Crews have stopped drilling the relief well that's intended to permanently plug BP's broken gulf oil well as a strengthening tropical depression bears down on the site. They have about 30 to 50 feet left to drill, but officials say the last steps will have to wait at least two to three days until the bad weather passes. Meantime, crews will pop in a temporary plug to safeguard what they've drilled so far, but they won't send workers back to land. A tropical storm warning has been issued for much of the Gulf Coast affected by the oil spill, from Florida to Louisiana. The depression is located about 290 miles east-southeast of the mouth of the Mississippi River and is moving northwest near ten mph. The relief well is meant to allow BP to pump mud and cement into the broken well from deep underground for a so-called bottom kill. Tt's a permanent seal that will complement a plug injected into the top of the well last week.
Hot, sultry weather that has most of Texas in its grip has generated two peak demand records in as many weeks on the state's biggest electrical grid. The Electric Reliability Council of Texas operates that grid, which covers most of the state. An ERCOT statement said peak demand reached a new record of 63,830 megawatts in one hour on Tuesday afternoon. That broke the record of 63,594 megawatts set during the same hour August 4th, which beat the July 13th, 2009, record of 63,400 megawatts. One megawatt is about enough electricity to power about 200 homes during hot weather running air conditioners. The ERCOT statement says the region has enough generating capacity to cover an expected summer peak demand of 64,000 megawatts and still leave a 21 percent reserve cushion to cover unexpected major outages.
The International Energy Agency says global oil demand will be 2.2 percent higher this year and will continue to grow in 2011, thanks to improving economic conditions in Europe and developing countries. The Paris-based agency said global oil demand this year will reach 86.6 million barrels a day, up from its forecast last month of 86.5 million barrels. The agency warns however that the short-term economic outlook "is highly uncertain" and that significant risks to oil demand growth remain.
Republican pleas and the threat of a lawsuit did not stop Texas Democrats in Congress from helping to pass the emergency $26 billion jobs bill that critics say will cost Texas schools more than $800 million. President Barack Obama signed the bill into law last night, hours after it received final approval from Congress. The new law requires Governor Rick Perry to promise Washington that Texas will maintain certain education spending levels through 2013. Perry says the Texas constitution prohibits him from committing future legislative spending. Republican Lieutenant Governor David Dewhurst has said he would file a lawsuit against the federal government if the language was not removed. Democrats say it is not unconstitutional and that Perry should agree to the terms so schools can get the money. The constitution states that no "appropriation of money be made for a longer term than two years." Democrats say the jobs bill will save 300,000 teachers, police and others from election-year layoffs. Lawmakers interrupted their summer break to return to Washington for a one-day session. Democrats declared a need to act before children return to classrooms minus teachers laid off because of budgetary crises in states that have been hard-hit by the recession. Republicans saw it differently, calling the bill a giveaway to teachers' unions and an example of wasteful Washington spending and voters will punish the Democrats for in this fall's elections.
The U.S. trade deficit surged in June to the highest level in 20 months and imports of foreign consumer goods hit an all-time high. But U.S. exports faltered, representing a setback for the global hopes of American manufacturers. The Commerce Department says the deficit jumped 18.8 percent in June compared to May, widening to $49.9 billion. The wider deficit came as a surprise to economists who had forecast a smaller trade gap because of lower global oil prices. U.S. exports slipped 1.3 percent to $150.5 billion. Sales of American farm products, computers and telecommunications equipment all declined. Imports rose three percent to $200.3 billion. Imports of consumer goods surged to a record high as shipments of cell phones, household appliances, televisions and clothing all increased.
Continental's CEO says the nation's air traffic control system needs to be modernized to help reduce fuel costs and tarmac delays. Jeff Smisek, speaking during the National Business Travelers Association annual convention, says some of the industry's problems would be helped if the Federal Aviation Administration upgrades its 1950s-era air traffic control system. Nearly 6,000 people are attending the conference, which wraps up today. Many attendees are corporate travel officers who book trips for major U.S. companies.
The Federal Reserve is looking to make some changes to give the economy a boost. As it wrapped up a one-day meeting, the Fed said it will use the proceeds from investments in mortgage bonds to buy government debt. That should help lower interest rates on mortgages and corporate debt, but economists say it won't likely have a dramatic impact on growth. In a more downbeat assessment of the recovery, the Fed now believes economic growth will be "more modest" than it expected during the late June meeting. Citing "subdued" inflation, the Fed pledged to maintain its target for a key interest rate at zero to 0.25 percent for an "extended period." The focus again on energizing the recovery is a shift from earlier this year, when the Fed was starting to plan its exit strategy from the extraordinary measures taken to rescue the economy.
Home prices rose in nearly two-thirds of U.S. cities in the second quarter of this year as buyers took advantage of tax incentives. The National Association of Realtors says the median sales price for previously occupied homes rose compared with last year in 100 out of 155 metropolitan areas tracked in the April-to-June quarter. That compares with 91 out of 152 cities in the January-to-March quarter. Fourteen cities had double-digit price increases. Most experts believe these gains will fade as the economic recovery weakens. They expect prices to turn downward, The national median price in the second quarter was $176,900, up from $174,200 in the same quarter last year and up from $166,400 in the January-March period.
Applications for home loans were almost flat last week even though mortgage rates fell to the lowest level in decades. The Mortgage Bankers Association says that overall applications rose 0.6 percent from a week earlier. Applications to refinance home loans increased 0.6 percent, while those taken out to purchase homes rose 0.3 percent. The numbers are adjusted for seasonal factors. Mortgage rates have been at or near the lowest levels in decades since mid-April. Investors have poured money into safer U.S. Treasury bonds over concerns about European debt problems. That has lowered the yield on Treasurys. Mortgage rates tend to track that yield. The average rate for a 30-year fixed loan fell to 4.57 percent last week from 4.6 percent a week earlier.
The cattle industry is trying to counter bad publicity from the release of a video showing mistreatment of cows on an Ohio dairy farm by promoting low-stress handling techniques. The National Cattlemen's Beef Association has several cowboys traveling to state fairs and feedlots to teach low-stress methods and do public demonstrations. One is Curt Pate, the 49-year-old Montana cowboy who consulted on the 1998 Robert Redford film The Horse Whisperer. Pate teaches ranchers to maintain eye contact with animals, avoid loud noises, avoid rushing and to use equipment like cattle prods as little as possible. He says farmers who don't follow those guidelines risk raising the animals' stress, increasing sickness and lowering production.