Thursday PM June 21st, 2007

Senate blocks tax breaks for renewable energy financed by new taxes for oil companies...City-funded day labor center to close after officials decide not to renew contract...McMoran Exploration paying Newfield Exploration $1.1 billion for properties in Gulf of Mexico...

Senate Republicans have blocked a $32 billion package of tax breaks for renewable energy that would have been financed mostly by new taxes on major oil companies. Democrats came three votes short of overcoming a threatened Republican filibuster that was keeping the measure from being attached to a broader energy bill. Republican Senators say the nearly $29 billion in additional taxes on major oil companies would have led to reduced production and higher gasoline prices.

A city-funded day labor center in Houston will close at the end of this month after officials decided not to renew its $100,000 contract. Critics have said the East End Worker Development Center encouraged illegal immigration. It was Houston's only city-funded day labor site--funded through the Federal Community Development Block Grant program. It's been popular with illegal workers, who gather there to seek employment. Last spring, then-Councilwoman Shelley Sekula-Gibbs criticized the city funding. Sekula-Gibbs was running for the GOP nomination to succeed Congressman Tom Delay. She said taxpayer money shouldn't be used for something that promotes illegal immigration. Neighborhood Centers Incorporated has operated the center since 2005. The director of the Houston non-profit human services agency says he'd keep operating the center if funding is found.

The revival of the U.S. Senate immigration bill also resurrects a rare split inside organized labor. The AFL-CIO formally came out against the bill Wednesday. That reflects the distaste among manufacturing unions and others whose members have been displaced by or forced to compete with overseas competition. But embracing the bill are a couple of unions that cater to workers in the fast-growing service sector of the economy. They are the Service Employees International Union and Unite Here, an amalgamation of formerly separate unions representing hotel, restaurant, laundry and textile workers. They split from the AFL-CIO in 2005 and have seen their membership rosters swell with immigrants taking jobs in hotels and restaurants and as janitors. The Senate legislation would legalize some 12 million unlawful immigrants. It also would create a new temporary guest worker program wanted by employers in virtually all sectors of the economy. That's where the unions' interests diverge. The Service Employees Union and Unite Here favor keeping temporary foreign worker programs--as long as the government ensures the workers aren't abused. They prefer a House plan that would allow temporary foreign workers to apply for a three-year visa which can be renewed for another three years.

Federal prosecutors have filed papers in response to Linda Lay's attempt to prevent the seizure of nearly $13 million in assets. The widow of Enron founder Ken Lay argues that the government hasn't sufficiently proven allegations that the assets--including a $6 million condominium--are tainted by ill-gotten money. But prosecutors respond that their case is solid. Ken Lay died last summer just weeks after a jury convicted him and former Enron CEO Jeff Skilling of fraud and conspiracy. Lay's record was cleared because he died before sentencing or appeals. Prosecutors allege Lay gained $99 million from criminal activity, repaying Enron loans through company stock as the company was collapsing. They say they can trace nearly $13 million in ill-gotten gains.

Independent petroleum producer McMoran Exploration agrees to pay Houston-based Newfield Exploration $1.1 billion. In return, New Orleans-based McMoran gets all of Newfield's producing properties in the shallow waters of the Gulf of Mexico. McMoran says the deal would give it a portfolio of properties with significant production of oil and natural gas, while providing increased cash flow. Newfield said the agreement was part of its strategy to concentrate on a longer-lived reserve base. As part of the deal, McMoran assumed liabilities associated with the future abandonment of wells and platforms and received future exploration rights for the properties, which include 125 fields on 146 offshore blocks that current produce about 270 million cubic feet of natural gas equivalents daily. McMoran said proven reserves are estimated to be 327 billion cubic feet of natural gas equivalents. The company says about 70 percent of the reserves consist of natural gas.

Calpine and some subsidiaries have filed a joint plan of reorganization in the U.S. Bankruptcy Court for the Southern District of New York to emerge from bankruptcy protection by the end of the year. The California-based company operates Calpine Merchant Services in Houston. Calpine has sold off power plants and cut staff by 30 percent since filing for bankruptcy in 2005.

Britain's Weir Group engineering firm has agreed to buy Fort Worth-based SPM Flow Control for $653 million in cash. SPM makes high-pressure pumps and related flow control equipment for the oil industry. A Weir Group statement says SPM is well-aligned in which in which Weir has been most eager to grow.'' The British company said SPM expects 2007 revenue of $320 million. The transaction will be financed with a combination of new and existing bank facilities and available cash balances.

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