Bailout

JP Morgan still financing mountaintop removal mining

By Felix Salmon

In the wake of the publication of an extremely high-impact article in Science magazine which says that mountaintop removal mining has enormous environmental impacts which can’t possibly be mitigated, the campaign against JP Morgan Chase’s financing of such activity is heating up again:

JPMorgan Chase has been funding six of the top eight coal mining companies responsible for mountaintop removal coal mining in the United States. Recently, its investment bank underwrote more than $1 billion in new financing to Massey Energy, the largest mountaintop removal coal mining company.

JPMorgan Chase states that its “environmental goal is to make a positive contribution to sustainable business practices by integrating environmental practices into our business model.” Yet, Massey Energy has a deplorable environmental record, having violated the Clean Water Act no fewer than 4,500 times – resulting in a $30 million fine in 2008.

The practice of mountaintop removal mining is egregious in the extreme: the Economist, for instance, has said that “the underlying question is why America allows this practice at all”. And JP Morgan can’t fall back on the “everybody else is going it” argument: BofA pulled all its financing as long ago as 2008, and Wells Fargo has pulled out as well, leaving the field wide open for JP Morgan — which can either charge monopoly rents for such financing, or can do the right thing and withdraw from the field as well.

It makes financial sense for the likes of Massey Energy to destroy the environment in search of cheap coal. That’s what they do. But it’s not JP Morgan’s job to facilitate such activity, in the US or anywhere else. If they want to stop being perceived as evil banksters, they’d be well advised to get out of this business sharpish.

Full post as published by Macroprudential on January 14, 2010 (boomark / email).