Wednesday PM June 30th, 2010

Hurricane Alex is on a heading toward Mexico and the South Texas coastline. The National Hurricane Center says Alex has top winds of 80 mph but is expected to strengthen, possibly into a Category 2 hurricane by the time it comes ashore either late tonight or early tomorrow. While Texas residents have been preparing for days, the state is only expected to get a glancing blow. Alex is on track to make landfall south of Matamoros, Mexico, some 100 miles south of Brownsville. Alex is the first June hurricane from the Atlantic since 1995.

Three oil rigs and 28 platforms in the storm's path have been evacuated, but Hurricane Alex is projected to stay far away from BP's ruptured well and the oil spill zone. However, the storm is producing bigger waves, tossing around some of the oil-soaking booms and pushing oil onto beaches from the Mississippi Delta in Louisiana to the Florida panhandle. A marine science technician working on Louisiana's Grand Isle and Elmer's Island says the heavy seas are wiping out any progress, with tar balls the size of apples washing onto the beach. Cleanup vessels that had been skimming the oil from the surface have been ordered to remain in their docks. The National Weather Service says the nasty weather will likely remain through tomorrow. However, scientists says the rough seas and wind could have an up side, helping to break apart the oil and make it evaporate faster.

Representative Edward Markey says BP's disaster response plan for an oil spill doesn't mention hurricanes or tropical storms. Markey says the omission is yet another example of what the oil giant was not prepared to handle. The Massachusetts Democrat's comments came during a Congressional hearing on a law to improve technology intended to prevent disasters like the Deepwater Horizon oil spill.

A Senate panel has voted to require stronger oil spill response plans and to remove limits on a company's liability against economic harm. The legislation, approved by the Senate Environment Committee, now advances to the full Senate, where it is likely to be merged with other bills being developed in response to the spill. The Senate Environment and Public Works Committee voted to remove the current $75 million liability cap for economic damage. The other bill requires companies to show they have the economic and technical capabilities to contain a spill. Several GOP Senators complained the requirements will bar all but the biggest oil companies from offshore drilling.

The chairman of the Senate Finance Committee is launching an investigation into the tax practices of Transocean, owner of the Deepwater Horizon rig that exploded in the Gulf. The company moved its headquarters to landlocked Switzerland two years ago, where it paid a 16 percent tax on its $4.4 billion global operating income last year. Before that, the company had been located in the Cayman Islands, another tax haven. Democratic Senator Max Baucus of Montana said his investigation would examine whether Transocean has exploited U.S. tax laws.

Government scientists are on their way to study the Gulf of Mexico's loop current to see if it will bring oil around the tip of Florida and up the U.S. Atlantic Coast. The National Oceanic and Atmospheric Administration ship Nancy Foster began a two-week survey in the eastern Gulf and the Florida Straits. Mission Chief Scientist Ryan Smith says the researchers are trying to determine what's happening in the currents that may trap some of the oil and carry it far away from the blown-out BP well. The team will collect samples of water and marine life at different depths. They're also looking for oil, dispersants and tar balls in the water column. So far, between 70.8 million gallons and 137.6 million of oil have spewed into the Gulf, according to government and BP estimates.

Kenneth Feinberg, the administrator of a program set up to compensate Gulf oil spill victims, tells Congress that some of the claims he'll be asked to decide will involve tough calls. Representative Vern Buchanan, a Florida Republican, told Feinberg he was worried about hotels and restaurants that may have not been hit by the oil--but are suffering lost tourism because of public perception. Feinberg answered that these are very tough issues that "we've got to deal with." He promised to get an answer on that type of claim in weeks, not months. Feinberg was testifying at the House Small Business Committee, his first appearance before Congress since taking over the program.

An Interior Department official says the government is expected soon to issue more permits for drilling in shallow waters of the Gulf of Mexico. The decision would not affect the six-month moratorium on deepwater drilling imposed in the aftermath of the oil spill. While drilling in shallow waters was not part of the moratorium, there has been confusion about whether new permits will be approved for shallow water leases. Interior Deputy Secretary David Hayes told a House hearing that he expects more shallow water drilling applications to be approved as they are received.


The Interior Department says it has fined BP America $5.2 million for allegedly submitting false reports about energy production on an Indian reservation in Colorado. The Interior Department accuses BP of repeatedly misreporting its output on Southern Ute Indian tribal lands. BP officials didn't immediately return a call. Federal officials say Southern Ute auditors initially discovered the allegedly incorrect reports in 2007 and reported them to BP, which promised to make changes. Officials say a later check showed BP continued to falsely report production figures.


The U.S. Environmental Protection Agency has officially overturned a 16-year-old Texas air permitting program it says violates the Clean Air Act, leaving some of the country's largest refineries in a state of limbo. The move ends years of backdoor bickering, negotiations and public arguments between the EPA and Texas. The argument recently escalated from a battle over environmental issues into a heated political dispute over states' rights. Governor Rick Perry has been using it to drive home his contention that the Obama administration is overreaching. The EPA's decision will force some 140 refineries and petrochemical plants to invest millions of dollars to get new permits. Many plants may also have to invest in updates to comply with regulations.


Unemployment rates in roughly two-thirds of the nation's largest metropolitan areas dipped in May as the gradual economic recovery spurred some hiring. The Labor Department says the jobless rates dropped in 237 of 382 areas in May from April. It rose in 118 areas and was flat in 27. The figures aren't adjusted to account for seasonal trends, such as lifeguards hired during the summer or retail clerks let go after the holiday shopping season. So they tend to be volatile from month to month. Among the places seeing large declines in their jobless rates are Ocean City, New Jersey, Sandusky, Ohio, and Springfield, Illinois. By contrast, areas in Louisana--hit by the BP oil spill--saw gains. Those includes Baton Rouge, New Orleans-Metairie-Kenner and Houma-Bayou Cane-Thibodaux.

President Barack Obama says the global economy is forcing the U.S. to compete "like never before" with other countries and that his administration is moving on many fronts to bring jobs back home. Obama's administration is spending billions of dollars on education and training as well as on improving the infrastructure--such as roads and bridges but also on broadband and other technologies. Obama says a new health care law will put the brakes on health care costs and help businesses grow and hire workers. He says investments in research and development, tax code changes and fairer trade also will help bring jobs back to a country where unemployment is near ten percent. Obama spoke at a town hall meeting in Racine, Wisconsin.


The House has passed a bill giving homebuyers an extra three months to complete their purchases and still qualify for a generous tax credit. Under current law, homebuyers who signed purchase agreements by April 30th had until Wednesday to close on the sale to qualify for tax credits of up to $8,000. The bill would give buyers until September 30th to complete their purchases. The extended deadline only applies to people who signed purchase agreements by April 30th. The National Association of Realtors estimates that about 180,000 homebuyers who already signed purchase agreements are likely to miss the current deadline. The bill now goes to the Senate, where Senate Majority Leader Harry Reid has sponsored a similar measure.

Applications for mortgages rose last week as consumers refinanced their loans at the lowest rates in more than 50 years. The Mortgage Bankers Association says overall applications increased nearly nine percent from a week earlier. But the growth in borrowing came from applications to refinance home loans and not to make new purchases. Refinancings were up 13 percent, the highest level since May 2009. But they remain about half the level of early 2009. New mortgages taken out to purchase homes fell four percent. They were 36 percent below last year's levels. The average rate for a 30-year fixed loan sank to 4.69 percent last week, according to Freddie Mac. That was the lowest since the since the mortgage company began keeping records in 1971.


Confronting public pessimism about the economy, President Barack Obama says the U.S. faces a choice between returning to what he calls failed economic policies of the past, or moving forward. In excerpts of remarks delivered in Wisconsin, Obama promotes Wall Street reform legislation pending in Congress, saying it will "protect our economy from the recklessness and irresponsibility of a few." Obama continued a tone that has characterized some of his recent public remarks, accusing Republicans of being out of touch with the struggles of ordinary Americans.


The Obama administration is launching a special coverage program for uninsured Americans with medical problems this week. But here's the catch: premiums will be a stretch for many, even after government subsidies to bring rates close to what healthier groups of people are charged. And $5 billion that Congress allocated to the program through 2013 could run out well before that. An administration official said the pre-existing condition insurance plan will begin accepting applications in many states on July 1st, with coverage available as early as August 1st. Consumers can check availability in their states on a new Website, healthcare.gov. The official spoke on condition of anonymity ahead of the administration's announcement later this week.


Smart meters alone are not enough to save energy and money, a new study finds. Significant savings are possible, however, and consumers save more when given information tailored to their use. Programs that focus on energy efficiency and conservation also produced more savings than those that sought to move energy use to off-peak hours. Those are some of the findings of a review of 57 studies conducted over three decades for the Washington-based American Council for an Energy-Efficient Economy. The study comes as Maryland regulators and Baltimore Gas & Electric struggle over BGE's smart meter proposal, which the utility said would allowed savings through better information on power prices. Regulators said consumers bore too much of the program's cost.


The government's highway safety agency wants a scientific panel to help it learn whether electronics are to blame for vehicles suddenly accelerating in the aftermath of Toyota's massive recalls. A National Academy of Sciences panel is reviewing the potential causes of unintended acceleration in vehicles across the auto industry. The study is expected to last until late 2011. David Strickland, the head of the National Highway Traffic Safety Administration, told the panel his agency's Toyota investigation was ongoing but the problem of unwanted acceleration was not exclusive to the Japanese automaker. The study is part of the government's efforts to learn what led to the recall of 8.5 million Toyotas due to sudden acceleration.

Ford says it's making another $4 billion payment on its huge debt. The company will pay $3.8 billion in cash to a United Auto Workers trust fund that pays retiree health care bills. It also will pay $255 million in dividends on preferred securities that had been deferred as the automaker worked its way through financial troubles. Ford says the payments are a sign of confidence that its restructuring plans are working. The company says the actions will reduce its debt to around $27 billion. It had $34 billion in debt on March 31st. The automaker borrowed more than $23 billion to avoid bankruptcy and make it through the recession. But recently it has recorded sales gains and four straight quarterly profits.


 

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