The Biden administration on Monday approved a massive oil development project on Alaska’s North Slope, and said it is adding new environmental protections to limit future oil development in several areas of the National Petroleum Reserve-Alaska.
ConocoPhillips’ $8 billion Willow prospect in the Indiana-size reserve is expected to be one of the largest oil fields developed in Alaska in decades. It’s expected to produce oil for 30 years, including 180,000 barrels daily at its peak.
The White House’s decision bucked intense pressure from environmental groups, which have called the project a “carbon bomb” and said it contradicts President Joe Biden’s goal of cutting greenhouse gas emissions in half by 2030. Biden’s decision to approve Willow angered those organizations.
“We will keep fighting the Willow project and future projects like it,” Kristen Miller, executive director of the Alaska Wilderness League, said in a statement Monday. “And we call on the administration to change the way we manage all our nation’s public lands for climate, starting with America’s Arctic.”
Many Alaska Native leaders, Alaska politicians and business groups had lobbied intensely for approval of the field, saying it would provide badly needed revenues to support North Slope villages and help Alaska’s struggling economy.
Alaska’s congressional delegation, during a call with reporters Monday morning, called the decision a landmark moment.
“We finally did it, Willow is finally reapproved, and we can almost literally feel Alaska’s future brightening because of it,” Republican Sen. Lisa Murkowski said in a statement.
The Biden administration’s 124-page decision, signed by Deputy Interior Secretary Tommy Beaudreau, approves a scaled-back version of the project from previous plans proposed by the federal government as recently as last month. It will allow ConocoPhillips to construct three drill sites with 199 total wells, plus an airstrip, roads, pipelines, a crude-oil processing facility and other infrastructure.
ConocoPhillips said Monday that it’s pleased with the approval. A three-pad plan is economically viable, the company has said, though it is a reduction of the five drill sites that the oil company had originally sought when it began seeking a permit five years ago.
ConocoPhillips said it expects to immediately begin building gravel roads to launch development. The company is also reviewing the decision from the Interior Department and internally will take steps toward making a final investment decision in the project. Oil production is expected to begin in 2029, and the company said it plans to provide more information about its timing at an April meeting with investors.
“This was the right decision for Alaska and our nation,” said Ryan Lance, ConocoPhillips’ chief executive.
The decision on Willow comes a day after the Biden administration announced it will limit oil drilling on 16 million acres in the NPR-A and the Arctic Ocean in an apparent nod to environmental groups that have fought the project.
Oil and gas development in the remote reserve has been limited to the northeastern corner. With many specific details of the administration’s plan uncertain, it was difficult to know on Monday how the additional protections will impact any future prospects for oil and gas development there.
Legal action expected
Conservation groups said that while they were pleased to see additional protections to limit drilling in the region, Biden’s approval of Willow overshadowed those environmental gains.
On Monday, those groups said they plan to fight the decision.
”We regret that (the protections) were immediately followed by the profoundly disappointing decision to approve the Willow project, which will accelerate climate change and harm local Indigenous communities,” said Karlin Itchoak of The Wilderness Society. ”We will continue to fight this project with all means at our disposal.”
Dawnell Smith, with Trustees of Alaska, said the nonprofit environmental law firm sees litigation as imminent.
“The project will, without question, reduce access to food and cultural practices for local communities and pump out massive amounts of greenhouse gases that drive continued climate devastation in the Arctic and world,” Smith said.
The scaled-back version of the project would produce about 240 million metric tons of greenhouse gas emissions over its life, according to Interior’s decision.
Willow would also produce 576 million barrels over its three-decade life, worth more than $45 billion at today’s oil prices.
Alaska’s congressional delegation said during a call with reporters Monday that numerous factors likely led the Biden administration to approve the project, including that ConocoPhillips has held valid lease rights for decades at Willow, and that the Alaska economy is in poor shape compared to its peers nationally. They also credited the fact that many Alaska and Alaska Native groups supported Willow.
The decision is “critically important for Alaska’s economy, good-paying jobs for our families, and the future prosperity of our state,” Republican U.S. Sen. Dan Sullivan said in a statement.
“Today, the people of Alaska were heard,” said Rep. Mary Peltola, a Democrat, in a statement. “After years of consistent, determined advocacy for this project, from people all across the state and from every walk of life, the Willow Project is finally moving forward.”
Alaska’s congressional delegation said they expect environmental groups to immediately file a request in federal court to halt the project. However, they said they believe the compromises that have led to a smaller project will help protect the project in court.
“This is going to be the next hurdle, and it’s going to be a big battle, and it’s probably going to happen any day,” Sullivan told reporters.
Alaska Republican Gov. Mike Dunleavy said he was pleased to see the approval of the project but is disappointed by the plans to restrict future oil and gas development associated with the reserve.
“It’s disgraceful that the Biden administration thinks that this is a compromise that will benefit America,” Dunleavy said in a statement. “Taking future oil production in Alaska off the map won’t decrease global oil consumption. It will just shift the market and give leverage to producers in countries that don’t have our high standards for the environment and human rights.”
Money set aside for North Slope communities
An analysis of the slightly larger version of the Willow project proposed by the federal government last month showed that between $1.3 billion and $5.2 billion would go to the state of Alaska over the project’s life, in production, property and corporate income taxes.
But in its initial years, Willow would cost the state revenue, in part because Alaska tax law allows ConocoPhillips to write off project development costs from its overall production taxes, according to an analysis by the Alaska Department of Natural Resources. Also, since the project is on federal land, half the royalties would go to the federal government.
The rest of the royalties would be set aside by law for Alaska communities that are most affected by oil and gas development, under an impact mitigation program that has provided about $200 million in grants to North Slope Borough communities.
The Voice of the Arctic Iñupiat, representing several Iñupiat organizations from the region that support Willow, said the project is important for Alaska Native self-determination and will help villages continue to support traditional activities such as whaling.
The group said the project will create jobs and contracting opportunities for Native-owned businesses, help boost property tax revenue to the eight-village North Slope Borough by more than $1 billion, and add about $2.5 billion to the impact mitigation fund.
“The Biden administration’s (decision) to advance 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,” the statement said.
The Arctic Slope Regional Corp., Iñupiat Community of the Arctic Slope and the North Slope Borough said in a joint statement that the decision recognizes that Willow “represents a new opportunity to ensure our Indigenous, Alaska Native communities’ ten thousand years of history has a viable future.”
However, the mayor of the Iñupiat village closest to the project, Nuiqsut Mayor Rosemary Ahtuangaruak, had opposed it, citing concerns it will threaten subsistence hunting and her community’s health. Ahtuangaruak could not be reached for comment Monday.
Sovereign Iñupiat for a Living Arctic, an organization opposed to Willow, said the decision locks in oil exploration in the reserve for decades, and sets the stage for increased climate impacts and health issues for local people, including by hurting access to subsistence foods.
“The Biden administration’s approval makes it clear that its call for climate action and the protection of biodiversity is talk, not action,” said Sonia Ahkivgak, the group’s social outreach coordinator. “Our fight has been long and also it has only begun. We will continue to call for a stop to Willow because the lives of local people and future generations depend on it.”
‘Potential bad news coming down the pike’
The Interior Department said in a statement Monday that by allowing the development of three drill sites instead of five, nearly a dozen miles of roads and about 20 miles of pipeline are eliminated, reducing impacts to caribou migration and subsistence users.
ConocoPhillips has also agreed to relinquish nearly 70,000 acres of leases held in the same unit where the Willow project is located, the statement said. That will shrink the size of the unit by one-third, reducing the project’s freshwater use and scaling back the project within the constraints of valid existing rights under ConocoPhillips’ decades-old leases, Interior’s statement said.
Murkowski and Sullivan said they had been assured by administration officials that additional leases, including leases outside Willow held by multiple companies and totaling about 1.5 million acres, would not be impacted by the administration’s plans.
The administration’s actions will also create an additional buffer from exploration and development activities near calving grounds and migratory routes for the Teshekpuk Lake caribou herd, an important subsistence resource for nearby Alaska Native communities, Interior said in the statement.
The Interior Department said it will launch a rulemaking process to achieve maximum protection for five special areas encompassing more than half of the reserve, including the Teshekpuk Lake special area. It will also take action to designate nearly 3 million acres in the Beaufort Sea near the reserve as indefinitely off limits for future oil and gas leasing, to protect habitat for whales, seals, polar bears and subsistence hunters.
Dunleavy in a press conference Monday characterized the additional restrictions as a potential noose that tightens around future development.
“This is good news for Alaska,” he said of the decision to approve Willow, “with a lot of potential bad news coming down the pike on the horizon.”