Today, over 30 U.S. environmental, development and faith-based organizations sent a letter to the U.S. House of Representatives (Acrobat .pdf) calling on Members to support the End Oil Aid Act.“The U.S. can play a critical role in fighting our addiction to oil, alleviating global poverty and combating climate change as we move toward a clean energy future. Using taxpayer dollars to support the oil industry undermines these goals, and Congress should end this international ‘oil aid.’”

The full text of the letter is below and a copy of the letter including a list of signatories is available here (Acrobat .pdf).

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June 5, 2007
Re: Cosponsor H.R. 1886, the End Oil Aid Act

Dear Member of Congress:

On behalf of the thousands of members of our organizations, we urge you to cosponsor H.R. 1886, the End Oil Aid Act. This bill, introduced by Rep. Hinchey (D-NY), would limit U.S.-funded international financial institutions and export development agencies from subsidizing the oil and gas industry’s overseas operations.

Each year, financial institutions including the World Bank, the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank (Ex-Im) provide billions of dollars to the oil sector. This “oil aid” subsidizes an already-profitable industry, including companies such as ExxonMobil, Halliburton, and Chevron, which have recently reported record profits.

Moreover, these subsidies contribute to significant social and environmental problems and can undermine the core purposes of development assistance. Oil projects have been shown to increase conflict and instability, exacerbate corruption and threaten the land and livelihoods of local and indigenous communities in many developing countries. Oil aid fuels global warming, creating impacts that will disproportionately harm impoverished countries which lack the systems and infrastructure to adequately adapt to droughts, severe weather events, and agricultural disruption. In addition, soaring oil prices undercut the benefits of debt cancellation by draining far more money out of impoverished countries than cancelled debts are able to contribute. Every country can choose to develop its own resources. However, scarce foreign assistance dollars should be used to fight poverty and help developing countries pursue clean energy pathways instead of promoting oil and gas projects.

H.R. 1886 would help meet these goals. This bill would limit U.S. support for the international oil industry by prohibiting OPIC and Ex-Im from financing oil and gas projects. Since 1995, these agencies combined have provided more than $20 billion in financing to oil and gas companies. The bill would also make it U.S. policy to oppose oil and gas projects financed by multilateral development banks such as the World Bank. While the World Bank’s own panel of experts concluded in 2003 that it should phase out its support for oil, the Bank provided over $800 million in financing for fossil fuel projects in fiscal year 2006 alone.

The U.S. can play a critical role in fighting our addiction to oil, alleviating global poverty and combating climate change as we move toward a clean energy future. Using taxpayer dollars to support the oil industry undermines these goals, and Congress should end this international “oil aid.” We urge you to cosponsor H.R. 1886, the End Oil Aid Act.

A statement released June 1 by the US Government Accountability Office (the “investigative” arm of Congress), finds that “the US federal government receives one of the lowest government takes [from oil and gas development] in the world.”The testimony, delivered to Congress on May 1 but only publicly released last Friday, indicates that while there are trade-offs between increasing the royalty rates paid by oil companies and attracting investment, raising rates on future federal oil and gas leases would likely increase the government’s revenue from these projects.

The GAO statement feeds into ongoing Congressional debate around increasing the rate of return for the government on oil and gas projects and is another reminder of the give-aways that continuing to be provided oil giants like BP and ConocoPhillips, at the expense of the American tax-payers.

Only 10 days after Congressman Maurice Hinchey introduced the End Oil Aid Bill in the U.S. Congress, more than 150 organizations from 50 countries have written to House Speaker, Nancy Pelosi, recognizing her clean energy efforts and calling on her to lend support to eliminate international ‘oil aid’.

The letter (Acrobat pdf) cites over $20 billion in international subsidies to oil companies since the early 1990s and states that the projects supported by this aid “fuel global warming, encourage oil dependence, and increase conflict and poverty around the world.” The letter emphasizes that “ending oil aid and focusing on supporting truly sustainable energy alternatives would be an important step in addressing energy poverty and catalyzing new renewable energy.” “As Congress acts to repeal tax breaks and other handouts for oil companies,” signatories urge Speaker Pelosi that she “also work to end international assistance to Big Oil.”

• Read the End Oil Letter to Speaker Pelosi (Acrobat pdf) with list of signatories.
• Read and provide your comments in our blog on the End Oil Aid Bill.