U.S. Ex-Im Bank Undermines U.S. Credibility at Copenhagen By Confirming $3 Billion in Financing for ExxonMobil Fossil Fuel Project

Biggest Deal in Ex-Im Bank's 75 Year History to Emit More Than 3 Million Tons of Greenhouse Gas Emissions Annually 

San Francisco, CA - December 9, 2009 - As global climate debates heat up in Copenhagen, the U.S. Export-Import Bank (Ex-Im Bank) in Washington D.C added fuel to the fire today with its official confirmation of its record-breaking $3 billion in financing for the ExxonMobil-led Papua New Guinea Liquid Natural Gas fossil fuel

project (PNG LNG).[1] [2] The $3 billion in financing, the largest transaction in the history of Ex-Im Bank, is undermining the credibility of U.S. negotiators in Copenhagen who seek to convince the world that the U.S. is serious about reining in greenhouse gases. The PNG LNG project will emit vast amounts of lifecycle greenhouse gases, slash a pipeline through globally significant primary tropical forests, spew toxic pollutants, and foster an increase in violence in project areas.

"Ex-Im Bank's timing is spectacular," said Doug Norlen, Policy Director for Pacific Environment. "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."

The U.S. Ex-Im Bank's provision of $3 billion in financing subsidies to Exxon conflicts with President Obama's and other G20 leaders' commitment in September to phase out fossil fuel subsidies as a step toward reducing greenhouse gas emissions and achieving an agreement in Copenhagen.

The U.S. Ex-Im Bank estimates that PNG LNG will emit 3,100,000 tons of CO2 every year in direct emissions,[3] yet even this figure omits the much greater lifecycle emissions associated with LNG schemes which includes pipeline transport, liquefaction, tanker transport, re-gasification and ultimate combustion of this fossil fuel. According to a Carnegie Mellon study, lifecycle greenhouse gas emissions for LNG projects are more comparable to the lifecycle emissions of coal projects.[4]

Ex-Im Bank's $3 billion in financing for PNG LNG is twice the $1.5 billion in Ex-Im Bank's total financing for all oil, gas and LNG projects supported in FY 2008, and nearly 99 times the $30.4 million that Ex-Im Bank provided for renewable energy that same year.[5] While Ex-Im Bank's record $3 billion in financing for PNG LNG is jaw-dropping, the second and third runner-ups are equally controversial: $2 billion preliminary commitment in May, 2009 benefiting Petrobras, the Brazilian state oil company[6], and $900 million in financing in April 2009 benefiting PEMEX, Mexico's state oil company.[7]

Ex-Im Bank's financing announcement is creating a storm at Copenhagen as many environmental groups question the inconsistency, including Greenpeace and Oil Change International. [8][9]

"Exxon made more than $45 billion last year, making it the most profitable corporation on the planet," said Steve Kretzmann of Oil Change International in Copenhagen. "This is the last place that taxpayer support should be going."

The export credit agencies such as those of Australia, Italy and Japan are believed to be committing smaller amounts.

Key Facts about the Exxon-led PNG LNG project, read here.

See Press Release from 12.7.09

About Pacific Environment

Pacific Environment is a non-profit organization based in San Francisco that protects the living environment of the Pacific Rim by promoting grassroots activism, strengthening communities and reforming international policies. For nearly two decades, we have partnered with local communities around the Pacific Rim to protect and preserve the ecological treasures of this vital region. Visit www.pacificenvironment.org to learn more about our work.

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[1] See http://www.exim.gov/pressrelease.cfm/7535CB14-FFEC-9345-C10DCBC7C5317341/

[2] http://www.pnglng.com/project/artists.htm and www.pnglng.com

[3] See http://www.exim.gov/products/policies/environment/envproj.cfm

[4] P. Jaramillo, W.M. Griffin, and H.S. Matthews, "Comparative Analysis of the Production Costs and Life-Cycle GHG Emissions of FT Liquid Fuels from Coal and Natural Gas," Environmental Science & Technology, vol. 42, 2008, pp. 7559-7565.

[5] http://www.exim.gov/about/reports/ar/ar2008/ExIm_AR.08_.html

[6] http://www.exim.gov/pressrelease.cfm/1C3E8A59-FA74-F3CB-3F3E6E44E287C2DA/

[7] http://www.exim.gov/pressrelease_print.cfm/D89347BA-EAAC-F210-E74E87239B14CAF0/

[8] http://i3.democracynow.org/2009/12/8/as_epa_rules_greenhouse_gases_endanger

[9]http://www.thenation.com/blogs/copenhagen/503878/us_cash_for_exxon_yes_cash_for_climate_change_no