US approves $500 million for Bahrain oil project despite opposition

A federal bank that finances projects abroad voted Thursday to put $500 million into an oil and gas project in Bahrain, a transaction that critics said was inconsistent with President Biden’s climate commitments.

Just days before the vote, six lawmakers had urged the bank, the Export-Import Bank of the United States, or ExIm, not to move forward with the financing given the project’s negative effects on the climate. “We cannot afford for ExIm to undermine domestic and international climate progress,” lawmakers led by Senator Jeff Merkley, Democrat of Oregon, said in a letter to the bank’s board of directors last week.

The bank said the financing, in the form of loan guarantees, was consistent with its mission to boost U.S. exports and jobs. The new drilling in Bahrain could yield lucrative contracts for U.S. engineering and construction management companies, the bank said. The project includes measures to control greenhouse gas emissions, a statement said.

The agreement with Bahrain comes just months after the United States joined the agreement almost 200 other countries in a pledge to move away from fossil fuels, the combustion of which dangerously overheats the planet. It also comes as Mr Biden works to shore up support from climate-conscious voters as he runs for re-election.

Plans to finance the projects in Bahrain in February This prompted two of the bank’s climate advisors to resign. And Mr. Biden’s aides have expressed their concerns about the direction of the bank, which has consistently ignored a 2021 presidential order that government agencies stop financing carbon-intensive projects abroad.

The Bahrain project is one of several controversial foreign fossil fuel projects that ExIm Bank is currently considering. Also being considered a natural gas export project in Papua New Guinea and an offshore pipeline in Guyana, in addition to some renewable energy-related projects such as 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 a count by the Perspectives Climate Group and the non-profit organization Oxfam.