Senate Support for US Export-Import Bank Is Big Win for Polluting Companies

By Friends of the Earth

16 May 12

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oday the U.S. Senate passed H.R. 2072, a bill to reauthorize the federal government�s Export-Import Bank, which provides billions of dollars in public financing for harmful fossil fuel projects worldwide.[1] Passage of the bill will allow the agency to increase its portfolio cap from $100 billion to $140 billion. It now moves to President Obama�s desk to be signed into law.

�By passing today�s Ex-Im Bank reauthorization, the Senate ensured that some of the country�s most profitable and polluting companies, like ExxonMobil, will continue to enjoy billions of dollars in public subsidies, leaving behind them a wake of damaged environments and harmed communities,� said Doug Norlen, Policy Director at Pacific Environment.

The passage of the Ex-Im Bank reauthorization bill omits environmental, social and some anti-corruption reforms necessary to hold the agency accountable for the damage done by the projects it finances.[2] The bill�s omission of public interest reforms comes despite earlier passage of a Senate Banking Committee version of the bill with language promoting more renewable energy, and a previously passed House Financial Services version that would have established an independent accountability mechanism to address the growing number of severe violations of the agency�s environmental and social policies.

However, two provisions of the bill could draw more public attention to Ex-Im Bank fossil fuel projects. The first is a provision that requires public notice and comment for any Ex-Im Bank transaction exceeding $100 million, which will cover many Ex-Im Bank fossil fuel projects. The second is a requirement for the U.S. to initiate and pursue negotiations with other countries� export credit agencies to substantially reduce, with the ultimate goal of eliminating, subsidized export financing programs and other forms of export subsidies. Many export credit agencies subsidize fossil fuel projects.

�When negotiating to end export financing subsidies, the Obama Administration should start by cutting the Ex-Im Bank�s bloated support for fossil fuel projects,� said Michelle Chan, Economic Policy Director at Friends of the Earth. �This would go a long way towards demonstrating that the U.S. is serious about Obama�s G20 pledge to phase out fossil fuel subsidies.�

Environmentalists point out that Senate passage of the Ex-Im Bank reauthorization bill does nothing to curb the agency�s skyrocketing support for fossil fuel projects, which surpassed $4.5 billion in 2011, six times as much as for renewable energy. Moreover, an amendment introduced by Sen. Bennet, calling on Ex-Im Bank to increase renewable energy financing, and to identify barriers to doing so, was defeated.

"The Senate's failure to approve clean energy and accountability reforms keeps the Ex-Im Bank hopelessly stuck in the past and cedes U.S. market share, jobs, and competitiveness in the clean energy race," said Justin Guay, Washington Representative of the Sierra Club�s International Finance Program.

�It�s bad enough that the Obama Administration pawns publicly-owned coal for export, and seriously entertains approval of the tar sands pipeline. Now it is complicit in an Export-Import Bank reauthorization bill without any requirement to clean up the agency�s portfolio. It's as if the Obama Administration wants to push climate pollution,� said Kyle Ash, Senior Legislative Representative, Greenpeace.

[1] http://www.govtrack.us/congress/bills/112/hr2072/text
[2] These reforms were presented in testimony by Pacific Environment�s Policy Director, Doug Norlen, before a Senate subcommittee hearing on Export-Import Bank reauthorization, available at http://banking.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=8c4ab7ec-5960-4fc7-a453-4a1efaecb2fb.

Contact:
Doug Norlen, Pacific Environment, 202.465.1650, dnorlen@pacificenvironment.orgThis e-mail address is being protected from spambots. You need JavaScript enabled to view it
Michelle Chan, Friends of the Earth, 415.544. 0790 x214, mchan@foe.orgThis e-mail address is being protected from spambots. You need JavaScript enabled to view it
Kyle Ash, Greenpeace, 202.319.2417, kyle.ash@greenpeace.orgThis e-mail address is being protected from spambots. You need JavaScript enabled to view it
John Coequyt, Sierra Club, 202.669.7060, john.couquyt@sierraclub.orgThis e-mail address is being protected from spambots. You need JavaScript enabled to view it