By Robert McCabe
Environmental groups on Wednesday filed a federal lawsuit challenging the U.S. government’s backing of a loan that facilitates the export of some Appalachian coal through the ports of Hampton Roads and Baltimore.
The lawsuit, filed in San Francisco, alleges that the U.S. Export-Import Bank broke federal law by approving a $90 million loan guarantee in support of Latrobe, Pa.-based coal broker Xcoal Energy & Resources LLC without first preparing an “environmental impact statement.”
The taxpayer-backed financing, approved on May 24, 2012, will help leverage $1 billion in coal exports from Appalachia to markets in Japan, South Korea, China and Italy through coal terminals in Hampton Roads and Baltimore, the groups said.
“Ex-Im Bank turned a blind eye to the toxic coal dust, heavy train traffic and disruptive noise that our members living near ports and railways experience on a daily basis,” said Diana Dascalu-Joffe, senior general counsel with the Chesapeake Climate Action Network, one of the plaintiffs.
The groups that filed the complaint, which also include the Center for International Environmental Law, Friends of the Earth, Pacific Environment, Sierra Club and West Virginia Highlands Conservancy, stated that it is the first lawsuit to challenge the federal government’s financing of the export of coal from Appalachia.
The lawsuit requests that the court declare that the government bank’s approval of the $90 million loan guarantee supporting Xcoal – without first conducting an environmental review – is a violation of the National Environmental Policy Act.
It seeks the rescinding of the loan guarantee and an environmental study of the risks from coal dust before the federal bank can back Xcoal’s coal exports.
An Export-Import Bank spokesman wrote in an email that it’s the bank’s policy not to comment on pending litigation.
A spokesman at PNC Bank, which provided the loan backed by the Export-Import Bank, also declined to comment.
Hampton Roads, which has the capacity to handle more than 76 million tons of coal a year, is the top coal-exporting port in North America.
Norfolk Southern Corp.’s Lamberts Point coal terminal alone accounts for roughly half of that capacity.
The lawsuit comes at a time when the railroad’s coal business has softened.
Last week, it reported that second-quarter revenue from coal – its biggest commodity group by revenue – fell 17 percent from the same quarter last year because of reduced global demand for U.S. coal and competition from natural gas.
Officials at Norfolk Southern declined to comment on the lawsuit Wednesday.
