This article is over 14 years old


Monday PM August 4th, 2008

Residents prepare for Tropical Storm Edouard…Limited evacuations ordered for oil and natural gas drilling rigs and production platforms…Houston Ship Channel shut to tankers and shipping…

Residents along the Gulf of Mexico are preparing to get hit with another strong storm for the second time in less than a month. And Tropical Storm Edouard is threatening to pick up strength. At midday, Edouard had maximum sustained winds near 45 miles per hour, with higher gusts. The storm’s center was located about 160 miles south-southeast of Lafayette, Louisiana, and 265 miles east-southeast of Galveston. Edouard is expected to turn toward the west-northwest, which would bring the center near the coast on either side of the Texas-Louisiana border by tomorrow morning. A tropical storm warning is in effect from the mouth of the Mississippi River westward to Port O’Connor. A hurricane watch is in effect from west of Intracoastal City, Louisiana to Port O’Connor. Forecasters say isolated tornadoes are possible over parts of southern Louisiana and the upper Texas coast. Rainfall of three to five inches is expected in coastal Louisiana and southeast Texas, with isolated amounts up to ten inches in Texas. Tides of two to four feet above normal levels are expected in parts of the warning area.

Shell Oil, Chevron and BP have begun limited evacuations of workers from some Gulf of Mexico drilling and production operations. But the companies say they don’t expect any impact on oil production in the Gulf. Energy fellow Ken Medlock with Rice University’s Baker Institute says Gulf Coast refineries are on the dirty side of the storm’s projected path, but swells won’t likely be big enough to do sustained damage.

The Coast Guard says the Houston Ship Channel is shut to tankers and shipping, with Tropical Storm Edouard approaching. The Louisiana Offshore Oil Port suspended marine operations late Sunday as the storm strengthened in the Gulf. But pilots continue operations at the refinery ports of Freeport and Corpus Christi, as well as through Sabine Pass, which is the passage to refineries in Beaumont and Port Arthur. The National Petrochemical and Refiners Association says the Houston area’s eight refineries have a combined processing capacity of 2.22 million barrels a day, or 13 percent of the U.S. total.

The state’s electric grid operator is urging consumers to reduce electricity usage from 3 p.m. to 7 p.m. today. The Electric Reliability Council of Texas is expected to break previous power consumption levels. ERCOT says peak electricity demand could top 63,000 megawatts this afternoon because of high afternoon temperatures. A “power watch” is the first of four steps ERCOT can take during times of high demand.

Four workers at a Houston refinery were injured when a tank of sulfur caught fire and released fumes. The leak was quickly contained Monday morning at the Valero Houston refinery, and the shelter-in-place was lifted. Nearby residents were told they could go to a shelter to wait out the fumes. Valero Energy spokesman Bill Day says four workers were taken to a hospital for evaluation. He says officials do not believe the loading tank fire poses any further threat to the community. Debris was scattered on the ground below where the tank ruptured in the Manchester area of east Houston, near the Houston Ship Channel. Day says the cause of the fire is under investigation. The Houston refinery makes gasoline and gas derivatives. The cause of the fire was not immediately determined. The Valero refinery produces gasoline and gas derivatives.

About 20 House Republicans have cut short their August vacations, gathering on the floor to protest Democratic energy policy and demand that Speaker Nancy Pelosi call lawmakers back into session to vote on an energy package. The bill would include GOP demands for more domestic drilling. It was a repeat of last Friday’s protest, when Republicans refused to leave the floor after the House officially adjourned for a summer break. As on Friday, the lights were dimmed, the microphones were off and there was no TV coverage as Republican lawmakers delivered impassioned speeches to tourists in the visitors’ gallery. Many visitors were also allowed onto the House floor–a very rare ticket–to get a better view. Representative Tim Price, a Georgia Republican, told colleagues the time had come for Congress “to go to work on the most important issue of the day–and that’s the rising gas prices.”

The government says consumer spending, after adjusting for inflation, fell in June as shoppers were hit with the biggest increase in prices in nearly three decades. The Commerce Department reports that consumer spending dipped by 0.2 percent in June, after removing the effects of higher prices, the poorest showing since a similar drop in February. The data show that higher prices reflected a big surge in gasoline costs and helped to drive an inflation gauge tied to consumer spending up by 0.8 percent in June, the biggest increase since a one percent rise in February 1981. The big rise in inflation ate up a part of the billions of dollars in stimulus payments delivered during the month.

The government says orders to U.S. factories shot up at the fastest pace in six months in June, reflecting big increases in petroleum prices and heavy demand for military equipment. The Commerce Department reported Monday that orders rose by 1.7 percent in June, the best showing since a 1.9 percent rise in December. The June increase is more than double the gain that economists had been expecting and was led by a 5.2 percent surge in orders for primary metals such as steel. The report says orders for defense capital goods soared by 16.9 percent, the second consecutive double-digit gain. It reflects heavy demand for military hardware to fight the wars in Iraq and Afghanistan.

British Airways says that it hopes to seal an alliance with its U.S. partner American Airlines within weeks. A BA spokesman says that the carrier expected final preparations for a deal to be completed within two weeks, and an application to U.S. regulators for antitrust immunity to be filed shortly afterward. BA and Fort Worth-based AMR Corporation’s American, the world’s largest carrier, have failed in the past to win an exemption from U.S. competition laws to work more closely. That was because of their dominance at London’s Heathrow, where the pair have more than half the capacity to and from the United States. But they are expected to argue that the competitive situation has changed since the “Open Skies” agreement between the U.S. and the European Union came into force in March, allowing airlines to fly to and from any point in the U.S. and any point in the EU. The BA spokesman says talks with American are running concurrently with BA’s discussions with Spain’s Iberia over an all-share combination, a potential deal that could also form the basis of a three-way trans-Atlantic combination.

International air cargo volume has declined. The International Air Transport Association cites global economic woes in reporting that cargo business fell in June and passenger demand growth slowed. Cargo shrank by 0.8 percent compared to June 2007. It was the first such decline seen since May 2005 and follows several months of falling manufacturing sector confidence indicators. IATA says passenger demand growth fell to 3.8 percent, the lowest level since 2003. Passenger load factors dropped to 77.6 percent, 1.2 percentage points below the 78.8 percent recorded for June 2007. The association says the situation could get worse with consumer and business confidence falling and persistently high oil prices. It also notes that the airline sector is in trouble, with billions of dollars in losses expected this year. IATA represents 230 airlines comprising 93 percent of scheduled international air traffic.

JetBlue Airways says it now charges customers for pillows and blankets. The carrier has done away with the recycled blankets and pillows used on its flights, and has started offering an “eco-friendly” travel blanket and pillow that can be purchased for $7 on flights longer than two hours. The pair come in a kit with a $5 coupon to home furnishings retailer Bed Bath & Beyond. The carrier claims the pillow and blanket feature a fabric technology, developed by CleanBrands, that blocks pesky critters like dust mites, mold spores, pollen and pet dander. JetBlue already offers free “snooze kits” on overnight flights from the west that include an eyeshade and ear plugs. But the blanket and pillow kit is the latest in a string of a la carte items the company says are providing a revenue boost to help offset the soaring price of jet fuel. A JetBlue spokeswoman declined to predict how much the sale of these kits will bring in.

Verizon Communications is back in talks with two unions about new labor contracts for 65,000 workers. The Communications Workers of America, the largest of the unions, said negotiations had resumed Monday morning after ending at 2 a.m. Verizon’s contracts with the CWA and the STRONG>International Brotherhood of Electrical Workers were set to expire Saturday at midnight. But the unions “stopped the clock” on the expiration because progress was being made in the negotiations. Their members continued to work under the old contracts. The union members, who work at Verizon’s landline side, have authorized a strike. Verizon Wireless has few unionized employees. Major bargaining issues include health care coverage, wages and union representation for new jobs.

A new report tells parents they won’t be finding many healthy choices for their kids at the nation’s top restaurant chains. The nonprofit Center for Science in the Public Interest report looked into the nutritional quality of kids’ meals at 13 major restaurant chains. The center found 93 percent of 1,474 possible choices at the 13 chains exceed 430 calories. That’s one-third of the daily recommendation from the National Institute of Medicine for children ages four through eight. Some meal combinations contained more than 1,000 calories. The report says that while there are some healthy choices, “parents have to navigate a minefield of calories, fat and salt to find them.” The report notes that eating out now accounts for a third of children’s daily caloric intake, twice the amount consumed away from home 30 years ago.

Subscribe to Today in Houston

Fill out the form below to subscribe our new daily editorial newsletter from the HPM Newsroom.

* required