Barr Questions Treasury Secretary Jack Lew about Coal
During a House Financial Services Committee hearing on December 11, Congressman Andy Barr questioned Treasury Secretary Jack Lew about the Obama Administration’s policy guidance for the World Bank and the Export-Import Bank, which discourages the sale of American coal overseas. The respective missions of the World Bank and the Export-Import Bank are to help grow the economies of developing countries and to support American exporters in reaching new markets. And yet, as part of this Administration’s efforts to prevent the mining, burning, and now even the exporting of domestic coal, these organizations are being told to enforce greenhouse gas regulations internationally – a recipe for hurting the world’s poor and cutting off markets for job-creating American export industries.
REPRESENTATIVE GARLAND "ANDY" BARR (R-TX): Mr. Secretary, welcome to the committee. Is the mission of the Export-Import Bank to support U.S. exports and jobs for U.S. workers?
SEC. LEW: It's to promote opportunities for U.S. export, which is good for the U.S. economy and for creating U.S. jobs.
REP. BARR: And is the mission of the Export-Import Bank to pick winners and losers among U.S. industries?
SEC. LEW: It's to level the playing field in the world so U.S. industry has the ability to compete in a fair way.
REP. BARR: The reason I ask those questions, because I am from Kentucky and, like Chairman Capito, from a coal-producing state and so share her concern about Treasury directives and policies with respect to the coal industry.
We want to see a future for the coal industry and the vitality of the American coal industry. Kentucky's the third-largest coal-producing state in the country. And so my questions really are directed on behalf of the 6,200 coal miners in my state who have lost their jobs -- with all respect -- because of the anti-coal policies of this administration over the last couple of years.
And so with respect to the policies directed to the multilateral development banks, most notably the World Bank, opposing funding for new coal plants, and also the Export-Import Bank has adopted, at the administration's direction, stringent carbon standards that
essentially prohibit funding for coal-fired plants -- power plants abroad, I noted with optimism the written testimony that you presented here today, where you indicated that Treasury has worked successfully to secure support from the World Bank and the African Development Bank for President Obama's Power Africa initiative, which, as you say, aims to bring energy to half a billion people in sub-Saharan Africa.
I share your interest in that because for many parts of the world, coal-generated electricity is vital because it remains one of the only means to lift people out of darkness, literal darkness, into energy diversity and energy prosperity. And in fact the International Energy Agency estimates that over 1.3 billion people on this planet, nearly 20 percent of the world's population, live with no access to electricity, to say nothing of the 1.7 billion who have very limited access.
So my question is, the rhetoric in your written testimony that we want to deliver energy, diversity and opportunity to people living in poverty in Africa, and the reality of the policy which is depriving these impoverished people with access to affordable, reliable coal-fired power, how do you reconcile the policy -- the reality of the policy and this rhetoric and this desire -- the rhetorical desire to deliver energy opportunities to people in poverty?
SEC. LEW: Well, Congressman, we believe very much in being good partners in helping developing countries gain access to electricity. It's key to their economic growth and their further development. There are a lot of ways to develop electricity. For a lot of these countries, renewables and hydro and natural gas are --
REP. BARR: But I mean the reason why these countries are in poverty and the reason why these people are in poverty is because they don't have access to affordable, reliable baseload power. Coal is a proven technology. Why would we -- why would we discriminate against this particular reliable source of energy?
SEC. LEW: As I tried to explain in my response to Congresswoman Capitol, that we have very strong concerns about climate change, domestically and internationally, and we're trying to balance our concerns while promoting access to energy around --
REP. BARR: I understand. I heard your testimony before.
SEC. LEW: -- (inaudible). Our policy is -- regards our vote in international bodies.
REP. BARR: Right.
SEC. LEW: It does not regard private financing, nor does it -- (inaudible).
REP. BARR: Well, with respect -- reclaiming my time, I would encourage Treasury to reconsider. If the goal truly is to deliver energy diversity and opportunities to impoverished nations, we ought to -- we ought to consider true energy diversity, which would include a portfolio of coal-fired power.
Quickly shifting to the Volcker rule, I do want to focus on the ambiguity and complexity of the Volcker rule and whether or not the rule is capable of consistent enforcement. You've heard from recent -- in recent days after the final issuance of the rule, Fed Governor Sarah Bloom Raskin at the Federal Reserve talking about how Section 619 of Dodd-Frank certainly doesn't, you know, specify enforcement standards. She indicates that the SEC may bring one perspective in its supervision of broker-dealers, the OCC may bring a different perspective.
Commissioner Gallagher of the SEC says that, you know, banking agencies can employ discretion, whereas the SEC, a rule is a rule and they have a different approach. So with a 71-page textual rule, no guidance really in the statutory language of Section 619, 882 pages of explanation, how are banking and market regulators, under your purview, supposed,to enforce this rule, the five separate regulators supposed to enforce the rule consistently when they have such divergent philosophies?
SEC. LEW: Mr. Chairman, may I take just 30 seconds to respond?
REP. HENSARLING: Brief response, please.
SEC. LEW: Congressman, I think that, you know, we have for a hundred years seen the evolution of our financial regulatory system that has worked to create the five bodies. I think that the fact that the five agencies agreed to identical rule text and are embarking on supervision and enforcement from a common starting point is enormous progress. So I think we're going into this stronger than anyone might have expected.