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export import bank
Green Groups Urge US Credit Agency to Oppose Papua New Guinea LNG Project
"Rising sea levels, extreme weather events, and environmental degradation are already threatening many people's existence and threatening our way of life," said one local, warning the project will worsen the climate crisis.
Aug 29, 2023
More than two dozen advocacy groups from Papua New Guinea, the Asia Pacific region, and the United States on Tuesday urged the U.S. export credit agency to reject a liquefied natural gas project that they warned "presents significant financial risks and opportunity costs, as well as harmful climate impacts."
The groups—including the Center for Environmental Law and Community Rights Inc. (CELCOR), Food & Water Watch, Friends of the Earth (FOE) United States, Global Witness, Oil Change International (OCI), and Sierra Club—wrote to U.S. Export-Import Bank (EXIM) Chair Reta Jo Lewis about the Papua LNG project led by TotalEnergies.
The coalition argued that approving Papua LNG not only would contradict the Biden administration's 2021 pledge to end new public support for fossil fuel energy projects abroad and "further position the United States as an international laggard on climate, but would further jeopardize international climate goals, risk $13 billion USD in stranded assets, and put Pacific frontline communities at further environmental, social, and economic risk."
Peter Bosip, executive director of the Papua New Guinea-based CELCOR, stressed in a statement Tuesday that "the people of PNG are already facing the full force of climate change."
"Rising sea levels, extreme weather events, and environmental degradation are already threatening many people's existence and threatening our way of life," Bosip said. "Papua LNG will add to and exacerbate this climate crisis—and financiers cannot, and should not, finance it."
"Approving this project risks wasting billions of taxpayer dollars on infrastructure that will become a stranded asset, and worse, further places our climate goals of minimizing global warming to 1.5°C far out of reach."
The fossil fuel project "has not secured any guaranteed sales—with no long-term sales and purchase agreements (SPAs) or nonbinding heads of agreement supply deals," the letter notes. "In addition to these climate and financial risks, Pacific civil society and governments have repeatedly called for the end of all fossil fuels in order to safeguard a habitable climate for the region, as warming above 1.5°C risks the habitability of many Pacific island communities."
Limiting global temperature rise this century to 1.5°C above preindustrial levels is the more ambitious goal of the 2015 Paris agreement. Representatives of countries who have signed on to the deal—including the United States—are set to gather in the United Arab Emirates in November for the next United Nations climate summit, COP28.
"EXIM's potential support for this project signals that the agency and this administration [are] not serious about achieving international climate goals," OCI export finance climate strategist Nina Pusic charged Tuesday. "Approving this project risks wasting billions of taxpayer dollars on infrastructure that will become a stranded asset, and worse, further places our climate goals of minimizing global warming to 1.5°C far out of reach."
The letter points out that "PNG itself does not need fossil gas for its own energy needs—it could dramatically expand its energy usage and still provide 78% of its on-grid energy needs from renewable energy by 2030 were appropriate financing made available."
During the Obama administration—for which President Joe Biden was vice president—EXIM dumped billions of dollars into PNG LNG, a project led by ExxonMobil that, as the letter highlights, "has previously been associated with human rights abuses, escalating tensions, land-related issues, and broken economic promises."
FOE U.S. senior international finance program manager Katie DeAngelis said Tuesday that rather than repeating past mistakes of EXIM "by continually approving support for liquefied natural gas projects" that harm local communities and the climate, the Biden administration should "instead invest in renewables that will help the people of Papua New Guinea transition to a clean energy future."
Along with pressuring EXIM to reject the Papua LNG project due to the "enormous risks" associated with it, the letter concludes by calling on the agency to "take immediate action to implement the Clean Energy Transition Partnership (CEPT), by announcing a fossil fuel exclusion policy which most other high-income signatories of the CEPT have already done."
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Green Groups Blast Biden Over 'Taxpayer-Funded Bailouts' for LNG Industry
"This is an insult to the communities forced to bear the brunt of LNG buildout and the devastating impacts of climate disasters fueled by fossil fuel dependence," said a Sierra Club campaigner.
Jul 14, 2023
Green groups on Friday called out the Biden administration after the U.S. export credit agency approved lending support for Trafigura, a major commodities trader, that will enable a surge in gas exports to Europe even as the climate emergency driven by the fossil fuel industry rages worldwide.
"Despite posting record-breaking profits, Trafigura just received a massive giveaway from the U.S. government that will let them work with the biggest liquefied natural gas (LNG) exporters in the world to drive up energy prices for Americans and fund stock buybacks for their investors," said Sierra Club's Talia Calnek-Sugin in a statement.
"This is an insult to the communities forced to bear the brunt of LNG buildout and the devastating impacts of climate disasters fueled by fossil fuel dependence, and to families and businesses across the country that will face higher energy prices that come from exporting overseas," she asserted. "It's time to put an end to the U.S. government's taxpayer-funded bailouts of risky commodity speculators like Trafigura."
"It's time to put an end to the U.S. government's taxpayer-funded bailouts of risky commodity speculators like Trafigura."
The Export-Import Bank of the United States (EXIM) recently notified Congress of plans to insure $400 million in revolving credit facilities for Trafigura. As the Financial Timeshighlighted last month, the commodity trader "reported record net profits of $5.5 billion in the first half of its financial year," over double the same period 12 months earlier, and "paid a record $3 billion dividend to be shared among about 1,200 shareholders," which "was up from $1.7 billion in the previous year."
Following EXIM's legally required congressional notification, the agency confirmed Thursday that its board of directors greenlighted financial institution buyer credit (FIBC) policies for Citibank and Credit Agricoles that will allow Trafigura to buy LNG from U.S. exporters to sell mostly to European buyers seeking alternate sources of gas due to Russian President Vladimir Putin's invasion of Ukraine.
"With this vote, we continue to fulfill EXIM's mission of supporting American exporters and jobs while advancing the Biden-Harris administration's climate efforts," said Reta Jo Lewis, the agency's chair and president. "The approval of these two FIBC policies also builds on the U.S. commitment to help improve European energy security due to Vladimir Putin's unjustified war in Ukraine."
Green groups continue to condemn fossil fuel giants for taking advantage of the war as well as rich governments' support for the LNG industry, which they argue is wrecking the planet, leaving the world's energy crisis unsolved, and setting the stage for stranded assets. Such critics also accuse self-styled climate champions like U.S. President Joe Biden of breaking their promises to tackle the global emergency.
"While extreme heat and environmental disasters from the continued use of fossil fuels ravage communities from coast to coast, the U.S. government is financing the companies contributing to the climate crisis," Friends of the Earth United States campaigner Kate DeAngelis said Friday.
"The potentially hundreds of millions of dollars in support to Trafigura will only advance the further buildout of dirty and dangerous liquefied natural gas export facilities that perpetuate environmental injustices in Gulf communities," she stressed. "The Biden administration must follow its commitments to reduce harmful emissions and end overseas fossil fuel finance by putting a stop to global LNG expansion."
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Biden Accused of Breaking Key Climate Pledge After Ex-Im Bank Backs Indonesia Oil Refinery
"This dirty refinery would threaten the air, land, and water of communities in Indonesia, making a mockery of Biden's purported commitment to environmental justice," said one climate campaigner.
May 12, 2023
Climate groups accused President Joe Biden of violating his pledge to end public financing for international fossil fuel projects after the U.S. Export-Import Bank voted Thursday to approve a $99.7 million loan for an Indonesian oil refinery.
The Export-Import Bank's (EXIM) board of directors, chaired by Biden appointee Reta Jo Lewis, said the loan would "support facility expansion and fuel efficiency and safety upgrades" at a Balikpapan refinery run by Pertamina, Indonesia's state-owned oil company.
Lewis said the expansion project—which has drawn vocal opposition from U.S. and Indonesian civil society organizations—would also "support hundreds of U.S. jobs at dozens of manufacturers across the country, and allow Indonesia to substantially reduce its reliance on imported, refined transportation fuels."
But climate organizations aren't buying the bank's claims about the supposed benefits of funding the oil refinery expansion, a move that runs directly counter to Biden's 2021 vow to end new financing for overseas fossil fuel projects. The decision to approve the funding came less than a month after EXIM briefly backed off its plan to support the nearly $100 million loan in the face of outrage from environmentalists.
"Biden's claims to be a climate leader are increasingly laughable after EXIM's approval of this refinery," Adam McGibbon, public finance strategist at Oil Change International, said in a statement Friday. "Biden has broken the most significant climate promise the United States made at the 2021 Glasgow climate conference."
Kate DeAngelis, international finance program manager at Friends of the Earth U.S., said Thursday that EXIM's support for the refinery expansion "thumbs its nose at Biden's pronounced need for responsible climate action, and his commitment in Glasgow to end overseas fossil fuel finance."
"This project is disastrous enough and yet continues to be a high risk of fires and spills that will harm local communities and the environment," said DeAngelis. "While President Biden is putting forward policies to address climate change, he is financially backing climate disasters through the Export-Import Bank."
\u201cThe oil refinery in Indonesia that @EximBankUS voted to support has a history of fires and spills that have polluted the marine environment.\n\nOne oil spill area polluted at least 7,000 hectares of water. And the risk of further incidents is high. https://t.co/YGEZvSiF3W\u201d— Friends of the Earth (Action) (@Friends of the Earth (Action)) 1683837274
Bloomberg reported Thursday that EXIM's financing is "set to help bolster gasoline production by 101,000 barrels per day at the PT Kilang Pertamina Balikpapan Petroleum Refinery." The loan's approval marked "the first major EXIM bank decision on a fossil fuel project since Biden became president and promised to curb such public funding support," the outlet noted.
Facing backlash over EXIM's move, the Biden White House tried to distance itself from the vote.
"EXIM made an independent decision to approve the loan under its authorities and its decision does not reflect administration policy," said National Security Council spokesperson Adam Hodge, who insisted the White House "stands by its commitment to end new direct public support for the international unabated fossil fuel energy sector."
EXIM has long been criticized for funneling public money to the fossil fuel industry amid the worsening climate emergency.
Friends of the Earth and Oil Change International noted in a report last year that "fossil fuels dominate EXIM's energy portfolio," pointing to the bank's approval of "one of the largest transactions in its history for [liquefied natural gas] in Mozambique in 2019 (and then revised in 2020)."
"Since then," the report continued, "EXIM has continued to approve support for troubling projects, including Pemex, the Mexican oil and gas company with a terrible worker safety and environmental record that led to an ocean inferno and massive methane leak, and Freeport LNG, which involved a lender that quickly collapsed after the EXIM deal and a recent explosion created a 450-foot fireball."
In a letter to EXIM board members earlier this year, Friends of the Earth U.S. and Wahana Lingkungan Hidup Indonesia—both affiliates of Friends of the Earth International—warned against any U.S. support for the Balikpapan refinery, citing the "the high risk of fires and oil spills and the negative impacts on the local communities and climate."
"As the main purpose of the refinery is to produce gasoline and diesel," the letter added, "EXIM support for this project would be in violation of President Biden's climate executive orders and plans, as well as his commitment in Glasgow to end public support for the international fossil fuel projects."
EXIM's vote came as the Biden administration continued to face backlash for greenlighting the Willow project and other major drilling initiatives that will undercut lagging efforts to rein in planet-warming carbon emissions.
"Lending his support to devastating fossil fuel development like the Willow oil project, Alaska LNG, Gulf Coast exports, and the Mountain Valley Pipeline is bad enough," Collin Rees, Oil Change International's U.S. program manager, said Friday.
"But this [EXIM financing] approval shows the United States is committed to doing the fossil fuel industry's bidding in all corners of the world," Rees added. "This dirty refinery would threaten the air, land, and water of communities in Indonesia, making a mockery of Biden's purported commitment to environmental justice."
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