Top Bush administration officials say they're concerned about possible natural gas shortages in the wake of Hurricane Katrina. Energy Secretary Samuel Bodman says there's less known about the storm's damage to the natural gas supply system than about its effect on crude oil production. He's been touring regions ravaged by Katrina, along with Interior Secretary Gale Norton. Bodman met with industry executives in Houston last night to get an update on hurricane recovery efforts. It's his first trip to the Gulf region since the hurricane. The price of gasoline surged well over $3 a gallon in the days after Katrina hit but eased last week, dropping an average of 11 cents a gallon. Bodman says the post-Labor Day drop in gasoline demand will help. The Energy Department predicts new imports and a partial recovery from Hurricane Katrina should ease high gas prices. Four large Gulf Coast refineries will probably remain out of commission for two to three months, but analysts say their product should be replaced by gasoline from other sources. What is known is that 58 percent of Gulf oil production is down, as is 38 percent of natural gas production. But Interior Secretary Norton expects 90 percent of Gulf oil platforms back in action by month's end. She says natural gas could be more of a problem, since there's less of an international market to rely on in the meantime. Energy analysts have predicted natural gas prices could soar this winter, with increases as high as 71 percent in parts of the Midwest.
The Port of Houston is getting the biggest chunk of nearly $142 million worth of port security grants. Those federal grants to 36 ports were announced today by the Department of Homeland Security. The Houston port was awarded $35.3 million by the port security grant program. Two Louisiana ports damaged to varying degrees by Hurricane Katrina also received awards. The Port of New Orleans, which restarted commercial cargo operations this week, received $2 million. The Port of South Louisiana, which sustained minor structural damage and is 85 percent operational, received $1.1 million. Those funds will be held until those ports are ready to implement proposed security projects.
Many bananas that were headed for the hurricane-damaged port of Gulfport, Mississippi have been detoured to the Port of Freeport. Before Hurricane Katrina, Freeport handled about 300 containers of bananas a week. Officials say now the site is getting more than 1,000 containers of bananas weekly. The port has had to expand hard surface areas to accommodate the extra containers. The Port of Houston has also experienced an increase in shipments of various goods at its docks. Authorities say so far, the Port of Houston has seen about 64,000 tons of additional goods ranging from rubber to timber.
The Agriculture Department says Texas cotton producers are forecast to bring in 7.2 million bales this year, an 18 percent increase over the 2005 estimate published last month. The USDA's survey also shows that, nationally, the outlook is also up from last month's forecast. The estimated 1.1 million-bale increase in Texas would more than offset losses in Mississippi and Louisiana, the states hardest-hit when Hurricane Katrina mauled the Gulf Coast on August 29th. The storm hit east of the cotton growing regions in those states, but 140-mile-per-hour winds battered crops in Mississippi. Texas, by far the country's largest producing state, is forecast to harvest 600,000 fewer bales than last year's record crop of 7.8 million bales.
Hurricane Katrina evacuees can now check a Web site designed to match displaced Gulf Coast restaurant workers with jobs at restaurants across the nation. The site was created by Aventine Solutions of Houston for the Council of Independent Restaurants of America and its Houston chapter. The site has average 200 new job postings in each of its first three days, with nearly 1,000 jobs in the first week.
Hurricane Katrina damaged two Dynegy natural gas processing plants of 11 plants to be sold to Houston neighbor Targa Resources. But a Dynegy spokesman says that won't hinder the nearly $2.5 billion cash deal. Spokesman John Sousa said the deal announced in early August remains scheduled to close in the fourth quarter this year. He says Katrina's damage to two of the Houston energy marketer's plants along Louisiana's Gulf Coast "will not affect the timing of the transaction completion.'' A Targa spokesman declined comment beyond Dynegy's statement. The sale was approved by directors at both companies. It will let Dynegy shed its natural gas processing business and position itself solely as a power generator primed for consolidation with other companies. Targa is an independent company affiliated with private equity investor Warburg Pincus. It now has 120 workers and operations in West Texas and Southwest Louisiana.
Demand following Hurricane Katrina has Houston's Cooper Power Systems boosting production of special transformers. Cooper has increased production of Envirotran EF transformers, which use oil made from soybeans. The soybean transformer oil is designed to minimize damage from hazardous materials in areas vulnerable to hurricanes.
New Orleans-based PetroCom is working to restore basic communications to speed the recovery of the Gulf's oil and gas industry in the wake of Hurricane Katrina. The company says terrestrial networks suffered severe outages, causing issues for wireless carriers. The company's wireless switches are now processing analog and GSM cellular traffic from many offshore locations, and land-based connectivity to public switched networks has been partially restored. Business operations have been moved to the Houston and Lafayette, Louisiana offices.
Hurricane Katrina's devastation along the Gulf Coast is expected to strain home builders. Walter Molony of the National Association of Realtors says the need for evacuees to rebuild their homes is projected to push home building to the highest level since 1973. He says that will create shortages of building materials and increase construction costs, putting additional pressure on overall home prices. Molony says at least 200,000 homes will need to be replaced, but the increase in projected construction is only 130,000 units "so there's going to be a shortfall.'' He says the rental market is already tightening up and mobile homes will probably be needed to help address the demand. But the association expects mortgage interest rates to rise more slowly as a result of post-storm economic conditions, to accommodate the loss of homes, jobs and businesses. He says that's likely to push home sales to new records.
Texas schools won't get federal emergency funds to pay for additional teachers and textbooks for students displaced by Hurricane Katrina. That's according to a memo released by the Federal Emergency Management Agency. Texas schools will need an estimated $450 million to educate the anticipated influx of students displaced by the hurricane. Officials had hoped those costs would be covered by grants from FEMA. But the memo says Texas schools will be eligible for reimbursement for temporary classroom buildings, mental health counselors and school computers. In total, at least 372,000 students have been displaced by Hurricane Katrina. And Education Secretary Margaret Spellings says that there are no clear answers about where the money will come from to educate them.
Houston's economy grew in August for the 32nd consecutive month, according to the National Association of Purchasing Management. The Houston PMI is based on a monthly survey of some 80 purchasing executives in Houston industries, including oil and gas exploration and production, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare. Business Survey Committee Chairman Doug Miller says the big driver in August was the employment component, which reached an index of 34 on a scale of 100. Employment has only reached that level twice before in the past ten years. Sales added to the push, with over half of participating firms reporting increased sales for the month.
The Houston Technology Center has been selected to serve as the Gulf Coast Regional Center of Innovation and Commercialization for the Texas Emerging Technology Fund. HTC will serve in collaboration with the Greater Houston Partnership. The Gulf Coast RCIC will serve 32 counties and accept all funding applications for energy and technology companies in the region. It will also accept life science funding applications, along with the Texas Life Science Center of Innovation and Commercialization. The Texas Emerging Technology Fund was created in June 2005 when Governor Rick Perry allocated $200 million for the fund, which hopes to improve research at Texas universities, assist small to mid-sized technology firms to launch sooner and reduce the time it takes to move new life-changing inventions out of the lab and into the hands of consumers.
It's the increased real estate value of its 109-acre site that prompted it demise. Six Flags is closing AstroWorld at the end of the year, and looking for a buyer for the site where the theme park sits near Reliant Park. The company says it expects the property will yield a good price. The money from the sale of the 37-year-old park would be used to reduce debt and for general corporate purposes. Kieran Burke, Chairman and CEO of Six Flags, says the company decided the best way to enhance shareholder value was to sell the park because of the increase in real estate values in Houston. The closing will affect 119 permanent jobs, but Six Flags said a number of those people may be offered jobs at other Six Flags sites.
Hewlett-Packard will be putting unused property on the southeast corner of its campus on the market, according to Richard Zigler of O'Connor & Associates. The five buildings are inactive--some have been unused for more than two years. HP recently sold the undeveloped tract of land east of Texas 249 for private development. The Houston HP campus remains on of the five largest HP sites worldwide, both in terms of square footage and number of employees.
The M. D. Anderson Cancer Center in Houston is recruiting smokers to test a drug that's been linked to heart attacks. The call comes just weeks after a jury in Angleton ordered a $253 million award against Merck over its Vioxx painkiller. A woman whose husband took Vioxx--and died in 2001--sued Merck. The company is appealing. Patients who agree to take Pfizer's Celebrex to gauge whether it prevents lung damage will be monitored for cardiovascular changes and treated if necessary. Dr. Bernard Levin says Celebrex's cancer prevention potential makes the study worth the heart-attack risk. Levin also says the first concern--is to do no harm. Merck last September pulled Vioxx from the market. Various studies seeking to gauge Celebrex's value as a cancer treatment were suspended last year.
Lawyers at the second Merck Vioxx trial made quick work of selecting a jury today in Atlantic City, New Jersey. Seven women and three men will hear opening statements tomorrow. Whitehouse Station, New Jersey-based Merck maintains the painkiller did not cause an Idaho man's heart attack. Merck says Frederick Humeston, who survived the attack four years ago, only took Vioxx intermittently and had multiple cardiac risk factors. Merck pulled Vioxx from the market last year. A jury in Angleton last month awarded more than $253 million to a woman who sued after her husband took Vioxx and later died.
The leaders of a major Hispanic organization say they favor limits on long-distance flights from Dallas Love Field. The executive committee of the League of United Latin American Citizens, or LULAC, says airlines should instead expand service at nearby Dallas-Fort Worth International Airport. They say Hispanic residents are worried that expanding long flights to and from Love Field would increase air traffic and hurt the quality of life in nearby neighborhoods. The statement propels the group into the midst of a fight between two of the nation's major airlines. Southwest Airlines wants to repeal a 1979 law that prohibits commercial passenger jets with more than 56 seats from flying from Love Field beyond Texas and seven nearby states. Southwest is opposed by American Airlines, the nation's largest carrier and the dominant airline at DFW Airport.
Illinois Attorney General Lisa Madigan says the state has reached a settlement with a Texas company over a 2003 jet fuel leak in suburban Chicago. Madigan said yesterday the deal with Texas Eastern Products Pipeline Company should prevent a repeat of the leak that occurred at a storage tank in the Village of Alsip. The settlement resolves a lawsuit filed earlier by Madigan's office. The Texas company must pay a $70,000 penalty and also must implement a series of new safety measures. Madigan says the leak of thousands of gallons of fuel was fortunately contained but that it could have caused widespread damage had it ignited. She says it also threatened to contaminate nearby groundwater. A state investigation later revealed that the leak went undetected during a weekend the Alsip facility was unattended.
Seven Houston companies are among 50 recently named by Deloitte & Touch USA to the Texas Crescent Technology Fast 50. PreCash was the highest-ranked Houston company, coming in at #3, offering an electronic payment card allowing consumers to pay cash for prepaid and postpaid subscription-based service accounts. Data-Cert ranked #9 on the list, supplying electronic invoicing and spend management solutions for the legal industry. Other Houston-area companies on the list include I-Sector, Merrick Systems, ChaseCom and Lexicon Genetics of the Woodlands.