Friday PM April 30th, 2010

There's more bad news for Louisiana as the Deepwater Horizon oil spill oozes its way to the state's wetlands. The National Weather Service predicts wind, high tides and waves this weekend could push oil deep into the inlets, ponds and lakes that line southeast Louisiana. Thunderstorms were expected today with seas of six to seven feet pushing tides several feet above normal toward the coast. A federal wildlife official says the high waves could wash over booms that are strung out just offshore to stop the oil. A Coast Guard official tells ABC that the weather will prevent crews from skimming oil from the surface or burning it off for the next couple of days. The slick caused by an explosion at an oil rig in the Gulf of Mexico could become the nation's worst environmental disaster in decades. The leak from a blown-out well a mile underwater is five times bigger than first believed. Government officials say the blown-out well 40 miles offshore is spewing about 5,000 barrels a day into the water. At that rate, the spill could eclipse the worst oil spill in U.S. history, which was the 11 million gallons that leaked from the grounded tanker Exxon Valdez in Alaska's Prince William Sound in 1989. Ultimately, the spill could grow much larger than the Valdez because Gulf of Mexico wells tap deposits that hold many times more oil than a single tanker.

Two Air Force planes have been sent to Mississippi to start dumping chemicals on the oil spill threatening the Gulf Coast. Master Sergeant Bob Barko Junior from the 910th Airlift Wing says that two C-130s specially modified for aerial spraying were sent from the Youngstown Air Reserve station in Ohio. The unit also sprayed for mosquitoes after Hurricane Katrina in 2005. The Navy says 66,000 feet of inflatable boom and seven skimming systems has arrived in Gulfport, Mississippi. Fifty contractors who use the equipment are on their way. The Navy also has sent equipment for the cleanup.

A faint glaze of oil from a massive spill has started to wash ashore along the Gulf Coast at the mouth of the Mississippi River. The spill threatens migrating birds, nesting pelicans and even river otters and mink along Louisiana's fragile islands and barrier marshes. The Coast Guard says crews in boats are patrolling coastal marshes looking for areas where the oil has flowed in. The Gulf Coast is one of the world's richest seafood grounds, teeming with shrimp, oysters and other marine life. Fishermen rushed to scoop up shrimp and crews spread floating barriers around marshes as the oil started to wash ashore. Thicker oil is in waters south and east of the Mississippi Delta about five miles offshore.

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The slick could reach Alabama's shore as early as Sunday. The state has hired companies to place oil-blocking booms across Alabama's 53-mile coastline except for the mouth of Mobile Bay, which will be protected with boats that skim the water to remove oil. But George Crozier, director of the Dauphin Island Sea Lab, says he's doubtful it will work since waves can wash oil over the booms and the well could continue spewing petroleum for weeks.

The Louisiana National Guard is preparing to send communication equipment, boats, all-terrain vehicles and other equipment. The guard plans to send resources to Orleans, Plaquemines, St. Bernard, Terrebonne, LaFourche and Jefferson Parishes. Guard liaisons will work with local officials to determine what is needed. The guard also is planning to send dump trucks and security vehicles to help deal with the oil spill.

Florida Governor Charlie Crist has declared a state of emergency in several panhandle coastal counties because of the spill. The executive order covers Escambia, Santa Rosa, Okaloosa, Walton, Bay and Gulf Counties. The order says "the resulting oil slick is generally moving in a northerly direction and threatens Florida's coast."

Interior Secretary Ken Salazar says those responsible for the massive oil spill will be held accountable. Federal officials are investigating what caused an oil rig to explode and sink in the Gulf, killing 11 people. Homeland Security Secretary Janet Napolitano said at the same news conference the federal government will continue to push BP, which operated the rig, for a strong response to the spill.

A senior Coast Guard official is defending the federal response to a massive oil leak in the Gulf of Mexico as the first waves of oil hit Louisiana's ecologically rich wetlands. Coast Guard Rear Admiral Sally Brice-O'Hara faced questions on all three network television morning shows about whether the government has done enough to push oil company BP to plug the underwater leak and protect the coast. Brice-O'Hara said the federal response led by the Coast Guard has been rapid, sustained and has adapted as the threat grew since a drill rig exploded and sank last week, causing the seafloor spill. The oil slick could become the nation's worst environmental disaster in decades, threatening hundreds of species of fish, birds and other wildlife along the Gulf Coast. Government officials say the blown-out well 40 miles offshore is spewing about 5,000 barrels a day into the water. Presidential adviser David Axelrod also defended the administration's response to the April 20th accident, saying "we had the Coast Guard in almost immediately." He deflected comparisons with the government's slow response to Hurricane Katrina in 2005, telling ABC's Good Morning America that such speculation "is always the case in Washington whenever something like this happens."

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Four New Jersey lawmakers are calling for President Barack Obama to reverse his plan for new offshore oil and gas drilling in light of the giant Gulf Coast oil spill. The Democratic lawmakers said they welcomed the White House's assurance that no additional offshore drilling will be authorized until an investigation of that accident is completed. But they said the president should go further and reverse his March 31st proposal to allow more offshore drilling. The letter was signed by the state's two senators, Frank Lautenberg and Robert Menendez, as well as Representative Frank Pallone and Rush Holt. It said New Jersey should not become "the next test case for the oil companies' experiment in how to maximize profits and minimize regulations." The White House says Obama will visit central New Jersey on Wednesday.

A class-action lawsuit has been filed by commercial fishermen and shrimpers against BP and rig owners Transocean for economic losses. Also named in the suit are Cameron International, the maker of the rig's blow-out prevention equipment and Halliburton Energy Services, which was engaged in cementing operations of the well and well cap. The suit seeks compensatory damages of at least $5 million. Ten law firms are joining the legal action, filed in U.S. District Court in New Orleans.


Baker Hughes is expanding its drill bit manufacturing facility on Grogan's Mill Road in The Woodlands, adding 130 skilled jobs to the local economy. About 750 are currently employed at the plant. The expansion represents a $12 million investment, according to Baker Hughes Chairman and CEO Chad Deacon. The Woodlands campus will have the capacity to produce about twice its 2009 output.


The Houston Food Bank has purchased a new warehouse and headquarters on Portwall, the former distribution center of Houston-based Sysco Foods. The purchase will make it the largest food bank in the nation, in square footage. The new buildings will nearly quadruple the bank's space. Move-in is set for April 2011. Food is currently distributed from two other Houston-area centers. The Food Bank is on track to distribute more than 60 million pounds of food this year.


A militant group claims to have attacked an oil pipeline in Nigeria that is operated by a subsidiary of Royal Dutch Shell. A statement sent by a group calling itself the Joint Revolutionary Council of the Niger Delta says it carried out the attack on the pipeline at Buguma. A Shell spokesman said he had no information about any such attack or disruption. The group also threatened to strike in the coming days "in a way that the international community will be forced to come into this conflict."' Militants in the troubled Niger delta have attacked pipelines, kidnapped petroleum company employees and fought government troops since January 2006. Even claims of attacks have affected global oil prices in the past.


The government says the economy grew at a solid 3.2 percent pace during the first quarter of this year as consumers boosted their spending by the most in three years. The report provides more evidence that the recovery remains on track. It marked the third straight quarterly gain as the United States heals from the longest and deepest recession since the 1930s. But that's weaker than the fourth quarter of last year, when the economy grew at 5.6 percent. Consumers increased their spending this quarter at a 3.6 percent pace, the strongest showing since early 2007. That marked a big improvement from the fourth quarter when consumer spending grew at just a 1.6 percent pace.

President Barack Obama says the report shows the nation is moving in the right direction. He called it "an important milepost on the road to recovery." Obama hailed the report showing that the economy grew at a 3.2 percent pace during the first quarter of the year. He says the nation's economic heartbeat is strong, but more jobs are needed. The report marked the nation's third straight quarterly gain.


Employment costs rose modestly in the first quarter, reflecting an acceleration in the cost of benefits such as pensions. The Labor Department says that its employment cost index rose 0.6 percent for the three months ending in March. It was the biggest quarterly gain since a similar 0.6 percent rise in the third quarter of 2008. Economists had expected a smaller 0.5 percent increase. Even with the slight uptick, employment costs remain subdued, rising by just 1.7 percent for the 12 months ending in march as the worst recession since the Great Depression has kept a lid on employee compensation.


Billionaire Warren Buffett says the economy is finally starting to show signs of significant improvement. Berkshire Hathaway's CEO told the Fox Business Network that reports from his company's roughly 80 subsidiaries showed a "big upswing starting in March." Buffett says any improvement before last month had been slow, but March brought a real change, especially in the U.S. and Asia. An interview transcript was provided to the Associated Press. Buffett is expected to take questions during his company's annual meeting Saturday in Omaha. About 40,000 people are expected to attend. Berkshire owns clothing, insurance, railroad, furniture, jewelry, small tool and utility businesses.


The Federal Reserve has adopted a plan allowing banks to set up the equivalent of certificates of deposit at the central bank. The move would help the Fed mop up money pumped out during the financial crisis and prevent inflation from taking off later. Under the plan, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy. Once the economy is on firm footing, this would be one of the tools the Fed could use to tighten credit. The Fed says the action has "no implication for the near term conduct of monetary policy."

The government has received $320.3 million from the sale of warrants it held from PNC Financial Services Group as part of the support it provided the bank during the financial crisis. The Treasury Department says that it sold 16.9 million warrants in an auction with a sales price of $19.20 per warrants. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price. Financial institutions have been eager to cut all ties to the $700 billion bailout program, known as the Troubled Assets Relief Program, to escape various restrictions imposed on institutions receiving government support including limitations on executive compensation.


Interest is soaring in a program that connects volunteers with farmers across the country. About 9,000 people have joined a group called World Wide Opportunities on Organic Farms USA, which helps volunteers work non-paid stints at nearly 1,200 farms and ranches. Farmers get much-needed extra help at only the cost of providing meals and a bed. Volunteers get to learn more about rural life and the hard work behind the food they eat. The number of people taking part in the program is more than five times what it was in 2005. The U.S. program is linked to an international effort that operates in more than a dozen other countries.


Comic book retailers nationwide are holding their Free Comic Book Day on Saturday, as they give out over two million comic books. Many of the titles being given away are specially printed editions printed for this annual event. This is the ninth year, and companies as large as DC Comics Marvel as well as many smaller independent publishers are creating special titles.


Earnings

D.R. Horton says it turned a profit in the fiscal second quarter as the homebuilder reported a 19 percent increase in completed sales. The builder says it had a profit of $11.4 million for the three months ended March 31st. A year earlier, it had a loss of $108.6 million. Revenue was $896.8 million, up 16 percent from $775.3 million. Analysts polled by Thomson Reuters expected revenue of $863 million. Completed sales increased to 4,260 homes from 3,585 a year earlier. New home orders increased to 6,438--a 55 percent jump from 4,160 in the year-ago period.


 

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