ICF International Warns U.S. Industry
Coming Carbon Regulations Must be Considered to Avoid Risking Billions in Stranded Energy Investments

Study Reveals Winning Strategies for
Predicted Carbon-Constrained Future

FAIRFAX, VA, November 7, 2006 – ICF International (Nasdaq: ICFI) announced today the release of its U.S. Emission and Fuel Markets Outlook, 2006 edition. The study examines U.S. energy market dynamics under alternative carbon dioxide (CO₂) emission regulations, some form of which ICF views as inevitable. ICF’s global experience in carbon markets and policies leads us to conclude that the United States will have to come to terms with reducing CO₂ emissions.

Already volatile energy markets are heavily influenced by international oil and gas market disruptions. Given the increasing convergence of energy markets, these international disruptions will ripple across all energy commodities and emission allowance markets, including the U.S. energy market. ICF’s study shows that CO₂ (or broader greenhouse gas) regulation will likely raise natural gas prices, shrink operating margins of existing coal-fired electric generators, and shift new capacity needs from predominantly coal to a diverse portfolio of generation technologies. In this turbulent market, technologies that can convert domestic coal resources to natural gas and petroleum products will be a vital component of an overall strategy to manage the nation’s exposure to international risks.

In U.S. environmental markets, ICF expects the interaction of CO₂ policy and energy markets to have a particularly noticeable impact on the profitability of new and existing fossil-fired electric generators and, therefore, control decisions and allowance prices. “This is not the time for market participants to get complacent. At risk are billions of dollars of sunk pollution control and new capacity investments,” said John Blaney a senior vice president at ICF. “Pursuing plans to build new electric generation capacity and control existing generation units without considering the impact of potential CO₂ policy on fuel, allowance, and electric markets could be a very costly mistake,” he added. ICF’s projections show 10 to 20 percent of control investments made in a three-pollutant world not being economical should a moderate CO₂ policy be implemented.

ICF’s study also examines the impacts of several of the proposed policies on energy and environmental markets, including those on electric generation supply over the next 25 years. “No single generation technology available today will simultaneously and cost effectively manage fuel price risk and CO₂ regulatory risk, and be available in sufficient amounts to meet growing demand,” said Chris MacCracken, a project manager at ICF. “We forecast a mix of new capacity technologies that varies by region and is composed of everything from coal to nuclear to wind.” Similarly, ICF’s study projects that a diverse portfolio of fuels and fuel sources will be necessary to meet growing demand, including liquefied natural gas (LNG), petroleum, coke, coal-to-liquids, and unconventional gas from the United States and Canada.

ICF’s study provides a comprehensive, integrated view of coal, natural gas, oil, and U.S. allowance markets based on more than two decades of forecasting energy market trends as one of the nation’s leading energy and environmental analysis firms. For more information, visit http://www.icfi.com/emissions.

ICF International (Nasdaq: ICFI) partners with government and commercial clients to deliver consulting services and technology solutions in the energy, environment, transportation, social programs, defense, and homeland security markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, from analysis and design through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 1,800 employees serve these clients worldwide. ICF’s Web site is http://www.icfi.com.

For Immediate Release Contact: Douglas Beck 1.703.934.3820