Big bank says it won't lend to coal firms that mine mainly by mountaintop removal; are there any?

Bank of America said this week it will "phase out financing of companies whose predominant method of extracting coal is through mountaintop removal." However, the new policy "may be little more than show," reports Vicki Smith of The Associated Press, who reviewed annual reports of major coal producers and deduced that "few get more than half their coal from mountaintop mines, and few borrow significant amounts" from the bank. (AP photo of West Virginia's Kayford Mountain, with Coal River Mountain in the background, by Jeff Genter)

"I think it was a bit of a public relations ploy at a time when there's a lot of press attention on mountaintop removal," Carol Raulston, spokeswoman for the National Mining Association, told Smith. She said no NMA members had contacted her about it. A bank spokeswoman "refused to elaborate on how the phase-out would work, how many companies it would affect or how much of its business involves coal industry financing," Smith reports. There could also be questions about how the bank defines "mountaintop removal," which can differ in legal terms and practice.

Still, a worried West Virginia Coal Association Vice President Chris Hamilton told Smith the announcement could be "precedent-setting," and others agreed. Smith notes, "Earlier this year, three investment banks announced new non-binding environmental standards to help lenders evaluate risks associated with investments in coal-fired power plants."

The bank's statement was part of a broader coal policy the bank announced on its Web site in conjunction with a $1 million grant to Harvard University for research on capturing and storing carbon dioxide from power plants. The bank said the grant is part of its effort "to address climate change through lending, investing, the creation of new products and services, operations and philanthropy." (Read more)

Meanwhile, Scott Finn of West Virginia Public Broadcasting reports for National Public Radio on the reaction in the main mountaintop-removal state to the new federal rules that will ease the practice. To read and listen, click here.