In the New York Times Science blog Dot Earth, Andrew Revkin writes that “the scope of oil aid was revealed last December at the climate talks in Bali.” He goes on to cite our “Aiding Oil, Harming the Climate report “criticizing the World Bank and other international development institutions for subsidizing the expansion of oil and gas industries in various ways adding up to $63 billion since 2000.” Visit Dot Earth to read and comment on the article.

Bali, Indonesia – Oil Change International today released a new database and report that reveals over $61.3 billion in international public financing has benefited the oil and gas industry since 2000.Just last week, the European Parliament overwhelmingly passed language calling for an end to fossil fuel financing by the European Investment Bank and Export Credit Agencies.

“As governments debate how best to fight climate change, they continue to pour billions into the oil industry”, said Steve Kretzmann, Executive Director of Oil Change International.

“The World Bank, aid agencies, and other institutions have better things to do with their money than support wealthy oil companies. The sad fact is that Northern aid agencies are encouraging exactly the same industries that have caused climate change, while neglecting support for clean renewable energy. They are still funding more of the problem than the solution”.

The new report, called “Aiding Oil, Harming the Climate,” reveals that the U.S. is the #1 provider, with at least $15.6 in oil aid distributed. However, European countries collectively, provided $16.5 billion. Of the multilateral institutions, the World Bank Group is the largest, with about $8 billion, mostly in loans, since 2000.

In 2004, Dr. Emil Salim, the Eminent Person who headed up the World Bank’s Extractive Industries Review, wrote: “The World Bank Group should phase out investments in oil production by 2008 and devote its scarce resources to investments in renewable energy resource development,”

Max Christian, Advisor to the Ecuadorian Government in Bali at the Climate Convention’s 13th Conference of Parties, stated that “International financing is needed for developing countries who are oil exporters, but that financing is best directed to preserving cultural and bio-diversity, protecting ecological integrity and leaving oil in the ground.”

At the World Bank’s annual meetings several months ago, more than 200 groups from 56 countries signed the Global Call to End Oil Aid.

The database and report are available online at http://oilaid.priceofoil.org

The US House of Representatives missed an important opportunity to end oil aid in a bill [Acrobat pdf] that will “re-authorize” the Overseas Private Investment Corporation (OPIC) – one of two agencies in the US government that uses taxpayer dollars to provide financing, insurance and guarantees to US businesses wanting to expand their operations in foreign countries.The bill’s report language “discourages” OPIC from providing any assistance “for projects that involve the development, extraction, processing or transportation of crude oil.” It also states that “limited public resources for foreign assistance should focus on the many critical needs of development countries” and “extractive industries have significant access to private capital markets and increasingly do not need OPIC assistance.” While these are important and significant assertions, unfortunately, the report language is non-binding, acting as guidelines to OPIC rather than legal mandates.

This year, the House could have taken an important step to close loopholes in OPIC statute which, despite restrictions on directly financing the surveying and extraction of oil, allow indirect financing of these activities and the provision of any type of support for other oil-related operations. For example, in 2005 alone OPIC provided $580 million in support for oil and gas projects, including direct financing for pipelines. In the past several years, OPIC has used public funds to subsidize the overseas operations of many oil giants such as Exxon, BP and Unocal/Chevron.

The OPIC Reauthorization Bill (H.R. 2798) [Acrobat pdf], passed by the House on Monday and now being debated in the Senate, not only fails to rollback subsidies to the international oil industry, but falls short when it comes to clear directives in other areas:

• While the House bill mandates that OPIC “establish a goal of substantially increasing its support of projects that use, develop, or other-wise promote the use of clean energy technologies” [emphasis added] it fails to clearly define a portfolio target, giving large discretion to OPIC to determine what is meant by a “substantial increase.”

• While the House bill require that OPIC notify Congressional committees 30 days before providing support to a project in the extractive industries, this only applies to projects in which OPIC assistance is valued at $10,000,000 or more. This is a seemingly high threshold.

• While the House bill requires that OPIC “gives preference to” a project in which both the investor and host country implement the internationally recognized Extractive Industries Transparency Initiative (EITI) principles, it only requires that either the investor or country meet EITI principles “or substantially similar principles and criteria.” As written, such a provision will do little to change the way OPIC currently operates.

It is disappointing that the House OPIC Reauthorization Bill could not make clear commitments around such things as a defined target for lending to renewable energy projects and phasing out support to oil companies which have adequate access to private capital. We can’t fight climate change and invest our public resource in clean, renewable energy technologies while, as the same time, continuing to subsidize the oil industry. While the US must carry the responsibility for lowering its own emissions, our public foreign assistance should be geared towards helping impoverished countries establish renewable energy infrastructure rather than following the current policy and creating an oil-based infrastructure that will result in these developing countries producing harmful greenhouse gases.

• See the entire bill: H.R. 2798 Overseas Private Investment Corporation Reauthorization Act of 2007. [Acrobat pdf] (See the end of the summary of Section 8, on page 20, for the language that “discourages” OPIC investment in oil operations.)

• See an IPS article on the bill: OPIC Extension Tied to Terror and Environment.