Tuesday PM September 14th, 2010

EPA to allow Texas petrochemical companies to work directly with Feds on fixing banned air permits…Petroleum group objects to administration plans to double offshore inspection fees…Wall Street fluctuations make U.S. investors leery of buying individual stocks…

The Environmental Protection Agency will soon allow Texas petrochemical companies to work directly with the federal government to start fixing air permits banned under the Clean Air Act. EPA regional director Al Armendariz says he’s trying to reach a deal with Texas on a state-operated program that would meet federal requirements. Recent letters from Armendariz to Texas officials indicate significant obstacles remain. Armendariz says the federal audit program will be announced soon. He says it will guarantee forgiveness on past pollution violations to companies that participate. EPA and Texas officials will meet industry leaders Thursday. The EPA officially barred the state’s so-called flexible permits in June, but Texas is challenging in court.

The oil and gas industry says an Obama administration plan to double fees charged for inspections of offshore operations could cost jobs. American Petroleum Institute President Jack Gerard says the industry recognizes the need for improved inspections and oversight following the oil spill. But he says doubling the fees isn’t appropriate. The White House has asked Congress to approve the higher fees as part of a request for $80 million in new spending for the agency that oversees offshore drilling. The proposal would more double the amount collected from oil and gas companies, to $45 million next year from about $20 million this year.

The drilling moratorium enacted after the BP oil spill applies only to the deepwater Gulf of Mexico. Yet energy exploration in the Gulf’s shallow waters has come to a virtual standstill as drillers grapple with tougher federal rules since the spill. An Associated Press analysis of government data shows the pace at which regulators grant drilling permits in water less than 500 feet deep has slowed sharply this summer. Just four out of ten shallow-water drilling applications have been approved from June through August; 15 applications were sought and approved in the same period last year. Environmental groups are encouraged by the trend. But drilling executives say the new rules are adding millions of dollars in costs and causing delays that have led to layoffs.

OPEC’s Secretary-General says the oil producing bloc’s most significant challenges in the coming years are the protection of the environment, shifting market conditions and finding new sources of revenue. In an interview in today’s edition of the Pan-Arab daily Asharq Al-Awsat, Abdalla El-Badri also said that the 12-nation group was not looking to add new members. The interview comes at the group that supplies about 35 percent of the world’s crude celebrates its 50th anniversary. El-Badri said OPEC supported efforts to shift to alternate sources of energy for power generation and noted that the world needs to come to terms with the fact that oil will one day run out. But he says crude will continue to play a key role for years.

Last week’s explosion of a gas pipeline in a San Francisco suburb has shed light on a situation that experts say exists in many communities across the country. The section of pipeline that ruptured in San Bruno was built in 1956–when the neighborhood contained just a handful of homes. Since then, an expanded community has been built above that pipeline. The vice chairman of the National Transportation Safety Board, Christopher Hart, says it’s an issue that’s going to have to be addressed elsewhere–aging pipelines that have been in place since before dense populations arrived. He’s hoping other states will see the San Bruno tragedy as a wake-up call. Although utilities have been under pressure to inspect and replace aging gas pipes, critics say the government has largely left it to the companies to do the inspections–and the companies aren’t willing to spend the money to fix and replace the pipelines.

Retail sales rose in August by the largest amount in five months, suggesting a late spring economic swoon was temporary and not the start of another recession. The Commerce Department says retail sales rose 0.4 percent last month, the best advance since March. Excluding a big decline in autos, retail sales increased 0.6 percent. That’s double the amount economists had expected. The strength came in a number of areas from department stores to clothing stores and sporting goods outlets. The advance was the latest indication that the economy is regaining its footing after a dismal spring.

Inventories held by businesses jumped in July by the largest amount in two years while sales rebounded after two months of declines. The Commerce Department says total business inventories rose one percent in July, the biggest monthly gain since a similar increase in July 2008. Total business sales were up 0.7 percent in July after falling 0.5 percent in June and 1.2 percent in May. The rebound in sales was an encouraging sign that consumer demand is rising after two weak months. Businesses need to see more demand to continue rebuilding their stocks. Inventory growth helped drive the early stages of the economic recovery after many businesses slashed their stocks during the recession.

Wild fluctuations on Wall Street have made U.S. investors leery of buying individual stocks and skeptical that the market is a fair place to keep their money. In an Associated Press-CNBC poll of investors, 61 percent say the market’s recent volatility has made them less confident about buying and selling individual stocks. And 55 percent of those surveyed say the market is fair only to some investors. More than 60 percent say they had paid attention to news reports about swings in the stock market. The poll also found widespread distrust in regulators’ ability to oversee the financial system. Just eight percent express strong confidence in regulators. Half express little or no confidence, including 16 percent with no confidence at all. Asked to rate six investment options as a way to build wealth, mutual funds are the favorite, with 62 percent calling them a good investment.

The Senate has advanced a bill to create a $30 billion government fund to help open lending for credit-starved small businesses, handing President Barack Obama a long-sought victory. Democrats beat back a GOP filibuster of the measure with crucial help from Ohio Republican Senator George Voinovich. The 61-37 tally sets the stage for a final vote later this week to return the measure to the House, which is likely to approve it for Obama’s signature. The new fund would help community banks increase lending to small businesses hurt by the recession and the 2008 Wall Street crisis. The bill would also provide about $12 billion in tax breaks over a decade to both large and small businesses.

The Senate has failed to repeal a tax provision of the new health care law that even the White House isn’t happy with. Tucked into the law is a requirement that businesses file tax forms called 1099s for every vendor that sells them more than $600 in goods. Business groups say it would create a paperwork nightmare for more than 40 million companies. The procedural vote was defeated 46-52 and came on an amendment by Senator Mike Johanns that would have repealed the reporting provision. But it fell short of a required 60-vote majority. Lawmakers have been unable to agree on how to fill a $19 billion revenue gap from repealing the requirement. The rule goes into effect in 2012.

The White House says President Barack Obama is weighing whether to name a temporary director to a new consumer protection bureau. The move would allow the nominee to avoid a Senate confirmation hearing. Obama spokesman Bill Burton says that while an interim appointment is an option, the president is considering a variety of factors. He says an announcement on the post will be made “very soon.” A provision in the financial regulatory bill Obama signed earlier this year allows him to name a temporary director without Senate confirmation. Consumer advocate Elizabeth Warren is considered the leading candidate to head the bureau. But Warren is unpopular with the financial industry, and her appointment could lead to contentious confirmation hearings.

The makers of high fructose corn syrup want to sweeten its image with a new name: corn sugar. The bid to rename the sweetener by the Corn Refiners Association comes as Americans’ concerns about their health have sent consumption of high fructose corn syrup to a 20-year low. The group plans to apply to get “corn sugar” approved as an alternative name for food labels. Approval could take two years. There’s a new online marketing campaign at and on television. Renaming products has succeeded before. For example, rapeseed oil became much more popular after becoming “canola oil” in 1988. Prunes tried to shed a stodgy image by becoming “dried plums” in 2000.