By Clark Mindock and Timothy Gardner
WASHINGTON (Reuters) – The oil industry on Monday cheered the U.S. government’s green light for ConocoPhillips’ multibillion-dollar oil drilling project in Alaska’s Arctic, but court challenges could scuttle the plans in further delays.
President Joe Biden’s administration approved a scaled-down version of the $7 billion Willow project on federal lands in a pristine area on Alaska’s north coast. Biden has sought to balance his goal of decarbonizing the US economy by 2050 as Russia’s war in Ukraine raises concerns about global energy security.
ConocoPhillips has held the leases in the National Petroleum Reserve-Alaska since 1999. Former President Donald Trump’s administration approved the project in 2020. But Alaska District Court Judge Sharon Gleason blocked it a year later, claiming its environmental impact analysis was flawed.
Now environmental groups are scrutinizing the Biden Interior Department approval for flaws that could give them the basis for new lawsuits.
“We have some serious questions about whether this decision is actually consistent with the court’s August 2021 order,” said Bridget Psarianos, senior staff attorney at the Trustees for Alaska. “We will take a closer look at how the (Interiors) Bureau of Land Management (BLM) is considering alternatives and what its final approvals are.”
Judge Gleason had ruled that Trump’s Department of the Interior failed to include projections for greenhouse gas emissions from foreign consumption of Willow’s oil, nor to analyze alternatives to the project.
The Trustees for Alaska is also analyzing whether the latest approval complied with federal statutes such as the National Environmental Protection Act, the Endangered Species Act and the 1976 Naval Petroleum Reserves Production Act, Psarianos said.
Kristen Monsell, a senior attorney at the Center for Biological Diversity, another group involved in the earlier cases, said Monday’s approval of the Willow project is “still inadequate in several respects.”
The approval would allow Conoco to develop more than 90% of the oil it had originally targeted, despite the number of well pads being limited, and the administration failed to explain how this was consistent with climate change goals, Monsell said.
She said the analysis did not adequately address the cumulative effects of oil and gas development, including how greenhouse gas emissions from burning fossil fuels would affect the survival of threatened or endangered animals such as polar bears and seals.
“It just adds insult to injury for these species, which will be directly harmed by the project through oil spills, habitat destruction and noise pollution,” Monsell said.
Interior said it had no comment.
Senator Dan Sullivan, a Republican from Alaska, told reporters that state lawmakers are prepared to defend the decision against “frivolous” legal challenges.
“We will do that by working closely with the same Alaska stakeholders that brought us this far,” Sullivan said. “We are already preparing an amicus brief for any lawsuit that will come against this decision,” he said.
Erik Grafe of Earthjustice, an environmental law firm, called litigation “highly likely” and said it “does not appear that Interior has corrected the myriad legal errors that Earthjustice and others identified for the agency before its decision.”
Jenny Rowland-Shea, director of public lands at the left-leaning Center for American Progress, said another concern was a leak last year of 7.2 million cubic feet of natural gas at ConocoPhillips’ nearby Alpine oil field, which forced out 300 of the 400 workers. there to evacuate. Local regulatory authorities are still evaluating the causes.
The BLM’s environmental impact statement downplayed the risk of such a leak at Willow, but attorneys could argue that Interior’s decision report did not adequately consider the issue, Rowland said.
Dennis Nuss, a spokesman for Conoco, said the company would not be surprised by another legal challenge, but believes U.S. agencies “have conducted a thorough process that meets all legal requirements.”
WILL DRILLING STILL BE ECONOMIC?
John Leshy, a professor at the UC College of the Law, San Francisco and a former Interior secretary’s lawyer under former President Bill Clinton, said that if Interior had not approved Willow, ConocoPhillips likely would have sued the agency, saying its lease rights had been taken.
Even if Interior could beat back the oil company’s challenge, it would likely mean just another delay for Willow, he said. “The court could just send Interior back to the drawing board for another decision,” he said.
Mark Squillace, a professor at the University of Colorado Law School and former Interior Department attorney, said the legal challenges “are going to be tough.”
But he said there were other threats to the project, including potential falling oil prices as electric vehicles drive the energy transition, which could threaten the viability of a long-term project like Willow.
“The bigger risk to the project is financial,” he said.
(Reporting by Timothy Gardner, Clark Mindock, Nichola Groom and Valerie Volcovici; Editing by David Gregorio)
