Above the harbor in Curtis Bay is a 1-acre urban farm. "Look out over the harbor and you can see piles and piles of coal," says Jason Reed, a community organizer who works there.
That coal is the subject of a lawsuit filed Wednesday by a coalition of environmental groups against the U.S. Export-Import Bank, challenging the federal agency's financing of fossil fuel exports from ports in Baltimore and Hampton Roads, Va.
The lawsuit, filed in a federal court in California, targets a $90 million loan guarantee the bank made last year to Xcoal Energy & Resources, a Pennsylvania coal broker, to sell coal from Appalachian mines to customers in Asia and Italy. The plaintiffs say the bank failed to conduct a required environmental review before providing the guarantee. They want to block a portion of the $90 million that hasn't yet been disbursed through Xcoal's intermediary, PNC Bank.
The U.S. Export-Import Bank makes loans and loan guarantees to private companies to encourage the export of U.S. products by assuming the financial risks involved in international trade. The bank has been increasing its support for domestic and foreign fossil-fuel projects, according to Doug Norlen, policy director for Pacific Environment, one of the plaintiffs. Norlen attributes the increase to an effort to meet President Barack Obama's stated goal of doubling U.S. exports by 2015.
In a speech on climate change last month, Obama announced that the bank would no longer support the construction of new coal-fired power plants overseas. Fumes from coal combustion are particularly heavy in carbon dioxide, which contributes to global warming.
In the lawsuit, the plaintiffs contend that the financing ban should also apply to domestic coal exporters.
"What we see with this case is a clear problem in coherence between the administration's ending of support for overseas projects but a lack of oversight for projects, specifically export projects, here at home," the Sierra Club's Justin Guay told reporters Wednesday.
The bank declined to comment on the lawsuit, noting in a statement that it is trying to balance "the need to protect the environment" with its mission of "supporting U.S. exports and American export-related jobs."
Phil Smith, communications director for the United Mine Workers of America, said the union has "thousands of members whose jobs depend on that coal, at least in some part, being exported. Their families depend on that, their communities depend on that, their school districts depend on that."
Coal exports have increased rapidly in recent years for several reasons, including high demand in China and Europe and a glut of cheap natural gas from domestic shale, which utilities have been substituting for coal. Traffic at the Hampton Roads port, site of the country's busiest coal export terminals, has nearly doubled in volume since 2009. Exports from Baltimore's two privately owned terminals have tripled in the same period.
Environmentalists say the increase is harmful to the global climate and to residents who live near shipping facilities and railroads. Coal dust, which can contain mercury and arsenic, is everywhere in Curtis Bay, according to Reed, the community organizer. Some residents have to wash their windows every few days, he said, and the dust is so fine that it accumulates inside cars even if they have been locked overnight.
After noticing that many of the children he works with in the garden seemed short of breath, and worrying about the acrid, metallic smell that seemed to cling to the back of his tongue there, Reed began to feel "a moral prerogative" to try to improve ecological conditions in the area. He joined the Chesapeake Climate Action Network, another plaintiff.
Xcoal plans to use the loan to move $1 billion in coking or metallurgical coal, which is used to manufacture steel. If the lawsuit succeeds, the company would still be able to seek commercial funding for its venture, though a loan at the market rate would presumably be more expensive than borrowing from the federal government.Copyright © 2014, The Baltimore Sun