Goshen News, Goshen, IN

January 25, 2014

Briefly

THE ASSOCIATED PRESS
Goshen News

---- — INDIANAPOLIS

Cargo up at Indiana ports

The Ports of Indiana handled 8.3 million tons of cargo at its three ports last year, an increase of 20 percent over a year earlier.

Officials with the Ports of Indiana say it was the third highest total of cargo in the organization’s 52-year history and the highest since 2006. They say shipments of coal, steel and agricultural-related products helped lead the increases.

The ports in the fourth quarter alone handled nearly 3 million tons of cargo, which is the highest total for any quarter since the ports opened.

The statewide port authority operates two ports on the Ohio River and one on Lake Michigan.

NEW YORK

PepsiCo drops ‘natural’ labeling

PepsiCo has quietly gotten rid of the word “Natural” in some of its products and instead is going with “Simply.”

The company changed its “Simply Natural” line of Frito-Lay chips to simply be called “Simply,” although the ingredients remain the same. Similarly, its “Natural Quaker Granola” got a makeover as “Simply Quaker Granola.”

The food and beverage giant says the name changes, which took place last year, are the result of it updating its marketing. But they come at a time when PepsiCo and other companies face legal challenges over their use of the word “natural.”

The Food and Drug Administration doesn’t have a definition for what constitutes “natural,” but says it doesn’t object to the word’s use as long as the product doesn’t contain “added color, artificial flavors or synthetic substances.” Still, a number of lawsuits recently have challenged whether the ingredients in products labeled as “natural” fit that billing.

In some cases, companies are realizing the use of “natural” isn’t worth the headache, said Steve Gardner, director of litigation for the consumer advocacy group Center for Science in the Public Interest, an advocacy group that has filed lawsuits against companies on the topic.

Last year, PepsiCo agreed to remove the words “all natural” from its Naked juices after a lawsuit noted the drinks contained artificial ingredients, such as a fiber made by Archer Midland Daniels. Another ongoing lawsuit filed in 2012 has challenged its description of some of its chips as “natural.” And in November, PepsiCo killed off its Gatorade Natural line, saying the drinks didn’t “resonate” with its core consumers.

“We constantly update our marketing and packaging,” said Candace Mueller-Medina, a spokeswoman for PepsiCo’s Quaker brand.

PepsiCo Inc. isn’t alone in retreating from “natural.” The owners of Ben & Jerry’s and Breyers ice cream agreed to change its packaging in 2012 to settle lawsuits over its use of “all natural.” Campbell Soup was sued in 2012 for describing its Pepperidge Farm Goldfish crackers as natural, with the suit noting they contain genetically modified ingredients. The Camden, N.J.-based company removed the word from its revamped packaging, but said it was the result of marketing changes and declined to comment any further on the change.

The word “simply” isn’t entirely free of controversy either. Although it didn’t file a lawsuit, the Center for Science in the Public Interest met with General Mills in 2010 over labeling on a variety of the company’s products. Among those singled out was “Simply Fruit,” which the group noted contained canola oil and carrot juice — not just fruit.

When asked if it had a response to the CSPI’s complaint that the name was misleading, a General Mills spokesman Mike Siemienas said in an email, “Yes, we do have a response: It isn’t.”

NEW YORK

Natural gas future prices jump 10 percent

The frigid winter of 2014 is setting the price of natural gas on fire.

Friday, the price in the futures market soared to $5.18 per 1,000 cubic feet, up 10 percent to the highest level in three and a half years. The price of natural gas is up 29 percent in two weeks, and is 50 percent higher than last year at this time.

Record amounts of natural gas are being burned for heat and electricity. Meanwhile, it’s so cold that drillers are struggling to produce enough to keep up with the high demand. So much natural gas is coming out of storage that the Energy Department says supplies have fallen 20 percent below a year ago — and that was before this latest cold spell.

“We’ve got record demand, record withdrawals from storage, and short-term production is threatened,” says energy analyst Stephen Schork. “It’s a dangerous market right now.”

Natural gas and electric customers are sure to see somewhat higher rates in the coming months. But they will be insulated from sharp increases because regulators often force natural gas and electric utilities to use financial instruments and fuel-buying strategies that protect residential customers from high volatility.

To understand the price increase, just look at the thermometer. A second major cold snap this month is gripping much of the country, including the heavily-populated Northeast. And forecasters are now predicting colder weather in the weeks to come, extending south through Texas.

Natural gas is used by half the nation’s households for heating, making it the most important heating fuel. Electricity is the second most popular heating source, and electric power generators use natural gas to generate power more than any other fuel except for coal.

Commodity Weather Group, which predicts heating demand for energy companies and consumers, said in a report Friday that periodic breaks in the cold weather are expected to be “weaker and briefer, extending the duration of colder weather” in late January and early February.

There are a couple of other factors at play. In the past, much of U.S. natural gas was produced in the Gulf of Mexico. If weather disrupted supplies there, it was typically in the early fall, during hurricane season, when heating and electricity demand are low and natural gas storage facilities are mostly full in preparation for winter.

Now, much of U.S. production comes from on-shore formations that are more susceptible to cold, ice and snow. Wells that are not designed for such extreme conditions can freeze, halting production.

“Now the threat to production is when demand is at its highest,” Schork says.

Also, electric utilities have for several years been switching to cheaper natural gas for power generation. And new pipelines aren’t being built fast enough to deliver all the gas required at times of high demand. That can lead to regional shortages that send prices skyrocketing.

In some producing regions in Pennsylvania gas was selling for below national benchmarks Friday, But closer to East Coast cities it was selling for 10 times those benchmarks because producers couldn’t get their gas into packed pipelines, according to Citibank energy analyst Anthony Yuen.

When the Calvert Cliffs Nuclear Station in Maryland shut down earlier this week because of an electrical problem brought on by snow and ice, power generators across the East Coast scrambled to replace the lost power by cranking up natural gas-fired plants. That sent natural gas prices for immediate delivery, known as the spot price, to a record $120 per 1,000 cubic feet in some markets on the East Coast. To put that in perspective, that’s equivalent to oil at more than $700 per barrel.

Analysts say there is plenty of gas to replenish supplies, and drillers will likely ramp up production so they can fetch prices they haven’t seen since June of 2010.

That could push prices back down somewhat in the coming weeks. If, that is, the weather warms up later in February and March. If it’s still cold when base