Wednesday PM May 30th, 2007

Kinder Morgan completes deal to go private...ExxonMobil: creating policies to reduce greenhouse gas emissions is important, but premature...Texas lawmakers end session without action on TXU sale...

Houston-based energy transportation firm Kinder Morgan has completed the deal to take the company private. Trading of KMI's common stock on the New York Stock Exchange is suspended as the company takes steps to delist the stock from the exchange. The sale was to a group of investors, including Kinder Morgan Chairman and CEO Richard Kinder, co-founder Bill Morgan, board members and affiliates of Goldman Sachs Capital Partners, American International Group and affiliates, The Carlyle Group and Riverstone Holdings.

ExxonMobil today reiterated its position that creating far-reaching policies to reduce harmful greenhouse gas emissions is important but premature. That came even as some shareholders lambasted the oil giant for what they said was an irresponsible and even dangerous environmental stance. Record profits aside, the world's largest publicly traded oil company was criticized by a dozen or so of the 450 attending its annual shareholder meeting in downtown Dallas. In particular, a number of environmental-minded investors and shareholder activists asked the Irving-based company to set quantitative goals for reducing greenhouse gas emissions--and to commit to greater investment in renewable sources of energy. They got neither. Instead, Chairman and Chief Executive Rex Tillerson continued to insist the prudent strategy was to focus on finding and producing new supplies of crude oil and natural gas. The reason: ExxonMobil is a petroleum and petrochemical company, and worldwide demand for its products will persist for decades.

Unemployment figures in the Houston area continue falling, according to the Bureau of Labor Statistics. Houston's unemployment rate fell to 3.8 percent in April from 4.1 percent in March. The area had an increase of 84,900 jobs—one of the largest increases among metropolitan areas in April compared with a year ago. The area also had one of the largest year-over-year percentage increases in employment of 3.5 percentage points.

Houston leads the nation in manufacturing jobs, according to the 2007 Texas Manufacturers Register, an industrial directory published by Illinois-based Manufacturers' News. Houston has 18.5 percent of the state's manufacturing jobs—up 2.7 percent from April 2006. The publication says Texas has 24,910 manufacturing companies employing 1.2 million workers. The oil industry remains the state's top industrial employer, with 11.5 percent of the state's manufacturing employment. Texas is second in the nation only to California for manufacturing.

When the $32 billion sale of TXU was announced in February, stunned Texas lawmakers drafted far-reaching proposals to cut prices for electricity and protect consumers from overgrown utility companies. Lawmakers raged at TXU over high prices and pollution, and they quizzed TXU's buyers about plans for the state's largest power generator. But when the legislature adjourned, nothing had come out of the uproar except the record-breaking sale of the company, which now appears more likely than ever to be completed. TXU is being bought by an investor group led by private equity firms Kohlberg Kravis Roberts and TPG, formerly Texas Pacific Group. The buyers had lobbied against many of the proposals in Austin, especially Senate-passed plans to force TXU to sell power plants and submit the sale to more thorough state review and a House proposal to split TXU into three companies. KKR founding partner Henry Kravis personally warned lawmakers that some of the proposals would kill the deal and cause other companies to think twice before doing business in Texas.

The Clean Coal Technology Foundation of Texas commends the Texas House Energy Resources Committee and Texas Senate Natural Resources Committee leadership for successful passage of a bill promoting development of advanced clean energy. It creates incentives for the installation of technologies that render carbon dioxide capable of capture and sequestration. It promotes gasification and creates higher energy emissions standards for plants seeking to be designated as ad advanced clean energy project.

In a union of two large meat-processing companies, a Brazilian firm announced it will acquire Swift in a $225 million cash deal. It will give the combined company greater access to expanding markets and operations on three continents. J&F Participacoes--which controls Brazil's leading beef exporter Friboi--won out over other bidders for Swift. Swift, headquartered in Colorado, is the third-largest U.S. processor of beef and pork and has plants in six states and an operation in Australia. J&F will buy Swift from its owners, H.M. Capital Partners of Dallas and Vail-based Booth Creek Management. The companies said the combined company will become the largest beef processing operation in the world. Closing, which is contingent upon antitrust reviews, is expected in mid-July.

BP says refining and marketing chief John Manzoni is leaving the company to head up the Canadian firm Talisman Energy. He was criticized for his handling of safety management after a March 2005 explosion killed 15 workers at BP's Texas City refinery. But the British oil giant says his departure is linked instead to the appointment of Tony Hayward as CEO earlier this month. BP said Manzoni had been among those considered to replace former CEO John Browne, and that he decided to look at other opportunities after Hayward's appointment. BP says Manzoni will be replaced by fellow executive Iain Conn, effective Friday. However, Manzoni will stay on for a three-month transition period.

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