By Luke Popovich

In soccer it’s called an “own goal”—a player mistakenly kicks the ball into his own net, scoring one for the opposition.  There were a couple of own goals scored this month during the World Cup in South Africa, but none was bigger than the one committed here in the United States.  

This one was scored by the Export-Import Bank, an often controversial lending agency run by presidential appointees.  It’s a story that says a lot about the nagging conflict between “clean energy” and coal-based employment. Just days before the president appeared in Wisconsin to tout his administration’s recovery efforts, Ex-Im Bank officials denied a loan guarantee that would have enabled an Indian company to buy hundreds of millions of dollars worth of coal mining equipment from Bucyrus International of South Milwuakee, Wis.  

It was bad enough the bank’s decision put 1,000 jobs at risk in 13 industrial states, just six months before the fall elections.  Even the president’s vaunted eloquence would find that decision a tough sell in the industrial heartland staggering through a jobless recovery. Did Bank officials not know the president was speaking in Racine, a former mill town with a 14.2% unemployment rate, second highest in the state?  But worse than the decision to kill the sale was the reason given for killing it: the made-in-the-USA mining machinery would have supplied coal (“gasp!”) to a power plant in India whose “carbon footprint” would conflict with U.S. green energy objectives.

How’s that again?  On one hand, we had 1,000 American jobs at risk; on the other, we had CO2 emissions from a single coal plant that would be built anyway, in a country that’s among the world’s biggest greenhouse gas emitters.  So, a thousand U.S. jobs, or CO2 emissions created by another country’s supplier?  This should not be a tough decision.  Recall the scene in Ghostbusters, when Bill Murray knocks on a door to find Sigourney Weaver asking him in a dreamy voice: “Do you want to sleep with me?”  A puzzled Murray replies: “Is that a trick question?”  Faced with a decision of similar complexity, the bank somehow decided the project’s estimated emissions were unworthy of the loan.

Reasoning like this could explain the angry voter phenomenon.  The bank rankled the state’s congressional delegation and state officials— Democrats as well as Republicans—infuriated the steelworkers union and completely dumbfounded Bucyrus CEO Tim Sullivan.  “I don’t understand politics,” he said.  “All I care about is that we don’t lose these jobs.”

Thankfully, Mr. Sullivan got his wish.  Ex-Im Bank President Fred Hochberg agreed to reconsider his decision “in light of new information” that the Indian company had agreed to build a solar power plant to offset emissions from the coal project.  Bucyrus was “very pleased with the (bank’s) decision to change course,” said Sullivan, but probably no less pleased than an administration relieved to stop Team USA from scoring any more goals against itself.

This happier ending shouldn’t obscure the larger question: In the dog-eat-dog world of global commerce, can we afford to view industries like coal as environmental liabilities while our competitors view them as indispensible assets? The Sierra Club, which condemned the bank’s reversal, says yes we can; The National Association of Manufacturers says we can’t.  In a report last month, the NAM underscored the threat to U.S. manufacturing from low-wage, high-growth countries that are increasingly nimble in attracting global investment. We can meet this threat, says the NAM, only by aligning government’s policies with the needs of a more competitive economy—i.e. only if Team USA works together to that end.  

The answer is critically important for American manufacturing in general and U.S. mining in particular.  Bucyrus has other deals pending that require Ex-Im loan guarantees.  The president seemed confident of his answer when he told cheering crowds in Racine:  “Nothing is more important than reversing the damage of the Great Recession and getting folks back to work.”  


Popovich is a spokesperson for the National Mining Association, the industry’s trade group based in Washington, D.C.