Gasoline prices continue upward climb…Cross examination of Ken Lay continues on Monday…Offshore Technology Conference begins four-day stand at Reliant Center on Monday…
Texas gasoline prices rose this week for the eighth week in a row. The weekly AAA Texas gas price survey released today shows the price of self-serve regular averaging $2.89 per gallon. That’s six cents more than last week and almost 77 cents more than last year’s average. The national average is $2.93 per gallon–up a dime from last week. Auto club spokeswoman Rose Rougeau says prices are nearing the record levels seen immediately after Hurricane Katrina disrupted Gulf Coast refineries last year. But she says prices should start declining by Memorial Day once refineries finish switching over from MTBE-blend fuels to ethanol blends. The state’s costliest gas this week is found in Dallas and Fort Worth, where prices rose six cents to an average of $2.96 per gallon. The cheapest gas is in San Antonio, where it’s averaging $2.80 per gallon–up three cents from last week.
President Bush says Americans “expect to be treated fairly at the pump.” But Bush doesn’t support a proposal to tax the massive earnings that oil companies are reporting amid high gas and oil prices. At the White House Rose Garden, Bush told reporters, “the temptation in Washington is to tax everything.” Instead, Bush says oil companies need to re-invest their profits in projects to strengthen America’s energy system. Asked if he believes oil companies are ripping off drivers, he replied that he has “no evidence that there’s any rip-off taking place.” Now that oil costs so much, Bush says alternative fuels are more competitive. He says that will spur investment to give consumers “different options and different choices.”
Energy Secretary Samuel Bodman says the idea from Senate Republicans who want to give Americans a $100 tax rebate to offset higher gasoline costs “certainly has merit.” But Bodman tells CBS that leaders must watch for “unintended consequences” of measures aimed at relieving drivers frustrated by fuel expenses. He says President Bush is doing “everything that can be done that we know that works.” Bodman says hitting oil companies with a new tax on their surging profits is among the measures “that don’t work.” He says a “windfall tax,” as he put it, “skews the economic system.”
The Enron fraud and conspiracy trial takes its usual Friday off today before the cross-examination of Enron founder Ken Lay continues on Monday. So far, Lay has mostly kept his temper in check under prosecution grilling about such issues as personal stock sales and his candor. But it took one of the most arcane allegations in his fraud and conspiracy trial to raise his ire again–an accusation that he tried to dodge accounting rules. Lay often appeared to treat prosecutor John Hueston’s questioning like an irritant, but answered inquiries in a matter-of-fact tone. Yet he chastised the prosecutor during lengthy questioning on the accounting issue. He responded that he thought it “a real waste of the jury’s time.” Lay’s defense attorney George Secrest said he’s not surprised that the Hueston spent time on Lay’s attempt to contact Enron’s former risk manager a few weeks ago. Lay said he tried to phone Vince Kaminski nine days before he was called to the stand for the prosecution.
“Well, it’s a typical tactic by the (Enron) Task Force. They want to do everything they can to try any and every allegation or made-up scenario rather than having to deal with the actual allegations in this indictment. I’m not at all surprised.”
Defense attorney Daniel Petrocelli said time spent on issues that are not in the indictments, such as Skilling’s undisclosed investment in a former girlfriend’s company which had contracts with Enron, is not a good use of the jury’s time.
Defense attorneys say they expect to wrap up their case with character witnesses and experts next week, followed by another week of rebuttal witnesses from the government.
Houston-based Motiva Enterprises says it plans to expand its Port Arthur oil refinery into the nation’s largest. The joint venture of Saudi Refining and Shell Oil says it’s been studying its existing refineries with an eye toward expanding its U.S. refining capacity. It announced today that it’s decided to expand the throughput capacity at its Port Arthur plant by 325,000 barrels per day. Motiva president and CEO William Welte says the plan for the former Texaco refinery responds directly to the nation’s growing demand for gasoline, diesel and aviation fuels. But in expanding that capacity, Motiva says modern design and technology would limit any pollution increases from the expanded refinery. Motiva says it still needs to finalize some details before proceeding with the project, but hopes to begin construction next year with completion in 2010. Meanwhile, it’s still studying whether to expand refining capacity further at its refineries in Port Arthur and at Convent and Norco in Louisiana.
There’s fresh evidence that energy companies are sitting in high cotton as consumers dig deep to pay for gasoline California-based Chevron is reporting its first quarter profit rose 49 percent to $4 billion. Revenue topped $54 billion, a 31 percent increase from a year earlier. It is joining two rivals, ConocoPhillips and Exxon Mobil, which reported similarly stunning first-quarter profits. Combined, the three oil companies earned $15.7 billion during the three months of the year.
The four-day 2006 Offshore Technology Conference begins Monday at Reliant Center, showcasing the latest developments in offshore exploration and production. Conference vice chairman Don Vanderman says OTC means a lot for Houston.
“It takes a lot of people working a long time throughout the course of the year to pull the conference together, with this many attendees–you know, we’re expecting over 51,000 people again this year, 21 hundred exhibitors–and dealing with the new issues each year, and new growth topics, we have to keep it fresh. And I think we’ve done a real good job of keeping it fresh this year.”
Special attention is being given to developing new talent. Topics will include harvesting wind power from offshore locations and the way the industry deals with hurricanes.
The Business Leaders Confidence Index indicates that Texas business expects the state’s economy to outperform the national economy in the second quarter of 2006. Panelists expect the economy to fully recover from setbacks and uncertainties associated with Hurricanes Katrina and Rita. Of the six components of the survey, conducted by Compass Bank, respondents are most optimistic about sales, with 76 percent expecting moderate or strong increases. Their outlook for hiring and capital expenditures remains strong.
A strong rebound was registered by the U.S. economy in the first three months of this year. The Commerce Department reports first quarter growth was seen at an annual rate of 4.8 percent. The strongest showing for gross domestic product in two and a-half years, compares to the lackluster gain of just 1.7 percent in the final quarter of last year. The problem then was largely fallout from the Gulf Coast hurricanes. Since then, consumers, businesses and the government all increased activity. Even with the acceleration, inflation was reported to have moderated in the first quarter.
The government says employment costs posted their smallest increase in seven years in the first quarter. The Labor Department’s Employment Cost Index, rising six-tenths of one percent, suggests that the firm job market is not leading to huge gains in wages and benefits. It is a tamer report than economists expected. It is the slowest increase since early 1999. The index had risen eight-tenths of one percent in the fourth quarter of last year. The modest increase means that the Federal Reserve could consider standing down at some point in the coming months. In his testimony to a Congressional panel yesterday, Fed Chairman Ben Bernanke indicated that the central bank could soon pause in its rate-hiking campaign.