Energy

Federal judge rejects permits for ConocoPhillips’ Willow oil project

A federal judge in Alaska on Wednesday voided development permits for a major oil development on the North Slope that was backed by the Trump and Biden administrations.

In a written order, U.S. District Court Judge Sharon Gleason said the Bureau of Land Management and U.S. Fish and Wildlife Service incorrectly approved the Willow oil project, which could produce more than 160,000 barrels of oil per day from the National Petroleum Reserve-Alaska, west of Prudhoe Bay.

The project has been seen by its developer, ConocoPhillips, as part of a “renaissance” in North Slope oil development. Several conservation groups sued the BLM in November, saying the agency underestimated the plan’s harm to wildlife, among other factors.

“This is a huge deal,” said Siqiñiq Maupin, executive director of the Sovereign Inupiat for a Living Arctic, the lead plaintiff in the lawsuit.

“This will actually stop the entire project, they will have to do everything over again,” she said.

A spokeswoman for ConocoPhillips said the company is reviewing the decision and evaluating its available options.

Maupin said she expects the decision will be appealed.

“I’m sure that if the process can be appealed, ConocoPhillips will do what they can,” she said.

The state of Alaska intervened on the side of ConocoPhillips during the lawsuit, and Alaska Gov. Mike Dunleavy implied an appeal in a statement issued after the decision.

“Make no mistake, today’s ruling from a federal judge trying to shelve a major oil project on American soil does one thing: outsources production to dictatorships and terrorist organizations,” the governor said. “This is a horrible decision. We are giving America over to our enemies piece by piece. The Willow project would power America with 160,000 barrels a day, provide thousands of family-supporting jobs, and greatly benefit the people of Alaska.”

Though the suit was filed under the Trump administration, the federal government’s support for the project continued under the Biden administration, with attorneys for the new president arguing that the project is legal.

A preliminary injunction, approved by the 9th Circuit Court of Appeals in February, halted preliminary work on the project, and Wednesday’s decision from Gleason said the conservation groups’ arguments have merit.

Among other findings, she concluded that federal authorities incorrectly considered the impact the project would have on foreign greenhouse gas emissions and disregarded potential alternative development plans for the region.

In a June 30 call with investors, senior ConocoPhillips vice president Nick Olds called Willow the company’s “next great Alaska hub.”

He said the company’s financial analysis had indicated that the area could support 200 wells and a processing plant capable of supporting 180,000 barrels per day of production.

The company was slated to make a $6 billion final investment decision by the end of the year, with first oil production possible by 2027. He included a note of caution: That schedule was dependent upon the end of the court case.

“We have every reason to believe that Willow should and will be developed,” Olds said on the June call. “However, we’ve been clear that we won’t take the final investment decision until the legal risks are resolved.”

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