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Released March 15, 2023 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--A trickling relative to output from the premier shale oil basins in the Lower 48, the $15 billion expected in tax revenue and near-universal support for the project prompted consultant group Wood Mackenzie to call the Willow oil project the start of an Alaskan revival.
ConocoPhillips Company (NYSE:COP) (Houston, Texas), after a lengthy process that involved the U.S. courts, received a record of decision from the U.S. Department of the Interior that paves the way for new oil developments on Alaska's North Slope.
Signing off on Conoco's so-called Alternative E, the U.S. Department of the Interior will allow for a scaled-down version of the supermajor's initial plans for a five-pad development. Forfeiting nearly 70,000 acres worth of existing leases in the process, Conoco can now move forward with weighing the final investment decision necessary to drill three sites at the Willow project.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a list of related project reports.
"Located in the National Petroleum Reserve in Alaska (NPR-A), the Willow project is estimated to produce 180,000 barrels of oil per day at its peak, decreasing American dependence on foreign energy supplies," Conoco said in welcoming the decision.
That's a drop in the bucket relative to inland shale basins in the Lower 48. While the pace of growth year-on-year is declining, U.S. shale oil production accounts for about 75% of total U.S. crude oil production. And the forecast for just more than 12 million barrels per day (BBL/d) in average production this year will set a record that would be in jeopardy again in 2024, should federal estimates prove accurate.
The U.S. economy may pivot on global events such as the war in Ukraine and the subsequent impact on commodity indices, but it is largely dependent on North American producers for imports. The combined 4.1 million BBL/d coming from Canada and Mexico over the four-week period ending March 3 represented about 70% of total U.S. crude oil imports.
Meanwhile, Alaska some 35 years ago was front and center of domestic production developments, though output peaked at just 2 million BBL/d in the late 1980s. The Permian Basin, by comparison, is expected to churn out about 5.6 million BBL/d next month.
Legal wrangling over the approval stemmed from the nod from former President Donald Trump, who backed the project, arguing the emissions would be less than a similar project on foreign soil. The advocacy community, meanwhile, was incensed at the decision, with Food & Water Watch chastising President Joe Biden for backing away from pledges to stall new drilling on federal lands.
"He cannot have it both ways," said Wenonah Hauter, the executive director at the advocacy group, of Biden's decision. "Promoting clean energy development is meaningless if we continue to allow corporations to plunder and pollute as they wish."
The oil from Willow would have the equivalent emissions of putting nearly 2 million conventional vehicles back on the road over the next 30 years, though the equivalent emissions represent an 8% reduction from Conoco's preferred program.
Outside looking in, Willow might not make much sense. Warming trends in general make Alaska challenging, as frozen tundra turns to mush and thawing ice makes it much more difficult to bring in the heavy equipment necessary for a successful program.
A closer look from Wood Mackenzie, meanwhile, finds the environmental consequences might not be as severe as expected. Scope 1 emissions--those coming from direct operations--and Scope 2--derived largely from the use of energy itself--will be lower than other state projects and, confirming Trump's point, oil derived from foreign resources.
In coordination with the federal nod, the Biden administration also placed some Alaskan acreage off limits to future drilling.
U.S. Interior Secretary Deb Haaland, a member of the Pueblo aboriginal group, presumably backed the program, as did U.S. Representative Mary Peltola, a Democrat representing Alaska and a former tribal judge.
In Alaska, the program had near-universal report from bipartisan legislators to many of the tribal communities in the state.
Willow won't do much for the national energy landscape, but it does support an Alaskan economy that depends on revenue from its oil and gas reserves. Wood Mackenzie expects Willow to result in $15.2 billion in revenue for various governments over its 30-year lifespan.
"After years of relentless advocacy, we are now on the cusp of creating thousands of new jobs, generating billions of dollars in new revenues, improving quality of life on the North Slope and across our state, and adding vital energy to TAPS (Trans-Alaska Pipeline System) to fuel the nation and the world," U.S. Senator Lisa Murkowski, R-Alaska, said.
The Trans-Alaska Pipeline System is running at a trickle compared with its peak capacity due to field maturation in the state. On top of Willow, Wood Mackenzie sees new developments leading to 700,000 BBL/d in production by 2030, a performance not seen since 2008.
That still pales in comparison to shale, but it may be more of a state-level economic boon than an overall boost for U.S. production and energy security.
"Without production from Willow and these other new projects, the Trans Alaska Pipeline System would eventually run into low flow issues, jeopardizing all production coming from the North Slope," said Mark Oberstoetter, the head of Americas upstream for Wood Mackenzie.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
ConocoPhillips Company (NYSE:COP) (Houston, Texas), after a lengthy process that involved the U.S. courts, received a record of decision from the U.S. Department of the Interior that paves the way for new oil developments on Alaska's North Slope.
Signing off on Conoco's so-called Alternative E, the U.S. Department of the Interior will allow for a scaled-down version of the supermajor's initial plans for a five-pad development. Forfeiting nearly 70,000 acres worth of existing leases in the process, Conoco can now move forward with weighing the final investment decision necessary to drill three sites at the Willow project.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a list of related project reports.
"Located in the National Petroleum Reserve in Alaska (NPR-A), the Willow project is estimated to produce 180,000 barrels of oil per day at its peak, decreasing American dependence on foreign energy supplies," Conoco said in welcoming the decision.
That's a drop in the bucket relative to inland shale basins in the Lower 48. While the pace of growth year-on-year is declining, U.S. shale oil production accounts for about 75% of total U.S. crude oil production. And the forecast for just more than 12 million barrels per day (BBL/d) in average production this year will set a record that would be in jeopardy again in 2024, should federal estimates prove accurate.
The U.S. economy may pivot on global events such as the war in Ukraine and the subsequent impact on commodity indices, but it is largely dependent on North American producers for imports. The combined 4.1 million BBL/d coming from Canada and Mexico over the four-week period ending March 3 represented about 70% of total U.S. crude oil imports.
Meanwhile, Alaska some 35 years ago was front and center of domestic production developments, though output peaked at just 2 million BBL/d in the late 1980s. The Permian Basin, by comparison, is expected to churn out about 5.6 million BBL/d next month.
Legal wrangling over the approval stemmed from the nod from former President Donald Trump, who backed the project, arguing the emissions would be less than a similar project on foreign soil. The advocacy community, meanwhile, was incensed at the decision, with Food & Water Watch chastising President Joe Biden for backing away from pledges to stall new drilling on federal lands.
"He cannot have it both ways," said Wenonah Hauter, the executive director at the advocacy group, of Biden's decision. "Promoting clean energy development is meaningless if we continue to allow corporations to plunder and pollute as they wish."
The oil from Willow would have the equivalent emissions of putting nearly 2 million conventional vehicles back on the road over the next 30 years, though the equivalent emissions represent an 8% reduction from Conoco's preferred program.
Outside looking in, Willow might not make much sense. Warming trends in general make Alaska challenging, as frozen tundra turns to mush and thawing ice makes it much more difficult to bring in the heavy equipment necessary for a successful program.
A closer look from Wood Mackenzie, meanwhile, finds the environmental consequences might not be as severe as expected. Scope 1 emissions--those coming from direct operations--and Scope 2--derived largely from the use of energy itself--will be lower than other state projects and, confirming Trump's point, oil derived from foreign resources.
In coordination with the federal nod, the Biden administration also placed some Alaskan acreage off limits to future drilling.
U.S. Interior Secretary Deb Haaland, a member of the Pueblo aboriginal group, presumably backed the program, as did U.S. Representative Mary Peltola, a Democrat representing Alaska and a former tribal judge.
In Alaska, the program had near-universal report from bipartisan legislators to many of the tribal communities in the state.
Willow won't do much for the national energy landscape, but it does support an Alaskan economy that depends on revenue from its oil and gas reserves. Wood Mackenzie expects Willow to result in $15.2 billion in revenue for various governments over its 30-year lifespan.
"After years of relentless advocacy, we are now on the cusp of creating thousands of new jobs, generating billions of dollars in new revenues, improving quality of life on the North Slope and across our state, and adding vital energy to TAPS (Trans-Alaska Pipeline System) to fuel the nation and the world," U.S. Senator Lisa Murkowski, R-Alaska, said.
The Trans-Alaska Pipeline System is running at a trickle compared with its peak capacity due to field maturation in the state. On top of Willow, Wood Mackenzie sees new developments leading to 700,000 BBL/d in production by 2030, a performance not seen since 2008.
That still pales in comparison to shale, but it may be more of a state-level economic boon than an overall boost for U.S. production and energy security.
"Without production from Willow and these other new projects, the Trans Alaska Pipeline System would eventually run into low flow issues, jeopardizing all production coming from the North Slope," said Mark Oberstoetter, the head of Americas upstream for Wood Mackenzie.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
