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Felicity Bradstock

Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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The Willow Oil Controversy, Explained

  • The Biden administration has approved the Willow project in Alaska, a $8 billion oil and gas development by ConocoPhillips.
  • The project is expected to generate revenue for the federal government, create jobs, and provide money for Alaskan Native communities.
  • Climate activists, Alaskan natives, and international organisations have raised concerns about Willow leading to more decades of oil production and increased carbon emissions in the region.
Alaska

After years of uncertainty, ConocoPhillips’ Willow project has finally got the green light in Alaska. Stakeholders were unsure whether Willow would go ahead after several delayed oil and gas leases and cancelled oil pipelines in the U.S. However, following repeated bids from ConocoPhillips and Alaskan politicians for the project to go ahead, to support Alaska’s economy, which still relies heavily on oil and gas, Biden approved Willow.

Willow was previously approved under the Trump administration but was halted by a decision by a federal judge in Alaska in 2021. The judge cited “serious errors” in ConocoPhillips’ environmental review of the project, with little analysis of the climate impact the project would have. President Biden has also faced significant pressure over the project, with climate activists and international organisations suggesting that his approval of the project would go against U.S. climate aims and recent policies, such as the Inflation Reduction Act (IRA). They pointed out that if the project went ahead it would lead to many more decades of oil production in an area that is volatile to climate change, as well as increasing carbon emissions in the region significantly. 

Despite concerns about whether it would go against U.S. climate aims, Biden approved the $8-billion Willow Project this week. While there were many reasons to cancel Willow, there are also several positives being seen by the state and federal governments. The project is expected to bring in $17 billion in revenue for the federal government, and generate huge revenues for Alaska, as well as create 2,500 new jobs. There is an estimated 600 million barrels of oil reserves in Willow and the project is expected to bring between 160,000 bpd and 180,000 bpd of crude oil online, supporting U.S. aims to boost national production and enhance its energy security.  Related: Blackrock CEO Fink: Oil & Gas Is Vital In Meeting Energy Needs

ConocoPhillips will be permitted to drill three well pads in Alaska’s National Petroleum Reserve, which covers 23 million acres of public land. This will prolong the life of Alaska’s oil industry. The CEO of ConocoPhillips, Ryan Lance, stated that the approval “was the right decision for Alaska and our nation.” Lance added, “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.” 

Regional opinions on the project have been split. State lawmakers are enthusiastic about Willow bringing jobs and greater revenue to the region, helping to reduce Alaska’s reliance on federal funds. A coalition of Alaska Native groups on the North Slope is also hopeful that money from the project will be pumped into education and healthcare in overlooked communities. However, Alaskan natives living close to Willow are concerned about the health and environmental threats the project will bring. 

Climate activists are also outraged by the decision, having spent years warning policymakers of the potential risks involved with the project and lobbying against it. Over one million letters were written to the White House opposing Willow, as well as almost three million signatures collected on a Change.org petition. Environmental organisations are now expected to seek an injunction to try to block the project, likely resulting in delays. The project’s construction can only be carried out in the winter season as Conoco requires ice roads to build the project’s infrastructure, so delays could have a major impact on the project’s timeframe. 

In a bid to reduce the project’s impact on the environment, the U.S. Department of the Interior insisted on lowering the number of drilling sites from five to three. In addition, ConocoPhillips was asked to relinquish rights to about 68,000 acres of existing leases in the region to the government, to establish a buffer between exploration and development in the region outside of Willow. These changes to the original plan are expected to help reduce the negative effect of the project on climate change and wildlife in the region, although many suggest that the approval of any form of Willow will exacerbate climate change in the region. Willow could be operational for as long as 30 years, releasing as much as 278 million metric tonnes of carbon emissions, according to U.S. Department of the Interior estimates.  Jeremy Lieb, an Alaska-based senior attorney for environmental organisation Earthjustice, stated “We and our clients don’t see any acceptable version of this project, we think the [environmental impact] analysis is unlawful.”

However, the Biden Administration said its hands were tied when it came to approval as ConocoPhillips already had valid leases in the region, meaning that legally, courts would not have permitted the government to reject or drastically reduce the project. The rejection of the project could have left the government with high fines and facing legal action from Conoco. 

Just because the Alaskan Willow Project has been approved it doesn’t make it any less controversial. Following several advances in U.S. climate policy, Biden’s approval of the ConocoPhillips project came as a shock to many, a turnaround on his ambitious climate pledges. While the government promised a scaled-down version of the project, there will inevitably be significant pushback from climate activists and groups hoping to stop Willow altogether.

By Felicity Bradstock for Oilprice.com 

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