Energy Scorecard

The House will soon consider legislation to reauthorize the Export Import Bank. Having expired this summer, a band of Representatives summoned a seldom-used parliamentary procedure known as a discharge petition to skirt the usual legislative process and force a vote on the House floor for H.R. 597, the Reform Exports and Expand the American Economy Act of 2015. The Ex-Im Bank is the poster-child for corporate welfare and a hallmark of cronyism. Further, the Export-Import bank is used to provide hundreds of millions of dollars a year for unnecessary energy subsidies that distort the market and hurt consumers. The American Energy Alliance urges all Members to oppose reauthorization of the Export-Import Bank and vote against H.R. 3611.

President Obama has used Ex-Im to advance his costly green energy agenda. The Ex-Im Bank has been very aggressive with their subsidies for renewable energy exports to the tune of $257 million in FY 2013, $355.5 million in FY 2012, $721.4 million in FY 2011, $332 million in FY 2010, and $101 million in FY 2009. Ex-Im has provided large subsidies for natural gas, solar, nuclear, and wind projects. In fact, Ex-Im doled out $19 billion for energy-related projects between FY2007 and FY2014, 11 percent of all of Ex-Im subsidies over that time period.

This green agenda is checkered with controversial arrangements and marked disasters. For example, at one point Ex-Im issued $455.7 million in loan guarantees to St. Clair Solar in order to purchase solar panels from First Solar. Remarkably, it was uncovered that St. Clair actually owns First Solar; Ex-Im was paying a company to buy and sell products to itself and call it an “export.”

Examples of Ex-Im corruption further abound in the energy sector. Some companies “double dip” in federal subsidies as well as Ex-Im financing. For instance, energy giants Gamesa, Areva, and Abengoa - whose combined 2014 revenue tops $20 billion - have all received billions of dollars from a combination of Ex-Im assistance and taxpayer-subsidized Section 1603 grants.

One of Ex-Im’s most notable ventures came in the Solyndra debacle. Ex-Im approved a $10 million loan guarantee to a Belgian bank that financed the purchase of solar panels from Solyndra, a firm that went bankrupt after receiving a loan guarantee of more than $500 million from the Obama administration.

Further, the Ex-Im bank has been tied to Brazilian industrial magnate Marcelo Odebrecht, who was arrested on corruption charges for allegedly bribing officials at Petrobas, Brazil’s state-owned oil company. Diane Katz of The Heritage Foundation points out instances of Petrobras receiving Ex-Im handouts:

In 1998, for example, the Ex-Im board conferred “delegated authority” on Petrobras to issue up to $100 million in loan insurance and guarantees backed by the bank. Other deals include:

• January/May 2001: $44 million in financing for Petrobras to purchase a steam turbine and generator from General Electric for a power plant project. Four months later, the loan amount was increased to $97 million.
• October 2001: A $178 million loan to buy gas turbines and other equipment for a power plant project involving Petrobras and two other companies.
• May 2005: A $39 million loan guarantee for equipment to build an oil production platform for Petrobras off the coast of Brazil.
• 2009: A preliminary commitment of $2 billion to Petrobras as part of the bank’s “proactive outreach.” The financing was intended to develop offshore oil and gas reserves and upgrade its refining and distribution infrastructure. (This financing coincided with the Obama administration’s restrictions on offshore oil and gas projects.)
• February 2010: A $308 million loan guarantee to a Petrobras subsidiary for oil and gas field development. Bank records show $100 million is still outstanding.
• 2012: A $23 million loan guarantee to a Brazilian firm that will supply helicopter services to Petrobras for its deep-water drilling rigs.

While the Ex-Im bank was busy financing Brazil’s corrupt state-run oil company, the Obama administration has made it more difficult for American oil companies to obtain offshore drilling permits in the U.S., has not allowed the Keystone XL pipeline to cross the border from Canada, and has cancelled lease sales that would allow more oil and natural gas production in the United States.

Congress should listen to the American people and refuse to reopen the Export-Import Bank. The American Energy Alliance urges Congress to oppose H.R. 3611 and will include it in our American Energy Scorecard. NO is the pro-taxpayer, pro-free markets, anti-corruption, and pro-energy vote.