A federal court ruled Aug. 18 that federal regulators failed to provide enough environmental impact analyses and sufficient plans on protecting polar bears when they approved the Willow project, a ConocoPhillips Co. oil field project on the North Slope of Alaska.
The court vacated the Bureau of Land Management (BLM) approval of the project in the National Petroleum Reserve-Alaska (NPR-A) and at the same time vacated an accompanying assessment by the US Fish and Wildlife Service (FWS) on the grounds that polar bear protections were insufficiently detailed.
Judge Sharon Gleason of the US District Court for the District of Alaska remanded the project approval and the FWS “biological opinion” to the agencies.
Gleason concluded that the environmental analyses did not sufficiently address the greenhouse gas emissions that would result from downstream consumption of the oil, whether in the US or overseas. Nor did the BLM offer a sufficient argument for why such analyses were impossible, she said.
She also said it was insufficient to rely on the Marine Mammal Protection Act and references to standard methods of protecting polar bears. The FWS should have gone into more detail about exactly what actions would protect the bears and what the impacts might be on the bears, she ruled.
Uncertainty for big project
A ConocoPhillips spokesman, asked about the possibility of an appeal or the prospect of the BLM and FWS amending their analyses, would say only, “We will review the decision and evaluate the options available regarding this project.”
ConocoPhillips has estimated the project would require about $6 billion in capital investment to reach first production and $8 billion for total development of the field, with peak production projected in excess of 160,000 b/d and recoverable reserves estimated at 600 MMboe.
But a final investment decision awaits resolution of the legal fight, according to the company.
“On our current timeline, first oil occurs about 6 years after we take our final investment decision,” said Nick Olds, ConocoPhillips senior vice-president for global operations, during a June 30 investor update.
The Willow project is competitive on a cost-of-supply basis in the mid-$30s per barrel on a WTI price basis, he said. And the company has identified up to 3 billion boe in nearby prospects with similar characteristics that could leverage Willow infrastructure, he said.
‘A horrible decision’
Gov. Mike Dunleavy (R) reacted to the court decision with sharp words issued Aug. 19.
“Make no mistake, today’s ruling from a federal judge trying to shelve a major oil project on American soil does one thing: outsources production to dictatorships and terrorist organizations,” Dunleavy said. “This is a horrible decision.”
Earlier in the year there had been some doubt that the Biden administration would defend the decisions of the BLM and FWS in the court fight, but a court filing in May by the Biden Interior Department put the administration on record defending its agency decisions.
The court ruling involved two lawsuits by environmental groups. One of the lawsuits was filed by the Center for Biological Diversity, Friends of the Earth, and Greenpeace. The other suit was by the Sierra Club, the Wilderness Society, Defenders of Wildlife, Alaska Wilderness League, Northern Alaska Environmental Center, and Sovereign Inupiat for a Living Arctic.
On the North Slope of Alaska, the Inupiat natives typically support oil development, given its importance to their incomes and jobs. But the recently founded Sovereign Inupiat for a Living Arctic includes at least two young Inupiat natives who cofounded the group and constitute its staff, plus some activist advisers.
Nine Alaska business groups sent a letter to Interior Secretary Deb Haaland in February urging her to allow the Willow project to go ahead. The letter called attention to the benefits for indigenous people.
“The BLM estimates the project will generate over $1.2 billion in property tax to the North Slope Borough alone over the life of the project, and $2.6 billion for the NPR-A Impact Mitigation Program,” the letter said. The North Slope Borough is an Inupiat political subdivision of Alaska.
