Senior Tory MP Bill Cash paid his daughter £15,000 in rent from Parliamentary expenses despite owning a flat closer to Parliament.
Mr Cash named a London flat owned by his daughter Laetitia as his second home in 2004-5 and claimed for rental payments, the Daily Telegraph revealed.
Mr Cash told the paper that "what is lawful is appropriate" but he would repay the money if required to.
Three further MPs are standing down after criticism of their expenses.
'Within the rules'
Conservative MPs Julie Kirkbride and Christopher Fraser and Labour's Margaret Moran said on Thursday they would not defend their seats at the next election although all insisted they had not done anything wrong.
Mr Fraser said he was standing down for personal reasons to care for his ill wife.
In its latest batch of disclosures about MPs' expenses, the Telegraph said Mr Cash rented a property from his daughter - an aspiring MP - in London despite owning a property closer to Westminster himself.
MPs are currently not allowed to rent properties from family members but the rules were only changed in July 2006 - after Mr Cash rented from his daughter.
He designated her flat as his second home and claimed more than £15,000 in rental payments given to her - equivalent to about £1,200 a month.
Ms Cash - who herself stood as a Tory candidate at the last general election and hopes to do so at the next election - later sold the property for a £48,000 profit, the newspaper added.
The arch eurosceptic, who has been an MP for 25 years, told the BBC that he had shown the tenancy agreement to the Commons authorities and it had been approved.
He also said that he had never claimed any allowances for his much larger principal residence in Shropshire, which would have cost the taxpayer much more.
He also stressed that, while living with his daughter, he had not rented out his own London property.
Mr Cash said he was happy for his arrangements to be examined by the Tories' internal scrutiny panel which is looking at all expenses claims made by MPs in the past four years.
Justifying claims
Tory leader David Cameron has said all his MPs must justify their expenses claims to their constituents as public anger over the issue led to some MPs to step down.
Among further allegations made by the Telegraph, the newspaper said Labour MP Nigel Griffiths claimed £3,600 for a digital TV and radio set so that he could keep up with news developments in his constituency in Scotland.
It said the Edinburgh MP's claim was rejected but that Mr Griffiths made other claims which were approved for decorating his second home, including one for £9,250 in 2004.
Mr Griffiths said the Commons authorities had turned down the claim for a TV and radio and he had bought the items without spending any public money.
Thursday, May 28, 2009
New president weeps over dead son
The president-elect of El Salvador has made an emotional statement at a trial for his son's murder in Paris.
"I am a man who is not seeking vengeance... only the truth," said Mauricio Funes. He wept in court.
Alejandro Funes, 27, a photography student in France, died in October 2007 from stab wounds on a pedestrian bridge near the Louvre Museum.
Mohamed Amor, the main suspect, has asked the family for forgiveness. The motive of the attack is unclear.
Mr Amor has already told the court he cannot remember exactly what happened.
"I never wanted to kill him," he said. If found guilty he could spend up to 30 years in prison.
Another suspect is also on trial for allegedly participating in the attack.
'Shared ideals'
Mr Funes spoke to his son by telephone the night before his death.
"The least we can hope for is to know the facts and establish who is responsible," he said.
"All this will not bring back my son, but I want to honour his memory," he added.
The weapon used to kill Alejandro is believed to have been an awl - a pointed tool for making holes in wood or leather.
President-elect Funes's brother was shot dead at the beginning of El Salvador's civil war in 1980 and safety had been a factor in Alejandro leaving the country, plagued by gang violence, to study in France.
"We thought he would be safer here.. I would never have imagined that he would be beaten to death here," said Mr Funes, unable to stop himself from crying as he spoke.
The left-wing leader, who takes office in June following his electoral victory in March, paid tribute to his son.
"We shared the same ideals, the same life projects and the desire to transform El Salvador, to convert it into a just society that would put an end to violence," Mr Funes said.
"I am a man who is not seeking vengeance... only the truth," said Mauricio Funes. He wept in court.
Alejandro Funes, 27, a photography student in France, died in October 2007 from stab wounds on a pedestrian bridge near the Louvre Museum.
Mohamed Amor, the main suspect, has asked the family for forgiveness. The motive of the attack is unclear.
Mr Amor has already told the court he cannot remember exactly what happened.
"I never wanted to kill him," he said. If found guilty he could spend up to 30 years in prison.
Another suspect is also on trial for allegedly participating in the attack.
'Shared ideals'
Mr Funes spoke to his son by telephone the night before his death.
"The least we can hope for is to know the facts and establish who is responsible," he said.
"All this will not bring back my son, but I want to honour his memory," he added.
The weapon used to kill Alejandro is believed to have been an awl - a pointed tool for making holes in wood or leather.
President-elect Funes's brother was shot dead at the beginning of El Salvador's civil war in 1980 and safety had been a factor in Alejandro leaving the country, plagued by gang violence, to study in France.
"We thought he would be safer here.. I would never have imagined that he would be beaten to death here," said Mr Funes, unable to stop himself from crying as he spoke.
The left-wing leader, who takes office in June following his electoral victory in March, paid tribute to his son.
"We shared the same ideals, the same life projects and the desire to transform El Salvador, to convert it into a just society that would put an end to violence," Mr Funes said.
Fresh blasts hit Pakistani city
At least 10 people have been killed in two separate attacks in the Pakistani city of Peshawar.
Six were killed and about 70 injured when two bombs exploded at a busy market, police said.
Shortly after, a suicide bomber attacked a military checkpoint on the city outskirts, killing four soldiers.
The attacks came hours after Pakistani Taliban warned of further violence following a gun and bomb attack in Lahore which killed at least 24 people.
In the initial Peshawar attacks, bombs were on two motorcycles and detonated by timers, bomb disposal squad chief Shafqat Malik told reporters, according to Associated Press news agency.
'Sudden blast'
Tahir Ali Shar, a resident of the Peshawar, told Reuters news agency he could see about 15 wounded people lying on the ground.
Some of the wounded are believed to be in a serious condition.
Shops and vehicles were damaged and television images showed men trying to douse flames, while injured people were being dragged out of the market to safety.
"It was a sudden blast and then there was fire all around, a cloud of smoke filled the sky," injured shopkeeper Khair Uddin told Reuters news agency.
Gunmen started shooting in the narrow alleyways as police arrived.
Police later said two suspected militants had been killed and two arrested.
While the gunfight was going on, a suicide bomber drove a car laden with explosives at a military checkpoint on the outskirts.
The apparent co-ordination of the attacks, coming so soon after Lahore and the Taliban warning, could herald a new wave of violence in Pakistani cities, says the BBC's Barbara Plett in Islamabad.
Also on Thursday, a bomb killed at least three people and injured several in the town of Dera Ismail Khan, about 186 miles, (300km) south of Peshawar.
Peshawar is the capital of the North Western Frontier Province and has seen an increase in violence in the past three weeks:
• Six days ago a car bomb outside a cinema in a busy marketplace killed at least six people and injured about 70
• On 16 May a car bomb exploded in the densely populated Kashkal area, killing at least 11 people and injuring many others.
Swat revenge
The attack in Lahore a day earlier was in response to the army's operation in the Swat valley, Taliban deputy Hakimullah Mehsud told the BBC by phone.
The army is claiming sweeping victories against Taliban insurgents in the Swat valley, near the Afghan border.
The army says more than 1,000 militants have been killed in the past month. There has been no independent confirmation of the figure.
It says it has recaptured 70% of Swat's main city, Mingora, and expects to secure it in a matter of days.
Hakimullah Mehsud, Taliban commander for Orakzai and Khyber tribal regions, called on citizens to "evacuate their cities"
He warned of further attacks on "government targets" in the Pakistani cities of Lahore, Islamabad, Rawalpindi and Multan.
Pakistan's government said in the immediate aftermath of the Lahore bomb that it suspected it to be an act of revenge by militants in Swat.
The attack on Wednesday, which injured more than 200 people, targeted buildings belonging to the police and intelligence agency, the ISI.
A group of men shot at police officers before detonating a powerful car bomb, reportedly killing at least one ISI agent and 12 police officers, along with one child
Six were killed and about 70 injured when two bombs exploded at a busy market, police said.
Shortly after, a suicide bomber attacked a military checkpoint on the city outskirts, killing four soldiers.
The attacks came hours after Pakistani Taliban warned of further violence following a gun and bomb attack in Lahore which killed at least 24 people.
In the initial Peshawar attacks, bombs were on two motorcycles and detonated by timers, bomb disposal squad chief Shafqat Malik told reporters, according to Associated Press news agency.
'Sudden blast'
Tahir Ali Shar, a resident of the Peshawar, told Reuters news agency he could see about 15 wounded people lying on the ground.
Some of the wounded are believed to be in a serious condition.
Shops and vehicles were damaged and television images showed men trying to douse flames, while injured people were being dragged out of the market to safety.
"It was a sudden blast and then there was fire all around, a cloud of smoke filled the sky," injured shopkeeper Khair Uddin told Reuters news agency.
Gunmen started shooting in the narrow alleyways as police arrived.
Police later said two suspected militants had been killed and two arrested.
While the gunfight was going on, a suicide bomber drove a car laden with explosives at a military checkpoint on the outskirts.
The apparent co-ordination of the attacks, coming so soon after Lahore and the Taliban warning, could herald a new wave of violence in Pakistani cities, says the BBC's Barbara Plett in Islamabad.
Also on Thursday, a bomb killed at least three people and injured several in the town of Dera Ismail Khan, about 186 miles, (300km) south of Peshawar.
Peshawar is the capital of the North Western Frontier Province and has seen an increase in violence in the past three weeks:
• Six days ago a car bomb outside a cinema in a busy marketplace killed at least six people and injured about 70
• On 16 May a car bomb exploded in the densely populated Kashkal area, killing at least 11 people and injuring many others.
Swat revenge
The attack in Lahore a day earlier was in response to the army's operation in the Swat valley, Taliban deputy Hakimullah Mehsud told the BBC by phone.
The army is claiming sweeping victories against Taliban insurgents in the Swat valley, near the Afghan border.
The army says more than 1,000 militants have been killed in the past month. There has been no independent confirmation of the figure.
It says it has recaptured 70% of Swat's main city, Mingora, and expects to secure it in a matter of days.
Hakimullah Mehsud, Taliban commander for Orakzai and Khyber tribal regions, called on citizens to "evacuate their cities"
He warned of further attacks on "government targets" in the Pakistani cities of Lahore, Islamabad, Rawalpindi and Multan.
Pakistan's government said in the immediate aftermath of the Lahore bomb that it suspected it to be an act of revenge by militants in Swat.
The attack on Wednesday, which injured more than 200 people, targeted buildings belonging to the police and intelligence agency, the ISI.
A group of men shot at police officers before detonating a powerful car bomb, reportedly killing at least one ISI agent and 12 police officers, along with one child
Wednesday, May 27, 2009
Healthcare cuts would mean higher costs and possibly deaths, officials warn
She had been born with AIDS, lived with it all her 24 years. She credits her survival to the state program that provides the expensive antiviral drugs she takes daily.
Now, with that HIV-prevention program facing the ax as California grapples with a $24-billion deficit, she came before a legislative panel today to plead for life.
"If these cuts take place, you're not just cutting money from the program -- you're cutting my life," said the woman, who gave lawmakers only her first name, Linnea.
"I choose to live," she said, her voice shaking and tears falling. "Please don't make me die. My choice is life."
Public health officials warned that Gov. Arnold Schwarzenegger's effort to resolve the yawning budget deficit would halt medical insurance for more than 2 million Californians, sending them streaming into emergency rooms and costing the state billions of dollars for the more expensive care -- and potentially causing deaths.
Scores of patients and healthcare advocates told a 10-person legislative committee on the budget that in many cases the loss of state funding would mean an even bigger loss of federal dollars. A proposal to cut funding for family planning, for instance, would mean the loss of $9 in federal money for every $1 spent by the state, advocates testified.
In the worst cases, cuts from, or elimination of, some health programs -- such as Healthy Families and the state's poison control program -- would strip the state of its healthcare safety net and could result in the deaths of some patients who would not be able to get proper and timely treatment.
Michael Arnold, a representative of the California Dialysis Program, said the potential loss of that program would have two results for patients: "Either they die, or they show up at an emergency room for treatment."
David Welch, a California Nurses Assn. board member, said the results of the governor's proposed budget cuts would be "perfectly predictable": more people without care. More showing up at emergency rooms. And more dying.
If it eliminates healthcare for some its most vulnerable residents, he said, California will become "a contemptible society -- and a society that history will not judge kindly."
Schwarzenegger, a Republican, contends that the state's declining economy and plummeting tax revenues have boxed him into a corner, and that deep cuts are needed in health and welfare programs that have been the backbone of California's social safety net. Without those tough measures, the governor says, the state will cartwheel toward insolvency.
Some who testified pleaded for more revenue, ignoring the exhortations from Republican lawmakers to stand fast against tax increases as the state toils in coming weeks to balance its books.
"What I suggest is: Let's raise some revenue," said John Malone of the California Alliance of Retired Americans, adding that the state needs to boost taxes on alcohol, tobacco and residents with high incomes, and impose them on oil pumped from California soil.
Some simply pleaded from the heart.
James Nuñez, who has a developmental disability, told lawmakers that he worried about surviving without government help.
"I'm a human being like you," he said. "And I'm very, very scared."
Now, with that HIV-prevention program facing the ax as California grapples with a $24-billion deficit, she came before a legislative panel today to plead for life.
"If these cuts take place, you're not just cutting money from the program -- you're cutting my life," said the woman, who gave lawmakers only her first name, Linnea.
"I choose to live," she said, her voice shaking and tears falling. "Please don't make me die. My choice is life."
Public health officials warned that Gov. Arnold Schwarzenegger's effort to resolve the yawning budget deficit would halt medical insurance for more than 2 million Californians, sending them streaming into emergency rooms and costing the state billions of dollars for the more expensive care -- and potentially causing deaths.
Scores of patients and healthcare advocates told a 10-person legislative committee on the budget that in many cases the loss of state funding would mean an even bigger loss of federal dollars. A proposal to cut funding for family planning, for instance, would mean the loss of $9 in federal money for every $1 spent by the state, advocates testified.
In the worst cases, cuts from, or elimination of, some health programs -- such as Healthy Families and the state's poison control program -- would strip the state of its healthcare safety net and could result in the deaths of some patients who would not be able to get proper and timely treatment.
Michael Arnold, a representative of the California Dialysis Program, said the potential loss of that program would have two results for patients: "Either they die, or they show up at an emergency room for treatment."
David Welch, a California Nurses Assn. board member, said the results of the governor's proposed budget cuts would be "perfectly predictable": more people without care. More showing up at emergency rooms. And more dying.
If it eliminates healthcare for some its most vulnerable residents, he said, California will become "a contemptible society -- and a society that history will not judge kindly."
Schwarzenegger, a Republican, contends that the state's declining economy and plummeting tax revenues have boxed him into a corner, and that deep cuts are needed in health and welfare programs that have been the backbone of California's social safety net. Without those tough measures, the governor says, the state will cartwheel toward insolvency.
Some who testified pleaded for more revenue, ignoring the exhortations from Republican lawmakers to stand fast against tax increases as the state toils in coming weeks to balance its books.
"What I suggest is: Let's raise some revenue," said John Malone of the California Alliance of Retired Americans, adding that the state needs to boost taxes on alcohol, tobacco and residents with high incomes, and impose them on oil pumped from California soil.
Some simply pleaded from the heart.
James Nuñez, who has a developmental disability, told lawmakers that he worried about surviving without government help.
"I'm a human being like you," he said. "And I'm very, very scared."
Detention of local officials marks shift in anti-drug efforts
The detention this week of more than two dozen local officials in Michoacan on suspicion of aiding a narcotics cartel marks a new tack in Mexico's bloody drug war, a strategic shift that Wednesday sent nervous politicians running for cover.
Ten mayors and 17 other officials were swept up in raids by federal authorities on Tuesday, and Wednesday were being interrogated in Mexico City. Ricardo Najera, spokesman for the federal attorney general's office, said the officials are suspected of having ties to La Familia, one of Mexico's most violent drug syndicates.
President Felipe Calderon declared war on drug gangs when he came to power in December 2006, saying that traffickers had "overwhelmed" a number of local governments.
But until now, he had focused his energies primarily on a military offensive, deploying 45,000 army and federal police forces throughout Mexico. Top drug gangsters have been killed or captured, and federal authorities have also targeted for arrest corrupt law enforcement officers.
But tainted politicians remained largely untouched. And in states like Michoacan, federal authorities allege, local politicians aid and abet traffickers who produce and transport billions of dollars worth of drugs, most of it to the U.S.
"If the accusations are confirmed," the daily El Universal said in an editorial, "we will have incontrovertible proof that the cartels have entirely penetrated the country's local political elites."
On Wednesday, the state prosecutor for Michoacan, Miguel Garcia Hurtado, resigned and turned himself in for questioning.
Dismantling the local support networks -- in city halls, police departments, state governments -- is a crucial step in the larger war, analysts say.
"It is at the local level that traffickers have their most important protection," said Jorge Chabat, a Mexico City-based security analyst. "They don't buy off the president of the republic. They buy off the local officials, the mayors, the police chiefs."
Calderon may have decided he would never make sufficient inroads in ending drug violence without taking on local politicians. But it is unclear whether he can or will sustain the effort.
And in some quarters, Calderon's motives and timing were being questioned. Mexico is 40 days away from nationwide legislative elections in which the president's National Action Party, or PAN, may take big losses.
"You cannot forget the political context in which this is taking place," said Samuel Gonzalez, an analyst who served as Mexico's top anti-drug prosecutor in the 1990s. "You can run the same operation three, five, 10 times, and you still won't get results" because the problem is so widespread.
The Michoacan raids scooped up six mayors from the Institutional Revolutionary Party, or PRI, which ruled Mexico for decades and which poses the greatest electoral challenge to Calderon's party now. Two mayors from Calderon's PAN and two from the leftist opposition Democratic Revolution Party, or PRD, were also detained.
Michoacan state Gov. Leonel Godoy, also of the PRD, complained bitterly that he was not notified in advance of the raids. Leaving him out of the loop raised suspicions that he too might be implicated. Among those detained were a key advisor to Godoy; as well, his brother was questioned by the army but was not arrested, his brother told a Michoacan newspaper.
Godoy on Wednesday denied any connection to drug traffickers but also said he was not willing to submit himself to investigation because he was "democratically elected and will only do so if required to constitutionally."
Mexico's laws make it next to impossible to prosecute a sitting governor.
Godoy said he tried to find out what was happening Tuesday morning when he heard that masked gunmen were hauling officials from their offices and homes. When such actions are reported, he said, "You never know if these are operations being carried out by authorities or by the organized criminals."
Ten mayors and 17 other officials were swept up in raids by federal authorities on Tuesday, and Wednesday were being interrogated in Mexico City. Ricardo Najera, spokesman for the federal attorney general's office, said the officials are suspected of having ties to La Familia, one of Mexico's most violent drug syndicates.
President Felipe Calderon declared war on drug gangs when he came to power in December 2006, saying that traffickers had "overwhelmed" a number of local governments.
But until now, he had focused his energies primarily on a military offensive, deploying 45,000 army and federal police forces throughout Mexico. Top drug gangsters have been killed or captured, and federal authorities have also targeted for arrest corrupt law enforcement officers.
But tainted politicians remained largely untouched. And in states like Michoacan, federal authorities allege, local politicians aid and abet traffickers who produce and transport billions of dollars worth of drugs, most of it to the U.S.
"If the accusations are confirmed," the daily El Universal said in an editorial, "we will have incontrovertible proof that the cartels have entirely penetrated the country's local political elites."
On Wednesday, the state prosecutor for Michoacan, Miguel Garcia Hurtado, resigned and turned himself in for questioning.
Dismantling the local support networks -- in city halls, police departments, state governments -- is a crucial step in the larger war, analysts say.
"It is at the local level that traffickers have their most important protection," said Jorge Chabat, a Mexico City-based security analyst. "They don't buy off the president of the republic. They buy off the local officials, the mayors, the police chiefs."
Calderon may have decided he would never make sufficient inroads in ending drug violence without taking on local politicians. But it is unclear whether he can or will sustain the effort.
And in some quarters, Calderon's motives and timing were being questioned. Mexico is 40 days away from nationwide legislative elections in which the president's National Action Party, or PAN, may take big losses.
"You cannot forget the political context in which this is taking place," said Samuel Gonzalez, an analyst who served as Mexico's top anti-drug prosecutor in the 1990s. "You can run the same operation three, five, 10 times, and you still won't get results" because the problem is so widespread.
The Michoacan raids scooped up six mayors from the Institutional Revolutionary Party, or PRI, which ruled Mexico for decades and which poses the greatest electoral challenge to Calderon's party now. Two mayors from Calderon's PAN and two from the leftist opposition Democratic Revolution Party, or PRD, were also detained.
Michoacan state Gov. Leonel Godoy, also of the PRD, complained bitterly that he was not notified in advance of the raids. Leaving him out of the loop raised suspicions that he too might be implicated. Among those detained were a key advisor to Godoy; as well, his brother was questioned by the army but was not arrested, his brother told a Michoacan newspaper.
Godoy on Wednesday denied any connection to drug traffickers but also said he was not willing to submit himself to investigation because he was "democratically elected and will only do so if required to constitutionally."
Mexico's laws make it next to impossible to prosecute a sitting governor.
Godoy said he tried to find out what was happening Tuesday morning when he heard that masked gunmen were hauling officials from their offices and homes. When such actions are reported, he said, "You never know if these are operations being carried out by authorities or by the organized criminals."
Big Oil Warms to Ethanol and Biofuel Companies
For decades, the big oil companies and the farm lobby have been fighting about ethanol, with the farmers pushing to produce more of it and the refiners arguing it was a boondoggle that would do little to solve the country’s energy problems.
So why are technicians for BP, the giant oil company, now working at an experimental ethanol plant in this old Louisiana oil town, helping to make it more efficient?
The erstwhile enemies, it turns out, are gradually learning to get along, as refiners increasingly see a need to get involved in ethanol production. Ethanol, made chiefly from corn, now represents about 9 percent of the country’s market for liquid fuels. And the percentage is growing year after year because of federal mandates. With the nation’s thirst for gasoline, and the ethanol that is blended into it, expected to revive when the economy does, the oil companies want to be in a position to take full advantage.
The interest expressed by big oil companies is coming in the nick of time for small companies that desperately need capital and cannot find it these days in the private markets. Take the case of Verenium Corporation, a small company based in Cambridge, Mass., that here in Jennings is testing new forms of biofuels in alliance with BP. Instead of ethanol made from food crops, the partners are devising a version from grasses in the sugar cane family.
The experiments here are preparation for building a second, $250 million plant in Florida with the capacity to produce 36 million gallons a year of new biofuels — the first commercial plant of its type built with oil company money and expertise. Verenium scientists have already developed a secret sauce of enzymes and microbes that ferment and distill biomass into ethanol. Now BP is contributing technical expertise aimed at getting the temperatures and pressures in the vats just right.
Commercial success is not assured, of course. But the fact that a major oil company has even made an alliance to go commercial with Verenium is considered a breakthrough by many ethanol executives.
“Any time you get Big Oil into the game, that changes the paradigm because nobody can go large scale chemical engineering like Big Oil,” said Brent Erickson, an executive vice president of the Biotechnology Industry Organization, a trade group.
Only two years ago, BP had only a minuscule investment in biofuels. But since then the company has committed $1.5 billion to various projects. Along with its work with Verenium, it entered a partnership with a Brazilian concern last year to produce ethanol from sugar cane.
Lessons learned in Louisiana may eventually help convert Brazilian cane into more advanced biofuels, researchers say, producing a potentially vast new reserve for BP.
BP also speaks with optimism about a partnership with DuPont to test production of biobutanol, an advanced liquid alcohol fuel that is made from the same feed stocks as advanced ethanols and is compatible with existing pipelines and car engines. Executives say they hope to begin making the fuel in large amounts by 2013.
“We can see biofuels as being a really big potential reservoir,” said Phil New, president of the company’s BP Biofuels unit. “For an energy firm to get into sugar cane farming is a pretty big move.”
Oil companies are still skeptical about conventional ethanol, especially the type made from corn, which they say corrodes pipelines and is inefficient.
The plant here is just one sign that the big oil companies are now at least grudgingly accepting biofuels — particularly those made from wastes and nonfood sources, which do not bear corn ethanol’s stigma of raising food prices.
The big change came in the 2007 energy law enacted by Congress that set ambitious mandates for refineries to blend increasing amounts of biofuels over the years. By 2022 they will be obliged to blend 36 billion gallons of biofuels, or more than three times current levels.
“If the government is going to make a market happen, we needed to be able to participate commercially in that market,” Mr. New said.
The oil companies also say that as crude oil becomes ever more difficult and expensive to find, biofuels can bolster their reserves.
“There will be a need for all these fuels,” said Graeme Sweeney, executive vice president for future fuels and carbon dioxide at Royal Dutch Shell. He predicted that the 1 percent of the world’s transportation fuels that are biofuels today “could easily be 10 percent in the next decade or so.”
Shell was the first of the big oil companies to venture significantly into the new biofuels, getting its toes wet in 2002 by providing money to a Canadian company called Iogen Corporation to research making ethanol from plant waste. Shell would not discuss how much money it is now investing in biofuels, but said it had quadrupled biofuel research spending since 2007.
Shell has also formed partnerships with a variety of small companies at work on improving enzymes that break down various plants and waste materials for ethanol, making fuels from algae and even biogasoline from sugary liquids derived from plant materials. Chevron has formed a joint venture with Weyerhaeuser to develop biofuels from wood waste.
And Valero Energy Corporation, the country’s largest petroleum refiner, has snapped up seven corn ethanol plants from VeraSun Energy in recent months since VeraSun filed for bankruptcy protection last fall. Valero has suggested that it could transform the plants for newer blends of ethanol.
Each initiative is still small compared with the companies’ multibillion-dollar oil exploration and refining budgets, prompting skeptics to say they are more interested in improving their image than producing clean fuels.
“If we depend too heavily on the big oil companies to drive the biofuel agenda,” warned Jeff Broin, chief executive of the ethanol producer Poet, “we’ll be using large volumes of oil for many, many years to come.”
But taken together, the research projects and deals are a sharp contrast to the scaled-back oil company projects in other alternative energy sources like hydrogen and solar. And the support is welcome for small entrepreneurial companies that are long on new technologies and short on capital.
“With any start-up company, people say ‘Wow, but is it going to work?’ ” said Randy Cortright, founder and chief technical officer of Virent Energy Systems. His company wants to make a biogasoline from plant sugars that is chemically similar to gasoline produced by conventional petroleum refineries.
He said Shell’s investment raised his company’s credibility with lenders “by giving their vote of confidence in this technology, spending resources and providing their own people for development.” Shell also will eventually distribute the product, he said, “and they already have the infrastructure for taking the product to the fuel pump so the consumer can use it.”
Arnold R. Klann, chief executive of BlueFire Ethanol, a company that converts municipal waste into ethanol and is seeking financing to build plants, said lenders wanted to know that an ethanol company had credible long-term customers to generate revenues. He said he had draft contracts with two major oil companies he could not yet identify that wanted to invest in his operations and use his fuels.
“There is tremendous interest by the oil companies to invest in these first-of-a-kind projects,” Mr. Klann said. “Where they were initially investing very tentatively in new technology development, in the last year they have begun to finally invest in companies that are building commercial production facilities.”
In Jennings, BP technicians advise Verenium technicians on what types of metals to use to line their pipes, what kind of valves will last longest and how to position blades in fermenting tanks to best mix chemicals and feed stocks. It is all an effort to reduce the price of the product to quickly compete with conventional ethanol and perhaps, eventually, with gasoline.
“We are the chef, and they are more like the restaurant manager,” said Mark G. Eichenseer, Verenium’s vice president for operations. “We have the recipes, and they have the experience and know-how to select the pots and pans.”
So why are technicians for BP, the giant oil company, now working at an experimental ethanol plant in this old Louisiana oil town, helping to make it more efficient?
The erstwhile enemies, it turns out, are gradually learning to get along, as refiners increasingly see a need to get involved in ethanol production. Ethanol, made chiefly from corn, now represents about 9 percent of the country’s market for liquid fuels. And the percentage is growing year after year because of federal mandates. With the nation’s thirst for gasoline, and the ethanol that is blended into it, expected to revive when the economy does, the oil companies want to be in a position to take full advantage.
The interest expressed by big oil companies is coming in the nick of time for small companies that desperately need capital and cannot find it these days in the private markets. Take the case of Verenium Corporation, a small company based in Cambridge, Mass., that here in Jennings is testing new forms of biofuels in alliance with BP. Instead of ethanol made from food crops, the partners are devising a version from grasses in the sugar cane family.
The experiments here are preparation for building a second, $250 million plant in Florida with the capacity to produce 36 million gallons a year of new biofuels — the first commercial plant of its type built with oil company money and expertise. Verenium scientists have already developed a secret sauce of enzymes and microbes that ferment and distill biomass into ethanol. Now BP is contributing technical expertise aimed at getting the temperatures and pressures in the vats just right.
Commercial success is not assured, of course. But the fact that a major oil company has even made an alliance to go commercial with Verenium is considered a breakthrough by many ethanol executives.
“Any time you get Big Oil into the game, that changes the paradigm because nobody can go large scale chemical engineering like Big Oil,” said Brent Erickson, an executive vice president of the Biotechnology Industry Organization, a trade group.
Only two years ago, BP had only a minuscule investment in biofuels. But since then the company has committed $1.5 billion to various projects. Along with its work with Verenium, it entered a partnership with a Brazilian concern last year to produce ethanol from sugar cane.
Lessons learned in Louisiana may eventually help convert Brazilian cane into more advanced biofuels, researchers say, producing a potentially vast new reserve for BP.
BP also speaks with optimism about a partnership with DuPont to test production of biobutanol, an advanced liquid alcohol fuel that is made from the same feed stocks as advanced ethanols and is compatible with existing pipelines and car engines. Executives say they hope to begin making the fuel in large amounts by 2013.
“We can see biofuels as being a really big potential reservoir,” said Phil New, president of the company’s BP Biofuels unit. “For an energy firm to get into sugar cane farming is a pretty big move.”
Oil companies are still skeptical about conventional ethanol, especially the type made from corn, which they say corrodes pipelines and is inefficient.
The plant here is just one sign that the big oil companies are now at least grudgingly accepting biofuels — particularly those made from wastes and nonfood sources, which do not bear corn ethanol’s stigma of raising food prices.
The big change came in the 2007 energy law enacted by Congress that set ambitious mandates for refineries to blend increasing amounts of biofuels over the years. By 2022 they will be obliged to blend 36 billion gallons of biofuels, or more than three times current levels.
“If the government is going to make a market happen, we needed to be able to participate commercially in that market,” Mr. New said.
The oil companies also say that as crude oil becomes ever more difficult and expensive to find, biofuels can bolster their reserves.
“There will be a need for all these fuels,” said Graeme Sweeney, executive vice president for future fuels and carbon dioxide at Royal Dutch Shell. He predicted that the 1 percent of the world’s transportation fuels that are biofuels today “could easily be 10 percent in the next decade or so.”
Shell was the first of the big oil companies to venture significantly into the new biofuels, getting its toes wet in 2002 by providing money to a Canadian company called Iogen Corporation to research making ethanol from plant waste. Shell would not discuss how much money it is now investing in biofuels, but said it had quadrupled biofuel research spending since 2007.
Shell has also formed partnerships with a variety of small companies at work on improving enzymes that break down various plants and waste materials for ethanol, making fuels from algae and even biogasoline from sugary liquids derived from plant materials. Chevron has formed a joint venture with Weyerhaeuser to develop biofuels from wood waste.
And Valero Energy Corporation, the country’s largest petroleum refiner, has snapped up seven corn ethanol plants from VeraSun Energy in recent months since VeraSun filed for bankruptcy protection last fall. Valero has suggested that it could transform the plants for newer blends of ethanol.
Each initiative is still small compared with the companies’ multibillion-dollar oil exploration and refining budgets, prompting skeptics to say they are more interested in improving their image than producing clean fuels.
“If we depend too heavily on the big oil companies to drive the biofuel agenda,” warned Jeff Broin, chief executive of the ethanol producer Poet, “we’ll be using large volumes of oil for many, many years to come.”
But taken together, the research projects and deals are a sharp contrast to the scaled-back oil company projects in other alternative energy sources like hydrogen and solar. And the support is welcome for small entrepreneurial companies that are long on new technologies and short on capital.
“With any start-up company, people say ‘Wow, but is it going to work?’ ” said Randy Cortright, founder and chief technical officer of Virent Energy Systems. His company wants to make a biogasoline from plant sugars that is chemically similar to gasoline produced by conventional petroleum refineries.
He said Shell’s investment raised his company’s credibility with lenders “by giving their vote of confidence in this technology, spending resources and providing their own people for development.” Shell also will eventually distribute the product, he said, “and they already have the infrastructure for taking the product to the fuel pump so the consumer can use it.”
Arnold R. Klann, chief executive of BlueFire Ethanol, a company that converts municipal waste into ethanol and is seeking financing to build plants, said lenders wanted to know that an ethanol company had credible long-term customers to generate revenues. He said he had draft contracts with two major oil companies he could not yet identify that wanted to invest in his operations and use his fuels.
“There is tremendous interest by the oil companies to invest in these first-of-a-kind projects,” Mr. Klann said. “Where they were initially investing very tentatively in new technology development, in the last year they have begun to finally invest in companies that are building commercial production facilities.”
In Jennings, BP technicians advise Verenium technicians on what types of metals to use to line their pipes, what kind of valves will last longest and how to position blades in fermenting tanks to best mix chemicals and feed stocks. It is all an effort to reduce the price of the product to quickly compete with conventional ethanol and perhaps, eventually, with gasoline.
“We are the chef, and they are more like the restaurant manager,” said Mark G. Eichenseer, Verenium’s vice president for operations. “We have the recipes, and they have the experience and know-how to select the pots and pans.”
In Japan, Secure Jobs Have a Cost
When the sheet metal orders coming into his small business, High Metal, fell by half last October, it never occurred to MInstead, he set about brainstorming new projects to occupy them. An indoor vegetable garden? A handicrafts workshop?
Because of government subsidies, Mr. Taruki in the last three months installed rows of parsley, watercress and other plants, using factory space that has been empty since the company disposed of unused machinery. High Metal’s staff tend the sprouts religiously, topping up the water supply, adding fertilizer and adjusting the fluorescent lights.
When sales at the machinery maker Shinano Kogyo in central Japan plunged some 70 percent late last year, the company started dispatching its idle workers to sweep the streets and pick up trash in the wider community, while remaining on the payroll.
According to statistics released Wednesday, the Japanese economy suffered its worst contraction since 1955 in the first quarter, declining 15.2 percent on an annualized basis. But a far smaller portion of workers have lost their jobs in Japan than in either the United States or the European Union. (Japan’s unemployment rate in April was 4.8 percent, compared with 8.9 percent in the United States and Europe.)
Analysts say this is because lifetime employment is alive and well in Japan, with the state playing a big role in keeping it so.
“Job tenure in Japan remains remarkably long,” said Peter Matanle, an expert on Japanese employment at the University of Sheffield in Britain. “Companies get rid of the buffers first. They’ll get rid of temporary workers, reduce overtime, reduce bonuses. They would squeeze their suppliers. They would do anything before considering cutting regular workers.”
But Japan’s obsession with keeping workers employed — even those who are not needed — comes at a cost.
Companies slash wages, which reduces consumer spending. Businesses become more reluctant to take on new recruits, shutting young people out of the labor force. And productivity plummets, hurting Japan’s competitiveness in an increasingly aggressive international market.
“By helping to maintain excess employment, you face the risk of keeping alive businesses that are no longer competitive, and perhaps whose productive era is over,” said Hisashi Yamada, an economist at the Japan Research Institute, a private research group in Tokyo. “This could hurt employment in the long run. What you need is more structural change.”
The lifetime employment system, cemented in Japan’s postwar economic boom, bound dutiful workers and paternalistic employers together, producing a mutual loyalty (and labor harmony) rarely seen in the West.
By law, employers can cut workers’ hours but must pay at least 60 percent of their hourly wages during that time. The government has budgeted 60 billion yen, or about $624 million, this year to reimburse companies for half of those payments. In March, about 48,000 companies sought subsidies for 2.38 million employees, government figures show.
Even large exporters, like Nissan Motor and NEC Electronics, have used the subsidies to keep workers employed despite shorter factory hours.
In a recent survey by the Nikkei financial daily, zero percent of large business owners said they had plans to lay off permanent staff members, compared with 39 percent in South Korea. Experts say that without subsidies, Japan’s unemployment rate would be as much as 2 percentage points higher.
Since Japanese workers are hard to lay off, companies have turned to temporary workers, who receive lower pay and fewer benefits, and can be cut more easily. Such workers now make up a third of Japan’s work force.
But keeping all those permanent staff members occupied is its own challenge.
Mr. Taruki’s factory has been abuzz with activity over the vegetable garden. Using another government subsidy, Mr. Taruki spent 5 million yen to start a handicrafts workshop, installing a laser etching machine in a tiny room that had housed employee lockers. There, an employee practiced etching patterns onto lacquerware boards, small sheets of glass and other materials.
The company wants to make key chains and other trinkets, and is exploring ways to make ornaments for Buddhist altars.
“Even if the economy starts recovering, I’m doubtful whether we’ll ever bounce back entirely,” said Mr. Taruki, whose grandfather started the factory in Osaka decades ago. “So I need to start filling in what we’ve lost. It’s the responsibility of companies to protect jobs, to grow them.”
But some analysts wonder whether the recession will be so bad that Japanese companies will have to eventually start cutting regular workers.
Labor leaders say cases are increasing in which employees are subjected to such humiliating wage or hour cuts, or demotions, that they are driven to quit.
Some analysts say a cold-eyed look at bloated payrolls is just what Japanese companies need.
“Companies have hardly shed workers so far in this episode,” Carl B. Weinberg, who runs the economics analysis firm High Frequency Economics, said in a note to clients this month. “Massive layoffs are imminent, but they won’t come soon enough.”
asaaki Taruki to lay off his workers
Because of government subsidies, Mr. Taruki in the last three months installed rows of parsley, watercress and other plants, using factory space that has been empty since the company disposed of unused machinery. High Metal’s staff tend the sprouts religiously, topping up the water supply, adding fertilizer and adjusting the fluorescent lights.
When sales at the machinery maker Shinano Kogyo in central Japan plunged some 70 percent late last year, the company started dispatching its idle workers to sweep the streets and pick up trash in the wider community, while remaining on the payroll.
According to statistics released Wednesday, the Japanese economy suffered its worst contraction since 1955 in the first quarter, declining 15.2 percent on an annualized basis. But a far smaller portion of workers have lost their jobs in Japan than in either the United States or the European Union. (Japan’s unemployment rate in April was 4.8 percent, compared with 8.9 percent in the United States and Europe.)
Analysts say this is because lifetime employment is alive and well in Japan, with the state playing a big role in keeping it so.
“Job tenure in Japan remains remarkably long,” said Peter Matanle, an expert on Japanese employment at the University of Sheffield in Britain. “Companies get rid of the buffers first. They’ll get rid of temporary workers, reduce overtime, reduce bonuses. They would squeeze their suppliers. They would do anything before considering cutting regular workers.”
But Japan’s obsession with keeping workers employed — even those who are not needed — comes at a cost.
Companies slash wages, which reduces consumer spending. Businesses become more reluctant to take on new recruits, shutting young people out of the labor force. And productivity plummets, hurting Japan’s competitiveness in an increasingly aggressive international market.
“By helping to maintain excess employment, you face the risk of keeping alive businesses that are no longer competitive, and perhaps whose productive era is over,” said Hisashi Yamada, an economist at the Japan Research Institute, a private research group in Tokyo. “This could hurt employment in the long run. What you need is more structural change.”
The lifetime employment system, cemented in Japan’s postwar economic boom, bound dutiful workers and paternalistic employers together, producing a mutual loyalty (and labor harmony) rarely seen in the West.
By law, employers can cut workers’ hours but must pay at least 60 percent of their hourly wages during that time. The government has budgeted 60 billion yen, or about $624 million, this year to reimburse companies for half of those payments. In March, about 48,000 companies sought subsidies for 2.38 million employees, government figures show.
Even large exporters, like Nissan Motor and NEC Electronics, have used the subsidies to keep workers employed despite shorter factory hours.
In a recent survey by the Nikkei financial daily, zero percent of large business owners said they had plans to lay off permanent staff members, compared with 39 percent in South Korea. Experts say that without subsidies, Japan’s unemployment rate would be as much as 2 percentage points higher.
Since Japanese workers are hard to lay off, companies have turned to temporary workers, who receive lower pay and fewer benefits, and can be cut more easily. Such workers now make up a third of Japan’s work force.
But keeping all those permanent staff members occupied is its own challenge.
Mr. Taruki’s factory has been abuzz with activity over the vegetable garden. Using another government subsidy, Mr. Taruki spent 5 million yen to start a handicrafts workshop, installing a laser etching machine in a tiny room that had housed employee lockers. There, an employee practiced etching patterns onto lacquerware boards, small sheets of glass and other materials.
The company wants to make key chains and other trinkets, and is exploring ways to make ornaments for Buddhist altars.
“Even if the economy starts recovering, I’m doubtful whether we’ll ever bounce back entirely,” said Mr. Taruki, whose grandfather started the factory in Osaka decades ago. “So I need to start filling in what we’ve lost. It’s the responsibility of companies to protect jobs, to grow them.”
But some analysts wonder whether the recession will be so bad that Japanese companies will have to eventually start cutting regular workers.
Labor leaders say cases are increasing in which employees are subjected to such humiliating wage or hour cuts, or demotions, that they are driven to quit.
Some analysts say a cold-eyed look at bloated payrolls is just what Japanese companies need.
“Companies have hardly shed workers so far in this episode,” Carl B. Weinberg, who runs the economics analysis firm High Frequency Economics, said in a note to clients this month. “Massive layoffs are imminent, but they won’t come soon enough.”
asaaki Taruki to lay off his workers
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