H.R. 1886 (110th): To prevent public financing of oil or gas field development projects, surveying or extraction activities, processing facilities, ...

...pipelines, or terminals, or other oil and gas production or distribution operations or facilities, and for

110th Congress, 2007–2009. Text as of Apr 17, 2007 (Introduced).

Status & Summary | PDF | Source: GPO

I

110th CONGRESS

1st Session

H. R. 1886

IN THE HOUSE OF REPRESENTATIVES

April 17, 2007

introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Foreign Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To prevent public financing of oil or gas field development projects, surveying or extraction activities, processing facilities, pipelines, or terminals, or other oil and gas production or distribution operations or facilities, and for other purposes.

1.

Findings

The Congress finds as follows:

(1)

In 2005, the oil industry recorded revenues of $1,620,000,000,000, and profits for the industry totaled almost $140,000,000,000.

(2)

In 2005, multilateral development institutions such as those in the World Bank Group, and United States agencies such as the Export-Import Bank of the United States and the United States Overseas Private Investment Corporation, alone provided more than $3,000,000,000 in financing to the international oil and gas industry, including major oil companies.

(3)

Limited public resources for international finance and development assistance should support the many critical needs of developing countries, not the international oil and gas industry which has significant access to private capital markets.

(4)

Providing financing to oil and gas operations overseas increases the dependence of the United States on oil and gas imported from these operations.

(5)

Providing financing to oil and gas operations overseas increases the dependence of the developing world on oil and gas imported from these operations.

(6)

Oil and gas production in developing countries has generally not alleviated poverty, but has instead been widely associated with increased levels of poverty and economic inequality.

(7)

Oil and gas production has often exacerbated poor governance, corruption and conflict in many developing countries.

(8)

Oil and gas production has historically led to increased levels of developing country debt due to these countries’ reliance on external debt financing to provide infrastructure for oil and gas extraction projects.

(9)

Emissions from combustion of oil and gas account for just over one-third of all global greenhouse gas emissions.

(10)

While the vast majority of greenhouse gas emissions have occurred in the wealthy countries belonging to the Organization for Economic Cooperation and Development, it will be the poorest countries, who can least afford to adapt to a changing climate, who will suffer first and worst.

(11)

Following a 2-year multi-stakeholder process that evaluated the effects of international oil projects on developing country poverty, local environments, and global climate, the Extractive Industries Review by the World Bank Group recommended an end to financing of oil projects by the World Bank Group by 2008.

2.

Export-Import Bank

Section 2(b) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)) is amended by adding at the end the following:

(14)

Prohibition on financing for oil and gas projects

(A)

In general

The Bank may not guarantee, insure, or extend (or participate in an extension of) credit—

(i)

in connection with an oil or gas project; or

(ii)

to any entity that may use the guarantee, insurance, or credit to finance such a project.

(B)

Oil or gas project defined

The term oil or gas project means an oil or gas field development project (including surveying and extraction), processing facility, pipeline, or terminal, or other oil or gas production or distribution operation or facility.

.

3.

Overseas Private Investment Corporation

Section 237 of the Foreign Assistance Act of 1961 (22 U.S.C. 2197) is amended by adding at the end the following new subsection:

(p)

Restriction on insurance and finance for oil and gas projects

(1)

Restriction on insurance and financing of projects directly

The Corporation may not issue any contract of insurance or reinsurance, or any guarantee, or enter into any agreement to provide financing, for a proposed investment that involves an oil or gas project.

(2)

Restriction on insurance and financing for projects indirectly

The Corporation may not issue any contract of insurance or reinsurance, or any guarantee, or enter into any agreement to provide financing to any person if such insurance, reinsurance, or financing may be used by that person to insure or provide any form of financing to an oil or gas project.

(3)

Oil or gas project defined

In this subsection, the term oil or gas project means an oil or gas field development project (including surveying and extraction), processing facility, pipeline, or terminal, or other oil or gas production or distribution operation or facility.

.

4.

Multilateral development banks

(a)

In general

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p–262p–8) is amended by adding at the end the following:

1626.

Opposition to assistance for oil or gas projects

(a)

In general

The Secretary of the Treasury shall instruct the United States Executive Director at each multilateral development institution (as defined in section 1701(c)(3)) to use the voice and vote of the United States to oppose the provision by the respective bank of any kind of assistance, directly or indirectly, to any oil and gas field development project, surveying or extraction activity, processing facility, pipeline, or terminal, or other oil and gas production or distribution operation or facility.

(b)

Assistance defined

The term assistance means any grant, loan, direct or indirect extension of credit, technical assistance, or guarantee, or any other non-lending support or extension financing, insurance, or reinsurance.

.

(b)

Annual reports to the Congress

Not later than June 1 of each calendar year, the Secretary of the Treasury shall submit to the Committees on Financial Services and on Appropriations of the House of Representatives and the Committees on Foreign Relations and on Appropriations of the Senate, and make available on the website of the Department of the Treasury, a report which identifies and describes, with respect to each multilateral development institution (as defined in section 1701(c)(3) of the International Financial Institutions Act), any assistance approved by the institution during the preceding fiscal year for any oil or gas project, and any other financial or other assistance, including sectoral lending, provided to the energy sector.

5.

Report on United States assistance to support the oil and gas sectors of developing countries

Not later than 180 days after the date of the enactment of this Act, the Administrator of the United States Agency for International Development shall submit to Congress a report on the amount of assistance provided under chapter 1 of part I of the Foreign Assistance Act of 1961 (22 U.S.C. 2151 et seq.) to support the oil and gas sectors of developing countries for fiscal year 2007. The report shall include the name of each country that received assistance described in the preceding sentence and a description of the specific type and amount of assistance provided to the country.

6.

Organization for Economic Cooperation and Development

The President shall inform the Organization for Economic Cooperation and Development that it is the policy of the United States that the member states of the Organization should prohibit their export credit agencies from providing financing or other assistance to any oil or gas project.

7.

Study of energy sector lending

Not later than 180 days after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committees on Financial Services and on Appropriations of the House of Representatives and the Committees on Foreign Relations and on Appropriations of the Senate a report on the financing and other assistance provided to the energy sector (including the extraction, development, and use of fossil fuels and other fuel sources) by multilateral development institutions (as defined in section 1701(c)(3) of the International Financial Institutions Act), the Export-Import Bank of the United States, the Overseas Private Investment Corporation, and the United States Agency for International Development. The report shall include analyses of—

(1)

whether the energy projects and sectors receiving financing and other assistance contribute to greenhouse gas emissions;

(2)

the life cycle environmental impacts of the projects receiving the financing or other assistance; and

(3)

the extent to which the financing and other assistance has been used to facilitate the provision of energy to impoverished populations, including by means of renewable energy sources.

8.

Definitions

In this Act:

(1)

Assistance

The term assistance means any grant, loan, direct or indirect extension of credit, technical assistance, or guarantee, or any other non-lending support or extension financing, insurance, or reinsurance.

(2)

Oil or gas project

The term oil or gas project means an oil or gas field development project (including surveying and extraction), processing facility, pipeline, or terminal, or other oil or gas production or distribution operation or facility.