The nation’s export credit agency is backing an oil and gas project in Bahrain to the tune of a $500 million loan guarantee.
The U.S. Export-Import Bank’s announcement Thursday marks its latest infusion of cash into foreign fossil fuel infrastructure, despite calls from the Biden administration to stop supporting such overseas projects, Sara Schonhardt writes.
Last year, the Ex-Im Bank, as it’s called, approved a $100 million loan to an oil refinery in Indonesia, which the White House said is not aligned with the Biden administration’s climate policies. And since 2021, when President Joe Biden signed an executive order banning the financing of overseas fossil fuel projects, the bank has provided $1.3 billion toward oil and gas operations, according to Oil Change International, which tracks such projects.
The bank is an independent federal agency authorized by Congress and governed by its charter, making it difficult for a president to directly interfere with its decisionmaking. (The bank’s charter does allow the president to deny a transaction when doing so would advance U.S. policy in certain areas, including environmental protection, Sara noted).
“The EXIM Bank is demonstrating that it is a rogue agency — unwilling to follow Congress or the administration’s directive,” said Democratic Sen. Jeff Merkley of Oregon.
Merkley joined several of his colleagues in sending a letter Wednesday warning the bank against making financing decisions that could exacerbate the climate crisis.
The bank maintains that the latest financing decision will not harm the planet. Reta Jo Lewis, who heads the bank, said the loan guarantee would help state-owned Bapco Energies implement measures “intended to reduce greenhouse gas emissions,” such as the use of methane leak detection equipment, solar energy production and the elimination of “non-emergency flaring.”
An environmental impact assessment on the Ex-Im Bank’s website notes, however, that the project would drill more than 400 new oil wells and 30 new gas wells, releasing 1.4 million metric tons of planet-warming pollution over two years.
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