This past Monday, the United States government gave the green light for the Willow Project, a controversial oil and gas development proposal in Alaska. The project, spearheaded by ConocoPhillips, aims to extract up to 600 million barrels of oil and 3.4 trillion cubic feet of natural gas from the National Petroleum Reserve-Alaska (NPR-A), a 23 million-acre area on the North Slope of Alaska.
After first submitting the proposal in 2017, ConocoPhillips now plans to build a series of drilling pads, pipelines, and processing facilities that would allow for the extraction of up to 160,000 barrels of oil per day. The Willow Project may also involve several Big Oil companies that already have a stake in Alaska’s oil and natural gas reserves, including Chevron Corp, ExxonMobil, and Hilcorp, which own roughly 16%, 60%, and 50%, respectively, across various oilfields in the North Slope.
Though this venture is expected to create jobs and stimulate the economy in the region, it has been met with fierce opposition from environmental groups who argue that it will have devastating effects on local wildlife and ecosystems, particularly in an area that is home to several endangered species. The new project is forecasted to release 260 million tons of carbon dioxide over its three-decade lifespan, add nearly 500 acres of gravel fill, and create hundreds of miles of roads and pipelines to one of the country’s most wild areas. Indigenous communities have also voiced concerns about the project's impact on their way of life and their ability to hunt and fish in the region.
The project’s exacerbation of climate change has raised contention around the Biden administration’s green agenda and prioritization of renewable energy sources. A coalition of six environmental groups- including the Sierra Club, Wilderness Society, and Trustees for Alaska- filed a lawsuit against the Biden administration, claiming that the approval is in violation of federal laws. In fact, in 2020, the Trump administration approved ConocoPhillips’ proposal, but a 2021 court decision sent it back to the Bureau of Land Management due to its projected environmental impacts.
Despite these concerns, state lawmakers argued that the decision will help the United States achieve energy independence and reduce its reliance on foreign oil imports from Saudi Arabia and Venezuela; this comes after the Biden administration received heavy criticism for gasoline price spikes following Russia’s invasion of Ukraine, which also increased the United States’ reliance on domestic oil production.
The Willow Project also holds implications for international business. Several international companies are involved, including Italy-based oil and gas giant Eni, which owns 30% of the Oooguruk oil field in the North Slope region. Furthermore, in 2022, ConocoPhillips submitted a plan to develop oil exploration in the North Norwegian Sea for $1.1 billion. Like Alaska’s North Slope, this region of Norway is part of its own oil and gas project: the Johan Sverdrup development, covering one of the largest oil fields in the North Sea, which drew similar backlash due to environmental and economic concerns.
The approval of the Willow Project is likely to have far-reaching implications for international business and politics. It remains to be seen how the project will impact the environment and local communities, but its approval marks a significant step in global ongoing reliance on fossil fuels. As the world grapples with the effects of climate change, the Willow Project serves as a stark reminder of the complex and interconnected nature of global energy systems.