Biden White House, DOI agree to complete review of 180,000 b/d Willow project in Alaska by February

The Biden administration has given a commitment to Alaska’s U.S. Sen. Lisa Murkowski to complete a federal review of ConocoPhillips’ Willow project in Alaska by the end of January and to issue a federal Record of Decision and permits for the project a month later, Murkowski said in a statement Dec 21.

What isn’t clear is that the U.S. Department of the Interior, which will decide on Willow, will choose the one alternative among several options that is economic, in other words that ConocoPhillips will build. The decisions had been expected in December, but were delayed.

ConocoPhillips is under the gun because the approvals must come in time to mobilize for the winter construction season. If they come too late the season could be missed, losing a year for the $8 billion project.

If it proceeds, Willow would produce 180,000 b/d of new Alaska production by 2026, ConocoPhillips has said. The U.S. Bureau of Land Management, a part of the U.S. Interior department, is conducting final reviews.

Murkowski, Alaska’ U.S. Sen. Dan Sullivan and Rep. Mary Peltola, the state’s lone member of Congress met with officials from the White House, U.S. Department of the Interior and U.S. Department of Labor and received assurances that the approval would be coming, Murkowski said.

“The Administration committed to having a final Supplemental Environmental Impact Statement released by the end of January 2023, and the Record of Decision completed by the end of February 2023.

That commitment includes all federal agency work required to comply with applicable laws in the permitting process,” Murkowski said. It was the second meeting the delegation held with Biden officials over the previous 10 days, she said.

The senator said she expects the U.S. Department of the Interior to endorse an alternative design, “Alternative E” for the project that was developed by the U.S. Bureau of Land Management and agreed on by ConocoPhillips. However, in its final decision the DOI can choose other options, some which the company feels would be uneconomic.

Murkowski said the administration was urged in the meetings to select Alternative E in Willow’s draft environmental impact statement. The alternative was developed by the Interior Department to respond to an Alaska District Court’s ruling in lawsuits brought by conservation groups.

The senator warned in a statement that approval of a project that is not viable (meaning an alternative other than ‘E’) would be viewed as a “denial of the project,” she said. “Alternative E, developed by the BLM and cooperating agencies, is a viable path forward for the project,” Murkowski said.

ConocoPhillips said any further delay of the final SEIS and record of decision will jeopardize the company’s ability to start construction in this winter season be meet the goal of a 2026 startup. “The thoughtful and careful NEPA review process for Willow has been under way for five years. Any further delay is unwarranted,” ConocoPhillips spokesperson Rebecca Boys said.

“Willow is an important project to Alaska Native communities, the state of Alaska and our country. Willow will produce some of the most environmentally and socially responsible barrels of oil in the world, while providing economic and employment opportunities,” Boys said in a statement.

Murkowkski said Willow has strong support among Alaska stakeholder groups, including Alaska Native communities as well as Alaska labor unions and building trades.

Willow is in the northeastern part of the National Petroleum Reserve-Alaska, or NPR-A, a large 23-million-acre federal enclave on the western North Slope and west of the major producing fields on the North Slope. It is the largest of four discoveries made by ConocoPhillips in the NPR-A.

Three of the earlier finds, CD5, GMT1 and GMT2, are now producing. Willow would be significantly bigger, however. If constructed it would boost Alaska production, now at about 500,000 b/d, by an estimated 180,000 b/d as well as produce significant federal oil production royalties. Half of tjose will be shared with the state of Alaska under federal law governing the NPR-A.

The area where ConocoPhillips is developing Willow been leased by the federal government and explored for years by several companies including ConocoPhillips but it is only in recent years that new technology has allowed the discoveries made there to be commecially developed.

Meanwhile another project on the North Slope, Pikka, has been gicen fibl approval and is in construction. Australia-based Santos Ltd. and Repsol, based in Madrid, are now building Pikka’s phase one, which will produce 80,000 b/d by 2026, the two companies have said.

A second phase Pikka is planned, but not yet approved, that would add another 80,000 b/d. Santos owns 5 percent of Pikka with Repsol owning 49 percent. The project is on state and Alaska Native corporation lands, so that royalties are shared between the state and Native corporations.

As with the Willow area of NPR-A, companies have previously explored and drilled in the Pikka area but again modern exploration and drilling procedures now allow this oil previously considered uneconomic to be produced.