THE WALL STREET JOURNAL ONLINE
September 1, 2006 4:59 p.m.
Crude oil prices tumbled to nearly $69 a barrel on the New York Mercantile Exchange after widely watched hurricane forecaster Colorado State University again cut its Atlantic storm forecast for the year. Here is Friday’s roundup of oil and energy news.
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RAID IN ALASKA: Federal agents raided the offices of at least six Alaska state lawmakers — including the son of Sen. Ted Stevens — in an investigation of a large oilfield-services company, officials said. The company named in the search warrant was Veco Corp., said Tam Cook, the legislature’s top attorney. Aides told the Associated Press the agents were looking for any ties between the company and lawmakers, including financial information and gifts.
•Seeking More Exxon Valdez Money: State and federal authorities late Thursday demanded $92 million from ExxonMobil to clean up oil that has lingered in Prince William Sound and the Gulf of Alaska since gushing from the Exxon Valdez tanker in 1989.
•Iraq Pipeline Explosion: A bomb targeting an oil pipeline south of Baghdad exploded, sparking a fire and cutting supply to a major electricity station, but causing no casualties.
•Venezuela, Angola Sign Oil Agreement: Continuing his whirlwind tour to lock up new oil relationships, Venezuelan President Hugo Chavez signed an oil-collaboration agreement with Angola.
•New Shipping Rules: The Philippines government is overhauling its shipping rules after the country’s worst-ever oil spill, the Manila Standard reports.
•New Pipeline Inspections Sought: Oil transit pipelines, including the one that led to a partial shutdown of Prudhoe Bay, would have to be regularly cleaned and checked for thin spots and leaks under a federal proposal.
•Comment: Go Easy on BP: The many recent missteps of BP have some on Capitol Hill contemplating stern sanctions against the company. That would be a mistake, Sybil Ackerman, legislative affairs director for the Oregon League of Conservation Voters, writes in the Financial Times (subscription required). “BP has, in fact, been a model of responsible corporate citizenship on environmental matters,” she writes.
•Peak Oil Piques Interest: ‘Peak-oil’ doomsayers have long been dismissed by oil companies and others, but they are starting to catch the ear of some on wall Street, Bloomberg reports.
•Experts Doubt Steep Gas-Price Decline: Gasoline prices have tumbled in the U.S. lately, and some experts have called for even more gas-price relief later this year. But many doubt the decline will be dramatic, the AP reports.
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PRUDHOE POSITIVE: BP said tests on the condition of a pipeline in Prudhoe Bay were encouraging. BP is assessing corrosion in the pipeline in hopes of bringing the massive Alaskan facility back to full capacity, Bloomberg reports. The company has scanned 5% of a five-mile section of suspect pipe and is working on plans to bypass problematic areas so it can ramp up output. BP is hoping to convince federal officials that the section is suitable to reopen until it can be replaced next year.
•Bouncing Back: Despite the recent memories of Hurricanes Katrina and Rita, the oil industry is ramping up Gulf Coast expansion, the Associated Press reports. Refiners expect to grow capacity in the region by 1.9 million barrels, or 11%, by 2010.
•Picket Plans: Nigeria’s main oil-workers’ unions called a protest strike after a worker’s death after weeks of captivity by militants. The three-day strike was pegged to begin Sept. 13. Previous strikes have rarely made a large impact on production.
•Payday: Oil’s lofty prices have provided a windfall for the industry’s CEOs, Bloomberg reports, which are raking in, on average, three times more than CEOs of similarly sized businesses, according to two watchdog groups.
•Accountability: Phillipines President Gloria Macapagal-Arroyo said those responsible for the oil spill off the coasts of Guimaras Island “would pay dearly” despite claims that the impact is smaller than expected.
•Capitol Inquisition: BP America President Bob Malone will testify at a Sept. 12 Senate hearing, a week after lawmakers in the U.S. House examine the BP unit’s pipeline failure in Alaska
•Driving The Ethanol Corridor: The New York Times sent a reporter to drive the length of the “Midwest Ethanol Corridor,” an ethanol-rich stretch of highway between Chicago and St. Louis. He found the much-hyped biofuel’s chances of success are far from certain.