Friday PM May 28th, 2010

The chief executive of BP says it will be about 48 hours before they know if pumping heavy mud into a blown-out well is successful in stopping the massive Gulf of Mexico oil spill. CEO Tony Hayward said on the CBS Early Show that his confidence level in the well-plugging bid remains at about 60 to 70 percent. BP is again pumping heavy drilling mud into the blown-out well on the gulf floor, after an 18-hour delay to assess its efforts and bring in more materials. The company says the "top kill" procedure is going well, though some drilling mud is escaping from the broken pipe. A spokesman says the situation "isn't ideal but it's not necessarily indicative of a problem." BP says it's considering shooting small rubber balls or assorted junk into the failed blowout preventer to keep the mud from escaping. Meanwhile, marine scientists say they have spotted a huge new plume of what they believe is oil, stretching 22 miles from the leaking wellhead northeast toward Mobile Nay, Alabama. They fear it could have resulted from using chemicals a mile below the surface to break up the oil.

Researchers say a newly discovered plume of thick oil in the Gulf is nearing an underwater canyon, where it could poison the food chain for sea life in the waters off Florida. The discovery of the plume, more than six miles wide and 22 miles long, was detected just beneath the surface, extending down to about 3,300 feet. Researchers say it's nearing a large underwater canyon whose currents fuel the food chain in Gulf waters off Florida. The discovery by researchers on the University of South Florida College of Marine Science's Weatherbird II vessel is the second significant undersea plume reported since the Deepwater Horizon exploded on April 20th. The first plume stretched from the leaking oil well southwest toward the open sea. This undersea oil cloud is headed miles inland into shallower waters where many fish and other species reproduce.

President Barack Obama, visiting the Gulf Coast, has inspected a beach south of New Orleans that's threatened by the massive oil spill. Protective boom and sand bags were laid out on Fourchon Beach and oil rigs were visible on the horizon. Coast Guard Admiral Thad Allen gave Obama a tour, pointing things out to the president, who stooped over at the edge of the water to look at the shore. The area was roped off by yellow protective tape. Obama took a helicopter to the beach after landing. And he was getting a briefing at a Coast Guard station later and planned to deliver remarks. Obama says he is ordering an increase in manpower in the Gulf Coast to deal with the massive oil spill. Obama says he will triple the manpower in places where oil has already hit the shore or is within 24 hours of doing so. The president says the increase will help contain the spill more quickly and minimize the amount of time oil is on the coastline. Obama is on his second trip to the region following the spill.

The head of the Interior Department's Bureau of Land Management is stepping in to run the much-criticized Minerals Management Service that oversees offshore oil drilling. Interior Secretary Ken Salazar says that Bob Abbey will begin to restructure the drilling agency, which has come under fire for lax oversight in the wake of the oil spill. Abbey also will continue as chief of the Land Bureau. Elizabeth Birnbaum resigned under pressure as director of the MMS. She had been criticized by lawmakers and others for failing to move quickly to reverse a culture in which regulators favored the oil and natural gas industry. Some agency inspectors have accepted trips, gifts and other favors from the industry.

BP says it has spent $930 million so far responding to the ruptured oil well. The company made the estimate in a regulatory filing. The costs include what it has spent on responding to the spill, drilling relief wells, paying grants to Gulf states, damage claims and federal costs. BP says it's too early to quantify other potential costs and liabilities associated with the spill. Scientists say the Gulf spill much worse than the Exxon Valdez disaster of 1989.


A French court is wrapping up a four-month-long trial into what caused the crash of a Concorde supersonic jet a decade ago. Continental Airlines and two of its employees are accused of manslaughter. All 109 people aboard and four people on the ground were killed in the June 2000 crash near Paris' Charles de Gaulle Airport. Investigators say a Continental jet dropped a metal strip onto the runway before the Air France Concorde took off. They say the runway debris gashed the plane's tire, sending pieces of rubber into the fuel tanks and sparking a fire. Continental denies any responsibility. A verdict is expected later this year. The Concorde program, which hosted legions of rich and famous passengers, was taken out of service in 2003.


American Airlines says it has reached a tentative contract agreement with about 10,600 ground workers. Terms of the settlement weren't immediately disclosed. The deal faces a ratification vote by the fleet service employees, who are represented by the Transport Workers Union. American has tentative deals with other groups of ground workers. It is still negotiating with flight attendants and pilots. The attendants have asked federal mediators to give them permission to strike after a 30-day cooling-off period, but the officials haven't granted the union's request. American Airlines, a unit of AMR, has more than 50,000 unionized employees.


Texas Republican leaders are asking state agencies to find more savings to prepare for a budget shortfall of up to $18 billion. The request for agencies to lower their future state funding requests by ten percent comes on top of an earlier plea to cut five percent out of their existing budgets. Governor Rick Perry, Lieutenant Governor David Dewhurst and House Speaker Joe Straus say they want agencies, with some exceptions for critical programs, to lower what they will ask for in the 2012-2013 budget. Officials say the funding requests are due by August 30th. The shortfall will top the agenda when legislators reconvene in January.


The government reports consumer spending was flat in April while incomes rose. Spending was the weakest in seven months, according to the Commerce Department report. Personal incomes rose 0.4 percent, in line with expectations. The savings rate rose 3.6 percent in April. Consumer spending is closely watched because it accounts for 70 percent of total economic activity.


Americans aren't in the mood to spend much on travel this summer. AAA says more people are expected to hit the road than did last year, but their budgets will be tighter because of high unemployment, stock markets in retreat and a still-fragile economy. AAA estimates families will spend an average of $809 on summer travel, compared with $876 in 2009, even though flying is more expensive than it was a year ago. They're knocking down the cost, travel agents say, by staying closer to home, choosing less-expensive modes of transportation or by picking destinations based on the best fares and lodging they can find.

Motorists will catch a break at the gas pump as they head out for the Memorial Day weekend. Gasoline prices have tumbled almost every day this month, dropping to a national average of $2.749 a gallon, according to AAA, as well as Wright Express and Oil Price Information Service. A gallon of regular unleaded is 12 cents cheaper than it was a month ago, eight cents cheaper than just a week ago. The timing couldn't be better for holiday travelers. AAA says 1.6 million more Americans will hit the highways this weekend than last Memorial Day, but the travel club expects them to spend less than last year. Gasoline is cheaper in part because of a plunge in oil prices. Crude's fallen more than 15 percent since it hit an 18-month high of $87.15 on May 3rd. Crude prices have dropped again, as stock markets retreated from Thursday's big gains on new worries about Europe.


The operator of the Trans-Alaska Pipeline System, Alyeska Pipeline Service, is awaiting the go-ahead from federal regulators to restart the flow of oil through the 800-mile line after a spill this week. The line has been shut down since Tuesday. That's when Alyeska says a power failure during a planned shutdown caused up to several thousand barrels of oil to spill into a partially filled storage tank. The tank, in turn, overflowed into a containment yard. Spokeswoman Michelle Egan says the company is ready to startup but received an order seeking documentation and other details about its plans from the Federal Pipeline and Hazardous Materials Safety Administration. She says the company is working with the agency to answer its questions.


Treasury Secretary Timothy Geithner says the U.S. and Europe broadly agree on the need for reform of the financial system. But he says global cooperation is needed. The Treasury chief also said countries are working together to balance cutting back deficits with supporting economic growth. Geithner met the German finance minister during a two-day visit to Europe that also took him to Britain and the European Central Bank in Frankfurt. The trip comes amid ongoing market volatility following European nations' agreement this month on a nearly $1 trillion loan backstop for governments in danger of defaulting on debt--coupled with efforts to cut budget deficits.


The House has adopted a measure renewing unemployment benefits for people who have been without a job for at least six months. The jobless benefits are in a legislative grab bag blending numerous spending measures with a renewal of tax breaks as well as tax increases to help pay for it all. Pressure from moderate blue dog Democrats unhappy over record budget deficits forced Democratic leaders to drop tens of billions of dollars of spending from the measure. It was adopted on a 215-204 vote. The Senate won't act on the bill before adjourning for a weeklong Memorial Day recess, leaving thousands of people without unemployment aid once their six months of state-paid benefits expire.


Two bills introduced in Congress would provide big grants to cities to set up the infrastructure needed for electric cars, and sweeten the tax credits for buyers of the vehicles. The similar bills in the House and Senate are designed to smooth the way for electric vehicles that are expected to start showing up at car dealerships in large numbers later this fall. The legislation would provide grants of up to $800 million to cities for installing public charging stations and other tools electric cars need. Car buyers in those cities would also be able to take advantage of greater tax credits for the purchase of an electric vehicle. That's on top of a $7,500 credit already available.


A Canadian company says it's buying a Missouri-based grain processor that has plants in Texas and Nebraska. Viterra of Calgary says it's paying $90.5 million in U.S. cash to acquire 21st Century Grain Processing, which is based in Kansas City, Missouri. 21st Century has an oat mill in South Sioux City, Nebraska, and a wheat mill near Amarillo. Viterra spokesman Karl Gerrand says that 21st Century "aligns well with our processing segment." 21st Century Chief Executive Lynn Rundle says the sale positions his company to continue its growth and long-term success. The sale faces regulatory approval. Publicly traded Viterra also has operations in Australia and New Zealand.


CITGO Petroleum refineries have been recognized by the National Petrochemical and Refiners Association with seven awards for safe operations during 2009. The awards were presented at the 18th annual Safety Awards banquet in San Antonio. Their Corpus Christi refinery received the Meritorious Safety Performance Award.


 

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