(Bloomberg) — The Biden administration has decided to authorize a ConocoPhillips oil project in northwest Alaska, rejecting arguments from environmental activists who insist it will exacerbate climate change, according to people familiar with the matter.
After weeks of deliberations, senior advisers have signed off on the move, which represents one of the most momentous climate decisions yet for President Joe Biden. The approval is set to be released next week by the Interior Department, said the people, who asked not to be named because an announcement has not been made.
Under the draft plan, ConocoPhillips would be permitted to drill from three locations across its Willow site in the National Petroleum Reserve-Alaska, unlocking an estimated 600 million bbls of oil.
ConocoPhillips originally had requested to drill from across five locations at Willow but later supported a plan with three drilling sites after pushback from regulators and some nearby residents.
White House Press Secretary Karine Jean-Pierre said “no final decisions have been made” on the project. “Anyone who says there has been a final decision is wrong.”
In an email, ConocoPhillips said it could not comment until it had seen a formal record of decision on the project, and none had been shared with the company.
The project is enormous by almost any measure. Its $8 billion price tag puts it at the forefront of pending U.S. oil projects today. And the 180,000 daily bbls of crude it’s projected to eventually yield represents roughly 1.6% of current U.S. oil production.
Willow presents a test of Biden’s energy and political priorities. The president campaigned on a pledge to block new drilling on public lands and accelerate the transition away from fossil fuels. Yet Biden also has implored oil companies to boost output to tame prices and address market disruptions spurred by Russia’s invasion of Ukraine.
Environmental activists who helped put Biden in the White House insisted approval would be a betrayal of his campaign pledges. At the same time, Biden has faced intense pressure from lawmakers, unions and many indigenous communities in Alaska who say the Willow project would provide an economic lifeline to the region, providing critical revenue to combat poverty, support local schools and even boost longevity.
Supporters argued oil from Willow would be produced under more stringent environmental protections than elsewhere in the world while helping bolster U.S. energy security and providing an alternative to Russian supplies.
It would be years before that crude would start to flow from the site. ConocoPhillips must squeeze many operations into short seasonal windows — typically from late January to late April when a hard winter freeze allows the construction of roads and other infrastructure. Environmental groups also 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 hadn’t sufficiently analyzed the climate consequences and failed to consider more protective options.
