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Beaumont Business Journal: A Monthly Publication of the Greater Beaumont Chamber of Commerce

Year in Preview: Development in Jefferson County
By Sarah Moore
Published 11:19 am, Monday, December 31, 2012

County Judge Jeff Branick is hoping to bring Asian-based companies to Jefferson County in the new year or beyond.

"We have Dutch, French, German, Egyptian" companies, he said, but no Asian companies.

"We've been talking to Korean, Chinese and Japanese companies."

The new year could also see renewed potential for resurrecting a long defunct stretch of Texas 87 between Sabine Pass and High Island, a project the county has labored for years to bring to fruition.


Energy Transfer Partners to acquire Sunoco in $5.3 billion transaction
May 8, 2012

Energy Transfer Partners, L.P. and Sunoco, Inc. have announced that they have entered into a definitive merger agreement whereby ETP will acquire Sunoco in a unit and cash transaction valued at approximately $5.3 billion.

This combination will create one of the largest and most diversified energy partnerships in the country by expanding ETP’s geographic footprint and strengthening its presence in the transportation, terminalling and logistics of crude oil, NGLs and refined productsm, according to a press release from ETP



Company proposing pipeline to PA reapplies
May 4, 2012

The Canadian company trying to build the disputed Keystone XL pipeline in the U.S. submitted a new application for the project Friday after changing the route to avoid environmentally sensitive land in Nebraska.

TransCanada said it applied again to the State Department for permission to build the pipeline to carry oil from so-called tar sands in western Canada to a company hub in Steele City, Neb. From there, the project would link up with other pipelines operated by the company to carry oil to refineries on the Texas Gulf Coast.



Industrial expansions to start, conclude in 2012
By Dan Wallach 
January 2, 2012

Cheniere Energy Partners plans to spend at least $6 billion in coming years to modify its liquefied natural gas terminal in Cameron Parish, La., to export natural gas.

Houston-based Cheniere said construction would begin in 2012 with export beginning in 2015. The company said the project would create 148 new jobs, retain 77 current jobs and provide 3,000 peak construction jobs.

Cheniere still has to secure adequate financing and all applicable federal and state permits. Its plan is to export liquefied natural gas to European markets, much of which is dependent on supplies from Russia, considered unreliable because of unstable politics.

Read full article
here 


State Approves Funding for Congested Corridors, Bridges
Texas Department of Transportation
September 29, 2011

AUSTIN – The Texas Transportation Commission today approved distribution of $3 billion in Proposition 12 bond funding that will address congested highways, rehabilitate bridges and improve connectivity between the state’s metropolitan areas.

The commission’s action will distribute $1.4 billion to TxDOT’s 25 districts and $600 million to the 25 Metropolitan Planning Organizations (MPOs) around the state according to existing formulas; as well as $200 million for statewide highway connectivity improvements; $500 million for bridges; and provide $300 million to begin developing projects to mitigate congestion in the four most congested regions of the state: Houston, Dallas-Fort Worth, Austin, and San Antonio.

These funds represent the balance of $5 billion in general obligation bonding authority approved by voters and first authorized by the Texas Legislature in 2007. Construction contracts for the first $2 billion in projects were approved in 2010.

TxDOT worked in partnership with MPOs, cities, counties and corridor associations to identify and prioritize needs. TxDOT held meetings with stakeholders and conducted public hearings, including the department’s first statewide hearing via video teleconference. Much of this intensive public involvement effort was conducted and completed in just four months.


U.S. Army Corps Chief of Engineers signs Chief’s Report for Sabine-Neches Waterway deepening project
Sabine-Neches Navigation District
July 22, 2011

July 22, 2011 (Nederland, Texas) – The U.S. Army Corps of Engineers (USACE) today signed the Chief of Engineers Report, or Chief’s Report, concluding a nearly 12 year assessment of proposed deepening of the Sabine-Neches Waterway (SNWW). With the signing of the Chief’s Report, the USACE is stating that the proposed deepening project is environmentally sound, economically beneficial, and is administratively complete. The Chief’s Report now moves on for review by the Assistant Secretary of the Army (Civil Works) and then is transmitted to Congress for authorization and funding.

“This is a great day for southeast Texas, the Gulf Coast and the nation. It’s been a long and intense process and we now have validation that this world-scale public works and infrastructure improvement project is sound and important to our country,” said Paul Beard, Chairman of the Sabine Neches Navigation District (SNND). The SNND is the local “sponsor” of the deepening project. He added, “The deepening project will secure our area’s future as America’s Energy Gateway and as the nation’s largest military out-load port. The potential economic benefits to our area, short-term and long-term, are staggering with literally billions of dollars of economic benefits and more than 20,000 new permanent jobs.”

The deepening of SNWW has received bipartisan support from both the Texas and Louisiana Congressional delegations. Ultimately, Congress will determine the timing and scope of funding once authorized in the Water Resources Development Act (WRDA).


Cheniere to spend $6 billion on Cameron LNG terminal
Baton Rouge Business Report
July 19, 2011

Cheniere Energy Partners says it will spend $6 billion to modify its liquefied natural gas terminal in southwest Louisiana to export natural gas. Houston-based Cheniere announced the project in May. Today the company said the project would create 148 new jobs, retain 77 current jobs and provide 3,000 peak construction jobs.
Gov. Bobby Jindal says the state is providing an economic package including industrial tax exemptions and a program that gives companies rebates for creating high-paying jobs. The jobs at the LNG terminal will have an average salary plus benefits of $100,000 a year. Cheniere plans to begin construction next year on modifying the terminal and hopes to be exporting natural gas in 2015. This will be the first dual importer and supplier of LNG. The terminal in Cameron Parish was originally built to import LNG when natural gas supplies were much lower.


Texas Legislature passes some rules that make state national leader, others that anger EPA
By Associated Press
May 31, 2011

HOUSTON — The Texas Legislature ended its regular session with a mixed bag of environmental rules, passing some bills that put it ahead of the nation and others that are bound to infuriate the U.S. Environmental Protection Agency.

Texas, an oil and gas powerhouse as well as one of the largest polluters in the nation, can only change and pass new laws once every two years, so the legislative session is meaningful. Federal agencies and other states often watch closely to see what energy and environmental rules are passed or changed in Texas, a state that has often set precedent in these areas — for good and bad.

This time, the Legislature passed a bill that could make Texas the first state to require by law that oil and gas companies publicly disclose the chemicals they use when breaking up dense rock to extract minerals. This could force other states and the EPA to move more quickly on a contentious issue that is gaining steam as hydraulic fracturing is used in more areas.

The Legislature also overwhelmingly approved a bill that would delay by at least two years efforts to strengthen air permitting rules for the oil and gas industry, a move that could ratchet up a drawn-out, sometimes ugly, public dispute between Texas and the EPA that has evolved from a tussle over environmental issues into a battle over states’ rights.

The Legislature passed the bill after the EPA’s Deputy Regional Administrator Lawrence Starfield sent a letter to the Texas environmental agency warning that if adopted “the EPA would have to consider taking additional action, including the consideration of sanctions” under the Clean Air Act. This could include a takeover of Texas’ air permitting program, a responsibility traditionally reserved for states.

Read full article
here


Total Port Arthur Refinery completes conversion project
By Dan Wallach
May 6, 2011


If the Total Port Arthur Refinery were a restaurant, the menu yesterday only would have offered hamburgers.

Today, you can get fried chicken, Michel Benezit, Total's executive vice president, said Thursday at a celebration of the refinery's conversion project completion.

Benezit described the greater flexibility the refinery has in making fuel from a wider range of crude oil, including crude with heavier sulfur content.

"The refinery has a brighter future because there is choice," Benezit said in an interview before a public event on the Lamar State College-Port Arthur campus. The project cost an estimated $2.2 billion.

The refinery's daily capacity to make fuels and other products from crude hasn't changed substantially, but the project widened its options for supply.

The centerpiece of the project, launched three years ago, is a 50,000-barrel per day coker, which gives the refinery the ability to remove sulfur from crude and to make ultra low-sulfur diesel, a transportation fuel required as a way to reduce air pollution.

Benezit continued his hamburger-fried chicken analogy in explaining the difference in price of the raw material. Crude with higher sulfur content often is cheaper, but refiners are concerned with making money in the spread between the cost of the raw material and the price they can charge for the finished product.

Crude prices fell almost 9 percent Thursday to just under $100 a barrel because investors see reduced demand as a result of high pump prices. It was the biggest one-day percentage drop in more than two years.

Total's investment won't increase jobs at the Port Arthur refinery, where about 600 are employed, but it will require skilled people to run and maintain it, Benezit said.

Total is an international oil and gas company with a presence in more than 130 countries. In the United States, it has 71 sites in 24 states. The Port Arthur refinery is Total's only one in North America.


Lanxess expands capacity for HNBR
Rubber & Plastics News
April 12, 2011

LEVERKUSEN, GERMANY (April 12, 11:45 a.m. ET) -- Lanxess AG is expanding its production capacities for hydrogenated nitrile butadiene rubber at its facilities in Leverkusen, Germany, and Orange, Texas, by 40 percent.

This synthetic high-performance rubber is marketed under the brand name Therban. Lanxess said it will invest, “a low single-digit million euro amount” in the expansion.

Expansion work on the German and U.S. production facilities has already begun. The expansion in Leverkusen is scheduled for completion in April 2012, while the Orange facilities will be ready by December 2012. The measures will create 15 jobs.

Lanxess said the HNBR market is growing globally at a double-digit annual rate. This is due in particular to a strong global demand from automotive manufacturers, especially in China and India.


Parkdale Mall to see three new stores
By Beth Rankin
Thursday, April 7, 2011

Parkdale Mall's got a few new stores getting ready to open over the next couple months.

Up first is the sneaker retailer Vans, which will open in what used to be American Eagle before it moved to the other end of the mall.

Vans sells men's and women's shoes, clothing and accessories that are geared toward a youth/skateboard market. They also sell accessories and safety equipment for BMX and snowboarding. The new Vans location is slated to open sometime in May.

Crazy 8, a children's retailer, is currently in the beginning phases of construction and is scheduled to open in late spring or early summer. The store sells clothing and accessories for newborns all the way up to pre-tween.

David's Bridal is also coming to the mall and will have its own external entrance, but that store isn't set to open until early summer. The store sells bridal and special occasion gowns and accessories and has a selection of tuxedos and prom dresses.

Other In the Works news

Research Center: Management Resources Group, Inc. recently presented plans to Port Arthur's Economic Development Corporation for a facility called the Verte' Energique Technology Research and Development Center, according to local realtor Charlie Foxworth. The center's intention is to focus on creating new clean energy initiatives, Foxworth said.

The R&D center currently has three potential sites in Port Arthur: one south of Texas 73 and two north of Texas 73.

Chiropractic and Wellness Center: A ribbon cutting was held yesterday in Groves at the new Chiropractic and Wellness Center at 4820 Twin City Highway. The new business - which aims to provide "optimal health and wellness through chiropractic care," according to its Facebook page, is open 8:30 a.m. to noon and 2 to 6 p.m. Monday through Wednesday, 2 to 6 p.m. Thursday and 8:30 a.m. to noon Friday.

Insurance Company: Bankers Life and Casualty Company, a company that according a press release focuses on the insurance needs of the retirement market celebrated its grand opening last week at 85 I-10 N, Suite 1-110 in Beaumont.


LU seeking to lease property for commercial development
KFDM Channel 6
March 17, 2011

BEAUMONT - Lamar University wants to provide prime commercial property for development.

The university is accepting proposals from companies that want to lease property at MLK and East Virginia as well as MLK and Colorado Avenue.

A spokesman for Lamar University told KFDM News it wants a company that would provide the best value to the university. It might be a restaurant or a store that sells LU merchandise.

The university is open to all ideas.

Lamar is accepting bids for the properties through April 4.


Rove: Drilling moratorium will hurt U.S. economy
By Heather Nolan
March 17, 2011

Karl Rove, a former senior advisor to President George W. Bush, spoke to local media Thursday about the offshore drilling moratorium, alternative energy and how the 2012 Republican presidential race is shaping up.

Rove was the featured speaker at the Texas Energy Museum's annual Blowout, an event that raises money for the museum's exhibitions and education programs. He spoke to the media before talking to a crowd of about 1,000 at Beaumont's Civic Center.

Rove, who was the senior advisor to President Bush from 2000-2007 and his chief of staff from 2004-2007, called the Obama Administration's offshore drilling moratorium "a huge mistake," saying the ban has "severe consequences for our economy and will for a long time to come."

There are large amounts of waters off of the U.S. coast that have "lots of good oil," Rove said, adding that several of those areas were open or on the verge of being open when the Obama Administration imposed the moratorium.


Crude prices drop 4 percent
By Dan Wallach
March 15, 2011


Crude oil prices fell by $4 Tuesday to $97.18 per barrel on deepening fears about Japan's economy after its nuclear crisis worsened following a devastating earthquake and tsunami.

That's a drop of 4 percent on the New York Mercantile Exchange, the Associated Press reported.

Investors reacted to the diminished demand for oil and other products in Japan, the world's third-largest oil importer. However, Wall Street analysts expect that Japan will eventually increase imports of oil, coal and natural gas, according to the Associated Press.

Potentially dangerous levels of radiation have been reported leaking from a crippled nuclear complex in the disaster area. More than 10,000 people are thought to have died after the earthquake and tsunami hit Japan on Friday.

If crude prices fall off sharply, why do prices at the pump remain high?

Oil analyst Tom Kloza of the Oil Price Information Service told The Enterprise in an e-mail Tuesday when wholesale prices drop, there is no compelling need to reduce prices immediately.

"After all, demand is fairly consistent," Kloza said. "But over the space of a few days, competitors will drop prices and ultimately the retail price will average about 15 cents per gallon over the wholesale, plus taxes, plus freight number."


Perry OKs dipping into rainy-day fund
By Peggy Fikac, The Houston Chronicle
March 15, 2011


Gov. Rick Perry publicly endorsed spending up to $3.2 billion from the rainy-day fund to help meet a deficit in the current fiscal year, issuing a statement that the House's budget chief said was politically necessary before the House Appropriations Committee took a vote.

Comptroller Susan Combs in January had announced a $4.3 billion deficit in the current fiscal year as part of her revenue estimate. It's part of a shortfall through the next two years estimated at $15 billion to more than $27 billion, with the larger number representing the amount needed to continue the current level of services through the next two years.

That deficit fell to $4 billion when Combs revealed Monday that stronger-than-expected sales tax revenues had yielded an extra $300 million. Lawmakers also plan to implement a net $800 million in cuts offered by state agencies at the direction of Perry, Lt. Gov. David Dewhurst and Speaker Joe Straus.

Perry has been back and forth over using the rainy-day fund, as more Republicans have suggest part of it should be spent to help close the immediate deficit.

Spending money from the rainy-day fund this fiscal year requires a three-fifths legislative vote. Tapping it again for the next two years would require a two-thirds legislative vote.

Perry started out before the session by saying he was against using the fund, then called its use premature since he wanted to be sure all possible cuts had been made first. Appropriations Committee Chairman Jim Pitts, R-Waxahachie, last week said budget-writers' job hadn't been eased by the governor suggesting there were more cuts at which budget-writers hadn't looked.

A top Perry aide testified in Appropriations last week that Perry hadn't "drawn a line in the sand" against using the savings account.

Perry aides refused a second invitation to appear before Appropriations on Monday, but Perry participated in a telephone town-hall meeting with the limited-government group Empower Texans in which he called use of the fund a last resort but added, "If there are some dollars in the rainy-day fund that are required to balance the budget, at the end of the day, we're going to have a balanced budget."

Read full article
here


Port Arthur has "green energy" plans
By Dan Wallach 
March 7, 2011

Management Resources Group Inc. in Port Arthur has announced plans to build a "green energy" technology research and development facility along with a 400-megawatt, natural-gas fueled power plant.

The power plant would cost about $400 million to build, said Jeff Hayes, a Port Arthur developer who also is on the board of Management Resources Group.

The project would need at least 400 acres of land at the start, with the ability to spread over 1,000 acres in the future, according to Hayes.

"We're looking at three different sites," he added.

The research component of the power plant complex could help to create what Hayes called "green collar jobs."

Representatives of Management Resources Group and its "green energy" research plans, to be called "Verte' Energique Research and Development Center, will talk about its plans at the Port Arthur Economic Development Corp. at 6 p.m. today at the EDC's office, 4173 39th St., Port Arthur.


Texas Soars: Site Selection’s Governor’s Cup returns to Texas
Mark Arend
Site Selection Magazine, March 2011

Texas Governor Rick Perry is proud to have won the latest pick-up basketball game with his fellow governors. But rather than gloat, the recently re-elected Lone Star State power forward says he sincerely wants his opponents to work harder on their game. That, he says, will force Texas to be more competitive in future match-ups.

"It's a clear challenge to improve the business climate in their states to put pressure on Texas to be more competitive," says Perry. "As well as Texas has done in the past and in 2010, we're not going to be what we can be, or as strong as we can be, unless we have competition from other states."

Texas reclaimed Site Selection's Governor's Cup for 2010 new-project activity, with 424 projects, after a four-year claim to the Cup by Ohio. The Governor's Cup recognizes the state that in the previous calendar year won the most new projects and expansions according to Site Selection's proprietary New Plant Database. Qualifying projects involve private-sector capital investment in commercial facilities of at least US$1 million, 50 or more new jobs or new construction of at least 20,000 sq. ft. (1,860 sq. m.). Runners up in the 2010 competition are Ohio (376 projects), Louisiana (347), Pennsylvania (337) and Georgia (251).

State-to-state competition isn't just about making the states more competitive, though if it attracts investment and jobs, that's reward in itself. It makes the U.S. more competitive, and that's the way it's supposed to work anyway, Perry asserts. How much more competitive could the states be, and how many more jobs would they attract nationally, if he and his counterparts could use the game's original rulebook?

Read full article
here


Teacher layoffs would hamper some local economies
Associated Press
March 3, 2011


AUSTIN, Texas (AP) — Gov. Rick Perry can't quit talking about jobs. But if he realizes his vision of a budget balanced through cuts alone, 100,000 teachers could lose their jobs.

That's about a third of the 333,000 teachers employed by Texas public schools.

Despite the tough budget situation, Perry has asked for $50 million to spend on his Texas Enterprise Fund. That money is given to companies for doing business in Texas. That money could keep 1,000 teachers employed.

Perry has also asked for $20 million for the Texas Film Commission to give moviemakers when they film in Texas. That money could save 400 teacher jobs.

The Legislature is debating whether to grant Perry his requests, or use that money elsewhere. 


Kountze-based sign business expands into Beaumont
By Beth Rankin
February 27, 2011


You might not realize it, but you've already seen plenty of County Sign and Awning's work.

And now, the Kountze-based business has opened a Beaumont location that can turn out signs in a hurry.

After nine years of creating signs - everything from vinyl banners to electric signage - for local businesses like Community Bank, Hamburger Depot, Texas Workforce Solutions, Ritter Lumber and plenty of local hotels, the owners decided to expand into Beaumont, where a lot of their business was coming from anyway.

The giant glowing sign beckoning you to the South Texas State Fair? Yep, that's them too.

"We pretty much are a full-spectrum, full-service sign company," said Rick Drew, a managing partner of the business. "Everything from a giant Chevron sign way up on a pole down to bumper stickers."

The new County Sign and Awning Express opened this week at 3695 Stagg Drive and offers quick turn-around for everything from window clings to vinyl banners.

They have designers on staff and can handle everything up to manufacturing, installation and repair, Drew said.

The new location is open from 8 a.m. to 4:30 p.m. Monday through Friday.


Brazil could soon be an energy rival to the Houston area
By Brett Clanton, Houston Chronicle
February 21, 2011


Today, Brazil may be best known for Carnival, soccer and gorgeous beaches. But deep-water oil and gas drilling is moving up the list.

Indeed, as the South American nation moves to turn huge offshore oil discoveries into producing fields, it is slowly building a domestic industry that can do more of the work on its own - and that may soon give Houston a run for its money.

The goal is to create a Silicon Valley-like cluster of scientists, engineers and manufacturers that can develop and build everything from drill bits to drilling rigs and unlock huge deep-water oil fields, buried under thick salt layers off Brazil's southeastern coast.

But the bigger mission is to establish an industry that can help the developing nation's economy grow, and can survive long after oil from those so-called pre-salt fields is gone.

"We understand that just extracting oil from the pre-salt is not enough to move Brazil forward," Segen Estefen, director of technology and innovation at the Federal University of Rio de Janeiro, told reporters visiting recently.

Behind the effort are strict government rules that require as much as 65 percent of products and services on new offshore projects to come from Brazilian companies, targets that often have proved hard to hit.

And Petrobras, the country's giant state-controlled oil company, is providing a boost by sending work to Brazil's universities, shipyards and manufacturing plants.

But international oil service companies are also expanding in Brazil and sharing technology, aware of the "potentially massive" opportunities in the nation's deep-water fields, analysts with Tudor, Pickering, Holt & Co. wrote in a report on Brazil last month.

A dozen major oil field services and equipment providers, including Schlumberger, Baker Hughes and Halliburton,are spending $50 million apiece on research centers in a technology park at the Federal University in Rio.

The centers will work on technology for pre-salt fields that often lie beneath more than a mile of water, another 10,000 feet of rock and a thick layer of shifting salt.

"It makes sense that they would want some of that technology developed near them," said John Gremp, chief operating officer of FMC Technologies, a Houston-based supplier of subsea oil and gas production equipment that is building one of the centers.


Read full article here 


Texas, EPA fight moves to Capitol Hill today
Hearst Newspapers
February 9, 2011

For months, Texas Attorney General Greg Abbott has battled the Environmental Protection Agency's plans to regulate greenhouse gas emissions from oil refineries and power plants.

So far, the arena for those fights has been the federal court system, as Texas mounted six separate legal challenges to the mandates.

But today, the dispute will move to Capitol Hill, with both Abbott and EPA Administrator Lisa Jackson scheduled to testify at a House Energy and Commerce subcommittee hearing on the issue.

The two won't exactly be squaring off in real time. As an agency head, Jackson will probably sit on a separate panel - testifying solo - before Abbott and other scheduled witnesses make their appearances. But the two are sure to have an opposing point of view.

Abbott is expected to lay out a case for Congress to pass legislation that would restrict the EPA's powers to regulate carbon dioxide and other greenhouse gases blamed for global warming. He has already pressed lawmakers on the issue.

Jackson, meanwhile, is poised to defend the EPA's mandate for states to issue greenhouse gas emission permits to refineries and power plants as well as the agency's ongoing work to develop standards for industrial facilities to best control how much they release. The EPA also took over greenhouse gas permitting in Texas after state leaders refused to cooperate.

The hearing today is focused on legislation sponsored by House Energy And Commerce Chairman Fred Upton, R-Mich., that would pre-empt the EPA's Clean Air Act powers.

Sen. James Inhofe, R-Okla., an outspoken critic of climate change, has introduced a companion bill in the Senate. A flurry of other proposals aim to block the EPA from doing anything on greenhouse gas emissions for two years or more. 


Beaumont seeks partial use of airport gas royalties
By Mike D. Smith 
February 8, 2011

BEAUMONT, Texas - There could be an option in federal rules that could let the city enjoy a portion of its $38.8 million in natural gas royalties earned from drilling at Beaumont Municipal Airport.

The catch: The money could only be used to reimburse the city for recent airport improvements and operations.

The money has been locked by a Federal Aviation Administration rule that bans using revenue earned from airports receiving grant money outside those airports.

The city is negotiating full release of the royalties for possible use on street projects. Last week, city officials met with FAA representatives from Fort Worth and Washington, D.C.


Economic development strategies vary across Southeast Texas
By Heather Nolan
Published: 07:42 a.m., Monday, February 7, 2011

The million-dollar occupied buildings that dot the Industrial Business Park on West Port Arthur Road represent the good things that have come during Floyd Batiste's almost six years as executive director of Port Arthur's Economic Development Corp.

The drawings in his office that show a renovated Procter Street Pavilion and an old downtown bank building are signs that more progress isn't too far off.

While Batiste knows things are happening and feels he'll eventually have something to show for the corporation's efforts, people sometimes raise questions since there's nothing to see right now.

Leaders of local economic development groups said they've faced criticism from community members and elected officials over the years, questioning their relevance and usefulness. Still they contend they wouldn't be around if they weren't needed.

"I know there have been groups that talk about (how) EDCs and economic development incentives are not necessary. Businesses will either be successful or they will not," said Bobby Fillyaw, who has served as executive director for the Orange County Economic Development Corp. for the last six years. "That would be a great, wonderful thing in a perfect world."

Read the full article 
here
 

States Let Private Sector Seal Deals
By Conor Dougherty
January 29, 2011

Some cash-strapped states have identified another job they want to shift to the private sector: economic development.

A number of governors are working to turn their development offices into some form of nonprofit private entity, a move that would transfer the task of giving out state grants, tax breaks and other economic incentives from the hands of government.

The idea, which has as much to do with economic philosophies as with saving money, is mainly gaining ground in states with Republican governors, including Ohio, Wisconsin, Iowa and Arizona.

"It's a matter of greater flexibility and the ability to act more like a chamber [of commerce] rather than a state agency," said Wisconsin's new Republican governor Scott Walker, adding that private groups are better equipped to create jobs and attract companies.

As tax revenue has shriveled in recent years, cities and states have moved to privatize various operations, such as state-run liquor stores, local libraries and parking meters.

Seven states, including Michigan and Florida, already have some form of private group filling the economic-development role. Critics say handing this power to a private entity can create conflicts of interest, because the nonprofits usually have boards made up of public officials and private business leaders. This can create conflicts as these boards help steer tax breaks and incentives.

Also, in many cases private economic-development agencies aren't subject to the same standards for public disclosure as government agencies, even though they receive government money. In Ohio, where newly elected Gov. John Kasich has proposed dissolving the state's Department of Development and creating an entity called JobsOhio, lawmakers have pushed to increase disclosures and allow the state's inspector general to investigate the proposed entity.

Advocates say it makes sense to separate the task of creating jobs from large government agencies that often have a broader mission. In Wisconsin, the current Department of Commerce has responsibility for regulation as well as economic development. Among the 400 employees in Ohio's Department of Development, 60 are focused on economic development; the balance handle areas including homeless programs, community development and home energy assistance.

The structure of private economic-development groups varies, but in general they are set up as nonprofit corporations that receive seed money and regular funding infusions from the state budget but are also free to solicit donations from corporations much like a chamber of commerce. Also, instead of reporting to the governor directly, they are usually run by a board of directors. By operating outside government, private authorities can make faster decisions, says Debi Durham, who was recently hired as director of the Iowa Department of Economic Development. Under a plan expected to be proposed by Gov. Terry Branstad on Monday, that department would be dissolved into a new entity called the Iowa Partnership for Economic Progress.

Jeffrey Finkle, president of the International Economic Development Council, a trade group for economic development agencies, including some nonprofit private groups, says there has been little to show that a private structure is better than an agency under the government's purview. "There is this naive assumption that a private-run state economic-development agency is better than a public one and I don't see evidence that that's true," he says.

The move to privatize economic-development agencies started two decades ago, according to Good Jobs First, a Washington nonprofit research group that monitors how states and localities use economic incentives. Several states have seen parts of their economic development agencies go from public to private and back to public again. "One of those was Wisconsin, where the concept is now being presented as something new," said a recent Good Jobs First report on the recent privatization trend.


ZEEP TO PURCHASE EASTMAN TXE GASIFICATION PROJECT
IN BEAUMONT, TEXAS


HOUSTON, Texas, Jan. 24, 2011 -- Zero Emission Energy Plants Ltd. (ZEEP) today announced it has entered into a definitive agreement with Eastman Chemical Company Investments, Inc., to purchase all of the membership interests of TX Energy, LLC (TXE). Eastman Chemical Company Investments, Inc., is a subsidiary of Eastman Chemical Company (NYSE:EMN). TXE is engaged in developing a gasification facility in Beaumont, Texas. The facility will convert petroleum coke, an oil refining waste product, into hydrogen (H2) and pipeline quality carbon dioxide (CO2).

The transaction is expected to close during the second quarter of 2011. The terms of the agreement are not being disclosed at this time.

“ZEEP is anxious to continue the work started by Eastman on the Beaumont site,” said Ron Oligney, ZEEP chief executive officer. “We look forward to being part of the Beaumont community and contributing to local and state economic development by employing up to 1,500 during construction with about 250 permanent jobs.”

“This site is uniquely suited for a gasification facility that converts waste petroleum coke into clean energy products,” Oligney continued. “The primary off take will be hydrogen, an important clean energy feedstock for transportation fuels, fertilizers and chemicals. Carbon dioxide produced from the facility will be captured and used to boost oil production in fields near Beaumont and through an existing CO2 pipeline network. This is truly a good news story for expanding clean energy, manufacturing and employment in America.”

About ZEEP
Zero Emission Energy Plants Ltd. is a private company focused on the development of state-of-the-art gasification facilities that convert coal, petroleum coke and biomass into high value energy products such as syngas, hydrogen, CO, CO2, methanol, gasoline and power. ZEEP has offices in Australia, Bermuda, Canada, China and the United States, and is working to develop gasification facilities in select locations around the world.

In various projects, ZEEP will deploy existing gasification technologies as well as innovative proprietary gasification technologies.

Find out more at
www.zeep.com.


Senate budget has more for border, less for schools
By Peggy Fikac, San Antonio Express-News 
January 25, 2011

Border security funding would get a slight boost, but public schools, higher education, criminal justice and health care for poor Texans would be cut under Senate leaders' first crack at a bare-bones budget.

The $158.7 billion, two-year starting-point measure filed Monday by Senate Finance Committee Chairman Steve Ogden would slash $28.8 billion, or 15.4 percent, compared to the current budget, looking at both state and federal funds.

It is more generous than House leaders' first draft, in large part because it assumes a larger federal Medicaid match than the House version.

However, generous is a relative term when lawmakers are facing a budget shortfall estimated at $15 billion to more than $27 billion in discretionary state general-revenue funds.

Ogden said there is a lot of work to be done to get the two-thirds support necessary for a budget in the Senate.

Bill wouldn't pass as is

"This is a starting point. I don't have - and never will have - 21 votes for this bill," said Ogden, R-Bryan. "So, what we've got to do starting on Monday is to start working with the senators to see what it is we need to do."

Lt. Gov. David Dewhurst has yet to name other Senate committees for the legislative session, but he appointed the Finance Committee on Monday so it could begin working on the measure.

Ogden said he hopes senators will suspend rules to allow him to begin hearing the bill next Monday.

Neither the House nor Senate's initial measures would raise taxes or dip into the state's rainy-day fund savings account, which will have a projected $9.4 billion.

Neither the House nor Senate's initial measures would raise taxes or dip into the state's rainy-day fund savings account, which will have a projected $9.4 billion.

Senate leaders' budget draft would keep funding to four community colleges, including Brazosport College, as would the House's first draft. It would cut higher-education formula funding, although by less than the House version for general academic and health-related institutions.

Financial aid a target

The Senate measure generally would restrict college financial aid to students already receiving it, just like the House. The Senate version holds out hope for some additional financial aid funding.

The Senate draft would put more money into public education than the House but still fall $9.3 billion short of current school funding formulas that pay for items, such as projected student enrollment growth and projected decreases in school district property values. It would include some funding for other education programs slashed in the House draft.

The Senate draft would put more money into public education than the House but still fall $9.3 billion short of current school funding formulas that pay for items, such as projected student enrollment growth and projected decreases in school district property values.

It would include some funding for other education programs slashed in the House draft.

"We haven't funded what current law anticipates we would fund for the Foundation School Program, so we're going to have to sit down there and work on that," Ogden said. "Either we're going to have to add some money or change the law."

The measure would not cover the number of people expected to enroll in Medicaid through the next two years, and it would slash Medicaid reimbursement rates to health care providers.

Border a priority

The bill filed by Ogden would cut public safety and criminal justice, including community supervision and parole programs, though less than the House proposal.

Ogden emphasized that the Senate's starting-point measure puts a priority on border security. House leaders also emphasized border security, but Ogden's bill would increase funding for it.

"That was a conscious decision that the first responsibility of government is to provide for the security of the people," Ogden said.

Sen. John Whitmire, D-Houston, said even the Senate's starting-point budget "would impact every Texan with significant cuts." He said it is crucial in legislative hearings that "everyone in charge of an agency or state institution come in and paint a true and accurate picture of what the cuts will do."

"The culture in this town is people kind of giving political answers, or maybe a soft approach to what proposed cuts will do," Whitmire added, saying it's up to lawmakers to ask the right questions.

Sen. Carlos Uresti, D-San Antonio, said, "The Senate's starting point budget doesn't come close to addressing the needs of Texas, particularly its schoolchildren. How can we possibly start building a new century for Texas with a budget that turns its back on the future?"

Moves called devastating

F. Scott McCown, of the Center for Public Policy Priorities, which focuses on low- and moderate-income Texans, said both the House and Senate measures show the need to use the rainy-day fund and come up with new revenue.

He said the Senate measure "just assumes somehow the state will come up with $1 billion more than the House. Unless Lt. Gov. Dewhurst is covering that personally, we don't see where the state will get it. Like the House, the Senate cuts to education and health and human services are devastating."

Talmadge Heflin, a former Appropriations Chairman who is with the limited-government Texas Public Policy Foundation, said that even though the outlined cuts would be significant, growth in the state budget also has been significant.

"It is encouraging to see that the budget writers in both chambers have come to the conclusion that there are no sacred cows this session," he said. "Every agency and program must be on the table if the Legislature is to balance the budget within available revenue."


Region's petrochemical base keeps surging forward
By Enterprise Editorial Staff
January 25, 2011
 
Several years ago the buzzword "diversification" was hot in talking about the region's economy. It referred to the concept of broadening our economy beyond its petrochemical base to be better positioned for future growth.

There's certainly nothing wrong with diversification, but lately the area's petrochemical sector has been doing pretty well for a supposedly one-dimensional, old-fashioned industry.

Area plants have committed to more than $10 billion in upgrades, and now you can add up to $2 billion to that impressive list.

Zero Emission Energy Plants - ZEEP - is reviving the petroleum coke gasification plant in Beaumont recently abandoned by Eastman Chemical Co.

That's 250 permanent jobs, 1,500 construction jobs and lots of tax revenues.

ZEEP's announcement reinforces the region's reputation as one of the strongest - and healthiest - petrochemical clusters in the nation.

That's an identity to embrace. 



East Texas wood pellets could fuel Europe's power plants
By Dan Wallach 
January 24, 2011


The new "green" in electrical energy is actually dark brown.

It now comes in the form of inch-long wood pellets intended as fuel to replace coal in the boilers of some power plants in European countries and will be shipped from the Port of Beaumont, which signed a lease Monday with the manufacturer, Zilkha Biomass Energy.

The lease is for warehouse space at the port, which will store the product until there is enough to load aboard ship.

Zilkha, based in Houston, operates a mill in Crockett that uses wood waste from saw mills, including saw dust, and turns it into pellets, said Glenn Dillon, Zilkha's chief financial officer. 


Govt's handling of science on oil spill questioned
By THE ASSOCIATED PRESS
November 10, 2010


WASHINGTON — The oil spill that damaged the Gulf of Mexico's reefs and wetlands is also threatening to stain the Obama administration's reputation for relying on science to guide policy.

Academics, environmentalists and federal investigators have accused the administration since the April spill of downplaying scientific findings, misrepresenting data and most recently misconstruing the opinions of experts it solicited.

Meanwhile, the owner of the rig that exploded in the Gulf of Mexico, Transocean Ltd., is renewing its argument that federal investigators are in danger of allowing the blowout preventer, a key piece of evidence, to corrode as it awaits forensic analysis. Testing had not begun as of last week, the company says, some two months after it was raised from the seafloor.

The blowout preventer could be a key piece of evidence in lawsuits filed by victims, survivors and others. Transocean was responsible for maintaining it while it was being used on BP's well. Investigators agreed to flush the control pods with fluid on Sept. 27 to prevent corrosion. But a Transocean lawyer wrote in his Nov. 3 letter that there have been no further preservation steps on the blowout preventer since then.

The latest complaint from scientists comes in a report by the Interior Department's inspector general, which concluded that the White House edited a drilling safety report in a way that made it falsely appear that scientists and experts supported the administration's six-month ban on new deep-water drilling. The AP obtained the report early Wednesday.

The inspector general said the editing changes by the White House resulted "in the implication that the moratorium recommendation had been peer reviewed." But it hadn't been. Outside scientists were asked only to review new safety measures for offshore drilling.

"There are really only a few people that know what they are talking about" on offshore drilling," said Ford Brett, managing director of Petroskills, a Tulsa, Okla.-based petroleum training organization. "The people who make this policy do not ... so don't misrepresent me and use me for cover," said Brett, one of seven experts who reviewed the report.

In a statement issued Wednesday, the White House insisted the review was properly coordinated and pointed to the inspector general's findings.

"Following a review that included interviews with peer review experts, the Inspector General found no intentional misrepresentation of their views...The decision to implement a six-month moratorium on deep-water drilling in the Gulf of Mexico was correctly based on the need for adequate spill response, well containment and safety measures, and we stand behind that decision," White House deputy press secretary Bill Burton said.

Last month, staff for the presidential oil spill commission said that the White House's budget office delayed publication of a scientific report that forecast how much oil could reach the Gulf's shores. Federal scientists initially used a volume of oil that did not account for the administration's various cleanup efforts, but the government ultimately cited smaller amounts of oil.

The same report said that President Barack Obama's energy adviser, Carol Browner, mischaracterized on national TV a government analysis about where the oil went, saying it showed most of the oil was "gone." The report said it could still be there. It also said that Browner and the head of the National Oceanic and Atmospheric Administration, Jane Lubchenco, contributed to the public's perception the report was more exact than it was by emphasizing peer review.

The new inspector general report said Browner's staff implied that scientists had endorsed the drilling moratorium, by raising a reference to peer review in the drilling safety report. At least one outside expert who was involved said he was convinced afterward that it wasn't a deliberate deception, and Interior Department officials told the inspector general they didn't deliberately make changes to cause confusion.

"There was no intent to mislead the public," said Kendra Barkoff, a spokeswoman for Interior Secretary Ken Salazar, who also recommended in the May 27 safety report that a moratorium be placed on deep-water oil and gas exploration. "The decision to impose a temporary moratorium on deep-water drilling was made by the secretary, following consultation with colleagues including the White House."

After one of the reviewers complained, the Interior Department promptly issued an apology during a conference call, in a formal letter and during a personal meeting in June.

All seven experts asked to review the Interior Department's work expressed concern about the change made by the White House, saying that it differed in important ways from the draft they had approved.

"We believe the report does not justify the moratorium as written, and that the moratorium as changed will not contribute measurably to increased safety and will have immediate and long-term economic effects," the scientists wrote earlier this year to Louisiana Gov. Bobby Jindal and Sens. Mary Landrieu and David Vitter. "The secretary should be free to recommend whatever he thinks is correct, but he should not be free to use our names to justify his political decisions."

Those complaints were similar to those of other scientists.

"Their estimates always seemed to be biased to the best case," said Joseph Montoya, a biology professor at Georgia Tech. "A number of scientists have experienced a strong push back."

The inspector general's report said the administration did not violate federal rules because the executive summary did not say the experts approved of the moratorium and because the department publicly clarified what the experts said and had offered a formal apology.

Associated Press writers Seth Borenstein in Washington and Harry R. Weber in New Orleans contributed reporting.


Beaumont, Vidor see fatter sales tax checks
By DAN WALLACH
November 10, 2010

Vidor seems to be the big winner in sales tax checks for Southeast Texas, announced Wednesday by the state comptroller's office.

For sales made in September, Vidor increased by 16.4 percent compared with the same period a year ago. The comptroller is sending $232,000 in sales tax remittances to Vidor compared with the $199,500 it earned last year, according to the state agency's figures.

Beaumont also is in positive territory, earning $3.44 million for September sales compared with $3.2 million a year ago, an increase of 7.7 percent.

For its year-to-date since January, Beaumont has earned $30.7 million, which is down by almost 15 percent compared with the year-to-date in 2009. It's an improvement, however, from last month when the city was 17 percent down in its year-to-date collection for calendar year 2010 compared with 2009.


Electric co-op applies for construction loan for bio mass power plant
By THE ENTERPRISE
November 9, 2010

The East Texas has officially its application for a $145 million low-interest federal loan to build a biomass electric power plant near Woodville.

The cooperative, which includes the Jasper-Newton among its 10 member co-ops applied to the Rural Utilities Service of the U.S. Department of Agricluture.

Slated to be completed in late 2013 or early 2014, the Woodville plant will produce about 50 megawatts of power and will become a part of the mix of utility resources managed by ETEC. The financing review should be finished in 2011 and the money available in 2012.

ETEC is made up of 10 not-for-profit electric distribution cooperatives: Bowie-Cass, Cherokee County, Deep East Texas, Houston County, Jasper-Newton, Panola-Harrison, Rusk County, Sam Houston, Upshur Rural and Wood County. For more information on ETEC, please visit www.etec.coop.

RUS, an agency of the USDA, is charged with providing loans and loan guarantees to finance the construction of electric distribution, transmission and generation facilities. Loans are made to entities, includings, that provide retail electric service needs to rural areas or supply the power needs of distribution borrowers in rural areas. For more information on RUS, visit www.usda.gov/rus/electric/


KKR Natural Resources Closes Oil and Gas Investment in Southeast Texas
November 1, 2010

NEW YORK & HOUSTON, Nov 01, 2010 (BUSINESS WIRE) -- Kohlberg Kravis Roberts & Co (together with its affiliates, "KKR") announced today that the firm has acquired certain oil and gas assets in southeast Texas in two related acquisitions. The transactions, together valued at $40 million, are the first acquisitions by KKR Natural Resources, KKR's partnership with Premier Natural Resources ("Premier") formed to pursue investments in oil and gas properties in North America.

"We are both excited about this asset and about the many attractive opportunities that we continue to see to acquire oil and gas properties in North America," said Jonathan Smidt, a Director at KKR and a senior member of KKR's Energy and Infrastructure business.

The assets are largely comprised of long-lived natural gas wells producing out of the Wilcox formation in Southeast Texas.

KKR announced a partnership to acquire and develop oil and gas assets with Premier in February, 2010. Founded in June 2006 by former executives of Vintage Petroleum, Inc., PNR currently operates a portfolio of assets located in the Texas Gulf Coast and the Permian Basin and has experience operating assets in most of the major producing basins in the United States.

KKR has been investing in the energy sector for more than twenty years and today, KKR's global energy business spans the globe and covers the full energy supply chain. KKR's recent oil and gas transactions include Hilcorp Resources and East Resources as well as the formation of a partnership with RPM Energy.

About KKR

Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global alternative asset manager with $54.4 billion in assets under management as of June 30, 2010. With over 600 people and 14 offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with investors through its client relationships and capital markets platforms. KKR is publicly traded on the New York Stock Exchange /quotes/comstock/13*!kkr/quotes/nls/kkr (KKR 12.75, +0.24, +1.92%) . For additional information, please visit KKR's website at www.kkr.com.

About Premier

Premier Natural Resources was formed out of the acquisition and exploitation business plan implemented by Vintage Petroleum, Inc. Vintage was started in 1983 by Charles C. Stephenson and a team of executives that built the organization up to a 75000 BOEPD oil and gas company that owned and operated properties in the U.S., Argentina, Bolivia, Canada, Ecuador, Trinidad and Yemen before being merged with Occidental Petroleum, Inc in January, 2006 for a market evaluation of $4.1 billion. In North America, Vintage operated properties in all U.S. major producing states from Alabama to California and from Canada to the Federal Offshore Gulf of Mexico. For more information, visit www.premiernaturalresources.com.

SOURCE: KKR


Orange Invista plant to hire new employees
By DAN WALLACH
October 27, 2010

ORANGE, Texas - Invista, a fiber producer, plans to hire more than 100 new employees for plants in Orange and other Texas locations, including Victoria and LaPorte.

The manufacturer also plans what it calls "significant investment" in those plants, but a spokeswoman declined to be specific about the amount and where the investment would be made.

"As a privately held company, we generally do not disclose proprietary operational information or financial details for competitive reasons," said spokeswoman Amy Hodges.

"The new positions will support one or more Texas facilities, including our Orange facility," Hodges said.

Invista occupies 70 acres of manufacturing space within the DuPont Sabine River Works. The company was formed in 2004 when a subsidiary of Koch Industries bought the assets from DuPont, which was spinning off its fibers business.

Products made from Invista's nylon intermediate chemicals include Stainmaster carpet, Antron carpet fiber, fabric for backpacks and hunting boots, soft-sided luggage, and automotive components.

Jeff Silliman, Global Intermediates human resources director for Invista, said individuals interested in careers at Invista should review openings at www.invistacareers.com for positions appropriate to their interest, skill and experience.

Positions include: project engineers, project estimators, project schedulers, chemical engineers, mechanical engineers, electrical engineers, environmental engineers or professionals, civil engineers, reliability engineers, instrument and controls engineers, and maintenance and production technicians.


Golden Pass receives first cargo shipment
By SARAH MOORE
October 21, 2010

Thursday's shipment of about 7.5 million cubic feet of liquefied natural gas to the Golden Pass Terminal was a drop in the bucket for the new facility, which has the capacity to store more than 27 million cubic feet - but as the first drop in the bucket, it made a big splash at the Sabine Pass plant.

The Al Khuwair tanker pulled into the terminal, steered by tugboats, at 11 a.m. as officials from Jefferson County, Port Arthur, the U.S. Coast Guard, the Sabine Neches Pilots Association and others gathered to congratulate Golden Pass on the event, which was a long time coming.

After seven years of planning and construction, including a year's setback due to Hurricane Ike damage, this initial "commissioning" shipment arrived.

"This is only one of many significant milestones," said Golden Pass spokesman Robert Bilnoski. "But it's a very signifi-cant milestone."

The terminal still is months away from being at full capacity.


Jobless rate improves in Southeast Texas
By DAN WALLACH
October 22, 2010

Unemployment in Southeast Texas improved with the net addition of 1,000 jobs in September, mostly in the local government category and that likely means school district hiring, the Texas Workforce Commission reported today.

The report shows the jobless rate fell to 10.4 percent, a half-percentage improvement from August when it was 10.9 percent, and just a shade over the 10.2 percent rate in September 2009.

Meanwhile, the unemployment rate for the state of Texas improved to 7.6 percent from the August rate of 8.4 percent. Nationally, the rate was 9.2 percent for September and 9.5 percent in August.

Some of the core industries in Southeast Texas remained unchanged with construction and mining, manufacturing, information services, financial services, and professional and business services showing no loss or gain.

Education and health services lost 100 jobs. Leisure and hospitality, and retail trades lost 100 jobs apiece.



October 21, 2010:
Chevron to file application to drill in gulf 
October 19, 2010: Lamar pursues new Ph.D in energy engineering
October 15, 2010: Lamar University valued at more than $260 million
October 18, 2010: Dispute over oil spill risks leaves rigs idle, hundreds jobless


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