Alaska Judge Sides With ConocoPhillips on New $7.5 Billion Oil Project

(Bloomberg) -- A federal judge upheld the Biden administration’s approval of ConocoPhillips’ 600-million-barrel Willow oil development in Alaska, a blow to environmentalists who argued it would imperil wildlife and exacerbate climate change. 

The ruling by Alaska-based US District Judge Sharon Gleason means ConocoPhillips can continue developing the $7.5 billion project in the National Petroleum Reserve-Alaska that promises to eventually yield some 180,000 barrels of oil per day. 

While equipment is being fabricated at Gulf Coast facilities, ConocoPhillips is preparing to resume on-site work during Alaska’s short, winter-operating season that could begin as soon as next month. 

At issue is the Interior Department’s March approval of the controversial Willow project following a fierce lobbying battle, an opposition campaign that went viral, and fraught deliberations inside the administration, where the issue was seen as testing President Joe Biden’s campaign commitments to combat climate change. 

Environmental and indigenous groups, including the Center for Biological Diversity, the Natural Resources Defense Council and the Sovereign Inupiat for a Living Arctic, argued the government violated the National Environmental Policy Act and other laws by failing to consider the full impacts of the project on climate change and species in the region. They said the government didn’t adequately consider options to meaningfully constrain the project’s oil production — and therefore its resulting carbon dioxide emissions — even as it ignored the greenhouse gas releases that could be unleashed from future developments that could be facilitated by Willow.

Some of the project’s challengers also took aim at the Fish and Wildlife Service’s determination that Willow wouldn’t harm polar bears that have dens in the National Petroleum Reserve-Alaska; the opponents argued instead that industrial oil operations pose a multi-faceted threat to the animals.

Gleason brushed aside those assertions Thursday, saying the Fish and Wildlife Service’s decisions — including its conclusion that Willow-related work was unlikely to injure non-denning polar bears — were “reasoned” and within the bounds of law. Environmental groups failed to prove the agency disregarded better available scientific evidence about the impacts of greenhouse-gas emissions from the project, Gleason said.

Erec Isaacson, president of ConocoPhillips Alaska, celebrated the ruling, saying it “confirms our confidence” the government review complied with all legal requirements. 

“Willow underwent nearly five years of rigorous regulatory review and environmental analysis, including extensive public involvement from the communities closest to the project site,” Isaacson said in a statement. “We now want to make this project a reality and help Alaskan communities realize the extensive benefits of responsible energy development.”

Erik Grafe, deputy managing attorney of the Alaska office for Earthjustice, which represented the Center for Biological Diversity, Defenders of Wildlife and other organizations, called the ruling “disappointing” and said the challengers planned to appeal.

“Beyond the illegality of Willow’s approval, Interior’s decision to greenlight the project in the first place moved us in the opposite direction of our national climate goals in the face of the worsening climate crisis,” Grafe said.

Siqiñiq Maupin, executive director of Sovereign Inupiat for a Living Arctic, said the ruling shows “the oil and gas industry exerts incredible power over those whose health and food are most impacted and who will most experience the climate harm and disaster this project will flame.”

The project’s backers have argued the government’s review was expansive. They also emphasized that crude extracted from the site inside the 23 million-acre National Petroleum Reserve-Alaska would be produced under more stringent environmental protections than elsewhere in the world, helping to bolster US energy security and provide an alternative to supplies from Russia. 

(Updates with ConocoPhillips comment in 8th and 9th paragraphs.)

©2023 Bloomberg L.P.