Survey results: U.S. depends too much on foreign oil; rising gasoline prices impact spending habits; Texas workers believe economy stronger; economists see diminished outlook for growth…
A new survey suggests that concern among Americans about dependence on foreign oil could translate into support for action to solve the problem. The survey commissioned by the Consumer Federation of America says 84 percent of those asked worry that the U.S. depends too much on foreign sources of oil, with 52 percent expressing great concern. At the same time, 55 percent of Americans mistakenly believe the U.S. holds more than twenty percent of the world’s oil reserves. In fact, the nation has less than three percent of this oil. According to the poll, 80 percent would support required increases in gas mileage–even though it might cost them more.
Consumers surveyed by the National Retail Federation’s 2007 Gas Prices Consumer Intentions and Actions Survey say rising gasoline prices have impacted their spending habits, according to the Houston Business Journal. More than 74 percent believe fluctuating gas prices have impacted their spending, with the same amount taking fewer shopping trips and 40 percent shopping closer to home. Nearly 31 percent are watching out for sales and more than 23 percent report using more coupons.
More Texas workers believe the economy is getting stronger, according to the Houston Business Journal, reporting on results of Spherion’s April Texas Employment Report. Thirty-one percent of Texans responding to the survey say they believe the economy is improving, compared to 19 percent of U.S. workers. About 72 percent of Texas workers say they have confidence in the future of their companies, but 41 percent expect to be looking for a new job. The Texas Employee Confidence Index rose 1.5 points to 62.2 between March and April.
Some of the nation’s top economists say the outlook for growth has diminished this year. But things should improve in 2008. The National Association for Business Economics panel looks for growth of just 2.3 percent this year. That’s down from the outlook offered just a few months ago. The group of 48 top forecasters figures the risk of recession in the coming year is about one-in-four. They say the housing market won’t hit bottom until the end of this year. After that, they see the economy picking up steam, with growth topping three percent in 2008.
The U.S. Supreme Court sided with the nation’s largest local phone companies in a consumer lawsuit alleging anti-competitive business practices. The court ruled seven-to-two that the suit lacked any specific allegations that the companies secretly agreed not to compete in each other’s territories for local telephone and high-speed Internet service. The case stems from changes to the Telecommunications Law in 1996. The local phone companies were to open their monopoly markets to competition. In return, they were given the opportunity to enter long distance business. At the time, the four companies controlled more than 90 percent of the market for local phone service. The defendants were Bell Atlantic, BellSouth, Qwest Communications and SBC Communications. Bell Atlantic is now part of Verizon Communications. San Antonio-based SBC bought AT&T and adopted the AT&T brand before merging with BellSouth. Consumers represented by a prominent firm of plaintiffs’ attorneys sued when the companies kept to their own territories rather than competing. The consumers also alleged the local phone companies conspired to keep smaller companies from competing successfully in the larger companies’ markets.
AT&T is accelerating its rebranding of Cingular Wireless, pulling down signs in its 1,800 stores and other vestiges of what was one of the best-known brands in the market. The logo and name will also disappear from new devices that are being sold. San Antonio-based AT&T began phasing out the orange “jack” logo in January after it got full ownership of Cingular in the buyout of BellSouth. But starting today, the logo will disappear in favor of the blue AT&T globe–though orange will remain in the color palette. That’s according to Wendy Clark, AT&T senior vice president of advertising. AT&T–a rebrand of SBC Communications after the company bought the long-distance business of Ma Bell–decided to give Cingular the AT&T name to help marry its various telecommunications and television services together. The company had said it planned to finish the rebrand before the busy holiday season.
Alltel–owner of the nation’s largest cell-phone network–says it’s agreed to a buyout by a pair of investment firms. The company says the sale agreement is with Fort Worth-based TPG Capital, formerly Texas Pacific Group, and New York-based GS Capital Partners. The deal worth about $24.8 billion must still be approved by the company’s shareholders. That includes a $27.5 billion sale price and assumption of $2.7 billion in Alltel debt. The agreement calls for the two firms to acquire all of the outstanding common stock of Alltel for $71.50 per share in cash. According to Alltel, that represents a 23 percent premium over Alltel’s share price before word of a possible buyout first appeared in the media on December 29th.
The Woodlands-based CB&I has been given a $500 million contract to add capacity to a liquified natural gas import terminal in southeast England, according to the Houston Business Journal. CB&I will increase the National Grid terminal capacity from 700 million cubic feet per day to 2.1 billion cubic feet per day. Work is expected to be complete by 2010.
Houston-based Natural Resource Partners is building a new coal preparation plant and railroad loading operation in southern West Virginia. NRP says construction has already begun on the $16 million plant facility near Eckman, West Virginia. While the prep plant should be up and running by the third quarter, NRP says work on the railroad loading operation is expected to take until next year. NRP says it’s hired Pittsburgh-based Taggart Global USA to build the project. NRP owns and manages coal properties and coal handling and transportation operations in Appalachia, the Illinois basin and the Powder River basin. Although based in Houston, NRP’s operational headquarters are in Huntington, West Virginia.
Houston-based Pioneer Companies is being acquired by Missouri-based Olin Corporation—a merger that will close in the second half of 2007, according to the Houston Business Journal. Olin says that makes the combined company the number three player in chlor-alkali and the number one player in industrial bleach in North America.
Anadarko Petroleum is divesting its interest in Anadarko Qatar to a subsidiary of Occidental Petroleum for $350 million, according to the Houston Business Journal. Los Angeles-based Occidental will take over interest in all but two blocks in Qatar.
Houston Community College is investing $7.6 million to upgrade its West Loop campus in Bellaire between Bissonnet and U.S. Highway 59, according to the Houston Business Journal. The expansion will include 39 additional classrooms and laboratories, new faculty offices, extra student areas and a food court.
The Metropolitan Transit Authority of Harris County has received a $1.5 million grant from the U.S. Transportation Security Administration to improve rail security, according to the Houston Business Journal. The security grant will provide terrorism awareness and response training for operators, supervisors, mid-level managers and operations control center staff.
Freight railroads and their investors can feel confident no new railroads will try to create a competing network–the cost is too high. So the six major players in the industry will continue helping businesses connect with suppliers and customers for years to come. That competitive advantage, along with strong demand from shippers, is part of why billionaire Warren Buffett’s company, Berkshire Hathaway, invested in three freight railroads. They are Fort Worth-based Burlington Northern Santa Fe, as well as Union Pacific and Norfolk Southern. The Associated Press reports are all trading near their 52-week highs. The same is true for the three other major North American freight railroads Berkshire didn’t buy: CSX, Canadian National Railway and Canadian Pacific Railway. Analyst Edward Wolfe with Bear Stearns says in a research report that the high-profile rail investors have helped generate new interest in the industry.
A cash crunch is fast approaching for the government trust fund that pays to build and repair highways and bridges. The federal tax on a gallon of gas hasn’t risen in 14 years, and Congress is reluctant to increase it. People are demanding more fuel-efficient vehicles–and with less gasoline used, there are fewer dollars for the Federal Highway Trust Fund. States already are looking for other places for road-building money–including road tolls and consumption-based sales taxes. They worry that the fund’s looming shortage could hurt their efforts to address traffic congestion as well as environmental and safety problems caused by inadequate roads. The situation can only get worse in 2009, when revenues for the trust fund begin falling short of planned federal spending. The fund provides the overwhelming bulk of federal dollars spent on highways. It gets its money mainly from the 18.4-cents-a-gallon excise tax that drivers pay at the pump. About 45 percent of all highway spending comes from the trust fund. With less money available from the fund, states must turn elsewhere for money to expand their highways and fill their potholes. That prospect is making lots of people unhappy. Texas is one of several states that have built or are building high-occupancy toll lanes where drivers can pay to have a congestion-free path before them. With the population of Texas increasing by 1,000 people a day, state transportation officials say they can’t afford to postpone road projects.
On former grazing land more than 15 miles north of downtown Fort Worth, bulldozers are carving from the prairie pads for upscale apartment buildings. The apartments are being built by the real estate arm of the Perot family, which is best known for industrial projects but has never developed multifamily housing on its own. The company viewed apartments as risky, complicated and low-reward. Now it’s having a change of heart. Mike Berry is president of the Perot-controlled Hillwood. He says the apartment market “is coming back. Rents are up, occupancy is up, and construction costs aren’t so out of control.” From Texas to California and Florida, the humble rental apartment market is coming back after a slump in the early part of this decade. Back then, low interest rates and easy financing meant renters could buy homes or condominiums without much increase in their monthly payments. But that changed after several years of rapidly rising home prices and relatively flat or even falling rents. Rentals are also getting a boost from tighter lending standards, which make it harder for people with marginal credit ratings to buy property. Some developers believe the biggest factor is the weak housing market itself. During hot housing markets, like the early 2000s, young people believed that if they didn’t buy immediately, prices would rise so fast that they could never afford a house or condo. That urgency is gone.
Dallas City Council members are set to consider an ordinance Wednesday that would darken thousands of city lights for four hours each night. According to an ordinance draft, businesses citywide would have to switch off most of their exterior and signage lighting between 2 a.m. and 6 a.m. Violators could face fines of up to $2,000. The proposed ordinance is part of an effort to conserve energy and reduce power plant emissions. Other measures to be considered by the council on Wednesday include strict regulations on idling trucks, pollutant-belching vehicles and where the city purchases its cement. Exemptions in Dallas would include security, hospital, traffic control, residential and transportation lighting. State and federal government facilities, as well as businesses open and operating in those late-night hours, would also be exempt. Not everyone is enchanted with the idea of Dallas’ distinctive skyline going dark.