Friday PM June 18th, 2010

Oil spill claims process examined; BP CEO relieved of day-to-day responsibility for managing Gulf spill…Texas unemployment rate remains at 8.3 percent for second month in a row…

Signaling a shift in strategy to fight against BP’s ruptured well in the Gulf, the Coast Guard is ramping up efforts to capture oil closer to shore. Admiral Thad Allen says an estimated 2,000 private boats in the so-called “vessels of opportunity” program will be more closely linked through a tighter command and control structure to direct them to locations less than 50 miles offshore to skim the oil. Allen, the point man for the federal response to the spill, previously had said surface containment efforts would be concentrated much farther offshore. Estimates of the oil being siphoned from the well a mile below the Gulf are growing. Allen said more than 1.2 million gallons was sucked up to containment vessels Thursday.

The oil slicks are creating the most visible environmental damage, but scientists warn that the natural gas being emitted is also a serious threat. A Texas A&M oceanographer says huge quantities of methane from the spill have entered the Gulf and could create “dead zones” where oxygen is so depleted that nothing can live. John Kessler says the oil emanating from the seafloor contains about 40 percent methane–compared with about five percent found in typical oil deposits. Methane is a colorless, odorless and flammable substance that is a major component in the natural gas used to heat people’s homes.

The head of a new office created to process claims from the spill says a plan to handle the remaining damage claims will be in place in 30 to 45 days. Kenneth Feinberg was chosen by President Barack Obama and BP to oversee the independent claims facility. His comments in Jackson, Mississippi, come as the House Judiciary Committee says data it’s collected shows that BP has paid less than 12 percent of claims submitted. Feinberg says he also plans to have a program going forward that would guarantee that people making claims in the future would receive them within 30 to 60 days of submitting it. Feinberg says guidelines will be developed for people and businesses making claims, though it hasn’t been determined if the payouts will be considered taxable income.

The House Judiciary Committee says data it has collected shows that BP has paid less than 12 percent of claims submitted by people and businesses arising from the Gulf oil spill. The committee said in a statement that only $71 million out of an estimated $600 million had been paid as of Tuesday. In addition, the panel said that BP didn’t make any payments in the first two weeks following the explosion and oil spill. Michigan Democratic Representative John Conyers said he’s concerned that BP “is stiffing too many victims and shortchanging others.” The committee said BP hasn’t made a single payment for bodily injury or diminished home property value. BP officials did not immediately respond to a request for comment.

The chairman of BP says embattled chief executive Tony Hayward is being relieved of day-to-day responsibility for managing the Gulf of Mexico oil spill. According to the transcript of an interview with Sky News television, Chairman Carl-Henric Svanberg says that Hayward “is now handing over the operations, the daily operations to (BP Managing Director) Bob Dudley.” It comes a day after Hayward’s grilling by a House committee. Hayward’s refusal to answer lawmakers’ questions, claiming that he was out of the loop, left many committee members furious. BP had announced June 4th that Dudley would lead the long-term response to the oil spill once the leak had been stopped.

The unemployment rate in Texas remains at 8.3 percent in May for the second month in a row. Texas Workforce Commission says the number of non-farming jobs grew for the fifth consecutive month, with 43,600 positions added in May. Texas’ unemployment rate continues to be well below the national seasonally adjusted rate of 9.7 percent for May. Ronny Congleton, representing labor for the commission, says jobs were added across nine major industries, including professional and business services, manufacturing and education and health services. Officials say more than 11.2 million Texans now have jobs. The jobless rate rose to 8.3 percent in April after holding steady at 8.2 percent the first three months of 2010.

A majority of states saw their unemployment rates drop in May. But the widespread declines were mainly because people gave up work searches and were no longer counted. The Labor Department says the unemployment rate fell in 37 states. Six states had increases and seven saw no change. Forty-one states saw a net increase in jobs. But that reflected national data showing a huge gain because of government hiring of temporary census workers. Nevada rose to the highest jobless rate in the country, marking the first time in more than four years that Michigan did not hold the top spot. Nevada’s rate was 14 percent. Michigan fell to 13.6 percent.

President Barack Obama is asking America’s Group of 20 trading partners to work closely him “to safeguard and strengthen the recovery” from the near collapse of the global economic system in the fall of 2008. Looking ahead to the coming G-20 summit in Toronto, Obama noted that “significant weaknesses” linger among the major and developing economic powers. He says in a letter to his summit partners that “it is essential that we have a self-sustaining recovery that creates the good jobs that our people need.” He said the summit in late June 27th must also work to stabilize public debt, while also saying that nations must be careful about withdrawing stimulus programs too quickly during times of slack demand and business sluggishness.

Canada’s finance minister says the G-20 leading rich and developing nations hope to announce an agreement on deficit reduction targets. Finance Minister Jim Flaherty tells the Associated Press that the G-20 is making progress on concrete targets on deficit and debt reduction. Flaherty says there hasn’t been an agreement on numbers yet, but leaders are aiming to reach a deal at the June 26th-27th summit. Flaherty did not indicate any targets for debt reduction or deadlines. U.S. Treasury Secretary Timothy Geithner has urged countries not to reduce stimulus spending too quickly.

The Senate has passed a bill to temporarily spare doctors from a scheduled 21 percent cut in Medicare payments. The measure would delay cuts for six months while lawmakers work on a more permanent solution. The bill now goes to the House, which won’t be able to take it up until next week. There is some urgency to approve the funding because the cuts were scheduled to take affect June 1st and lawmakers fear doctors will start turning away Medicare patients if their payments are cut. The Senate passed the measure by voice vote after failing the night before to pass a larger package that included these funds.

Bank borrowing over the past week from the Federal Reserve’s emergency lending program has fallen to the lowest point since before the credit crisis, The Fed says banks averaged $104 million in borrowing for the week ending on Wednesday. That was down by $1 million from the previous week. Discount window loans peaked at $110 billion a day during the height of the financial crisis in the fall of 2008 when credits sources dried up and banks were turning the fed as a lender of last resort. The decline is being seen as further evidence that credit markets are improving.

The Obama administration is proposing antitrust rules for meat companies that reflect a willingness to shift the balance of power between farmers and processors and to regulate an industry long-dominated by a handful of corporate giants. The rules will place the sharpest limits on meat companies since the Great Depression, drastically lowering the bar that farmers and ranchers must meet to sue companies whom they accuse of demanding unfairly low prices. Farmers must currently prove a company is harming competition in the industry overall. Under the new rules, the farmer will only need to show the company is engaged in deceptive practices. Experts say the change could lead to a wave of lawsuits.

Campbell Soup is recalling 15 million pounds of Spaghettios with meatballs due to possible under-processing. The Agriculture Department announced the recall. The company is recalling certain lots of three varieties of the pasta product often consumed by children: Spaghettios with Meatballs, Spaghettios A to Z with Meatballs, and Spaghettios Fun Shapes with Meatballs (cars). The recall dates back to December 2008. Campbell spokesman Anthony Sanzio says the company doesn’t know exactly when the cooker at the Paris, Texas, plant malfunctioned. He says officials believe it happened recently but aren’t sure.

Conagra Foods is recalling all Marie Callender’s brand cheesy chicken and rice frozen meals after they have been possibly linked to a salmonella outbreak in 14 states. The company said it is recalling the meals after it was informed by the Federal Centers for Disease Control and Prevention of a possible link between the meals and 29 illnesses. Eight of those sickened reported eating the product in April or May 2010. The company is recalling all of the meals, which are labeled “Marie Callender’s Cheesy Chicken and Rice White Meat Chicken and Broccoli over Rice, topped with rich cheddar sauce,” regardless of production date. The product was distributed to retail outlets nationwide.

More companies are developing technology and techniques for rooftop gardening as interest in local and homegrown food grows. Rooftop gardens are an option for city dwellers who don’t have yards. They can also be a good choice for manufacturers who have large, unused flat roofs but little land to spare. The gardens provide environmental benefits similar to traditional green roofs, in which plants are used to reduce storm water runoff, filter pollutants and cut heating and cooling costs. The Detroit-area manufacturer Trenton forging is developing an energy-efficient way to use what would otherwise be wasted heat from the forge to warm a greenhouse on its roof year-round. Company President David Moxlow says fruit and vegetables grown on the roof have helped improve workers’ diets.

The number of rigs actively exploring for oil and natural gas in the U.S. increased by 12 this week to 1,539. Houston-based Baker Hughes says that 953 rigs were exploring for natural gas and 574 for oil. Twelve were listed as miscellaneous. A year ago this week, the rig count stood at 899. Texas gained 12. 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.


Ed Mayberry

Ed Mayberry

News Anchor

Ed Mayberry has worked in radio since 1971, with much of his early career as a rock’n’roll disc jockey. He worked as part of a morning show team on album rock station KLBJ-FM, and later co-hosted a morning show at adult rock station KGSR, both in Austin. Ed also conducted...

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