Wednesday PM May 16th, 2007

Congressmen from Houston introduce legislation concerning refinery operations...CSB chair finds "similarities" between fatal BP Texas City explosion and Prudoe Bay, Alaska pipeline leak...Halliburton chairman and CEO leaves for new home and office in Dubai this week...

An explosion at BP's Texas City refinery that killed 15 people in 2005 continues to generate a call for regulatory reform. Two U.S. House Democrats from Houston have introduced legislation concerning refinery operations. They say the bills are crafted in response to the blast that also injured 170 people and is considered the worst U.S. industrial accident since 1990. Congressman Gene Green has proposed requiring employers to report contract workers' injuries, deaths and illnesses to the Occupational Safety and Health Administration. Green says federal law doesn't currently require deaths to be reported to OSHA if they involve contract workers. Congressman Al Green has introduced legislation to make employers criminally liable for deaths of contract employees at their work sites if safety standards were willfully violated. The two lawmakers say many workers are employed by contract firms rather than the companies on whose site they work in the energy industry.

U.S. Chemical Safety Board Chair Carolyn Merritt told members of a U.S. House of Representatives subcommittee that she found "striking similarities" between the causes of the fatal BP Texas City accident and the company's pipeline failure at Prudhoe Bay, Alaska. Merritt told the House Committee on Energy and Commerce Subcommittee on Investigations and Oversight that the root causes identified by an internal BP audit of the Prudhoe Bay incident have strong echoes in Texas City. She said BP's decision-making was driven by budget and production pressures. Merritt said investigations of both incidents uncovered deficiencies in how BP managed the safety of process changes, and there was flawed communication of lessons learned, decentralization of safety functions and high management turnover. Before the Houseo panel, BP America President Robert Malone acknowledged today that budget pressures made it difficult for workers trying to operate pipelines safely in Alaska. The Prudhoe Bay pipeline suffered extensive corrosion due to lack of maintenance, resulting in the leakage last year of more than 200,000 gallons of oil. In the March 2005 BP Texas City explosion, 15 people were killed—most had been working in or near portable trailers placed near hazardous process equipment.


Valero's Houston refinery will be offline until sometime next week because of boiler and steam problems, according to the Houston Chronicle. Production is halted on gasoline and distillates like diesel fuel and heating oil. The company says output is sold into the wider U.S. market through interstate pipelines, so it does not anticipate specific locations will be affected. Refinery outages across the country have been blamed for some recent increases in gasoline prices.


Halliburton Chairman and Chief Executive Dave Lesar said today he'll leave for his new home and office in Dubai at week's end. He made the announcement at Halliburton's annual shareholders meeting in The Woodlands. It comes as the Houston-based oilfield services conglomerate begins splitting its corporate headquarters between the United States and the United Arab Emirates. Halliburton announced the decision to create a second corporate office in March, saying it'll place the company closer to important oil and gas markets. Lesar repeated that the company will gain no special tax or legal advantages from the move.


Labor leaders confronted the CEO of American Airlines' parent company over management bonuses. But shareholders rejected a union resolution to let shareholders vote on executive pay. Union leaders said the bonuses broke a management promise to share gains as the company recovered from huge losses. But AMR Corporation Chief Executive Gerard Arpey declined to back down on the bonuses, which totaled about $160 million in stock. Arpey moved to end the meeting abruptly after a pilot said executives were focused on raising Fort Worth-based AMR's stock price instead of growing the company. Arpey said he's cautiously optimistic about AMR's prospects this year. But he says he worries about the effect of upstart carriers in the United States and airlines adding more flights on international routes. AMR earned a profit last year--its first since 2000. Shortly after the AMR meeting, shareholders of Dallas-based Southwest Airlines breezed through a perfunctory meeting. Chief Executive Gary Kelly announced a new $500 million share-repurchase program and said the carrier would also sell seats through the Galileo ticket-distribution network.


New York Attorney General Andrew Cuomo is taking Dell to court. In a lawsuit filed in Albany, Cuomo accuses the Round Rock-based personal computer maker and its financial services affiliate of deceiving customers to increase sales. A spokesman for Cuomo's office confirms the lawsuit was filed but declines to discuss details. Court officials say the case had not yet been assigned to a judge and documents aren't available to the public yet. But according to a story posted on the Wall Street Journal Web site, Cuomo's lawsuit claims that Dell and Dell Financial Services have engaged in fraud, false advertising and deceptive business practices. The lawsuit accuses Dell of attracting customers with misleading financing terms, rebates and other benefits, but then sticking them with high interest on lines of credit. According to the Journal, Cuomo accuses Dell of failing to come through with customer rebates, warranties and service contracts. A spokesman for the company says that Dell's conduct has been honorable.


Bio photo of Ed Mayberry

Ed Mayberry

Local Anchor, All Things Considered

Ed Mayberry has worked in radio since 1971, with many of those years spent on the rock 'n' roll disc jockey side of the business...