By Stephen Wisnefski Of DOW JONES NEWSWIRES  

BP PLC (BP, BP.LN), in response to a directive from the U.S. government to switch the type of chemical dispersant it's been using to break up the
massive oil spill in the Gulf of Mexico, said it still believes that the
product it has been using is the best option.

"Based on the information that is available today, BP continues to believe that Corexit was the best and most appropriate choice at the time when the
incident occurred, and that Corexit remains the best option for subsea
application," BP said in a letter dated May 20 and released Saturday by
the U.S. Environmental Protection Agency. BP said Corexit is effective,
safe for the environment and that other potential dispersants aren't
available in sufficient quantities.

The EPA on Thursday ordered BP to identify and use a less toxic and more effective dispersant than Corexit, which is manufactured by Nalco Holding Co.
(NLC) of Naperville, Ill. The EPA said the alternative needed to be
identified within 24 hours and implemented within 72 hours after that.
The EPA said that, if BP didn't identify an available alternative, it
had to provide the Coast Guard and the EPA with a detailed description
of the alternatives that were investigated and the reasons why they
aren't suitable.

In a release Saturday, the EPA said it met with BP to discuss the matter on Friday after receiving the letter late Thursday evening. The EPA said it will continue to work over the next 48
hours to ensure that BP is complying with the directive.

Corexit is on the list of the EPA's approved dispersants, which are commonly used to break up oil during spills, usually on the water's
surface. But the agency noted in its directive on Thursday that BP's use
of the product is unprecedented both in terms of the amount used and
the depth at which it is being used. The oil is emanating from a broken
pipe a mile beneath the surface.

BP, which has tried an array of techniques to contain the spill since the sinking of a rig it was leasing a month ago, has come under increasing criticism in recent days
for its failure to provide a clear picture of the extent of the leak.
The company had its first significant success in dealing with the spill
last weekend when it started siphoning thousands of barrels a day of oil
from the source to a vessel on the surface of the water. Still, oil
continues flowing from the broken pipe, and public officials and Gulf
Coast residents are increasingly anxious about the environmental and
economic toll it could take.

BP said in its letter--which was signed by Chief Operating Officer Doug Suttles and addressed to the EPA and Coast Guard--that Corexit was the only dispersant that was available
in sufficient quantities at the time of the spill. BP also noted that
Corexit was 55% to 63% effective in dispersing samples of South
Louisiana Crude.

Another dispersant, Sea Brat #4, made by Alabaster Corp. of Pasadena, Texas, is equally effective at dispersing oil and "has fewer acute toxicity effects". However, BP said that Sea
Brat #4 has a chemical that may degrade to nonylphenol, an organic
chemical that is toxic to aquatic life, and that it may persist in the
environment. BP said that the manufacturer hasn't evaluated the product
for those potential effects and that BP hasn't had time to do its own
tests.

Alabaster's president, John Sheffield, on Saturday disputed the notion that Alabaster hasn't evaluated the possible effects, noting that the company has shared its findings with BP and the
EPA. He acknowledged that there are legitimate questions about the
effect of using the amounts needed in the Gulf spill, but said that Sea
Brat #4 is an environmentally friendly alternative.

"I think the important thing to highlight is that the ingredient in question is not considered toxic as a 'Marine Pollutant' (by the federal government)
unless it is present in the mixture at a concentration of more than 10%
by weight," Sheffield said. Alabaster's analysis shows that the
concentration of the nonylphenol decomposition product would amount to
0.72%, and therefore wouldn't be considered a marine pollutant.

Alabaster said in a letter sent to BP on Wednesday, a copy of which was made available to Dow Jones, that ecotoxicity data for Sea Brat #4
was included with the original submittal to the EPA in 2002. Alabaster
said in the letter to BP it's "confident there will be no ecological
impact" from use of Sea Brat #4.

According to BP, Corexit doesn't have chemicals that will degrade to nonylphenol and doesn't persist in the environment. "These qualities make Corexit a better
choice for subsea application, based on the information currently
available. Corexit appears to have fewer long-term effects than the
other dispersants evaluated," BP said in its letter to the EPA and Coast
Guard.

Supply is also an issue. BP said it has an inventory of 246,380 gallons of Corexit that are available for immediate use and that the manufacturer is able to produce an additional 68,000 gallons
per day. Those amounts are enough to meet the potential needs for
dispersants, BP added.

BP also has an inventory of 100,000 gallons of Sea Brat #4 available for immediate use and the manufacturer can produce enough to ensure that surface application needs are met. But
it may not be enough for both surface and subsurface application needs
combined, BP said.

"None of the other dispersants that meet the acute toxicity and effectiveness criteria... are available in sufficient quantities at this time," BP said in the letter, adding that
manufacturers of the other potential dispersants have told them they
can't produce the required volume for 10 to 14 days or more.

"In addition, before supporting a decision to switch to those dispersants, it would be important to review the formula for each
alternative and evaluate it for additional risks, such as persistence in
the environment," the company said. "BP has not been able to do this in
the time provided."

The leak followed the April 20 explosion and later sinking of Transocean's (RIG) Deepwater Horizon drilling rig, which was drilling for BP about 40 miles off the Louisiana coast.
Efforts to contain the spill have proved especially difficult owing to
the depth of the leak.

Early next week, BP, which is responsible for the clean-up of the spill, will attempt to cap the well using heavy drilling fluids, a process known as "top kill." BP Chief
Executive Tony Hayward said in an email to employees Friday that this
would represent "another first for this technology at these water depths
and so, we cannot take its success for granted."

Most of BP's attempts to contain or shut down the spill have failed, though things began looking up for the company last Sunday when it began to remove at
least some oil from the site of the leak. The company is also drilling
two relief wells to permanently shut down the well, an effort that is
scheduled to take months.

-By Stephen Wisnefski, Dow Jones Newswires; 212-416-2191; stephen.wisnefski@dowjones.com