Thursday, May 20, 2010

Nalco (NYSE:NLC) Gets Knocked by EPA

Nalco (NYSE:NLC) had a good thing going while it lasted, as its highly effective chemical dispersant Corexit, which was used to battle the oil spill by BP (NYSE:BP), has now been ordered by the U.S. Environmental Protection Agency to stop being used, as they caved in to pressure from radical environmentalist and "scientists" because of unproven, theoretical ideas it could cause more harm to the ecosystem at some future time.

I guess they'd rather allow harm to the ocean and marine animals and life today, which is provable harm, than to take a chance that some theoretical thing will happen in some distant future.

As far as it affects Nalco, it's unclear whether or not they'll provide some less effective oil dispersant or not. BP did order huge amounts of the original dispersant, which was a great boon to Nalco, greatly increasing that particular segment of the company; although it did only account for about 1 percent of their revenue until the oil accident.

With that in mind, the 5.26 percent drop in the share price of the company, or $1.26 drop today was unwarranted, and shouldn't cause much damage to their bottom line, and it could improve if they have what is being called a less-toxic chemical dispersant to offer.

This was a cowardly and ridiculous response by the EPA, and they should have ignored it, as there were tests done before the dispersant was used, and they, the Coast Guard and BP all concluded Corexit was safe.

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