Biden backs $11b Alaska oil project despite climate peril

The US$8 billion (S$11 billion) project, opposed by environmental activists, is set to yield 180,000 barrels of crude a day. PHOTO: NYTIMES

WASHINGTON – US President Joe Biden has authorised a giant ConocoPhillips oil project in north-west Alaska that environmentalists argue has no place in a warming world, even as he sought to bar future drilling across US Arctic waters and lands.

The approach represents Mr Biden’s bid for a middle ground, as he seeks to accelerate the transition away from fossil fuels while bound by the legal decisions of past administrations.

ConocoPhillips has held some leases underpinning its 600 million-barrel Willow oil development since 1999, and the project was already approved once under former president Donald Trump.

With the Interior Department’s new authorisation, the company now 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, said anything short of three would not be viable.

But Mr Biden’s conservation moves mean oil companies also will have far fewer opportunities to find and develop prospects north of the Arctic Circle.

The authorisation represents one of the most significant climate decisions yet for Mr Biden, who campaigned on a pledge to block new drilling on public lands and presided over sweeping government investments in clean energy.

Yet, he has also implored oil companies to boost output to tame prices and address market disruptions spurred by Russia’s invasion of Ukraine.

Climate issues

The Willow project created additional political challenges, as Mr Biden faced intense pressure from unions and some indigenous groups in Alaska who argued the development would provide an economic lifeline to the region.

Environmentalists excoriated the approval of what would become one of the largest oil-and-gas-extraction projects on public lands.

“We are too late in the climate crisis to approve massive oil and gas projects,” said Ms Abigail Dillen, head of the advocacy group Earthjustice. “We know President Biden understands the existential threat of climate, but he is approving a project that derails his own climate goals.”

The US$8 billion (S$11 billion) project is at the forefront of pending US oil projects today, and the 180,000 daily barrels of crude it is projected to eventually yield represents roughly 1.6 per cent of current US production. Over 30 years, it could yield some 280 million tonnes of carbon dioxide emissions.

Conservationists argued Willow is incompatible with the International Energy Agency’s warnings that the world must forsake developing new oil and gas fields to avert the most catastrophic consequences of global warming and reach net zero emissions by 2050.

Some Alaska Natives who oppose Willow said new industrial operations there threaten caribou herds they depend on for subsistence.

Protections in place

The administration secured an agreement with ConocoPhillips to relinquish rights to approximately 27,500ha of existing leases in the NPR-A, including approximately 24,000ha around Teshekpuk Lake, which provides habitat for caribou and birds, said a person familiar with the matter.

But even as Willow gets a green light, the Biden administration is moving to limit future oil development across the 93,000 sq km NPR-A, which was set aside for energy supply needs roughly a century ago.

The Interior Department said it will soon propose a rule that could prevent future oil and gas leasing across more than 5 million ha of the Indiana-sized reserve.

Mr Biden also is invoking provisions of a 1953 law to prevent future oil and gas leasing across 1 million ha of the Beaufort Sea north of Alaska, expanding on restrictions former president Barack Obama imposed in 2016.

Environmentalists hailed the protections but said they did nothing to offset the climate damage from approving the Willow project.

“Protecting one area of the Arctic so you can destroy another doesn’t make sense, and it won’t help the people and wildlife who will be upended by the Willow project,” said Ms Kristen Monsell, a senior attorney at the Centre for Biological Diversity.

“We need to protect the entire Arctic and stop building massive oil and gas developments that will contribute to greenhouse gas emissions for years to come,” she said.

Legal challenges

Oil industry advocates argued the Biden administration moves conflicted with a push for domestic energy security.

The Biden administration is forestalling “responsible development of federal lands and waters”, and sending “mixed signals on energy policy”, said Mr Frank Macchiarola, senior vice-president of policy for the American Petroleum Institute.

Willow’s supporters have argued that oil extracted from the site would be produced under more stringent environmental protections than elsewhere in the world, while helping bolster US energy security and providing an alternative to Russian supplies.

Environmental groups are expected to challenge the approval in federal court, opening new legal risk the project is further delayed or derailed.

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 had not sufficiently analysed the climate consequences of the development and failed to consider more protective options. BLOOMBERG

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