USBancorp Pipeline Policy Will Cut Financing For Critical Infrastructure Projects … Why Does It Matter?
Last week, the Energy Equipment and Infrastructure Alliance (EEIA) sent an open letter to the officers, directors, and shareholders of USBancorp strongly objecting to the corporation’s new environmental policy that prohibits financing of pipeline projects. (The Metals Service Center Institute (MSCI) is a member of the EEIA.)
According to EEIA, USBancorp’s policy will “prohibit the outright the financing of construction of oil and gas pipelines, which include not only the major interstate transmission pipelines, but the vast capillary network of natural gas distribution lines that bring this clean-burning fuel to homes, businesses, factories and power plants.” The policy also appears to subject new and existing Bancorp clients who support energy infrastructure to heightened scrutiny of their policies and practices. (As EEIA explains, this new scrutiny would apply to “virtually all firms serving fossil energy production and infrastructure projects, mining and forestry, and coal, hydro and nuclear electric power generation.” EEIA says USBancorp’s new policy also “will trap in its dragnet any projects involving maintenance and upgrading of existing municipal natural gas distribution systems.”)
The letter notes that while EEIA applauds, supports, and encourages environmental stewardship, USBancorp’s “new policy is ill-advised, shortsighted and unjustifiably discriminates against companies and workers who collectively provide America with the clean, abundant, secure and affordable energy that powers our standard of living that is the envy of the world.” The EEIA letter also argues, “The clean fuels [that] our industries make possible are the main reason why America leads the world in reduction of greenhouse gas emissions.”
The letter concludes by asking that USBancorp issue a revised policy “that is more balanced and reflects the immense economic contributions that the energy supply chain provides to our nation.”
Why do actions like USBancorp’s matter?
The first answer is jobs. Along with MSCI, the EEIA represents the energy production and infrastructure supply chain—companies and workers that build oil and gas production, transmission, distribution, processing and logistics infrastructure. Its members provide construction, equipment, materials, logistics, professional services, and technology to energy operations. The supply chain that EEIA represents is comprised of more than 120,000 businesses, 90 percent of which are local and regional small businesses, and millions of workers whose skills and careers are primarily involved in the construction trades, as well as supporting professional, administrative, factory, and warehouse workers.
The second answer is competitiveness. The North American industrial metals supply chain requires a reliable, affordable energy supply to succeed and thrive. Lower, more stable energy prices will make U.S. manufacturers more competitive with their foreign counterparts. In addition, the United States would be less dependent on foreign energy sources, leading to more employment opportunities, higher incomes, and better benefits for U.S. workers. We already know that lack of infrastructure harms the industry. For example, a recent U.S. Chamber of Commerce study found that the lack of natural gas pipelines in the Northeast region is responsible for higher natural gas prices. Residential and commercial consumers pay about 30 percent more overall than the average American household while industrial consumers in the Northeast pay up to 62 percent more for energy because there are not enough pipelines.