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ConocoPhillips' Willow project in Alaska might end up shelved after the release of a highly anticipated environmental analysis of the project by the federal government.
In its analysis, the Bureau of Land Management outlined five alternative paths for the project, which Conoco acquired in the early 1990s. One of the alternatives involved setting up five drilling sites and constructing various infrastructure. Another alternative suggested fewer drill sites and less infrastructure, with a more limited impact on the environment.
The option that would be the worst news for Conoco is the BLM withholding approval for the project as a whole, which was another of the five options laid out by the agency.
The Bureau of Land Management approved Conoco's project for the development of the Willow prospect in 2020, during the Trump presidency. The project could deliver 160,000 bpd of crude, the BLM said at the time, with reserves estimated at between 400 and 750 million barrels. The lifetime of the project was estimated at up to 30 years in 2019.
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Last year, however, an Alaska District Court judge vacated the BLM's approval of Conoco's project on the grounds that the BLM had overlooked the greenhouse gas emission footprint of foreign oil consumption in its environmental review of the project.
The Willow project will be a fine balancing act for the Biden administration as it seeks the middle ground between its emission reduction ambitions and the immediate need for hydrocarbons to secure the country's energy supply.
Environmentalist organizations have been outspoken in their criticism of the Willow project, noting its proximity to sensitive ecosystems and endangered species habitats. After the BLM released its latest analysis of the project, one Alaska conservationist summed up the challenge for the Biden administration as "an unparalleled climate and biodiversity threat that puts President Biden's climate legacy at risk."
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com