An obscure government agency, the U.S. Export Import Bank (EXIM), will decide this week whether or not to fund a $5 billion liquefied natural gas (LNG) investment, the agency’s largest transaction ever. It shouldn’t move forward. This project will destroy ecosystems and local communities in northern Mozambique.
Fortunately, there is still time for EXIM’s board to stop U.S. financing of this boondoggle from going forward when the board takes its final vote on the project on Sept. 26.
Although natural gas is often touted as a cleaner fuel than coal, when you take into account the leaks involved in extraction, transportation, processing and burning of LNG it is not better for the climate than coal. Yet, the head of the EXIM board, Kimberly Reed, voiced her strong support for the industry.
Last November, the U.S. government’s National Climate Assessment found that more frequent and extreme weather events are already severely damaging the environment and economy at a cost of tens of billions of dollars while increasing harm to human health and loss of life. Meanwhile, a 2016 Oxford study found that for the world to have a 50 percent chance of staying within internationally agreed limits for global warming, no new fossil fuel plants could be built after 2017.
The LNG development in northern Mozambique is already having detrimental impacts on local communities and ecosystems. The many promised benefits have so far failed to materialize and most likely never will. Instead, local communities are being left with an environment that is destroyed.
Vulnerable people have already lost their land and livelihoods. If they received any compensation for their land at all, it has often been inadequate. Furthermore, many of these communities will no longer be able to fish or farm in order to feed themselves and provide their families with incomes.
Workers from outside the region are getting most of the jobs associated with the project. It is also unlikely that locals will reap the benefit of the LNG being extracted from Mozambique. The Mozambican government and foreign gas companies have almost no plans to improve electricity access in the region with the gas, even though four out of five Mozambicans lack access to electricity.
Populations of unique, including endangered, species could be decimated. Important ecosystems like mangrove forests, coral reefs and seagrass beds will suffer a similar fate.
What’s more, Mozambique has experienced recurring violence since the end of its civil war in 1992. Most recently, over 100 people were killed in northern Mozambique, the region where the LNG development is being built.
While affected communities will see a decrease in their quality of life, multinational corporations are seeing profits. They are getting rich as they extract the gas and sell it to countries around the world.
It seems unlikely that the Mozambican government will be able to handle the gas revenues in a way that will benefit the Mozambican people, rather than stoke further violence and exacerbate economic disparity. Mozambique is suffering from a classic case of “resource curse.” It ranks 153 out of 180 countries in terms of perceived public sector corruption.
Despite all of these negative impacts, EXIM is still considering supporting this LNG development. Unfortunately, it’s in line with projects EXIM has supported in the past. These include the Sasan coal plant in India where dozens of people have died and an LNG project in Papua New Guinea where a landslide related to the project killed local villagers while they slept.
To make matters worse, it is unclear that the project will actually have any benefit for U.S. workers — the whole reason that EXIM exists. Originally, a U.S. company, Andarko, was the main player in the LNG development, but another company is buying Anadarko and selling off its Mozambican assets to a French company. Despite this, EXIM may give U.S. taxpayer dollars to help European companies get rich while Mozambican villagers suffer.
But this project is not an inevitability. EXIM has rejected terrible fossil fuel projects in the past. It’s time for a repeat performance. The EXIM board must reverse course and reject the Mozambique LNG project.