The top Republican on the Senate Energy and Natural Resources Committee this morning released a discussion draft of legislation that would require the Treasury Department to formally oppose efforts at multilateral development banks to move away from fossil fuel investments.
The draft provision from Sen. Lisa Murkowski (R-Alaska) is part of legislation meant to incorporate more energy considerations into the Export-Import Bank of the United States reauthorization debate ahead of a Sept. 30 deadline. Murkowski would reauthorize the bank for a decade, ending in fiscal 2031.
Under the draft proposal, the Treasury Department would use its "voice and votes" at the multilateral development banks to oppose any restrictions of "development assistance to developing countries on the basis of the type of energy involved, including through restrictions on upstream fossil fuel activities and the use of coal-fired electricity generation."
The language in the "Strategic Energy for America Act" appears to be in response to the World Bank’s decision to stop supporting upstream oil and gas exploration and development beginning in 2019 (Climatewire, Dec. 13, 2017).
Similar efforts are underway at the European Bank for Reconstruction and Development, which voted to stop financing coal projects at the end of 2018 in its effort to combat climate change.
The Trump administration has already taken a similar stance to Murkowski’s on international fossil fuel financing restrictions.
"American companies and workers participate in highly competitive global energy markets that are often dominated by cartels, state-owned enterprises, and trade finance agencies in other countries, and we cannot unilaterally disarm," Murkowski said in a statement.
The Obama administration moved to push the Ex-Im Bank and other global financing bodies against backing carbon-heavy projects, but Congress reacted with riders limiting that agenda.
Murkowski has been focused on positioning the United States to participate in the international energy technology trade, most recently through a white paper released in July, which argued for increased congressional attention to long-term planning and relationship building (Greenwire, July 11)
That paper specifically highlighted natural gas and nuclear energy as two areas that could have long-term benefits for U.S. trade and diplomacy initiatives.
"In this era of strategic energy competition, we must strengthen our tools of statecraft through a rational, long-term approach," Murkowski said. "What I have released today outlines the means to continue growing our nation’s energy dominance."
The "Strategic Energy for America Act" includes measures that would enable the newly created International Development Finance Corp. to support civilian nuclear energy projects in developing countries with so-called 123 agreements with the United States.
The bill would also create a strategic energy portfolio at the Ex-Im Bank with the mission of advancing civil nuclear energy and natural gas infrastructure projects.
The new portfolio would have a cap for the aggregate amount of loans, guarantees and insurance at $50 billion at any one time.
In addition, the discussion draft would modify the Ex-Im Bank by raising "the exposure cap to $200 billion, address outdated restrictions, and modify the ‘2 percent all-stop freeze’ related to the default rate," according to a Murkowski news release.
Murkowski said her committee would be taking public comments on the discussion draft until Sept. 15 using the email address [email protected].
The House Financial Services Committee released bipartisan legislation to reauthorize the Ex-Im Bank, but concerns about China have delayed consideration (E&E Daily, June 27).