An exploration site at ConocoPhillips’ Willow prospect is seen from the air in the 2019 winter season. Willow is located in the National Petroleum Reserve in Alaska. (Photo by Judy Patrick/provided by ConocoPhillips Alaska Inc.)
The biggest Alaska oil development in two decades is a step closer to regulatory approval. The U.S. Bureau of Land Management on Wednesday released its recommendation for how ConocoPhillips’ massive Willow project on the North Slope would be developed.
Willow, if developed, would be the farthest-west producing field on the North Slope. It would tap into reserves of about 600 million barrels and, at peak production, produce 180,000 barrels per day, according to ConocoPhillips.
It could make a difference in how much money the state government brings in. Willow is the biggest of the pending or possible developments supporting a projection by the Alaska Department of Natural Resources for an increase in North Slope oil production after about 2027.
Under federal law, large projects must go through a review of the projected impact they will have on the environment. In the case of Willow, former President Donald Trump’s administration in 2020 had approved Willow based on the original environmental impact statement.
But in 2021, a federal judge in Alaska found the analysis to be inadequate. U.S. District Court Judge Sharon Gleason, ruling in a pair of related lawsuits challenging the project, concluded that the earlier environmental review failed to properly consider the project’s climate-change impact, failed to provide legally required protections to the Teshekpuk Lake area and contained other shortcomings. The lake area is habitat for the Teshekpuk Caribou Herd, for numerous migratory bird species and for other Arctic wildlife. That meant the Bureau of Land Management had to issue a supplemental environmental impact statement.
The BLM released the final version of this statement on Wednesday, including its new preferred alternative for developing Willow.
In December, ConocoPhillips suggested that government-imposed reductions to the Willow development would make it not economically worthwhile, and that the company would drop the project if too many limits were placed on it.
But on Wednesday, the company said it welcomed the new BLM analysis and alternative plan. It said work to construct the multibillion-dollar project will start as soon as possible if the federal agency follows up with a final decision approving it.
“After nearly five years of rigorous regulatory review and environmental analysis, the National Environmental Policy Act (NEPA) process is almost complete and should be concluded without delay. ConocoPhillips looks forward to a final record of decision,” with construction to begin “immedately” if that decision is favorable and other permitting is granted, ConocoPhillips Alaska President Erec Isaacson said in a statement.
The BLM’s notice about the updated environmental review is scheduled to be published in the Federal Register on Friday. At least 30 days must elapse from then before a record of decision is issued, the agency said.
The three-member Alaska congressional delegation also welcomed the news in a statement that urged the Biden administration to follow through with quick approval of the preferred alternative.
The three-pad plan is “the minimum for Willow to remain economically viable,” U.S. Rep. Mary Peltola, a Democrat, said in the statement.
While Alaska political and business leaders, including the North Slope Borough, support Willow development, the project is opposed by environmental groups. And there is some disagreement about it among Alaska Native organizations.
The Inupiat-owned Arctic Slope Regional Corp., for example, has been a strong supporter of the project, as has the Voice of the Arctic Iñupiat, a nonprofit formed in 2015. In a statement, that organization’s president, Nagruk Harcharek, said the Willow project, as designed, is consistent with “our time-honored cultural values,” including subsistence food-gathering. “The Willow Project will make it possible for our community to continue our traditions while strengthening the economic foundation of our region for decades to come,” he said in the statement.
But another organization, Sovereign Iñupiat for a Living Arctic, said in a statement that Willow “would set back our national climate goals tremendously” and called for the project to be rejected.
“No amount of fossil fuels, no amount of money, and no form of mitigation from this infrastructure will pass the climate test necessary to keep us on track to a sustainable future,” the statement said.
Because the Willow project is located on federal land – within the 23 million-acre National Petroleum Reserve in Alaska – the state general fund would not receive royalty revenues from it. That is a contrast to decades of revenue generation from the Prudhoe Bay field and most other fields on the North Slope, which are on state lands and provide both royalty and oil-tax revenue to the state treasury. In the petroleum reserve, half of the lease revenues go to a special grant program that disperses money to North Slope communities.
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