Wednesday PM August 18th, 2010

BP turns over claims processing to government-appointed administrator…Collin County Commissioners vote to reduce government matching funds for pensions…American Airlines to charge between 19 and 39 dollars for “express seats”…


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BP plans to stop processing claims from people and businesses hurt by the Gulf of Mexico oil spill as the company plans to transfer that role to a government-appointed administrator. The company stops accepting new claims after today. The April accident off Louisiana left 11 workers dead. The now-sunken rig is owned by Houston-based Transocean.

The government’s point man on the Gulf oil spill is no longer giving a timeline for completing the final stages of plugging BP’s runaway well for good. Retired Coast Guard Admiral Thad Allen told reporters that he will give the order to complete the so-called relief well when he is ready. He says BP still needs to come up with a plan to alleviate pressure that may build up once the relief well intersects with the runaway well. Ultimately, the plan is to pump mud and cement into the runaway well from the bottom to plug it permanently. Allen says he doesn’t want to give timelines anymore because if he has to change them, that could cause a credibility problem.

Their work is preliminary, but scientists from the University of South Florida are warning that there is a lot of crude oil lurking deep below the surface of the Gulf of Mexico. They’re disputing government claims that half the leaked oil is completely gone from the ecosystem. The team says it found poisoned plant plankton and evidence of microscopic amounts of oil in the soil of a critical undersea canyon. The findings were based on a ten-day cruise and have not been confirmed.

A toll booth will be set up to collect $5 fees from nonresidents when the Hurricane Ike-damaged Texas City dike reopens in a few weeks. Mayor Matt Doyle says the city’s plan includes free access for residents who display a window sticker on their vehicle. The city this week is mailing the stickers with water bills. Texas city residents will get two stickers per household. Doyle says the toll to access the dike will be charged Friday through Sunday. The fee could be dropped during some holiday periods. The mayor says the dike, which was heavily damaged during the September 2008 hurricane, is expected to open by October 1st. Boat ramps, fishing piers and bait camps lined the shores of the five-mile-long dike before the disastrous storm.

The Collin County Commissioners have voted to reduce government matching funds for their pensions during a budget workshop. Judge Keith Self says county workers should get less government matching funds for their pensions in a time when average citizens do not have similar benefits. The commission voted to reduce the match to employee retirement accounts by 50 cents on the dollar, to $2 for every $1 contributed by employees. The changes will go into effect January 1st. Self had proposed cutting the county’s match for every employee dollar contributed from $2.50 to $1.50. Average citizens “don’t get anywhere close to a two-and-a-half-to-one match. They don’t get guaranteed interest.” County employees, including law enforcement workers and prosecutors, expressed concerns about having their retirement package reduced.

Mexico has released a list of 99 U.S. products subject to higher tariffs to pressure Washington to lift a U.S. ban on Mexican cargo trucks. The tariffs range from five percent to 15 percent and apply to products including cheese, fruits, juices, wine, toilet paper and some pork products. The Mexican Economy Department published the list. The U.S. government has expressed disappointment in the measure announced Monday. The tariffs will affect about $2.5 billion worth of trade from 43 U.S. states. The tariffs were imposed to protest the cancellation of a pilot program allowing some Mexican trucks to transport goods into the U.S. Mexico says the suspension violates the North American Free Trade Agreement.

American Airlines has found another fee. The Fort Worth-based airline will charge between $19 and $39 for “express seats”–those spots in the first few rows of coach that include bulkhead seats. The carrier’s parent AMR says that the price of the seats includes getting on the plane in the first “general boarding” group of passengers. The seats can only be purchased at airport kiosks between 24 hours to 50 minutes prior to the flight for travel within the U.S. American still provides travelers with the option to pre-reserve other seats in the coach cabin at no charge. Several other major airlines, including UAL’s United Airlines and Continental Airlines, also charge for the best seats in coach.

Royal Dutch Shell is warning that it can’t meet forecast production in Nigeria after sabotage on its pipelines in the country’s restive Southern Delta. A Shell spokesman told the Associated Press that the company’s Nigerian subsidiary declared “force majeur”’ on its bonny light crude shipment. The term is used when it is impossible for an oil company to cover the promised supply from the field. Shell spokesman Tony Okonedo blamed recent damage done to its pipelines running through the Niger Delta, an oil-rich region of swamps, mangroves and creeks almost the size of South Ccarolina. The company recently said damaged pipelines near bonny bore signs of drilled holes and hacksaw cuts, suggesting black-market thieves tapped into the lines.

Mortgage applications rose 13 percent last week as consumers refinanced at the lowest rates in decades. The Mortgage Bankers Association says the increase was driven by a 17 percent surge in applications to refinance home loans. Those taken out to purchase homes fell by more than three percent. The numbers are adjusted for seasonal factors. Rates have fallen since spring as investors sought the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields. The average rate for a 30-year fixed loan rose slightly to 4.6 percent from 4.57 percent a week earlier.

The call from business for less government has a notable exception: the mortgage market. The Obama administration invited banking executives to offer advice on changing the government’s role in backing the mortgage market. While they disagreed on the exact level of support needed, the group overwhelmingly advocated the government should maintain a large role in the $11 trillion market. Executives said if the government pulled out, millions of Americans wouldn’t be able to convince banks to take the risk of giving them home loans. Ending government support could lead to a spike in mortgage rates. That could deter many from buying homes, and banks, mortgage lenders and realtors would lose money over time.

President Barack Obama rolled up his shirt-sleeves for a kitchen table conversation on the economy with an Ohio family. On the final day of a three-day campaign trip around the nation, Obama met with Joe and Rhonda Weithman and their two children in their home on a leafy, middle-class street in Columbus. Obama spoke with Joe Weithman about his efforts to jump-start the economy, initiatives the White House says have helped Weithman’s architectural firm.

A new survey says Americans aren’t feeling any more secure about their medical care after enactment of President Barack Obama’s health overhaul. The Robert Wood Johnson Foundation says medical consumer confidence spiked in April after Obama signed landmark legislation to expand coverage and try to control costs. But confidence levels have since fallen back to what they were last year at the start of an epic Congressional debate. It’s another sign of ambivalence over Obama’s historic accomplishment as Democrats campaign to preserve their Congressional majorities in the midterm elections. The ho-hum attitude may be because the law’s major benefits don’t take effect until 2014.

The Agriculture Department says the nation’s cranberry crop is on track this year to become the second largest on record. The USDA’s annual cranberry forecast calls for 7.35 million 100-pound barrels, up six percent from about 6.9 million barrels a year ago. Strong increases were forecast in Wisconsin and Massachusetts, by far the largest cranberry producing states. But declines were expected in the smaller producing states of New Jersey, Oregon and Washington because of unfavorable weather conditions.

Scientists say they have developed biofuel for cars from waste produced in distilling scotch whisky. Researchers at Edinburgh Napier University have produced a type of fuel called butanol using “pot ale”–the liquid residue from copper stills–and “draff,” or leftover grain. They say it can be used in ordinary cars without adapting the engines. And unlike some biofuels, it is made from waste products and does not require a crop to be grown. The researchers say they have filed a patent application for the fuel, and plan to set up a company to get it into British gas stations.

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