March 11, 2010, 1:19 PM EST
By Mark Drajem
March 11 (Bloomberg) -- President Barack Obama’s goals of boosting U.S. exports and combating climate change are colliding as the U.S. Export-Import Bank expands financing for oil, gas, mining and power-plant projects.
Bank-supported ventures approved in the year ended Sept. 30 will emit an estimated 17.9 million metric tons of carbon annually, more than triple the previous year and the most since the lender started releasing data in 2001, according to its annual reports. Among companies aided were General Electric Co. and Petroleos Mexicanos, Mexico’s state-owned oil business.
“Ex-Im is on a fossil-fuel binge,” said Doug Norlen, policy director at PacificEnvironment, an environmental advocacy group in San Francisco.
The Washington-based Export-Import Bank works to boost U.S. sales overseas by providing government-backed loans or guarantees to exporters. Obama, who has made doubling exports over the next five years a top goal, praised the bank for increasing financing to a record during the global downturn last year.
“We’ll continue to increase the amount of trade financing Ex-Im offers,” Obama said at the bank’s annual conference in Washington today.
At the same time, Obama is pushing for a global agreement to curtail carbon emissions blamed for climate change. In September he persuaded nations in the Group of 20 to pledge an end of subsidies to oil, gas and coal.
‘Historic’ End to Aid
Stopping aid for fossil fuels will mark “an historic effort” to increase energy security and combat climate change, Obama said when the announcement was made.
As private credit dried up with the recession, the Export- Import Bank’s financing grew 50 percent to $21 billion in the last fiscal year. More lending means more projects, such as power plants, that generate carbon emissions, said James Mahoney, the bank’s vice president for engineering and the environment.
“Our primary purpose is to create and sustain jobs through exports,” John McAdams, the bank’s senior vice president, said in an interview.
The largest project yet approved by the lender, $3 billion in financing announced in December for a liquefied natural-gas plant and pipeline sponsored by Exxon Mobil Corp. and its partners in Papua New Guinea, will generate 3.1 million tons of emissions each year, according to company projections.
Colombia, Brazil
In addition, the bank is considering funding for an aluminum smelter in the United Arab Emirates and has pledged $1 billion to Ecopetrol SA, Colombia’s state oil producer. The bank also may provide $5 billion in financing for U.S. suppliers of Brazil’s oil producer, Petroleo Brasileiro SA.
The Export-Import Bank says it increased lending for solar, wind and other clean-energy technology exports to $101 million in the year ended Sept. 30, more than three times the year before.
The bank on March 9 approved a plan to provide “fast- track” approval for renewable-energy deals, a spokesman, Phil Cogan, said. The bank says it has already taken steps, such as disclosing emissions in its annual report and requiring environmental assessments before approvals, to deal with the effects of development.
“We are very sensitive to these projects and the concerns over emissions,” McAdams said. “The projects we have approved represent that sensitivity.”
Caterpillar, Halliburton
Exporters including Caterpillar Inc., GE and Halliburton Co. have relied on the government support to sell bulldozers, electric turbines and oil-field drilling equipment.
Restricting the bank in the name of clean energy “would completely undermine the president’s goal of doubling exports,” Bill Lane, Washington director for Peoria, Illinois-based Caterpillar, said in an interview.
“Ex-Im Bank is the bank of last resort, so you would be ceding important export markets to our foreign competitors,” said Lane, whose company is the world’s largest maker of bulldozers and excavators.
Environmental advocates such as Norlen say the Obama administration should swear off oil and gas projects. Another government lender, the Overseas Private Investment Corp., pledged to cut emissions from its projects by 20 percent over the next decade. The Export-Import Bank hasn’t set a similar goal.
‘Makes a Mockery’
The bank’s environmental policy is a disappointment because it would allow an increase in spending on coal and other technologies harmful to the environment, said Steve Kretzmann, who runs Washington-based Oil Change International, which seeks to curb government aid to fossil-fuel companies.
“It makes a mockery of the Obama administration’s supposed commitment to phase out fossil-fuel subsidies,” Kretzmann said in an interview.
The project in Papua New Guinea led by Irving, Texas-based Exxon has become a particular point of contention.
The pipeline’s construction will destroy pristine tropical forests, PacificEnvironment’s Norlen said in a submission to the lender in September.
Exxon “is the most profitable corporation on the planet,” Kretzmann said. “This is the last place that taxpayer support should be going.”
The bank says the gas produced will replace coal and other dirtier fuels, resulting in a benefit to the environment.
“The project itself represents a reduction in greenhouse emissions,” McAdams said.
Source: http://www.businessweek.com/news/2010-03-11/obama-s-trade-goal-fights-his-clean-energy-plan-at-export-bank.html
By Mark Drajem
March 11 (Bloomberg) -- President Barack Obama’s goals of boosting U.S. exports and combating climate change are colliding as the U.S. Export-Import Bank expands financing for oil, gas, mining and power-plant projects.
Bank-supported ventures approved in the year ended Sept. 30 will emit an estimated 17.9 million metric tons of carbon annually, more than triple the previous year and the most since the lender started releasing data in 2001, according to its annual reports. Among companies aided were General Electric Co. and Petroleos Mexicanos, Mexico’s state-owned oil business.
“Ex-Im is on a fossil-fuel binge,” said Doug Norlen, policy director at PacificEnvironment, an environmental advocacy group in San Francisco.
The Washington-based Export-Import Bank works to boost U.S. sales overseas by providing government-backed loans or guarantees to exporters. Obama, who has made doubling exports over the next five years a top goal, praised the bank for increasing financing to a record during the global downturn last year.
“We’ll continue to increase the amount of trade financing Ex-Im offers,” Obama said at the bank’s annual conference in Washington today.
At the same time, Obama is pushing for a global agreement to curtail carbon emissions blamed for climate change. In September he persuaded nations in the Group of 20 to pledge an end of subsidies to oil, gas and coal.
‘Historic’ End to Aid
Stopping aid for fossil fuels will mark “an historic effort” to increase energy security and combat climate change, Obama said when the announcement was made.
As private credit dried up with the recession, the Export- Import Bank’s financing grew 50 percent to $21 billion in the last fiscal year. More lending means more projects, such as power plants, that generate carbon emissions, said James Mahoney, the bank’s vice president for engineering and the environment.
“Our primary purpose is to create and sustain jobs through exports,” John McAdams, the bank’s senior vice president, said in an interview.
The largest project yet approved by the lender, $3 billion in financing announced in December for a liquefied natural-gas plant and pipeline sponsored by Exxon Mobil Corp. and its partners in Papua New Guinea, will generate 3.1 million tons of emissions each year, according to company projections.
Colombia, Brazil
In addition, the bank is considering funding for an aluminum smelter in the United Arab Emirates and has pledged $1 billion to Ecopetrol SA, Colombia’s state oil producer. The bank also may provide $5 billion in financing for U.S. suppliers of Brazil’s oil producer, Petroleo Brasileiro SA.
The Export-Import Bank says it increased lending for solar, wind and other clean-energy technology exports to $101 million in the year ended Sept. 30, more than three times the year before.
The bank on March 9 approved a plan to provide “fast- track” approval for renewable-energy deals, a spokesman, Phil Cogan, said. The bank says it has already taken steps, such as disclosing emissions in its annual report and requiring environmental assessments before approvals, to deal with the effects of development.
“We are very sensitive to these projects and the concerns over emissions,” McAdams said. “The projects we have approved represent that sensitivity.”
Caterpillar, Halliburton
Exporters including Caterpillar Inc., GE and Halliburton Co. have relied on the government support to sell bulldozers, electric turbines and oil-field drilling equipment.
Restricting the bank in the name of clean energy “would completely undermine the president’s goal of doubling exports,” Bill Lane, Washington director for Peoria, Illinois-based Caterpillar, said in an interview.
“Ex-Im Bank is the bank of last resort, so you would be ceding important export markets to our foreign competitors,” said Lane, whose company is the world’s largest maker of bulldozers and excavators.
Environmental advocates such as Norlen say the Obama administration should swear off oil and gas projects. Another government lender, the Overseas Private Investment Corp., pledged to cut emissions from its projects by 20 percent over the next decade. The Export-Import Bank hasn’t set a similar goal.
‘Makes a Mockery’
The bank’s environmental policy is a disappointment because it would allow an increase in spending on coal and other technologies harmful to the environment, said Steve Kretzmann, who runs Washington-based Oil Change International, which seeks to curb government aid to fossil-fuel companies.
“It makes a mockery of the Obama administration’s supposed commitment to phase out fossil-fuel subsidies,” Kretzmann said in an interview.
The project in Papua New Guinea led by Irving, Texas-based Exxon has become a particular point of contention.
The pipeline’s construction will destroy pristine tropical forests, PacificEnvironment’s Norlen said in a submission to the lender in September.
Exxon “is the most profitable corporation on the planet,” Kretzmann said. “This is the last place that taxpayer support should be going.”
The bank says the gas produced will replace coal and other dirtier fuels, resulting in a benefit to the environment.
“The project itself represents a reduction in greenhouse emissions,” McAdams said.
Source: http://www.businessweek.com/news/2010-03-11/obama-s-trade-goal-fights-his-clean-energy-plan-at-export-bank.html
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