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Willow Oil Project in Alaska Receives Final Approval at a Cost of $8 Billion

ConocoPhillips announced on Friday the approval of funding for the construction of the $8 billion Willow oil drilling project in Alaska, a final investment decision that comes just days after a federal appellate court rejected an attempt by environmental groups and Native Alaskan residents to block the project.

Main Facts

The project was approved by the U.S. Department of the Interior earlier this year and is expected to generate revenue between $8 billion and $17 billion, according to data from the Bureau of Ocean Energy Management shared by ConocoPhillips in a statement.

ConocoPhillips estimates that approximately 600 million barrels of oil will be produced over the project’s lifespan and that it could create more than 2,500 construction jobs.

The scope of the project has been reduced from five drilling sites to three to protect migration routes for a herd of caribou that is a food source for some Native communities in Alaska, according to a report by The Wall Street Journal.

The reduction in drilling sites was not sufficient for the environmental and indigenous groups that filed an emergency petition a few weeks ago to reverse Biden’s approval of the project.

Opponents of the project have argued that it will increase the already existing impacts of climate change in the area and harm local indigenous villages, according to the Juneau-based news agency KTOO, which reported that the environmental law firm “Alaska Legal Services” will continue to challenge the Willow project.

Key Quote

“We are grateful for the many supporters who have advocated for Willow,” said ConocoPhillips’ CEO Ryan Lance in a statement. “The communities and Indigenous groups in Alaska, especially those closest to the project on the north side, have provided ongoing input that has helped shape this project.”

Basic Information

A senior attorney at Alaska Legal Services, which represents the plaintiffs, told KTOO that the appellate court’s decision to allow the project to proceed was disappointing, citing “ongoing lawsuits that accuse the Biden administration of illegally approving the project in the first place.” In 2020, plaintiffs successfully challenged the project approvals made during the Trump administration. However, the project was later approved after being modified to include fewer drilling sites once Joe Biden became president.

Main Background

Biden promised to move away from fossil fuels in 2020, a stance that has since been muddled by his mixed record on oil production. Biden sold oil and gas leases in the Gulf of Mexico in March, where Chevron and ExxonMobil led an auction that raised nearly $264 million. Biden also canceled the last remaining oil and gas leases in the Arctic National Wildlife Refuge in September. This cancellation reversed Trump’s drilling program that was approved in 2017 but had never officially been implemented.

Further Reading

ConocoPhillips to Develop Alaska-Based Willow Project Following Biden Administration Approval (WSJ)

Biden Administration Will Cancel Trump-Era Oil And Gas Leases In Alaskan Wildlife Refuge (Forbes)

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Antonio Pequeño IV

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Source: https://www.forbes.com/sites/antoniopequenoiv/2023/12/22/conocophillips-greenlights-8-billion-oil-project-in-alaska-following-failed-block-by-native-groups/


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