Tuesday PM May 25th, 2010

BP engineers say they have the equipment in place to try a complicated procedure that they hope will seal the blown-out Gulf of Mexico oil well. BP Senior Vice President Kent Wells says the company hopes to launch the "top kill" on Wednesday after 12 hours of tests to prepare for the maneuver. The procedure involves pumping heavy drilling mud into a massive device on top of the gushing well. Wells said it could be delayed if there's any snag in the tests. The top kill has proven successful in above-ground wells, but has never before been tried a mile beneath the sea. Company executives peg its chances of success at 60 to 70 percent.

BP says it siphoned more oil with a mile-long tube after two days of falling totals from the leaking seafloor well. BP spokesman John Curry told the Associated Press that the tube collected some 256,200 gallons of oil on Monday. The collections were further evidence that a previous estimate of the underwater spill is too low. Federal officials and BP have said that at least 210,000 gallons a day were gushing from the blown-out well. But Monday's total was well above that amount and live video from the wellhead showed that some oil was still escaping. A federal task force is gathering independent data to estimate how much oil is gushing from the well.

The White House energy adviser says BP is complying with the government's request to use less of a toxic dispersant in fighting the Gulf oil spill, but she says alternative dispersants aren't so readily available. In a letter to BP, the Environmental Protection Agency ordered the oil company to find a less toxic alternative to the dispersant the company is using to break up the oil. But in meetings that followed, White House adviser Carol Browner told ABC's Good Morning America, it became clear there aren't as many alternatives being manufactured in sufficient quantities as was originally thought. In the meantime, Browner says, the EPA has directed BP to use less of the dispersant.

BP briefed the federal government on its internal investigation into the oil spill that focuses on two key areas: cementing at the wellhead and the blowout preventer. BP says that its probe has not reached a final conclusion. The investigation is focusing on the casing system, which seals the well bore. But it said multiple control mechanisms should have prevented the accident that started with an oil rig explosion April 20th. Tony Hayward, chief executive of BP, called it a complex accident caused by an unprecedented combination of failures.

The company that owns the sunken Deepwater Horizon rig is arguing plaintiffs should not begin collecting evidence and testimony on the spill until November, the deadline for claimants to file suit. Transocean made its arguments in federal court in Houston. That court had accepted a Transocean petition to limit its liability in the oil spill incident to $27 million, the amount the company says the rig is worth. U.S. District Judge Keith Ellison has not ruled. He scheduled further briefings for early June. Transocean owned the rig that blew up on April 20th, killing 11 workers and causing one of the worst U.S. oil spills in decades.

Interior Secretary Ken Salazar says a new report by Interior's inspector general is "deeply disturbing" and shows the importance of reforming an agency that oversees offshore drilling. The report, which follows up on a 2007 investigation, found that staffers at the Minerals Management Service accepted tickets to sports events, lunches and other gifts from oil and gas companies and used government computers to view pornography. Salazar said several employees in the report have resigned, were fired, terminated or referred for prosecution. He said it showed the importance of his plan to abolish the agency and replace it with three new entities. All the violations mentioned in the report occurred between 2000 and 2008.

Eleven men who died in the offshore rig explosion that triggered the Gulf oil spill were honored at a somber memorial service with tributes from country music stars and drilling company executives. Transocean organized the event, held under tight security at the Jackson Convention Complex. Police patrolled outside. Transocean CEO Steven Newman said those attending were a community bound by the tragic accident that happened April 20th. Country music group Diamond Rio performed and singer Trace Adkins spoke to the crowd by video. Reporters weren't allowed inside but were ushered to a room where the service was broadcast on closed-circuit television.

A senior administration official tells AP that President Barack Obama will travel Friday to the Louisiana Gulf Coast to review firsthand the efforts to counter a disastrous oil spill. Obama will travel from Washington to Chicago on Thursday for a long weekend with his family, as planned. From there, he will go to Louisiana on Friday and return to Chicago that evening. The timing comes as the administration is under increasing scrutiny to defend its oversight of the ongoing oil leak in the Gulf Coast.

Chevron Houston Chronicle that the industry's reputation is hurt, but offshore drilling is too important to U.S. energy supplies and the economy not to go forward. The deepwater area of the Gulf accounts for roughly a third of the U.S. oil supply. Watson is attending Chevron's annual shareholder meeting in Houston tomorrow. About 7,000 of Chevron's global employees are in Houston.

A coalition of Chevron's critics have released an alternative annual report called "The True Cost of Chevron," criticizing the company for pollution and alleged global human rights abuses. The report is written by the author of the book Tyranny of Oil. Organizers expect to rally outside Chevron's headquarters on Louisiana tomorrow morning as the shareholders meeting gets underway. But Chevron points to its Corporate Responsibility Report, which discusses the $144 million it invested in communities around the world to promote education and business development.

A New York judge has given filmmaker Joseph Berlinger more time to release outtakes of a documentary for use in a legal dispute over whether Chevron owes billions of dollars in damages for oil contamination in Ecuador. Berlinger has until the end of the month to turn over footage from a film called Crude. The lawsuit is part of a 17-year-old fight. Ecuadoreans claim their land was contaminated during three decades of oil exploration and extraction by Texaco, which became a Chevron subsidiary in 2001. Chevron says the footage will help bolster its case.

The federal government has removed Texas' authority to issue an operating permit to a southeast Texas refinery, saying the state is violating the Federal Clean Air Act in dozens of cases. Al Armendariz, the regional head of the Environmental Protection Agency, says the EPA objected to 40 permits in December largely because they allowed flexible rules for emitting pollutants. He says months of talks failed, so the EPA blocked Texas from issuing its permit. Instead, the EPA will issue a stricter one for the Flint Hills Corpus Christi East refinery. Armendariz says the EPA will also block Texas from issuing permits in 39 other cases, including those for facilities owned by ExxonMobil, Chevron, ConocoPhillips and Dow Chemical. State environmental regulators said they were preparing a response.

A monthly report says consumers' confidence in the economy rose in May for the third straight month in a row as Americans' hopes for job growth improved. The Conference Board, based in New York, says its consumer confidence index rose to 63.3, up from a revised 57.7 reading in April. Economists surveyed by Thomson Reuters had expected 59. The increase was boosted by consumers' outlook for the next six months. That part of the index soared to 85.3 from 77.4, the highest since August 2007 before the economy went into recession. Economists watch the number closely because consumer spending, including health care and other major items, accounts for about 70 percent of U.S. economic activity.

Home prices fell in March from the previous month, signaling that temporary tax credits for buyers weren't enough to buoy the housing market. The Standard & Poor's/Case-Shiller 20-city home price index posted a 0.5 percent drop from February. Prices in 13 of the 20 cities tracked by the index fell month over month. Only six metro areas recorded price gains. One, Boston, came in flat. The figures point to a weakening housing market despite historically low mortgage rates and now-expired tax credits. Nationally, prices have climbed nearly three percent from their April 2009 bottom. But they remain nearly 31 percent below their July 2006 peak. In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter.

AT&T's new digital home phone service failed across the country this morning. Customers of AT&T's U-verse voice say their landline phones have had no dial tones since the morning. Reached by cell phone, the customers say those who call them get a message that the line has been disconnected. Support personnel are telling customers that a server crash brought down the service in AT&T's entire 22-state local-phone service area. AT&T spokeswoman Mari Melguizo says service was being restored in the afternoon, though some customers are still affected. U-verse voice sends calls over the customer's Internet connection, making it technically similar to independent services such as Vonage. AT&T said in January that it had signed up more than a million U-verse voice customers. U-verse Internet and TV services weren't affected by the voice outage.

President Barack Obama has invited small business owners to the White House to help persuade Congress to pass legislation to help them grow. The president is pushing a legislative package for small businesses. Including giving them better access to loans and tax credits and assistance in refinancing mortgages. In prepared remarks the president says government can't create jobs but can "create the conditions for small businesses to grow and thrive and hire new workers." He says small business owners should have easier access to capital and proposes eliminating the capital gains tax for investments in small businesses.

A new document shows three of the Federal Reserve's 12 regional banks made a push last month to bump up the interest rate banks pay the Fed for emergency loans. The regional banks were in Kansas City, St. Louis and Dallas. They wanted to boost the discount rate to one percent from 0.75 percent. The rate doesn't directly affect borrowing costs for Americans. Late last month, Federal Reserve Chairman Ben Bernanke and his four other board members unanimously decided to keep the current rate. In mid-February, the Fed raised the rate by one-quarter percentage point to 0.75 percent, a move to bring policy closer to normal after the financial crisis.

A civil lawsuit filed by jailed Texas financier R. Allen Stanford and three executives of his now defunct company involves who pays their legal fees. There's a hearing in the case in Houston. The legal fees, in criminal and civil cases, are related to charges that Stanford and the others bilked investors out of $7 billion in a ponzi scheme. Stanford and three executives of his now defunct Houston-based Stanford Financial Group have pleaded not guilty to charges including money laundering and fraud. Their legal fees are being paid by an insurance policy, but Lloyd's of London says the policy doesn't pay on charges of money laundering. An appeals court in March ruled the insurer must continue paying until a lower court determines if money laundering was committed.

George W. Bush says his upcoming book Decision Points, due for release in November, begins with an anecdote about his wife convincing him to give up drinking. The former president says that the opening lines of his memoir deals with Laura Bush pushing him to decide whether he preferred drinking to fatherhood, and him questioning whether he loved booze more than his wife. Bush said he realized he had an addictive personality and quit drinking cold turkey. He says that act set him on the path to the presidency. A relaxed and good-humored Bush, who left office in January 2009, was speaking to the American Wind Energy Association's convention in downtown Dallas. Bush said the nation is in the midst of an energy transition. As Texas governor, bush signed the 1999 renewable portfolio standard that set Texas on a path to leadership in the wind industry. Texas has nearly three times as much installed capacity as Iowa, the next closest state. Bush, who lives in Dallas, jokes that his domestic agenda now consists of taking out the trash and doing the dishes. He says he's not interest in criticizing his successor.


Share Options