Monday PM September 10th, 2007

BP Texas City explosion civil trial in Galveston and Oil-for-Food trial in New York continue...Brazil-Texas Chamber of Commerce sponsors biofuels summit...Lundberg Survey: Gas prices rising back up again...

A former manager of BP's Texas City plant--where 15 people died in a 2005 explosion--denies repairs were delayed because of concerns over profits. Dan Parus testified today in a Galveston court that the production of profits did not control the company's schedule. Parus took the stand in the first civil trial stemming from the March 2005 blast that also injured more than 170 people. Parus, in his third day of testimony, also denied that budget concerns would prevent him from fixing units if they were seriously in disrepair. A review found the explosion occurred after a piece of equipment called a blowdown drum overfilled with highly flammable liquid hydrocarbons. About 1,350 of the thousands of lawsuits filed since the accident--have been settled.

Prosecutors told a New York jury today that Texan Oscar Wyatt, Jr., was a greedy businessman who paid kickbacks to Saddam Hussein's regime--for contracts. But the defense portrayed Wyatt as a friend and adviser to U.S. presidents--and said he didn't break the law. Assistant U.S. Attorney Stephen Miller told jurors that two former Iraqi oil officials will be among witnesses at Wyatt's conspiracy trial. Miller accused the 83-year-old defendant of secretly obtaining oil from Iraq in the 1990s after Iraq's invasion of Kuwait and the Gulf War led to sanctions. The defense described Wyatt as a World War II hero who grew up poor. Wyatt, if convicted, could face more than 60 years in prison. The Oil-for-Food program was created to help Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.

Players in biofuels gathered to learn more about opportunities in Brazil at a summit sponsored by the Brazil-Texas Chamber of Commerce at the Houstonian. The group's executive director, Ricardo Peduzzi, says speakers have been talking about ethanol, trading and logistics, energy sustainability, economic development and the environment.

"We want this meeting to be the place to go if anyone in the globe wants to discuss biofuels. We're in the world's energy capital, and if in any place in the world you're going to discuss biofuels, it better be in Houston! And so we're bringing in the key players in the U.S.—we have the Commissioner of Agriculture from Minnesota, Gene Hugoson, and we have some of the leading producers of ethanol and sugar cane from Brazil. We have some key distributors of biodiesel in the U.S. and we have some important producers of biodiesel from the United States and ethanol from sugar cane in the United States. So I think what we're doing here is we're bringing the 'dream team' to discuss biofuels."

Peduzzi says this is more of a chance to get on the same page, rather than a business deal-producing event. Peduzzi co-founded the Brazil-Texas Chamber of Commerce in 2002. He founded Peduzzi and Company to assist client-companies explore international alliances.

Gas prices on average have risen about 6.5 cents over the last two weeks. According to the Lundberg Survey, the average price of self-serve regular gasoline nationwide is $2.81 a gallon, mid-grade is $2.94 and premium is $3.05. On Friday, the nation's lowest price was found in Newark, New Jersey, where a gallon of regular cost $2.52. The highest was in Chicago at $3.27.

Crews worked this weekend to clean up gasoline that spilled from a broken ExxonMobil pipeline in Brazos County. A construction worker removing dirt for a nearby highway widening project ruptured the line Friday. The accident prompted the evacuation of about a half-dozen homes and the closing of Texas 6 in southern Brazos County for about seven hours. ExxonMobil public affairs adviser Brian Dunphy says a temporary clamp was placed on the pipeline and it was back in service. A permanent repair will be made soon. Remediation has begun. Authorities weren't sure how much gasoline spilled from the pipeline before it was capped Friday night.

A shadowy leftist rebel group has claimed responsibility for six explosions today at several Mexican gas and oil pipelines. No injuries directly related to the explosions were immediately reported. It's the second time in three months that the so-called People's Revolutionary Army says it has targeted pipelines in its "prolonged people's war'' against "the anti-people government.'' The group, known as the EPR, staged several armed attacks on government and police installations in southern Mexico in the 1990s. The predawn explosions affected several natural gas pipelines and one oil pipeline in the Gulf Coast state of Veracruz. At least 21,000 people were evacuated--as a precaution. The Associated Press reports at least one un-detonated explosive device was later found in a swampy area near a highway toll booth just north of Veracruz.

With a growing number of analysts betting on a Fed rate cut next week, investors will continue to look closely at fresh economic data. In the week upcoming, reports are due on retail sales, industrial production and the trade deficit, among others. On Friday, the government reports on August retail sales. Analysts look for a gain of 0.5 percent. Before that, the July trade balance is scheduled for release on Tuesday. This coming Friday also brings the Federal Reserve's August Industrial Output report.

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