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Bank of America to stop financing mountaintop removal

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"Bank of America to stop financing mountaintop removal"

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The energy and climate news is coming way too fast and furious for me to comment at length on every story. So here is everyone’s favorite WV reporter, Ken Ward Jr. on the story:

CHARLESTON, W.Va. – One of the world’s largest financial institutions said this week it will phase out lending money to coal operators that use mountaintop removal mining.

Charlotte-based Bank of America Corp. said it will stop financing companies that produce more than half of their coal from mountaintop removal.

We feel the practice has a significant impact on the environment and on communities,” said company spokesman Ernesto Anguilla.

I’m glad they “feel” that way ’cause it is pretty darn obvious to just about everyone. Still, isn’t it great that the country’s biggest bank is secure enough in its sense of self-worth to share its feelings with us? But I digress:

Bank of America has provided financing for several major surface mine operators, including Massey Energy and International Coal Group, according to corporate financial disclosures. Bank officials announced their decision the same week that the Bush administration moved to finalize a rule that removes one potentially key legal hurdle for mountaintop removal.

The Bank of America move, announced Wednesday, was months in the making, and the result of lobbying by local citizen groups with the help of national organizations such as the Rainforest Action Network and the Natural Resources Defense Council.

Rainforest Action has sponsored protests outside banking operations across the country, and the NRDC took banking executives on a flyover to see West Virginia mining operations from the air.

“This is a testament to the hard work of Appalachian communities and anti-coal activists across the country, whose collective pressure left Bank of America with little choice but to abandon its support for this barbaric form of resource extraction,” said Rebecca Tarbotton, director of Rainforest Action’s Global Finance Campaign, which since October 2007 has pressed Bank of America to cease financing of mountaintop removal mining and coal-fired power plants.

Rob Perks, director of advocacy campaigns for NRDC, said Bank of America’s “bold step forward sends an unequivocal signal to the mining industry that business as usual is no longer acceptable.

“Make no mistake, this is a big step from one of the nation’s biggest lenders,” Perks wrote on his group’s Switchboard blog. “And it marks a turning point in the campaign to end the war on Appalachia being waged by the coal industry.”

Carol Raulston, spokeswoman for the National Mining Association, said Bank or America had made an “unfortunate decision … without any consultation with mining companies that I am aware of.”

Raulston said the bank’s decision puts mountaintop removal operators in the same situation as consumers, small business and homebuyers who are having trouble borrowing money with today’s credit crunch. “I don’t believe B of A consulted them either,” she said.

Bank of America’s decision on mountaintop removal comes after the bank also joined with Citigroup, J.P. Morgan Chase and Morgan Stanley in adopting plans to take climate-change risks into account when lending money.

The ultimate effect of Bank of America’s decision remains to be seen, said Dan Bakal, director of electric power programs with CERES, a group of investors, environmental groups and public interest organizations that pushes for sustainable financial practices.

It definitely seems like a significant step, but it’s not going to completely change the landscape,” Bakal said Wednesday. “The key question is will other bankers follow suit, and if any significant number of them do, it could be a very big deal.”

Hmm. It’s “not going to completely change the landscape” — is that some sort of a mountaintop removal joke?

Kudos to BofA for finally getting this right.

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7 Responses to Bank of America to stop financing mountaintop removal

  1. That is really nice.

    But I expect a serious investor would see the impending doom of the coal business – either because we wake up or because we choke and die.

    Either way, the looming day of decision is soon enough that large loans should not be made to such industries. Coal is poisoning its own market.

  2. Nick santos says:

    Question for anyone reading this who knows more about mountaintop removal than I do:

    Since they are only going to stop financing operations that get more than half of their coal from mountaintop removal, how likely is it that some of these operations change only enough to meet that criteria? What percentage companies using mountaintop removal meet that criteria?

    Thanks.

  3. Dill Weed says:

    (a little off topic, but relevant)

    This article bears in some intriguing ways to the problems being encountered in combatting climate change.

    http://www.cracked.com/article_14990_what-monkeysphere.html

    What is the Monkeysphere and how does it relate to climate change?

    An interesting and thought provoking article from a unexpected source; I just stumbled upon this.

    Dill Weed

  4. Brendan says:

    Definitely off topic, but an idea for policy that should be enacted.

    The government shouldn’t mandate that all companies have to be carbon neutral (and that certainly wouldn’t fly with any republican). However, the US government as an actor in the free market is allowed to make the choices it wants. So, we have a phase-in program, where companies have to be x% carbon neutral or something, working up to companies who want to work for the government need to meet several standards of environmentally friendliness and energy efficiency. This would have to be relaxed some for small businesses probably. I’m sure that as I’ve posed it is not the best way, but an idea on the theme. This plan is directly free, though indirectly may incur some costs.

    The other thought is while the government is putting out proposals to be met, oftentimes they just look at the initial cost, and take out of the lower-cost bidders. Instead the government should look at 5, 10, or lifecycle cost (whichever is appropriate if any of them are). Thus, in people trying to submit the low cost building proposal, over 1 year they use incandescents. For the 5 year proposal they switch to energy efficient lights.

    I hope either of these are useful or at least thought-provoking

  5. Bill Sweet says:

    Bank of America’s decision is especially welcome in light of the Bush Administration’s last minute decision to make it even easier for mountaintop loppers to dump their debris in nearby streams:
    http://blogs.spectrum.ieee.org/energywise/

  6. Joe, mountain-top removal is a horrible practice, but don’t forget that B of A still is funding MASSIVE coal expansion. They are spending 100 times more money on fossil fuels than green energy. All banks fund coal, but Bank of America and Citi are the biggest culprits. I would love to see you write an article about the relationship between banks and global warming, since I actually took part in RAN’s day of action against B of A and Citi here in Tempe.

  7. ER says:

    What a terrific way this would have been to protest Congress’ passage of SMCRA in 1977.