Thursday August 10th, 2006

New security measures in effect at airports because of alleged terrorist plot broken up in Great Britain...Lawyers for late Enron founder Ken Lay take first step toward erasing felony convictions...Citgo Petroleum indicted for allegedly violating Clean Air Act and Migratory Bird Treaty Act at Corpus Christi refinery...

U.S. air travelers are having to make other arrangements or plan for increased airport security because of an alleged terror plot broken up in Great Britain. London says the plan was to simultaneously blow up several jetliners en route to the U.S. using explosives smuggled on board in liquids smuggled in carry-on bags. U.S. counterterrorism officials say that Houston-based Continental Airlines and Fort Worth-based American Airlines were specific targets of the plot, as well as United Air Lines. Many travelers had to repack carry-on bags on the fly today before they were allowed past security checkpoints. American canceled six flights between the U.S. and London today to deal with delays at Britain's Heathrow Airport. The U.S. government is banning beverages, hair gels and lotions from flights, saying liquids are now considered a risk. Heathrow has banned most hand-held baggage. And most European carriers have canceled their flights to Britain, due to the massive delays triggered by the tighter security.

New security measures are in place at British airports in response to the thwarted terror plot. Prohibited items in airline cabins: all liquids, except medicine and baby formula verified as authentic; food bought at airport; handbags; all electrical and battery-powered items, including laptop computers, mobile phones and ipods; electric key fobs; wheelchairs; except those provided by airport. Items permitted in cabin, carried in clear plastic bag: pocket-size wallets and purses containing money, ID and credit cards; passports and tickets; prescription medicine and medical items; glasses and sunglasses, but not cases; contact lens holders, but not lens solution; baby formula and milk--but contents of each bottle must be tasted by passenger; diapers, wipes, creams for infants; tampons, sanitary napkins and tissues, but not boxes; keys. Passengers traveling from the United Kingdom to the U.S will be subject to a more extensive screening process.

All air travelers should get to their airports earlier than usual. Houston airport spokesperson Marlene McClinton urges domestic travelers to arrive two hours before departure, and international travelers to allow three hours. Continental Airlines is based and hubbed at Houston's Bush Intercontinental Airport. Airport director Rick Vacar is director of Houston's airport system.

"Given the threat that they were working with, they will try to streamline whatever procedures they have with respect to liquids, whether that goes long-period of time is clearly up to the TSA and what they perceive the threat to be. From our standpoint, it's simply going to take more time to get through the checkpoints. Fortunately we are configured such that we haven't had any substantial delays. In fact, no delays at the airport today exceeding even a half-hour. Now, one area of concern is that there's going to be a focus on international arrivals by Customs and border Protection, and that may influence the processing times. And then beyond that for those connecting international to domestic that will be additional TSA screening there, so those delay times on the international to domestic connects could be affected maybe substantially."

At Dallas-Fort Worth International Airport, where American is based and hubbed, airport spokesman Ken Capps says extra police and K-9 units have been mobilized. Those units have been patrolling terminals and parking garages. U.S. officials have banned all carry-on liquids and gels--including beverages bought at airport concessions stands.

Shares of airlines and many other travel-related companies are on the decline. As heightened security measures caused long delays and canceled flights at airports around Europe and the U.S., some experts say the alert could be a deliver a blow to affected businesses. But Greater Houston Convention & Visitors Bureau Chairman Douglas Horn doesn't expect too much disruption.

"I don't think it will affect anything other than the immediate domestic, I mean the immediate international travel. Domestic travel should not have a major impact, whatsoever. People traveling in the continental United States may be inconvenienced a little more, but, you know, in that they were smart enough to be able to get this before it went any further, the impact should be that we are a very secure group of people that are flying around out there. End result is I don't think it will have much impact whatsoever on the domestic. I think there will be an initial nervousness, but after that I think it'll be fine. Ed: Do you foresee business travel being altered in any way? I certainly hope not. I don't look for that to take place. I think that we've got a much more educated traveler than we did back, uh, September 11th time frame, and now, with the precautions that they've put, people are much more conscious of what's going on."

Jorge Franz is Executive Director of Tourism for the Greater Houston Convention & Visitors Bureau.

"This event will, I think will have a short-term impact on international travel to the city, and I mean, very short term. But the key is that they caught them and that the security is up to snuff. That's really what matters here. There's going to be, obviously, new policies that we're going to have to be mindful of, but the real problems have really been in Europe, especially with what happened. It's, it's really impacted the airports in Europe a lot more. Ed: But there's some kind of connection, or domino effect, perhaps? Absolutely. I mean, you know, London is one of the busiest, in terms of travel in the world. What impacts London pretty much impacts the rest of the world. However, for us, we're not that concerned about it simply on the international level because about 60 percent of international travel that comes to Houston, especially for leisure, comes from Mexico, and we don't expect any fallout from that."

American--through September 1st--will waive ticket changing fees and allow refunds for customers who don't wish to travel to or from the United Kingdom, or connect through the UK. American is the nation's largest carrier.

Lawyers for late Enron founder Ken Lay have taken their first official step toward erasing his felony convictions. Lay died last month in Colorado of heart problems. He was 64. Lay was convicted May 25th of fraud and conspiracy related to Enron's 2001 flameout and bankruptcy. Former Enron CEO Jeff Skilling was convicted of 19 counts of fraud, conspiracy, insider trading and lying to auditors. Lay's death came before he had appealed or been sentenced, so his legal team can ask U.S. District Judge Sim Lake to wipe his record clean. But first, Lake has to approve substituting Lay's estate for Lay himself so the entity can act on the late businessman's behalf. That court filing came yesterday. Skilling will be sentenced October 23rd and faces decades in prison.

The shutdown of an Alaskan oil field because of a pipeline leak is raising questions about whether there are similar problems in other U.S. lines. Stan Stephens with the Prince William Sound Regional Citizens Advisory Council says the concerns extend beyond corrosion. Stephens worries about general maintenance of the aging pipeline system, as well as environmental and safety issues with shipping and storage. BP this week said it would shut down Prudhoe Bay because of a small leak and severe pipeline corrosion. BP spokesman Scott Dean says the company will replace 16 miles of pipeline that might be affected by corrosion. BP hopes to continue to run oil at a lower capacity during the repairs. Oil and gas industry officials defend their monitoring practices. Houston-based ConocoPhillips operates the Greater Kuparuk Area field about 40 miles west of Prudhoe Bay. ConocoPhillips says it's constantly reviewing its inspection program and will spend $30 million on maintenance this year.

Alaska's governor has imposed a state hiring freeze in response to a huge cut in state income due to the Prudhoe Bay oil field shutdown. It's a quick step to try to keep the state from running out of money in about two months. Other measures are under consideration. Nearly 90 percent of Alaska's income is from oil; there's no sales or personal income tax. Oil giant BP has said it's shutting down the biggest oil field in the U.S. to fix severe pipeline corrosion revealed by a small leak. The loss to Alaska is nearly $6.5 million a day, about half its daily oil income. Governor Frank Murkowski wants BP officials to testify under oath at legislative hearings. He's also asking the state attorney general to investigate.

Citgo Petroleum has been indicted for allegedly violating the U.S. Clean Air Act and Migratory Bird Treaty Act at its Corpus Christi refinery. The federal grand jury in Corpus Christi returned the ten-count indictment against Houston-based Citgo yesterday. The wholly owned subsidiary of Venezuela's state oil company denies breaking any laws. The indictment accuses Citgo of two counts of violating an emissions standard for emitting benzene from its refinery. Benzene is a hazardous chemical found to cause cancer in people exposed to small amounts. Citgo also is charged with operating the facility without the necessary emissions controls. The Justice Department said in a statement that 20 protected birds were found coated with oil as a result of landing in open top tanks. If convicted, Citgo faces fines of up to a half million dollars--or twice the gross economic gain, whichever is greater.

Southwestern Electric Power announced plans to build a lignite-fueled, 600-megawatt power plant north of Fulton, Arkansas. Costs are to be spread among Swepco customers in Arkansas, Louisiana and Texas. The $1.3 billion unit is part of a plan that includes gas-powered plants at Tontitown and Shreveport, Louisiana. The plant near Fulton would run on an 85 percent mix of coal and lignite with gas. Fulton was competing for the plant against Hallsville, Texas, where Swepco already has a unit. Fulton was considered because the area has lignite coal deposits. The plant is expected to begin producing power in 2011. Swepco says the new Arkansas plant will use pulverized coal technology, which requires the use of less coal and produces fewer emissions. The coal will come from Wyoming.

A consumer group says an air quality modeling firm hired by the state to determine whether new power plants will pollute the air has been on the payroll of a company building some of the plants. That, they say, is a "breathtaking'' conflict of interest. TXU, which is building 11 of the proposed coal-fired power plants, disagreed, saying there is no conflict. Environ, a Novatas, California-based air pollution modeling company, was hired in 2005 by the state to study the cumulative impact of pollution on the Dallas-Fort Worth area from 17 new coal-fired power plants. The California firm is scheduled to present its findings to the North Texas Steering Committee on Friday. When Environ was hired by the state, it had already begun working for TXU to study the impact of a proposed plant called Oak Grove, Smith said in a news release. He called on lawmakers to investigate. TXU spokeswoman Kim Morgan said the issue is not new. She said Environ has two teams of scientists and engineers working on two completely different sets of data and no conflict exists.

University of Texas System regents today approved a $1.5 billion program to upgrade the state's scientific and medical research capacity. Officials say the money okayed at a meeting in Arlington will fund projects at 14 UT System campuses. The projects will add a combined three million square feet of research space, or an increase of 39 percent. Officials say that'll help accommodate a 20 percent increase in students over the past five years. The initiative would send the most new money to the University of Texas at Austin. The campus would get $423 million for seven projects. They include a $125 million experimental science building and a $67 million computer science hall. Also included are: $280 million to expand the Alkek Hospital at UT's M.D. Anderson Cancer Center in Houston and $62 million for a biomedical research facility at the UT Health Science Center at Houston.

The number of Americans filing new claims for unemployment benefits rose last week. The Labor Department reports 319,000 newly laid-off workers filed for benefits, up 7,000 over the previous week. The level was reported at a higher-than-expected total. The four-week moving average fell by more than 3,700 claims to nearly 309,000. Last week, the government said the July unemployment rate rose to 4.8 percent. That was as the number of jobs added to payrolls rose by 113,000, which was weaker than expected.

The government says the nation's trade gap narrowed slightly in June. Record sales of U.S. farm products and other exports helped counter the impact of soaring crude oil prices. The Commerce Department says the deficit for June dropped three-tenths of one percent to $64.8 billion. That is still the fifth-largest deficit on record. The imbalance in May was revised more than $1 billion than the initial estimate a month ago. Through the first half of this year, the deficit is running at an annual rate of $768 billion. It is on track to top last year's record--more than $716 billion.

For the third straight week, mortgage interest rates are on the decline. Freddie Mac says the national average for 30-year fixed-rate mortgages fell to 6.55 percent this week. That's down from 6.63 percent last week. The finance giant says the average for 15-year fixed stands at 6.20 percent, down from 6.27 percent last week. And for one-year Treasury-indexed adjustable rate mortgages, the average is put at 5.69 percent, unchanged from last week. Freddie Mac Chief Economist Frank Nothaft says between some weaker-than-expected jobs data and the Federal Reserve's decision to stand pat, rates for fixed-rate mortgages have drifted back to levels seen last spring.

Closing costs--what you pay for things like title searches and application fees when you buy a home--average more than $3,000. In a survey of charges by lenders in major cities in all 50 states and the District of Columbia, found the nationwide average is $3,024. The highest closing costs were found in Buffalo, New York--$3,887--while the lowest were in St. Louis at $2,713. Bankrate Senior Financial Analyst Greg McBride advises consumers to inquire about closing costs when shopping for a mortgage and to watch out for "junk fees''--inflated costs for things like document preparation that can boost their overall closing costs.

Plano-based Cinemark USA is buying the Century Theatres chain on undisclosed terms. Century is a 65-year-old movie theater chain based in San Rafael, California. Cinemark says it'll acquire all of Century's outstanding stock for a combination of cash and stock in Cinemark's parent company. There was no immediate announcement about possible job cuts. The combined company will have about $200 million customers a year at close to 400 theaters in 37 states and 13 countries. The acquisition is pending regulatory approval and the completion of financing.

The Dallas Morning News said today it expects 85 newsroom employees to accept voluntary severance packages. The flagship property of Dallas-based Belo says layoffs are still possible if not enough workers accept the buyouts. The newspaper says the reductions are part of an effort to change print and Internet products to meet changes in the way consumers and advertisers use media. The buyouts are being offered to almost all newsroom workers. If 85 people took the offer, that would represent nearly one-fifth of the newspaper's editorial employees. The offers include two weeks of base pay for each year of employment up to 15 years, then three weeks of base pay for each additional year of work. The paper also offered an additional payment equal to 12 months of health care premiums. The Morning News said it plans to emphasize more local content. Belo also owns the Providence (Rhode Island) Journal; the Press-Enterprise of Riverside, California; the Denton Record-Chronicle and 19 television stations.

J.C. Penney said today that its second-quarter profit surged by more than a third from last year's quarter. The Plano-based retailer says its bottom line was helped by improving sales of jewelry, accessories and women's apparel. Penney said it earned $179 million in the quarter ended July 29th. Revenue rose 6.5 percent to $4.24 billion. The sales results were slightly above the $4.19 billion analysts expected. Same-store sales at locations open at least one year rose 6.6 percent in the quarter.

Tenet Healthcare reports its second-quarter loss jumped to $398 million. Dallas-based Tenet pointed to spending on litigation that has dominated discussion about the nation's second-largest hospital operator. That compares to a year-ago loss of $33 million. Tenet says the loss included litigation and investigation costs included charges of $711 million to settle Medicare-over-billing charges, $27 million for restructuring the business, and other one-time gains and expenses. Last month, a doctor and two nurses at a Tenet hospital in New Orleans were charged with second-degree murder in the deaths of four patients stranded by Hurricane Katrina.

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