Tuesday PM November 6th, 2007

Houston home starts and closings continue falling...Mayor Bill White calls for chemical industry to improve air quality...Crude oil futures prices end at new record...

Houston home starts and closings continued falling in the third quarter, according to Houston-based MetroStudy, as reported in the Houston Chronicle. The research group blames poor mortgage lending practices. Developers started 9,725 single-family homes in the quarter—a 28 percent drop from the same period in 2006. Closings fell 10.5 percent to 11,302 units. Homes under $150,000 were affected most, with starts in that range dropping 36 percent.

An industry-led report is calling for chemical plant operators to act voluntarily to improve Houston's air quality. But Mayor Bill White says he's not willing to wait much longer. White welcomed the industry plan, but said the city must verify industrial efforts to clean up air pollution. The mayor says industrial polluters have six months to clean up their act. The report from the Houston Regional Air Quality Task Force recommends 18 steps for reducing toxic chemicals in the air--such as benzene and chlorine. The list includes petrochemical plants installing infrared cameras to identify emissions from roof storage tanks and other equipment. The task force also seeks new programs to reduce car and truck emissions. Meanwhile, some environmentalists say a call for voluntary actions from the industry to clean up emissions--won't work.

A Texas law that takes effect January 1st will allow property tax exemptions for equipment to clean up coal power plants. Some lawmakers have joined school districts, counties and cities in asking the Texas Commission on Environmental Quality to take a conservative interpretation of the law. The 2007 law gives businesses incentives to install pollution control equipment in coal plants. It's a revision of a program allowing property tax exemptions for certain equipment that reduces pollution. The wording is broad enough that local officials fear companies will lobby regulators to approve exemptions for major parts of existing power plants or refineries. But Representative Rick Hardcastle of Vernon says such concerns are exaggerated. Hardcastle says the new law is designed to ensure that new electric power plants are as clean as possible.

Crude oil futures prices ended higher at a new record on the New York Mercantile Exchange. The near-month contract for the benchmark grade increased by $2.72--closing at $96.70 a barrel. Bombings in Afghanistan and an attack on a Yemeni oil pipeline are compounding supply concerns that have driven crude prices higher in recent weeks. One analyst says the attack in Yemen disrupted a pipeline that carries 155,000 barrels of crude daily. Analysts look for Wednesday's update from the government to show that oil inventories have dropped over the previous week. The Energy Information Administration is predicting that oil consumption will rise in the current quarter and next year despite higher prices, and that inventories will fall. The weak dollar, down to a new low against the Euro, is also lifting oil prices.

The Hollywood writers strike is taking an additional toll. Networks say production of three sitcoms that are filmed before live audiences has been stopped. A spokesman for 20th Century Fox Television says the show "Back to You,'' with Kelsey Grammer and Patricia Heaton, won't return from a planned hiatus. Two other shows"'Til Death'' and "Rules of Engagement''--will also stop production immediately because of the strike. That's according to a Sony Pictures Television executive. "'Til Death'' airs on Fox, and "Rules of Engagement'' is on CBS. The shows are typically written the same week that they are filmed, and the jokes are sharpened by writers even on the day of production. Writers are in the second day of a strike. It immediately sent late night comedy shows into reruns. Key issues include how much money the writers will be paid when their shows are available on the Internet. No new negotiations are scheduled. And the chief negotiator for the producers says he expects a long standoff.

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