Federal regulators warned BP that it failed to make all required safety improvements at its Texas City refinery where a 2005 explosion left 15 people dead. The Occupational Safety and Health Administration, in a letter dated August 3rd, gave the oil company until Wednesday to complete the changes. BP spokesman Daren Beaudo told the Galveston County Daily News that the company believes it is "full compliance," but is working with OSHA on the concerns. Beaudo says BP Products has completed more than 550 OSHA citation abatement requirements and process safety related recommendations. BP, in an agreement with OSHA, promised changes at its Texas City refinery and paid a $21.5 million fine to settle safety issues cited by federal regulators.
The government of Venezuela is considering a lawsuit against Houston-based ConocoPhilllips for seeking Venezuela's stake in a Sweeny, Texas-based oil refinery. Oil Minister Rafael Ramirez state oil company Petroleos de Venezuela may file a lawsuit for exercising an option to purchase PDVSA's 50 per cent stake in the refinery. ConocoPhillips says PDVSA failed to deliver heavy crude since the beginning of the year, but PDVSA says it's complying with production quotas established by the Organization of the Petroleum Exporting Countries. ConocoPhillips has been negotiating for almost two years to set compensation for the nationalization of joint oil projects in Venezuela. It abandoned pumping oil in Venezuela under tougher terms posed by the government of President Hugo Chavez.
Speakers at an O'Connor & Associates luncheon are optimistic about the industrial market in the coming months. Representatives from StoneBridge, Jones Lang LaSalle and Trammell Crow say the industrial market in Houston is generally pretty stable—when compared to other markets around the nation. Mark Nicholas is with Jones Lang LaSalle.
"I'd say the market somewhat crashed in September of 2008, and now we're on the road to recovery, finally."
Ed: "What do you base that on?"
"I mean, there are so many variables involved in that, but I would say mostly because we're in Houston, Texas, and oil, energy, gas, oilfield service companies are all still doing very well with oil being over $60 a barrel."
Ed: "That's been the saving grace of Houston."
"Right. Absolutely. No question about it."
Jeffery Stringer with StoneBridge says for the first time, companies are looking at political risk.
"We have a new administration who is already saying they're going to raise taxes, which hurts business. They're talking about cap and trade, which, when you have an oil and gas community like Texas does, that can be a problem. So, you take all that — plus the slow economy — and put that together, and we have problems ahead of us."
Jim Casey with Trammel Crow says Houston has its own version of the recession, although job losses and other factors haven't been as intense.
A nearly 13,000-square-foot Houston condominium where disgraced Enron founder Ken Lay lived is reportedly on the market for $12.8 million. The Houston Chronicle says Linda Lay has listed the luxury condo she shared with her husband. Her spokeswoman Kelly Kimberly told the newspaper the condominium is the only property the widow still owns and she wants to live in a smaller place. Enron, a once high-flying energy trading company, collapsed in 2001, leaving billions in debt and worthless stock behind. Ken Lay was convicted of ten counts of fraud, conspiracy and lying to banks in May 2006. The 64-year-old Lay died weeks later of heart disease while vacationing in Aspen, Colorado. The convictions were vacated after his death.
The ball is in the Senate's court now that the House easily passed a bill to extend jobless benefits in high unemployment states. The Senate bill is similar, but not identical. Another 13 weeks of unemployment insurance benefits would be welcome for those jobless living in 27 states, plus the District of Columbia and Puerto Rico with unemployment rates topping 8.5 per cent. The bill is an economic lifeline to more than 300,000 people whose jobless benefits are set to expire at the end of the month. While analysts say the economy appears to turning around, jobs tend to take longer to return. House Majority Leader Steny Hoyer says it'll be a while before a lot more job are available: More than a million people expect their benefits to run out by years end. Majority Leader Harry Reid is promising quick Senate action on its version of the extension.
American Airlines is dropping its long-standing health insurance plan for retired executives and support staff over 65. That's as the Fort Worth-based airline battles rising medical costs and a decline in revenue. American officials said that letters went out to 5,500 retirees last week. The insurance plan will end December 31st, leaving retirees with the option of paying the full cost of their own coverage to supplement Medicare. Non-union retirees under 65 will continue to receive company-subsidized health insurance until they turn 65 and become eligible for Medicare. The changes don't affect American's union employees, including pilots, flight attendants and mechanics. But American has made a similar proposal in contract talks with the airline's three unions. American officials said that among the other major U.S. airlines, only United also offers retiree health benefits to those over 65.
Hewlett-Packard is re-branding Electronic Data Systems as HP Enterprise Services, roughly a year after buying the company in a blockbuster $13.9 billion deal. The buyout of EDS, founded by former presidential candidate Ross Perot, more than doubled the size of HP's technology services business and made it the second-largest company in the market behind IBM corp. HP cast the renaming as an important step in integrating the company, a process that has included nearly 25,000 layoffs. It comes as rival Dell is set to make a similar push into technology services, buying Perot Systems, another Ross Perot company, for $3.9 billion.
Intel's CEO says the personal computer market is quickly pulling out of its slump and could defy predictions by growing this year. The comments were more bullish than some analysts who have predicted a year-over-year decline in PC shipments this year, which would be the first such drop since 2001. The market has been dragged by a clampdown in corporate spending on new PCs, and some computer companies are already looking to next year for an upturn. Sales of cheap little "netbook" computers, used primarily for surfing the Internet, have been a bright spot, but those machines ring up low profits for PC and chip makers. Intel is the world's top maker of microprocessors, the "brains" of PCs.
A preliminary state report shows the pending federal health care reform plan would add about 2.5 million Texans to the state public insurance rolls. The report by the Texas Health and Human Services Commission also says the added enrollment would cost state taxpayers up to $20 billion over ten years. U.S. Senator John Cornyn requested the analysis and made it public at a Senate Finance Committee meeting. The Republican junior Senator from Texas opposes the plan introduced by U.S. Senator Max Baucus of Montana. However, the Obama administration says that Texas working families will face rising health insurance premiums if the reforms aren't made. Texas leads the nation in the number of residents not covered by health care insurance.
Experts and government watchdogs say $1.2 billion worth of stimulus money to help teens find summer jobs has yielded few new opportunities for the young. With more adults vying for the same low-wage positions as teens, the unemployment rate among 16- to 24-year-olds soared to 18.5 per cent in July--its highest level since just after World War II. Since the stimulus program began in May, almost a quarter of the nearly 280,000 youth enrolled in the work programs haven't gotten jobs. One labor expert calls the program a "half-disaster." Andrew Sum of the Center for Labor Market Studies at Northeastern University says it was "too little, too late and too poorly constructed to have any lasting effect." The Labor Department acknowledges it's still working out the kinks, but says if there are mistakes it's happy to correct them. And, the department insists there's a "a lot of good news" coming out of the program.
Bank of America and JPMorgan Chase say they're ready to make some changes in overdraft fees and practices that have been called excessive and harmful to consumers. The announcements come as lawmakers prepare to implement sweeping credit card reforms. Bank of America says it's capping the fees charged customers who overdraw their accounts. Starting October 19th, the bank will no longer charge overdraft fees when a customer's account is overdrawn by less than $10 in one day. A $35 fee will still be levied if the account isn't brought into balance within five days. The move backpedals on hikes the company had imposed just a few months ago. The bank also plans to limit to four the number of times an overdraft fee can be charged on an account per day. Just this year, the bank had raised that cap from five to ten. For its part, JPMorgan Chase will make overdraft protection opt-in for all customers, post transactions to accounts as they occur, and eliminate fees when accounts are overdrawn by $5 or less. It will also reduce the maximum number of fees per day to three from six. Those changes will start in the first quarter of 2010.
With the economy on the mend, the Federal Reserve says it is slowing the pace of a program to lower mortgage rates and prop up the housing market. The Fed says it will stretch out its goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae until the end of the first quarter of 2010. Originally, the Fed intended to complete buying those securities by the end of this year. In a more upbeat assessment, the Fed says: "economic activity has picked up following its severe downturn."
The great recession has encouraged people to save more for a rainy day. The personal savings rate has risen to more than four per cent after sinking to near zero in the months before last fall's meltdown. The number of people getting financial counseling is 3.2 million, double the amount two years ago. In ways big and small--from scrutinizing their bills and joining credit unions to scaling back weddings and college plans--people are finding creative ways to deal with the worst recession in a generation. In short, there's a quiet revolution taking place in the way people save, borrow and spend that represents a retreat from old habits, and the first steps toward new ones.