After bowing to political pressure to reverse its rejection of a huge coal fired power project in India, the United States Export Import Bank voted to provide a final commitment and send the project to Congress for final review.
The move marks the last step before final approval of US subsidies for one of the world's largest point sources of carbon dioxide emissions and yet another strategic misstep for the global climate and the clean technology export sector in the United States.
The 3,960 MW Sasan project is one of nine Ultra Mega Power Plants being pursued by the Indian government. Each UMPP is roughly the equivalent of eight average US coal fired power plants. Sasan alone will be responsible for 26 million tonnes to 27 million tonnes of carbon dioxide annually one fifth of all proposed coal fired power plants in the United States combined. With India averaging some of the highest transmission losses in the world of 25% to 40% as well as facing an increasing need for imported coal which leads to price instability for end users many questions the ability of these plants to deliver India's much needed boost in energy supplies.
Mr Doug Norlen policy director for Pacific Environment said that the fix is in at Ex Im Bank. The Bank's board bowed to political pressure and in so doing wastes public financing to worsen their fossil fuel binge. Like many large scale projects Sasan requires government backed financing to reduce the risk the private market refuses to take on.
Mr Michelle Chan economic policy director for Friends of the Earth said that "The US government already lavishly subsidizes the coal industry with some USD 19 billion in tax breaks and other handouts. With this vote, Ex Im Bank is choosing to dole out hundreds of millions more to dirty coal. The US company set to profit from the deal, Bucyrus took home hefty profits last year with USD 2.6 billion in revenue and despite its jobs rhetoric the company's 10 K states that it recently finalized JV with a local partner to expand our manufacturing capacity in China."
However, the support of Sasan is not an isolated incident. According to a recently released Government Accountability Office report, more than 95% of Ex Im's energy portfolio is based on fossil fuels and in 2009 Ex Im Bank financing for renewable energy was less than 0.5% of the agency's total financing. Yet, according to a recent study by the World Wildlife Fund, for every million dollars invested in energy projects, 13.5 jobs are created in the clean tech export sector while only 3.7 and 4.9 jobs are created in the oil, gas and coal industries respectively.
Mr John Coequyt director of International Programs at the Sierra Club said that "Addressing climate change by developing and exporting tomorrow's clean energy technologies strengthens the US economy. Continuing to finance outdated technologies that destroy our environment also destroys our chances for clean energy job creation. It only serves to cripple our competitiveness in the long run.”
The agency is now turning its sights on an even larger and more destructive project, the Kusile coal fired power project in South Africa. The 4,800 MW project would be responsible for 36.8 million tonnes of carbon dioxide annually and would increase South African energy sector emissions by 12.8% and the country's total contribution to climate change by 9.7%.
US citizens have already submitted nearly 7,500 public comments in opposition to the US government's contribution to this dirty project and its environmental impacts. The US Ex-Im Bank Board is expected to take up a due diligence vote on Kusile in early September. With the agency's reversal on Sasan and the sheer scale of the Kusile project in the pipeline, it is likely to be a pitched battle.
(Sourced from Reuters)
