NORFOLK, Va. — Environmental activists sued the federal government Wednesday over the exports of Appalachian coal to Europe and Asia, arguing it approved a $90 million loan guarantee to one company without considering the implications for air and water pollution along the transportation route.
The lawsuit filed in U.S. District Court in San Francisco says communities near the mines, ports and railways that connect them are all affected, and the U.S. Export-Import Bank was required to review the environmental impacts of its financing decision under the National Environmental Policy Act.
The bank provided a loan guarantee last year to Xcoal Energy & Resources, headquartered in Latrobe, Pa., but shipping from ports in Baltimore and Norfolk, Va., to Japan, South Korea, China and Italy.
Chesapeake Climate Action Network says citizens affected by toxic coal dust, heavy train traffic and noise should have a say over how their tax dollars are spent. Other plaintiffs are the Center for International Environmental Law, Friends of the Earth, Pacific Environment, Sierra Club and West Virginia Highlands Conservancy.
The National Mining Association called the case “a nuisance lawsuit replete with hyperbole” and based on sweeping, inaccurate and undocumented claims. Spokeswoman Nancy Gravatt said the intent appears to be to frighten the public and cause the industry economic harm.
Railroads have been hauling coal for more than 100 years without harming public health or the environment, she said, and technology has reduced coal dust loss by at least 85 percent.
“They grossly exaggerate what ‘science’ has said about coal’s environmental impact,” Gravatt said, “while wholly ignoring its beneficial impact on hundreds of millions of people in the developed world suffering from energy poverty as documented by the World Health Organization.”
While U.S. coal consumption has declined gradually for several years, overseas exports have risen.
The environmental groups contend the bank’s failure to account for environmental impacts and continued investment in coal also undermine the spirit of President Barack Obama’s recently announced climate action plan.
They want a judge to order the bank to prepare an environmental impact statement for the Xcoal loan guarantee in hopes that will create a precedent for future financing decisions.
Environmental groups have been suing coal operators for decades but have recently broadened their tactics.
Earlier this year, they began suing the owners of former strip mines, claiming they were never sufficiently reclaimed and continue to pollute waterways.
The new lawsuit opens yet another front for their litigation.
It is not, however, the first time environmental groups have targeted banks. For several years they’ve held protests aimed at pressuring big banks into cutting off funding for a particularly destructive form of surface mining unique to Appalachia — mountaintop removal mining.
PNC Bank announced in 2010 it would no longer fund mountaintop removal projects, which the industry considers cost-effective but which critics say destroys the environment. PNC’s decision followed similar actions by other big lenders, such as Bank of America, Citi and JP Morgan Chase.