Congress puts Obama's overseas coal ban on chopping block

President Obama's pledge to end US support for overseas coal projects is on the chopping block, as Congress debates the future of the US Export-Import Bank. A reversal of the coal ban would deal a blow to the administration's Climate Action Plan.

Centrist senators hope to scrap an Obama administration prohibition on financing for overseas coal projects as part of a compromise that would renew the charter for the US Export-Import Bank.

The Export-Import Bank borrows money and offers loan guarantees to accommodate trade deals and boost US exports. But as the Sept. 30 deadline for congressional reauthorization nears, some conservative Republicans hope to shutter the institution – targeting it as a recipient of “corporate welfare” and a symbol of big government.

In the face of conservative opposition to renewal, two moderates – Sens. Joe Manchin (D) of West Virginia and Mark Kirk (R) of Illinois – have drafted legislation that a bipartisan group of senators is rallying around. The Manchin-Kirk bill would grant a five-year charter renewal, while reversing recent Obama guidelines that limited the bank’s ability to finance overseas coal projects. The bill would also raise the bank’s credit exposure limit from $140 billion to 160 billion, according to a copy of the bill obtained by The Hill.

In a statement Friday, Sen. Roy Blunt (R) of Missouri said he was “pleased to co-sponsor” Senator Manchin’s bill. Senator Blunt specifically cited the fact that Manchin’s bill would “ease restrictions on financing exports for coal-fired power plants, and allow America to be more competitive in the international marketplace.” Other supporters include Sen. Mike Johanns (R) of Nebraska and Sen. Lindsey Graham (R) of South Carolina, according to a Manchin spokesperson.

With Republican support growing and Democrats on board, bank reauthorization could gather enough steam to clear the Senate with a filibuster-proof majority.

In the House, Democrats have pushed House Speaker John Boehner (R) of Ohio to bring reauthorization to a vote, but so far Mr. Boehner has left it to the House committee process. In June, 41 Republican congressmen signed a letter urging Boehner to expedite reauthorization of the bank, suggesting there is bipartisan support for reauthorization in that chamber as well.

But the Manchin-Kirk bill, if successful, would represent a blow to President Obama’s Climate Action Plan, which has guided administration efforts to reduce greenhouse emissions.

"Without guidelines or limits, ever-increasing numbers of new coal plants worldwide will just continue to emit more carbon pollution into the air we breathe,” Fred Hochberg, chairman and president of the bank, said in a December statement announcing the stricter environmental guidelines. Under those guidelines, the bank would not finance “high carbon intensity plants” unless they included carbon-capture technology or were in countries unable to secure other financing.

The move away from financing coal projects aligned Ex-Im with several other international and domestic financial institutions, including the Treasury Department and the European Bank for Reconstruction and Development.

Environmental groups call the Manchin-Kirk bill a huge step backward.

“We consider this an irresponsible use of public funding – not only for the environment, but for human health,” said Doug Norlen, senior program manager in the economic policy program at Friends of the Earth, an international network of environmental organizations.

But Manchin argues that any US coal technology would be an improvement over dirtier technologies otherwise used in the developing world.

“If we are truly committed to protecting and cleaning up our global environment, the US should lead the world in clean coal technology and export those technologies to countries worldwide,” he said in a statement Wednesday.

Manchin is chairman of the subcommittee that oversees the Export-Import Bank; Senator Kirk is ranking member on the subcommittee.

[Editor's note: This post originally misidentified John Boehner as "majority leader". He is speaker of the US House of Representatives.]