In a setback for environmentalists, the Biden Administration could be ready to approve an oil project in Alaska proposed by ConocoPhillips with a plan for limited drilling in the northwestern part of the state, sources with knowledge of an imminent decision of the Bureau of Land Management have told Bloomberg.
ConocoPhillips discovered the Willow prospect in the northeast portion of the National Petroleum Reserve-Alaska (NPR-A) in 2016.
The project was announced in early 2017. ConocoPhillips said back then that Willow is estimated to produce 180,000 barrels of oil per day (bpd) at its peak, and there are 600 million barrels of recoverable oil. The cost to develop was pegged at $8 billion, the largest project on the North Slope in more than 20 years.
In 2020, the Trump Administration approved an environmental review and the project to go forward. But the U.S. District Court for the District of Alaska tossed out the federal permits for the Willow project a year later, saying that the review failed to fully consider the impact on the environment and wildlife and didn't consider options that would be less harmful and invasive.
The Bureau of Land Management (BLM) then initiated a revised draft environmental analysis in 2022. The conclusions of this review to comply with the court decision are expected to be published as early as this week.
According to Bloomberg's sources, the BLM would go for approving a three-well development plan for the Willow project, down from a five-well development plan proposed by ConocoPhillips.
One of the alternatives the BLM has reviewed with three wells to be drilled is still "a good path forward," Nick Olds, Executive Vice President, Lower 48 for ConocoPhillips, said on an earnings call in August 2022.
The final decision rests with Secretary of the Interior Deb Haaland, who could impose further restrictions on the project.
ConocoPhillips warned at the end of 2022 that anything less than a three-well development wouldn't be economically viable.
"Anything less than a three-pad authorization would essentially be a project denial," ConocoPhillips Alaska President Erec Isaacson told Bloomberg in an interview in December. "It just wouldn't be a viable project at that point," considering the high cost of operations in northern Alaska, Isaacson added.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More