Biden backs $8 billion Alaska oil project despite climate peril

Alaska Source ConocoPhillips

President Joe Biden authorized a giant ConocoPhillips oil project in northwest Alaska.

With the Interior Department’s new authorization, the company will be permitted to drill from three locations across its Willow site in the National Petroleum Reserve-Alaska. ConocoPhillips, which originally sought to drill from five well pads at Willow, had said anything short of three would not be viable. But Biden’s conservation moves mean oil companies also will have far fewer opportunities to find and develop prospects north of the Arctic Circle.

The authorization represents one of the most significant climate decisions yet for Biden, who campaigned on a pledge to block new drilling on public lands and presided over sweeping government investments in clean energy. Yet he’s also implored oil companies to boost output to tame prices and address market disruptions spurred by Russia’s invasion of Ukraine. The Willow project created additional political challenges, as Biden faced intense pressure from unions and some indigenous groups in Alaska who argued the development would provide an economic lifeline to the region.

ConocoPhillips and lawmakers from Alaska cast the approval as a victory for the state as well as the nation. 

The $8 billion development is at the forefront of pending US oil projects. The 180,000 daily barrels of crude it’s projected to eventually supply represents roughly 1.6 per cent of current US production. Over 30 years, it could yield some 240 million tons of carbon dioxide emissions, the Interior Department said in its record of decision Monday.

New Drilling Restrictions

Even as Willow got a green light, the Biden administration is moving to limit future oil development across the 23 million-acre (93,000 square-kilometre) NPR-A, which was set aside for energy supply needs roughly a century ago. The Interior Department said it soon will propose a rule that could prevent future oil and gas leasing across more than 13 million acres of the Indiana-sized reserve.

Biden also invoked provisions of a 1953 law to prevent future oil and gas leasing across 2.8 million acres of the Beaufort Sea north of Alaska, expanding on restrictions former President Barack Obama imposed in 2016.

ConocoPhillips applied to develop the project in 2018 and the Trump administration approved it two years later. But a federal district court tossed out that approval in August 2021, after concluding the government hadn’t sufficiently analyzed the climate consequences of the development and failed to consider more protective options.

© 2023 Bloomberg L.P.

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