Legion of Angels News Archive

HOUSTON (Reuters) - A huge relief effort was accelerating in storm-struck Texas on Monday as the big oil center of Houston struggled to get back to business after it was battered by Hurricane Ike.

About 2,000 people have been rescued from flooded areas in the largest such effort in the state’s history as searchers scoured hard-hit places like the devastated island city of Galveston, which was shredded when the hurricane made landfall on Saturday morning before heading inland to Houston.

Reuters energy correspondent Erwin Seba reported that 12 of the 15 Texas oil refineries that had been shut as a precaution showed no visible signs of flooding or damage — a sign fuel production could resume more quickly than initially thought. But power outages could still hinder their start-up.

Over 4 million people, several refineries and many businesses and gas stations remained without power, but floods were receding as crucial aid such as ice, water and food was being delivered to distribution points.

“Sixty trucks with supplies rolled in earlier tonight. … As we are standing here, deliveries are being made,” Ed Emmett, chief executive for Harris County, which includes Houston, told a news briefing on Sunday night.

He added that six relief distribution points were already up and running and he expected 17 to be in operation by later on Monday.

The relief roll-out appeared to defuse tensions that flared between the Federal Emergency Management Agency and local officials as hard-pressed residents complained about the time it was taking to get supplies to those in need.

Local officials later attributed the rift to confusion over who was responsible for doing what in the relief chain, a situation that led to delays.

The Bush administration came under heavy fire for its botched relief efforts in New Orleans after Hurricane Katrina in 2005.

Floods have been among the obstacles to rescue efforts and aid operations, but officials said the waters were receding.

“The flood event should be behind us,” Emmett said. Local TV footage showed cattle driven onto roads by flooded fields.

DEBRIS, POWER OUTAGES

Houston Mayor Bill White said all city employees were expected to show up to work on Monday as the country’s fourth most populous city tries to get up and running again.

The city’s two main airports were to resume partial operations on Monday, but with debris still littering its streets and windows blown out of office buildings, as well as power problems, it seemed unlikely the city of more than 2 million people would return to business as usual soon.

That point was underscored by the imposition in Houston of a weeklong dusk-to-dawn curfew.

Power provider CenterPoint Energy reported it had restored power to 380,000 customers, but over 1.7 million or 76 percent of its clients remained without electricity as of Sunday night.

At least three bodies were found in Galveston, which sustained some of the worst damage of the storm. The scale of destruction became apparent as authorities allowed more people to return.

The downtown area, containing the few buildings that survived a hurricane in 1900 that killed thousands, was under a layer of foul-smelling mud and sewage.

“It looks like a war zone. Everything is gone. It’s heartbreaking,” said Susan Rybick, a retiree driving along the seafront with her husband, John.

Ike triggered the biggest disruption to U.S. energy supplies in three years and sent gas prices higher. But U.S. crude oil futures dropped more than $1.59 to as low as $99.59 a barrel on Sunday as traders shrugged off supply concerns.

Source — Yahoo!

WASHINGTON - Government officials handling billions of dollars in oil royalties engaged in illicit sex with employees of energy companies they were dealing with and received numerous gifts from them, federal investigators said Wednesday.

The alleged transgressions involve 13 Interior Department employees in Denver and Washington. Their alleged improprieties include rigging contracts, working part-time as private oil consultants, and having sexual relationships with — and accepting golf and ski trips and dinners from — oil company employees, according to three reports released Wednesday by the Interior Department’s inspector general.

The investigations reveal a “culture of substance abuse and promiscuity” by a small group of individuals “wholly lacking in acceptance of or adherence to government ethical standards,” wrote Inspector General Earl E. Devaney.

The reports describe a fraternity house atmosphere inside the Denver Minerals Management Service office responsible for marketing the oil and gas that energy companies barter to the government instead of making cash royalty payments for drilling on federal lands. The government received $4.3 billion in such Royalty-in-Kind payments last year. The oil is then resold to energy companies or put in the nation’s emergency stockpile.

Between 2002 and 2006, nearly a third of the 55-person staff in the Denver office received gifts and gratuities from oil and gas companies, the investigators found.

Devaney said the former head of the Denver Royalty-in-Kind office, Gregory W. Smith, used illegal drugs and had sex with subordinates. The report said Smith also steered government contracts to a consulting business that was employing him part-time.

Smith, contacted by e-mail by The Associated Press, said he had not seen the report and could not respond. He and nine other employees in the Denver office are mentioned in the reports.

The findings are the latest sign of trouble at the Minerals Management Service, which has already been accused of mismanaging the collection of fees from oil companies and writing faulty contracts for drilling on government land and offshore. The charges also come as lawmakers and both presidential candidates weigh giving oil companies more access to federal lands, which would bring in more money to the federal government.

“This all shows the oil industry holds shocking sway over the administration and even key federal employees,” said Sen. Bill Nelson, D-Fla. “This is why we must not allow big oil’s agenda to be jammed through Congress.”

While most government royalties for drilling on federal lands are paid in cash, the government in recent years has been receiving a greater share of its oil and gas royalties in actual product. More of that oil is also being sold on the open market, versus being deposited in the Strategic Petroleum Reserve, the nation’s emergency oil stockpile. Congress earlier this year passed a law halting deposits of oil to the reserve to alleviate high gasoline prices.

Interior Secretary Dirk Kempthorne, who was asked about the reports earlier in the day before they were given to him and congressional offices, said the investigation was prompted by a 2006 phone call from employee who said there were ethical lapses in the Denver office.

“I look forward to having the opportunity to review the inspector general’s findings so we can take the appropriate actions,” Kempthorne said.

Source — MSNBC

PHOENIX - With the price of oil still above $100 a barrel, everything from wood chips to chicken fat is being scrutinized as an alternative to traditional fuel. But when it comes to airplanes, finding the right mix poses a special challenge.

“When you’re in an airplane, you don’t want your fuel to start solidifying,” said Robert Dunn, a Department of Agriculture chemical engineer who is studying biodiesel jet fuel.

The airline industry is aggressively pushing for homegrown alternatives to petroleum-based jet fuel, while leaning on customers with a variety of new travel charges to help control a projected $61 billion industrywide fuel expense this year. A number of alternatives to standard jet fuel have been studied for years, though aircraft manufacturers say the challenge is to find ideas that will work now.

Jet engines can be retrofitted to run on hydrogen, for example. But hydrogen does not pack the same punch as traditional jet fuel — kerosene — and would require airlines to buy planes designed with massive tanks. That is a tough choice for cash-strapped carriers, said Billy Glover, managing director of environmental strategy at Boeing Commercial Airplanes.

The best bet right now for non-conventional fuel comes from South Africa, experts said. The country has powered its airline industry for a decade using a coal-based jet fuel blend developed by petrochemicals group Sasol. It’s technically a “synthetic” fuel, which means it can be used without altering engines or other aircraft equipment.

A number of U.S. companies are developing a variety of similar synthetics. Airline experts say three companies in particular could provide as much as three million gallons a day of synthetic fuel by 2012: American Clean Coal Fuels of Portland, Ore., Baard Energy in Vancouver, Wash., and Rentech Inc. of Los Angeles.

Though significant supplies will not be ready for several years, the Commercial Aviation Alternative Fuels Initiative (CAAFI) — a coalition that includes the Federal Aviation Administration, airline, manufacturing and airport associations — wants to set standards by the end of the year for a 50-percent synthetic jet fuel. CAAFI wants standards for a totally synthetic fuel ready in two years.

Executive Director Richard L. Altman said the push for new fuel standards is meant to show investors that airlines will buy synthetic fuel. Doing so will send needed dollars to energy startups that may one day replace foreign oil, Altman said.

“Nobody will invest unless the fuel is certified,” he said. “So we have a bit of a chicken-and-egg problem.”

With more companies investing in alternative energy, the thinking goes, the more synthetic jet fuel eventually becomes available. The more fuel available, the easier it will be for airlines to unshackle themselves from volatile petroleum markets.

Meanwhile, Boeing and Air New Zealand later this year will test a biofuel made from the oil-rich seeds of the jatropha tree, a Mexican plant that grows in warm climates. Other synthetic fuel tests will follow on Continental Airlines and Japan Airlines flights. In February, Boeing partnered with Virgin Atlantic to test a flight that included a biofuel mixture of babassu oil, which comes from a palm tree in northern Brazil, and coconut oil.

“We’re looking for something that is so correct in its performance that it can be interchanged with petroleum-based kerosene,” Glover said. “From a distribution standpoint, from a technical standpoint, it needs to fit without modifications or special handling.”

Many biofuels may create more problems than they solve, however. Using edible feedstocks such as corn and sugar could raise the price of food. And palm trees for babassu and coconut oil could lead to clearing large chunks of rain forest.

These are some of the reasons why algae-based synthetic fuel is getting a lot of attention.

Algae is inedible, and it has a relatively high yield compared with other crops, using less land to produce the same amount of oil.

“It can be grown anywhere you can have a pool of water and expose it to sunlight,” said Stanford Seto, an expert in aviation fuels who works with ASTM International, a Pennsyvania-based organization that develops standards for jet fuel.

Investors have pumped almost $84 million into companies developing algae-based fuel so far this year, up from $29 million in all of 2007, according to the Cleantech Group, an industry research firm.

Despite its promise, it will be years before algae biofuel could be sold at a price that would make sense to an airline, said Dave Jones, co-founder of LiveFuels, an algae fuel startup in San Carlos, Calif.

“If anyone is below $50 a gallon, I’d be stunned,” he said. “We have a pretty good idea on how to grow algae. The biggest challenge is in the harvesting and how to extract it from the water.”

Even if prices come down, most airlines see synthetic fuel as a chance to run a greener airline, not necessarily a cheaper one, said Nancy Young, vice president of environmental affairs for the Air Transport Association.

More fuel sources could temper the effect oil speculation has on gas prices, and they could give carriers fuel at a cost they can count on, she said. But “you aren’t going to find a fuel that’s pennies on the dollar than what we find today,” she said.

For travelers, that means that fewer flight options and charges for checked bags, drinks and other items are here to stay.

“Even if we were to double the volume we were to make in biofuels every year for the next 10 years, we’re still looking at maybe this will impact 15 percent of the overall fuel supply,” said Brian Fan, Cleantech’s senior director of research.

“Realistically, for anything to be happening at scale, enough to actually impact an airline’s bottom line, we’re years away,” Fan said.

Source — Yahoo!

NEW YORK (AP) – Oil prices were steady near $125 a barrel Monday as the market kept on eye on a tropical storm that could affect oil facilities in the Gulf of Mexico. Concerns that a showdown over Iran’s nuclear program could threaten crude supplies out of the Middle East also buoyed up prices.

By midday in Europe, light, sweet crude for September delivery fell 7 cents to $125.04 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.02 on Friday to settle at $125.10 a barrel.

In London, September Brent crude was up 29 cents at $124.47 a barrel on the ICE Futures exchange.

The National Hurricane Center issued a hurricane watch Sunday for the coast of western Louisiana and eastern Texas, which means that hurricane conditions are possible from Tropical Storm Edouard within the next 24 hours in the area.

The fifth named storm of the 2008 hurricane season has sustained maximum winds of about 50 miles per hour. By Sunday night, Edouard was located about 80 miles east-southeast off the mouth of the Mississippi River and about 390 miles east of Galveston, Texas.

Regarding Iran, U.S. Secretary of State Condoleezza Rice said Saturday that the United States would have no choice “but to begin again to prepare sanctions resolutions for the (U.N.) Security Council” if Iran did not halt the development of its uranium enrichment program.

Rice said that given the U.N.’s current scheduling, sanctions probably could not be expected in the next few weeks, but the U.S. will begin working with allies toward that goal.

“There’s concern about a potential confrontation down the line,” said Victor Shum, an energy analyst with Purvin & Gertz consultancy in Singapore.

Iranian President Mahmoud Ahmadinejad said Sunday that diplomacy is the only way out of his country’s standoff with the West as an informal deadline expired on an offer of economic and other incentives by six world powers if Iran agreed to curb enrichment.

Iran’s leader made the comments a day after asserting that his country would not give up its “nuclear rights,” signaling that it would refuse demands to stop enriching uranium or at least not to expand its enrichment work.

The United States and its European allies fear Iran intends to use the technology to develop material for nuclear weapons under the cloak of a civilian nuclear power program. Iran denies the accusation.

On Friday, oil shot up as much as $4 after news reports quoted Israeli Deputy Prime Minister Shaul Mofaz as saying that Iran’s nuclear program was nearing a “major breakthrough” and that his country must be “prepared for every option.”

Mofaz, a hawkish former defense minister and military chief, is a top contender to succeed Prime Minister Ehud Olmert, who announced last week he will resign in September amid a corruption probe.

In Nigeria, two French oil workers were kidnapped in that country’s volatile southern oil region Sunday. A statement released by France’s Foreign Ministry confirmed the kidnappings of the French nationals, but did not provide additional details about the two or say for which company they worked.

“You’ve got three supply-side worries pushing oil higher today: Iran, the storm and Nigeria,” Shum said.

In other Nymex trading, heating oil futures rose 0.68 cent to $3.4454 a gallon, while gasoline prices gained 1.66 cents to $3.1009 a gallon. Natural gas futures increased 9.1 cents to $9.48 per 1,000 cubic feet.

Source — CNN

NEW YORK - The price of oil recorded its biggest weekly drop ever, and a gallon of gas finally pulled back from its record high. So is it time to declare the energy bubble popped?

Experts won’t go that far just yet.

“It’s too early to say we’ve seen the worst of it,” said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J. “We would be Pollyannish if we believe one week represents a trend.”

Still, with oil recording yet another drop on Friday, some industry experts who just days ago thought there was more juice left in oil’s meteoric run are reconsidering.

“If this is not the bubble’s implosion, than it’s a reasonable facsimile,” analyst and trader Stephen Schork said in his daily market commentary. “Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view.”

Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange - well below its trading record of more than $147 a week earlier.

The average price of a gallon of regular gas fell about a penny for the day, to $4.105, according to auto club AAA, the Oil Price Information Service and Wright Express (nyse: WXS - news - people ). Diesel prices dipped three-tenths of a cent to $4.842 a gallon.

Some analysts said a nationwide average of $4 or even lower could be in the offing - almost unthinkable in a summer when there has seemed to be no relief at the pump - although they cautioned that there is no guarantee prices will stay low.

“We’re going to see some relief from that relentless march higher,” Kloza said.

Gas may be getting just a bit cheaper, but major changes in how Americans live and drive are already in motion.

Car buyers have been fleeing to more fuel-efficient models. U.S. sales of pickups and sport utility vehicles are down nearly 18 percent this year through June, while sales of small cars are up more than 10 percent.

While slashing production of more-profitable trucks and SUVs, automakers have been scurrying to build their most fuel-efficient models faster.

Toyota Motor Corp. (nyse: TM - news - people ), which hasn’t been able to keep up with demand for its 46-miles-per-gallon Prius hybrid, said last week it will start producing the Prius in the U.S. and suspend truck and SUV production to meet changing consumer demands.

Ford Motor Co. (nyse: F - news - people ) and General Motors Corp. (nyse: GM - news - people ) also have announced plans to increase small car production, and GM has said 18 of the 19 vehicles it is launching between now and 2010 are cars or crossovers.

Some brave traders used the week’s pullback in oil prices as a chance to buy barrels that suddenly seemed to be on sale. But oil analysts were advising investors to beware.

“Buying here is an opportunity if you are a deep believer in $200 (a barrel), otherwise we think that caution would be better applied,” analyst Olivier Jakob of Petromatrix in Switzerland said in a research note.

If oil buyers sense that the slide was overdone, you’ll probably notice at the pump quickly.

“If (oil prices) rebound, you’re going to see a quick reaction at the gas station, because their profit margins are so stretched,” AAA spokesman Geoff Sundstrom said. “They may be very fast bringing prices back up.”

In other Nymex trade, heating oil futures fell 5.23 cents to settle at $3.6915 a gallon while gasoline futures edged up 0.73 cent to $3.1709 a gallon. Natural gas futures rose 3.3 cents to $10.57 per 1,000 cubic feet.

In London, Brent crude futures for September delivery rose 88 cents to settle at $130.19 on the ICE Futures Exchange.

Source — Forbes