SAN FRANCISCO (CN) - The U.S. Export-Import Bank illegally approved a $90 million loan to a polluting coal company whose mining threatens public health, six environmentalist groups claim in court.
Chesapeake Climate Action Network et al. sued the Export-Import Bank of the United States and its chairman Fred P. Hochbert, in Federal Court.
The environmentalists claim the bank agreed to fund Xcoal Energy & Resource's coal mining and export business without conducting the environmental impact surveys required by the National Environmental Protection Act (NEPA).
"The $90 million loan guarantee facilitates a commercial loan between Xcoal and PNC Bank, N.A. and supports Xcoal's mining, transport, and export of coal," the lawsuit states. "Ex-Im Bank's financing enables Xcoal to broker an estimated $1 billion in sales of coal for export from mines in Appalachia; transport that coal by rail to port facilities in Baltimore, Md., and Hampton Roads, Va.; unload, store and otherwise handle that coal in port; and then transport that coal by ship to clients in China, Japan, South Korea and elsewhere."
Xcoal, based in Latrobe, Pa., mines and ships coal to customers around the world. "Xcoal also funds coal mine development, promotes expansions of coal preparation plants, and develops bulk terminal projects, among other coal-related infrastructure projects," the complaint states.
The groups claim Ex-Im Bank's deal with Xcoal will endanger public health by emissions of toxic coal dust and diesel exhaust, exacerbating respiratory conditions such as bronchitis and asthma.
"Trains that transport coal from mines to export terminals pollute the air along rail lines and at rail terminals with coal dust. Coal trains in the United States are not covered. Each open car carrying coal from mines in Appalachia to the port terminals in Hampton Roads and Baltimore releases coal dust into the air, water, and soil in the communities through which it travels. Coal dust blows off the tops of these cars, especially during changes in temperature, humidity, and wind speed. Coal dust may also escape through holes in the bottom of the cars. When a train arrives at the Hampton Roads or Baltimore terminals, it may wait for days in a train yard at the port before its coal is unloaded. Alternatively, a train arriving at port may dump its coal into an open-air storage pile or holding silo. These waiting train cars and open-air coal piles are significant sources of coal dust at port terminals. When a ship is ready for loading, conveyer belts transport the coal from the train car, silo, or coal pile, and dump the coal onto the ship, thereby releasing additional coal dust into the air," the complaint states.
If coal dust 2.5 micrometers in diameter or smaller enters the lungs or bloodstream, it can cause "premature death in people with heart or lung disease, heart attacks, decreased lung function, and increased respiratory effects, including irritation of the airways, aggravated asthma, coughing, and breathing difficulties," according to the complaint.
Children, elderly people, low-income communities and people with asthma or lung and heart problems face the highest risks from exposure to coal dust.
Small dust particles also increase haze, alter the acidity and nutrient balance in water and reduce ecosystem diversity, according to the complaint.
Coal dust from Appalachian mines contains small amounts of arsenic and mercury, which can cause cancer, neuropathy, and kidney damage. The toxic metals damage the environment by increasing air pollution and contaminating water and soil, among other things, the complaint states.
"Coal mining also causes significant environmental impacts ... including long-term acid mine drainage that causes acidification of watersheds and release of toxic metals; large amounts of waste rock and contaminated waste water (slurry); and water and air pollution from extraction, crushing, processing and washing of coals," the complaint adds.
Since Ex-Im Bank's financial support of Xcoal's activities will allow Xcoal to mine and transport even more coal, the deal will increase Xcoal's capacity to harm the environment and the public health, the groups claim.
NEPA requires federal agencies to conduct environmental impact surveys to ensure that their actions will not harm the natural and human environments.
NEPA's Council on Environmental Quality allows agencies to exempt certain actions from this requirement if they can demonstrate that the action will not have a significant effect on the environment or people. "However, the agency must provide for 'extraordinary circumstances in which a normally excluded action may have significant environmental effect," the complaint states.
Ex-Im Bank claimed its loan to Xcoal was exempt from NEPA's environmental survey requirement. But the environmentalists claim the loan does not meet the "extraordinary circumstances" requirement because of "the significant environmental impacts of the activities" it will finance.
They seek declaratory judgment that Ex-Im Bank violated NEPA by failing to conduct adequate environmental review before approving the loan, and a court order rescinding the loan until the bank fulfills its obligations under NEPA.
Plaintiffs include Friends of the Earth, the Sierra Club, the West Virginia Highlands Conservancy, the Center for International Environmental Law, and Pacific Environment
They are represented by Sarah H. Burt with Earthjustice.
The Export-Import Bank declined to "comment directly on pending litigation," but noted that it "has been an environmental leader among the world's export credit agencies for decades, balancing the need to protect the environment with its mission of supporting U.S. exports and American export-related jobs."
It then provided a timeline that it says demonstrates how it "adheres to strict environmental guidelines, and has taken a number of actions since 1992 to address the impact on the environment related to its export financing."
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