ACC Supports HPV Chemical Information Collection Rule

Aug 16: The American Chemistry Council (ACC) expressed its support for U.S. EPA's use of authority under the Toxic Substances Control Act (TSCA) to obtain information on “orphan” High Production Volume (HPV) chemicals. The final rule and technical corrections were announced in the Federal Register [71 FR 47122-47130, 8/16/06]. EPA has now finalized separate Preliminary Assessment Information Reporting (PAIR) rules and Health and Safety Data Reporting rules for each of 243 “orphan” High Production Volume (HPV) chemicals. Orphan HPV chemicals are those which were not voluntarily sponsored in the HPV Chemical Challenge Program. ACC indicates that since 1998, the association and its members have worked with EPA, the environmental organization Environmental Defense, and other stakeholders to ensure that the HPV Chemical Challenge Program is a success. Through this unprecedented program, chemical companies have volunteered to provide the public with important health and environmental effects data and other information for more than 2,222 individual substances, which together represent approximately 93 percent (by volume) of chemicals in U.S. commerce.

EPA's final rule, issued pursuant to section 8(a) of TSCA, requires certain manufacturers (including importers) of certain HPV Challenge Program orphan (unsponsored) chemicals to submit a one-time report on general production/ importation volume, end use, and exposure-related information to EPA. The Interagency Testing Committee (ITC), established under section 4(e) of TSCA to recommend chemicals and chemical mixtures to EPA for priority testing consideration, amends the TSCA Section 4(e) Priority Testing List through periodic reports submitted to EPA. The ITC recently added certain HPV Challenge Program orphan (unsponsored) chemicals to the Priority Testing List in its 55\th\ and 56\th\ ITC Reports, as amended by deletions to this list made in its 56\th\ and 58\th\ ITC Reports. Two tungsten oxide compounds were added to the Priority Testing List by the ITC in its 55\th\ ITC Report but were removed from the Priority Testing List in the 58\th\ ITC Report. In addition, EPA is making technical corrections to update the EPA addresses to which submissions under the Preliminary Assessment Information Reporting (PAIR) rule must be mailed or delivered.

The final rule is effective September 15, 2006; however, Sec. 712.28 and 712.30(c), which contain technical corrections, are effective August 16, 2006. For purposes of judicial review, this rule shall be promulgated at 1 PM EDT on August 30, 2006. PAIR Forms must be submitted to EPA on or before November 14, 2006. A request to withdraw a chemical from the PAIR rule, pursuant to 40 CFR 712.30(c), must be received on or before August 30, 2006. ACC said that the final rule helps to “level the playing field” by ensuring that health and environmental information is also provided on chemicals for which the manufacturers or importers did not voluntarily commit to providing this information to EPA and to making this information public. The rules are also among EPA’s office pollution prevention and toxics largest rulemakings, in terms of the number of chemicals covered. As such, ACC said, "they demonstrate that TSCA is both strong and flexible."

Access the FR announcement (click here). Access an ACC release with links to related information (click here). Access EPA's HPV Challenge Program website for extensive information (click here). [*Toxics]

NE-Mid-Atlantic States Release Final Model GHG Rule

Aug 15: The participating states issued a model rule for the Northeast-Mid-Atlantic Regional Greenhouse Gas Initiative (RGGI) program. The model set of regulations details the proposed program, as outlined in the Memorandum of Understanding (MOU). The model rule will form the basis of individual state regulatory and/or statutory proposals to implement the program [See WIMS 3/27/06]. The states that agreed to sign the MOU include Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont. Development of the model rule was subject to detailed public input. On March 23, 2006, the participating states released a draft version of the model rule for public comment. The states received public input on the draft model rule for a period of 60 days. In excess of 1,000 pages of comments were received from more than 100 organizations.

The states made substantial revisions to the draft model rule in response to public comments. Some of the changes made to the model rule required substantive changes to the MOU. As a result, an amendment to the MOU was also agreed to and signed by the agency heads of the energy regulatory and environmental agencies in each participating state. The participating states also released a Post-Model Rule Action Plan outlining the actions that will be taken to implement the program and work items that will be undertaken to support program implementation.

Under the Regional Greenhouse Gas Initiative (RGGI), seven Northeast states agreed to propose a cap-and-trade program to reduce carbon dioxide (CO2) emissions, which are a major contributor to global warming. This is the first mandatory cap-and-trade program for CO2 emissions in U.S. history. In addition to the states listed above, the State of Maryland recently adopted legislation requiring Maryland to join RGGI by June 2007. Under RGGI, the seven states will launch a regional cap-and-trade system that utilizes emissions credits or allowances to limit the total amount of CO2 emissions. Beginning in 2009, emissions of CO2 from power plants in the region would be capped at approximately current levels -- 121 million tons annually -- with this cap remaining in place until 2015. The states would then begin reducing emissions incrementally over a four-year period to achieve a 10 percent reduction by 2019. Compared to the emissions increases the region would see from the sector without the program, RGGI will result in an approximately 35 percent reduction by 2020.

Access links to a press release, the model rule, rule revisions, the rule action plan and the MOU (click here). Access the WIMS-EcoBizPort Climate Change website for links to additional resources [*Climate]

$15 Million U-M Michigan Dioxin Exposure Study Released

Aug 15: People living in parts of Midland and Saginaw counties, near the Dow Chemical Co. plant have higher levels of dioxins in their bodies than a control group of people elsewhere in Michigan, according to a University of Michigan study released August 15, 2006. The $15 million U-M Dioxin Exposure Study was financed by a grant from Dow Chemical and was controlled and conducted entirely by U-M researchers. Research decisions were reviewed by an independent scientific advisory board. U-M researchers spent two years studying residents in five geographic areas.

The report indicates that in the Tittabawassee River floodplain near Dow, one of the geographic areas studied, people had 28 percent higher median levels of total dioxin-like chemicals in their blood than people in a control group in Jackson and Calhoun counties. Dioxins are toxic chemicals. They had 32 parts of dioxins for every trillion parts of blood, compared to 25 in people living in Jackson and Calhoun counties.

The Jackson/Calhoun region was used as a comparison because it is similar to Midland/Saginaw but is more than 100 miles away from the Dow plant. Dioxin levels in Jackson/Calhoun residents are close to the national median level. According to a release, much of the increased amount of dioxins in Midland/Saginaw residents was related to age. Nationally, older people have higher dioxins levels. People in Midland/Saginaw tend to be older than people in Jackson/Calhoun. Some of the increase was associated with eating certain foods such as fish from local waters contaminated by Dow and other sources, engaging in recreational activities on or near contaminated waters, or having worked at the Dow plant from 1940 to 1959. A small portion of the increase was related to living on soil contaminated by Dow, the study found.

U-M scientists studied levels of dioxins in people’s property soil, household dust and blood samples, and interviewed residents about their age, body mass, dietary habits, land use, occupation, and other personal details. A total of 695 Midland/Saginaw residents and 251 Jackson/Calhoun residents gave blood samples. Participants in the study were at least 18 years old. The researchers found that the median level of dioxins in soil in Jackson/Calhoun, the control area, was 4 parts per trillion -- 4 parts of dioxins for every trillion parts of soil. The median levels in Midland/Saginaw ranged from 4 parts per trillion in the near-floodplain area to 13 in the floodplain and 59 in the area downwind of Dow. The researchers found that people who lived in Midland/Saginaw on property with contaminated soil had higher median levels of dioxins in their blood. If the dioxins in their soil increased by 1,000 parts per trillion, the dioxins in their blood increased by about 0.7 parts per trillion (a 2 percent increase over the average level of blood dioxin for most people).

Access a release (click here). Access the U-M Dioxin website for the complete report, handouts, presentations, information on meetings and background information (click here). Access the WIMS-EcoBizPort Special Report on Midland Area Dioxin Issues for further background information and links to additional resources (click here). [*MIToxics]

UNFCCC Awards Kyoto International Transaction Log Contract

Aug 15: The United Nations Framework Convention on Climate Change (UNFCCC) Secretariat has awarded the multi-million dollar contract to build the electronic infrastructure required for settling emission trades under the Kyoto Protocol, the International Transaction Log (ITL). The contract went to Trasys SA, an IT company based in Belgium. The company subcontracted the European company LogicaCMG to maintain the system’s day-to-day operation. Richard Kinley, acting head of the UNFCCC Secretariat said, “Both companies are solid members of the IT community. They bring strong reputations and many years of experience from developing and operating similar systems in other markets.”

The Kyoto Protocol requires 35 industrialized countries to reduce greenhouse gas emissions below levels specified for each of them in the Protocol. Overall, this should amount to reductions of at least 5% below 1990 levels between 2008 and 2012. The ITL will be connected to the emissions trading registries of all the industrialized countries that sign up to the Kyoto Protocol. Kinley said, “Awarding this contract is a significant milestone in finalizing the systems to make carbon trading under the Kyoto Protocol a reality. We remain on track for Kyoto countries' systems to link to the ITL and become fully operational by April 2007.” Companies investing in climate friendly projects can obtain additional carbon credits in exchange for every tonne of emissions saved through the Kyoto Protocol’s project-based mechanisms (Clean Development Mechanism and Joint Implementation, i.e. CDM & JI). These can then be freely traded on the carbon market.

Access a UNFCCC release (click here). Access the UNFCCC website with links to extensive information including details of the CDM and JI programs (click here). [*Climate]

8th Circuit Joins 2nd Circuit On CERCLA Suits

Aug 11: In the U.S. Court of Appeals, Eighth Circuit, Atlantic Research v. United States, Case No. 05-3152. Atlantic Research Corporation of Camden, Arkansas, sought partial reimbursement from the United States for costs incurred in an environmental cleanup. Atlantic’s claim is based on the Comprehensive Environmental Response, Compensation, and Liability Act, amended by the Superfund Amendments and Reauthorization Act of 1986. The issue for consideration is whether CERCLA forbids a party such as Atlantic, which has voluntarily cleaned up a site for which it was only partly responsible, to recover part of its cleanup costs from another liable party. The Appeals Court held that CERCLA § 107 permits such a cause of action.

Atlantic sought to recover a portion of these costs from the United States by invoking CERCLA §§ 107(a) and 113(f).3 Atlantic and the government began to negotiate in an effort to resolve these financial matters. The negotiations ended with the United States Supreme Court decision in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 125 S. Ct. 577, 160 L.
Ed. 2d 548 (2004) (Aviall). In Aviall, the court found a party could only attempt to obtain § 113(f) contribution 'during or following' a §§ 106 or 107(a) CERCLA civil action. Id. at 161, 125 S. Ct. at 580. As no action had been commenced against Atlantic under either §§ 106 or 107(a), the Aviall decision barred its § 113(f) contribution claim. With its § 113(f) claim Aviall-foreclosed, Atlantic amended its complaint. The amended complaint relied solely on § 107(a) and federal common law. In lieu of answer, the government moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing this Court’s pre-Aviall decision in Dico, Inc. v. Amoco Oil Co., 340 F.3d 525 (8th Cir. 2003) (Dico) foreclosed Atlantic’s § 107 claim. The district court agreed and Atlantic appealed the decision.

The Appeals Court provides considerable discussion of pre-Aviall claims and the effect of the Aviall Supreme Court decision. The Second Circuit is the only Court which has considered this question since the Aviall decision. That Court also revisited its pre-Aviall precedent and concluded that § 107 allowed one liable party to recover voluntarily incurred response costs from another. Consolidated Edison Co. v. UGI Utilities, Inc., 423 F.3d 90, 100 (2d Cir. 2005).

The Eighth Circuit said, "We agree with our sister Circuit, and hold that it no longer makes sense to view § 113 as a liable party’s exclusive remedy. This distinction may have made sense for parties such as Dico, which was allowed to seek contribution under § 113. But here, Atlantic is foreclosed from using § 113. This path is barred because Atlantic – like Aviall – commenced suit before, rather than 'during or following,' a CERCLA enforcement action. Atlantic has opted to rely upon § 107 to try to recover its cleanup costs exceeding its own equitable share. We conclude it may do so."

Editor's Update Note: On January 19, 2007, the U.S. Supreme Court agreed to hear the case of U.S. v. Atlantic Research Corp. (Docket: 06-0562). The case was appealed from the Eighth Circuit Court of Appeals decision of August 11, 2006 [See WIMS 8/14/06]. The primary questions presented in the case is: "Whether a party that is potentially responsible for the cost of cleaning up property contaminated by hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), but that does not satisfy the requirements for bringing an action for contribution under Section 113(f) of CERCLA, 42 U.S.C. 9613(f), may bring an action against another potentially responsible party under Section 107(a), 42 U.S.C. 9607(a)?"

Access the complete Eighth Circuit opinion (click here). Access a Medill News Service summary of the action (click here). Access the U.S. Supreme Court Docket for the case (click here). [*Remed]

Ninth Circuit Interprets Supreme Court Wetlands Decision

Aug 10: In the case of Northern California River Watch v. City of Healdsburg, in the U.S. Court of Appeals, Ninth Circuit, Case No. 04-15442. [Editor's Note: The Ninth Circuit provides considerable discussion of its interpretation of the Rapanos decision and, in particular, the interpretation of Justice Kennedy's "controlling" opinion. The discussion begins on page 9 of the opinion.]

The City of Healdsburg appeals the district court’s judgment in favor of Northern California River Watch, an environmental group, in this litigation under the Clean Water Act (CWA). Plaintiff alleges that Healdsburg, without first obtaining a National Pollutant Discharge Elimination System (NPDES) permit, violated the CWA by discharging sewage from its waste treatment plant into waters covered by the Act. Healdsburg discharged the sewage into a body of water known as “Basalt Pond,” a rock quarry pit that had filled with water from the surrounding aquifer, located next to the Russian River.

The issue is whether Basalt Pond is subject to the CWA because the Pond contains wetlands adjacent to a navigable river of the United States. The district court held that discharges into the Pond are discharges into the Russian River, a navigable water of the United States protected by the CWA. The court followed the United States Supreme Court decision in United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

The Ninth Circuit, in what is believed to be the first Appeals Court interpretation of the Supreme Court's Rapanos decision [See WIMS 8/2/06] said, "The Supreme Court, however, has now narrowed the scope of that decision. See Rapanos v. United States, 126 S.Ct. 2208 (2006). In a 4-4-1 decision, the controlling opinion is that of Justice Kennedy who said that to qualify as a navigable water under the CWA the body of water itself need not be continuously flowing, but that there must be a “significant nexus” to a waterway that is in fact navigable. Adjacency of wetlands to navigable waters alone is not sufficient. Id. at 2236-52. In light of Rapanos, we conclude that Basalt Pond and its wetlands possess such a “significant nexus” to waters that are navigable in fact, because the Pond waters seep directly into the navigable Russian River. We affirm the district court’s holding that Basalt Pond is subject to the CWA. We also affirm the district court’s ruling that neither the waste treatment system nor the excavation operation exceptions in the Act apply to Healdsburg’s discharges."

In it discussion of the Supreme Court ruling in Rapanos, the Ninth Circuit said, "In the last term, however, the Supreme Court discussed the intersection between Riverside Bayview Homes and SWANCC. United States v. Rapanos, 126 S.Ct. 2208 (2006). The Rapanos decision involved two consolidated cases, United States v. Rapanos, 376 F.3d 629 (6th Cir. 2004) (Rapanos I) and Carabell v. U.S. Army Corps of Engineers, 391 F.3d 704 (6th Cir. 2004)...

"In Rapanos, a 4-4-1 plurality opinion, the Supreme Court addressed how the term 'navigable waters' should be construed under the Act. The plurality, written by Justice Scalia for four Justices, would have reversed on the grounds that only those wetlands with a continuous surface connection to bodies that are 'waters of the United States' are protected under the CWA. Justice Stevens, writing the dissent for four Justices, would have affirmed on the grounds that wetlands not directly adjacent to navigable waters, but adjacent to tributaries of navigable waters, are protected under the CWA. Justice Stevens argued that Riverside Bayview Homes is still the controlling precedent and does not require a 'significant nexus' test.

"Justice Kennedy, constituting the fifth vote for reversal, concurred only in the judgment and, therefore, provides the controlling rule of law. See Marks v. United States, 430 U.S. 188, 193 (1977) (explaining that '[w]hen a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds')..."

Access the complete opinion (click here). On August 1: The Senate Committee on Environment and Public Works, Subcommittee on Fisheries, Wildlife, and Water, Chaired by Lincoln Chafee (R-RI) held a hearing on interpreting the effect of the U.S. Supreme Court's recent decision in the joint cases of Rapanos v. United States and Carabell v. U.S. Army Corps of Engineers on "The Waters of the United States". Access the hearing website and links to all testimony (click here). Access a "simple" explanation of the Rapanos v. U.S. decision from QuizLaw (click here). [*Water]

EPA Proposes Revisions To Degreaser Air Toxics Rule

Aug 10: U.S. EPA is proposing options to reduce air toxics emissions by up to 70 percent from halogenated solvent cleaning operations. Halogenated solvents, also known as degreasers, are used to remove soils such as grease, oils, waxes, carbon deposits and tars from metal, plastic, fiberglass and other surfaces. The proposal includes two options, both of which would result in increased health protection for the public and cost savings for the industry. The proposals would impose an annual cap on emissions of the solvents methylene chloride, perchloroethylene and trichloroethylene. The caps would provide affected facilities with the flexibility to reduce their emissions using any traditional methods available. Most degreasing operations already emit less than either proposed caps. The proposal would focus on facilities posing the highest risks by requiring them to reduce emissions and meet the cap. EPA issued a national rule to limit emissions of air toxics from degreasing operations in 1994.

The proposal addresses the residual risk and the eight-year technology review provisions in the Clean Air Act. These provisions direct EPA to review existing control technology standards. EPA is to tighten those standards if needed to protect health or because of improvements in emissions reduction methods. EPA will accept public comment on its proposal for 45 days following publication of the proposed action in the Federal Register.

Access a release (click here). Access a fact sheet on the proposed rule (click here). Access a prepublication copy of the proposed rule (click here). [*Air]

DOE Releases National Electric Transmission Congestion Study

Aug 8: On the first anniversary of Energy Policy Act of 2005 (EPAct), Department of Energy Secretary Samuel Bodman announced that the Department has published the National Electric Transmission Congestion Study. The report identifies three groups of congestion areas that merit further federal attention. The most severely congested areas are called “Critical Congestion Areas.” These areas are Southern California, and the Atlantic coastal area from the New York City area to northern Virginia. A second group, “Congestion Areas of Concern,” consists of four areas that appear to require close observation and further study to determine the magnitude of their existing or emerging congestion problems. These are: New England, the Phoenix-Tucson area, the Seattle-Portland area, and the San Francisco Bay area. The third group, “Conditional Congestion Areas,” consists of areas where congestion is not acute at present, but it would become so if large amounts of new electric generation were to be built without associated transmission capacity including Montana-Wyoming, the Dakotas-Minnesota, Kansas-Oklahoma, Illinois, Indiana, Upper Appalachia and the Southeast.

With the release of the study, DOE will now be seeking comments until October 10, from interested parties on the possible designation of National Interest Electric Transmission corridors in relation to all three groups of congestion areas. If appropriate, the DOE Secretary will designate certain areas as National Corridors in accordance with the law. The study, and comments on it from stakeholders, will be used in future decisions by the Department concerning the designation of National Corridors. Section 1221(a) of the Energy Policy Act of 2005 updates Section 216 of the Federal Power Act and requires DOE to issue a national transmission congestion study for comment by August 2006 and every three years thereafter. Based on the study and public comments, DOE may designate selected geographic areas as "National Interest Electric Transmission Corridors." Applicants for projects proposed within designated corridors that are not acted upon by state siting authorities within one year may request FERC to exercise federal "backstop" siting authority.

Bodman also released a report prepared by the Department that details other programs that have been undertaken since the passage of EPAct. The report, On the Road to Energy Security: Implementing a Comprehensive Energy Strategy, is designed to be an easy-to-read document that explains many of the highlights of EPAct, and provides a progress summary on achieving the Act’s goals of greater energy security. Additionally, Bodman provide an overview briefing on issues surrounding the Prudhoe Bay, Alaska oil field shutdown.

Access a lengthy release (click here). Access links to the complete Congestion study, an executive summary, comment procedures, and extensive background information (click here). Access the EPAct accomplishments summary (click here). [*Energy]

How Federal Policies Affect The Allocation of Water

Aug 7: The Congressional Budget Office (CBO) has issued a report entitled, How Federal Policies Affect the Allocation of Water. According to the report, the drought conditions of recent years have focused attention on the nation’s use of freshwater resources. This CBO paper examines the mechanisms that govern water allocation, how they affect the benefits that accrue to society from its use of water resources, how those effects might change over time, and what influence federal policies could have on such considerations. The paper was prepared in response to a request from the Ranking Member of the Subcommittee on Water and Power of the House Committee on Resources, Raul Grijalva (R-AZ). CBO notes that in keeping with its mandate to provide objective, impartial analysis, the paper makes no recommendations.

To examine how society uses its water resources, the CBO analysis addresses several major questions: What are this country’s water sources, and how is the water used?; What determines the underlying allocation, and does that allocation maximize water’s potential benefits to society as a whole?; and What policies might the federal government consider toward that end? The report indicates that the state laws governing property rights and the pricing mechanisms that conceal opportunity costs make the current allocation of water relatively inflexible. That inflexibility might become increasingly costly in the future, as it exacerbates pressures on federal spending and reduces the potential gains to the economy from the use of water resources. Four developments in particular augment demand pressures: the settlement of Indian tribes’ claims on water rights currently held by others; environmental laws that require greater amounts of water be retained in natural courses; growing populations in arid states; and the recurring impacts of droughts, which may increase in frequency and intensity as a result of shifts in precipitation patterns.

Under policy options, the report says that broader use of markets in deciding how scarce water resources are allocated could improve on the current system of administrative allocation that has emerged under state law. Because markets offer flexibility in balancing supply and demand -- by providing incentives to reallocate water among users, to use less water, and to provide more water -- they could mitigate society’s costs of adjusting to changing conditions. The report notes that, "The federal government could facilitate market transfers of water by clarifying the potential for broader water marketing using its jurisdiction under the commerce clause of the Constitution and federally reserved water rights. The commerce clause gives the Congress the authority to allocate interstate waters to serve the national interest -- even if doing so means overriding state law."

Access the complete 32-page report (click here). [*Water]

Prudhoe Bay Oil Field Shutdown; Iran Plays The Oil Card

Aug 7: BP Exploration Alaska, Inc. announced that it has begun an orderly and phased shutdown of the Prudhoe Bay oil field following the discovery of unexpectedly severe corrosion and a small spill from a Prudhoe Bay oil transit line. Shutting down the field will take days to complete. Over time, these actions will reduce Alaska North Slope oil production by an estimated 400,000 barrels per day, reportedly 8 percent of U.S. domestic crude oil production. The decision follows the receipt on Friday, August 4 of data from a "smart pig run" completed in late July. Analysis of the data revealed 16 anomalies in 12 locations in an oil transit line on the eastern side of the oil field.

BP America Chairman and President Bob Malone said, “We regret that it is necessary to take this action and we apologize to the nation and the State of Alaska for the adverse impacts it will cause. However, the discovery of this leak and the unexpected results of this most recent smart pig run have called into question the condition of the oil transit lines at Prudhoe Bay. We will not resume operation of the field until we and government regulators are satisfied that they can be operated safely and pose no threat to the environment.” BP indicated it is identifying and mobilizing additional resources from across Alaska and North America in order to speed inspection of remaining Prudhoe Bay oil transit lines. BP operates 22 miles of oil transit pipeline at Prudhoe Bay. Smart pigging inspection has been completed over about 40 percent of that length. BP previously announced plans to replace a three-mile segment of pipeline following inspections conducted after a large spill discovered on March 2, 2006.

Meanwhile, various media reports indicate that Iran's Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian, in India for two days of talks on a proposed $7 billion gas pipeline, said that global crude oil prices could reach $100 a barrel on geopolitical tension and soaring winter demand. Other Iranian statements have warned of oil prices of $200 if international sanctions were imposed on the country in its nuclear dispute with the U.S.

An August 7, 2006, Standard & Poor's article entitled, The Effect Of A Major Oil-Supply Disruption On U.S. And Global Economies, analyzes a range of options that indicate oil prices could reach $250 oil barrel, under a worse case scenario where Iran would close the Strait of Hormuz, a shipping route for oil tankers from Kuwait, Saudi Arabia and the United Arab Emirates. The most likely scenario according to S&P is based on a limited Middle East conflict with oil prices around $75 a barrel and falling even lower by year's end.

Access a release from BP (click here). Access the BP Alaska corrosion Response website for continued updates and information (click here). Access an extensive Reuters financial analysis (click here). Access links to various media coverage on the Iranian oil issue (click here). Access the S&P for links to the article and an audio playback of a telephone conference call held on July 27, 2006 to discuss S&P's view on the economic impact of increased oil prices (click here, registration required). [*Energy]