Fix provided by @jhole (use the database name directly, e.g. without --variable stuff):

Change:

PGPASSFILE=/root/.pgpass psql --username=myuser --host=myserver.local --port=5432 --variable database_name=mydb

to:

PGPASSFILE=/root/.pgpass psql --username=myuser --host=myserver.local --port=5432 -mydb