Friday PM February 23rd, 2007

AAA Texas tracks higher gasoline prices...UH conference looks at renewable energy...BP settles pair of lawsuits stemming from 2005 Texas City oil refinery explosion...

Texas motorists faced higher retail gasoline prices for a third week in a row. The weekly AAA Texas Gas Price Survey found regular-grade gas prices rose an average of four cents to $2.15 per gallon. The national pump price average rose five cents to $2.30 per gallon. Houston's average is up 4.5 cents to $2.13 a gallon. The most expensive gas was found in Amarillo, where regular grade rose an average of four cents to $2.26 per gallon. The cheapest gas was in Corpus Christi and San Antonio, where it averaged $2.08 per gallon. That was a six-cent increase in Corpus Christi and a four-cent increase in San Antonio. Auto club spokesperson Rose Rougeau says the higher prices result from recent increases in crude oil prices, which topped $60 per barrel this week. She also says U.S. refineries are nearing their annual switch to cleaner-burning summer-grade fuels, which result in higher prices at Texas pumps.

Interest in renewable energy is driven by energy security and climate change. A conference hosted by the University of Houston's Environmental and Energy Law and Policy Journal at the UH Hilton looked at wind energy and biofuels as two ways to reduce dependence on foreign oil. Law Foundation Professor of Law Sanford Gaines says there are a couple of reasons that Europe is ahead of the curve in embracing wind power, for example.

"One is that I think they were more sensitive given that they have no petroleum, essentially—very little of their own. Some offshore petroleum in the UK and Norway, but basically, in terms of petroleum, they were heavily reliant upon imports--much more than we were. So there was, the energy security consideration was there. But we see very rapid growth in the United States in recent years--26, 27 percent annual growth rate in installation of wind generation capacity in the United States, Texas being a leading example of that."

The conference looked at the challenges of using wind energy for electricity, including noise and aesthetics and distribution problems. The conference probed issues raised by the use of biofuels for vehicles and industrial use, such as land management changes and the economics of investments in processing technologies.

BP is settling a pair of lawsuits stemming from a deadly 2005 explosion at its Texas City oil refinery. That's the word from an attorney for two workers injured in the March 2005 blast. Brent Coon represents contract workers Clarence Kindard and E.J. Godeaux. No terms were released--and there's no comment yet from BP. Jury selection in the lawsuits had been set for next week in a state district court in Galveston. They would have been the first cases connected to the blast to go to trial. The British energy giant has said it has settled most of more than 1,000 claims filed against it since the blast. Fifteen workers died and more than 170 others were hurt. BP's outgoing chief executive, John Browne, had been scheduled for a deposition in the case Friday, but that deposition was delayed.

U.S. and Mexican officials say they'll try prescreening trucks in both directions, as U.S. roads open to Mexican trucking. U.S. Transportation Secretary Mary Peters announced in El Paso that DOT will begin a one-year pilot program to let U.S. and Mexican trucks cross their shared border more freely. She announced the program in a ceremony on the U.S. side of the bridge of the Americas between El Paso and Ciudad Juarez, Mexico. For one year, 100 Mexican trucking companies and a like number of U.S. companies will have their trucks prescreened for security and safety concerns. Trucks approved for the program will be allowed to deliver and retrieve cargo in the interiors of both countries. Currently, Mexican trucks must hand over their cargos to U.S. companies within a trade zone close to the border crossing. U.S. truckers don't cross into Mexico currently. U.S. and Mexican officials announced that U.S. officials would be allowed to inspect U.S.-bound Mexican trucks and their cargoes in Mexico before they cross the border.

American Airlines' parent company says Brazil launched a surprise search of the airline's cargo facilities as part of a price-fixing investigation. Fort Worth-based AMR Corporation says the search happened January 23rd at a cargo terminal in Sao Paulo. It says Brazilian authorities are investigating whether American and other carriers violated Brazilian competition laws by conspiring to set fuel surcharges on cargo shipments. AMR disclosed the search in its annual financial report filed with the Securities and Exchange Commission. It says it intends to cooperate fully with investigators. American and other carriers have imposed surcharges on cargo and passengers in recent years to recover high jet fuel costs.

A Washington, D.C. judge has refused to dismiss charges against Texas oilman Oscar S. Wyatt, Jr., Houston-based Bayoil USA sole shareholder David Chalmers, Jr., and trader Ludmil Dionissiev. They face wire fraud and conspiracy charges for allegedly paying secret and illegal surcharges to Iraq to receive allocations of oil. The three have pleaded not guilty, are free on bail and await trial. But a South Korean man is going to prison for accepting at least $2 million to secretly work on Iraq's behalf to influence the UN Oil-for-Food program. A federal judge in New York sentenced businessman Tongsun Park to five years in prison. Park was convicted last year on conspiracy charges. A jury rejected claims that Park was a middleman representing UN interests in relieving the pain of Iraqis under Saddam Hussein.

The number of rigs actively exploring for oil and natural gas in the United States increased by eight this week to 1,754. Houston-based Baker Hughes reports that of the rigs running nationwide, 1,472 were exploring for natural gas and 278 for oil. Four were listed as miscellaneous. A year ago, the rig count stood at 1,543. Of the major oil- and gas-producing states, Texas lost one. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.

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