Friday February 10th, 2006
by: Ed Mayberry, February 10, 2006 5:02:00 am
The first witness in the conspiracy and fraud trial of two former Enron executives is expected back on the stand Monday. That's when testimony resumes in the federal trial of Ken Lay and Jeff Skilling. Lay attorney Mike Ramsey says he expects to finish questioning Mark Koenig on Monday. The first prosecution witness in the fraud and conspiracy trial has spent six days in the witness chair. Earlier, Enron's former investor relations chief acknowledged that Lay had to jump back into nuts-and-bolts management of his company when he resumed the role of chief executive. Koenig described how Lay took over when Skilling resigned less than four months before Enron collapsed into bankruptcy in December of 2001. Lay was chairman of Enron throughout 2001, but he handed over the CEO position to Skilling in February that year. Skilling abruptly resigned six months later. The government's next witness is expected to be Kenneth Rice, former head of Enron's Broadband unit and once a close ally to Skilling. Both Koenig and Rice are among 16 ex-Enron executives who have pleaded guilty and are cooperating with prosecutors.
Texas gasoline prices drifted lower for a second week in a row this week. The weekly AAA Texas Gas Price Survey found the retail price of regular unleaded self-serve averaging $2.25 per gallon statewide. That's down two cents. Dallas has the highest average price at the pump, averaging $2.27 per gallon. That's down three cents. The lowest price is in Corpus Christi, which saw the biggest slide in the average price of six cents to $2.09. Regular self-serve unleaded averaged $2.33 per gallon nationwide, down nearly three cents. Auto club spokeswoman Rose Rougeau says unseasonably warm winter weather in the United States is helping keep crude oil prices below $65 a barrel. That's helping keep retail gasoline prices lower. But she says it's still unclear how long those price declines will continue in the face of global concerns over Iran's nuclear plans.
O'Connor & Associates has released its Office and Retail Performance Updates, chronicling recent activity in the Houston area. The downtown office market continues to be plagued by average vacancies close to 20 percent and stagnant rents. Fourth-quarter news included EPCO's acquisition of 1100 Louisiana, where they occupy 300,000 square feet. Wells Real Estate Funds paid the highest per-square-foot price in the Houston office market's history for 5 Houston Center, paying $286 a square foot. Burlington Resources and Bank One are expected to vacate the Central Business District this year after acquisitions by ConocoPhillips and Chase. Calpine reduced its space in the same building Burlington is expected to vacate, and Calpine Center is now known by its address, 717 Texas. Foley's will disappear this year in Houston, along with Kaplan's Ben-Hur in the Heights. Foley's will be re-branded as Macy's. Wulfe & Company will demolish the Pavilions Center, and O'Connor & Associates says Whole Foods may anchor the mixed-use redevelopment of the site.
Cable television provider revenue rose faster than inflation last year. But federal regulators said today that cable's share of the TV-viewing market declined as satellite services gained ground. The Federal Communications Commission said cable revenue rose an estimated 10.8 percent from June 2004 through June 2005. The number of cable households fell by nearly one million, and cable's share of households with something more than an antenna fell to 69 percent from almost 72 percent a year earlier. Satellite's share rose to almost 28 percent from 25 percent. The findings were released as the FCC approved its annual report on video competition. The commission didn't indicate how much cable rates rose, but Commissioner Michael Copps said they were too high. Texas last year made it easier for phone companies to offer video by bypassing the slow process of winning local franchises. Instead, one franchise covers the whole state. Verizon and San Antonio-based AT&T have begun offering TV service. The commission met in Keller, near Fort Worth, the first town to receive Verizon TV service.
The FutureGen Industrial Alliance has announced the site selection process to choose the host site for the world's first coal-fueled near-zero emissions power plant. A draft Request for Proposals will be issued in late February 2006, with a final RFP targeted for release in March 2006. All states competing to be selected as the host site for FutureGen must submit their proposals in May 2006. The FutureGen Alliance will choose the final project site in the fall of 2007. Construction will begin following the completion of the permitting process, with the plant operational by 2012. FutureGen is designed to produce electricity and hydrogen and to capture and store carbon dioxide.
Energy executives and analysts have an idea they say will ease gas shortages after last year's hurricanes destroyed three percent of the nation's annual production. Their solution? Placing above-ground storage tanks along the nation's coasts where energy companies can store imported liquefied natural gas--also known as LNG. Once stored in these receiving terminals, the natural gas would be shipped via pipelines throughout the United States. But the idea isn't without debate. Proponents say the tanks are safe and a vital means to energy companies' organic growth. But critics say these storage tanks--each the size of a baseball field--are potentially dangerous, especially in densely populated regions, and an easy terrorist target. Houston-based ConocoPhillips is currently collaborating on a terminal in Quintana, about 90 miles south of Houston. The terminal will likely to come online sometime next year.
Regulators have approved five new LNG terminals in Texas and three in Louisiana, but companies have struggled to find a home away from the Gulf Coast. Sempra isn't the only company using a cross-border strategy in the energy industry's rush to LNG. Terminals are being built in Canada to fuel the eastern United States--one by suburban Houston-based Anadarko Petroleum in Nova Scotia, another by the Spanish company Repsol YPF in New Brunswick. In late 2003, Sempra Energy's bid to build the first liquefied natural gas terminal in Western North America was in deep trouble. Plans to import gas from Bolivia sparked a popular uprising that killed dozens of people and toppled the government there. Today, Sempra is leading the race. It turned to Indonesia for the gas, and is building a $1 billion facility on pristine Mexican shoreline, 50 miles south of San Diego. The terminal, to be completed in early 2008, will be a key fuel source for Californians for decades to come. The decision to build in Mexico is paying off big for Sempra, which owns Southern California's two major gas utilities. Rivals who want to build LNG terminals on California's coast are being stymied by environmental and grass-roots opposition groups. For Sempra, the choice was easy. Chairman and CEO Donald Felinger says the Mexican government greeted the Sempra project with open arms.
Shell has restored Gulf of Mexico production to 340,000 barrels of equivalent daily since the hurricanes. That compares to 450,000 barrels prior to Hurricanes Katrina and Rita. The storms had knocked production down to 200,000 barrels per day. The company says progress continues on the Mars platform, which is expected to start production by the middle of 2006. Full production is expected to be restored in the second half of 2006.
The Board of Directors of Anadarko Petroleum has authorized a two-for-one split of its common stock. Anadarko's common stock should begin trading on a post-split basis on May 29th.
The government says the U.S. trade deficit surged to a record $725 billion last year. It swelled because of record imports of oil, food, cars and other consumer goods. Not only did the deficit with China hit an all-time high. So did the nation's deficits with Japan, Europe, OPEC, Canada, Mexico and South and Central America. The '05 record, reported by the Commerce Department, marks an increase of more than 17 percent from the previous year. For December, the deficit rose one and a-half percent to $65.7 billion, the third highest monthly figure on record.
By one measure, consumers' confidence in the economy and their own financial outlook has climbed to a 16-month high. The RBC Cash Index, from the Ipsos polling firm, comes in at 96.1. That's a gain of more than 17 points from last month. And it's is the best showing since October 2004. Along with better feelings about the job market, analysts say the mood was helped by mild winter weather in many parts of the country, keeping a lid on heating bills. The government reported last week that the nation's unemployment rate dropped to 4.7 percent in January, the lowest in four and a-half years. Wages, which had trailed inflation for most workers last year, showed a solid gain.
The Robert Half International staffing service has opened a new branch location on the Northwest Freeway. The new branch includes two specialized staffing divisions: Accountemps, which provides temporary accounting, finance and bookkeeping professionals, and OfficeTeam, providing temporary administrative and office personnel.
Houston apartment developer Marvy Finger has acquired land near the convention center at the edge of a future urban park planned by the city. Finger signed a 99-year ground lease for the 1.4-acre site bordered by Austin, LaBranch, McKinney and Lamar. The city last year purchased several blocks in front of the George R. Brown Convention Center to develop a 12-acre urban park by the fall of 2007.
A Dallas-based cabinet maker will open a 650,000-square-foot factory in Greenville, Mississippi, later this year. Trio Industries Group said in a statement today that the Greenville facility will produce finished wood products using a polymer-based acrylic dry powder coating. The Mississippi-Yazoo Delta plant will employ an initial 100 workers. Equipment delivery and operational startup are scheduled by late 2006. Trio's initial production line will produce kitchen cabinets to be sold through large home improvement retailers and housing developers. Officials said Trio's decision will lead to kitchen cabinets and bathroom vanities produced in the Delta being sold in large retail stores nationwide.
The Quality of Life Coalition has launched a new Website highlighting issues affecting the region's quality of life. The site identifies four areas that affect quality of life--parks and recreation, trees and landscaping, billboard and signage and litter and graffiti. The Quality of Life Coalition is an umbrella organization established in 1999, composed ob 82 business, civic and charitable organizations.
As consumers, we all have our unique, frustrating experiences on the hardest-to-open packages. Consumer Reports has been feeling our pain, out with a list of those which it believes are the worst of the worst. Number-one is the "hard-plastic clamshell,'' such as one used for a cordless phone set. The magazine says it couldn't be cut with scissors, requiring box cutter or razor blade. It says it took more than nine minutes to get the thing open. After that came similarly-tough toy packaging. Number-three on the list involves disc and game packaging. These items are often software, like CD's and video games. Ever tried cutting the cellophane? Fourth on the list: pills in blister packs, noting trouble with perforations. Number-five is cereal boxes with those inner liners that never seem to tear just right, often spilling the food onto the floor.
The Wachovia Foundation has donated $1 million to help Texas students develop leadership skills, succeed in school and go to college. It's in the form of two grants of $500,000 each to Advancement Via Individual Determination and to Communities in Schools. The first group will use the funds to expand into new schools in Houston and other Texas cities, and the second group will use the funds to establish a new program targeting at-risk 4th and 5th grade students.