The US trade agency supports oil and gas drilling in Bahrain, despite President Biden’s commitment

The United States is poised to invest public funds into expanding oil and gas production in Bahrain, despite the Biden administration’s pledges to cease support for fossil fuel projects overseas.

The US Export-Import Bank (Ex-Im), a federal export credit agency, is moving forward with plans to finance the drilling of over 450 new oil and gas wells in one of the oldest extraction fields in the Middle East.

Ex-Im’s board voted to inform the US Congress about the potential investment, a required step for projects exceeding $100 million. Observers anticipate that financing for the Bahrain project will be secured as early as next month.

At the COP26 summit, the US, along with 33 other nations, committed to ending direct public finance for overseas fossil fuel projects by the end of 2022. However, despite this pledge, the US approved over $2 billion in international fossil fuel finance last year, with Ex-Im responsible for nearly half of it.

Nina Pušić, an export finance climate strategist at Oil Change International, expressed concern, stating that while the US has the potential to lead a transition from fossil fuels to renewables, approvals such as this are a significant setback.

Ex-Im’s financing in Bahrain will contribute to a $4.2 billion program aimed at increasing production in a decades-old field where new reserves were discovered in 2018. Tatweep Petroleum, a state-owned company, plans to drill new gas and oil wells, construct processing facilities, and develop transport networks as part of the program.

The expansion of oil and gas extraction in Bahrain is expected to result in significant carbon emissions, contributing to global warming. Despite ongoing tensions regarding Ex-Im’s support for fossil fuels overseas, the agency continues to prioritize financing projects that support American jobs and exports.