May Federal Budget Deficit Comes in at $58 Billion

- May Federal Budget Deficit Comes in at $58 Billion



Jun 10, 2011

The Federal Government's budget deficit came in at $58 billion in May, down 58% from May 2010, the Treasury Department reported today in its monthly budget statement.

In a once a year revision, the Treasury also said it now expects the Troubled Asset Relief Program to cost a total of $48 billion. That's down from an estimate in August of 2009 that the total cost of the program could reach as high as $341 billion.

The government is getting more back for its investments in banks than it originally estimated it would, an official said. The downwardly revised re-estimate doesn't represent money in or out. It is essentially an accounting change.

The deficit has totaled $927 billion through the first eight months of the year, down $8 billion from the $935 billion reported over the same period in 2010.

The government spent $233 billion in the month, while total receipts were $175 billion. $30.9 billion was spent on interest payments to service the national debt, while receipts increased 19% from last May.

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Chrysler Fully Repays Government Loans, Fiat Stake Increases To 46%

Chrysler Fully Repays Government Loans, Fiat Stake Increases To 46%



May 24, 2011

Chrysler said today it has fully repaid the U.S. and Canadian governments, more than six years earlier than it was required to, making final payments of $5.9 billion to the U.S. Treasury and $1.7 billion to the governments of Canada and Ontario.

"Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise," Chrysler and Fiat CEO Sergio Marchionne said in a statement today.

Mr. Marchionne noted that Chrysler repaid its bailout loans faster than the last time the company got a bailout from the federal government back in the late 1970's when Lee Lacocca led the company.

As a result of the repayment, Fiat's stake in Chrysler will rise to 46%, putting the company close to its goal of 51% by the end of 2011. Once Chrysler develops a vehicle that gets 40 miles per gallon on a Fiat platform, a development expected in the fourth quarter, Fiat can increase its stake to 51%.

Chrysler paid more than $1.2 billion in interest on its debt in 2010, and is swapping out government debt with cheaper debt from institutional investors. The refinancing will not reduce the company's debt load, but will save the company more than $300 million a year in interest expenses.

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S&P's Ratings Services Affirmed Credit Ratings For US, Revised Its Outlook To Negative

S&P's Ratings Services Affirmed Credit Ratings For US, Revised Its Outlook To Negative



Apr 18, 2011

Standard & Poor's Ratings Services affirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on the U.S., according to a Bloomberg report.

It also revised its outlook on the long-term rating to negative from stable.

The revised outlook reflects the U.S.'s "very large budget deficits and rising government indebtedness" relative to its triple-A peers.

Crude For May Delivery Approaches $112 A Barrel

Crude For May Delivery Approaches $112 A Barrel



Light crude for May delivery approached the $112 a barrel level, while Brent crude futures rose $1.74 to $124 a barrel.

Buying momentum has continued as hopes fade for a quick resolution of conflicts in Libya. Last week, crude-oil futures traded at $106 a barrel and prices have only climbed since then.

The weakening of the U.S. dollar and uncertainty over a possible U.S. government shutdown helped crude-oil prices increase.

Tudor Pickering Holt analysts said, "Middle East tensions driving further crude-oil gains from these elevated levels will make us incrementally more nervous about energy demand, the economy and inflation."

Government Tries to Clarify Offshore Drilling Rules

Government Tries to Clarify Offshore Drilling Rules

Tuesday, March 29, 2011
Houston Chronicle

by  Jennifer A. Dlouhy

 

The federal government on Monday issued a five-page memo meant to clarify rules for offshore drilling, in response to oil and gas industry complaints that new mandates imposed since last year's Gulf spill are muddled.

The federal Bureau of Ocean Energy Management, Regulation and Enforcement also said it would reopen a public comment period to help guide the agency's possible rewrite of a drilling safety rule put in place last October.

"Our goal remains the same as it has been from day one: to ensure that offshore operations are conducted as safely as possible," said Michael Bromwich, the bureau's director. "This guidance document gives deep-water drilling operators additional information to help address some of the recurring issues that have been raised in our ongoing discussions with industry."

The document covers several areas but focuses on a major source of industry complaints: confusion about the wording of the October offshore drilling safety rule. That measure adopted two sets of recommended practices for emergency equipment and well design that had been developed by the American Petroleum Institute.

The problem was that instead of rewriting those mandates in their own words, government regulators simply referenced API documents and specified that any time the API recommended practices said "should" it now meant "must" under the interim drilling safety rule.

Industry representatives complained that the changes affected more than 14,000 discretionary provisions in 80 different standards, and in some cases, those new requirements were conflicting.

For instance, API's recommended well construction practices sometimes offer operators an array of options that might make sense, but the language of the rule seemed to make all of those options mandatory.

"There are areas where it says you should do this or you should do that," said Al Reese Jr., the chief operating officer of Houston-based ATP Oil & Gas. "But I can't turn left and turn right at the same time."

His company navigated the process and received a permit to resume a deep-water pro-ject in the Gulf of Mexico.

A positive step

The new guidance document clarifies that operators are allowed to select "any of the appropriate options," without getting special permission from the bureau.

It also suggests that oil and gas companies maintain documentation demonstrating they evaluated the recommended practices, even when the government's rule doesn't make them mandatory.

Erik Milito, the upstream director at the American Petroleum Institute, called the announcement a positive step.

"Ensuring a clear, consistent and efficient process for offshore regulatory requirements and for approvals of permits is a crucial component to steadily increasing offshore production," he said.

'Departure documents'

With Monday's memo, the ocean energy bureau also formalized a process it has used in approving six deep-water drilling projects in the Gulf of Mexico -- "departure documents" that specify how individual operators are not strictly following the API recommended practices incorporated in the drilling safety rule.

The ocean energy bureau said that whenever oil companies intend to deviate from the recommended practices incorporated in the rule, they must get approval to use alternate procedures or equipment.

The bureau said that it is evaluating potential revisions to the drilling safety rule "in light of comments received from the public and other considerations."

The government said that it will reopen the public comment period, probably within a month, giving people another chance to tell the bureau what works and what doesn't.

Any rewrite of the rule would take months, or longer.