CONROE - Lawmakers should reauthorize the Export-Import Bank of the United States because it supports billions of dollars in projects in energy and other industries, bank Chairman Fred Hochberg said Thursday in a visit to the Houston area.
The federally chartered bank's authorization expires at the end of September, and Hochberg is fighting to save it amid calls from some congressional Republicans to kill off the 80-year-old financial institution.
"This keeps America competitive," Hochberg said. "This is about making sure we get more exports and more jobs."
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The bank's mission is to offer financing tools that support U.S. exports and ultimately, create American jobs.
Its mechanisms for accomplishing that include insurance against missed payments by exporters' foreign customers; financing for foreign buyers purchasing U.S. goods and services; and credit lines to help U.S. companies fill orders.
Bank officials said its financing has supported $11 billion in export sales from the Houston area since 2009, with $3.5 billion of that attributable to small businesses. The bank provides more financing to the Houston region than any other part of the country, officials said.
Hochberg toured a Conroe facility where Applied Machinery Corp. builds and refurbishes onshore drilling rigs.
The Conroe yard is one of six Houston-area locations where the company upgrades rigs for drilling contractor Nabors Industries. When work is complete, those rigs will head for Saudi Arabia, where Nabors will operate them for Saudi Aramco.
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"We get a domestic rig, and we completely strip it down, 100 percent," said Joe Schelebo, a project manager for Nabors who helps oversee the Applied Machinery Corp. operation in Conroe. "Then we refurbish it, just like restoring a car."
Applied Machinery was founded in 1994 and began operating the Conroe yard in 2012. Company officials said their work probably wouldn't be possible without the support of the Export-Import Bank.
It arranged a line of working capital for the company and provides insurance on Applied Machinery's exports.
"It's not easy, as a midsized company, to go to a bank and ask for an extra $25 million of credit," said Matt McDevitt, general manager of finance and administration for Applied Machinery. "They're very risk-averse."
But critics of the Export-Import Bank argue that while it supports smaller businesses like Applied Machinery, it also helps major corporations including Boeing and General Electric that don't need government-backed support.
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Hochberg's trip to the area included scheduled visits to ConocoPhillips and Anadarko Petroleum Corp., major oil producers, and to Halliburton, an oil field services giant.
Advocates of eliminating the Export-Import Bank, including some lawmakers from Texas, also say it has been managed poorly. They note that an inspector general's report warned the bank that it lacks a systematic approach to managing risk in its portfolio.
"Reauthorizing the Export-Import Bank is a bad idea," said House Financial Services Committee Chairman Jeb Hensarling, R-Dallas, in a statement last month. "In many respects, it's the face of cronyism."
Rep. Michael Burgess, R-Lewisville, is co-sponsoring legislation to end the bank, and Houston-area GOP Reps. Ted Poe and John Culberson voted against the bank's 2012 reauthorization.
Hochberg argues, however, that the bank exists partly to fill a void left by conventional lenders.
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"Our role is to provide financing when it's not readily available, or it's not available at all, so we can support companies as they export," he said. "The bottom line is we're looking for jobs."
He called the bank's critics a "vocal minority" who believe the government has no role to play in economic development.
"When the private sector can do it," he added, "we get out of the way."
The bank is considering financing all or part of the U.S. portion of a project involving Anadarko, based in The Woodlands, Italian oil company Eni and the government of Mozambique.
Since other governments have similar entities, Hochberg said, it's critical that the Export-Import Bank continue as well.
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"We want to make sure engineering services, technical services and equipment come from the U.S.," Hochberg said. "And frankly, Italy will do the same thing. So we want to keep it a level playing field."