International Airport in Florida, from where it flies to the Caribbean. DFW says Spirit will be the sixth low-fare carrier at the airport, which has been trying to attract more airlines since Delta cut back on flights. DFW also is locked in a bitter dispute with Southwest Airlines over the Wright Amendment. The regulation limits long-haul flights from Dallas Love Field, where Southwest is based. Southwest wants the rule lifted. American Airlines, which is the nation's largest carrier, calls DFW airport home and wants the Wright Amendment to stay in place. DFW has given Fort Lauderdale-based Spirit more than $250,000 to help begin service.