In documents filed on Tuesday in Anchorage International oil company ConocoPhillips claimed that an ongoing legal battle in the federal courts is expected to decide the fate of the largest planned oil development in Alaska in a long time.
In the event that Alaska District Court Judge Sharon Gleason cancels required federal approvals, “the Willow project is extremely unlikely to move forward even if it does,” said Connor Dunn Vice President for Willow in ConocoPhillips.
Dunn’s remarks was made after ConocoPhillips submitted an official response to various environmental groups that had have filed suit against Federal government officials earlier this year. The group demanded Gleason to revoke federal approvals as insufficient.
The plaintiffs are The plaintiffs include the Alaska Wilderness League, Sierra Club and Sovereign Inupiat for a Living Arctic. Following a similar suit that was filed in 2020 changed a Federal approval and required regulators to restart the process. New authorization was granted in the spring of this year..
The federal government has backed the environmental group’s lawsuit and is supported by ConocoPhillips and Alaska’s state government Alaska and North Slope Borough, North Slope Borough, and various businesses and organizations who want to see the project come into being.
ConocoPhillips announced in its latest reports that as of July, it has invested $925 million in Willow and, if it’s permitted to continue, the company anticipates to invest another $903 million by the close of the 2023-2024 winter construction season.
A total of 1,200 are expected to be involved in direct construction, according to the company further 600 would provide assistance.
Willow is believed to contain up to 600 million barrels oil that is recoverable and could generate billions of dollars to the states of Alaska in the long run however, it it will cost the state cash in the beginning.
Environmental groups have been set to respond to ConocoPhillips and the other defendants before mid-September, allowing Gleason to make a decision before the beginning of winter’s construction season.
If the matter isn’t settled in time and ConocoPhillips isn’t able to operate in the winter, there’s an opportunity that the company may not meet the conditions of its lease with the federal government.
Willow is the first major project to be constructed within the National Petroleum Reserve-Alaska, and ConocoPhillips 30 year lease was signed in the year 1999.
According to the agreement according to the agreement, the first oil has to be flowing by September 2029. The letter addressed the letter Gleason, Dunn said that “timely first oil demands an extremely integrated set of construction milestones beginning in 2023 to 2029, and there is no way to further reduce the construction timeline that will not pose a significant execution risk.”
The federal government would allow an extension of the lease however, he added, this isn’t a guarantee.
If Gleason changes the current approval entirely, through what’s referred to as”vacatur” order “vacatur” order it will likely cost ConocoPhillips at the very least two winter construction seasons, Dunn said, because of the amount of time required by federal regulators to re-do the approval procedure.
“It could take several years depending on market conditions, in order to gather the necessary team to carry out the project in a safe and efficient manner,” Dunn said. “This is a very real effect of a vacatur notice which will be very detrimental to ConocoPhillips continuing with a project which is facing the risk that leases will expire.”
This article was originally published in Alaska Beacon and is republished here with permission.
