Thursday will witness a crucial vote at the bank
The financing of an oil project in Bahrain will be deliberated upon. This project is the most recent addition to a series of Amid Fossil Fuel projects undertaken abroad.
A federal bank, responsible for financing projects abroad, is scheduled to hold a vote on Thursday regarding the utilization of taxpayer dollars to support the drilling of oil and gas wells in Bahrain. This decision has sparked controversy and prompted the resignation of two climate advisers affiliated with the bank, as per individuals who possess information about their choices.
The Export-Import Bank of the United States is currently evaluating a number of contentious fossil fuel projects, including the project in Bahrain.
Last week, two members of the 18-person board established by President Biden to incorporate climate change considerations into the bank’s investment decisions, tendered their resignations following a meeting regarding the Bahrain project. This information was disclosed by five present and former bank officials, who requested anonymity due to their lack of authorization to disclose internal discussions.
Climate advisory board members have expressed their growing frustration as they describe being left uninformed about forthcoming fossil fuel loans and prevented from providing input on whether to endorse or alter a specific project.
The officials have revealed that there are at least two more individuals on the climate advisory board who are currently contemplating the possibility of stepping down from their roles.
Concerns have been voiced by Mr. Biden’s team regarding the bank’s course of action, as it has consistently violated a presidential order from 2021 that prohibits government agencies from providing financial support to carbon-intensive projects outside the country.
Barbara Buchner, the global managing director of the Climate Policy Initiative, a nonprofit research group, and Stacy A. Swann, founder of a climate investment group called Resilient Earth Capital, have both stepped down from their positions. However, they have chosen not to provide any comments regarding their resignations.
The amount of money in loans or guarantees being considered by the bank was not disclosed. However, it is anticipated that the bank will seek approval from Congress, as it is a requirement for projects exceeding $100 million. Additionally, the bank did not provide information regarding the number of American jobs that would be created by the project or the specific details concerning greenhouse gas emissions that would be produced.
The controversy surrounding a potential Bahrain deal arises just two months after the United States, along with nearly 200 other nations, made a commitment to transition away from fossil fuels. The burning of these fuels poses a significant threat to the planet, causing dangerous overheating. This development also coincides with Mr. Biden’s efforts to secure support from voters who prioritize climate issues as he seeks re-election.
Furthermore, apart from providing financial support for the Bahrain project, the Export-Import Bank is currently evaluating the possibility of funding a natural gas export initiative in Papua New Guinea and an offshore pipeline in Guyana. Additionally, the bank is also considering various renewable energy projects, including a zinc-lead mine in Greenland. In the previous year, the bank has already granted approvals for various ventures such as $100 million for an oil refinery in Indonesia, $400 million to facilitate U.S. liquefied natural gas exports, and a loan guarantee to an Estonian company for the acquisition of American storage tanks for an oil project in the Bahamas.
Kate DeAngelis, an environmental group member working on international finance at Friends of the Earth, expressed her concern about the unwavering support for fossil fuel companies. She emphasized that this pattern has been observed repeatedly.
The Export-Import Bank, also known as ExIm, was established in 1934 with the aim of promoting American jobs through providing loans and guarantees for the export of U.S. goods and services.
Over the years, the bank has faced significant criticism for its financing of fossil fuel projects.
During the Obama administration, the bank received backlash for funding coal plants. As part of a legal settlement with environmental organizations in 2010, the bank agreed to implement a thorough due diligence process for all energy projects with high carbon emissions.
Although the bank has not financed coal projects for approximately ten years, it continues to provide substantial support for oil and gas ventures. According to data compiled by the Perspectives Climate Group and the nonprofit group Oxfam, between 2017 and 2021, the bank allocated nearly $6 billion for fossil fuel projects and $120 million for clean energy initiatives.
Upon assuming office, President Biden established the ExIm Chairman’s Council on Climate to advise the bank on how to enhance its support for U.S. exporters in the clean energy sector, facilitate the transition to a low-carbon economy, and generate clean jobs within the United States.
The financing provided by the United States for Bahrain aims to support the expansion of the Bahrain Field, which is one of the oldest oil and gas fields in the Middle East and is located in the center of the country. The project, operated by a subsidiary of the state-owned National Oil and Gas Holding Company, plans to drill over 400 new oil wells and more than 30 new gas wells. This information can be found in an environmental impact report that has been posted on the bank’s website.
In addition to the development of the field, this project could also lead to profitable contracts for American engineering and construction management firms. Last year, Ms. Lewis visited Bahrain to engage with government officials and corporate executives in order to expand the presence of the Export-Import Bank of the United States in the region and create new opportunities for U.S. exporters in Bahrain.
According to a meeting agenda released by the bank, SLB, an oil field services company based in Houston, is involved in this project. However, attempts to contact the state-owned company and Bahrain’s Ministry of Oil and Environment have not received any responses. Similarly, SLB has not provided any comments in response to requests for information.