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PNC Financial Services Group, the seventh-biggest US bank, has given in to environmental and financial pressure to dramatically reduce the financing it provides to companies that mine coal by shearing off the tops of mountains.
The new policy will be to offer no credit to miners that get at least 25 percent of their coal from mountaintop removal (MTR), the Pittsburgh-based bank said it its latest Corporate Responsibility Report, issued March 9. In a policy in place since 2010, that threshold was previously 50 percent or more. PNC said it also will maintain its existing policy of not financing individual MTR projects.
“We see this as a way to continue serving our clients in the region while contributing to a better environment for everyone,” PNC spokesman Fred Solomon said in an e-mail.
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Another reason was PNC’s “risk appetite,” the bank’s report said. Or more to the point, profits, according to Ingrid Lakey, a member of the board of the Earth Quaker Action Team, which has been among the groups pressing PNC for a stricter MTR policy. “Coal mining has become less and less profitable,” she told The Guardian.
Decreasing demand and low prices for the fuel has forced at least one mining company to file for bankruptcy protection. Others have been penalized for environmental damage. One, Alpha Natural Resources, had to pay $27.5 million a year ago for damage to waterways in Kentucky, Pennsylvania, Tennessee, Virginia and West Virginia and set aside $200 million for wastewater treatment.
Lakey’s Earth Quaker Action Team welcomed the decision as a victory for the environment, which she sees as the fruit of a five-year protest campaign of demonstrations at the bank’s shareholder meetings and encouraging supporters to withdraw their deposits from PNC.
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“Five years ago, PNC was one of the top financiers of [mountaintop removal mining],” Lakey told the Pittsburgh Post-Gazette by e-mail. “Now they are finally acknowledging the environmental and health concerns.”
PNC hasn’t been the only target of environmental protests of MTR and the financing of coal companies that engage in it, but it is the latest to accede to the environmentalists’ demands. Other banks who have reduced their involvement in the practice include Bank of America, Citigroup, Credit Suisse, JPMorgan Chase, Morgan Stanley and Wells Fargo.
Evidently PNC held out for as long as it did because it had been one of the most generous among the banks that finance MTR.
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Mountaintop removal involves blasting off the tops of mountains to expose the coal they hold. The debris is then dumped down the side of the mountain where it fouls rivers and disperses coal dust, which has been linked to health problems including cancer, to settle on nearby towns. MTR also leaves the mountain itself hideously scarred.
One environmental group, Earthjustice, calls the practice “strip mining on steroids.”
By Andy Tully of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com