|
9th Circuit affirms in part and reverses in part Willow decision
Kristen Nelson Petroleum News
In a June 13 decision on appeal, a three-judge panel of the U.S. Court of Appeals for the 9th Circuit affirmed in part and reversed in part a federal district court's decision on ConocoPhillips Alaska's development of the Willow project. The appeal was over a 2023 Bureau of Land Management approval of the Willow project.
The appeals panel, while remanding the district court decision, did not vacate it. The panel said it did not vacate the decision because BLM's lone error was procedural.
"Vacatur was unwarranted because the procedural error was minor and the on-the-ground consequences of vacatur would be severe," the appeals panel said.
BLM said in the supplemental environmental impact statement that it was required to approve development of all economic oil and gas. But in the record of decision, it adopted an alternative which did not accord with that reasoning, eliminating an option for an additional drilling pad, thus stranding some oil.
A 2020 BLM approval of the project, remanded by the federal district court in 2021, had required BLM to prepare a supplemental environmental impact statement. Environmental groups contested the SEIS.
ConocoPhillips made a final investment decision on Willow in December 2023, following a record of decision from the U.S. Department of the Interior in March 2023 and positive court orders, including the 9th Circuit Court of Appeals denial of plaintiffs' request for an injunction.
In a June 13 statement emailed to Petroleum News, ConocoPhillips said:
"ConocoPhillips welcomes the 9th Circuit Court of Appeals decision, which allows construction on the Willow project to continue. We recently completed another significant winter construction season, and the project remains on track for first oil in 2029. We look forward to continuing the responsible development of Willow, which will enhance American energy security while expanding local employment opportunities and providing extensive benefits to Alaska Native communities and the State of Alaska."
Full development BLM's 2020 approval was vacated by the district court, which said BLM violated the National Environmental Policy Act because its project alternatives were based on ConocoPhillips having the right to produce all the oil and gas possible from its leases; the court also said the 2020 EIS failed to "analyze effects of Willow's downstream foreign greenhouse gas emissions."
The appeals panel said that in the SEIS it prepared after the 2021 remand, BLM "insisted that in selecting project alternatives, it could only adopt a development proposal that would fully develop the oil field and not strand a large quantity of oil and gas that, standing alone, was economic to development." The court said BLM reasoned that it did not want to approve a project alternative leaving economic oil undeveloped, which could result in further project applications and piecemeal development.
But in the record of decision for the 2023 SEIS, BLM approved a modified version of the preferred alternative from the SEIS, one that was not analyzed in the SEIS, disapproving a fourth drill site which, in the SEIS, had been deferred.
"By disapproving another drill pad, modified Alternative E barred development on several of ConocoPhillips' leases. BLM never explained whether this constituted full field development or not," the appeals panel said.
Willow milestones ConocoPhillips has been moving the project along, aiming for first oil in 2029.
In a May 8 first quarter earnings conference call, ConocoPhillips Senior Vice President Kirk Johnson said with winter construction the civil scope of the project -- roads, pads, bridges -- is roughly 50% complete, and some 80 miles of pipeline are installed (see story in May 18 issue of Petroleum News).
Willow is in the National Petroleum Reserve-Alaska, west of ConocoPhillips' Alpine field.
And "very importantly," Johnson said the project team executed a horizontal directional drill underneath "one of the key waterways and that allows us to connect east-west pipelines. ... Again, we continued build out of that infrastructure."
He said the operations center pad was a critical part of this year's work, and "modules that we sealifted up there last year, those are now set on the pad."
Project operator and subsidiary ConocoPhillips Alaska also opened its Willow Construction Camp, "and that becomes important because it allows us to begin construction work on the North Slope a bit more throughout the year as opposed to being completely confined to the winter season," Johnson said.
Outside of Alaska, engineering and fabrication on Willow's processing modules continues to go well, he said.
"And then, of course, key for us there this year being our second major season on this project is procurement activities and sourcing activities. ... we do expect to source and receive a bulk of the engineered equipment that's required to procure, again, for those process modules as well as all this forward-looking work that we have on the Slope," Johnson said, noting that by year end, the company will have 90% to 95% of that work sourced.
--KRISTEN NELSON
| 