Hochberg's Ex-Im Bank Legacy -- A Dirty Fossil Fuel Binge
This week at a press conference for the release of the U.S. Export-Import Bank's (Ex-Im) annual report on the agency's competitiveness, Chairman Fred Hochberg called for more transparency from international Export Credit Agencies (EAC). But when we asked about increasing transparency for the billions of U.S. taxpayer financing Ex-Im allots to fossil fuel projects, we got the same, tired excuses for the Bank's undying support for dirty, outdated coal technology:
- Hochberg claimed that Ex-Im only finances coal projects in countries like South Africa with strong environmental policies already in place. However, an environmental policy is only as good as its enforcement. The Bank awarded over $800 million for the massive Kusile coal-fired power plant in South Africa, despite the fact that the plant is being built in an area that already exceeded South Africa's own limits for pollution known to cause health problems. Of course, our own environmental standards aren't always that great. Mountaintop removal coal mining is literally killing communities in Appalachia, but this May Ex-Im approved financing to export West Virginia and Pennsylvania coal and pollution abroad. Hochberg talks the talk, but he doesn't walk the walk.
- The chairman also touted the "open" process for the environmental reviews coal projects must pass, but he neglected to mention that the dollar amounts and even what is being exported are kept secret until after the financing is approved. Additionally, in approving coal projects the Bank violates its own carbon policies, as well as a Congressional mandate to reserve 10 percent of its financing for renewable energy. In just one example, Ex-Im originally rejected Reliance Power's Sasan coal-fired power plant in Singrauli, India, but reversed its decision three weeks later and eventually awarded over $900 million in financing due to pressure from the Administration. Finally, they have still failed to release the full due diligence around carbon impacts from the Kusile project -- not exactly the "open" process Hochberg claims it is.
- The Bank often justifies fossil fuel financing by claiming the agency's involvement forces companies to make projects better. However, the Bank regularly fails to disclose monitoring reports necessary to ensure compliance with concessions made in exchange for financing are actually implemented. After we alerted the Bank to the worker deaths and forced removals of communities around the Bank approved Sasan coal-fired power plant, Ex-Im agreed to meet with local community members, but then backed out. Instead, the Bank chose to meet only the company that covered up the deaths and required that any community members travel to meet with Bank officials at their own expense -- despite the fact that these communities cannot even afford electricity or running water. This is an ongoing tragedy that Hochberg himself is overseeing.
- Last, Hochberg always ends by claiming that these fossil fuel projects would be built whether Ex-Im's involved or not. This is an outright abdication of American international leadership. Do we really think we don't hold ourselves to stronger standards than other repressive, and autocratic regimes around the world? The Bank has an obligation to help grow emerging industries employ pollution controls and dramatically ramp up clean technology that will sustain all our economies over the long term. Moreover, at a time when financial indicators show that coal is a risky investment internationally, Ex-Im's decision to double down on coal is helping to prop up an industry that should be relegated to the previous century.
We know that coal is a bad investment internationally, as projects face bankruptcy in India and storage facilities in China near capacity with unused coal supplies. We know that every dollar invested, clean energy creates over twice as many jobs in the U.S. as coal. We know that pollution from coal is literally killing people. The latest figures attribute 70,000 deaths in India alone to coal. And we know that clean energy is better at alleviating energy poverty than coal (pdf). But Ex-Im isn't listening. Instead Chairman Hochberg and the Bank continue to doggedly promote deadly and outdated fossil fuel technology at a time when the rest of the world is investing in the cutting edge, emerging clean energy sector.
-- Nicole Ghio, Sierra Club International Program