Tuesday PM May 20th, 2008

BP blast victims petition appeals court over plea agreement; jurors being screened for separate Galveston trial…Single-family home sales continue slide in Houston…Baker Institute for Public Policy predicts further pain at the pump…

Twelve victims of the BP Texas City refinery explosion have asked for a rehearing with the full U.S. Fifth Circuit Court of Appeals to have the BP plea agreement rejected. A three-member panel of the Fifth Circuit earlier this month found that their rights had been violated by the U.S. Attorney’s Office in Houston when it reached a plea bargain with BP. The panel didn’t block the deal, but remanded to the district court for further proceedings.

Meanwhile, 300 potential jurors are being selected from a pool of about 1,200 in Galveston for the latest scheduled BP trial. Jury selection will begin on Thursday, as another 40 former employees and contractors not part of earlier settlements seek compensation for the 2005 blast. Attorney Brent Coon deposed former BP CEO Lord John Browne in a teleconference on April 4th, after repeated efforts to get his deposition. Coon says he had wondered what Lord Browne was hiding, and now he knows. The case will be heard by Judge Susan Criss.

A monitor says BP is making substantial progress in improving safety at its U.S. operations–three years after the deadly explosion. The fiery accident at BP’s Texas City unit killed 15 workers and left more than 170 people hurt. It’s the first report by the independent monitor—Duane Wilson. But Brent Coon, one of the attorneys for blast victims, cited three worker deaths since the March 2005 accident as a sign that significant improvements are needed. BP spokesman Daren Beaudo says lots of progress has been made–but more needs to be done.

Sales of single-family homes across the Houston area slid in April, although the average price of those homes increased by a third straight month to the highest ever for the month of April. The Houston Association of Realtors says single-family home sales fell 11 percent on a year-over-year basis. The average price rose by 0.9 percent to $207,270, and the median prices is stable at $150,000. Total property volume was recorded at $1.3 billion—a 9.9 percent decline from a year earlier.

Drivers can expect to pay more at the pump in the near future, according to a new study by Rice University’s Baker Institute for Public Policy. The study’s authors say gasoline could easily reach $4.20 per gallon around Memorial Day. The report says temporary demand and supply factors can cause gasoline prices to rise substantially, and refinery capacity hasn’t kept pace. Growing demand elsewhere in the world means increased competition for gasoline, which drives up the price to attract imports during high-demand periods.

Energy analysts Douglas-Westwood told an energy conference in Aberdeen, Scotland, that reductions in consumption in developed countries will not offset growing demand from the developing world. If China were to use the same amount of oil per person as Europeans it would require an additional 36 million barrels per day—about four times the oil production of Saudi Arabia. Douglas-Westwood says published statistics indicate production from ten of the top 13 international oil companies may have already passed its peak.

President Bush has signed a bill forcing his administration to temporarily stop acquiring oil for the U.S. emergency stockpile in the Strategic Oil Reserve. Earlier, the White House had spoken out against the measure. Both the House and Senate, with Republican support, approved the bill last week. Sponsors said they hoped to lower energy prices. But the administration said the amount of oil involved–about 76,000 barrels a day–was relatively small and would have no effect on gas prices.

An annual survey released by the University of Michigan finds customers giving airlines the worst grades since 2001. The industry’s overall scores are down for a third straight year. Continental Airlines and US Airways registered the biggest declines from 2007, both experiencing double-digit percentage drops. United Airlines and US Airways Group, which are in talks to potentially combine into a single carrier, finished next-to-last and last, respectively, in the university’s American Customer Satisfaction Index. A familiar bright spot in the results was Southwest Airlines, which led the industry in passenger satisfaction for the 15th consecutive year.

Consumer satisfaction with cable and satellite TV providers is at its highest since ratings began. But according to a widely watched annual customer service survey, the industry ranked second to last among 18. Only airlines flew lower than cable and satellite TV, which tied with newspapers in the University of Michigan’s American Customer Satisfaction Index, which began tracking the industry in 2001. Cable and satellite TV companies’ average rating rose 3.2 percent from a year ago to a score of 64 for 2008. The survey finds the nation’s largest cable operator pulled its lowest rating ever. Comcast, whose service so infuriated a Virginia
grandmother that she took a hammer to a local Comcast office, tied with struggling charter communications for last place among cable and satellite firms. The report surveyed about 20,000 people by phone from January to March. It had a margin of error of plus or minus two percentage points for individual companies and less than one percentage point for the industry as a whole.

Merck is paying $58 million as part of a multistate settlement concerning advertising of the now-withdrawn painkiller, Vioxx. The settlement addresses allegations that Merck’s advertising deceptively downplayed the health risks of Vioxx. New Jersey-based Merck is not admitting any wrongdoing under the settlement. Pennsylvania Attorney General Tom Corbett says the settlement ends investigations by 29 states, including Texas, and the District of Columbia into Merck’s advertising practices involving Vioxx. The settlement also calls for Merck to submit all new TV commercials for its drugs to the FDA for review. Vioxx was taken off the market in 2004 after research showed it doubled the risk of heart attacks and strokes.

Two Senators are pressuring the Energy Department to wait on plans to scrap a deal with power and coal companies to build a nearly emissions-free plant. Senators Dick Durbin of Illinois and Kit Bond of Missouri urged Energy Secretary Samuel Bodman in a letter Monday to continue funding FutureGen until March 2009. That would allow the next president to decide the project’s fate. The deal between the Energy Department and the companies expires this June. The companies decided in December to build the plant in Mattoon in central Illinois. Two sites in west Texas had been finalists. But the DOE pulled the plug in January, complaining costs had increased too much. Durbin and bond are backing legislation to fund FutureGen until March.

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