Friday PM December 15th, 2006

Gasoline prices level off in Texas...Goodyear Tire & Rubber resuming talks with union on new labor deal...Joint Strike Fighter jet takes maiden flight in north Texas...

Rising gasoline prices leveled off this week in Texas. That's according to the weekly AAA Texas Retail Gas Price Survey released today. The survey report says the average retail price of regular, self-serve gasoline in Texas remained essentially unchanged this week at $2.19 per gallon. The national price average rose about a penny a gallon to $2.29 per gallon. Houston's average is at $2.15 per gallon—up two-tenths of a penny. Auto club spokeswoman Rose Rougeau predicts motorists should see gas prices remain around current levels for the next few weeks. That's with crude oil trading near $62 a barrel and OPEC ministers voting against any immediate production cuts. But she notes OPEC has left open the possibility of February production cuts. Austin-San Marcos has the most expensive gasoline, averaging $2.23 per gallon. That's two cents lower than last week. The cheapest gas is in Houston, where prices average $2.15 per gallon. That's essentially unchanged from last week.

Goodyear Tire & Rubber and the union representing 15,000 striking workers will resume talks on a new labor deal. United Steelworkers and the world's third-largest tire maker have disagreed over health care proposals for retirees and plans to close a tire factory in Tyler.

The Interior Department has signed deals with five oil companies to pay royalties going forward on some deepwater production in the Gulf of Mexico. But the department will not collect back royalty payments because of botched lease agreements. Shell Oil, BP, ConocoPhillips, Marathon Oil and Walter Oil and Gas will pay royalties on production dating back only as far as October 1st. Lawmakers passed the Deep Water Royalty Relief Act in 1995 to encourage further deepwater Gulf exploration, giving producers a pass on royalty payments until they had produced a certain amount of oil and gas or prices rose to certain levels. But contracts signed with more than 50 operators in 1998 and 1999 failed to include price triggers that would have forced the producers to pay royalties at certain thresholds.

The mayors of Dallas, Houston and other cities opposed to building seven coal-fired power plants in east Texas--have won the right to challenge them. But those city leaders failed to persuade two administrative law judges to slow the permitting process. TXU's coal proposal is on the fast track, under a 2005 executive order from Governor Rick Perry, to expand production of electricity--and lower its cost. Critics say Dallas-based TXU is driven by profits and is rushing to beat more stringent federal rules on carbon dioxide emissions. An administrative hearing begins February 21st. Two administrative judges ruled that city and county governments have the legal right to be involved if their areas are affected. The judges also decided that some cities supporting the construction will be allowed to participate in the hearings.

The new Joint Strike Fighter jet made its first flight today in north Texas. The fighter is assembled at Lockheed Martin's plant in Fort Worth. Hundreds of people turned out to witness the flight from the Lockheed Martin facility for the flight that was expected to last about one hour. The F-35 will likely be the largest defense contract ever--with a current overall cost of $275 billion to be stretched over the next two decades. The Pentagon plans to make roughly 2,500 planes. Eight other countries might also purchase the military jet.

Analysts say a private-equity consortium's proposed takeover of Australia's Qantas Airways isn't likely to spur a flurry of similar bids for airlines across the Asia-Pacific region. But some believe the deal signals more investor confidence in the global airline industry hit hard in recent years by surging fuel prices, terrorist attacks and health fears spurred by SARS and bird flu outbreaks. The $8.6 billion bid for Qantas is one of the biggest in Australian corporate history. Qantas said its board unanimously agreed to recommend the offer from the consortium led by Australia's MacQuarie Bank and Fort-Worth based Texas Pacific Group. The bid represents a 33 percent premium above Qantas' share price before takeover speculation began in early November.

Baker Hughes in Houston says the number of rigs actively exploring for oil and natural gas in the U.S. decreased by eight this week--to reach 1,716. One year ago the rig count stood at 1,463. Texas slipped by three.

Tags: News


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