Federal regulators approve multi-state natural gas pipeline

(AP) Federal regulators have approved construction of a 270-mile natural gas pipeline project through Louisiana, Mississippi and Alabama.

The project, known as Southeast Supply Header, is a joint venture between CenterPoint Energy and Spectra Energy Corp., both of Houston, Texas.

It is designed to connect natural gas pipelines in Arkansas, Oklahoma and Texas with another line that connects that Gulf of Mexico to Florida.

The 36-inch pipeline will transport up to 1 billion cubic feet of natural gas per day from a CenterPoint-owned hub in northeast Louisiana to one co-owned by Spectra in Mobile, Ala. A segment will cross the Mississippi River into Warren County at LeTourneau and head southeast near the Yokena community.

It represents the final step in the Federal Energy Regulatory Commission’s process.

“We appreciate FERC’s comprehensive review and timely approval of this important infrastructure project,” the companies said in a statement released Friday. “SESH is committed to constructing, operating and maintaining this project safely and ensuring that impacts to landowners, communities and the environment are kept to a minimum.”

Three mainline compressor stations and two booster compressor stations to be built along its pipeline’s path.

Environmental impact was termed substantive but not significant in a study completed by FERC in August.

Final cost estimates grew to $840 million in the project’s final filings with FERC.

Construction is expected to begin before year’s end and wrap up by summer 2008, the companies said.

Shell executive: U.S. needs coherent energy policy

By BECKY BOHRER

The Associated Press

Lack of a coherent U.S. energy policy threatens to feed into a sense of “energy insecurity” in this country, the president of Shell Oil Company said last week. John Hofmeister told local business leaders it doesn’t have to be that way.

“We have seen our country pass, in my opinion, the tipping point of energy supply keeping up with energy demand in ways that secure our future,” he said. As a result, he said, prices have been volatile and high – good for economic growth but, “the bad news is, we need ever more energy from the natural resource base of this country, which is prohibited from development by public policy – public policy, which inevitably feeds energy insecurity if we don’t do something about it.”

Shell endorses a plan that in the short-term would see more oil and gas development and exploration; in the midterm, support that and the further development of alternative energy; and in the long-term, add into the mix new technologies that would spur new energy supplies and manage greenhouse gases, he said. He did not say how long a period he envisioned for each, though he said Shell is currently involved in alternative energy projects, including such things as wind and hydrogen fuel.

The United States relies heavily on foreign oil to meet its nearly 1 billion gallons-a-day demand, Hofmeister said, and he suggested that could be eased with an easing of development restrictions offshore and on unspecified public lands. For example, he said 15 percent of the Outer Continental Shelf – an area he said is believed to hold vast stores of untapped oil and gas reserves – is open to exploration and production off of the Gulf Coast.

Oil companies won’t drill where they’re barred, “but then the nation will not get the energy that they might otherwise get, and Americans will face what I believe is not just an energy crisis, ladies and gentlemen, but even as important as an energy crisis to the economy and to our lifestyle is the crisis of social injustice that would play out across this country as the haves have all the energy they can buy and the have-nots can’t afford energy,” he said.

Ann Morgan, vice president for public lands for The Wilderness Society, said government figures show that 40 million onshore acres are currently under lease in the United States, while just 12 million of those have been drilled. Offshore, she said, 40 million acres also are under lease but just 7 million are in production.

“We believe some lands are appropriately leased and some are not appropriate for leasing, but by scaring the American public by saying they don’t have access to the resource is doing a disservice,” she said.

New Orleans is the 44th of 50 cities that Shell plans to visit in an effort to speak to and hear from local leaders and consumers.

The national tour, which began in June 2006, was borne of the “public animosity” and frustration that followed the 2005 hurricanes and high spikes in fuel prices, a Shell spokeswoman said.

Crude prices fall on profit-taking, but

analysts expect gasoline prices to rise

By JOHN WILEN

AP Business Writer

Oil prices fell Friday as investors sold to lock in profits, but analysts say gasoline prices are about to start rising again, following oil’s recent record-breaking run.

Gasoline prices have so far held steady or even fallen despite a rally that has boosted oil to new records in each of the last eight trading sessions on the New York Mercantile Exchange.

“That’s over now,” said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. “From now on, every $1 a barrel advance in crude has to be accompanied by a 2 1/2 cent increase in gas prices.”

Oil’s advance has been driven by a combination of the Federal Reserve’s half-point interest rate cut, the falling dollar and concerns that tropical storms will strike key oil and gas installations in the Gulf of Mexico.

Interest rates and their role in pulling the dollar lower are drawing fresh investment dollars into energy markets, analysts say.

Because oil and other commodities are priced in dollars, they still appear cheaper to overseas investors, whose currencies have strengthened against the dollar.

Despite Friday’s swoon, many analysts expect oil to continue rising in the near term.

“What interest rates were placed at … is the key to oil prices going higher,” said James Cordier, president of Liberty Trading Group in Tampa, Fla.

As oil has risen, the spread between what many retailers pay for their gasoline and what they charge consumers has shrunk substantially, or even reversed in some cases.

“The people who actually sell the gasoline are really, really suffering,” Kloza said.

Retail gas prices in many areas are already a nickel behind where they would need to be to allow retailers to turn a profit, Kloza estimated.

Gas prices will likely rise an average of 10 to 15 cents a gallon nationwide over the next couple of weeks, Cordier said.

Now, with peak summer driving season receding in the rearview window, many analysts had concluded that falling demand would compensate for supplies, which are again falling.

They didn’t count on oil’s fall surge. Gas prices have little choice but to follow, Kloza said. Still, he doubts prices will again reach the $3 level this year.

Oil prices typically peak for the year in early October, Kloza said. When that happens, oil prices will decline into the winter months, pulling gasoline back down.

But in the meantime, he said, oil could rise as high as $91 a barrel.

Associated Press Writers Pablo Gorondi in Budapest and Gillian Wong in Singapore contributed to this report.

Is Louisiana primed for another budget bonanza?

By DAN JUNEAU

President, Louisiana Business

& Industry Association

The Revenue Estimating Conference (REC) recently met and continued its string of announcing rosy fiscal estimates in post-Katrina/Rita Louisiana. The REC was actually meeting to establish its official estimate of the Unemployment Compensation Trust Fund, but used the occasion to announce that the projected budget surplus for the Fiscal Year 06/07 budget was expected to be approximately $1 billion.

The actual figure will be announced in December. Once it is established, our Constitution dictates that the funds are used for specified categories of non-recurring purposes, such as capital outlay, paying down state debt, and coastal restoration.

Most of the major candidates for governor expressed some opinions about the surplus and its potential uses.

Public Service Commissioner Foster Campbell said the surplus should be used first to shore up the unfunded accrued liability (UAL) of the state’s public retirement systems.

He makes a good point. The last budget ended with an $827 million surplus. The Blanco administration and Legislature didn’t spend a dime of that money on paying down the retirement system debt. Making a substantial down payment against the debt now will mean that the future burden on Louisiana’s taxpayers could be greatly reduced.

State Senator Walter Boasso said he thinks much of the potential surplus should be used on highway construction. While our Legislature did put some of the excess revenue into highways last session, much more needs to be done. Whittling down the backlog of state priority projects would certainly be a good use of the anticipated surplus.

Congressman Bobby Jindal expressed relief that the potential surplus wasn’t spent for more recurring expenditures in the spending spree that occurred during the last legislative session. Jindal is concerned, and rightfully so, that the budget surplus to be announced in December will be accompanied by another hefty increase in excess revenues for the current budget that could fuel more recurring expenditures in an already bloated budget.

Where is the excess money coming from?

There appear to be three major sources, two of which are rather suspect. Approximately $200 million of the potential surplus comes from the fact that most Louisiana income tax filers did not claim the property insurance tax credit passed by the Legislature last December. The income tax form did not clearly indicate where to take the credit, so most individuals failed to claim it. Another major contributor to the surplus is record energy prices. Oil was budgeted at $57 a barrel and is currently trading at over $80.

But how long will $80-a-barrel oil prices last, and what happens if those prices fall significantly while we rely on them to cover recurring expenditures?

A significant amount of the projected surplus comes from higher corporate and individual income tax revenues. Employment levels are now starting to approach pre-Katrina/Rita levels again, and the worker shortages brought on by the storms have resulted in higher wages being paid in many areas. The corporate income tax increases are influenced in part by the energy industry, but those revenues have been very volatile in the past and will likely prove to be the same in the future.

From all indications, the REC will meet in December and shower more revenues on state government. Those revenues will be used by a new governor and a Legislature with many new faces.

It won’t take long to find out the quality of leadership of the new batch of state officials. How they address the explosive growth of state revenues and how they treat recurring versus non-recurring revenues will tell us all we need to know about their character.

U.S. weekly oil and gas rig count down 18

By The Associated Press

The number of rigs actively exploring for oil and natural gas in the United States dropped by 18 this week to 1,769.

Of the rigs running nationwide, 1,458 were exploring for natural gas and 305 for oil, Houston-based Baker Hughes Inc. reported Friday. Six were listed as miscellaneous.

A year ago, the rig count stood at 1,754.

Of the major oil- and gas-producing states, Louisiana lost 14 rigs, and Colorado lost six. New Mexico and Oklahoma lost three apiece, and California lost one. Wyoming gained four, and Texas gained three. Alaska’s count was unchanged.

Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.

Mentor program gives firms tax credit; benefits protégés

STAFF REPORT

To meet the state’s demand for knowledgeable contractors, the state Economic Development department is offing a Mentor Protégé Tax Credit to Louisiana-based contractors and emerging construction technology firms.

LED Secretary Michael J. Olivier touted the program for its technical and economic benefits.

“The new Mentor Protégé Tax Credit Program presents another opportunity for Louisiana’s economy to expand as we continue to support entrepreneurs and their efforts to move Louisiana forward,” Olivier said. “This program is significant given the tremendous growth in Louisiana’s construction industry following hurricanes Katrina and Rita.”

The program was made possible by the Mentor Protégé Tax Credit Program Act of 2007. It is designed to enhance Louisiana’s entrepreneurial construction industry and capitalize on the booming construction technology centered in the state.

The program offers mentor firms income or franchise tax credits of up to $50,000 yearly by offering technical assistance to a protégé firm. Olivier said protégé firms, in turn, can use the monies to grow business, ultimately contributing to expanding the state’s economy and creating additional jobs.

To be eligible to become a mentor, a firm must be able to provide professional guidance and support to help protégés develop and grow.

Mentor firms must also demonstrate the capability to provide managerial or technical skills.

Protégé firms are required to be active certified participants in the LED’s Small and Emerging Business Development Program or registered in the state’s Small Entrepreneurship/Hudson Initiative Program.

For more information on the program, and a full list of rules and requirements, visit Louisiana Forward.com/entrepreneur or call (225) 342-4320.

Bond Commission settles on scoring system for GO Zone projects

By THE ASSOCIATED PRESS

The state money panel overseeing a hurricane recovery business loan program has agreed to a grading system for projects applying for the limited pool of dollars.

Now that the grading system is in place, the State Bond Commission plans to hold a special meeting within weeks to start voting on projects seeking the tax-free Gulf Opportunity Zone Act loans. The commission had delayed application approvals while deciding how to divvy the dollars.

GO Zone loans are available to private business ventures in 31 parishes affected by hurricanes Katrina and Rita. The Bond Commission has received $13 billion in applications for GO Zone bonds, but the program was capped at $7.8 billion by Congress.

Free tech support available to small businesses, nonprofits

STAFF REPORT

The Louisiana Technology Council is offering free technical support help to small businesses and non-profit agencies in the metropolitan New Orleans area.

On Oct. 2, the council will host a session teaming technology professionals – speaking in simple English – who will field questions and offer help designed to grow businesses.

The session will be held at the Louisiana Technology Council, which is located in the second floor assembly room at 215 Prytania St. in New Orleans. It will begin at 5:30 p.m.

Applications for free technical help are available online at www.LTC-LA.org.

To be eligible, businesses must be based in Louisiana. Only small businesses or non-profit organizations with fewer than 50 employees or start-up businesses with a business plan and ready to begin in the next 90 days may apply. Eligible businesses must also be located in the Katrina/Rita damage zones.

Applicants should also have a defined vision about how technical assistance will help their enterprise.

For more information, call (504) 301-2485.

List of biggest U.S. refineries

By The Associated Press

A list of the largest U.S. oil refineries, by capacity in barrels of oil per day:

– Exxon Mobil Corp., Baytown, Texas; 562,500

– Exxon Mobil, Baton Rouge, La.; 503,000

– Citgo Petroleum Corp., Lake Charles, La.; 429,500

– BP PLC, Texas City, Texas; 417,000

– BP, Whiting, Ind.; 410,000

– Exxon Mobil, Beaumont, Texas; 348,500

– Sunoco Inc., Philadelphia; 335,000

– Deer Park Partnership, Deer Park, Texas; 333,700

– Chevron Corp., Pascagoula, Miss.; 330,000

– WRB Refining LLC, Wood River, Ill.; 306,000

Deer Park Partnership is a joint venture between Shell and Mexico’s Petroleos Mexicanos, or Pemex.

WRB Refining is a joint venture between ConocoPhillips and EnCana Corp.

Figures are as of July, from the U.S. Energy Information Administration.

Total U.S. operable refining capacity:

– 17.45 million barrels of oil per day in June 2007

– up from about 17.38 million barrels per day in 2006

– 17.2 million in 2005; 16.97 million in 2004; 16.75 million in 2003; 16.74 million in 2002; 16.58 million in 2001.

Source: U.S. Energy Information Administration.

TEDA moves forward on

confidentiality paradox

By BRIAN FONTENOT

Staff Writer

The Terrebonne Economic Development Authority grappled again with the paradox: how does it share confidential information about its clients publically?

TEDA currently has 34 active projects, and seven projects on hold.

TEDA has actually conducted a face-to-face meeting or conference call with the interested party in only 11 of the 34 active projects.

All of these projects have codenames to protect the interested party and to not break faith with site consultants.

Site consultants are fickle individuals. They stake out property for companies, while protecting the identity of the company.

The general thinking is that if a land owner learns a large, well-known company wants to buy his property, then the landowner will raise the land’s price, thinking the company can afford to pay for it.

Site consultants and organizations like TEDA that preserve confidentiality ensure this does not happen.

If TEDA were to leak any information about a perspective company at a meeting, the consultants would not only pull out of talks with TEDA, but refuse to do business with the economic development group in the future.

In August, the group’s board members, for the most part, were asked to vote to give TEDA CEO Mike Ferdinand authorization to send a letter of support on behalf of the group for a company code-named, “Inkwell.”

But, a significant portion of the board members did not know anything about the company codenamed, “Inkwell,” and had to vote blindly.

Ferdinand could not inform the board members about “Inkwell,” because TEDA’s meetings are open to the public and the information is confidential.

“Unless we’re sponsoring some kind of crazy terrorist organization and don’t know it, we have to depend on Mike’s ability to decipher a good client,” said former TEDA treasurer and current South Central Industrial Association president Don Hingle at the August meeting. “There’s really no risk to TEDA in my opinion.”

Some boards members do not necessarily feels this way. And currently TEDA is looking for a way to discuss the details of the code-name projects in private in executive session.

“It would be nice to have a little more input in some areas,” said TEDA Recruitment Director Michelle Edwards.

During the board’s September meeting last week, TEDA secretary and the Tri-Parish Times publisher Darrin Guidry suggested seeking an opinion from the state Attorney General as to what can be discussed during executive sessions, which are closed to the public.

Guidry said the reason for seeking the Attorney General’s opinion is to be able to bring it to the legislature for potential legislative action, if the opinion does not allow TEDA to conduct private executive session meetings to discuss such matters.

“If landowners find out these companies are looking, the price jacks up and there’s a whole bunch of ramifications,” said Guidry.

In such a meeting, there would be no voting and strategizing would be limited to discussion of a particular confidential company.

TEDA’s legal advisor Assistant District Attorney James Dagate suggested he write a brief synopsis of the problem on the District Attorney’s letterhead and give his opinion.

With this letter, TEDA would then be able to go to the local legislators for assistance, without being bogged down with the Attorney General’s office.

Dagate’s verbal opinion is TEDA cannot go into a private executive session for strictly strategic planning.

Also during the September meeting, the proposed South Louisiana Wetlands Children’s Discovery Center discovered it would keep its land across from the Houma-Terrebonne Civic Center, despite the interests of hotel companies to develop it, along with another site next to the Civic Center.

The parish administration made the call and just one of the two available sites, site A, will be sent back to the prospective hotels for proposals.

“The parish is going to offer one site only,” said TEDA president Henry Richard.

The interested hotels have roughly 10 days to make proposals for just one hotel site.

TEDA will review the new proposals before recommending one to the parish administration.

Also at the meeting, Chet Morrison Services LLC applied for Enterprise Zone benefits for three investments.

The company is investing $500,000 for additional equipment for its Industrial Boulevard location in Houma, $1 million for additional equipment for its local diving company and $50,000 for additional equipment at its Barataria Avenue location.

All three investments should generate 15 new jobs and $37,500 in tax credits for the company.

Matthew Armand was nominated to be TEDA’s new treasurer, replacing Don Hingle, who currently serves as the SCIA president.