Friday PM July 9th, 2010

Coast Guard says new containment cap and addition ship could contain BP oil spill as early as Monday; first relief well could be finished by end of month…Houston in the running for Toyota product quality field office…


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The federal official leading the Gulf oil spill cleanup says a new containment cap and an additional ship collecting oil could effectively contain the spill as early as Monday. National Incident Commander Thad Allen says that the work to replace a leaky containment cap on the well head with a tighter one will begin Saturday. At the same time, a ship connecting to a different part of leak is expected to come online Sunday. If all goes according to plan, the combination could collect all of the oil leaking from the seafloor. Work continues on what officials hope will be the ultimate solution: a pair of relief wells intercepting the leaking well far below the seafloor.

BP officials say the first of two relief wells being drilled to stop the Gulf oil gusher could be finished by the end of the month, but that’s a best-case scenario. Such an optimistic timetable would require ideal conditions. The Obama administration’s point man says the backup plan would be transferring the crude to non-producing underwater wells that are miles away. Retired Coast Guard Admiral Thad Allen says BP would run the flow through pipelines across the floor of the Gulf of Mexico. Allen says that would take some construction and some time and would change the timetable to late August. Still, the best hope to stop the spewing oil from the blown-out well a mile under the sea is the relief wells. The leak began more than 21/2 months ago following a deadly rig explosion off the Louisiana coast.

Anadarko Petroleum is refusing to pay BP about $272 million for its share of the costs tied to the massive Gulf oil spill. The Houston-based oil company is part owner in the well that blew out on April 20th and has sent millions of gallons of oil into the sea. Spokesman John Christiansen says that Anadarko informed BP of its intention to withhold payment for the bill BP sent it in early June. So far, BP has paid more than $3 billion to deal with the spill. According to a joint-operating agreement, Anadarko is on the hook for a quarter of the costs, so BP could be sending more bills. Anadarko claims it shouldn’t be held responsible because it believes BP was reckless in the drilling operation.

The leaders of the new Presidential Oil Spill Commission say they will focus on how safety, government oversight and the ability to clean up spills haven’t kept up with drilling technology. Panel members hold their first meetings Monday and Tuesday in New Orleans. Co-chairman William Reilly says existing clean-up technology and response plans are primitive. He and Co-Chair Bob Graham say they also will examine the root causes of the April 20th oil rig explosion in the Gulf of Mexico, looking deeper than just equipment failures. The seven-member panel will first hear from Gulf Coast victims of the oil spill and from state officials.

Inventories held by wholesalers rose for a fifth consecutive month in May but sales fell for the first time in more than a year, sending a mixed signal about the strength of the recovery. The Commerce Department says wholesale inventories rose 0.5 percent in May but sales dropped by 0.3 percent. It was the first decline for sales since March of 2009. The May sales decline is the latest sign that the economic recovery could be losing momentum as it enters the second half of this year. Weakness in sales could discourage businesses from boosting their orders. That would translate into a slowdown in factory production.

Americans’ love affair with debt and credit appears to be history, based on the latest figures from the Federal Reserve. Consumer borrowing fell by $9 billion in May, having dropped in 15 of the past 16 months. Households have been struggling with uncertain job prospects and damaged finances following the deep recession. In May, consumers borrowed less on their credit cards and took out fewer auto loans. Credit card borrowing has fallen for 20 straight months.

Houston is one of three cities in the running as Toyota is considers opening a product quality field office, according to the Houston Chronicle. The office would concentrate on trucks and chassis components. Toyota has been opening similar offices in the past year, and three other product quality field offices are scheduled to open in the next 12 months.

The government says Chrysler is recalling about 22,000 sport utility vehicles and trucks to fix brake tubes that could lead to the loss of brake fluid. Ford, meanwhile, is recalling more than 30,000 2010 transit connect vans to replace pushpins holding the liners above the driver’s head. The company says government testing found it failed to meet federal standards protecting the head. Chrysler says its recall affects certain 2010 Dodge Nitro, Dodge Ram, Jeep Liberty and Jeep Wranglers that could have defective brake tubes. The problem could lead to the loss of brake fluid, making it difficult to brake and posing the threat of a crash. Chrysler says owners should be notified in August.

The state with the nation’s largest organic farming community is launching an effort to improve oversight of an industry many describe as a poorly regulated free-for-all. The California organic program is considering new rules to help officials monitor the more than 2,800 organic farms and ranches that bring in about $1.1 billion every year. Among other things, the new rules would allow the state to establish a spot inspection program to ensure California-made products labeled as organic are authentic. The state says it will target known problem areas, such as farmers markets, where enforcement has been spotty and produce is often passed off as organic when it’s not. Many organic farmers and certifiers say weeding out impostors will help honest farmers and consumers.

Monsanto, the world’s biggest seed company, has agreed to pay the Environmental Protection Agency a $2.5 million penalty for selling mislabeled bags of genetically engineered seed. The EPA says it is the largest fine ever imposed under a law that regulates pesticides and fungicides. Between 2002 and 2007, Monsanto improperly sold its Bollgard and Bollgard II cotton seeds in ten Texas counties where the seeds were banned, according to the EPA. The cotton seeds are regulated as pesticides because they kill insects, and the seeds were banned in parts of Texas to avoid growing pest resistance to them. The ban has since been lifted. Monsanto informed the EPA it was selling seeds in the ten Texas counties, even though the company was supposed to label the seeds as banned in those areas, the EPA said. Monsanto later changed its cotton seed labels to reflect the ban.

Privately-held Carlson is expanding its Country Inns & Suites By Carlson with its opening on Galveston Beach—the brand’s first beachfront location in the state. There are 17 Country Inns & Suites hotels in Texas. The 60-room facility is on the Galveston Seawall at 29th Street.

Dell is trying to set its laptops apart from the competition with customized tops. For its latest set of designs, which add $85 to the cost of a laptop, Dell turned to an online t-shirt design community. On, anyone can submit a t-shirt design idea. Visitors to the site vote on favorite designs, and ones that get top marks are printed and sold online. Dell’s threadless collection is starting with 11 designs from the site. Examples include a deer with cherry blossoms on its horns, a bright yellow daisy and an intricate line drawing of London street sights. The company says it plans to add new designs later.

The number of rigs actively exploring for oil and natural gas in the U.S. increased by ten this week to 1,567. Houston-based Baker Hughes says that 964 rigs were exploring for natural gas and 592 for oil. Eleven were listed as miscellaneous. A year ago this week, the rig count stood at 916. Texas lost two. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.

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