Monday PM August 23rd, 2010

A joint federal marine board panel investigating the cause of the BP oil spill hears testimony from BP, Transocean, Halliburton and others. There have been three other public hearings, but this is the first to take place in Houston. Previous testimony revealed there were warning signs about dangerous conditions before the blowout. There are unanswered questions about the blowout preventer, which failed to seal off the well. Houston attorney Dan Cogdell had an op-ed piece in the Houston Chronicle this weekend, saying that the legal artillery may be even more formidable that what was seen in the Enron trial. A number of witnesses have declined to appear. Cogdell notes that attorneys are complaining about what testimony should be allowed and what documents should be made available for review.

"There’s a notion in order to extradite and prosecute individuals in the U.S. who are no longer in the confines of the United States there’s this thing called dual criminality. In other words, it has to be a crime in both the country that is seeking him—that being the U.S.—and the country that he’s in. And the environmental laws, particularly some of the more esoteric doctrines like the Responsible Corporate Officers Doctrine that apply to that apply to U.S. environmental cases is not necessarily linear over in the UK, so it may be the smartest thing that was done, probably not for him but that benefitted him was to get him back over to the UK." Ed: “What are the consequences of not showing up if you’re subpoenaed?” “You could be fined. Your licenses could be examined or pulled if you’re the corporate entity, but, you know, that’s not prison time and that’s not loss of your liberty and that’s not loss of your opportunity for income for life. So whatever penalties that the board can mandate kind of pale in comparison to what can happen in a federal courtroom.”

The official in charge of identifying and dealing with risks of BP's offshore Gulf marine operations acknowledged he rarely had contact with a key manager at the owner of the rig. Neil Cramond testified that he rarely communicated with Paul Johnson, identified as Houston-based Transocean's rig manager. Cramond also testified that captains of rigs like the Deepwater Horizon are ultimately responsible for crew safety and environmental matters, but are not always involved in decisions about how to deal with drilling and risks. The U.S. Coast Guard and the Bureau of Energy Management, Regulation and Enforcement is conducting the investigation, trying to uncover what caused the April 20th explosion on the BP-operated Deepwater Horizon rig that led 206 million gallons of oil to pour into the Gulf. The hearings continue through Friday.

The man who will run the new claims facility for damage from the Gulf oil spill says payouts will be more generous than from any court. Ken Feinberg also says it makes more sense to settle than sue. He says anyone he disqualifies would also lose in court. The new facility overseeing the $20 billion fund began operations today. Feinberg says it was his idea, not BP's, to require that anyone who receives a final settlement from the $20 billion fund give up the right to sue.


Eight new air monitors will be installed in the North Texas region where a natural gas drilling boom has raised questions about emissions effects. The Texas Commission on Environmental Quality says that sites and funding for the monitors haven't been determined, but they could be operational as early as year's end. Some state lawmakers said they didn't want to wait until the legislative session to increase emissions monitoring in the Barnett Shale, the gas-rich underground rock formation that stretches beneath Dallas, Fort Worth and about 20 counties. The new monitors will join seven others--including four already operational in the area.


Jailed Texas financier R. Allen Stanford and three of his former company executives have racked up millions of dollars in legal fees as they defend themselves against charges they bilked investors out of $7 billion in a massive ponzi scheme. An insurance policy has thus far covered their legal bills. But the insurer, Lloyd's of London, is trying to turn off the financial spigot by having the policy voided. Stanford and the ex-executives have sued Lloyd's. The question of whether the insurer will continue paying is in the hands of U.S. District Judge Nancy Atlas, who is holding a court hearing on Tuesday on the issue. The hearing, which could last up to four days, might also provide a preview of the upcoming criminal trials in the case.


A bright spot for drivers who are watching their wallets in these uncertain economic times--gasoline pump prices are continuing to fall. The average retail price for a gallon of unleaded regular was $2.708 a gallon, according to AAA, Wright Express and Oil Price Information Service. It has dropped about 4.2 cents in the past week but is around 8.1 cents more than a year ago. With the summer driving season about to end, experts predict pump prices will drop anywhere from a dime to a quarter a gallon in the weeks ahead. In robust economic times, pump prices don't typically begin to fall until after Labor Day. This year, demand has remained weak, which is one reason the prices are dropping earlier than usual.


An over-easy egg should make you un-easy--according to the head of the Food and Drug Administration. Margaret Hamburg says consumers should strictly avoid runny yolks, as investigators continue their probe of a salmonella outbreak that has sickened about 1,300 people. About a half billion eggs have been recalled from two Iowa egg distributors. On the network morning news programs today, Hamburg also said the FDA needs to be able to take a more “preventive approach” to food safety issues, rather than simply reacting after the fact. under current law, she says, there's not much the FDA can do ahead of time. Hamburg says Congress should approve pending legislation that would give the FDA greater enforcement power, and allow it to “hold companies accountable.” The number of illnesses from the salmonella outbreak is expected to increase.


Hewlett-Packard is making a bid of $24 per share for data storage provider 3par just a week after rival Dell agreed to acquire the company. Hewlett- and Dell both have been looking to expand from personal computers over the past few years in a search for bigger profits. HP's bid tops Dell's offer of $18 per share. HP is based in Palo Alto, Calififornia. Dell is based in Round Rock.


Having trouble finding the smart phone you want? The seemingly recession-proof phones are also feeling the effects of a tough economy. Manufacturers are having trouble making them fast enough, because chip makers scaled back production during the downturn. That's put companies trying to compete with the iPhone in a lurch. Consumers are having to wait weeks for Motorola's Droid X, among other phones. It's generally a problem with a component here and there, but if just one of the 20 to 30 critical chips that go into a smart phone is unavailable, the whole production line falters.


Ranchers from across the country are gathering in northern Colorado this week to talk aboutcompetition in the cattle industry. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack are scheduled to attend the Friday meeting in Fort Collins. It's the fourth in a series of meetings the Obama administration has been holding across the country to discuss antitrust issues in agriculture. The meat packing industry has long been dominated by a handful of corporate giants, and some producers accuse them of demanding what they call unfairly low prices. Proposed antitrust rules from the administration would make it easier for ranchers to sue. A Montana-based ranchers' group, R-Calf USA, is trying to get 25,000 supporters to attend.


Farmers in the south say a new disaster aid program created by Congress has failed them. The program is supposed to help farmers whose crops are damaged by bad weather. Most agree it has worked well in the Midwest, but it hasn't helped much in the south, in part because farmers must buy crop insurance to qualify. Southern farmers tend to forgo insurance because they say premiums are too high for the benefits they receive. The disaster aid program is paying farmers now for losses in 2008. as of August 17th. The most aid had gone Iowa, where farmers received nearly $211 million. Other top states were North Dakota, Texas, Ohio and Wisconsin. Congressman Earl Pomeroy of North Dakota says the program should be changed to ensure regional fairness.


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