Parties agree to expedited schedule in Willow lawsuit

  • The Doyon Drilling Rig 141 is seen working at the ConocoPhillips Willow prospect on the eastern edge of the National Petroleum Reserve-Alaska. Planned work this winter at the project was halted in federal court after an injunction to prevent construction of a gravel quarry. (Photo/Judy Patrick/ConocoPhillips)

ConocoPhillips has agreed with a coalition of Alaska Native and conservation groups on a timeline to resolve a court dispute over the adequacy of the environmental review for its multibillion-dollar Willow project that could allow the company to resume on-the-ground activity next winter.

Per the agreed-upon timeline to argue the lawsuit, ConocoPhillips will not restart construction work at the large North Slope oil prospect before Dec. 1. The Houston-based oil major intervened in the suit originally filed last November against the Bureau of Land Management over the agency’s approval of the company’s development plan last year.

ConocoPhillips was planning to open a gravel quarry to feed road and facility pad construction in the National Petroleum Reserve-Alaska in February before a 9th Circuit Court of Appeals panel stopped work on the project with a preliminary injunction Feb. 13 in which the judges concluded the groups were likely enough to succeed on at least one of the National Environmental Policy Act Claims that allowing the potential environmental harm from the mining work last winter was not worth it.

Shortly after the injunction, attorneys for ConocoPhillips requested a July decision on the merits of the case of Federal District Court of Alaska Judge Sharon Gleason so the company could prepare for the 2021-22 winter work season on the North Slope.

Timely completion of the project is in Alaskans’ interests because of the economic benefits it can provide, the company’s attorneys wrote.

The summary judgment schedule in the case approved by Gleason starts with the conservation groups filing their opening brief by April 23 with defendant replies by May 26 and the plaintiffs’ reply on June 11, according to an April 5 order.

As currently proposed, the Willow master development plan calls for the eventual construction of five drill sites stretching north-south over approximately 20 miles in the northeast corner of the federal petroleum reserve. ConocoPhillips also has two other nearby developments in the NPR-A but the Willow project would be several times larger than the single-drill site Greater Mooses Tooth-1 and 2 projects extending from the Alpine field.

Full build-out of Willow is estimated at a cost of up to $6 billion, according to the company, with first oil during the 2025-26 winter. The project’s oil production is expected to approach 160,000 barrels per day at its peak. Overall, the project is expected to produce about 590 million barrels over 30 years.

ConocoPhillips Alaska representatives have said it’s too early to tell what, if any impact the work stoppage early this year will have on the overall development schedule for Willow.

Gov. Mike Dunleavy’s office announced April 15 that the state would also ask Gleason to intervene on BLM’s behalf. Dunleavy said in a statement that developments such as Willow provide the economic base for critical services on the North Slope.

“Oil and gas development is critical to North Slope communities, and Alaska has long anticipated bringing the Willow project online. With the potential to produce 100,000 barrels of oil per day, it is imperative that Alaska is given the opportunity to responsibly develop our resources,” Dunleavy said.

While the state’s oil production tax applies to projects in the federal petroleum reserve, the state will distribute its 50 percent share of any royalty revenue from Willow through grants to eight North Slope communities. Royalties have been the primary source of petroleum revenue for Alaska since prices fell from their $100 per barrel high in 2014.

Department of Law attorneys argued the state has significant economic interests in protecting Willow’s development, not only in the upwards of $3.5 billion the project is expected to generate in state and local tax revenue, but also the direct and indirect jobs it would add to Alaska’s sputtering economy.

According to the environmental impact statement for Willow, the project would support at least 1,000 construction jobs and approximately 400 operations positions when finished.

Attorney for Sovereign Inupiat for a Living Arctic Bridget Psarianos wrote in an April 19 response to the state’s request that the group does not outright oppose the state’s participation in the suit but waiting to intervene until months after the case was filed could complicate the accelerated briefing schedule the sides had previously agreed to.

Editor's note: This story has been modified to note that while construction work won't restart any earlier than Dec. 1, development work will continue. The original version also stated that the state will not receive royalty revenue from Willow. The state will receive 50 percent of the royalties, but under federal law it is required to distribute that money to the North Slope communities as grants.

Elwood Brehmer can be reached at [email protected].

04/22/2021 - 10:22am