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Fury Over $500 Million US Export-Import Bank Loan to Bahrain 'Climate Bomb'
"This approval signals another setback for Biden's climate commitments, and cements the United States yet again as the worst of the laggard countries in violation of the promise to end international public finance for fossil fuels," one campaigner said.
Mar 15, 2024
Despite a Biden administration pledge to stop backing international fossil fuel projects by 2022, the U.S. Export-Import Bank announced Thursday that it would provide a $500 million loan for oil and gas expansion in Bahrain.
The funding marks the fifth time that EXIM has chosen to back a fossil fuel project abroad since President Joe Biden joined the Clean Energy Transition Partnership (CETP) at the United Nations COP26 climate conference in Glasgow in 2021.
"EXIM's decision to approve the Bahrain oil and gas project is another alarming step in the wrong direction for climate action, as the bank goes rogue and continues to defy President Biden's promises," Nina Pušic, an export finance climate strategist at Oil Change International, said in a statement, adding that the project was a "huge climate bomb paid for by the American taxpayer."
"This is the wrong decision. Our health, planet, and future are at stake—the U.S. must stop financing oil and gas expansion."
Signatories to CETP vowed to "end new direct public support for the international unabated fossil fuel energy sector by the end of 2022" and instead shift financing toward renewable energy projects. Yet an Oil Change analysis published in September found that countries including the U.S. continued to back fossil fuel projects after signing.
According to that analysis, the U.S. had approved the largest number of projects after the CETP's 2022 deadline to stop funding oil, gas, and coal. What's more, counting Thursday's $500 million, the EXIM has funded fossil fuel projects to the tune of $1.3 billion since the cut-off date.
"This approval signals another setback for Biden's climate commitments, and cements the United States yet again as the worst of the laggard countries in violation of the promise to end international public finance for fossil fuels," Pušic said.
In its announcement, EXIM said that the money, lent to Bahrain's semi-independent Bapco Energies, would support around 2,100 jobs in Texas and other U.S. states and "was not expected to result in a meaningful increase in oil and gas production." The bank pointed out that Bapco Energies had signed the COP28 Oil and Gas Decarbonization Charter, promising net-zero operations by 2050 and an end to flaring by 2030.
"This transaction will support thousands of U.S. jobs and play a crucial role in ensuring Bapco Energies is able to achieve its climate goals of enhanced grid interconnectivity, more efficiency, decarbonization, and investments in large-scale solar projects," EXIM President and Chair Reta Jo Lewis said in a statement.
However, EXIM told Congress when it first announced the potential funding that the project would create more than 400 new oil wells and 30 new gas wells, Reuters reported.
The announcement came two days after Democratic and Independent lawmakers led by Sen. Jeff Merkley (D-Ore.) sent a letter to the bank urging it not to fund the project "because of its negative impacts on the climate."
In the letter, the legislators pointed to the International Energy Agency's assessment that any new oil, gas, and coal investment was incompatible with the Paris agreement goal of limiting global heating to 1.5°C. Further, they noted that Congress had stipulated that EXIM should review the environmental and climate impact of projects when it reauthorized its charter in 2019.
"The world is in the midst of a climate crisis that is already having devastating impacts on millions of people across the globe," the letter concluded. "We cannot afford to have EXIM undermine domestic and international climate progress by financing projects that worsen this crisis. We urge you to take EXIM's mandate to consider the environmental impacts of projects seriously, and to start by disapproving new funding for oil and gas drilling in Bahrain."
"The United States has lost any credibility it had as a climate leader, and instead has proven to be led by forces like EXIM to prop up a dying industry while simultaneously killing its own people."
Instead of heeding the lawmakers' request, EXIM approved five times the amount of funds it had initially told Congress is was considering.
"We can't tackle climate chaos and lead the globe to a renewable energy economy if we keep greenlighting fossil energy of the past," Merkley said on social media in response to the news. "This is the wrong decision. Our health, planet, and future are at stake—the U.S. must stop financing oil and gas expansion."
The move comes as younger voters have warned Biden that he should double-down on climate friendly policies to encourage youth turnout in the 2024 presidential election. Writing in Common Dreams on Thursday, Noa Greene-Houvras, a 17-year-old climate activist with Fridays for Future NYC, encouraged the president to stand up to EXIM and back an OECD proposal to end the support of export credit agencies for oil and gas projects.
In a separate statement, Greene-Houvras said: "We are horrified at the decision to send $500 million to new oil projects in Bahrain. The United States has lost any credibility it had as a climate leader, and instead has proven to be led by forces like EXIM to prop up a dying industry while simultaneously killing its own people."
"As youth we are watching our future slip away, engulfed by fire and flood," Greene-Houvras continued, adding "We are both terrified and baffled at this decision making process, and we will not let this stand."
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Biden Must Do Much More to Win Over Young Climate Voters
Biden must end the flow of public money to fossil fuels, sending a clear statement to voters that he is the candidate who will stand up to fossil fuels, and stand up for our future.
Mar 14, 2024
I turn 18 just in time for the 2024 election, and I know that the stakes are higher than ever. It’s not just a contest between President Joe Biden and former President Donald Trump; it’s a choice between the only person who can lead the U.S.’ much-needed energy transition and a criminal who’s promised to systematically dismantle environmental protections and our democracy.
As a climate activist the choice should be easy, but my peers aren’t jumping for joy at the prospect of casting a vote for Biden. While the Inflation Reduction Act was a step in the right direction, we’ve also witnessed a string of new oil and gas projects, watered-down language, and broken promises. Biden must do much more to win over young climate voters ahead of this year’s election, and he can start by keeping his promise to stop public money flowing into fossil fuels.
A record number of young people voted in the 2020 election, with as much as 10% increases in young voter turnout across key battleground states like Arizona, Wisconsin, and Georgia. This year, Harvard polling has predicted a lower level of youth turnout, which could be potentially fatal for the Biden-Harris administration. To win, Biden needs a strong turnout from young voters. The White House is now on an all-out offensive to charm young climate voters like me, recently setting up a TikTok page and inviting a group of young climate influencers to the White House.
Youth can help transform the Biden campaign into a powerful political movement, but we are not willing to compromise on the climate crisis.
Despite his efforts to connect with us, Biden’s climate hypocrisy is a line many of us aren’t willing to cross. Last year, Biden approved the Willow project, going directly against his promise to end fossil fuel projects on public land and water. This caused outrage in many youth circles.
The promise-breaking goes beyond Willow. In 2021, the Biden administration and 33 other governments signed up to the Clean Energy Transition Partnership, promising to end international public finance for fossil fuels by the end of 2022. But in the last year alone, the U.S. channeled almost $1 billion into new oil and gas, through the U.S. Export-Import Bank, EXIM. Next week, the EXIM board is voting on a major oil and project in Bahrain. If it is approved, at least $100 million U.S. tax dollars will go toward over 400 new oil wells, contrary to Biden’s fossil fuel pledges.
Export credit agencies like EXIM are government-owned institutions that provide financial services to large infrastructure projects around the world. They are also the world’s largest international public funders of fossil fuels. Each year, Organisation for Economic Cooperation and Development (OECD) countries’ export credit agencies provide over $40 billion of public money to fossil fuels—five times their support for clean energy.
This must stop. With our planet and our democracy in the balance, President Biden needs to fund a just energy transition. It’s not an accident that the largest climate march since the pandemic took place in September last year—young people are fighting for better. To win the youth climate vote, Biden must end the flow of public money to fossil fuels, sending a clear statement to voters that he is the candidate who will stand up to fossil fuels, and stand up for our future. This will get the youth vote out much more than a 30-second TikTok ever could.
This week, the OECD is meeting in Paris to discuss groundbreaking proposals to stop export credit agency support for oil and gas. It’s one of Biden’s last chances to prove himself as a climate leader, and the U.S. will play a critical role. Biden can either support the proposals and put a stop to EXIM, or choose to continue plunging public money into coal, oil, and gas.
Youth can help transform the Biden campaign into a powerful political movement, but we are not willing to compromise on the climate crisis. Many of us grew up believing we would “one day” see the effects of climate change, but in the last year, my education has been stalled or stopped due to flooding and extreme smoke multiple times. I refuse to vote away my health, my community, and my safety.
Our democracy is incredibly fragile, deeply worth protecting, and impressively resilient, much like our planet. I will cast my first-ever vote for Joe Biden, but to get a record youth turnout he needs to do more. Next week, Biden has an opportunity to build momentum from his pause in new LNG permits and match his promises with action, ending the flow of U.S. public money into fossil fuels for good. In the meantime, I will continue to pressure Biden to listen to young people, because I refuse to choose between my future and my vote.
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'A Huge Step Backward': US Export-Import Bank Approves Estonian Fossil Fuel Project
The approval comes as the nation has signed off on $1.5 billion for overseas oil and gas projects so far this year, even though it pledged to stop doing so by the end of 2022.
Oct 13, 2023
Despite President Joe Biden's commitment to end investments in overseas fossil fuel projects, the U.S. Export-Import Bank on Thursday agreed to fund the Liwathon oil tank project in Estonia.
The decision comes on top of the $1.5 billion that the U.S. has already promised to overseas oil and gas developments in 2023, in violation of a 2022 deadline to end international fossil finance.
"President Biden cannot claim climate wins while his U.S. Export-Import Bank is propping up a pollutive industry," Kate DeAngelis, senior international finance program manager for Friends of the Earth U.S., said in a statement. "EXIM spent the hottest months in history approving four major fossil fuel projects, demonstrating its disregard for the planet and all living beings. An institution that chooses polluters over people should not be trusted to follow President Biden's climate commitments."
"Biden and the United States risk becoming an international embarrassment with these retrograde approvals."
Biden signed an executive order in 2021 in which he promised to develop a climate finance plan that would promote "the flow of capital toward climate-aligned investments and away from high-carbon investments." Then, at the COP26 U.N. climate conference in Glasgow, Scotland, the U.S. joined 24 other countries and five financial institutions in pledging to stop funding "unabated fossil fuel energy" overseas by 2022.
Despite this, Oil Change International found in a September report that the U.S. had approved more money for international fossil fuel projects in 2023 than any other nation that agreed to stop.
"EXIM's decision to approve the Liwathon oil project is yet another concerning step in the wrong direction for climate action," Collin Rees, U.S. program manager at Oil Change International, said in a statement, calling the approval "yet another setback for President Joe Biden's climate commitments."
"Despite lofty promises and international agreements, Biden continues to approve projects that exacerbate our climate crisis and threaten communities," Rees continued. "As many other G-20 countries implement their commitment to end public finance for fossil fuels, Biden and the United States risk becoming an international embarrassment with these retrograde approvals."
In addition to the Liwathon approval, the EXIM specifically has already signed off on almost $100 million for an oil refinery in Indonesia, $240 million for an Iraqi gas development, and $400 million for Trafigura to support U.S. exports of liquefied natural gas (LNG), Friends of the Earth said. The bank is also weighing whether to fund Papua LNG in Papua New Guinea and oil and gas projects in Bahrain and Guyana.
Both the International Energy Agency and the Intergovernmental Panel on Climate Change have concluded that no new oil, gas, and coal developments are compatible with limiting global heating to 1.5°C above preindustrial levels. At the same time, Nina Pusic, export finance climate strategist at Oil Change International, argued that fossil finance goes against economic as well as scientific sense.
"Ultimately, using American taxpayer dollars to finance oil and gas infrastructure is not only an irresponsible use of public money from a climate perspective, but also risks creating stranded assets, as many regions of the world quickly transition to cleaner energy sources," Pusic said in a statement.
However, it's not too late to reverse course.
"The U.S. can help lead a shift of billions of dollars from last century's dirty energy into the clean, renewable energy of the future," Rees said, "but approvals like Liwathon are a huge step backward."
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