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Wednesday August 10th, 2005

Third incident in six months at BP Texas refinery confines nearby residents…Texas Alliance of Energy Producers probe negative perceptions of oil industry…Riviana Foods cuts jobs nationwide, including at least 30 in Houston… Residents near the site of the March blast at a BP refinery that killed 15 people were once again confined to their homes […]


Third incident in six months at BP Texas refinery confines nearby residents…Texas Alliance of Energy Producers probe negative perceptions of oil industry…Riviana Foods cuts jobs nationwide, including at least 30 in Houston…

Residents near the site of the March blast at a BP refinery that killed 15 people were once again confined to their homes last night. Sirens sounded just after 1 a.m. after a leak of heavy oil and gas caused a plume of smoke to cover much of the area. This is the third incident in six months at the Texas City refinery. Texas City Emergency Management Coordinator Bruce Clawson told the Galveston County Daily News that the leak occurred at BP’s cat feed hydro unit. There was no indication of explosion or fire, and the Texas City Fire Department monitored the air and found no indication of toxic or harmful materials. The order to stay indoors was lifted after almost two hours when officials said the leak was contained. The plant is the site of an explosion in March that killed 15 people and injured 170. Another explosion in July happened because contractors installed the wrong type of pipe, leading to a rupture and release of flammable hydrogen gas. There were no injuries in that mishap, or in this morning’s leak.

The Texas Alliance of Energy Producers, which tracks oil industry performance by employment, price, rig count, drilling permits and completions, recently polled Texans about their perceptions of the oil industry. Alliance Senior Vice President Pat French says there is little disagreement within the oil and gas industry that a serious problem exists regarding the industry’s public image.

Pat French audio 1

French says the survey shows people perceive the oil industry as greedy, made up of fat cats, environmentally irresponsible and not the kind of industry they would recommend to their children. Forty percent blamed oilmen for the rise in gasoline prices.

Pat French audio 2

French says there’s a direct correlation between public perception and public policy.

Pat French audio 3

An informational media campaign will involve television and print media advertising in selected test markets, and then another survey will determine any changes in public attitudes.

Pat French audio 4

French says negative public opinion has resulted in overly burdensome laws and regulations that often needlessly drive up the cost of doing business. The poll was a telephone survey of 750 people in the Houston area plus another 300 Texans in other areas of the state.

Riviana Foods is cutting about 130 jobs nationwide, or 12 percent of its 1,075 employees, according to the Houston Business Journal. Some 30 jobs are to be trimmed from Houston’s corporate office, as well as processing and technical functions in Houston. The bulk of the layoffs will be from the company’s Abbeville, Louisiana packaging and milling operations. Other job cuts will be in Arkansas and Tennessee.

Houston’s economy produced a Purchasing Manager’s Index of 63.7 in July, according to the National Association of Purchasing Management. That means that sales have grown again for the 31st consecutive month. That level has only been bettered three times in the past ten years. The employment index is at the highest level it has attained since early 1998, with 40 percent of participating Houston firms increasing their manpower while only ten percent had overall staff decreases. The PMI is based on a monthly survey of some 80 purchasing executives in oil and gas exploration and productino, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare.

Car and truck sales rose 34 percent in July compared to the same month a year ago, according to the Houston Automobile Dealers Association. Employee discount programs by the Big Three are credited, even helping automakers without such programs. Houston’s numbers are similar to national figures, with the U. S. auto industry posting its strongest month in its history according to the Detroit Free Press. The second-strongest month was October 2001, when carmakers began offering zero-percent financing.

Enron has won court approval of a settlement with the Royal Bank of Scotland providing creditors with $21.8 million–the first settlement to win court approval in the Enron “MegaClaim” litigation. Enron sued Royal Bank of Scotland and nine other financial institutions in 2003, accusing them of assisting in the accounting fraud that drove the company into bankruptcy which cost investors $68 billion. Enron has also reached settlements with the Canadian Imperial Bank of Commerce for $250 million and the Royal Bank of Canada for $25 million.

Reliant Energy has told the Securities and Exchange Commission that it received notice of a class-action lawsuit filed in Ontario, according to the Wall Street Journal, The suit seeks $50 billion from the company and about 20 other power generators over emissions from U. S. and Canadian coal-fired plants.

Four U. S. oil companies, including Marathon Oil, are targets of an investigation by the SEC looking into possible illegal payments made by companies to the West African government of Equatorial Guinea. At issue are payments made by the companies to officials of Equatorial Guinea which may have violated the U. S. Foreign Corrupt Practices Act. A Senate probe disclosed that some U. S. oil companies rented property from companies owned by the president of Equatorial Guinea and hired a security firm owned by the president’s brother. The companies also allegedly paid tuition and living expenses for children of government officials who were studying abroad.

Some airports in Arizona, California, Florida and Nevada recently came within days–and at times within hours–of running out of jet fuel. Experts blame supply bottlenecks. Airlines were forced to fly in extra fuel from other markets and scramble for deliveries by truck. The cost of fuel also has been going up. Glenn Hipp is Director of Fuel Purchasing and Inventory Management at Dallas-based Southwest Airlines. Hipp says late July and early August were unprecedented for Southwest for the number of cities where they’ve had to manage supply problems. Fort Worth-based American Airlines, United Airlines and America West also say they’ve had recent supply trouble. Those carriers haven’t canceled flights or made extra stops to tank up, nor have planes flown with less than the minimum fuel required by the Federal Aviation Administration. The Associated Press reports refining and pipeline capacity in some regions of the U. S. have grown slower than demand. Also, the petroleum industry has reduced its fuel inventories in recent decades.

Congresswoman Eddie Bernice Johnson today announced she supports the Wright Amendment. Johnson’s district includes Dallas Love Field, where the rule limits long-haul flights. Johnson threatened to introduce legislation to close commercial traffic at Love Field if Southwest Airlines succeeds in repealing the Wright Amendment. Johnson says repealing the 1979 ban, which was meant to protect Dallas-Fort Worth International Airport in its early days, would weaken the bigger airport. Fort Worth-based American Airlines, which calls DFW home, welcomed Johnson’s stand. Meanwhile, Plano Congressman Sam Johnson, who favors repealing the rule, criticized his colleague’s talk of closing Love Field. He said “talk about a dumb idea. How can someone who represents Dallas Love Field support legislation to shut it down? That is reckless and wrong.”

Southwest Airlines says it’s giving members of its frequent-flier program an extra year to earn credits toward free travel. The Dallas-based low-fare carrier also says it’ll begin removing blackout dates in February. The airline said today that members of its rapid rewards program would get two years instead of one year to earn travel credits, effective immediately. Existing credits will be extended an additional year before expiring. However, it also says it would the limit number of seats for free travel, starting February 10th. Most other carriers already do that. Southwest says the number of free seats would vary by flight–and it warned that it may be difficult to redeem awards during holiday or peak travel periods.

Texas lawmakers today sent legislation to the governor that would make it easier for phone and other companies to offer cable TV-like services. The House has joined the senate in passing the wide-ranging telecom bill. The bill–which the Senate passed yesterday–would let phone companies avoid having to get licenses from thousands of local governments. The local licenses are required of cable TV providers–who waged a bitter battle against the telecom bill. Supporters say phone companies such as San Antonio-based SBC Communications and Verizon would boost competition for cable services and give consumers more choices. But the cable TV industry says the legislation would give big phone companies unprecedented competitive advantages.

A former CEO of Merck says the drug manufacturer did not put profits over safety to get Vioxx on the market in 1999. The videotaped deposition from Raymond Gilmartin came in the Angleton trial over the death of a Texan who took the painkiller. Robert Ernst died in 2001. Gilmartin earlier this year retired as head of New Jersey-based Merck. His deposition was played as part of Merck’s defense. And Merck’s head of clinical trials, Dr. Alise Reicin, today denied that the company skewed studies to make Vioxx appear safer than it was. Merck pulled Vioxx from the market in September when a study showed it could double risk of heart attack or stroke if taken for 18 months or longer. But whether Ernst had a heart attack is in dispute. His autopsy says he died of an irregular heartbeat secondary to clogged arteries. The case is the first of more than 4,200 Vioxx-related state and federal lawsuits across the country to go before a jury.

Dell will open its first customer call center in the Philippines early next year. The Round Rock-based company says it’ll initially hire 700 agents for the Manila call center. Dell plans to hire an additional 70 people in “leadership and administrative” positions by the end of the month and “technical support specialists” in November. The center is to begin operations in February. The call center industry is one of the fastest growing sectors in the Philippines, which has a large pool of college-educated workers easily trained for English-language customer assistance. Dell says it operates more than 30 contact centers around the world for round-the-clock customer support.

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