US$8 billion Project Willow receives funding approval from ConocoPhillips

The US$8 billion oil drilling project in Alaska named Project Willow has received funding approval from ConocoPhillips. The project was green-lit earlier this year by the US Department of Interior. It is expected to generate between US$8 to 17 billion in revenue. Willow is set to be one of the biggest North Slope oil fields to be put into operation. It has been estimated that 600 million barrels of reserves are expected to be produced over its 30-year lifetime. Given its location within the National Petroleum Reserve in Alaska, it is also set to be the North Slope’s westernmost producing oil field. According to ConocoPhillips, the first production is expected in 2029.

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Construction Start Date

Construction began earlier this year with about 800 employees and contractors at work on the project. Furthermore, the project has the potential to create over 300 long-term jobs and 2,500 construction jobs that last beyond construction. The project, embraced by Alaska political and business leaders, is viewed as critical to preserving the North Slope’s oil operations. Willow is expected to supply up to 180,000 barrels per day at peak operation. This is more than a third of the average daily production in the fiscal year that ended on June 30. Moreover, the Bureau of Land Management (BLM) environmental impact statement found it would result in 287 million tons of carbon emissions plus other greenhouse gases.

History on the project

More than 2 decades ago, ConocoPhillips acquired the first Willow-area leases in the northeast portion of the National Petroleum Reserve in Alaska called the Bear Tooth Unit. 17 years later, the company drilled two oil exploration wells, which encountered “significant pay”. It named this discovery Willow and in 2018, it appraised the greater Willow area and discovered three additional oil prospects. In August 2020, the BLM approved the development of the ConocoPhillips project option.

New Project Willow Scope

In a bid to protect migratory routes for a regional caribou herd that has acted as a food source for some Alaska Native communities, the project’s scope was reduced from five to three drilling sites according to a report from the Wall Street Journal. The reduction of the drilling sites was not enough for environmental and Native groups. They went on to file for an emergency injunction a few weeks back that would have reversed Biden’s approval of the project.

The project has faced a lot of backlash due to its impacts on the environment. In March this year, Earthjustice, an environmentalist organization filed a lawsuit on behalf of conservation groups to stop the Willow project. Activists say that the approval of a new carbon pollution source contradicts President Joe Biden’s promises to slash greenhouse gas emissions in half by 2030. In a second lawsuit, on the same day the Natural Resources Defense Council, Center for Biological Diversity, Greenpeace and others asked the federal Alaska court to vacate the approval. In response to these appeals, Biden’s administration cancelled oil and gas leases in the Arctic National Wildlife Refuge. However, approvals were not revoked for this Willow project.