Morning News - An Inconvenient Aria Edition
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Oil prices fell sharply yesterday -- $4.41 a barrel -- after the government said a decline in crude supply was due to temporary import issues, and a sign of a stronger U.S. economy that could shore up the weak dollar.
The Commodity Futures Trading Commission yesterday disclosed a broad nationwide probe into potential oil-market manipulation and said they are expanding surveillance of energy markets. The agency has about 60 manipulation investigations open in various commodity markets.
BP's partners in a Russian oil venture are seeking the ouster of the unit's chief executive, escalating a dispute that could shape the future of BP and the role of foreign companies in Russia. The Russians want BP to fire its appointed CEO of a pioneering 50-50 venture in Russia. BP has a lot at stake – the joint venture accounts for nearly a quarter of BP's oil production and close to a fifth of its reserves. The Medvedev Administration appears to be staying out of the dispute for now.
The New York Times reports that the national effort to create clean coal technologies – a concept almost universally supported by all parties -- is lagging badly. In January, the government canceled its support for what was supposed to be a showcase project, a plant in Illinois where there was coal, access to the power grid, and soil that backers said could hold the carbon dioxide for eons. In the last few months, utility projects in Florida, West Virginia, Ohio, Minnesota, and Washington State that would have made it easier to capture carbon dioxide have all been canceled or thrown into regulatory limbo. Many of these projects were derailed by the short-term pressure of rising construction costs. However, the article says there are many other obstacles: Scientists need to figure out which kinds of rock and soil formations are best at holding carbon dioxide; they need to be sure the gas will not bubble back to the surface; they need to find optimal designs for new power plants so as to cut costs; and some complex legal questions need to be resolved, such as who would be liable if such a project polluted the groundwater or caused other damage far from the power plant.
In non-energy news:
A federal judge has overturned a Dallas suburb's ban on apartment rentals to illegal immigrants, saying it is unconstitutional and that only the federal government can regulate immigration.
Merck scored two major victories yesterday in its ongoing defense of Vioxx lawsuits. A Texas appeals court overturned one verdict and a New Jersey appeals court partially overturned another, involving about $35 million in damages. Merck agreed last year to a $4.8 billion settlement, which is not yet final. Some Vioxx litigants opted out of the settlement in the hopes of taking their case to trial. They may reconsider following yesterday’s decisions.
BNSF’s CEO Matthew Rose is warning of a meltdown in the rail freight system and chaos in the nation’s supply chain if something isn’t done to reduce bottlenecks and expand capacity on the nation’s rail network. His contention is bolstered by a new analysis by AP that says that the 140,000-mile system is already heavily congested and it’s only going to get worse. Not everyone is buying that scenario, however. Kenneth Kremar, a Global Insight analyst, said talk of a looming crisis serves industry interests as rail companies try to get more money from Congress. He said investment in larger, high-tech train cars and computer systems that better pace trains should help avert logjams. He says: "It's illogical to assume nothing will be done. Railroads have an inherent interest in doing something. The market will respond. There's no reason think they're headed for the abyss."
First it was a slideshow, then a film, and then a book. Now Al Gore’s "An Inconvenient Truth" is going to be an opera. La Scala officials say the Italian composer Giorgio Battistelli will mount a production for the 2011 season. (Editor's Note: The comments on the linked article made me laugh.)