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ST. LOUIS (AP) — The Environmental Protection Agency is at risk of misallocating nearly $1 billion in lead pipe replacement funding to the wrong states because it didn’t verify inaccurate data provided by Texas and Florida, an agency watchdog announced.

It’s possible that the EPA can avoid much of the misallocation and can recover some funds that already went where they shouldn’t have, the EPA’s Office of Inspector General said. But the errors mean some states with the biggest needs may have to wait longer for funds — or will get less than they should have, the OIG said in a report this week.

The EPA disputed the watchdog’s conclusions, saying it tried to balance evolving information on lead service lines in each state with the need to quickly allocate money from the Bipartisan Infrastructure Law. Officials promised to review future allocations for Texas and Florida.

At issue is a first-of-its-kind EPA survey that asked local officials to estimate the number of lead pipes in their state. Some states with long industrial legacies like Illinois and Michigan have far more than others. The bipartisan infrastructure law provided $15 billion to find and replace lead pipes. The survey was to ensure states with more pipes got more money.

But the EPA didn’t verify what states told them and there were glaring problems with the numbers provided by Texas and Florida, according to the inspector general. For example, a single data entry error by Houston caused the EPA to allocate nearly $120 million more to Texas than it probably should have in fiscal year 2023, the report said. When Houston told Texas officials about the mistake, the state didn’t inform the EPA, the report said.

“Florida seriously screwed up and Texas was obstinate,” said Tom Neltner, national director of the lead policy nonprofit Unleaded Kids.

The findings were released just weeks after the Biden administration finalized an ambitious rule mandating that most cities remove their lead pipes within a decade, highlighting how difficult that effort will be. Lead harms brain development in children and increases blood pressure in adults and the agency estimates it will cost $50-$80 billion to replace the country’s roughly 9 million lead pipes. Federal funds are vital for ensuring the cost doesn’t fall too heavily on homeowners.

“We have warned the EPA repeatedly about the real and significant consequences of using unreliable data. The Agency needs to fix these systemic flaws before more taxpayer dollars are misdirected,” said EPA Inspector General Sean W. O’Donnell.

O’Donnell’s office wants the agency to develop methods to verify state data. EPA says the OIG misunderstood the point of its survey and wants to focus on addressing the questionable Florida and Texas data and allocations. It’s considering what to provide to those states going forward.

Texas did not return a request for comment. The OIG provided an initial report on the problem in May. At that time, Florida said the EPA estimate for the state was premature and too high. They blamed the EPA for a flawed calculation. Florida officials did not respond this week to AP’s questions about the inspector general’s report.

The EPA survey was important because many water providers don’t know how many lead pipes they have or where they are. Before the survey, lead funding levels weren’t linked to how many pipes a state had. Accurate inventories are expensive and time-consuming so the agency relied on states to provide their best judgment so it could quickly distribute federal funds based more closely on each state’s needs.

“This agency effort redirected hundreds of millions of dollars to areas of the country with higher need for lead service line replacement,” the agency said.

The EPA also gave states a chance to update faulty data, and funds that aren’t used by states eventually are reallocated to places that can use it.

When the EPA initially released state results, however, some experts immediately raised questions about some, including Florida’s, because they differed widely from prior industry and nonprofit estimates. In 2023, Florida received the highest allocation in the country, Texas the fifth most.

The inspector general said that skepticism was warranted. The report said Florida used an estimation method that inflated its lead pipe count and inconsistently applied that methodology. The watchdog also talked directly to eight water providers that accounted for about 40% of the state’s total number of reported lead pipes. Four showed the OIG that they reported no known lead pipes.

“None of their responses matched the (lead pipe) data that the state submitted to EPA,” the report said, adding that one anonymous water system manager told the inspector general’s office that the data the state submitted for their system “made absolutely no sense.”

The EPA tried to collect better data from Florida, but state officials didn’t update their submission when given the chance. Florida was awarded its full amount — $254.79 million – for 2023, the report said. Its allotment was reduced to $228.68 million the following year — a high amount the inspector general also called into question.

“Flaws in Florida’s (lead pipe) data carry significant financial implications for other states,” the report said.

Neltner said it matters if Florida, a state with few lead pipes, spends a lot on searching for them when other states with documented problems desperately need money to get lead out of the ground now.

Even after the EPA allocates money, there’s time to correct problems. It is unclear how much Texas actually received in 2023, Neltner said. The following year, Texas was given the minimum. That meant that others states like Minnesota and New Jersey received more money.

DETROIT (AP) — Tesla’s third-quarter net income rose 17.3% compared with a year ago as its electric vehicle sales rose.

The Austin, Texas, company said Wednesday that it made $2.17 billion from July through September, more than the $1.85 billion profit it posted in the same period of 2023.

The profit came despite price cuts and low-interest financing that helped boost sales of the company’s aging vehicle lineup. It was the company’s first year-over-year quarterly profit increase of 2024.

Revenue in the quarter rose 7.8% to $25.18 billion, falling short of Wall Street analysts who estimated it at $25.47 billion, according to FactSet. Excluding one time items, Tesla made 72 cents per share, beating analyst expectations of 59 cents.

Shares in Tesla Inc. soared almost 9% in trading after Wednesday’s closing bell.

Earlier this month Tesla said it sold 462,890 vehicles from July through September, up 6.4% from a year ago and the first quarterly increase of 2024. The sales numbers were better than analysts had expected.

Even with sales drops in the first two quarters, Tesla said in its letter to shareholders that it expects slight growth in vehicle deliveries for the full year despite “ongoing macroeconomic conditions,” mainly high interest rates. Last year the company sold 1.8 million EVs worldwide.

The letter said that Tesla is on track to start production of new vehicles, including more affordable models, in the first half of next year, something investors had been looking for. The new vehicles will use parts from its current models and will be made on the same assembly lines as Tesla’s current model lineup, the letter said.

The new vehicles were not identified. CEO Elon Musk has said the company is working on a car that will cost about $25,000 as well as a purpose-built robotaxi.

By using parts from existing models and the current manufacturing system, Tesla won’t reach cost reductions that it previously expected. But the company said this method should enable more than 50% growth over 2023 production.

Tesla said it reduced the cost of goods per vehicle to its lowest level yet, about $35,100. “Despite sustained macroeconomic headwinds and others pulling back on EV investments, we remain focused on expanding our vehicle and energy product lineup, reducing costs and making critical investments in (artificial intelligence) projects and production capacity,” the letter said.

The company’s widely watched gross profit margin, the percentage of revenue it gets to keep after expenses, rose to 19.8%, the highest in a year, but still smaller than the peak of 29.1% in the first quarter of 2022.

During the quarter, Tesla’s revenue from regulatory credits purchased by other automakers who can’t meet government emissions targets hit $739 million, the second highest quarter in company history.

EVERETT, Wash. (AP) — Boeing reported a loss of more than $6 billion in the third quarter and immediately turned its attention to union workers who will vote Wednesday whether to accept a company contract offer or continue their crippling strike, which has dragged on for nearly six weeks.

New CEO Kelly Ortberg laid out his plan to turn Boeing around after years of heavy losses and damage to its reputation.

In remarks he planned to deliver later Wednesday to investors, Ortberg said Boeing needs “a fundamental culture change in the company.” To accomplish that, he said, company leaders need to spend more time on factory floors to know what is going on and “prevent the festering of issues and work better together to identify, fix, and understand root cause.”

Ortberg repeated that he wants to “reset” management’s relationship with labor “so we don’t become so disconnected in the future.” He expressed hope that machinists will vote to approve the company’s latest contract offer and end their strike.

“It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again,” he said.

The strike is an early test for Ortberg, a Boeing outsider who became CEO in August.

Ortberg has already announced large-scale layoffs and a plan to raise enough cash to avoid a bankruptcy filing. He needs to convince federal regulators that Boeing is fixing its safety culture and is ready to boost production of the 737 Max — a crucial step to bring in much-needed cash.

Boeing can’t produce any new 737s, however, until it ends the strike by 33,000 machinists that has shut down assembly plants in the Seattle area.

Ortberg has “got a lot on his plate, but he probably is laser-focused on getting this negotiation completed. That’s the closest alligator to the boat,” said Tony Bancroft, portfolio manager at Gabelli Funds, a Boeing investor.

Boeing said Wednesday that it lost $6.17 billion in the period ended Sept. 30, with an adjusted loss of $10.44 per share. Analysts polled by Zacks Investment Research were calling for a loss of $10.34 per share.

Revenue totaled $17.84 billion, matching Wall Street estimates.

Shares were flat before the opening bell.

Boeing hasn’t had a profitable year since 2018, and Wednesday’s numbers represent the second-worst quarter in Boeing’s history. The long-profitable company’s fortunes soured after two of its 737 Max jetliners crashed in October 2018 and March 2019, killing 346 people. Safety concerns were renewed when a panel blew off a Max during an Alaska Airlines flight in January.

Ortberg said Boeing is at a crossroads.

“The trust in our company has eroded. We’re saddled with too much debt. We’ve had serious lapses in our performance across the company, which have disappointed many of our customers,” the new CEO said. But he also highlighted the company’s strengths, including a backlog of airplane orders valued at a half-trillion dollars.

Investors were looking for Ortberg to project calm, determination and urgency when he presides over an earnings call for the first time since he ran Rockwell Collins, a maker of avionics and flight controls for airline and military planes, in the last decade.

The biggest news of the day, however, is likely to come Wednesday evening, when the International Association of Machinists and Aerospace Workers reveals whether striking workers are ready to go back to their jobs.

They will vote at union halls in the Seattle area and elsewhere on a Boeing offer that includes pay raises of 35% over four years, $7,000 ratification bonuses, and the retention of performance bonuses that Boeing wanted to eliminate.

Boeing has held firm in resisting a union demand to restore the traditional pension plan that was frozen a decade ago. However, older workers would get a slight increase in their monthly pension payouts.

At a picket line outside Boeing’s factory in Everett, Washington, some machinists encouraged colleagues to vote no.

“The pension should have been the top priority. We all said that was our top priority, along with wage,” said Larry Best, a customer-quality coordinator with 38 years at Boeing. “Now is the prime opportunity in a prime time to get our pension back, and we all need to stay out and dig our heels in.”

Best also thinks the pay increase should be 40% over three years to offset a long stretch of stagnant wages, now combined with high inflation.

“You can see we got a great turnout today. I’m pretty sure that they don’t like the contract because that’s why I’m here,” said another picketer, Bartley Stokes Sr., who started working at Boeing in 1978. “We’re out here in force, and we’re going to show our solidarity and stick with our union brothers and sisters and vote this thing down because they can do better.”

WASHINGTON (AP) – The unregulated carbon dioxide removal industry is calling on the U.S. government to implement standards and regulations to boost transparency and confidence in the sector that’s been flooded with billions of dollars in federal funding and private investment.

A report Wednesday by the Carbon Removal Alliance, a nonprofit representing the industry, outlined recommendations to improve monitoring, reporting, and verification. Currently the only regulations in the U.S. are related to safety of these projects. Some of the biggest industry players, including Heirloom and Climeworks, are alliance members.

“I think it’s rare for an industry to call for regulation of itself and I think that is a signal of why this is so important,” said Giana Amador, executive director of the alliance. Amador said monitoring, reporting and verification are like “climate receipts” that confirm the amount of carbon removed as well as how long it can actually be stored underground.

Without federal regulation, she said “it really hurts competition and it forces these companies into sort of a marketing arms race instead of being able to focus their efforts on making sure that there really is a demonstrable climate impact.”

The nonprofit defines carbon removal as any solution that captures carbon dioxide from the atmosphere and stores it permanently. One of the most popular technologies is direct air capture, which filters air, extracts carbon dioxide and puts it underground.

The Inflation Reduction Act and the Bipartisan Infrastructure Law have provided around $12 billion for carbon management projects in the U.S. Some of this funding supports the development of four Regional Direct Air Capture Hubs at commercial scale that will capture at least 1 million tons of carbon dioxide annually. Two hubs are slated to be built in Texas and Louisiana.

Some climate scientists say direct air capture is too expensive, far from being scaled and can be used as an excuse by the oil and gas industry to keep polluting.

Gernot Wagner, a climate economist at Columbia Business School at Columbia University, said this is the “moral hazard” of direct air capture — removing carbon from the atmosphere could be utilized by the oil and gas industry to continue polluting.

“It does not mean that the underlying technology is not a good thing,” said Wagner. Direct air capture “decreases emissions, but in the long run also extends the life of any one particular coal plant or gas plant.”

In 2023, Occidental Petroleum Corporation purchased the direct air capture company, Carbon Engineering Ltd, for $1.1 billion. In a news release, Occidental CEO Vicki Hollub said, “Together, Occidental and Carbon Engineering can accelerate plans to globally deploy (the) technology at a climate-relevant scale and make (it) the preferred solution for businesses seeking to remove their hard-to-abate emissions.”

Jonathan Foley, executive director of Project Drawdown, doesn’t consider carbon dioxide removal technologies to be a true climate solution.

“I do welcome at least some interventions from the federal government to monitor and verify and evaluate the performance of these proposed carbon removal schemes, because it’s kind of the Wild West out there,” said Foley.

“But considering it can cost ten to 100 times more to try to remove a ton of carbon rather than prevent it, how is that even remotely conscionable to spend public dollars on this kind of stuff?” he said.

Katharine Hayhoe, chief scientist of The Nature Conservancy and a distinguished professor at Texas Tech University, said standards for the direct carbon capture industry “are very badly needed” because of the level of government subsidies and private investment. She said there’s no single fix for the climate crisis, and many strategies are needed.

Hayhoe said these include improving the efficiency of energy systems, transitioning to clean energy, weaning the world off fossil fuels and maintaining healthy ecosystems to trap carbon dioxide. On the other hand, she said, carbon removal technologies are “very high hanging fruit.”

“It takes a lot of money and a lot of energy to get to the top of the tree. That’s the carbon capture solution,” said Hayhoe. “Of course we need every fruit on the tree. But doesn’t it make sense to pick up the fruit on the ground to prioritize that?”

Other climate scientists are entirely opposed to this technology.

“It should be banned,” said Mark Z. Jacobson, professor of civil and environmental engineering at Stanford University.

Carbon removal technologies indirectly increase the amount of carbon dioxide in the atmosphere, Jacobson said. The reason, he said, is that even in cases where direct air capture facilities are powered by renewable energy, the clean energy is being used for carbon removal instead of replacing a fossil fuel source.

“When you just look at the capture equipment, you get a (carbon) reduction,” Jacobson said. “But when you look at the bigger system, you’re increasing.”