Export Financing Subsidies Could Pour Into Fracked Gas

[Celerity]

The Export-Import Bank is pledging to help fund renewables and not to finance stranded assets. Can they help it?

https://prospect.org/environment/export-financing-subsidies-could-pour-into-fracked-gas/


President Donald J. Trump participates in a walking tour of Cameron LNG Export Terminal, May 14, 2019, in Hackberry, Louisiana.

As the U.S. attempts to bring down the soaring price of energy, financing from a New Deal–era agency could be used to ramp up domestic gas production. It is planning those controversial investments with almost no opportunity for public review.

The U.S. Export-Import Bank (Exim), a government agency that helps finance sales for American exporters, last year provided its first loan guarantee for the domestic liquefied natural gas (LNG) sector. It went to Greensill Capital, a Softbank-backed financier that also lent money to West Virginia Gov. Jim Justice’s coal-mining empire, and it was aimed at channeling $50 million in supply chain financing to a natural gas facility in Texas. Two months after Exim provided the financing, the company imploded.

Now, under pressure from LNG interests, Exim may double down on its investment in fracked gas through a domestic financing program President Biden has created to strengthen supply chains.

Exim was long criticized on a bipartisan basis as either picking winners or providing corporate welfare. While it has historically backed large and politically powerful multinationals, Biden has made the case for productive federal investment and has tasked the bank with backing neglected sectors like semiconductors, renewables, and critical minerals. The plan is to help overseas sales of American products—for instance, supporting the export of mining equipment. There is emphasis on loans for small businesses, which Exim, along with similar agencies like the U.S. Development Finance Corporation (DFC), could assist in finding a market for their products abroad.

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