A federal judge has reversed the Trump administration’s environmental approval for ConocoPhillips’ multibillion-dollar proposed Willow development on Alaska’s North Slope, throwing a significant roadblock in front of a project seen by analysts as a needed boost to the state’s flagging oil industry and tax revenue.
U.S. District Court Judge Sharon Gleason, in a 110-page ruling on two related lawsuits Wednesday, said the Trump administration’s approval of the project under the National Environmental Policy Act was flawed because it failed to thoroughly analyze potential greenhouse gas pollution, and didn’t sufficiently consider legal protections for Teshekpuk Lake, an important subsistence area on the North Slope.
The ruling by Gleason, an appointee of former President Barack Obama, sets aside the project’s approval by the Bureau of Land Management. It also vacates a formal opinion by the U.S. Fish and Wildlife Service that said the project was unlikely to jeopardize polar bears’ continued existence and unlikely to harm their critical habitat.
The decision, released Wednesday afternoon, quickly reverberated around Alaska’s political and oil industry circles. In a reflection of Willow’s broad significance, ConocoPhillips, Gov. Mike Dunleavy’s administration and the North Slope Borough had all intervened in the litigation in defense of the federal agencies being sued by nine separate environmental groups.
Other major potential Alaska oil developments have endured recent political and financial setbacks: The Biden administration has halted development in the Arctic National Wildlife Refuge, a state government-sponsored LNG pipeline has stalled and another major project on the North Slope, Pikka, is in limbo amid the acquisition of its owner.
Willow, located in the National Petroleum Reserve-Alaska, was the “one bright spot in what was otherwise a gloomy world,” said Brad Keithley, a retired Alaska oil and gas attorney and state budget watchdog who tweeted a news story about Gleason’s ruling alongside a “scream” emoji.
The project, Keithley noted, has the potential to employ many Alaskans, and federal projections indicate that it could generate as much as $13 billion in taxes and royalties for state government.
“How do you say anything other than, ‘uh oh’?” Keithley said in a phone interview Wednesday. “It’s not only a big deal in the ConocoPhillips boardroom, it’s a big deal not only to the Alaska oil industry, it’s a big deal to the Alaska fiscal situation. It just hits all those buttons.”
Keithley said he was especially concerned about Gleason’s rejection of the Trump administration’s analysis of greenhouse gas pollution that could be caused by Willow.
The judge rejected several other claims brought by the environmental groups, but concluded that the greenhouse gas projections were inadequate because they failed to account for foreign emissions.
Related: Federal court rejects approval for Hilcorp’s Liberty Project
Her opinion relied on a recent precedent set by a higher court in litigation over another Alaska oil project, Hilcorp-owned Liberty, that faulted another federal analysis of foreign emissions.
In its Willow analysis, the Trump administration made similar errors, Gleason wrote. Those errors included asserting, without sufficient evidence or research, that an individual project has a negligible impact on global emissions and that the government lacks reliable data on foreign oil consumption, she said.
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The action by Gleason leaves Willow’s future uncertain. Either the Biden administration, which was defending the Trump administration’s approvals of the project, or ConocoPhillips could appeal the decision.
A spokesperson for the Department of the Interior, the BLM’s parent agency, said Gleason’s decision was being analyzed. Conoco responded to the ruling with a brief statement: “We will review the decision and evaluate the options available regarding this project.”
Alaska elected officials were quick to criticize Gleason. In a prepared statement, Dunleavy, a Republican, called her ruling a “horrible decision” and said it outsources oil production to “dictatorships and terrorist organizations.”
Anchorage Republican state Sen. Josh Revak, in a prepared statement, said the decision “should be deeply concerning to every Alaskan.”
“Alaska resource development pays the bills for public safety, education and the health and well-being of all Alaskans,” said Revak, the chair of the state Senate committee with jurisdiction over oil and gas. “This ruling is heartbreaking for the hard-working men and women in the industry.”
Willow, if built, could produce 160,000 barrels of oil a day, or roughly a third of the state’s current total production, and a total of 600 million barrels over three decades. It would include five drill sites, an oil processing center, 37 miles of gravel roads, seven bridges, 100 miles of new pipelines and a freshwater reservoir.
Conoco has already invested $500 million in the project, according to court documents, and its full cost could be as high as $6 billion.
Earlier this year, Biden’s administration faced criticism by environmental groups when it decided to continue defending the Trump administration’s environmental approvals in the court cases.
Related: Biden administration throws support behind massive Willow oil project in NPR-A
Observers interpreted the decision as an effort to appease Republican U.S. Sen. Lisa Murkowski, a moderate who has occasionally been a key vote in favor of some of Biden’s Congressional priorities.
By that point, though, a panel of higher-level of judges had already signaled that Willow was in significant legal jeopardy. In February, the panel had agreed to a request by the environmental groups to temporarily bar work at the project site, citing a strong likelihood that they could win their underlying lawsuit before Gleason.
If Gleason’s decision stands, the Biden administration would likely have to redo the Trump administration’s environmental reviews, according to Bridget Psarianos, an Anchorage-based attorney who worked with the groups that filed the lawsuits. That would give the Biden administration an opportunity to more rigorously analyze the project’s impacts, she added.
“This is definitely a chance for them to do the right thing,” Psarianos said. “I hope they take it.”
Environmental groups have pointed to the potential greenhouse gas pollution generated by Willow as a key reason to fight it. But they have also opposed it because it represents a major westward expansion of Alaska’s oil industry into the National Petroleum Reserve — which, in spite of its name, contains valuable fish and wildlife habitat. Some of those areas, like Teshekpuk Lake, are important subsistence resources for the North Slope’s Indigenous residents.
Wednesday’s victory, oil development opponents said, buys them time, given the financial industry’s increasing wariness about investing in fossil fuels — particularly in the Arctic. Psarianos said she’s conscious that that’s causing real impacts on Alaskans’ lives and jobs, but added that the transition away from the industry is necessary.
“The longer we can hold off Willow, the better,” Psarianos said. “Because the oil industry is suffering, and there is an exodus going on.”
