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Friends of the Earth, Greenpeace, and the city of Boulder, Colorado sued two U.S. government agencies for providing financial assistance to oil and other fossil fuel projects without first evaluating the projects' global warming impacts on the United States.
The suit was filed against two U.S. government agencies – the Export Import Bank (Ex-Im) and the Overseas Private Investment Corporation (OPIC). Ex-Im and OPIC are taxpayer funded agencies that provide financing and loans to U.S. corporations for overseas projects that commercial banks deem too risky.
Update: February 6, 2009 – The federal lawsuit that sought to force two U.S. agencies to address the global warming implications of their overseas financing activities was settled today after more than six years; the suit established important legal precedents related to global warming.
Friends of the Earth, Greenpeace, and the city of Boulder, Colorado filed the suit in August 2002 and were later joined by the California cities of Arcata, Santa Monica and Oakland. The Plaintiffs alleged that the Export-Import Bank of the United States (ExIm)and the Overseas Private Investment Corporation (OPIC) illegally provided more than $32 billion in financing and insurance to fossil fuel projects over 10 years without assessing whether the projects contributed to global warming or impacted the U.S. environment, as they were required to do under the National Environmental Policy Act (NEPA). By 2003, the fossil fuel projects financed by the two agencies from 1990 to 2003 accounted for nearly eight percent of the world’s carbon dioxide emissions, or nearly one third of total U.S. emissions.
In August 2005, a federal judge found that the Plaintiffs suffering economic and other damages from climate change had standing to sue under NEPA, opening up the courthouse doors for the first time to those injured by climate change. Testimony from the case, which successfully asserted that climate change is real and caused by human activities, later informed the Mass. v EPA decision, in which the Supreme Court held that carbon dioxide and other greenhouse gases are pollutants that can be regulated under the Clean Air Act.
Under the settlement agreed to today, the Export-Import Bank will begin taking carbon dioxide emissions into account in evaluating fossil fuel projects and create an organization-wide carbon policy. The Overseas Private Investment Corporation will establish a goal of reducing greenhouse gas emissions associated with projects by 20 percent over the next ten years. Both agencies will commit to increasing financing for renewable energy.
The settlement represents an important victory in the continuing campaign to hold both agencies accountable for their contributions to climate change.
Read Friends of the Earth International’s Position Paper on fossil fuel and mining projects.
Pam and Jesse Williford
Pam and Jesse Williford live in Raleigh, North Carolina. Mrs. Williford works at home. Mr. Williford is retired from a career with IBM and now teaches math at Wake Technical Community College. Mr. and Mrs. Williford are members of Greenpeace and Friends of the Earth.
Mr. and Mrs. Williford bought a building lot on Emerald Isle on North Carolina’s Outer Banks approximately twenty-five years ago. They hope to build a home and retire there within the next couple of years. The lot is located in the middle of the western side of the island approximately 1,000 feet from the ocean side of the island with an approximate elevation of five to eleven feet.
Mr. and Mrs. Williford are concerned about the rising ocean levels, increased storm surge, the increased frequency and severity of storms, and increased erosion resulting from climate change. They may not have bought the lot if, twenty-five years ago, they had known the dangers of climate change. If the Williford’s build, they will have to design and build their home at substantial additional cost to account for rising ocean levels, and the resulting erosion from more frequent and more powerful storms. The Williford’s are also concerned about Emerald Isle’s vegetation. The storms and storm surge will adversely affect the trees and vegetation and the island’s aesthetic value. Additionally, there is concern about the effects on the water supply and sewage systems. Mr. Williford says “I did not think that in our lifetime or our kids’ lifetime that a house in the middle of Emerald Isle would be so affected, but now we know otherwise.”
Dr. Phillip Dustan
Dr. Phillip Dustan is a full-time professor in the Biology Department of the College of Charleston in Charleston, South Carolina. He is a member of Friends of the Earth.
Dr. Dustan started his study of coral reefs in 1969. Much of his work has focused on coral reefs off the Florida Keys. In 1974, he established long-term reef monitoring sites in the Key Largo National Marine Sanctuary. This site is the oldest permanently marked coral reef study site in the Eastern Atlantic/Caribbean area. He is still monitoring that site and has published papers detailing his findings. In 1995, Dr. Dustan was asked to be a principal investigator on the Environmental Protection Agency’s Florida Keys Coral Monitoring Project.
The EPA Coral Reef Monitoring Project documented an overall 38 percent loss of living coral cover in the Florida Keys National Marine Sanctuary between Key Largo and Key West and the Carysfort Reef in the northern Florida Keys between the years 1996 and 2000. Climate change is a significant factor responsible for this loss of coral.
Climate change harms Dr. Dustan because its effects diminish opportunities for fundamental biological research. Dr. Dustan states that the impacts on coral reefs are “tantamount to going to Sequoia National Forest and finding every 90 out of 100 trees dead or on the ground. I cannot keep my head in the sand and keep studying the pure physiology and evolutionary biology of corals. I have to speak up.”
Dr. Dustan’s recreational interests are also harmed by climate change. He is an active scuba diver. He has and will continue to scuba dive in reefs affected by climate change, including reefs off of the Florida Keys. These reefs are no longer healthy. They are very small with only few individual colonies, and with far fewer fish. His enjoyment of the reefs, and his ability to share the reefs with family and friends has been diminished.
Dr. Dustan and his family also own land and are building a home on John’s Island, approximately 10 miles southwest of Charleston, SC. He and his family bought the land in 1999. Their home is being built on the shore of an estuary known as the Stono River, approximately 5.5 miles from the ocean and on land eight feet above sea level. The climate change is causing rising sea levels, increased storm severity, and increased storm frequency. As a result, Dr. Dustan is building his home higher and stronger than required by current code even though the home is over five miles from the ocean. This is costing him a significant amount of money. His insurance for the new home is more expensive, which Dr. Dustan believes is attributable to the effects of climate change.
Arthur and Anne Berndt
Arthur and Anne Berndt own and operate Maverick Farm in Sharon, Vermont. They have owned Maverick Farm since 1988. They are members of Greeenpeace and Friends of the Earth. Maverick Farm is one of the largest maple syrup producers in Vermont. Maple syrup is produced from sap drawn from approximately 15,000 – 16,000 sugar maple trees.
Arthur and Anne plan to continue operating Maverick Farm for at least the next twenty years. He will either pass the farm on to his children or conserve the land when he retires.
However, Arthur understands that, as a result of global warming, there will be a significant northward shift in the prevailing forest types. According to official U.S. government reports, the maple-beech-birch forest type is projected to shift north into Canada and no longer be dominant in the northeastern United States by the late 21st century. The diminished population of sugar maples will cause loss of syrup production in northern New York and New England. At current rates of warming, this shift is likely to occur with the next ten to twenty years, and possibly sooner if the warming is accompanied by outbreaks of pests or disease.
“We all feel nervous about climate change,” says Arthur Berndt. “If we have no maples we have no farm income and the aesthetic value of the land will be devastated. This would adversely affect the economic and conservation value of my farm.”
Over the last few years, Mr. Berndt has noticed that the regeneration rate for the sugar maple trees appears lower, although the trees’ production of seeds has been unusually and exceedingly heavy. The seeds sprout but the trees die while they are still small saplings. Maple trees produce heavy seed crops when they are stressed.
He has also noticed that the maple-sugaring season starts and ends earlier. This year (2002), the season started in mid-February. Generally, the season has advanced two to three weeks, to well before Town Meeting Day —the traditional start of the season. Town Meeting Day in Vermont is the first Tuesday in March. He has also noticed that they receive more rain and less snow during the winter and that swings in the weather are more dramatic and that low temperatures are now warmer. Low temperatures below freezing are necessary to maple syrup production.
“If climate change will have the predicted impacts, we should start culling trees now as the timber market will become saturated rather quickly once maples start disappearing in large numbers. However, like many people, we are in denial because it is too depressing to consider the loss of Maverick Farm’s long-term value,” says Arthur Berndt.
Melanie Duchin lives and works in Anchorage, Alaska. She is a voting member of Greenpeace, a supporter and a Greenpeace employee.
Ms. Duchin currently lives in downtown Anchorage and would like to buy a house on the Anchorage hillside. However, she is afraid to invest in a home on the Anchorage hillside because of fire danger. Warmer temperatures, linked to global warming, have contributed to a spruce bark beetle outbreak that has decimated the forests of southcentral Alaska. Many forests and trees are dead or dying, creating a significant fire danger. The drier weather over the last several years also contributes to this fire danger.
The dying Spruce trees throughout the region also harm Ms. Duchin’s recreational interests in southcentral Alaska. She lives fifteen minutes from hiking trails in the Chugach Mountains which form a perimeter around the south and east sides of Anchorage. She regularly hikes and runs in the Chugach Mountains. She also travels to the Matanuska-Susitna Valley, Prince William Sound and the Kenai Peninsula several times every summer to visit friends, hike and run in the mountains, kayak, and sail. Ms. Duchin’s wilderness recreational activities are diminished by concern and worry about this and the threat of fire.
Dead and dying Spruce trees are everywhere in her area. On the Kenai Peninsula, an entire Spruce forest has died in the last decade. The dead and dying forests obviously have dramatic and adverse impact on Alaska’s aesthetic beauty, as well as it safety as a recreational destination.
Ms. Duchin also spends time in the Alaskan Arctic for her personal enjoyment. The Arctic is one of her favorite places because of its unique beauty and the distinctive Arctic species of flora and fauna that live there. In June of 2000 she took a whitewater-rafting trip down the Hula Hula River. The trip started in the Brooks Range and ended at the Beaufort Sea. The entire trip was in the Arctic and in environments of permafrost, glacially-fed rivers and the Beaufort Sea. Each of these environments is affected by global warming.
Her Labrador retriever has been trained to track ringed seals for biologists studying in the Arctic. She is continuing his training and intends to travel to work with more biologists conducting research in other parts of the Arctic. However, shrinking and receding pack ice makes the Arctic environment more dangerous for her and her dog. Early spring break-up, early flooding of rivers and unstable ice are hazards that are linked with and exacerbated by global warming.
Melanie would like to continue to travel in the Arctic for recreational purposes. She loves to bird watch, and see mammals such as musk ox, caribou, and grizzly bears. She also enjoys watching seals and whales in their natural habitat. It is very important to her that the Arctic and all of its distinctive species and ecosystems remain intact. She is planning an excursion on the ice with her dog in the spring of 2003 and an Arctic river trip in the summer of 2003, but can only hope to return to the Arctic in subsequent years given the pace of global warming in the region.
Featured Projects of Destruction
1) Chad-Cameroon Pipeline
U.S. ECA Funding Sources: Ex-Im and OPIC Cumulative Greenhouse Gas Emissions: The Chad-Cameroon Oil Pipeline will result in emissions of 445.9 million tons of CO2 over its anticipated life under the Pace University methodology. Oil will be shipped from the coast of Cameroon to international markets including the United States.
Background: This project will run from Chad through most of Cameroon and has a capacity of an estimated 225,000 barrels of oil per day.
On June 14, 2000, Ex-Im’s Board approved a $158.1 million loan guarantee in support of the ExxonMobil, Chevron investment in the Chad-Cameroon Oil Pipeline. Among the project developers named to receive the Ex-Im Bank guarantee: Halliburton subsidiary Brown & Root; Willbros Engineers Inc.; and IWL Communications.
On May 23, 2002, the Board of Directors of the Overseas Private Investment Corporation (OPIC) approved up to $250 million in OPIC political risk insurance for the drilling and repair of oil and gas wells in southwestern Chad by Pride International, Inc., headquartered in Houston.
Ex-Im and OPIC did not comply with NEPA before deciding to finance this project.
In addition to the climate change impacts of this project a number of severe biodiversity and indigenous peoples impacts are also occurring including tropical forest destruction. Please contact Friends of the Earth and Greenpeace for more information. For more project information please see Friends of the Earth’s “Broken Promises” report athttp://www.foei.org/ifi/brokenpromisessum.html. Also please see letters from non-governmental organizations to Ex-Im regarding project concerns:http://www.bankwatch.org/publications/policy_letters/2000/chadlettexim.htmlhttp://www.foe.org/international/eca/letter.html
2) Sakhalin II Oil & Gas Invesment- RUSSIAN FAR EAST
US ECA Funding Sources: OPIC Cumulative Greenhouse Gas Emissions: Sakhalin II will result in 1129.9 tons of carbon dioxide emissions over its lifetime under the Pace University Methodology.
Background: According to Sakhalin Energy, Sakhalin II will deliver 45,000 bbl/day. Sakhalin II holds estimated reserves of 1 billion barrels of oil in the Piltun Astokhskoye field, and 14 trillion cubic feet of gas in the Lunskoye field.
In 1997, OPIC committed to a $116 million loan guaranty for the project. The $650 million first phase of Sakhalin II is being undertaken by Sakhalin Energy Investment Company, Ltd., in which Houston, Texas-based Marathon Oil Company was a 37.5 percent interest. Marathon was the stated client of OPIC, however after Marathon pulled out of the consortium, OPIC financing remained despite no U.S. companies in the consortium.
OPIC did not comply with NEPA before deciding to finance this project.
Sakhalin II is currently under operation.
In addition to the climate change impacts of this project a number of other environmental and social concerns are being brought about by Sakhalin II. Please see the following links for additional project information: www.seen.org andhttp://www.pacificenvironment.org/infocenter/Articles/Sakhalinecology.htm
Featured Projects Currently Under Consideration For OPIC or Ex-Im Approval
1) Camisea Fossil Fuel Drilling and Extraction- PERU
PlusPetrol, Hunt Oil and other companies have begun preliminary seismic testing and routing but full construction is dependent on loans from Ex-Im and other financial institutions including the Inter-American Development Bank and Citicorp. U.S. ECA Funding Source: Ex-Im Bank (pending) Cumulative Greenhouse Gas Emissions: 133.2 million tons over its lifetime. This single project’s emissions are greater than those of all of Central and South America combined (excluding Argentina and Brazil) in the year 2000, and more than the entire African continent combined (excluding South Africa) for the same year, according to the Institute for Policy Studies. One key market for this LNG will be California.
Ex-Im has indicated the view that NEPA is not applicable to this project.
Background: The Camisea natural gas project is the first major gas development in Peru. The project is located in one of the world’s most ecologically prized rainforests in the remote Lower Urubamba Valley of the Peruvian Amazon. The Camisea region is described by scientists as “the last place on earth” to drill for fossil fuels. The gas development area known as Block 88 covers the legally titled territory of several voluntarily isolated and uncontacted indigenous peoples. The field contains an estimated 11 trillion cubic feet of gas and 600 million barrels of condensate. Half of this gas is anticipated to be shipped to the United States to supply West Coast energy markets.
A U.S. $2.7 billion project, Camisea involves the construction of gas wells, flow lines, a processing plant and two pipelines (running side by side) to the Peruvian coast. The project is expected to be on line by December 2003 and preliminary construction has begun. The upstream environmental license was awarded in December 2001 and the downstream environmental license was granted in early March 2002.
For more information on this project please see www.amazonwatch.org
2) Baku-Ceyhan Pipeline- CASPIAN REGION
U.S. ECA Funding Sources: OPIC and Ex-Im Cumulative Greenhouse Gas Emissions: 3.1 billion tons, based upon a planned pipeline capacity of 50 million tons per year, for 20 years per Pace University Methodology.
Background: BP/Amoco is the lead corporate applicant to Ex-Im and OPIC. Proven oil reserves in Azerbaijan and Kazakhstan are about 20 billion barrels, a little more than the North Sea and slightly less than the U.S. Potential exports from the Caspian region could increase by 1.8 billion bpd from the current 800 bpd by 2005, as the United States works closely with private companies and countries in the region to develop commercially viable export routes, such as the Baku-Tbilisi-Ceyan (BTC) and Caspian Consortium oil pipelines. Moreover there is concern that exports could grow even more.