The Republican-controlled House is expected on Wednesday to
vote on, and almost certainly approve, H.R. 3, the Northern
Route Approval Act.

The bill would declare a Presidential cross-border permit is
not required to approve the TransCanada Corp.’s
proposed pipeline, which would carry oil sands from Canada’s
Alberta province to refiners in Texas.

Obama’s advisers “would recommend that he veto this bill,”
the White House’s Office of Management and Budget said in a
statement of administrative policy.

Prospects for action on Keystone in the Senate, which is
held by Democrats, are uncertain.

A majority of the 100-member Senate wrote to Obama in
January urging approval of the project. But those 53 backers,
including nine Democrats, would be short of the 60 votes needed
to overcome a presidential veto.

In its statement the OMB said the House bill “conflicts with
longstanding Executive branch procedures regarding the authority
of the President, the Secretaries of State, the Interior, and
the Army, and the Environmental Protection Agency
administrator.”

It added that the State Department “is working diligently to
complete the permit decision process” for Keystone, making the
bill “unnecessary.”

A decision on the pipeline has been pending for over four
years. The project is strongly supported by much of the energy
industry as a boost to North American oil security, and by some
unions as a driver of job creation.

Environmental groups say the 830,000-barrel-per-day
pipeline would raise greenhouse gas emissions and lock the
United States into oil dependence for decades into the future.

U.S. security officials and private sector experts wonder what kinds of time-bombs can be – or have been – embedded by malware into computer networks, just waiting to explode.

Cyber espionage is already “the greatest transfer of wealth in history,” National Security Agency Director Keith Alexander, the top U.S. general in charge of cybersecurity, told the Reuters Cybersecurity Summit in Washington this week.

“Disruptive and destructive attacks on our country will get worse,” he said. “Mark my words, it will get worse.”

Stealing software or money – like the $45 million lifted from two Middle Eastern banks in a daring global plot revealed this month – might pale next to an attack that could, for example, switch off the lights in a major U.S. city.

That was the fear in New Orleans in February when a power outage struck the Super Bowl, the National Football League’s championship game, witnessed by tens of millions of viewers. The outage was blamed on an electrical relay device not a cyber attack.

“The known unknown is what I worry about,” U.S. Secretary of Homeland Security Janet Napolitano told the Summit.

“For example, we don’t have the identity of all the adversaries who are trying to either commit crimes or acts over the cyber networks. The things we know about, we can deal with. It’s the known unknown,” she added.

The military is a big target, something that Rear Admiral William Leigher, who is in charge of “information dominance” with the U.S. Navy, takes on board.

“Our networks see thousands of intrusion attempts every day…staying up with the threat, making sure that our defensive systems are up to par is probably one of the things that gets most of my attention,” Leigher said.

(For a video on what keeps cybersecurity experts up at night, click on reut.rs/YXcifd)

To be sure, the United States has not suffered the kind of destructive cyber attack that damaged some 30,000 computers at Saudi Arabia’s oil company, Saudi Aramco, last year. But experts said they were worried about the increasingly sophisticated cyber capabilities of countries such as China, Russia and Iran.

“This new growing trend of nation states engaged in cyber attacks that are designed to be destructive to parts of the U.S. economy is very, very concerning,” said Mike Rogers, chairman of the U.S. House Intelligence Committee.

“The ferociousness of these attacks is increasing and it’s something that we better get a handle on,” Rogers added.

Dmitri Alperovitch, co-founder of Crowdstrike, a security technology specialist firm that works with governments and private companies, said he is most concerned about Iran, particularly if there is a spike in tensions in the Middle East.

He is watching the attacks that have taken down the websites of more than a dozen U.S. banks in the past nine months. <ID:L2N0DY26C> There are no signs that hackers have managed to destroy or modify crucial financial data, but that is the fear.

“Attacks that focus on modifying data in the stealth way, sabotage, integrity attacks – those are the ones that are most insidious and those are the ones we really should worry about,” Alperovitch said.

The migration of ever more elements of the economy to the digital world opens the door to malfeasance.

“We keep hooking more and more stuff up to the Internet, so the attack surface keeps growing,” said Michael Daniel, cybersecurity policy coordinator at the White House. “Pretty soon your coffee maker and your refrigerator is going to be an attack vector because it’s going to be hooked up to the Internet.

(Reporting by Ros Krasny; Editing by Tiffany Wu and Leslie Gevirtz)

The outbreak, the severity of which is not yet known, is believed to be the first of PEDV in the western hemisphere, although the virus exists in much of the world.

The USDA’s National Veterinary Services Laboratories has detected the virus in the Iowa hog population, a Department of Agriculture spokesman said.

Cindy Cunningham, spokeswoman for the National Pork Board in Des Moines, Iowa, said: “It may be a little bit more widespread than just with Iowa at this point … we’re still trying to understand that and determine where it all is.”

Hog futures in Chicago fell sharply on Friday as rumors swirled the disease had been detected in Iowa, the largest U.S. producing state, and Minnesota.

PEDV is not a food safety concern and does not affect humans, the USDA spokesman said.

Officials with USDA’s Animal and Plant Health Inspection Service (APHIS) held a call with livestock industry representatives on Friday to discuss the situation. There are currently no interstate trade restrictions related to PEDV for U.S. hogs and pigs.

PEDV has been seen in England, much of Europe, China, Taiwan and South Korea, according to Iowa State University. It closely resembles transmissible gastroenteritis (TGE) in swine.

“We don’t know the orientation of this particular disease (PEDV) and how it first got here to the United States,” Cunningham said.

Tom Burkgren, executive director of the American Association of Swine Veterinarians, said his group was getting “conflicting reports” on how the virus might have arrived.

There is no effective treatment for the virus other than good care and the provision of adequate water to combat dehydration, according to the university. Sanitary and quarantine measures can help to slow the spread of the virus.

“All ages of the swine can be affected. But the most severe clinical signs are seen in the very young and nursing baby pigs, the baby pigs that are still nursing,” said Burkgren.

(Additional reporting by Theopolis Waters and P. J. Huffstutter in Chicago; Editing by Chris Reese and Andre Grenon)

The draft legislation approved by the House Energy and Commerce health subcommittee was aimed at enhancing supply chain security for patients, including protection against counterfeit or stolen drugs.

The bill will “ensure that overlapping red tape does not impose dramatic costs on patients in the form of higher prescription drug costs or potential drug shortages,” said subcommittee chairman Joe Pitts, Republican of Pennsylvania.

The House bill would require drugs to be traced only down to the level of lots, which can contain thousands of individual bottles, or packs of vials.

A Senate version introduced in April would require each individual drug unit to be traceable, after a phase-in period.

The House bill would establish a timeline that could delay even the consideration of tracking drugs down to the unit level by more than a decade.

The U.S. Food and Drug Administration would be asked to propose such regulations in 2027, 12 years after the potential implementation of the current bill. Those FDA rules could not be in place until 2029 at the earliest, and might never go ahead, according to critics.

“This prolonged timeline will eradicate momentum in the supply chain towards unit-level traceability,” the Pew Charitable Trusts, which supports tougher regulations, said in a letter to subcommittee leaders.

Many Republicans oppose tracing drugs down to individual units as too costly to pharmaceutical companies.

At a hearing in April, a representative of the Generic Pharmaceutical Association said the cost of tracking drugs down to the unit level would be in the billions of dollars.

Also advancing on Wednesday was HR 1407, a separate bill to reauthorize user fees for veterinary drugs. The FDA collects funds under the program to help speed up approval of new drugs for pets and livestock.

It is unclear when the bills will be moved to a vote by the full committee.

Other attempts to create national standards have foundered amid complaints from companies that they would be too costly. Some states have developed strong rules of their own – notably California, whose regulations are set to go into effect in 2015.

California will require the distribution history and location of every drug, down to the smallest individual saleable unit, be accessible by regulators electronically, in real time.

The dangers of counterfeit drugs have been growing more apparent over the past decade. In 2012 fake vials of Roche Holding AG’s cancer drug Avastin appeared in the United States from Britain, where they were purchased from a Turkish wholesaler.

The World Health Organization estimates that less than 1 percent of medicines available in the developed world are likely to be counterfeit. Globally, that number is around 10 percent.

(Reporting By Ros Krasny; Editing by Carol Bishopric)

The draft legislation approved by the House Energy and
Commerce health subcommittee was aimed at enhancing supply chain
security for patients, including protection against counterfeit
or stolen drugs.

The bill will “ensure that overlapping red tape does not
impose dramatic costs on patients in the form of higher
prescription drug costs or potential drug shortages,” said
subcommittee chairman Joe Pitts, Republican of Pennsylvania.

The House bill would require drugs to be traced only down to
the level of lots, which can contain thousands of individual
bottles, or packs of vials.

A Senate version introduced in April would require each
individual drug unit to be traceable, after a phase-in period.

The House bill would establish a timeline that could delay
even the consideration of tracking drugs down to the unit level
by more than a decade.

The U.S. Food and Drug Administration would be asked to
propose such regulations in 2027, 12 years after the potential
implementation of the current bill. Those FDA rules could not be
in place until 2029 at the earliest, and might never go ahead,
according to critics.

“This prolonged timeline will eradicate momentum in the
supply chain towards unit-level traceability,” the Pew
Charitable Trusts, which supports tougher regulations, said in a
letter to subcommittee leaders.

Many Republicans oppose tracing drugs down to individual
units as too costly to pharmaceutical companies.

At a hearing in April, a representative of the Generic
Pharmaceutical Association said the cost of tracking drugs down
to the unit level would be in the billions of dollars.

Also advancing on Wednesday was HR 1407, a separate bill to
reauthorize user fees for veterinary drugs. The FDA collects
funds under the program to help speed up approval of new drugs
for pets and livestock.

It is unclear when the bills will be moved to a vote by the
full committee.

Other attempts to create national standards have foundered
amid complaints from companies that they would be too costly.
Some states have developed strong rules of their own – notably
California, whose regulations are set to go into effect in 2015.

California will require the distribution history and
location of every drug, down to the smallest individual saleable
unit, be accessible by regulators electronically, in real time.

The dangers of counterfeit drugs have been growing more
apparent over the past decade. In 2012 fake vials of Roche
Holding AG’s cancer drug Avastin appeared in the United
States from Britain, where they were purchased from a Turkish
wholesaler.

The World Health Organization estimates that less than 1
percent of medicines available in the developed world are likely
to be counterfeit. Globally, that number is around 10 percent.

(Reporting By Ros Krasny; Editing by Carol Bishopric)

FAA Administrator Michael Huerta told lawmakers the agency could not find the kind of “sizeable” non-payroll budget cuts that would have avoided furloughs and the resulting flight delays, but added that passenger safety is not at risk.

“We are focused on maintaining our core operational and safety responsibilities,” Huerta told a House appropriations subcommittee hearing on the agency’s 2014 budget request. “We will not do anything to compromise safety.”

The FAA has said will furlough 47,000 employees for up to 11 days through the end of the fiscal year in September as part of its plan to meet $637 million in required spending cuts. Nearly 13,000 of those employees are air traffic controllers.

Bipartisan legislation was introduced in the Senate on Wednesday to provide the U.S. Department of Transport, which administers the FAA, the flexibility to transfer funds between accounts in order to abate air traffic controller furloughs. The immediate prospects for the bill were unclear.

Mike Quigley, a Democrat from Illinois, asked Huerta why the agency did not manage furloughs to maintain higher staffing levels at major hubs versus regional airports.

“We concluded we couldn’t be in the business of picking winners and losers between particular hubs, particular facilities,” Huerta said, adding that conducting the furloughs unequally would still result in significant delays while being unfair to employees.

Among major hubs, Huerta said Chicago’s O’Hare International Airport had not seen “significant impacts” this week, and that delays at Atlanta’s Hartsfield International have not been as bad as models might have predicted. The busy summer travel season is still a wildcard, he added.

Ed Pastor, the ranking Democrat on the panel, pressed Huerta on how aggressively the agency had tried to adapt to its budget cuts. The FAA has authority to move 2 percent of its operational budget without congressional approval.

“We have taken full advantage of the flexibilities we have” in terms of budget, but “we simply couldn’t not get to” the $637 million in cuts required under sequestration for fiscal 2013 without idling staff, Huerta said.

Huerta was also quizzed about whether the FAA had asked for flexibility within its overall budget to preserve funds for air traffic operations as well as on why the agency was still paying overtime to employees.

“We have dramatically reduced all scheduled overtime and are preserving overtime to deal with emergency situations,” he said.

The FAA has had a hiring freeze since the start of the year, has canceled contracts with many contract and temporary employees and has cut back on staff travel, training, IT expenses and other costs, Huerta said.

“We have had big savings … we simply could not get to the number,” he said, noting repeatedly that 70 percent of FAA’s operations budget is for salaries.

Air travelers in the United States have experienced delays at some airports this week as the furloughs of air traffic controllers got under way.

The delays have been spotty. Early on Wednesday, Los Angeles International airport was experiencing 45-minute delays on some arriving planes that the FAA attributed to staffing, but other airports were mostly operating normally, according to the FAA.

(Reporting by Ros Krasny; Editing by Alwyn Scott, G Crosse and Bernard Orr)

A series of winter storms, which have continued into March,
add up to a more positive outlook for crops that will be planted
from the Plains to the East Coast, AccuWeather said in its 2013
U.S. spring weather outlook.

“A bumper crop of corn alone later this summer could
eventually reduce the pressure on grain, livestock feed and
other consumer prices,” said the firm, which is based in State
College, Pennsylvania.

“Compared to last year, for the season as a whole, more
moisture will be available for agriculture due to lower
temperatures and lower evaporation rates from the Mississippi
Valley to much of the Atlantic coastal plain.”

The U.S. Department of Agriculture has projected record
large U.S. corn and soybean crops this year, assuming normal
growing conditions. New-crop futures at the CBOT are
trading well below old-crop in anticipation of bumper harvests.

“We expect ample moisture during most of the growing season,
with few exceptions into this summer from the Mississippi Valey
to the East Coast,” said Paul Pastelok, head of AccuWeather’s
long-range forecasting department.

Echoing a recent U.S. government forecast, AccuWeather said
that parts of California and the Florida peninsula could
experience drought or at least drier-than-normal conditions into
the first part of the summer.

“A lack of big snowstorms over the Sierra Nevada and other
ranges in the West could mean water resource limitations in
California,” the firm said.

But overall, the severe drought that extended over much of
the United States in 2012, and hammered U.S. corn, soybean and
wheat growers, is not expected to be repeated.

Winter storms have added up to near-normal snowfall for
major cropping areas of the lower Plains through the Midwest and
in parts of the Northwest United States, AccuWeather said.

Average temperatures are also significantly lower this March
from a year ago, which will result in lower evaporation rates
for a time.

“Overall, less long-lasting, extreme heat is forecast from
the Mississippi Valley to the East during most of the spring and
summer,” the group said.

One negative of cooler spring temperatures is that crops
generally could be planted later this year, limiting the
opportunity for double-cropping, said Dale Mohler, an
agricultural weather specialist with the firm.

(Reporting By Ros Krasny; Editing by Bernard Orr)

“Work performed under the grant to LG Chem Michigan had not
been managed effectively,” Gregory Friedman, the DOE’s inspector
general, concluded in a report dated Feb. 8 and made public on
Wednesday.

Specifically, the report said workers at the Michigan plant,
a subsidiary of chemicals company LG Chem Ltd, sometimes had
little to do and spent their time watching movies, playing cards
and board games, or volunteering at local organizations – all on
the U.S. taxpayers’ dime.

LG Chem Michigan was awarded more than $150 million in
funding under the 2009 Recovery Act to help construct a $304
million lithium-ion battery cell manufacturing plant.

A groundbreaking at the plant, then known as Compact Power
Inc, in July 2010 was attended by President Barack Obama and
Jennifer Granholm, who was then governor of Michigan.

The project’s goal was to design, construct, start up
and test a production facility for lithium-ion polymer
batteries, create more than 440 jobs, and produce enough battery
cells annually to equip 60,000 electric vehicles by the end of
2013.

But LG Chem continues to supply from its South Korean
facilities, not from Michigan, the cells that are used by GM in
the final assembly for the battery packs used in the electric
Chevrolet Volt. And only about half of the expected jobs have
been created.

A GM spokesman referred questions to LG.

The report said management at LG Chem Michigan “stated that
it had initiated actions to address the issues identified.” A
U.S. spokesman for LG Chem Michigan could not immediately be
reached for comment.

The inspector general said his office received a complaint
in October that the company had misused grant funds.

“The complainant asserted that employees … had little work
to do and were spending time volunteering at local non-profit
organizations, playing games and watching movies at the expense
of the federal government and taxpayers,” Friedman wrote.

“The review confirmed the allegations. Specifically, LG Chem
Michigan inappropriately claimed and was reimbursed for labor
charges incurred by a variety of supervisory and staff employees
for activities that did not benefit the project,” Friedman
added.

“Even though the facility had produced a large number of
test cells, the plant had yet to manufacture battery cells that
could be used in electric vehicles sold to the public.”

LG Chem Michigan so far has far reimbursed the Energy
Department for $842,189 in costs that the inspector general
found to be “unreasonable and unallowable.”

Some of those costs entailed time billed while employees
were volunteering at Habitat for Humanity, animal shelters and
outdoor nature centers, among others – sometimes on an almost
full-time basis.

“The amount of time spent volunteering ranged from one day
for certain employees to five days per week for others,” the
report said.

Obama nominated Jewell, chief executive of outdoor retailer
REI, on Wednesday, calling her an “expert on the energy and
climate issues that are going to shape our future” as well as a
savvy executive who understands the link between conservation
and economic progress.

Jewell is the first woman chosen to join Obama’s second-term
Cabinet, which has been criticized as lacking diversity.

“I am humbled and I’m energized by this opportunity,” Jewell
said in a brief White House ceremony, where she was introduced
by outgoing Interior Secretary Ken Salazar.

Her background, which includes a stint as an oil company
engineer, won praise from conservationists and some industry
groups, but Jewell’s nomination drew skepticism from some
Republicans.

“I look forward to hearing about the qualifications Ms.
Jewell has that make her a suitable candidate to run such an
important agency, and how she plans to restore balance to the
Interior Department,” said U.S. Senator Lisa Murkowski of
Alaska, the top Republican on the Senate Committee on Energy and
Natural Resources.

Murkowski has criticized the department, including its
decision in December to open about half the vast National
Petroleum Reserve in Alaska’s North Slope to drilling, which she
said was not enough.

David Vitter of Louisiana, the top Republican on the Senate
Environment and Public Works Committee, said he wanted to learn
Jewell’s views on the administration’s five-year offshore oil
leasing plan, which he has argued should allow for expanded
drilling in the Gulf of Mexico.

Jewell, 56, has been a leader in land conservation in the
Pacific Northwest, but she worked in the energy and banking
sectors earlier in her career.

Besides managing the U.S. National Park Service, the
Interior Department oversees about a fifth of the nation’s land
mass and vast offshore oil fields.

Interior has a strong say in rules that govern hydraulic
fracturing, or fracking, on public lands as well as drilling for
oil and gas in the Arctic. It will help implement the
president’s push for more renewable energy development on
federal land.

EXPERIENCE IN FINANCE

Jewell joined Recreational Equipment Inc as a board member
in 1996 before taking over as chief operating officer in 2000
and then later as CEO of the national retail chain.

A graduate of the University of Washington, where she now
serves as a regent, Jewell began her career as an engineer at
Mobil Oil Corp, working in Oklahoma and Colorado.

At Washington’s Rainier National Bank in the early 1980s,
she gained a reputation for rejecting risky loans to the oil and
gas sector, inoculating the bank from a string of failures when
the Oklahoma and Texas oil boom went bust.

“Her experience as a petroleum engineer and business leader
will bring a unique perspective to an office that is key to our
nation’s energy portfolio,” the Western Energy Alliance said in
a statement.

Jewell’s recognition from many environmental groups, and the
reputation of Washington state-based REI for conservation and
environmental stewardship efforts, seemed certain to draw
attention.

“We’re not going to get excited that she’s suddenly going to
change course from the current anti-energy policies of the Obama
administration,” said Myron Ebell of the Competitive Enterprise
Institute.

But the group said Jewell did not seem to be a “lock it up
and throw away the key preservationist,” and Ebell said CEI did
not plan to oppose her nomination.

Jewell is an outdoorswoman who lists snowboarding and
kayaking among her hobbies and has climbed Vinson Massif,
Antarctica’s highest mountain. She served on the “National Parks
Second Century Commission,” whose goal was to help shape the
future of the National Parks System.

“In Jewell, President Obama chose a leader with a
demonstrated commitment to preserving the higher purposes public
lands hold for all Americans – recreation, adventure, and
enjoyment,” said Michael Brune, executive director of the Sierra
Club, one of many environmental groups praising the choice.

About 30 percent of U.S. oil and gas production and 40
percent of the nation’s coal come from land managed by Interior,
according to the agency’s website. The department collected
roughly $12 billion in revenue from federal land last year.

Interior has come under scrutiny in recent years for giving
industry undue sway in awarding contracts and collecting too
little royalty revenue.

Last month, the Senate energy committee asked the department
to investigate whether mining companies were shortchanging the
government on coal export royalties.

Obama is remaking his energy and environmental team at a
time when the nation is responding to a surge in shale oil and
gas development that has transformed the U.S. energy outlook.

The president has said he hopes to reduce the country’s
reliance on carbon fuels blamed for climate change.

Jewell has received several awards for her work in
environmental conservation. As a leader with the Mountains to
Sound Greenway Trust, an initiative to create a green corridor
around the Puget Sound to inland Washington State, Jewell has
worked with government and private interests to protect land for
conservation and recreational use.

The president has yet to name replacements for Lisa Jackson,
the Environmental Protection Agency administrator, and Steven
Chu, the Energy Secretary, both of whom have announced their
departures.

Jewell’s Senate confirmation hearings have not been
scheduled.

The program, administered through USDA’s Farm Service
Agency, will offer various loans of up to $35,000 for terms of
up to seven years to help recipients deal with farming’s often
prohibitive start-up costs.

“History tells us micro loans in combination with technical
assistance often results in a successful operation,” USDA
Secretary Tom Vilsack told reporters on a conference call.

The program will require less paperwork than traditional
USDA loans to farmers and ranchers – a mere eight forms to fill
out instead of 17 and the provision of one year of records
instead of three years.

“We hope this will be the next step up for those young
people” who might be interested in agriculture, but have
struggled with funding, Vilsack said.

USDA also cited returning veterans as among those who might
want to give farming a try, but currently struggle with funding.

“Small farmers often rely on credit cards or personal loans,
which carry high interest rates and have less flexible payment
schedules, to finance their operations,” USDA said.

The final rule establishing the program will be published on
Jan. 17 in the Federal Register.

Producers can apply for loans to pay for start-up expenses
such as essential tools, irrigation, delivery vehicles and
recurring expenses such as seed, fertilizer, rent and
distribution expenses.

The agency anticipates that some applicants will graduate to
operating loans up to $300,000 or obtain financing from a
commercial lender under the Farm Service Agency’s guaranteed
loan program.

Those larger loans can be used for a variety of purposes,
including buying land and livestock.

The National Farmers Union, a group that represents mostly
family farmers and ranchers, applauded the program.

“Access to credit is one of the greatest challenges that
beginning farmers and ranchers face,” said NFU President Roger
Johnson.