U.S. Approves $500 Million for Bahrain Oil Project, Despite Opposition

U.S. Approves $500 Million for Bahrain Oil Project, Despite Opposition - The New York Times

Supported by
SKIP ADVERTISEMENT

U.S. Approves $500 Million for Bahrain Oil Project, Despite Opposition

The financing faced criticism that it doesn’t mesh with U.S. commitments on climate change. Earlier, two climate advisers had resigned over the plan.

A federal bank that finances projects overseas voted Thursday to put $500 million toward an oil and gas project in Bahrain, a transaction that critics said was out of step 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 ahead with the financing, given the project’s negative effects on the climate. “We cannot afford to have ExIm 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 that the financing, in the form of loan guarantees, was consistent with its mission to bolster American exports and jobs. The new drilling in Bahrain could mean lucrative contracts for American engineering and construction-management firms, the bank said. The project will include measures to keep greenhouse gases in check, it said in a statement.

The Bahrain deal comes just months after the United States joined nearly 200 other nations in a promise to transition away from fossil fuels, the burning of which is dangerously overheating the planet. It also comes as Mr. Biden is working to shore up support from climate-minded voters as he runs for re-election.

In February, plans to finance the Bahrain projects prompted two of the bank’s climate advisers to resign. And Mr. Biden’s aides have expressed concern about the direction of the bank, which has consistently flouted a 2021 presidential order that government agencies stop financing carbon-intensive projects overseas.

The Bahrain project is one of several controversial overseas fossil fuel ventures that ExIm Bank is currently considering. Also being considered are a natural gas export project in Papua New Guinea and an offshore pipeline in Guyana, alongside some projects related to renewable energy 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 a tally by the Perspectives Climate Group and the nonprofit group Oxfam.

Hiroko Tabuchi covers the intersection of business and climate for The Times. She has been a journalist for more than 20 years in Tokyo and New York. More about Hiroko Tabuchi

Learn More About Climate Change
Have questions about climate change?
Our F.A.Q. will tackle your climate questions, big and small.
MethaneSAT,
a washing-machine-sized satellite, is designed to detect emissions of methane, an invisible yet potent gas that is dangerously heating the world. Here is how it works.
Two friends, both young climate researchers, recently spent hours confronting the choices that will shape their careers, and the world.
Their ideas are very different.
New satellite-based research reveals how land along the East Coast is slumping into the ocean,
compounding the danger from global sea level rise. A major culprit: overpumping of groundwater.
The planet needs solar power.
Can we build it without harming nature? Today’s decisions about how and where to set up new energy projects will reverberate for generations.
Did you know the ♻ symbol
doesn’t mean something is actually recyclable? Read on about how we got here, and what can be done.