US Export-Import Bank Investment in Coal

While US coal consumption has declined over the past 10 years, US coal exports have increased. The range of impacts on local communities and ecosystems – which face a chain reaction of increased mining, rail traffic, and port activity – remains woefully unaddressed by state and federal regulators.

In 2012, the US Export-Import Bank (Ex-Im Bank)—a federal agency that has been channeling billions of US tax dollars into polluting energy projects abroad—provided a $90 million loan guarantee to XCoal & Energy Resources for coal exports. The coal is to be extracted in Appalachia and shipped from ports in Baltimore, Maryland and Norfolk, Virginia to markets in China, Japan, and South Korea.

In July 2013, CIEL and other environmental groups filed a lawsuit against the Ex-Im Bank, challenging its failure to conduct an assessment of environmental impacts as required under the National Environmental Policy Act (NEPA). The loan guarantee directly counters President Obama’s Climate Action Plan, which promised to increase America’s role in the fight to reverse climate change by setting carbon pollution standards for new and existing US coal plants as well as by reducing public funding for coal-fired power plants overseas.

Ex-Im Bank’s continued support for coal exports flouts these commitments, and the Climate Action Plan does nothing to address the United States’ expanding role in coal exports, a major loophole. US coal exports have significant social and environmental impacts both at home and overseas. In the United States, communities near mining sites, as well as those located along the transport routes and ports, are affected by coal extraction, transport and dust – and these impacts must be assessed.

In January 2015, the DC District Court denied our motion for summary judgment. Without reaching the merits of the NEPA claims, the court found that the plaintiffs lacked standing. This decision does not imply that Ex-Im Bank is in compliance with the law or that NEPA does not apply to the Bank’s loan guarantees for coal exports. Coal still kills, even if this court has decided not to hear our claims. The harms from coal exports are real and the government should be taking them into account before financing coal exports.