Wall Street Journal, “U.S. Ex-Im Bank Reconsiders India Coal Project“:
The U.S. Export-Import Bank backed down Wednesday from an environmental-protection stand that threatened to cost hundreds of U.S. jobs.
The federal export-credit agency said Wednesday its board will reconsider a decision last week against providing loan guarantees to help finance the purchase of U.S. coal-mining equipment by Reliance Power Ltd of India. The Ex-Im Bank had denied that support on the ground that the equipment was to be used to feed a new coal-fired power plant that will create carbon-dioxide emissions.
In a letter to Reliance Wednesday, the bank invited the company to reapply for the guarantees. The bank said it now would take into account Reliance’s plans to build two solar-powered electricity plants in India and their potential to offset environmental damage from the coal project.
As we observed yesterday, “It’s hard to see how President Obama can travel to Racine, Wisc., Wednesday to talk about the economy and not have this issue resolved.” And so THIS issue, the conflict over this specific project, is resolved by the Export-Import Bank finding a face-saving way to reconsider its 2-1 vote against financing the loan guarantees.
Congratulations on getting this one right, albeit only after Wisconsin political leaders, groups like the NAM, members of Congress and even the White House told the Export-Import Bank to wise up.
But from what we read in the news accounts, this “compromise” keeps the fundamental problem in place, and that’s policies that emphasize environmental purity over exports and export-related jobs. Ex-Im Bank Chairman Fred Hochberg explained the Board’s original 2-1 vote against the financing in a statement:
President Obama has made clear his administration’s commitment to transition away from high-carbon investments and toward a cleaner-energy future. After careful deliberation, the Export-Import Bank board voted not to proceed with this project because of the projected adverse environmental impact.
The bank’s misplaced emphasis threatened the loss of $600 million in sales and 1,000 jobs for Bucyrus and its suppliers, and denying the financing would not have accomplished a single environmental benefit. On the contrary. Less efficient and environmentally attuned companies in Belarus or China would have built the equipment for the mine and power plant in India.
Here’s the reality of the situation: India, China and other developing countries are going to burn coal as they industrialize and strive to move hundreds of millions of people out of poverty. They’re going to dig and operate coal mines and burn that coal in power plants, whether the United States likes it or not. An export-financing agency should focus on its mission of supporting U.S. exports, not on driving a global environmental agenda. By doing so, U.S. manufacturers will stay in the competitive game, having access to a market not just for mining equipment, but for all sorts of manufactured goods — including environmental technology.
- Milwaukee Journal-Sentinel, “Export-Import Bank reaches deal in Bucyrus case“
- Milwaukee Small-Business Times, “Tentative compromise could save Bucyrus jobs“
- Wall Street Journal Washington Wire, “As Obama Visits Wisconsin, Ex-Im Bank Reopens Mining Equipment Sale”
- Newt Gingrich, Steve Everley, Fox News, “Why Is Obama Killing American Jobs In the Name of Clean Energy?”
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