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Biden Expected To Greenlight Alaska Oil Project

The Biden administration is set to give its final approval to the Willow oil project in Alaska but will also announce drilling limitations by curbing offshore oil leasing in the area, the New York Times has reported, citing unnamed sources with knowledge of the matter.

The news about the Willow project made headlines at the end of last week when the administration was reported to be about to approve the project. On Friday, Reuters quoted the White House as saying no final decision had been made yet.

Yet on Sunday, the Interior Department said the administration would move to limit drilling activities inside the National Petroleum Reserve in Alaska, which some have seen as an attempt on the part of President Biden to appease environmental activists who have been staunchly opposing the Willow project development.

The $8-billion project, led by ConocoPhillips, was awarded to the company by the Trump Administration’s Bureau of Land Management in 2020. 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.

Because of Biden’s stated dedication to the transition away from fossil fuels, approving the project in the face of so much opposition despite strong demand for oil has become quite tricky. Therefore, to cushion the blow, the administration has decided to ban drilling across 16 million acres in the National Petroleum Reserve.

The new ban on offshore drilling is a continuation of President Obama’s ban on offshore drilling in federal waters and will exclude the Beaufort Sea from future oil leases.

It is, however, unlikely to appease environmentalists much. These groups have made it clear that the only decision they would accept is a rejection of the project. This puts the administration in a difficult position, having to juggle its own pledge to move away from fossil fuels with the fact that the U.S. economy runs on those very same fossil fuels.

By Irina Slav for Oilprice.com

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