ConocoPhillips Willow project approved, but more of Arctic put off-limits to drilling

March 13, 2023
The Biden administration took the final step needed to approve ConocoPhillips Co.’s 600-million boe Willow project in the National Petroleum Reserve-Alaska (NPR-A), issuing its record of decision on the proposal.

The Biden administration took the final step needed to approve ConocoPhillips Co.’s 600-million boe Willow project in the National Petroleum Reserve-Alaska (NPR-A), issuing its record of decision on the proposal. At the same time, the administration announced it would put more Arctic areas off limits to oil and gas development.

The record of decision is the legal step that allows ConocoPhillips to proceed with development. The company welcomed the announcement, which approves three core pads for drilling.

The administration mostly stuck with the Bureau of Land Management’s (BLM) preferred alternative, but with one change, a decision that two other drill sites definitely will not get approval. Earlier, the BLM had said its preferred alternative was to defer a decision on one of those two other drill sites (OGJ Online, Feb. 1, 2023).

“We are truly grateful for the steadfast support from Alaska’s Congressional Delegation—Senators Lisa Murkowski and Dan Sullivan and Representative Mary Peltola—Alaska Native communities, the state legislature and organized labor groups,” said Ryan Lance, ConocoPhillips chairman and chief executive officer.

The company estimates Willow development will cost $8 billion and will deliver $8-17 billion in revenue to the federal government, the state, and Alaska North Slope communities. It is projected to produce 180,000 b/d at its peak.

Negotiations between ConocoPhillips and the government resulted in an agreement that the company will relinquish rights to about 68,000 acres of NPR-A.

More put off limits

To coincide with the Willow announcement, which immediately drew fire from environmental groups, the Biden administration said it would put more of the Arctic off limits to oil drilling.

President Biden also announced he was barring new oil and gas leasing in areas of the Beaufort Sea not already put off limits to such work. He said he was exercising that authority under Section 12(a) of the Outer Continental Shelf Lands Act, while noting that nothing in the decision affects rights under existing leases in the affected areas.

The Interior Department said the decision affects 2.8 million acres and builds upon a similar decision in 2016 when President Obama put most of the Chukchi Sea off limits.

Offshore oil production in Arctic waters has continued at moderate rates for a few decades in the state waters of the Beaufort Sea. Typically, state jurisdiction extends 3 miles from the shore and is exempt from federal decisions.

For the NPR-A, the Interior Department said it is initiating a rulemaking to limit future development by considering additional protections for designated special areas, which cover more than 13 million areas. The rule would limit future oil and gas leasing in special areas including those in the regions of the Colville River, Teshekpuk Lake, Utukok Uplands, Kasegaluk Lagoon, and Peard Bay, Interior said.

Joy and disapproval

The Alaska delegation to Congress—two Republican senators and on Democratic House member—welcomed the record of decision.

“We finally did it, Willow is finally reapproved, and we can almost literally feel Alaska’s future brightening because of it,” Murkowski said. “This was Alaska at its very best, with ConocoPhillips, Alaska Native leaders, labor leaders, our unanimous State Legislature, and so many more joining with the delegation to do everything we could to make this happen.”

Sullivan said he would especially like to commend the Alaska Natives who live on the North Slope and “who bravely spoke out—even as far-left, Lower 48, eco-colonialist NGOs continued their efforts to silence Alaska Native voices.”

Natives on the North Slope are almost entirely the Inupiat, who have supported the Willow project especially through the North Slope Borough and the Arctic Slope Regional Corp. and thanked the Alaska congressional delegation for its advocacy. The project will generate jobs for Inupiat, and its revenues will support basic services including education, fire protection, law enforcement, wildlife research, and more.

Some of the nongovernmental organizations (NGOs) that Sullivan referenced had a different view. The Natural Resources Defense Council (NRDC) and the Sierra Club denounced the decision.

“This is a grievous mistake,” said Christy Goldfuss, NRDC’s chief policy impact officer and a former managing director of the White House Council on Environmental Quality in the Obama administration.

“We will consider every appropriate tool in our continuing fight to stop the Willow climate bomb,” Goldfuss said. She did not specify a tool, but the implication was litigation.

Sen. Joe Manchin (D-W.Va.) welcomed the reapproval of Willow, which had been approved in 2020 by the Trump administration. “The torturous, nearly 5-year process it took to get to this final approval is proof that permitting reform is needed more than ever,” Manchin said, signaling legislative battles to come.

Sen. Ed Markey (D-Mass.) sharply criticized the decision. Markey had tried to head it off by joining with Rep. Raul Grijalva (D-Ariz.) to send a Mar. 3 letter to Biden urging him to block the project. The letter was signed by seven senators and 15 House members.