1 of 2. An attendant stands inside a high-speed train during an organized experience trip from Beijing to Zhengzhou, as part of a new rail line, December 22, 2012. China will open the world's longest high-speed rail line next week when a link between Beijing and the southern metropolis of Guangzhou is inaugurated, officials said on Saturday.

BEIJING/ZHENGZHOU, China | Sat Dec 22, 2012 6:32am EST

BEIJING/ZHENGZHOU, China (Reuters) - China will open the world's longest high-speed rail line next week when a link between Beijing and the southern metropolis of Guangzhou is inaugurated, officials said on Saturday, underscoring its commitment to a trouble-plagued transport scheme.

The 2,298-km (1,428-mile) line, parts of which are already in operation, will begin full service on Wednesday, halving travel time to less than 10 hours on trains which will run at 300 kph (186 mph).

The new route offers a chance for China's railways ministry, which has been dogged by scandals and missteps, to redeem itself.

A July 2011 crash of a high-speed train killed 40 people and raised concerns about the safety of the fast-growing network and threatened plans to export high-speed technology.

"We have developed a full range of effective measures to manage safety," Zhou Li, head of the ministry's science and technology department, told reporters on a trial run from Beijing to the central city of Zhengzhou.

"We can control safety management," he added.

Last year's accident near the booming eastern coastal city of Wenzhou occurred when a high-speed train rammed into another stranded on the track after being hit by lightning.

Rail investment slowed sharply in the wake of that accident and state media reported earlier this year that the government had cut planned railway investment by 500 billion yuan ($80.27 billion) to 2.3 trillion yuan under a five-year plan to 2015.

But that may reflect cuts that have already taken place as the Ministry of Railways has raised its planned investment budget three times this year as part of government efforts to bolster a slowing economy.

The ministry plans to spend a total of 630 billion yuan in 2012 and has been given clearance to sell more bonds to finance the investments - one of the few outright spending commitments made by the central government in a slew of project approvals worth $157 billion which have not specified how they will be funded.

The approvals include 25 rail investments, state media say.

Despite its expanding network, the Ministry of Railways struggles to make money. It suffered an after-tax loss of 8.8 billion yuan in the first half of 2012 in the face of rising operating costs and mounting debts.

However, the government says it remained committed to building high-speed railways between its major cities, with China eventually planning to run them into Russia and down to Southeast Asia.

"High-speed railways are needed for national development, for the people and for regional communication. Many countries have boosted their economies by developing high-speed rail," Zhou said.

China said in May it would open up the railway industry to private investment on an unprecedented scale, but private investors have been skeptical.

The need for funding is acute. China still needs billions more in rail investment to remove bottlenecks in cargo transport, ease overcrowding in passenger transport and develop commuter lines in its sprawling megacities.

($1 = 6.2286 yuan)

(Reporting by Sabrina Mao and Ben Blanchard; Additional reporting by Nick Edwards; Editing by Nick Macfie)

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The Soyuz TMA-07M spacecraft carrying the International Space Station (ISS) crew of U.S. astronaut Thomas Marshburn, Russian cosmonaut Roman Romanenko and Canadian astronaut Chris Hadfield blasts off from its launch pad at the Baikonur cosmodrome December 19, 2012.

CAPE CANAVERAL, Florida | Fri Dec 21, 2012 3:42pm EST

CAPE CANAVERAL, Florida (Reuters) - A Russian Soyuz capsule carrying a multinational crew of three arrived at the International Space Station on Friday, setting the stage for a Canadian for the first time to take command of the orbital research base.

The spacecraft carrying Chris Hadfield from the Canadian Space Agency, NASA's Tom Marshburn and Russian cosmonaut Roman Romanenko blasted off from Kazakhstan's Baikonur Cosmodrome on Wednesday and parked at the station's Rassvet docking module at 9:09 a.m. EST as the ships sailed 255 miles above northern Kazakhstan.

"The Soyuz sleigh has pulled into port at the International Space Station with a holiday gift of three new crewmembers," said NASA mission commentator Rob Navias.

The trio joined station commander Kevin Ford and Russian cosmonauts Oleg Novitskiy and Evgeni Tarelkin, who are two months into a planned six-month mission.

Ford is due to turn over command of the $100 billion research complex, a project of 15 nations, in mid-March to Hadfield, who will become the first Canadian to lead a space expedition.

"This is a big event for me personally," Hadfield said in a preflight interview. "It takes a lot of work, a lot of focus. It's something that I can look back on as an accomplishment and a threshold of my life."

Command of the station, which has been continuously occupied since November 2000, typically rotates between an American and a Russian crewmember.

In 2009, Belgian astronaut Frank De Winne broke that cycle to become the first European Space Agency commander. Japan's Koichi Wakata is training to lead the Expedition 39 crew in March 2014.

All three of the station's new residents have made previous spaceflights. Hadfield, 53, is a veteran of two space shuttle missions. Marshburn, 52, has one previous shuttle mission and Roman Romanenko, 41, a second-generation cosmonaut, served as a flight engineer aboard the space station in 2009.

The station crew will have some time off to celebrate several winter holidays in orbit - Christmas, the New Year and then Orthodox Christmas - before tackling a list of about 150 science experiments and station maintenance, including two spacewalks.

Among the studies will be medical research into how the human cardiovascular system changes in microgravity.

"When you live in an environment like that, the heart actually shrinks. Your blood vessel response changes. It actually sets us up to cardiovascular problems," Hadfield said. "We have a sequence of experiments that's taking blood samples and monitoring our body while we're exercising and doing different things to try and understand what's going on with our cardiovascular system," he said.

The research is expected to help doctors unravel the aging process on Earth, which is similar in many respects to what happens to the human body in weightlessness.

In addition to medical research, the space station serves as a laboratory for fluid physics and other microgravity sciences, a platform for several astronomical observatories and a testbed for robotics and other technologies.

(Edited by David Adams and Leslie Gevirtz)

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Snow blows across US Highway 218 as near whiteout conditions begin in Waterloo, Iowa, December 20, 2012.

CHICAGO | Fri Dec 21, 2012 9:04am EST

CHICAGO (Reuters) - The first major snow storm of winter did little to ease the worst drought in more than 50 years in the crop growing Central Plains and Midwest, while snarling traffic and hampering feeding and transportation of livestock.

MDA EarthSat Weather meteorologist Kyle Tapley said six to 12 inches or more snow fell from Nebraska into Wisconsin during the past two days, the equivalent of about 0.50 inch to 1.00 inch of rain, that will help ease but not eliminate drought worries.

Tapley said roughly 10 inches of moisture or rainfall would be needed in a large portion of the Plains and Midwest to break the drought of 2012 that trimmed crop production and sapped soil moisture reserves.

"The snow put a small dent in the drought and I don't see any moisture for next week," Tapley said.

Commodity Weather Group (CWG) said the snow favored Wisconsin, far eastern Iowa, far northwestern Illinois and west-central Michigan on Thursday with better than a foot of snow in Wisconsin.

"Another storm over the weekend into early next week will bring rain to the Delta and Southeast and a chance for snow near the Ohio River Valley," said CWG meteorologist Joel Widenor.

Widenor said prospects for more rain or snow in the southern Plains hard red winter wheat producing states were more limited on Friday.

But there could be some light rain or snow in the area on Tuesday but "this would provide only limited additional drought relief," Widenor said.

Winterkill threats for wheat and frost threats for Florida citrus are still limited, despite cooling the next two weeks, according to CWG's advisory on Friday.

(Reporting By Sam Nelson; Editing by Grant McCool)

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Russia's President Vladimir Putin gestures during a news conference after their meeting with Turkey's Prime Minister Tayyip Erdogan in Istanbul December 3, 2012.

BRUSSELS | Fri Dec 21, 2012 8:02am EST

BRUSSELS (Reuters) - Russian anger at an EU energy law blocked progress at talks between Russian President Vladimir Putin and European Union leaders on Friday.

Putin, on his first visit to Brussels since his re-election as president in May, was greeted by four topless women, protesting against civil rights curbs in Russia and shouting "Putin, go to hell". They were bundled away by police.

Relations between the 27-nation bloc and Russia, its main external supplier of energy and a key trading partner, have long been poisoned by rows over gas pipelines.

Europe relies on Russia to cover around a quarter of its natural gas needs, but over the past decade Moscow has had a series of disputes with its ex-Soviet neighbors - Ukraine and Belarus - that disrupted its gas exports to Europe.

Those disputes increased the EU's determination to diversify supply away from Russia.

Adding to the grievances are simmering trade disputes over everything from cars to pigs, and European leaders' condemnation of the jailing of members of the band Pussy Riot, seeing it as part of a trend of squashing personal freedoms.

For Russia, which sits on the world's largest natural gas reserves and supplies more than a quarter of the European Union's natural gas imports, energy is the major issue.

In opening comments, Putin referred to EU energy law as "uncivilized".

POTENTIAL

"Of course the EU has the right to take any decisions, but as I have mentioned ... we are stunned by the fact that this decision is given retroactive force," Putin told reporters on the sidelines of a Russia-EU summit in Brussels. "It is an absolutely uncivilized decision."

He was referring to EU legislation to create a single energy market and prevent those that control supply, such as Russia's Gazprom, also dominating distribution networks.

From the European Union side, European Commission President Jose Manuel Barroso said there was "huge potential for cooperation" to the benefit of both sides.

"I think we should in fact be able to transform what is today an interdependence by necessity into an interdependence by choice, a political choice," he said. "That's what requires political leadership on both sides."

Expectations for Friday's talks have always been low, but Russian and EU sources both see the need for continued dialogue.

The EU's executive Commission added to tensions between Europe and Moscow in September when it opened an investigation into suspected anti-competitive market practices by Russia's state-dominated Gazprom.

Trade disputes are also high on the agenda. EU Trade Commissioner Karel De Gucht said this month time was running out for Russia to settle trade disputes with the EU on everything from pigs to cars and he threatened to take Moscow to the WTO.

Putin also complained about lack of agreement on travel visas, saying Russia was being unfairly treated compared with other nations.

"I have a long list of states here with me which have a visa-free regime with the EU. There is Venezuela, Honduras, Mauritius, Mexico, seems everyone else is there," Putin said.

(Additional reporting by Adrian Croft and Justyna Pawlak)

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ANCHORAGE, Alaska | Fri Dec 21, 2012 5:43pm EST

ANCHORAGE, Alaska (Reuters) - Two species of far-north seals, victims of disappearing sea ice and dwindling snowpack in their Arctic habitat, will be granted protections under the Endangered Species Act, federal officials announced on Friday.

The National Oceanic and Atmospheric Administration ordered "threatened" listings for populations of ringed seals and bearded seals in the waters off northern Alaska, in parts of Russia and other regions of the Arctic.

Both types of seals depend on sea ice and snow, which is becoming scarce in the Arctic region during the non-winter months, NOAA officials said in a written statement.

"Our scientists undertook an extensive review of the best scientific and commercial data. They concluded that a significant decrease in sea ice is probable later this century and that these changes will likely cause these seal populations to decline," said Jon Kurland, protected resources director for the Alaska region of NOAA's National Marine Fisheries Service.

The listings will become effective 60 days after NOAA's notice is published in the Federal Register.

Ringed seals use snow caves to nurse and protect their pups, NOAA said. The warming climate has brought autumn rains instead of the snowfalls that used to be dominant, and the warming trend has caused an earlier spring melting that leaves snowpack too shallow for cave formation, NOAA said.

Bearded seals use sea ice for breeding, nursing and raising their young, NOAA said, and both types of seals depend on floating sea ice during their early summer molting period, when they shed old fur to make way for new fur.

Arctic sea ice coverage this year shrank to the lowest level since satellite records began in 1979, according to the National Snow and Ice Data Center in Boulder, Colorado.

Ringed seals are the primary prey for polar bears, which in 2008 were listed as threatened because of similar problems with disappearing sea ice. Polar bears were the first animals granted Endangered Species Act protections because of climate change.

Now several other ice-dependent animals have been or are expected to be listed.

The decision covers bearded and ringed seals outside of U.S. territory as well as those off Alaska including a listing for a rare subspecies of ringed seal that lives in Ladoga Lake in Russia.

The listing decisions and studies have been prompted largely by petitions and litigation from an environmental organization, the Center for Biological Diversity. The center has also advocated for Endangered Species Act listings of the spotted and ribbon seal and the Pacific walrus.

A Center official said Friday's listing decision was a good step, but called on the Obama administration to do more.

"The Obama administration has to take decisive action, right now, against greenhouse gas pollution to preserve a world filled with ice seals, walruses and polar bears," Shaye Wolf, the center's climate science director, said in a statement.

(Editing by Dan Whitcomb and Leslie Gevirtz)

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WASHINGTON | Fri Dec 21, 2012 4:11pm EST

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency has softened rules to curb pollution from industrial boilers and large incinerators, revising earlier versions to target only the largest polluters and give them more time to comply.

The agency on Friday formalized standards it initially released in March 2011 for reducing toxic air pollution, including mercury and particle pollution, known as soot, from boilers, solid waste incinerators and cement kilns.

Boilers, typically fired by coal, oil, natural gas and biomass, are used to power heavy machinery and provide heat for industrial processes.

The new rules target roughly 2,300 boilers, or less than 1 percent of the 1.5 million units operating in the United States, requiring them to meet numerical limits on their release of air toxins.

The agency said it had analyzed new data provided by industry groups and "additional information about real-world performance and conditions under which affected boilers and incinerators operate" in order to adjust the rule and propose more "targeted revised emission limits".

Large-source boilers, found mainly at refineries, chemical plants and other industrial facilities, will have three years to comply instead of one and can be granted a fourth year if needed to install controls, the EPA said.

The rule also targets 106 industrial solid waste incinerators, which have five years to comply with the EPA standards.

"The adjusted standards require only the largest and highest-emitting units to add pollution controls or take steps to reduce air pollution, making the standards affordable, protective and practical," according to an EPA factsheet.

Some environmental groups said the EPA's handling of the long-delayed boiler rules signaled that the agency's upcoming regulation would be more flexible to industry concerns.

"These watered-down rules suggest the Obama administration will collaborate more with industry in the second term," said Frank O'Donnell of Clean Air Watch.

The EPA first introduced the rule in 2005, but the U.S. Court of Appeals for the D.C. Circuit vacated it in 2007.

The rule was re-proposed in June 2010 but industry groups slammed that version, calling its set limits unachievable, prompting the EPA to relax and reintroduce the rule.

"After years of delays, the finalized Boiler MACT standard ends uncertainty and allows businesses to move forward with one standard that applies across the nation, leveling the playing field," said Howard Learner, executive director of the Environmental Law & Policy Center.

MACT is an acronym for Maximum Achievable Control Technology.

Another environmental group, the Natural Resources Defense Council, applauded the EPA's boiler rules for being stronger than previous versions but criticized the agency for going in the "wrong direction" in its standards for incinerators and cement kilns.

"The agency ... eased standards in their final rules for cement manufacturers, which is troubling and deserves further explanation."

Despite relaxing the rules, the EPA said the standards would prevent up to 8,100 premature deaths, 5,100 heart attacks and 52,000 asthma attacks.

The agency estimated that Americans would receive $13 to $29 in health benefits for every dollar spent to meet the final standards and that the rules would create a small net increase in jobs.

Some industry groups were still wary.

"Several billions of dollars in capital spending will be necessary to comply. This is a significant investment for an industry still recovering from the economic downturn, especially in light of the growing cumulative regulatory burden we face," the American Forest & Paper Association, the national lobby group of the forest products industry, said on Friday.

The National Association of Manufacturers, an opponent of EPA regulations, said in November that compliance costs for the agency's six air pollution rules, including the boiler rule, could total $111.2 billion by EPA estimates and up to $138.2 billion by industry estimates.

The lobby group said the boiler rule would cost covered sources $2.7 billion in annualized costs in 2013 and $14.3 billion in upfront capital spending - higher than EPA estimates of $1.9 billion in annualized costs in 2013 and $5.1 billion in capital spending.

Other groups that have opposed the rules include the Industrial Energy Consumers of America - representing the chemicals, cement, aluminum and other industries.

Bob Bessette, president of the Council of Industrial Boiler Owners, cautiously welcomed the revised rule but said it was still studying the economic impact.

"Hopefully, the changes EPA has made will decrease the economic and jobs impact on the still-struggling manufacturing, commercial, and institutional sectors and national economy," he said.

(Reporting by Valerie Volcovici; Editing by Nick Zieminski, David Gregorio and Dale Hudson)

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n">(Reuters) - California Energy Commission staff on Friday said BrightSource Energy's proposed 500-megawatt Hidden Hills solar thermal power project would have "significant" impact on the environment.

In a statement on the final staff assessment, the state's primary energy planning and policy agency cited impacts on "biological resources, cultural resources, land use, and visual resources" even if recommended mitigation measures are implemented.

BrightSource said the company is looking forward to the formal evidentiary hearings upon which the Commission will base its final decision.

"Unmitigated environmental impacts and non-compliance with applicable laws and regulations would require the Commission to adopt override findings if the project is approved," the CEC said in a statement.

The proposed project would consist of two 250-MW solar plants, each having about 85,000 heliostats - elevated mirrors used to focus the sun's rays on a solar receiver. It would be located on 3,277 acres of private land leased in Inyo County next to the Nevada border.

The construction of the $2.2 billion project, if approved, would take about 29 months with work scheduled to start in the second quarter of 2013 and end in the fourth quarter of 2015.

BrightSource's first major project, the $2.2 billion Ivanpah plant in California, is nearly complete. The 377-megawatt plant is backed by a $1.6 billion government loan guarantee and is expected to enter service in 2013.

California has a goal to produce 33 percent of its power from renewable sources by 2020.

(Reporting by Nichola Groom in Los Angeles and Koustav Samanta in Bangalore; editing by Jim Marshall)

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A protective layer of ice form on oranges in a grove near Dover, Florida December 14, 2010.

MIAMI | Fri Dec 21, 2012 12:37pm EST

MIAMI (Reuters) - U.S. government forecasters have issued a freeze warning for parts of Florida's key citrus-growing region as a cold front threatens to carry icy temperatures into the Sunshine State this weekend.

The National Weather Service office in Tampa Bay-Ruskin said in an advisory on Friday that the freeze warning for Levy, Citrus, Sumter, Hernando and Pasco counties was in effect from 2 a.m. to 9 a.m. EST (0700-1400 GMT).

Tyler Fleming, a senior forecaster in the Tampa Bay office, said it was the first freeze warning of the year for the area and that temperatures could dip below freezing for at least two hours.

A freeze watch was also in effect for the same five-county area for late Saturday night through early Sunday morning, Fleming said.

Typically, citrus can be damaged by four hours or more of temperatures below 28 degrees Fahrenheit (minus 2 Celsius).

Andrew Meadows, spokesman for the state's leading growers association, Florida Citrus Mutual, said the weekend chill was unlikely to be long-lasting or extreme enough to cause any damage to the state's $9 billion citrus industry.

"Actually, this kind of cold event is a good thing because it brings the brix content up in the fruit and helps prepare the tree for any cold weather ahead," Meadows said in an email.

Ray Royce, executive director of the Highlands County Citrus Growers Association in central Florida, agreed that there was no cause for alarm.

"The next two nights will be the coldest nights of the season so far," Royce told Reuters in a phone interview.

"There may be a chance for frost," he said, "but it doesn't appear that there's going to be enough cold to damage wood or to damage fruit."

Royce added a note of caution, however.

"You never know what could happen. You just don't want to get flat-footed and have it all of a sudden be 5 or 6 degrees colder than you're expecting."

Florida's groves yield more than 75 percent of the U.S. orange crop and account for about 40 percent of the world's orange juice supply.

(Reporting by Tom Brown; Editing by Lisa Von Ahn)

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Fri Dec 21, 2012 4:28pm EST

n">(Reuters) - A controversial genetically engineered salmon has moved a step closer to the consumer's dining table after the U.S. Food and Drug Administration said Friday the fish didn't appear likely to pose a threat to the environment or to humans who eat it.

AquAdvantage salmon eggs would produce fish with the potential to grow to market size in half the time of conventional salmon. If it gets a final go-ahead, it would be the first food from a transgenic animal - one whose genome has been altered - to be approved by the FDA.

The AquAdvantage Atlantic salmon egg was developed by AquaBounty Technology to speed up production to meet global seafood demand.

In a draft environmental assessment, the FDA affirmed earlier findings that the biotech salmon was not likely to be harmful. It said it would take comments from the public on its report for 60 days before making a final decision on approval.

"With respect to food safety, FDA has concluded that food from AquAdvantage salmon is as safe as food from conventional Atlantic salmon, and that there is a reasonable certainty of no harm from consumption," the FDA assessment states.

AquaBounty officials said they were caught by surprise by the news that its product was a step closer to approval as years of controversy had followed the company's application for a go-ahead from the regulator. They said they did not know the timing or details of the process the FDA will follow following the 60-day comment period.

"We are encouraged that the environmental assessment is being released and hope the government continues the science-based regulatory process," said AquaBounty Chief Executive Ronald Stotish.

Critics say the new salmon is a "dangerous experiment" and have pressured the FDA to reject it. They say the FDA has relied on outdated science and substandard methods for assessing the new fish.

"We are deeply concerned that the potential of these fish to cause allergic reactions has not been adequately researched," said Michael Hansen, a scientist at the Consumers Union. "FDA has allowed this fish to move forward based on tests of allergenicity of only six engineered fish, tests that actually did show an increase in allergy-causing potential."

There were also concerns the FDA would not require the genetically modified salmon to be labeled as such, and some critics said they may file a lawsuit to prevent what they fear could be the imminent approval of the engineered fish.

"Congress can still keep FDA from unleashing this dangerous experiment," said Wenonah Hauter, executive director of Food & Water Watch, a consumer advocacy group. "Although this latest FDA decision is a blow to consumer confidence, we encourage everyone to contact their members of Congress and demand this reckless decision be overturned."

The Center for Food Safety, another non-profit consumer protection group, was highly critical of the FDA report, and officials said they might sue the regulator over the issue.

"It is extremely disappointing that the Obama Administration continues to push approval of this dangerous and unnecessary product," said Andrew Kimbrell, executive director of the Center for Food Safety. "The GE salmon has no socially redeeming value. It's bad for the consumer, bad for the salmon industry and bad for the environment."

FDA spokeswoman Morgan Liscinsky said no final decisions have been made on labeling or on the application for approval.

"The release of these materials is not a decision on whether food from AquAdvantage Salmon requires additional labeling; nor is it a decision on the new animal drug application currently under review. It also does not provide a final food safety determination," Liscinsky said.

The AquAdvantage salmon would be an all-female population with eggs produced in a facility on Prince Edward Island in Canada and shipped to a "grow-out facility" in Panama, where they would be reared to market size and harvested for processing.

(Editing by Bernadette Baum; and Peter Galloway)

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The tanker Stena Primorsk hauling crude oil sits anchored in the Hudson River after loosing its steering and running aground south of Albany, New York December 20, 2012.

NEW YORK | Fri Dec 21, 2012 11:53am EST

NEW YORK (Reuters) - Oil trapped in a tanker that ran aground on the Hudson River near Albany, New York will be transferred to a barge on Friday night, the Port of Albany said.

The Stena Primorsk, a 600-foot (182-metre) motor tanker, was carrying 11.7 million gallons (under 280,000 barrels) of light crude oil when it lost steering control on Thursday morning and hit land near Stuyvesant, New York, about 20 miles downriver from Albany, according to the U.S. Coast Guard.

The light crude oil on the tanker was from the Bakken shale in North Dakota destined for Irving Oil Ltd's 300,000 barrel-per-day Saint John, New Brunswick refinery in Canada, Richard Hendrick, general manager of the Port of Albany said. This was the first such shipment out of the Albany port.

A smaller barge and tug unit is en route to the site of the accident after it left Brooklyn, New York early on Friday, Hendrick said. The barge is expected to arrive around 5:00 PM EST (2200 GMT) Friday, he added.

The U.S. Coast Guard said no pollution was reported related to the incident.

(Reporting by Selam Gebrekidan;editing by Sofina Mirza-Reid)

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A natural gas well is drilled near Canton, in Bradford County, Pennsylvania January 8, 2012. Bradford County is currently ground zero for fracking the Marcellus shale in the Northeastern United States.

WASHINGTON | Fri Dec 21, 2012 1:57pm EST

WASHINGTON (Reuters) - The Obama administration issued the framework on Friday of a long-term study on whether fracking for natural gas pollutes drinking water, but will not make conclusions until 2014 about the controversial technique that is helping to fuel a domestic drilling boom.

Critics of the Environmental Protection Agency study, called for by Congress in 2010, complain it does not closely examine the impact of drillers' injecting waste water deep underground, a practice that has been linked to small earthquakes.

The progress report outlined case studies at drilling sites in states including North Dakota, Pennsylvania and Texas that will inform the final study. For a link to the study click here r.reuters.com/jec84t

It also explained the scientific methods the EPA is using to understand how drinking water supplies are affected by the lifecycle of water used fracking. That cycle ranges from withdrawing the water from ground and surface supplies to treating it in wastewater plants.

Although conclusions are more than a year away, power utilities, chemical companies and other big consumers of natural gas fear the study could lead to more regulations and raise costs as a result. Power generators, including American Electric Power and Southern Co, have been enjoying rock bottom prices for natural gas in recent years.

Fracking involves forcing large volumes of water laced with chemicals and sand deep underground to crack rock and free oil and natural gas. Critics of fracking, including many environmentalists, worry drilling operations near schools and homes can pollute water and air.

The drilling industry and some Republicans in Congress have said the EPA study is overkill because fracking is safe.

The EPA's long-term study will examine the large volumes of water sucked up by fracking operations, surface spills of fracking fluids on well pads, and the drilling itself.

The study will also look at spills of so-called "flowback" water that rushes up from wells when they start producing gas, and how well wastewater treatment plants operate.

But the study does not closely look at the effects of injecting waste water deep underground, a practice environmentalists worry could become a dormant threat to water supplies.

Drillers say they are recycling more and more water used and produced in fracking. But some of the waste is still injected underground.

Ben Grumbles, a former assistant administrator for water at the EPA, said injection of the waste is "legitimate and important concern."

Ohio recently linked the disposal method to a series of small earthquakes and placed a moratorium on the injections but lifted it in November.

Grumbles, who is now president of the U.S. Water Alliance, said the omission of examining the practice was "not a fatal flaw" of the study because he believes a different arm of the EPA is doing research on waste water injection.

"They really do need to look at the issue," he said. "I would hope the offices were coordinating and efforts to review potential risks of large volumes of waste water being injected ... will be looked at, " he said.

(Reporting by Timothy Gardner; Editing by Gerald E. McCormick and Sofina Mirza-Reid)

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1 of 4. An opposition activist waves a flag portraying journalist Al-Hosseiny Abu Deif during his funeral in Cairo December 19, 2012. Abu Deif died on December 6, 2012 during clashes between supporters and rivals of Egyptian President Mohamed Mursi. Egyptian Islamist groups are planning a mass protest in Alexandria on Friday, a move that will raise tensions a day before the final stage of a referendum on a new constitution that has split the nation.

ALEXANDRIA, Egypt | Fri Dec 21, 2012 4:34am EST

ALEXANDRIA, Egypt (Reuters) - Egyptian Islamists prepared to stage a rally in Alexandria on Friday that could fuel tensions on the eve of a divisive referendum that will shape the most populous Arab nation's political future.

The Muslim Brotherhood called for the mass gathering after a violent confrontation between Islamists and the liberal, secular opposition in Egypt's second city last week ended with a Muslim preacher besieged inside his mosque for 14 hours. Rival factions were armed with clubs, knives and swords.

The run-up to the vote on a new constitution has been marked by often violent protests that have cost at least eight lives.

Islamists formed groups checking worshippers arriving for Friday prayers at Alexandria's al-Qaid Ibrahim mosque, scene of last week's violence. Riot police were deployed nearby.

Banners referring to last week's clashes read: "Our revolution will remain peaceful despite the thugs."

President Mohamed Mursi and his Islamist allies back the draft constitution as a vital step in Egypt's transition to democracy almost two years after the fall of Hosni Mubarak.

The opposition, facing defeat in the referendum, has called for a "no" vote against a document it views as leaning too far towards Islamism.

The first day of voting on December 15 resulted in a 57 percent majority in favor of the constitution. The second stage on Saturday is expected to produce another "yes" vote as it covers regions seen as more conservative and likely to back Mursi.

The National Salvation Front, the main opposition coalition, said a "no" vote meant taking a stand against attempts by the Muslim Brotherhood, Mursi's political base, to dominate Egypt.

"For the sake of the future, the masses of our people should strongly and firmly say 'no' to injustice and 'no' to the Brotherhood's dominance," the Front said in a statement.

POLL WITHIN TWO MONTHS

The constitution must be in place before elections can be held. If it passes, the poll should be held within two months.

Mursi and his backers say the constitution is needed to seal a transition from decades of military-backed autocratic rule. Opponents say it ignores the rights of women and minorities, including the 10 percent of Egyptians who are Christian.

Demonstrations erupted when Mursi awarded himself sweeping powers on November 22 and then fast-tracked the constitution through a drafting assembly dominated by his Islamist allies and boycotted by many liberals.

The referendum is being held over two days because many of the judges needed to oversee polling stayed away in protest. In order to pass, the constitution must be approved by more than 50 percent of those voting.

Adding to the uncertainty as the final round of the referendum approaches, Egypt's chief prosecutor suddenly announced that he was retracting his decision to quit.

Prosecutor Talaat Ibrahim, appointed by Mursi when he assumed his new powers, said he had changed his mind because his resignation on Monday was under duress.

Ibrahim had quit after more than 1,000 members of his staff gathered at his office to demand he step down because his appointment by the president, rather than by judicial authorities, threatened the independence of the judiciary.

After he announced he was staying, several prosecutors announced they were suspending work and would stage an open-ended protest outside Ibrahim's office.

(Writing by Giles Elgood; Editing by Alistair Lyon)

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MOMBASA, Kenya | Fri Dec 21, 2012 4:43am EST

MOMBASA, Kenya (Reuters) - Thirty-nine people, including several children, were killed in tribal violence in Kenya's coastal Tana Delta region on Friday, police said, heightening security concerns ahead of next year's presidential election.

Tribal fighting on the northern coast and deadly riots in the port city of Mombasa have raised fears that the March 2013 election in east Africa's biggest economy will be marred again by violence and electoral abuses.

Police said Friday's raid on a village appeared to have been a revenge attack after clashes in August between farmers from the Pokomo tribe and semi-nomadic Orma tribesmen, who have fought for years over access to grazing, farmland and water in the coastal region. They said six women and 13 children were among the dead and nine of the attackers were killed.

More than 100 people were killed in a series of attacks in the area in August and September.

"About 150 Pokomo raiders attacked Kipao village which is inhabited by the Ormas early on Friday. The Ormas appeared to have been aware and were prepared," Robert Kitur, Coast Region deputy police chief, told reporters.

He said the raiders used firearms, spears, machetes and arrows, adding: "We have identified where the attackers came from and are pursuing them."

Kenya Red Cross, which has a team on the ground treating the wounded, put the death toll at 30, including several children, with about 45 houses set on fire. Red Cross photographs posted on Twitter showed the injured being treated for serious cuts to the arms and head. One person had lost an arm.

Tourist numbers on the coast have tumbled over fears of a repeat of the ethnic violence that rocked Kenya after the disputed 2007 election.

(Writing by Drazen Jorgic; Editing by George Obulutsa and Janet Lawrence)

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WASHINGTON | Thu Dec 20, 2012 6:05pm EST

WASHINGTON (Reuters) - The White House on Thursday came to the defense of former Republican Senator Chuck Hagel against critics who have attacked his record on Israel and Iran in a bid to head off his possible nomination as President Barack Obama's next Pentagon chief.

With Hagel considered a leading choice for defense secretary, the administration joined allies rallying to support him against the onslaught, led by some pro-Israel groups and neo-conservatives, but also including former colleagues on Capitol Hill.

It was the second time since Obama's re-election last month that the White House has found itself forced to defend a Cabinet candidate who has yet to be nominated for anything, a source of frustration for the president's advisers.

Obama's aides have been preparing for a realignment of his national security team, possibly by Friday, sources familiar with the process have said. But with Obama focused on the "fiscal cliff" standoff and the Hagel controversy also fueling concerns, an announcement could easily be delayed.

Some American Jewish leaders contend Hagel, who left the Senate in 2008, at times opposed Israel's interests, voting several times against U.S. sanctions on Iran, and made disparaging remarks about the influence of what he called a "Jewish lobby" in Washington.

White House spokesman Jay Carney made clear Obama's faith in the former lawmaker, who is a decorated Vietnam war veteran.

"Senator Hagel fought and bled for his country. He served his country well. He was an excellent senator," Carney said, without acknowledging that Hagel was under consideration to succeed Defense Secretary Leon Panetta. He did not address any of the specific criticisms aimed at Hagel.

The controversy over Hagel's possible nomination comes after U.N. Ambassador Susan Rice withdrew from consideration for secretary of state last week amid withering attacks from Republicans over her role in initial explanations of the deadly September assault on the U.S. consulate in Benghazi, Libya.

"We've been through this before with Ambassador Rice where there's an effort to go after somebody," Carney said.

The drumbeat of criticism against Hagel could prompt Obama to reconsider whether it would be worth the likely Senate confirmation battle. But the White House has given no sign of dropping him the president's short list.

Obama himself has been criticized by some Jewish leaders for his approach to close U.S. ally Israel, especially given his strained relations with Prime Minister Benjamin Netanyahu.

BATTLE LINES DRAWN

Some of the attacks on Hagel stem from comments he made to former U.S. diplomat Aaron David Miller for his 2008 book, "The Much Too Promised Land," in which Hagel was quoted as saying, "The Jewish lobby intimidates a lot of people up here."

Senator Lindsey Graham of South Carolina, a member of the Armed Services Committee, said earlier this week that Hagel would "have to answer for that comment" if he is nominated.

William Kristol of the conservative Weekly Standard wrote in a recent column that Hagel "has anti-Israel, pro-appeasement-of-Iran bona fides."

Hagel's supporters have started firing back, insisting he has shown himself supportive of Israel and tough on Iran.

"His views are strong, solid on American foreign policy. I'm amazed at the turnout of the neo-cons and so on," Brent Scowcroft, national security adviser under President George H.W. Bush, told Reuters.

He was referring to the neo-conservatives, a loose group of right-wing foreign policy thinkers who gained ascendancy during the tenure of Obama's Republican predecessor, George W. Bush.

And Jeremy Ben-Ami, president of J Street, a liberal American Jewish group, denounced what he said was a "smear campaign" against Hagel.

Democratic presidents have sometimes turned to Republicans to fill key national security posts. Former President Bill Clinton chose former Senator William Cohen to lead the Defense Department, and Obama kept Robert Gates, former President George W. Bush's last defense secretary, on board for part of his term.

QUESTIONS ON CUBA

Florida Republican Senator Marco Rubio's office said he also would have questions about Hagel's record on Cuba, and raised the possibility of putting a hold on his nomination. Hagel has voiced doubts about the wisdom and effectiveness of maintaining the decades-old U.S. trade embargo on communist Cuba.

"Promoting democracy in Latin America is a priority for Senator Rubio, and he's put holds on other administration nominees over the issue," said Rubio spokesman Alex Conant.

"If President Obama were to nominate Senator Hagel for a cabinet position, I'm sure we would have questions about Cuba positions." Rubio is Cuban-American.

Adding to the sense of battle lines drawn, Hagel's critics and allies are circulating dueling fact-sheets on Capitol Hill.

Many Republicans consider Hagel suspect. He was an early dissenter on the Iraq war - an issue that helped Obama rise to prominence - and crossed the aisle to endorse the president in his successful re-election bid this year.

Since leaving the Senate after two terms, he has also been a vocal critic of his own party's fiscal policies.

Obama is said to feel comfortable with Hagel. The two traveled together to the Middle East during the 2008 campaign. Hagel currently co-chairs Obama's Intelligence Advisory Board.

(Additional reporting by Steve Holland and Warren Strobel; editing by Todd Eastham)

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Mayor of Newark, New Jersey, Cory A. Booker reacts during the first day of the Democratic National Convention in Charlotte, North Carolina September 4, 2012.

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Senate Majority Leader Harry Reid (D-NV) speaks to the media about the ''fiscal cliff'' on Capitol Hill in Washington December 18, 2012.

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Ohio Governor John Kasich speaks during the CERAWEEK world petrochemical conference in Houston March 7, 2012.

COLUMBUS, Ohio | Thu Dec 20, 2012 6:36pm EST

COLUMBUS, Ohio (Reuters) - Ohio's Republican Governor Johns Kasich on Thursday signed into law a measure that would slightly weaken the state's law on carrying concealed weapons, less than a week after a Connecticut school massacre focused national attention on gun control.

The bill would require Ohio residents demonstrate competency with the weapon only once rather than each time the concealed carry permit expires. It also would allow carrying concealed weapons in the parking garage of the State Capitol.

Kasich signed the bill along with 41 others and did not hold a signing ceremony. A press release summarizing his actions put the gun law near the bottom of list of those signed.

Kasich foreshadowed the action earlier in the week, telling reporters he would sign it: "Whatever we do, we don't want to erode the Second Amendment rights of law abiding citizens."

The Second Amendment to the U.S. Constitution gives American citizens the right to bear arms.

Democratic state Representative Tracy Maxwell Heard said Kasich should not have signed such a "divisive" bill less than a week after a national tragedy.

"Rather than rushing to sign legislation that weakens our gun laws, we must use this time for a full, inclusive reflection," Maxwell Heard said.

Last Friday, a gunman opened fire at an elementary school in Newtown, Connecticut, killing 20 children and six adults before shooting himself.

Michigan's Republican Governor Rick Snyder on Tuesday vetoed a proposed law that would have allowed some gun owners to bring concealed weapons into public places such as schools. Snyder said that the Connecticut shooting had influenced his decision.

(Editing by Greg McCune, desking by G Crosse)

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1 of 2. The U.S. Consulate in Benghazi is seen in flames during a protest by an armed group said to have been protesting a film being produced in the United States in this September 11, 2012 file photo. U.S. Secretary of State Hillary Clinton said December 19, 2012, she accepted the findings of an independent panel that faulted the State Department over the deadly September attack and had ordered widespread changes to bolster US. Diplomatic security overseas.

WASHINGTON | Thu Dec 20, 2012 5:06pm EST

WASHINGTON (Reuters) - The U.S. State Department will seek billions of dollars in new funds and revamp security procedures around the globe in response to criticism by an independent investigation of the September 11 attack on the U.S. mission in Benghazi, Libya, senior officials said on Thursday.

U.S. Secretary of State Hillary Clinton's two top deputies appeared at a Senate hearing and conceded that U.S. officials had failed to "connect the dots" ahead of the attack, which killed U.S. Ambassador to Libya Christopher Stevens and three other Americans.

"We learned some very hard and painful lessons in Benghazi," said Deputy Secretary of State William Burns. "We are already acting on them. We have to do better."

The State Department said on Wednesday its security chief had resigned and three other officials were relieved of their posts following the report, which cited leadership and management deficiencies, poor coordination and confusion over who had the authority to make decisions.

Senate Foreign Relations Committee Chairman John Kerry, tipped to be President Barack Obama's pick to replace Clinton when she steps down next month, chaired the session and led the call for increased funding.

"We need to make certain that we are not penny wise and pound foolish when it comes to supporting America's vital interest overseas," Kerry, a Massachusetts Democrat, said.

SECURITY SPENDING EYED

Clinton, unable to appear at the hearing due to illness, has already asked for $1.4 billion in funds for the 2013 fiscal year to be re-allocated to improve security at U.S. diplomatic missions, a State Department fact sheet said.

The State Department is also expected to request $2.3 billion per year for the next 10 years to further this work.

Some Republican lawmakers challenged the call for more money.

"If the State Department intends to blame its long string of failures on inadequate funding, then perhaps it should take a closer look at the money that is being lavished on global climate change, culinary diplomacy programs and other favored projects," House Foreign Affairs Committee chairwoman Ileana Ros-Lehtinen, said at an afternoon hearing.

But the panel's top Democrat, Representative Howard Berman, said the diplomatic security budget was cut so often it "created a culture at the State Department that is more preoccupied with saving money than with achieving its security goals."

Deputy Secretary of State Thomas Nides said the department had formed a task force to implement 29 specific recommendations in the panel's report and sent security assessment teams to 19 U.S. missions in 13 countries.

The department, in cooperation with the Pentagon, intends to send 35 additional Marine detachments, or about 225 uniformed personnel, to beef up security at medium- and high-threat posts and to boost staffing of its own Bureau of Diplomatic Security by about 5 percent, or 150 additional agents, Nides said.

"Implementation of each and every recommendation will be under way by the time the next secretary of state takes office," Nides said.

The State Department said Bill Miller, a diplomatic security special agent since 1987 who has served in Egypt and Iraq, was appointed deputy assistant secretary of state for high-threat posts - a new position in the Bureau of Diplomatic Security.

The job will focus on U.S. posts in Afghanistan, Azerbaijan, Egypt, Indonesia, Iraq, Jordan, Kenya, Libya, Mauritania, Nigeria, Pakistan, Somalia, South Sudan, Sudan, Syria, Tunisia and Yemen, the State Department said.

The Benghazi incident could tarnish Clinton's four-year tenure as secretary of state but the report does not fault her specifically.

Burns said to his knowledge the security requests from diplomats in Libya "did not get as far as Secretary Clinton."

White House spokesman Jay Carney said Obama endorsed the recommendations of the Benghazi report and expects them to be fully implemented.

"Immediately, accountability has been brought to bear with regard to four individuals who are very senior," he said.

'SCLEROTIC' DEPARTMENT

Republican Senator Bob Corker, an outspoken critic of the Obama administration's response to Benghazi, said the panel report revealed a "sclerotic" State Department that has failed to make good use of the resources already at its disposal.

"We have no idea whether the State Department is using its money wisely or not," he said.

Nides said the department still was coming to terms with widespread changes across the Middle East and defended the department's overall track record.

"We get this right about 99 percent of the time. We would like to be at 100 percent without question," he said.

Republicans have focused much of their firepower on U.S. Ambassador to the United Nations Susan Rice, who appeared on TV talk shows after the attack and suggested it was the result of a spontaneous protest rather than a planned attack.

The report concluded there was no such protest and Rice, who had been widely seen as Obama's top pick to succeed Clinton, withdrew her name from consideration last week.

U.S. officials say the assault, which occurred on the anniversary of the September 11, 2001, attacks on New York and Washington, was the work of Islamist extremists and have pledged to bring those responsible to justice.

Burns said the attack highlighted the need to take a broader look at security rather than focus on "specific and credible" threats, which officials insist were absent in Benghazi.

"What happened in Benghazi was clearly a terrorist attack," Burns said. "We did not do a good enough job, as the report highlights, in trying to connect the dots."

(Additional reporting by Tabassum Zakaria and Mark Felsenthal; Editing by Bill Trott and Todd Eastham)

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1 of 13. A military honor guard carries the casket of Senator Daniel Inouye (D-HI) as it arrives on Capitol Hill in Washington December 20, 2012.

WASHINGTON | Thu Dec 20, 2012 3:54pm EST

WASHINGTON (Reuters) - Scores of members of the U.S. Congress put aside partisan fights on Thursday to gather in solemn tribute to Senator Daniel Inouye, who represented Hawaii in Congress since its statehood and received the rare honor of lying in state in the Capitol Rotunda.

A highly decorated World War Two veteran who lost an arm in battle, the Democrat who led the powerful Appropriations Committee was remembered as quiet, unassuming and genuine.

"Lord, we're grateful for the excellence that distinguished his significant career, the quiet grace and dignity with which he represented the Aloha State," Senate Chaplain Barry Black prayed as nearly every member of the U.S. Senate and many U.S. representatives gathered around the flag-draped casket.

Inouye died on Monday at the age of 88. He was chairman of the Appropriations Committee, the second-longest serving senator ever and third in the line of presidential succession as the Senate's senior member.

Inouye became Hawaii's first full-fledged member of the U.S. House of Representatives on August 21, 1959, when Hawaii became the 50th state. He was elected to the U.S. Senate in 1962.

After nine consecutive Senate terms, he was the only member of Hawaii's original congressional delegation still serving on Capitol Hill. He was the highest-ranking elected Asian-American official in U.S. politics.

"He leaves behind a legacy of public leadership and private kindness that will not be forgotten as long as these walls stand," Senate Majority Leader Harry Reid, a Democrat, said.

In what Republican House Speaker John Boehner called "a quiet ceremony for a quiet man," members of the U.S. armed services carried in and saluted Inouye's casket as many of his friends and colleagues placed their hands on their hearts.

Congressional leaders and Vice President Joe Biden, who served in the Senate with Inouye, later placed three wreaths around the casket.

The last U.S. dignitary to lie in state in the Rotunda was former U.S. President Gerald Ford, in 2006.

BIPARTISAN SHOW

In a rare show of bipartsanship, Reid, Boehner and Biden recounted stories from Inouye's career in the military and in Congress, echoing each other in recalling his loyalty to the United States, genuineness and quiet presence that inspired respect.

"No one, no one, in the 40 years I served with him, ever, ever, ever, ever, ever once doubted he would do what he said," Biden said. "No one ever doubted his motive."

Inouye enlisted in the U.S. Army at age 17, shortly after the 1941 Japanese attack at Pearl Harbor. A son of a Japanese immigrant, Inouye had to petition the government for the right to serve in the U.S. military because he was declared an "enemy alien" for his Japanese heritage.

Inouye lost his right arm in battle in Italy in 1945, earning a Purple Heart. He also received the Medal of Honor, the highest award for military valor.

"Danny had the most fulsome embrace of life with one arm as any man could have with two," Biden said.

"He was, in every sense, the quintessential American."

Under Hawaii law, Democratic Governor Neil Abercrombie will name a successor to fill Inouye's seat until a new senator is chosen in the 2014 general election.

Inouye will lie in state at the National Cathedral in Washington on Friday, and at Hawaii's state capitol in Honolulu on Saturday before a final memorial service at the National Memorial Cemetery of the Pacific on Sunday.

(Reporting by Alina Selyukh; Editing by Vicki Allen)

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LAS VEGAS | Fri Dec 21, 2012 2:26am EST

LAS VEGAS (Reuters) - A seven-term U.S. congresswoman from Nevada, Shelley Berkley, violated ethics rules by using her office to try to help her husband's medical practice but had no "corrupt intent" in doing so, the U.S. House Ethics Committee said on Thursday.

The committee said no further action was needed against the Democratic member of the House of Representatives. It had launched a probe in July into allegations Berkley may have been improperly involved in a bid to help save a hospital program linked to her husband's business.

Berkley's husband, Larry Lehrner, is a kidney specialist who owns a string of dialysis facilities and had a contract with the transplant unit at University Medical Center in Las Vegas when it was threatened with closure.

Nevada Republicans asserted in their initial complaint to Congress that Berkley would have directly benefited financially from her involvement in the 2008 case due to her husband's links to the hospital's kidney center.

Berkley, who failed in November to unseat Nevada Republican Dean Heller from his U.S. Senate seat in a narrow race, has said her effort to help keep the center open when it was facing federal action that could have resulted in its closure was not motivated by a potential financial interest.

She said she did nothing wrong.

A House Ethics panel agreed that her work to help the transplant center did not constitute a violation, but said that it was a mistake for her office to assist her husband's dialysis business in getting payment reimbursements.

"Representative Berkley had a legitimate concern, raised at the time that these issues were ongoing, that failures on the part of government insurers to reimburse providers in a timely fashion might result in the providers opting not to see patients insured by those programs," the Ethics Committee said in a statement.

It added that Berkley testified credibly that she had not helped her husband to obtain future benefits, and that the level of assistance her office provided him was not unusual compared to that given to other doctors.

But the panel ruled that she was mistaken when she determined her course of action was proper, although her lack of "any corrupt intent" mitigates the severity of the violations.

Heller, who had been a member of the House at the time, also joined in the Nevada delegation's efforts to keep the government from closing the kidney unit.

(Reporting by Cynthia Johnston; Editing by Lisa Shumaker)

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United States Ambassador to the United Nations Susan Rice speaks with Reuters at the B'Nai Torah Congregation in Boca Raton, Florida, in this May 10, 2012 file photo.

NEW YORK | Thu Dec 20, 2012 3:36pm EST

NEW YORK (Reuters) - With any hopes for replacing Hillary Clinton as the top U.S. diplomat dashed, Susan Rice told the annual U.N. Correspondents Association dinner "there's nowhere in the world I'd rather be tonight" - speaking against a backdrop of the State Department.

In a rare lighthearted moment, Rice made fun of her ill-fated appearance on several Sunday morning television shows in September that sparked anger among Republicans. On those shows she suggested that street protests, and not militants, were behind a September 11 attack on the U.S. mission in Benghazi, Libya, in which four Americans were killed, including the U.S. envoy.

Her television remarks turned out to be incorrect and Republican critics accused Rice, the U.S. ambassador to the United Nations, of misleading the American public. She defended herself by saying her remarks had been cleared by U.S. intelligence agencies beforehand.

"My talking points for this evening have been provided to me and fully cleared by the intelligence community, so how could this possibly go wrong?" Rice told a New York audience of 540 on Wednesday that included Hollywood actor and former California governor Arnold Schwarzenegger and U.N. chief Ban Ki-moon.

Rice withdrew her candidacy for the post of secretary of state last week, saying the Senate confirmation hearings would have been overly contentious.

The 48-year-old diplomat, who has a reputation for bluntness and caustic language during closed-door negotiations of the U.N. Security Council, also made fun of her diplomatic dust-ups with Russian envoy Vitaly Churkin, who has criticized her vocabulary.

To have a dig at Churkin, she recalled the oft-ridiculed remark of former Alaska governor and 2008 Republican vice-presidential candidate Sarah Palin that she could see Russia from Alaska.

"Day after day, I engage in highly substantive, highly technical negotiations with my colleagues here at the U.N., like the Russians," Rice said. "As a matter of fact, I can see the Russian mission from my house."

(Reporting By Louis Charbonneau and Michelle Nichols; Editing by Vicki Allen)

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1 of 4. House Speaker John Boehner makes a brief statement to the media at the Capitol in Washington December 19, 2012.

WASHINGTON | Thu Dec 20, 2012 10:28pm EST

WASHINGTON (Reuters) - Republican lawmakers delivered a stinging rebuke to their leader, House of Representatives Speaker John Boehner, on Thursday when they failed to back an effort designed to extract concessions from President Barack Obama in year-end "fiscal cliff" talks.

The dramatic twist threw into disarray attempts to head off $600 billion worth of indiscriminate tax hikes and spending cuts that could push the U.S. economy into recession next year.

It also cast doubt over Boehner's future as speaker after failing to control unruly conservatives in his caucus.

With only 11 days left for bickering politicians to prevent automatic tax hikes and spending cuts, U.S. stock futures fell sharply on the news of the rebuke to Boehner.

The Ohio congressman had hoped to demonstrate Republican unity by passing a bill through the House, known as "Plan B," that would limit income-tax increases to the wealthiest sliver of the population - those earning $1 million and more, a far smaller slice of taxpayers than Obama wants to pay higher taxes.

But Boehner canceled the vote after failing to round up enough support from his party because many conservative Republicans are opposed to tax hikes on even the richest wage-earning Americans.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement after huddling with other Republican leaders.

The White House pledged to work with Congress to reach a deal as quickly as possible.

"We are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy," White House spokesman Jay Carney said in a statement.

The bill, had it passed, would have put Republicans on record as supporting a tax increase on those who earn more than $1 million per year, breaking with decades of orthodoxy. It won the blessing of influential anti-tax activist Grover Norquist, but other conservative groups fiercely opposed it and many rank-and-file members said they would not support it.

Obama wants to raise taxes on families earning more than $400,000, a much lower threshold.

RECESSION THREAT

Obama and Boehner aim to reach a deal before the New Year, when taxes will automatically rise for nearly all Americans and the government will have to scale back spending on domestic and military programs. Economists say the combined $600 billion hit to the economy could push the U.S. economy into recession.

Boehner said Obama now must first pass a bill through the Democratic-controlled Senate before he holds another vote in the House.

Democrats said Boehner should first hammer out a deal with Obama. "The only way to avoid the cliff altogether is for Speaker Boehner to return to negotiations," said Adam Jentleson, a spokesman for Senate Democratic Leader Harry Reid.

With Republicans in chaos, Boehner will almost certainly need support from House Democrats to pass a deal before the end of the year. But he will have to keep an eye on his right flank before he stands for re-election as the top House lawmaker on January 3.

Alternatively, Boehner could wait until the new year to hold a vote. At that point, tax cuts passed in 2001 and 2003 will have expired for all Americans, and it presumably would be easier to pass a bill that would restore tax cuts for most.

Opinion polls show that more Americans would blame Republicans rather than Obama if they don't reach a deal before then.

So far, negotiations appear to be following the dysfunctional pattern set by the 2011 battle over the debt ceiling: fitful progress alternating with public posturing. Boehner also struggled during that showdown to corral the most conservative members of his own party.

Washington narrowly avoided defaulting on the U.S. government's debt in August 2011, but the down-to-the-wire nature of the effort prompted a first-ever debt rating downgrade and spooked investors and consumers.

This time around, concern over the fiscal cliff has weighed on markets but analysts say that investors appear to be assuming that the two sides will avert disaster.

"The markets are likely to interpret this as signaling even tougher negotiations in coming days," Mohamed El-Erian, chief executive of bond giant PIMCO, told Reuters.

S&P 500 stock futures fell 1.6 percent while Dow Jones stock futures and Nasdaq futures both lost 1.5 percent. At one point S&P 500 e-mini futures were down as much as 3.6 percent.

Lawmakers had hoped to wrap up work before the year-end Christmas break, but leaders in both the House and the Senate have indicated that they may call members back to work next week.

"The brinkmanship will continue," said a senior Republican aide. "This isn't the end of the story. More drama to come."

(Additional reporting by Thomas Ferraro, Mark Felsenthal, Richard Cowan, Jennifer Ablan, Dominic Lau and Kim Dixon; Writing by Andy Sullivan; Editing by Philip Barbara)

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Piles of clothes are seen alongside sewing machines in the Tazreen Fashions garment factory, where 112 workers died in a devastating fire last month, in Savar November 30, 2012.

WASHINGTON | Thu Dec 20, 2012 9:04pm EST

WASHINGTON (Reuters) - A dozen U.S. lawmakers pressed President Barack Obama's administration on Thursday to complete a long-running review that could lead to suspension of trade benefits for Bangladesh after a deadly factory blaze there last month.

"We are seriously concerned about the deterioration of working conditions and worker rights in Bangladesh," the congressional Democrats said in a letter to U.S. Trade Representative Ron Kirk.

"The latest apparel industry fire, with over 100 workers killed, in the Tazreen garment factory is the latest in a series of events and practices constituting this decline," the lawmakers said.

A Bangladeshi panel investigating the November 24 fire at the Tazreen Fashion Factory that killed 112 workers concluded it was the result of both sabotage and negligence.

A U.S. trade official said Kirk's office had been concerned about the worker-rights situation in Bangladesh for some time and had conveyed those concerns to the Bangladeshi government on numerous occasions.

The Tazreen fire had "intensified our concerns," the official said.

"USTR takes the rights and conditions of workers very seriously and we are carefully reviewing this situation to determine next steps, including with respect to an ongoing review of worker rights in Bangladesh under the Generalized System of Preferences (GSP) program," the official said.

The Tazreen tragedy put a spotlight on global retailers that source clothes from Bangladesh, where labor costs are as little as $37 a month for some workers. Human rights groups have called on big-brand firms to sign up a fire-safety program.

The largest U.S. labor organization, the AFL-CIO federation, has raised concerns for years about working conditions in Bangladesh and filed a petition in 2007 asking for a review of trade benefits for the country under the GSP program, which waives U.S. import duties for poor countries on thousands of goods.

GSP rules require a country to demonstrate that it is "taking steps to afford internationally recognized human rights," the U.S. lawmakers said. "We believe it is vital that your office complete your assessment of Bangladesh's compliance with these requirements."

(Reporting By Doug Palmer; Editing by David Brunnstrom)

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Thu Dec 20, 2012 9:57pm EST

n">(Reuters) - Research In Motion shares tumbled more than 10 percent on Thursday after the company reported the first ever decline in its subscriber numbers and outlined plans to transform the way it charges for its BlackBerry services.

RIM, which hopes to revive its fortunes and reinvent itself via the launch of a brand new line of BlackBerry 10 devices next month, caught investors off-guard on its quarterly conference call, when it said it plans to alter its service revenue model - a move that will pressure the high-margin business that accounts for about a third of RIM's sales.

"RIM provided few details regarding the economics of these changes, thus adding a large cloud of uncertainty to the primary driver of its profitability, which we view as especially worrisome given risks already surrounding the firm's massive BlackBerry 10 transition," said Morningstar analyst Brian Colello.

Those subscribers who need enhanced services like advanced security will pay for these services, while those who do not use such services will generate much lower to no service revenue, RIM Chief Executive Thorsten Heins told analysts and investors on a conference call on Thursday.

"I want to be very clear on this. Service revenues are not going away, but our business model and service offerings are going to evolve ... The mix in level of service fees revenue will change going forward and will be under pressure over the next year," cautioned Heins.

The news startled investors, who had earlier in the evening pushed RIM's stock more than 7 percent higher in post-market trading, after the company reported a narrower-than-expected quarterly loss and said it boosted its cash cushion ahead of next month's crucial launch of the BlackBerry 10 smartphone.

RIM's shares have for weeks been on a tear as optimism around BB10 has grown. Following RIM's surprise announcement on service revenues, however, the stock ended 9 percent lower at $12.85 in trading after the closing bell.

Analysts also expressed concern about the decline in RIM's subscriber base.

"The early reaction was probably just 'Hey, numbers looked OK, better loss, the cash flow was good' but if you know the company, you're looking at the subscriber base falling off," said Mark McKechnie at Evercore Partners in San Francisco.

CASH BALANCE

One reason the shares rose earlier was RIM managed to build up its cash cushion to $2.9 billion from $2.3 billion in the previous quarter.

Analysts have been keeping a sharp eye on the size of RIM's cash pile, as RIM will need the funds to manufacture and effectively promote BlackBerry 10 in a crowded market.

RIM is counting on the new line to claw back market share lost in recent years to the likes of Apple Inc's iPhone and a slew of devices powered by Google Inc's Android operating system.

"They've done a great job at generating cash," said Raymond James analyst Tavis McCourt in Nashville. "They're certainly in a much better position than they were three or four quarters ago."

The Waterloo, Ontario-based company said it is now testing its BB10 devices with more than 150 carriers - up from about 50 carriers as of the end of October. RIM expects more carriers to come on board ahead of the formal launch of BB10 on January 30.

Positive feedback from developers and carriers around RIM's new BlackBerry 10 devices has buoyed the stock in the last three months. Despite the plunge in RIM's share price on Thursday, the stock has more than doubled in value the last three months.

SMALLER-THAN-EXPECTED LOSS

On an operating basis, RIM fared a little better than Wall Street had expected. It reported a loss of $114 million or 22 cents a share, excluding one-time items. Analysts, on average, had forecast a loss of 35 cents a share, according to Thomson Reuters I/B/E/S.

RIM also reported a surprise net profit of $9 million, or 2 cents a share, for its fiscal third quarter ended December 1, on the back of a one-time income tax related gain. That compared with a year-ago profit of $265 million, or 51 cents.

RIM said it shipped 6.9 million smartphones in the quarter, even as its subscriber base fell to about 79 million in the quarter from about 80 million in the period ended September 1.

In recent years, RIM's user base has grown, even as the BlackBerry lost ground in North America and Europe, boosted by gains in emerging markets. While eye opening, the shrinkage was not as bad as some observers expected during the last quarter before the BB10 launch.

"We're encouraged that the subscriber base only declined slightly during a very public transition, and BlackBerry sales were about what we expected," said Morningstar's Colello, who is based in Chicago.

(Reporting by Euan Rocha; Additional reporting by Alastair Sharp, Cameron French, Allison Martell and John Tilak in Toronto; Editing by Janet Guttsman, Frank McGurty, Jan Paschal and Chris Gallagher)

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Panasonic Corp logos are seen at an electronics store in Tokyo November 15, 2012.

TOKYO | Fri Dec 21, 2012 2:31am EST

TOKYO (Reuters) - Japan's Panasonic Corp said on Friday that it would appeal a decision by the European Commission to fine it 252 million euros ($327 million) on charges of fixing prices for TV and computer monitor cathode-ray tubes along with five other companies.

The European Commission fined six firms, including Philips, LG Electronics Toshiba Corp Samsung SDI and French company Technicolor a total of 1.47 billion euros, its biggest antitrust penalty in history.

The Commission on Dec 5 said executives from the European and Asian companies had met until six years ago to fix prices and divide up markets for TV and computer monitor cathode-ray tubes, a business that has since been replaced by flat panel displays.

Panasonic in a statement said it "will seek a fair judgment".

Until now, the Commission's biggest antitrust penalty had been a 1.38 billion euro fine imposed on participants in a car glass cartel in 2008.

(Reporting by Tokyo Newsroom; Editing by Ron Popeski)

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1 of 2. A woman walks past a Nokia advertisement board at a home appliances store in Shenyang, Liaoning province December 6, 2012.

HELSINKI | Fri Dec 21, 2012 4:18am EST

HELSINKI (Reuters) - Struggling Finnish mobile phone maker Nokia has settled its patent dispute with BlackBerry maker Research in Motion in return for payments, as it tries to exploit its trove of technology patents to boost its finances.

Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.

Nokia is one of the industry's top patent holders, having invested 45 billion euros ($60 billion) in mobile research and development over the past two decades.

It has been trying to make use of that legacy to ensure its survival, amid a fall in sales as well as cash. The Finnish firm is battling to recover lost ground in the lucrative smartphone market to the likes of Apple and Samsung.

The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC Corp and ViewSonic still stood.

"This agreement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market," said Paul Melin, Nokia's chief intellectual property officer.

Nokia has earned around 500 million euros a year from patent royalties in key areas of mobile telephony.

Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully.

Analysts estimated its June 2011 settlement with Apple was worth hundreds of millions of euros.

($1 = 0.7555 euros)

(Reporting by Ritsuko Ando; Editing by Hans-Juergen Peters and Mark Potter)

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n">(Reuters) - Instagram, the popular photo-sharing service, has retreated from some but not all of the controversial changes in its terms of service that prompted a fierce backlash from users earlier this week.

In a blog post on Thursday, Instagram founder and CEO Kevin Systrom apologized for a failure to "communicate our intentions clearly." The terms of service changes pertaining to advertising have been reversed, Systrom said, and restored to what they had been before the changes announced on Monday.

Instagram, which allows people to add filters and effects to photos and share them easily on the Internet, was acquired by Facebook earlier this year for $715 million.

Some top users of Instagram, including National Geographic magazine, said they would stop using the service after the new rules were announced on Monday.

Language that had appeared to allow Instagram advertisers to display user photos without compensation have been removed from updated terms of service posted on Thursday.

The updated terms also do not appear to contain a controversial provision which had stated that if a child under the age of 18 used the service, it implied his or her parent had tacitly agreed to Instagram's terms.

However, the new terms still contain a mandatory arbitration clause, which is not included in terms of service for other leading social media companies like Twitter, Google, YouTube or even Facebook itself. That immunizes Instagram from many forms of liability, according to legal experts.

Internet experts said Instagram had been very aggressive in asserting its rights to user information and inviting anyone who did not agree to delete their accounts within a few weeks.

The updated terms still say that anyone who accesses Instagram agrees to be bound by the new terms which are slated to go into effect on January 19.

Also, Instagram kept language which gave it the ability to place ads in conjunction with user content, and "that we may not always identify paid services, sponsored content, or commercial communications as such."

Instagram representatives could not immediately be reached for comment.

Systrom stressed in the blog post that the company had no intention of selling the photos that users post on the service. Many users had read the new terms of service as an indication that the company was reserving the right to do that.

"Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work," Systrom said.

(Reporting by Jonathan Weber and Dan Levine; Editing by Paul Tait and Michael Perry)

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The Apple logo hangs in a glass enclosure above the 5th Ave Apple Store in New York, September 20, 2012. Apple's iPhone 5 goes on sale tomorrow.

WASHINGTON | Thu Dec 20, 2012 6:04pm EST

WASHINGTON (Reuters) - Tech giant Apple Inc, battling Samsung Electronics Co over patents in several countries, argued on Thursday that a U.S. appeals court should reconsider its decision to overturn a pretrial sales ban on Samsung for infringement.

The U.S. Court of Appeals for the Federal Circuit in October overturned a pretrial sales ban ordered by a lower court in California. The order was to stop sales of Samsung's Galaxy Nexus smartphone.

Apple argued that this was inappropriate and asked for an "en banc review," which means that a larger panel of judges would reconsider the decision made by the three-judge panel in October.

The fight is over a single patent - one that allows the smartphone to search multiple data storage locations at once. For example, the smartphone could search the device's memory as well as the Internet with a single query.

Apple argued that the sales ban should be reinstated because it uses the patent in question and competes with Samsung. The three-judge panel had said that consumers did not buy Samsung phones primarily because of the patent, and thus, a sales ban was inappropriate.

It has become increasingly difficult for companies to win sales bans related to patent infringement in recent years. Such sales injunctions have been a key for companies trying to increase their leverage in courtroom patent fights.

Apple, in a different patent lawsuit, scored a sweeping legal victory over Samsung in August when a U.S. jury found Samsung had copied critical features of the hugely popular iPhone and iPad and awarded Apple $1.05 billion in damages.

The Nexus phone was not included in that trial, but is part of a tandem case Apple filed against Samsung earlier this year.

The case in the Federal Circuit is Apple Inc vs. Samsung Electronics Co Ltd et al., 12-1507.

Earlier this week, U.S. District Judge Lucy Koh rejected Apple's request for a permanent sales ban against 26 mostly older Samsung phones, though any injunction could potentially have been extended to Samsung's newer Galaxy products. Koh cited the Federal Circuit's Nexus ruling as binding legal precedent in her order.

In a separate court filing on Thursday, Apple said it intended to appeal Koh's ruling.

(Reporting by Diane Bartz; Editing by Leslie Gevirtz)

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n">(Reuters) - Red Hat Inc, the world's largest distributor of Linux operating software, posted third-quarter revenue above analysts' estimates on strong growth in its subscription business, sending its shares up 6 percent in after-market trading.

The company also said it would buy privately held ManageIQ, which provides management and automation programs for cloud computing, for $104 million in cash.

The acquisition, its fourth since October last year, is not expected to have any material impact to Red Hat's revenue for the fiscal year ending February 28.

Red Hat expects to earn between 29 cents and 30 cents per share in the fourth quarter, on revenue of $347 million to $351 million, it said on a conference call with analysts.

Analysts were expecting earnings of 30 cents on revenue of $350.9 million, according to Thomson Reuters I/B/E/S.

Third-quarter net income fell to $34.8 million, or 18 cents per share, from $38.2 million, or 19 cents per share, a year earlier.

On an adjusted basis, the company earned 29 cents per share, in line with expectations. Revenue rose 18 percent to $344 million, beating estimates of $338 million.

Red Hat's subscription revenue rose 19 percent to $294.2 million in the quarter ended November 30.

Shares of the Raleigh, North Carolina-based company were trading at $55.60 after the bell. The stock closed at $52.61 on the New York Stock Exchange on Thursday.

(Reporting by Neha Alawadhi; Editing by Krishna N. Das)

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The loading screen of the Facebook application on a mobile phone is seen in this photo illustration taken in Lavigny May 16, 2012.

SAN FRANCISCO | Thu Dec 20, 2012 4:35pm EST

SAN FRANCISCO (Reuters) - Facebook Inc unveiled a test on Thursday that charges users to send certain types of messages through the social network, the latest example of the company looking for new sources of revenue and profit.

Until now, Facebook's messaging system sends the most-relevant messages, including those from users' Facebook friends, into an Inbox and siphons off less-relevant messages, such as potential spam, in an "Other" folder.

"Today we're starting a small experiment to test the usefulness of economic signals to determine relevance," Facebook said. "This test will give a small number of people the option to pay to have a message routed to the 'Inbox' rather than the 'Other' folder of a recipient that they are not connected with."

A Facebook spokesman said the charge for the test is $1 per message, but added that the company is still looking for the "optimum" price. Users can only receive one of these paid, re-routed messages per week, he noted.

The company said its test service may be useful in certain situations, such as allowing users to send a message to someone they heard speak at an event but are not friends with, or contacting someone about a job opportunity.

Facebook, which went public earlier this year, is under pressure from Wall Street to find new sources of revenue and profit. The company has responded with a series of new services and tests in recent months. In September, the company said it would start charging merchants to run offers on its social network.

The test messaging service is similar to the InMail service from LinkedIn Corp, the professional networking rival to Facebook, which lets users with high-end subscriptions send messages to other LinkedIn members outside their networks.

"For the receiver, this test allows them to hear from people who have an important message to send them," Facebook added.

(Reporting by Alistair Barr; Editing by Dan Grebler)

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