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Tuesday September 27th, 2005

President Bush tours hurricane-stricken areas of Southeast Texas and Southwestern Louisiana…Lyondell dismisses Venezuelan oil minister’s statement that refinery is for sale…Refineries continue damage assessments and startups… President Bush says he’s giving top priority to helping getting food, water, fuel and electric power to coastal residents left without by Hurricane Rita. His comments came after a […]

President Bush tours hurricane-stricken areas of Southeast Texas and Southwestern Louisiana…Lyondell dismisses Venezuelan oil minister’s statement that refinery is for sale…Refineries continue damage assessments and startups…

President Bush says he’s giving top priority to helping getting food, water, fuel and electric power to coastal residents left without by Hurricane Rita. His comments came after a briefing in Beaumont by Governor Rick Perry and Southeast Texas local officials. Now, he’s getting a look from above as he tours Southeast Texas and Southwestern Louisiana by helicopter. Speaking to reporters, Bush said he’s doing his best to support state recovery efforts. He also repeated his plea to evacuees to heed warnings not to return home until power and water are restored. The Gulf Coast swing was Bush’s seventh since Hurricane Katrina hit a month ago–and comes as he urges Americans to save gas. Beaumont is home to several refineries shut down by the storm. Spokesman Scott McClellan says Bush has ordered his staff to conserve energy, too. Among other things, his motorcade of gas-guzzling vans and SUV’s has been shortened.

Houston drivers are having an easier time getting gasoline as more stations receive fuel deliveries. Suppliers were delivering to key areas first, such as stations along I-10, I-45 and U. S. 290, to accommodate returning Houstonians who fled the city before Rita. Spot shortages are still expected throughout the week.

An official suggests that Venezuela-owned Citgo Petroleum is seeking to sell its Lyondell refinery in Houston. Oil Minister Rafael Ramirez told reporters that Lyondell is an “extremely poor business, a terrible business.” Ramirez was responding to questions about his comments in a weekend interview with the El Universal newspaper in which he said, “we have to get out of this refinery.” Lyondell’s David Harpole responds:

David Harpole audio 1

Harpole says the oil minister’s statement is seen as rhetoric because this would be an odd point in time to sell the refinery:

David Harpole audio 2

The Texas refinery is jointly owned by Citgo and Lyondell Chemical. Ramirez and Venezuelan President Hugo Chavez repeatedly have said contracts with refineries in the U. S. have produced losses for Venezuela.

Citgo has also faced difficulties with its refineries along the Gulf of Mexico region due to Hurricanes Katrina and Rita. Citgo’s David McCollum says its Lake Charles refinery has not yet restarted, contrary to a Department of Energy report:

David McCollum audio

Venezuelan Oil Minister Raphael Ramirez says the company’s refinery in Chalmette, Louisiana, which was damaged by Katrina, won’t restart operations until early next year. Citgo’s Lyondell refinery is up and running, according to Lyondell’s David Harpole:

David Harpole audio

Hurricane Rita forced 22 refineries to shut down or reduce refinery runs, often because of the lack of crude oil supplies, according to the Energy Department. Four additional refiners are still shut down nearly a month after Hurricane Katrina. The lack of power has delayed restarts at Louisiana and East Texas refineries operated by ConocoPhillips, Shell Motiva, Total and Exxon Mobil. The Port Arthur Valero Energy plant sustained significant damage. With so many refineries down, others are focusing their output on gasoline, rather than switching some output to heating oil, which usually happens at this time of the year. That could mean short supplies of heating oil this winter.

Houston-based Rowan Companies, Global Santa Fe and Noble Corporation report significant damage to Gulf rigs because of Rita. A Chevron production platform was cut from its moorings.

Entergy says critical users like police, fire and hospitals should have power restored in a day or two. But the rest of Jefferson County won’t be fully powered-up for another month. About 376,000 homes and businesses in Texas are still without electrical power because of Hurricane Rita. Entergy has about 254,000 customers still without power. Centerpoint Energy estimates about 95,000 customers are without electricity. TXU says some 27,000 customers are still without power. Texas-New Mexico Power is down to 200 without service.

New Jersey officials say some oil companies and independent gas station owners have tried to take advantage of consumers in the face of disaster. The state is suing Hess, Motiva Shell and Sunoco, saying during Hurricane Katrina they inflated gas prices and raised prices more than the once-a-day legal limit. Some independent gas station operators are also being targeted. New Jersey Attorney General Peter Harvey says some dealers used Katrina to artificially inflate prices. Harvey said more than 400 gas stations were monitored during the first week of September, with 100 alleged violations recorded. The probe began after consumers complained about steep and sudden rises in gas prices just before Labor Day weekend.

The public facilities of the Port of Houston Authority are re-opened for commercial trucks assigned to transport cargo in or out of the facilities, according to the Port’s Argentina James.

Argentina James audio 1

Larger tankers are able to come into the channel with the Coast Guard’s okay that ships with deeper drafts can enter. The port’s facilities sustained only minimal damage from Rita. The Houston Ship Channel is open to all tug and barge traffic.

Argentina James audio 2

Navigation aids were washed away or damaged by strong wind and waves, according to the Houston Pilots, the organization responsible for bringing ships into port. Buoys, lights and other aids are similar to street signs that ship pilots use to guide vessels through the channel. More than 60 ships were waiting on Sunday to enter the port.

The Coast Guard says it’s reopened waterways in Texas, Louisiana and the Gulf of Mexico–but with some restrictions. The Calcasieu, Neches and Sabine Rivers have been opened to daylight tug and barge traffic–as are parts of the Gulf Intracoastal Waterway. Only a portion of the Calcasieu River to Cameron Parish in Louisiana is closed. And Entergy and Coast Guard crews are working to remove a downed power line in a section of the Intracoastal Waterway. The Coast Guard advised boaters to be careful because some aids to navigation might not be working.

Union Pacific operations avoided catastrophic damage from Hurricane Rita. But key train routes in East Texas and Western Louisiana remain closed while workers clear debris and set up generators. UP says about 2,500 miles of its track were affected by the hurricane, which came ashore early Saturday near Sabine Pass. The affected routes connect Houston to New Orleans and Shreveport, Louisiana. Union Pacific is working to reroute traffic onto other lines in the area. But company spokeswoman Kathryn Blackwell says UP is having trouble contacting all of its employees–because many of them were evacuated ahead of Rita.

Damage from Hurricane Rita could result in insured losses of $2.5 billion to $6 billion, according to estimates from Boston’s AIR Worldwide and Oakland, California-based EQECAT. Both firms expect significant damage to residential and commercial properties near and to the east of Rita’s track.

The U. S. Department of Labor has extended the filing deadline for Disaster Unemployment Assistance through November 30th for those who are jobless after Hurricane Rita. The department also lengthened to 90 days the paperwork requirements needed to support an initial unemployment application, rather than the usual 30 days. To qualify for Disaster Unemployment Assistance, individuals must not be eligible for regular state or federal unemployment insurance benefits.

The Nevada Gaming Commission today approved the sale of the Golden Nugget Casinos to Landry’s Restaurants. It’s the Houston-based dining company’s first venture into the highly competitive gambling industry. Landry’s will now take over Golden Nugget Properties in downtown Las Vegas and Laughlin, Nevada. Landry’s paid $140 million and assumed $155 million in debt for the hotel-casinos. The sale was announced in February. Company Chairman Tilman Fertitta says Landry’s will begin renovating the Golden Nugget Las Vegas immediately–and start an expansion next year. Landry’s owns and operates more than 300 restaurants, including Landry’s Seafood House, Joe’s Crab Shack, Willie G’s Seafood & Steakhouse and the Chart House.

Federated Department Stores is phasing out operations at the corporate headquarters of May Department Stores on March 1st, affecting 1,200 employees at the Houston corporate office of Foley’s. With the merger between St. Louis-based May and Cincinnati-based Federated, 16 stores in the Houston area will be converted to the Macy’s brand. The Macy’s outlet in the Galleria will be closed and the Foley’s in that mall will be converted to Macy’s.

Sentencing for former Enron Broadband Services executives Ken Rice and Kevin Hannon has been reset to December 2006. The two will be sentenced by U. S. District Judge Vanessa Gilmore after cooperating with the government in other Enron-related trials. Rice and Hannon testified in the trial of five other executives from the Internet division–a case that ended in acquittals on a few charges, but most of the case ended in mistrial. A retrial is set for 2006 in three separate trials.

Former Merrill Lynch banker Robert Furst begins his 37-month prison sentence on September 29th for fraud in the Enron Nigerian barge scam case. He’s the fourth of five convicted bankers and Enron officials to go to prison. A fifth co-defendant has yet to be given a date by U. S. District Judge Ewing Werlein to report to prison.

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