Tuesday AM February 12th, 2008
by: Ed Mayberry, February 12, 2008 5:02:00 am
Climate change and the world economy are themes for this year's Cambridge Energy Research Associates annual conference this week in Houston. The focus is on oil and natural gas, electric and nuclear power. CERA researcher David Hobbs says energy security will be discussed, although the definition of energy security differs.
"It's a reflection of the uncertainty that people feel, caused in part by prices being high for many of the primary resources that we use in the world today. But also because everyday we read newspaper reports that suggest that our hold on the ability to deliver this reliably and cheaply is increasingly tenuous." Ed: "You do have to look at geopolitics in discussing energy and the future of energy." "That's absolutely right. Energy is increasingly becoming a political item, whether it is aligned with people's foreign policy and more importantly, it seems to be influencing the economies of many countries today. From the perspective of the upstream oil and gas business, access to the opportunities necessary to continue to grow their businesses is a primary concern. And that is in the face of increasing resource nationalism, in the face of fiscal burdens, in the face of--in some cases--worsening security issues. Those are really all combining to make the business as tough as I think it's ever been."
Hobbs says alternative energy resources will be discussed.
"Indeed, and we have Rajendra Pachauri, the chairman of the IPCC (Intergovernmental Panel on Climate Change) will be addressing conference on Tuesday. But also a number of important keynote speakers dealing with issues around energy and the environment and climate change as a particular important component of this." Ed: "Who attends these events?" "Typically, it's senior executives from a range of energy businesses--from the oil business, gas, power, from different facets of the renewables business. But also people from the investment community, policy-makers, and people genuinely who are interested in the increasingly interconnected field of energy and the economy. We'll be looking obviously convention fuels—oil, gas, coal, nuclear, but also increasingly the volumes of energy being created from unconventional sources, from renewable sources, and the rapidly increasing levels of investment over the course of the next 20-some years. We'll be seeing around $7 trillion spent on renewables and clean energy, and that is an increasingly large share of total energy investments. So clearly it will be getting a lot of weight in the course of the four days of the conference."
Tuesday is focused on the oil industry. Wednesday is natural gas day, and Thursday and Friday are electric power days.
A former partner at a prestigious New York law firm is headed to prison. William Lerach was sentenced in Los Angeles to two years behind bars for his role in a kickback scheme. It involved class-action lawsuits against some of the country's biggest corporations. Lerach's legal victories include a $7 billion judgment against Enron. Authorities say his former firm made an estimated $250 million over two decades by filing legal actions on behalf of professional plaintiffs, who then received kickbacks. Seven people, including three former partners at the firm, have pleaded guilty. Prosecutors say the lawsuits targeted companies including AT&T, Lucent, Worldcom, Microsoft and Prudential Insurance.
President Bush says the economy is structurally sound for the long haul, and that the stimulus package approved by Congress will help deal with uncertainties in the short term. The president signed an economic report to be delivered to Congress, an annual tradition like his State of the Union address and his budget proposal. On Wednesday, Bush expects to sign the stimulus package of tax rebates and incentives for businesses. He said "money will be going directly to American workers and families and individuals.'' Bush, trying to use his bully pulpit to emphasize the good points about the economy, encouraged businesses to start picturing how they can invest their freed-up capital. Overall, he said the stimulus plan is "going to help deal with the uncertainties'' of the shaky economy. As for the broader economic report, Bush said it indicates that "our economy is structurally sound in the long term and that we're dealing with uncertainties in the short term.'' The question, he said, is what can be done about it--and he said Congress and the administration responded by working together.
Though Washington's economic stimulus plan may come too late to prevent a recession this year, experts say the $168 billion boost could mean the difference between a quick downturn and something much more serious. The measure that President Bush plans to sign this week will send government payments to more than 130 million people. Checks will range from $300 to $1,200; households with children get an additional $300 per child. Businesses benefit, too, through tax breaks to increase investment spending on plants and equipment. Many economists expect anywhere from two-fifths to two-thirds of rebate checks to be spent in the first six months. If that happens, the aid plan will do its job of helping the economy rebound after a prolonged housing slump and a credit squeeze. Checks could be mailed out as early as May.
Lawmakers are looking for new ways to pass proposals that didn't make it into the economic stimulus package. An extension of tax breaks for the renewable energy industry isn't part of the stimulus package President Bush is about to sign but that could come up in the House this week. Senate Democrats had to jettison other proposals, although Senate Majority Leader Harry Reid stresses it doesn't mean those ideas are dead. Some lawmakers want the stimulus package to focus on the housing industry, while others are pushing for infrastructure projects.
A new poll suggests that most Americans believe the country is in a recession. An AP-Ipsos poll finds that 61 percent of people surveyed think the U.S. is suffering its first recession since 2001. The economy stalled in the final three months of last year largely because of a depressed housing market and a credit crunch. For all of 2007, the economy only grew by 2.2 percent, the weakest showing since 2002. The job market is faltering, as seen in a report showing employers cutting jobs last month for the first time in more than four years. And high energy and food prices are taking a toll on paychecks, with earnings falling nearly one percent last year. Respondents to the AT-Ipsos poll expressed concerns about neighbors not being able to sell homes and about not being able to buy items as they once had before. The biggest concern: retirement funds. Fifty-nine percent say they're worried about the value of their stocks and retirement investments dropping.
The U.S. economy may be stumbling, but J.C. Penney's CEO says Penney's biggest brand launch ever couldn't happen at a better time. Chairman and CEO Myron "Mike'' Ullman III tells the Associated Press that Plano-based Penney is "very well positioned to take market share,'' given the competitive climate. Ullman says the American Living brand is expected to be a billion-dollar business in the next few years, accounting for five percent of the department store chain's annual sales. It spans 40 categories, from women's and men's clothing to home furnishings, shoes and luggage. The merchandise has begun arriving in stores over the past few weeks. He says it reflects the Ralph Lauren aesthetic--pink cotton polo shirts, floral bedspreads and madras shorts, for example. Since taking over the helm in 2004, Ullman has spearheaded a store expansion plan while developing more upscale, exclusive labels with designers like Nicole Miller and home furnishing expert Chris Madden.
Mailing a letter will soon cost a penny more. The U.S. Postal Service says the price of a first class stamp will rise to 42 cents starting May 12th. The price of the "forever" stamp will go up at the same time. But until then, those stamps can still be had for 41 cents and will remain good after the rate increase. The post office says it has sold five billion "forever" stamps since they were introduced last April. It's planning to have another five billion in stock to meet the expected demand before the price change. Charges for other services are also changing. But specifics on prices for Priority and Express Mail will be announced later. Postage rates last went up last May, when a first class stamp jumped two cents.
Continental Airlines on Thursday plans to pay employees a record $158 million in profit sharing--based on its 2007 results. Houston-based Continental said last month that its pretax earnings for last year rose 53 percent to $566 million, and revenue increased eight percent to $14.23 billion. Last year, the nation's fourth-largest airline paid out $111 million in profit sharing, based on 2006 results. Continental has more than 45,000 employees.
Starbucks is teaming up with AT&T and will start offering a mix of free and paid wireless Internet service in more than 7,000 of its U.S. coffee shops beginning this spring. The world's largest specialty coffee retailer announced the move Monday, ending a partnership it's had with T-Mobile for the past six years. Starbucks will give customers that use its Starbucks purchase card two hours of free wireless access per day. After that, it will cost $3.99 for a two-hour session. Monthly memberships will cost $19.99 and include access to any of AT&T's 70,000 hot spots worldwide. People who already use AT&T as their Internet service provider will have unlimited wi-fi access at Starbucks.
Dell has stopped selling many computers with processors from Advanced Micro Devices on its Web site. Round Rock-based Dell will continue selling the items through retailers. The news is a setback for AMD, which wooed Dell for years before breaking the computer maker's exclusive supplier relationship with Intel in 2006. Intel still made the processors used in most computers sold on Dell.com. But AMD raised its profile in the chip field by being inside some Dell machines. Dell spokesman David Frink, called the development: "not even all that interesting.'' He says Dell regularly adjusts its product offerings and how customers can purchase them. An AMD spokesman says his company could benefit from Dell's push into retail sales, and the shift at Dell.com is not a near-term significant financial impact on AMD.
A Dallas company is challenging the state contract awarded to an Australian business to market and design Texas specialty license plates. Pinnacle Technical Resources is a minority-owned business that was beaten out by My Plates. It argues in its protest that My Plates didn't provide the best financial deal for Texas. Under the deal approved in November, Texas gets 30 percent to 45 percent of the revenue per plate sold and at least $40 million over the first five years of the contract. Pinnacle officials say their company guaranteed the state $60 million over the first five years of the contract. The purchasing director for the Texas Department of Transportation denied Pinnacle's first protest, but the company said it would appeal to the agency's executive director.
Town dance halls top a preservation group's new list of the most endangered historic places in Texas. Advocates warn that the Texas dance hall tradition could be wiped out if there's no revival for the buildings. Many still have wooden floors and walls--or dilapidated wiring and plumbing. The annual list of the state's most endangered places is produced by the nonprofit group: Preservation Texas. Members raise money and awareness for saving historic buildings. The 2008 list includes dance halls in general and 12 other specific sites in dire need of repair, ranging from an old school near Amarillo to a crumbling Spanish port near Bayside.