An exploration site at ConocoPhillips' Willow prospect is seen from the air in the 2019 winter season. (Photo by Judy Patrick/provided by ConocoPhillips Alaska Inc.)
The Biden administration on Monday approved Alaska’s largest oil and gas development in decades after a bipartisan lobbying effort by members of the state’s congressional delegation and the state Legislature.
Though the project has broad support from elected officials in Alaska, it’s strongly opposed by environmental groups. Some are already planning a lawsuit to block the project.
Located in the federal National Petroleum Reserve on the North Slope, the Willow project is expected to produce its first oil by the end of the decade and as much as 180,000 barrels per day at its peak. By comparison, the trans-Alaska Pipeline System carries about 480,000 barrels of oil per day.
“This is significant in the fact that not only will this mean jobs and revenue for Alaska, it will be a resource that is needed for the country and for our friends and allies. It has been widely, widely supported,” said Sen. Lisa Murkowski, R-Alaska.
State Rep. Josiah Patkotak, I-Utqiagvik, said getting the final approval felt like arriving home after a long snowmachine trip. You might arrive with a dirty carburetor and half-blown spark plugs, he said, but you made it.
“We found a way to get a win,” he said.
Fourth drill site eliminated from consideration
Monday’s decision was expected, but the details in the final approval – known as a record of decision – are slightly different from a preliminary document released in February.
Under the terms of the record of decision, the Bureau of Land Management will permit ConocoPhillips Alaska to operate from three drill sites, the minimum the company said was needed to make the project economically viable.
Last month’s preliminary document said a fourth drill site could be approved at a later date, but Monday’s plan rules it out entirely.
ConocoPhillips Alaska said on Monday that it is continuing to advance toward a final investment decision, the company’s last major go/no-go hurdle before development.
“This was the right decision for Alaska and our nation,” said Ryan Lance, ConocoPhillips chairman and chief executive officer in a prepared statement on Monday. “Willow fits within the Biden Administration’s priorities on environmental and social justice, facilitating the energy transition and enhancing our energy security, all while creating good union jobs and providing benefits to Alaska Native communities.”
If developed, Willow is expected to generate between $5 billion and $9 billion in state production tax revenue, the Alaska Department of Natural Resources estimated in 2019.
That estimate, based on oil at $60 per barrel, is still the best publicly available figure, though officials said a new estimate is being drafted.
Because Willow is in the federal National Petroleum Reserve instead of on state land, Alaska receives no production royalties. Those go to the federal government, which splits them with North Slope communities. The result is expected to be billions of dollars for the region, which also will receive property taxes from the development.
That won’t happen until the 2030s at the earliest.
“I realize some of the ramifications may be way into the future before we actually realize a positive cash flow on it, but I think it’s the right thing to go ahead and do it,” said state Sen. Donny Olson, D-Golovin, who represents the region.
Mixed reactions to approval
The North Slope Borough praised Monday’s announcement, as did the regional tribal government and Arctic Slope Regional Corp., the Alaska Native regional corporation for the North Slope.
The AFL-CIO and several business organizations lobbied in favor of the project before its approval, citing the fact that it will create 2,500 construction jobs and 300 long-term jobs.
They enthusiastically support the administration’s decision, they said in a joint statement Monday.
Environmental groups blasted the decision in a joint statement as a “giant step backwards in addressing the climate crisis.”
Oil production at Willow will not directly create a significant amount of greenhouse gas emissions, environmental analyses state, but if the oil is burned, it would create 254 million metric tons of carbon dioxide over the project’s 30-year lifespan — roughly seven times the amount of carbon dioxide released by the entire state of Alaska in 2020.
Sen. Dan Sullivan, R-Alaska, was among those who said they expect a lawsuit from environmental groups seeking to block the project, and one of those groups promptly confirmed that intent.
“Yes, we will sue,” said Tim Woody of the Wilderness Society, one of several groups that announced their disappointment with Monday’s decision.
Rep. Mary Peltola, D-Alaska, is a strong supporter of the Willow project and said on Monday that she has “been very frustrated at the desire for the environmentalists to completely lock up Alaska, and it seems like Alaska alone.”
The Biden administration has repeatedly said that it considers climate change to be a threat to the United States and has pledged to fight it.
Raena Garcia, a campaigner for Friends of the Earth, a national environmental group, said Monday’s decision to approve Willow is “a colossal and reprehensible stain” on the president’s environmental legacy.
Supporters of the project needed to mount an extensive lobbying effort to overcome environmental opposition. That campaign hit a climax two weeks ago when the three members of Alaska’s congressional delegation had an Oval Office meeting with President Joe Biden.
Petola said on Monday that during the meeting, Biden “really perked up” when she discussed the need for Willow oil to serve as “gap oil,” fuel to cover national needs during a transition to renewable energy.
“This project is a very good example of doing gap oil,” Peltola said.
Lawsuit looms as next step
On Sunday, the Biden administration announced that it plans to impose new environmental protections on land and water in the Arctic, a move widely seen as an attempt to balance Monday’s decision.
Gov. Mike Dunleavy, in a prepared statement Monday, spent more time criticizing those new protections than praising the approval of Willow.
“It’s disgraceful that the Biden administration thinks that this is a compromise that will benefit America,” the governor said.
Sullivan and other members of the Alaska congressional delegation said the details of those protections haven’t yet been released, making it difficult to comment.
The few details yet available indicate the new rules will not affect existing oil and gas leases but would prohibit drilling in federal waters in the Arctic Ocean offshore. Oil and gas companies have shown relatively little interest in offshore drilling. Some un-drilled onshore areas would also be protected.
In a prepared statement, the Wilderness Society noted that the proposed conservation measures “are welcome news,” but added, “We regret that they were immediately followed by the profoundly disappointing decision to approve the Willow project, which will accelerate climate change and harm local Indigenous communities. We will continue to fight this project with all means at our disposal.”
The Native Village of Nuiqsut, the tribal government for the town closest to Willow, opposes the project.
Three years ago, the Bureau of Land Management approved Willow in a decision similar to the one announced Monday, but environmental groups sued and a U.S. District Court judge concluded that the federal government had failed to adequately analyze the impacts of the project.
Murkowski said the key difference between that 2020 action and what’s taking place today is that the federal government has already responded to legal action, revised its work and come up with stronger justification for the project.
“That’s why I think there’s reason for optimism, good reason for optimism about the likelihood of prevailing on litigation,” she said. “So we’ve just got to get through it, and hopefully sooner rather than later.”
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