Friday PM November 2nd, 2007

Employment holding steady despite housing collapse and credit crunch...Gasoline up a dime, but Houston's average is lowest in Texas...Alabama Supreme Court throws out much of record $3.6 billion verdict against ExxonMobil...

The Labor Department reports the unemployment rate is holding steady, while payrolls rose by a surprisingly strong 166,000 in October, the most in five months. That's being seen as an encouraging signs that the nation's employment climate is holding up relatively well against the strains of a housing collapse and credit crunch. The Labor Department says unemployment for October was steady at 4.7 percent for the second month in a row. It's a figure that is considered low by historical standards. Job gains were logged for professional and business services, education and health care, leisure and hospitality, and for the government. Those employment increases more than offset jobs losses in manufacturing, construction and retail, which have been casualties of the problems plaguing the housing market.

Crude oil prices at historic highs continued to carry Texas retail gasoline prices with them this week. The weekly AAA Texas Gas Price Survey shows regular self-serve averaging $2.80 per gallon in 11 Texas cities surveyed. That's nine cents more than last week. Nationally, regular self-serve climbed nine cents to an average of $2.91 per gallon. Auto club spokeswoman Rose Rougeau says record crude oil prices topping $90 per barrel have boosted pump prices. Amarillo has the state's most expensive gasoline with regular self-serve averaging $2.91 per gallon after an eight-cent increase this week. Houston has the state's cheapest gas at $2.72, despite a ten-cent increase this week.

The Alabama Supreme Court has thrown out much of a record $3.6 billion verdict that the state won against ExxonMobil. The dispute with Irving-based ExxonMobil involves natural gas royalties from wells drilled in Alabama-owned waters. Alabama had claimed ExxonMobil intentionally underpaid royalties. But ExxonMobil said there was no fraud--and it was a contract dispute. The high court Thursday awarded Alabama $51.9 million in compensatory damages--saying the state failed to prove fraud. The court threw out all punitive damages. An Alabama attorney says the state will likely ask the court to reconsider. A jury in 2003 ordered nearly $103 million in compensatory damages and $11.8 billion in punitive damages. A judge later cut the punitive damages, to drop the total verdict to $3.6 billion.

The W.A. Parish power plant near Sugar Land is installing a system to capture large amounts of carbon dioxide for underground storage or for enhanced oil recovery, according to the Houston Chronicle. NRG Energy is installing a system using an ammonia-based solution. This will be the largest such project in the world. Carbon dioxide is a byproduct of burning coal for power generation.

The State Auditor's Office says Texas has been slow in distributing federal aid to homeowners and communities hit by Hurricane Rita more than two years ago. The state has used only two percent of the more than $500 million in federal aid. State Auditor John Keel's report recommends that the Texas Department of Housing and Community Affairs work faster while protecting against waste and fraud. Executive Director Michael Gerber says Housing and Community Affairs has acted on much of the advice already. He says the agency has focused on accountability rather than speed. Gerber says the agency expects to have begun construction on 100 homes by the end of the year, with 450 completed by the end of the summer. The agency has also hired a private contractor to handle processing and disbursement of federal aid funding.

Bush administration officials tell Congress they're aggressively dealing with a rising tide of mortgage foreclosures. Officials from Treasury and the Department of Housing and Urban Development testified at a hearing in the House, saying the administration has a comprehensive plan and is working with an industry group formed to deal with the crisis. But, they say it's up to homeowners to do their part if they face the possibility of losing their homes. Many Democrats have criticized the administration's efforts, arguing they are too dependent on the industry and don't offer enough government assistance. It's estimated there could be two million or more mortgage defaults over the next two years in the subprime mortgage market, as loans reset from low introductory rates to much higher ones.

Hollywood writers are looking for a happy ending. They're prepared for a strike but are leaving the door open for last-minute contract talks with TV and movie producers. Leaders of the Writers Guild are meeting in Los Angeles to set a date for a walkout agreed to after contract talks broke down Wednesday. Word from a membership meeting Thursday night is the walkout could begin Sunday or Monday. Union leaders say they will put off a strike if producers come up with a better offer. The president of the Alliance of Motion Picture and Television Producers say his group wants to resume talks and is "prepared to close'' a contract this weekend. The two sides have been hung up over the writers demand for a bigger share of revenue from DVDs and from sales and rentals of productions via the Internet. If there is a walkout, the first casualties would likely be talk shows that draw heavily from current events.

General Mills has recalled about five million frozen pizzas sold nationwide under the Totino's and Jeno's labels because of possible e. Coli contamination. The recall focuses on pizzas with pepperoni topping that were produced since July when investigations began into 21 e. Coli cases.

Baker Hughes in Houston says the number of rigs actively exploring for oil and natural gas in the U.S. this week jumped by 35--to reach 1,795. One year ago the rig count stood at 1,739. Texas gained 26 rigs this week. Baker Hughes has tracked rig counts since 1944.

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