It's a strategic gamble Barack Obama is making by going to Copenhagen at the end of the U.N.
climate-change conference instead of at its start. The president's idea is to
close the deal rather than open discussions with a long list of unlikely
promises. That leaves Todd Stern, America's
lead representative in Denmark,
to fight a rearguard action against claims that the United States owes
climate-change reparations in the meantime. If our disproportionate emissions
levels have caused damage to countries in the developing world, we should have
to pay the cost, they argue. It’s a damned mess. The stakes are high for both
Obama and the United States
-- the crisis is one of credibility, and reputations are on the line.
So explain this: In the middle of these heated climate-change discussions,
the Export-Import Bank of the United
States, the federal credit agency tasked
with boosting American exports, announces a final agreement on the largest
financing project in its 75-year history. The bank has brokered a $3 billion
deal to help Exxon Mobil and other companies build a liquefied natural gas
plant as well as a 400-mile pipeline to move the gas in Papua New Guinea.
The gas is located in Papua
New Guinea's remote highland areas, and it
will have to be moved to the coastal region by a 190-mile pipeline and then
transported through a different 250-mile stretch of undersea pipeline to the
processing plant. By conservative estimates, the project will result in an
additional 3.1 million tons of carbon dioxide pumped into the atmosphere every
year.
Environmentalists are crying foul.
"Ex-Im Bank’s announcement in the early days of the Copenhagen climate
talks shines a spotlight on the hypocrisy between this federal agency’s massive
subsidies for fossil fuel projects and the U.S. government’s commitment to end
fossil fuel subsidies," proclaimed Doug Norlen, policy director for
Pacific Environment, a San Francisco group that has waged war on the public
financing of environmentally harmful projects for years.
The Export-Import Bank deal is only part of it. The Papua New Guinea project
is a huge $15 billion effort led by Exxon but includes companies from Australia
and Japan as well. It is being sold as the country's biggest foreign investment
to date -- an economic game changer for the Pacific island nation that could
triple export revenue and turn the country into one of the world's most
significant energy producers.
The downside, of course, is that the project threatens to accelerate the
already brisk destruction of some of the world's most pristine and valuable tropical
rainforests.
"[It] undercuts the Obama administration's claims that they care about
reducing fossil-fuel emissions when your chief credit-financing agency is
financing fossil-fuel projects that make the problem worse," Norlen told
me.
But in the current economic environment, the Export-Import Bank’s mission to
advance a project that will boost U.S. exports all while preserving American
jobs, may take priority over environmental concerns half a world away. Accord
to bank officials, there are more than 60 American export companies that will
directly benefit from the PNG deal. Bank officials also insist that they are
not oblivious to the concerns about fossil-fuel emissions. Indeed, last month,
the Export-Import bank became the first agency of its kind to adopt
a "comprehensive carbon policy to guide its support of United States
exports in light of climate-change concerns."
Bank officials seem ambivalent about the new policy and argue that U.S. withdrawl
from projects involving fossil fuels will only drive the business elsewhere and
hurt American workers. The bank's solution to this problem is to lobby other
member countries of the Organization for Economic Cooperation and Development
to adopt similar carbon-reduction policies. But environmentalists say that
gradualism is not acceptable and only worsens the problem. "[The
Export-Import Bank] also [has] in their charter a responsibility to do no harm
to the environment," Norlen insisted. "Instead they are throwing
gasoline on the fire of climate change and making things worse."
Norlen understands that he works in a field where victory often looks like
defeat. The projects he campaigns against never die; they almost always get
built. His best hope is to try to contain them and the damage they do. Recently
he has devoted his time to making sure that these projects get as little public
funding as possible.
"The point now is to reduce public financing for these fossil-fuel projects
so that it is harder for them to get built and eventually to have that money go
into the financing of renewable-energy projects," Norlen said.
Norlen knows that it'll take a while -- if ever -- before his vision is
realized. The best evidence of the challenges that he and other activists face
is that the government most in favor of this project is not our own but that of
Papua New Guinea.
This summer, Arthur Somare, its minister for public enterprises, praised
Exxon’s efforts and celebrated the project's potential. "This puts Papua
New Guinea, which will have a direct 19.4 percent equity in the LNG [Liquefied
Natural Gas] project, right on deadline to become the world’s newest LNG
supplier by late 2013 or early 2014."
Exxon executives also stress that widespread support for the project exists
in Papua New Guinea,
pointing to an "Umbrella Benefits Sharing Agreement" signed by
government officials and landowners alike. And Miles Shaw, the chief
spokesperson for the project, argues that the project will boost Papua New Guinea's
economy at large.
But at what price to the environment? Norlen also points out, "These
projects generally benefit the elite in these countries, and the wealth hardly
ever trickles down."
It will be interesting to see how Obama finesses Exxon's role as a
super-producer of greenhouse-gas emissions coming out of Copenhagen, particularly in these tough
economic times. Certainly, projects like the one in Papua New Guinea, which pit the
environment against the economy, don't make the task easy.
FAIR USE NOTICE. This
document may contain copyrighted material whose use has not been specifically
authorized by the copyright owner. Pacific
Environment is making this article available in our efforts
to advance the understanding of environmental and social issues. We believe
that this constitutes a 'fair use' of the copyrighted material as provided for
in section 107 of the U.S. Copyright Law. If you wish to use this copyrighted
material for purposes of your own that go beyond 'fair use,' you must obtain
permission from the copyright owner.
