Apple seeks Texas leverage

The March 9 announcement by Gov. Rick Perry that Apple would expand its presence in Texas with a $304 million investment in Austin that will create more than 3,600 new jobs was greeted with predictable fanfare. A key part of the deal for the new campus that would more than double the size of Apple’s workforce in Texas over the next decade was an investment of $21 million in state taxpayer dollars over 10 years through the Texas Enterprise Fund (TEF).

Perry said the Apple deal “adds to the growing list of visionary high-tech companies that have found that Texas’ economic climate is a perfect fit for their future, thanks to our low taxes, reasonable and predictable regulations, fair legal system and skilled workforce.”

Perhaps overlooked in the hoopla was a single sentence near the end of the announcement from the governor’s office: “The agreement is contingent upon the finalization of contracts and a local incentive agreement with the City of Austin and Travis County.”

In the following week, however, it became apparent that this contingency was a key factor as Apple openly shopped the deal to Mesa, Ariz. The Austin City Council is expected to approve a waiver of real and personal property taxes on the new development worth at least $8.6 million over 10 years; Travis County is expected to offer additional incentives that may need to be substantial after Mesa Mayor Scott Smith said, “There is no doubt we would be neck and neck and provide anything Austin could provide and then some.”

There is already a significant Apple presence in Austin, with a customer support center that has grown to 3,500 employees over the past 20 years. A report from Kevin Johns, Austin’s director of economic growth and redevelopment services, indicated the Apple expansion would create 650 new full-time jobs with an average salary of $63,950 by the end of January 2015, with another 2,985 jobs added through 2021. The company would build a 200,000 square-foot structure, followed by an 800,000 square-foot expansion as needed.

Although the Austin project cannot be characterized as a done deal just yet, a March 15 report from Bloomberg suggests Apple will proceed with the Texas deal after it extracts maximum concessions from government entities here. The report suggested the Arizona bid faltered after Apple failed to obtain unspecified “tax policy assurances at the state level” and faced issues on its preferred site, which is controlled by the state land department.Apple is the world’s most valuable company with a market capitalization of $546 billion and a reported $100 billion in cash reserves and about 64,400 employees worldwide.

Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at or e-mail

‘We agree’ Helping kids love science is pretty cool

You’ve probably seen the Chevron commercial that has been in heavy national rotation in recent weeks featuring a middle-school student who helped build a robot and a Chevron engineer who is part of the company’s effort to boost the teaching of science, technology, engineering and mathematics.

The spot manages to tell a compelling story in 30 seconds.

The student says, “This is an RC robotic claw. Our science teacher helped us build it.”

It cuts to the engineer, who says, “My high school science teacher made me what I am today.”

The student demonstrates the robotic claw they built and says, “Isn’t that cool?”

Cut back to the engineer for the payoff. “Now I’m a geologist at Chevron, and I get to help science teachers,” he says. “Over the last three years, we’ve put nearly $100 million into American education. That’s thousands of kids learning to love science. And that’s pretty cool.”

The resulting spot is among the most effective in Chevron’s generally well-received series of print and broadcast ads with the “We Agree” theme. It was created by advertising agency powerhouse McGarryBowen, whose client list encompasses Burger King, Disney, Kraft and Pfizer, for whom they hawk Advil and Viagra. The “We Agree” campaign was launched in the wake of a spate of oil and gas industry PR fiascos, including the BP oil spill. It has been attacked and lampooned by environmentalists and other critics, with the vociferousness of the attacks the surest testament to the effectiveness of the campaign.

The teacher and student with the robot spot prompted the Business Journal to take a look inside the campaign for our Media Watch section.

First, we learned the people in the spot are who they are claimed to be.

Kaisaiah Clark is an eighth-grade student at Helms Middle School in Richmond, Calif. He is part of the engineering academy, which uses the Project Lead the Way curriculum, one of several programs aimed at promoting the teaching of science.

The Chevron engineer is Winston Seiler, a 2009 graduate of the University of Utah with a master’s in geology and geophysics who participates in a company-sponsored educational assistance program like the one he describes.

Having resolved our curiosity on that issue, we tested the spot’s claim that, “Over the last three years we’ve put nearly $100 million into American education.” Considering Chevron is a huge multinational corporation with facilities in the U.S. worth many billions of dollars, does this figure represent the school taxes paid in the normal course of business in the communities where those facilities are located?

Wrong again, Mr. Business Journal.

According to Chevron spokesman Brent Tippen, “This figure is our social investments in education, and not taxes paid. Our approach is one of partnership — by working with specialized and innovative nonprofits, we can dramatically expand the impact of our investments and collectively make each other stronger. We believe in the power of human capital. Many students don’t know what an engineer does. To reach these students, Chevron provides opportunities for them to interact with science, technology, engineering and math (STEM) professionals.”

Tippen was ready for my semi-tough questions, and his answers gave insight into the Chevron philosophy expressed in the ad campaign.

“Since 2008, Chevron has invested over $100 million in education in the U.S.; over the last two years, in our home state of California, Chevron invested almost $10 million in STEM education and reached more than 245,000 students and 3,900 teachers across the state,” he said. “We believe in coordinated, integrated approaches. Chevron works across sectors – with nonprofits, school districts, and statewide forums – to increase STEM education opportunities for young people.”

In addition, Tippen provided an op-ed written by Joe Laymon, Chevron vice president of Human Resources, Medical and Security that is upfront in admitting the company’s focus on science education is motivated at least in part by enlightened self-interest.
“Few would have predicted that the country that put the first man on the moon would, just a few decades later, face significant disparities in science, technology, engineering and math (STEM) education. But with the United States experiencing 9.1 percent unemployment, and with many jobs in technical fields unfilled, our challenges are clear,” wrote Laymon and emphasized that the energy industry is facing an acute human resource challenge.

“Chevron is thinking years ahead about how we can invest in the development of human capital in order to build a workforce that can utilize STEM skills and ingenuity to bring energy to the global marketplace,” he concluded.

In the end, one would must conclude that enlightened self-interest is still a form of enlightenment that can work for the common good – and that your college-student nephew who is always going on about the evils of the big oil companies doesn’t know the whole story. We agree.

Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at or e-mail

Miss Pearl runs aground off Sabine Pass

On Friday, Feb. 24, the 135-foot long offshore supply vessel Miss Pearl reported grounding on the west side of the Sabine Jetties.

The U.S. Coast Guard’s Sector Houston-Galveston office received a call at 6:17 a.m. that the vessel had run aground and that the four-person crew had suffered various injuries.

A 45-foot response boat and crew from nearby USCG Station Sabine was immediately dispatched along with a MH-65C Dolphin rescue helicopter from USCG Air Station Houston. The crew of the rescue helicopter hoisted the four crewmembers to safety and transported them to awaiting EMS personnel at the Jack Brooks Regional Airport. The crew of the Miss Pearl suffered only minor injuries not requiring hospitalization.

The Miss Pearl is owned by SEACOR Marine, which operates a fleet of offshore marine support vessels serving the global offshore oil and gas exploration and production industry with an extensive fleet deployed offshore in the Gulf of Mexico, Latin America, the North Sea, West Africa, Southeast Asia and the Middle East.

Built for SEACOR in 1993 by Breaux Brothers Enterprises of Loreauville, La., the Miss Pearl has a top speed of 25 knots. It can carry 62 passengers in what it describes as “business class” in addition to four crew cabins with a total of 10 berths. The ship can transport 17,154 gallons of drilling/potable water with a cargo deck that can accommodate 183 metric tons of cargo.

More important for authorities to know was that though the fuel capacity of the Miss Pearl was up to 12,206 gallons, the vessel was only transporting 6,000 gallons that morning.

The U.S. Coast Guard and personnel from the Texas General Land Office (GLO) along with representatives of vessel owner SEACOR arrived on the scene and established a unified command to oversee the incident response efforts. The Sabine Jetty Channel was temporarily closed and a 1,000-yard safety zone was established around the grounding site. A Broadcast Notice to Mariners was placed in effect to alert transiting mariners.

“The Coast Guard is working with the vessel owner and will supervise and direct cleanup efforts,” said Capt. Joe Paitl, commanding officer of MSU Port Arthur. “Our No. 1 one priority is the safety of everyone involved in the recovery and cleanup operations. Our goal is to salvage the vessel while mitigating environmental and economic impacts.”

The grounding took place in the pre-dawn darkness around 6:11 a.m., about six minutes before the first distress call was received by the Coast Guard. Although no preliminary report on the cause of the grounding is available, conditions at the time were far from ideal. In addition to being dark, there was as a small craft warning in effect with high seas and high winds along with the collision hazard at the jetty wall. The wind was blowing to the north at 29.9 knots with wind gusts up to 34.0 knots.

Of the 6,000 gallons of fuel on board, the first GLO incident report said an estimated 4,000 gallons of fuel was released from a damaged tank on Friday; sheen from the initial spill has dissipated. In order to address any possible environmental impact, containment and clean up equipment is on stand-by at the site of the grounded vessel.
By Monday, Feb. 27, a damage survey of Miss Pearl was completed allowing vessel salvage and recovery plans to be developed. USCG Lt. JG Jason Radcliffe said lightering vessels had arrived on the scene to remove the remaining fuel from the stricken ship. Lightering is the same process routinely used to offload crude oil from super tankers that are too large to navigate the Intercoastal waterway.

The grounding of the Miss Pearl is the latest reminder – as if any were necessary – that life in the Gulf of Mexico can be dangerous business and it doesn’t take a perfect storm for a seemingly routine trip to suddenly turn serious. Factor in the heavy maritime traffic generated by the oil and gas industry off the Texas and Louisiana Gulf coasts and it is a testament to the machines and their human operators that disasters are relatively few and normally far between – but not always.

On Dec. 13, 2011 – less than three months before the Miss Pearl incident – another supply boat roughly similar in size and function ran into trouble off Sabine Pass. International Marine’s 120-foot vessel the Intl’ Hunter was about 25 miles offshore when it struck a submerged object at 4:30 p.m. The ship quickly began to take on a large amount of water. Within about five minutes of the collision with the unknown object, the captain gave the order to abandon ship. The seven men aboard abandoned the vessel in lifeboats, were rescued within the hour and received medical attention upon arrival ashore in Cameron, La. They were released without serious injuries.
The submerged Int’l Hunter was located by its sister ship Int’l Navigator, an International Marine vessel that has been monitoring the area, at a location is 24 miles SE of the Sabine Pass Jetties. Despite delays caused by poor weather conditions, International Marine and the Coast Guard worked cooperatively to locate, secure and recover the vessel, while also minimizing navigational disruptions and threats to the environment.

Business Journal editor James Shannon offers a weekly column of business news for readers of The Examiner. For more details, see the editions of the Business journal published monthly in Beaumont, Port Arthur and Greater Orange. Check out the blog at or e-mail