Oil & Gas News

Biden Faces Litmus Test On Conoco’s Alaska Project

Biden, Alaska

By: Bloomberg – US President Joe Biden is nearing a critical decision on a massive proposed oil project in northwest Alaska that could unlock 600 million barrels of crude and has drawn the ire of environmentalists who have dubbed it a “carbon bomb.”

Biden’s verdict on ConocoPhillips’ $8 billion Willow venture in the National Petroleum Reserve-Alaska is being seen as a litmus test of his commitment to combating climate change.

“The decision on this project is a bellwether of whether we’re actually going to do something serious about the climate in time or whether we are just pretending,” said Earthjustice President Abigail Dillen. “Standing alone, this would be the biggest oil and gas project in a country that has become the world’s largest oil and gas producer.”

The project poses a political risk for the president, who has implored oil companies to boost production even as he tries to speed the US transition to emission-free energy. It also presents a new test of Biden’s ability to balance the desires of two oft-competing constituencies: environmentalists and organized labor.

The Interior Department is expected in the coming days to release a final environmental impact statement on Willow, ordered up after a federal court tossed out the previous analysis and project approval from the Trump administration. That may telegraph support for a plan allowing the company to drill three wells at the site, helping deliver up to 180,000 barrels per day in estimated peak production. But it’s Interior Secretary Deb Haaland’s final decision, expected no sooner than 30 days later, that will dictate whether the project goes forward.

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The head of ConocoPhillips’s Alaska operations has warned further restrictions that scale down drilling to just two locations would not be economically viable.

The Willow analysis is expected to be released as the Biden administration takes other moves to protect Alaska from some development. On Wednesday, the US Forest Service banned logging and new road construction across the Tongass National Forest. And next week, the Environmental Protection Agency is expected to issue a final determination barring the disposal of mining waste in Bristol Bay, thwarting the long-planned Pebble gold and copper mine.

Willow’s supporters, including members of Alaska’s congressional delegation, labor unions, and some residents of the North Slope, argue the project would bring much-needed crude to a market eager for alternatives to Russian oil while enhancing US energy security, sustaining jobs and generating revenue for the government.

Alaska’s Economic Lifeline

It also would extend an economic lifeline across the region, said Nagruk Harcharek, president of Voice of the Arctic Inupiat, a not-for-profit group representing eight communities of Alaska’s North Slope Borough. Oil development on the North Slope provides critical revenue to the borough, supporting local schools, emergency responders, and search-and-rescue operations.

“The economic benefits it provides our region allows us to be self-determined in a lot of ways,” Harcharek said. “We’re in control of our schools, we’re in control of our police and fire, we’re in control of the services that we provide our people.”

The project would be located in the northeast portion of the 23-million-acre NPR-A, with some activities occurring near Teshekpuk Lake, which provides critical habitat for waterfowl, caribou, and other wildlife.

Environmentalists and some Alaska Natives have implored the government to block the project, through rallies outside the White House and via direct appeals to Biden administration officials. Climate activists argue it would provide a hub for future oil development and, even on its own, would unleash more crude and carbon dioxide emissions than an ever-warming planet can afford. Others have warned it could imperil caribou populations and harm the subsistence lifestyle of nearby villages.

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