A federal bank that finances projects overseas voted Thursday to allocate $500 million towards an oil and gas project in Bahrain, a decision that critics argue contradicts President Biden’s climate commitments.
Just before the vote, six lawmakers urged the Export-Import Bank of the United States (ExIm) not to proceed with the financing due to the project’s adverse impact on the climate. Senator Jeff Merkley, leading the lawmakers, stated in a letter to the bank’s board of directors last week, “We cannot afford to have ExIm undermine domestic and international climate progress.”
The bank defended the financing, in the form of loan guarantees, as aligned with its objective to support American exports and jobs. It emphasized that the new drilling project in Bahrain could result in lucrative contracts for American engineering and construction-management firms, with measures in place to control greenhouse gas emissions, as stated in a release.
The Bahrain deal follows the United States’ commitment to transition away from fossil fuels, alongside nearly 200 other nations, to combat the dangerous effects of climate change. This decision also coincides with Mr. Biden’s efforts to appeal to climate-conscious voters in his re-election campaign.
In February, plans to finance Bahrain projects led to the resignation of two of the bank’s climate advisors. Concerns have been raised by Mr. Biden’s team regarding the bank’s direction, as it has consistently disregarded a 2021 presidential order to cease financing carbon-intensive projects overseas.
The Bahrain project is among several controversial fossil fuel ventures ExIm Bank is currently reviewing, including a natural gas export project in Papua New Guinea and an offshore pipeline in Guyana, alongside renewable energy projects like a zinc-lead mine in Greenland.
Between 2017 and 2021, the bank provided nearly $6 billion in financing for fossil fuel projects and $120 million for clean energy, according to data from the Perspectives Climate Group and the nonprofit organization Oxfam.
