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Wednesday AM March 21st, 2007

CSB: OSHA shares blame with BP for Texas City refinery fire…Dell blames high taxes for lagging PC sales in India…Embattled Blockbuster chairman and CEO to leave by year’s end… A report criticizes the Occupational Safety and Health Administration for lax oversight that factored in a deadly 2005 BP Texas City refinery explosion. The U.S. Chemical […]

CSB: OSHA shares blame with BP for Texas City refinery fire…Dell blames high taxes for lagging PC sales in India…Embattled Blockbuster chairman and CEO to leave by year’s end…

A report criticizes the Occupational Safety and Health Administration for lax oversight that factored in a deadly 2005 BP Texas City refinery explosion. The U.S. Chemical Safety and Hazard investigation board repeated allegations that organizational and safety deficiencies at BP led to the blast. The board’s 335-page report said that although the plant had had several fatal accidents over the past 30 years, OSHA had done only one process safety management inspection there–in 1998. Lead investigator Don Holmstrom says the placing of temporary work trailers near hazardous areas led to most of the deaths and injuries.

“The CSB was able to calculate that approximately 7,600 gallons of flammable liquid hydrocarbons were released from the top of the blowdown stack in just under two minutes. That’s nearly the equivalent of a full tanker truck of gasoline. High overpressures resulting from the vapor cloud explosion totally destroyed 13 trailers and damaged 27 others. As we stated in our urgent recommendation earlier, such trailers have no place in hazardous areas of chemical production.”

The CSB board noted that “cost-cutting in the 1990s by Amoco and then BP left the Texas City refinery vulnerable to a catastrophe.” Carolyn Merritt, who chaired the investigation, has recommendations for the board.

“Appoint an additional member of the board with expertise in refining operations and process safety. And we urge the BP board to put in place and monitor an incident investigation program, and process safety tracking, at all of its refineries. Evaluate all process units to ensure critical process equipment is designed safely. And ensure all instrumentation and process equipment necessary for safe operation is maintained and tested. Require knowledgeable supervisors and other technically trained personnel be present during hazardous operations such as unit startups.”

The March 2005 blast killed 15 people and injured another 180 in the nation’s worst industrial accident since 1990.

Dell Chairman and CEO Michael Dell says the company’s sales in India have soared in the past year. But he says high taxes the country levies on computers are preventing Dell from expanding investment and operations there. The Round Rock-based company has done well in selling servers and computers to large Indian companies in recent years, but it has failed to penetrate the mass market for desktop computers and laptops. India sales totaled $500 million last year, up 70 percent from a year ago and Dell says that number is headed toward $1 billion. Dell blames India’s tax structure for the company’s poor presence in the Indian market. Dell told reporters during a visit to New Delhi that the country levies both import tariffs and sales taxes that make up 20 percent to 25 percent of the cost of a computer.

The embattled chairman and chief executive of movie rental company Blockbuster will be leaving by the end of the year. During the tenure of John Antioco, Blockbuster has made a strong push into the online rental arena and cut costs in a reaction to falling revenue and earnings at its traditional stores. Billionaire financier Carl Icahn, a member of the company’s board, had battled openly with Antioco at the company’s 2005 shareholder meeting. At the end of his employment, Antioco will received a lump sum of $5 million.

The chief executive of low-cost Southwest Airlines in 2006 earned compensation worth less than $1 million. Gary Kelly led Dallas-based Southwest as the company posted its 34th straight year of profits. Kelly, who was named chief executive in 2004, was given a compensation package worth $976,000 for last year. Details are in a proxy statement filed with the Securities and Exchange Commission. Kelly received $417,000 in salary, a $462,000 bonus and other compensation worth $97,000. Southwest founder and chairman, Herb Kelleher, received almost as much–collecting $936,000 for 2006. Neither received stock grants for the year. The Associated Press bases its calculations of executive pay on salary, bonuses, incentives, perquisites, above-market returns on deferred compensation and the values of stock options and other awards granted during the year. They may differ from the total compensation listed by the company.

Halliburton said it expects first-quarter earnings to fall short of Wall Street estimates. That’s as the Houston-based oil services firm’s Energy Services Group struggles with decreased drilling and completion activities in Canada and the northern United States. Halliburton expects a quarterly per-share profit, excluding any potential additional losses from select overseas projects associated with KBR, the engineering, construction and government-services arm that Halliburton’s spinning off.

An investment group that includes the founder and chairman of Dallas-based Affiliated Computer Services is offering more than $5.9 billion in cash to take the information technology services company private. ACS Chairman Darwin Deason says he has teamed with Cerberus Capital Management in making the bid of $59.25 a share. That represents a more than 15 percent premium to ACS’s closing price Monday on the New York Stock Exchange. ACS shares have risen above the offered price in response. Deason said in a statement that he would keep the company’s “valuable employee base,” and would continue as chairman following the deal.

A unit of a Texas firm wants to drill methane gas wells atop old coal beds in Pennsylvania. Great Lakes Energy Partners is a subsidiary of Fort Worth-based range Resource Corporation. Great Lakes wants to pump out the gas that’s naturally produced by the underground coal fields. The company plans to drill about 50 gas wells in Clearfield Township–if enough gas is found. Under Pennsylvania law, companies don’t have to pay landowners for the drilling rights, but they do have to compensate them for any damage to the property. But farmers and other landowners told the Tribune-Democrat of Johnstown that the company is still negotiating for well and transmission line sites, paying a per-well fee and offering royalties.

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