Environmental groups are urging Congress to oppose legislation that would reauthorize the Export-Import Bank amidst a fight over a provision that would reverse bank policy limiting the financing of overseas coal projects.
Friends of the Earth, the Sierra Club, Greenpeace and other groups sent a letter to Senate leadership and President Barack Obama July 11 urging opposition to the bill, crafted by coal proponent Sen. Joe Manchin (D-W.Va.).
“When the Export-Import Bank finances coal projects, negative impacts ensue. Climate disruption and its effects intensify, the local environment degrades, and developmental, health, and human rights impacts worsen,” said the letter, which was sent by 11 organizations.
The bank, which faces a Sept. 30 deadline for Congress to reauthorize its charter, has authorized $1.5 billion in financing for coal projects, Linda Formella, a spokeswoman for the bank told Bloomberg BNA in an e-mail.
Coal Projects Financed
That funding includes $805.6 million in financing in 2011 for Overland Park, Kan.–based Black & Veatch Corp. for the construction of one the world's largest power plants, the 4,800 megawatt Kulsie project in South Africa being developed by Eskom Holdings Ltd.
The bank also provided $650 million in financing in 2010 to Reliance Power Ltd. for the construction of a 3,960 megawatt coal-fired power plant in Madhya Pradesh, India using exports from Milwaukee, Wis.-based mining equipment manufacturer Bucyrus International and other U.S. companies.
In addition, the bank is considering financing a 3,960 megawatt coal-fired power plant with an integrated coal mine called the Ultra Mega Power Project in Tilaiya, India, according to online records.
“You would never ever build a coal plant that big in the United States. There is way too much impact on the people living around it,” John Coequyt, director of the Sierra Club's international climate program, told Bloomberg BNA.
Formella, the Ex-Im Bank spokeswoman, said the bank has only financed two coal-fired power plants since 2011.
“The Bank's financing helped support hundreds of American engineering and equipment-manufacturing jobs,” Formella said.
The Manchin bill, which has yet to be unveiled, would require the Ex-Im Bank to abandon guidance it issued in December that said the bank would no longer support new power plants in developing nations unless there are no economically feasible alternatives or the plants use carbon capture technologies, according to a Manchin aide.
The change reflects Obama's climate action plan, which called for an end to U.S. support for the public financing of new coal-fired plants and to steer financing toward cleaner energy projects.
The Export-Import Bank provides financing to expand U.S. trade but has drawn opposition from Republicans such as the incoming House Majority Leader Kevin McCarthy (R-Calif.) and the conservative Heritage Foundation, clouding the prospects for its once routine reauthorization.
Manchin's provision on coal splits support from Senate Democrats, further darkening the prospects for the bank, Coequyt said.
“By turning this into a fight about coal, it almost certainly makes reauthorization harder for the Export-Import Bank,” he said.
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