Giant Alaskan oil project nears final approval

Biden administration officials are preparing a key environmental assessment to say the Interior Department can grant partial approval to a major oil drilling project on Alaska’s North Slope, known as Willow, setting the stage for one of the administration’s most consequential climate decisions.

The release of that report, due this week, will trigger a final decision from the Interior Department in a yearslong showdown between the federal government and ConocoPhillips about its legal right to drill one of the largest oil and gas developments on federal territory. The company controls oil leases in the National Petroleum Reserve-Alaska, and the report’s findings may force the Biden administration to approve the project next month over intense pressure from climate activists, who say it flies in the face of the president’s pledges to reduce the country’s contribution to global warming.

The report – a legally required part of the permit process is being drafted to lay out a preferred alternative that allows three well pads, down from the originally requested five, according to two people briefed on the process. That would match a preliminary proposal the agency put out this summer, and be in line with what company officials have publicly said they need to make the project worth the company’s investment.

The New York Times reported those recommendations late Tuesday. Interior Department officials declined to comment.

The Biden administration now has at least 30 days to mull a final decision on permitting the project, slated for the nation’s largest block of public land. The company initially planned for five pads at the Arctic site, but the assessment in July had suggested a smaller footprint was likely needed to limit the site’s contribution to greenhouse gas emissions, and its potential damage to nearby lakes and wildlife.

The preliminary estimates for the larger site said it would have generated between 278 and 284 million metric tons of carbon dioxide, which environmental groups have estimated would produce more emissions than 66 coal-fired power plants.

Interior Secretary Deb Haaland, who once fought the project as a member of Congress, now has the final decision on whether to approve it. Top White House climate officials are likely to be involved and potentially seek feedback from President Biden himself. Haaland has wide discretion, including the right to choose from other options or to mix and match options from the assessment. Those possibilities also include blocking one pad and deferring decisions on up to three more.

The administration has previously promised Alaskan leaders that they would make a final decision by the end of February. ConocoPhillips needs approval to start the project within weeks, while Arctic weather is still cold enough for the company to make the ice roads and ice platforms they build on to drill through tundra. Missing that window would put drilling off until the deep freeze returns next winter, opening the chance for court fights or other delays that may block Willow entirely.

Company leaders have also threatened to abandon the project if Haaland’s choice is too restrictive. A green light for any less than three pads would prevent Willow from being profitable enough to justify the company’s investment, given the high costs of such a remote project, they have said.

Alaska’s congressional delegation backed by several local Native American tribes and organizations has been lobbying the White House to give the company the approvals it wants, arguing that the $8 billion to $10 billion endeavor would bolster the nation’s domestic energy supplies and help enrich the state and local tribes. But the project is bitterly opposed by environmental groups, advocates for Alaskan wilderness and some locals, who say that its giant footprint threatens the president’s climate goals, wildlife especially polar bears and subsistence living in a remote part of the Arctic.

Willow would bring hundreds of miles of roads and pipelines along with airstrips, a gravel mine and a large new processing facility to the area’s pristine tundra and wetlands. There are only two existing drilling sites producing oil in the 23 million-acre reserve, both run by ConocoPhillips.

A ConocoPhillips official told investors in 2021 that the project could unlock 3 billion barrels of oil. Friday’s report estimates that over the three-decade life of the project, Willow would generate 629 million barrels of oil up from the government’s earlier estimate of 586 million barrels.

Willow would extend ConocoPhillips’s footprint farther to the west across the North Slope, toward Teshekpuk Lake, the largest lake in the Alaskan Arctic.

The nearest town is Nuiqsut, where residents are divided about the project. Some say existing drilling has helped elevate the standard of living far above other Native Alaskan villages. But many residents still depend on hunting and whaling for subsistence, and fear more drilling pads and pipelines will push migrating caribou further from the village, and further harm air quality.

In March last year, natural gas began leaking from the ground at Alpine, a neighboring ConocoPhillips facility. The leak caused ConocoPhillips to evacuate some 300 of its employees from the site and sparked panic in Nuiqsut, prompting several families to flee the area.

Willow was initially approved in the final year of the Trump administration, but in 2021, a federal judge blocked construction permits for the project, ruling that the government failed to assess the greenhouse gas impacts of burning the oil pulled from the ground.