The Obama administration’s point man for the government’s response to the Gulf Coast oil spill is acknowledging that reliable numbers on the severity of the crisis are hard to get. Speaking at a Washington briefing, Coast Guard Admiral Thad Allen conceded: “I think we’re still dealing with the flow estimate. We’re still trying to refine those numbers.” Allen gave reporters an update a day after a government task force said the blown-out well may have been spewing as much as 2.1 million gallons of oil per day–or twice as much as the government’s previous worst-case estimate. Allen said officials still hope to be able to capture all it as equipment gets upgraded and more becomes available.
A marine biologist says new estimates for the amount of oil spilling out may quadruple the harmful effects on the environment. Paul Montagna, who is a marine biologist at Texas A&M University in Corpus Christi, says the more oil spewing from the leaking well means it can travel over a larger distance. He told the Associated Press that the effects of the oil spill will likely be seen for at least a decade–and perhaps longer.
New York Mayor Michael Bloomberg has ventured into lonely territory, saying the world should not rush to judgment in the Gulf of Mexico oil spill disaster. The billionaire former CEO mayor is known for defending private businesses dealing with public relations problems. Bloomberg says on his weekly radio show that the head of British Petroleum “didn’t exactly go down there and blow up the well.” He added that everyone might want to wait to assign blame because the expertise of BP is needed to fix the problem. Scientists say the spill could now be in the realm of 42 million to more than 100 million gallons of oil.
President Barack Obama is again urging Congress to send him a package of tax breaks and other incentives to help small businesses grow and create jobs. The legislation would eliminate capital gains taxes for investments in such companies and encourage people to open businesses by offering tax relief to small startups. Obama says his administration is constantly hearing from small businesses that want to keep the workers they have and hire more employees, but are having trouble getting credit. Obama spoke at a White House Rose Garden event with small business owners, his second such event in recent weeks.
Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability of the economic recovery. The Commerce Department says that spending fell 1.2 percent last month. Auto sales were down 1.7 percent but there was widespread weakness in a number of areas. Excluding autos, sales fell 1.1 percent. The big decline cast new doubts about the strength of the economic recovery. Consumer spending accounts for 70 percent of total economic activity. Economists are concerned that households will start trimming outlays as they continued to be battered by high unemployment.
Inventories held by businesses rose for a fourth consecutive month in April while total business sales increased for a 13th consecutive month. The Commerce Department says that inventories were up 0.4 percent in April after an upwardly revised estimate of a 0.7 percent gain in March. Total business sales rose 0.6 percent in April, the 13th consecutive monthly gain in sales. The hope is that demand will remain strong enough to convince businesses to keep restocking their shelves. But a separate report shows that retail sales took a big tumble in May, casting a cloud over hopes for future strength in demand.
Consumers who take out home loans guaranteed by the Federal Housing Administration could soon pay higher fees after House lawmakers approved a bill giving the agency power to hike monthly premiums. Under changes being considered by FHA officials, a borrower with a mortgage of $170,000 would pay an extra $42 a month. Officials say the agency needs the power to stabilize its finances, which have deteriorated because of the foreclosure crisis. The agency is the primary source of mortgages for first-time homebuyers.
Retail gasoline prices fell again across Texas for a seventh consecutive week. The weekly AAA Texas survey shows regular unleaded gasoline is selling for an average of $2.59 per gallon across Texas–three cents less than last week. Nationally, the average price is $2.71 per gallon, a penny less than last week. The cheapest gasoline in Texas is, again, found in the Fort Worth-Arlington area where regular is averaging $2.53 per gallon–three cents less than last week. The most expensive gasoline is in Corpus Christi, where the average price remained unchanged at $2.68 per gallon.
Pennsylvania regulators have given the go-ahead for drilling to resume at two natural gas wells owned by the company that had a blowout last week at a third well nearby. Pennsylvania Environmental Department spokesman Neil Weaver says Houston-based EOG Resources was authorized to resume work at two wells that inspectors determined have no environmental or operational violations. State officials ordered EOG Resources to stop operations at all its sites after the June 3rd accident at a well near Penfield. Work will not resume at the blown-out well while an investigation continues. Dozens of the company’s other wells remain idle. No one was injured and there was no fire during the 16-hour accident in which highly pressurized gas and polluted water streamed into the air. The well was successfully capped June 4th.
The fire that has burned for days from a gas drilling explosion that injured seven workers in West Virginia is finally out. Chief Oil & Gas spokeswoman Kristi Gittins says the fire that’s been burning since Monday has ended, but she had few other details. Gittins has previously said Houston-based Wild Well Control would eventually cap the hole. Texas-based Union Drilling was sinking a natural gas well through an abandoned coal mine near Moundsville in West Virginia’s northern panhandle this week when it hit a methane gas pocket. What caused that methane to ignite is still under investigation. In the meantime, the State Department of Environmental Protection has halted all West Virginia operations by the well’s permit holder, AB Resources of Ohio.
Dell has lowered its first-quarter results by $100 million–to set aside a reserve it could need to pay as part of a settlement in an ongoing sec accounting probe. The review involves the round rock-based computer maker’s accounting and financial reporting practices. The company says CEO Michael Dell is talking with the Securities and Exchange Commission about a possible settlement. Dell first disclosed an internal investigation into its accounting in 2006, saying it was notified that year of an SEC inquiry related to revenue recognition and financial reporting. Dell in 2007 said it would restate more than four years of financial results with lower earnings. The probe found that its employees had misled auditors and manipulated results to meet performance targets. Dell last month reported a profit of $441 million for the February-through-April quarter.
The number of rigs actively exploring for oil and natural gas in the U.S. increased by 21 this week to 1,527. Houston-based Baker Hughes says that 954 rigs were exploring for natural gas and 561 for oil. Twelve were listed as miscellaneous. A year ago this week, the rig count stood at 876. Texas gained 16. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.