Biden administration offers climate activists a deal on Alaska’s Willow oil project

White House officials suggested to environmental groups in recent days that they may pair approval for a controversial Arctic oil project with new conservation measures in Alaska, but have failed to convince activists the idea is an acceptable compromise, according to three people involved or briefed on the calls.

The high-stakes talks involve what some officials see as one of the most consequential climate decisions of President Biden’s first term, a multibillion-dollar drilling project called Willow. The administration can announce a decision within days, and rejecting the project could lock the administration into a costly legal challenge and alienate key Alaska lawmakers in Congress.

The compromise measures under discussion would include a new ban on drilling in the Arctic Ocean off Alaska’s North Slope and more habitat protections for other parts of the state, said two of the people familiar with the talks, all of whom spoke on the condition of anonymity to discuss confidential communications. They added that administration officials are seriously considering shrinking the Arctic project to just two approved drilling pads, a size so small that officials for ConocoPhillips — the company that has spent nearly five years pursuing federal approval — have suggested it would cause them to back out.

ConocoPhillips has controlled leases in the National Petroleum Reserve-Alaska awarded by the Interior Department since 1999, giving it a strong case if the federal government blocks its ability to develop, legal experts said. That has pushed the administration to search for a compromise, hoping to curb backlash on a project that conservationists see as an irreversible catastrophe.

So far, environmental groups aren’t buying it. While President Warren G. Harding set aside the nearly 23 million-acre reserve a century ago to ensure that the U.S. Navy would have an adequate supply of oil — only a portion of it has been developed — and the expanse provides critical habitat for migrating caribou, waterfowl and other wildlife.

Many critics have focused on the proposal’s climate impact. The Biden administration’s own environmental review — released last month — estimated that Willow would generate roughly 9.2 million metric tons of carbon dioxide a year, which is equal to driving nearly 2 million gas-powered cars or burning nearly 51,000 rail cars’ worth of coal.

“Rejecting a project like Willow should be a no-brainer for a climate leader like Biden. And if he doesn’t, it’ll be a stain on his legacy,” said Lena Moffitt, chief of staff at the climate advocacy group Evergreen Action. “No form of this project is OK.”

[Q&A: Explaining the fight over the Willow oil project]

Based on its cost, Willow would be the largest pending oil development in the country, analysts say. The Bureau of Land Management’s final environmental impact statement said the project could best go forward with three of the five well pads ConocoPhillips initially proposed. Now that the report is finished, the law allows the Interior Department to issue a final decision on permits as soon as Monday.

A White House spokesman declined to comment Wednesday. Administration officials have previously said publicly that the final decision would rest with Interior Secretary Deb Haaland. Legally, the interior secretary must sign the final decision.

But according to individuals familiar with the process, White House officials have taken control of final deliberations, struggling to figure out whether a scaled-back version of the project can appease both environmentalists and Alaska allies. The individuals said the decision is primarily between approving the three well pads, or only two pads with a postponed decision on a third. State officials and Alaska Native groups have been lobbying the administration to approve all three to avoid the risk of ConocoPhillips backing out.

[Alaska Native supporters of Willow oil project push for approval in D.C.]

On Monday and in February, White House officials — at times including senior adviser John D. Podesta — outlined two possible options for prominent environmentalists, suggesting they may pair one of them with the offshore drilling ban and other moves, the three individuals said. That is not enough for many environmental groups involved in the talks, which have included Alaska Wilderness League, Earthjustice and the Sierra Club, among others. They see Willow as a climate litmus test, and some say they won’t negotiate with the White House.

For the administration, the politics are thorny. Environmental groups have helped deliver young voters in 2020 to Biden, who campaigned on a pledge to end new oil drilling on federal land. But the project’s supporters include other Biden allies — trade unions, many Alaska Natives and two key Alaska politicians — who say the project will boost the economy in a region that needs it.

While some While House climate officials argue the project should be blocked, many of Biden’s most senior advisers are wary, according to people familiar with deliberations. They say that group includes Steve Ricchetti and White House Deputy Chief of Staff Bruce Reed. They fear the legal consequences if their decision impedes development — or the political consequences of moves that would undermine a moderate Republican ally in the state, Sen. Lisa Murkowski, and Rep. Mary Peltola, an Alaska Democrat.

Company officials declined to say whether they might sue, noting that they would base their response on the details of the administration’s final decision.

“We believe this project fits with the Biden Administration’s priorities on environmental and social justice, facilitating the energy transition and enhancing our energy security — all while creating good union jobs and providing benefits to Alaska Native communities,” company spokesman Dennis Nuss said in a statement. “We look forward to a timely Record of Decision to enable this project to move forward in service of the public interest.”

[As White House advances Willow oil project, advocates uneasy about Biden administration’s ‘mixed messages’]

After years of planning and bureaucratic wrangling over the Arctic petroleum reserve, ConocoPhillips initially received permits for Willow during the final year of the Trump administration. The company’s plan for a 30-year project includes drilling on top of permafrost and constructing a network of chilling tubes to keep it frozen even as the region warms.

Environmentalists sued, and a federal judge blocked construction permits in 2021 because the government failed to assess how burning the oil pulled from the ground there would warm the planet. Those groups have continued pushing allies in Congress and Biden to fight the project.

“The western Arctic is one of the world’s last truly intact landscapes with tens of millions of acres that are completely undeveloped and that have only known subsistence use,” Sen. Martin Heinrich (D-N.M.) said in a statement. “I would urge President Biden to ask himself what he thinks America will value more a century from now: a few barrels of oil that are already long gone or the protection of one of the world’s truly great wildlife spectacles.”

The document the BLM released last month said that with hundreds of miles of roads and pipelines carving through often pristine wilderness, ConocoPhillips would need to shrink the footprint of its development by about 12% to protect a yellow-billed loon nesting site and caribou migration paths.

The Interior Department, which oversees the BLM, said it had “substantial concerns” about the environmental impacts even from that smaller development. And its leaders have been researching alternatives for the White House to consider.

That has led to an aggressive lobbying campaign from Murkowski and other Alaska elected officials to persuade the White House to accept the three-pad option outlined in the review. She has made the project her top policy priority with the administration and has considerable leverage, according to people who have been involved in deliberations, because the White House officials see her as a rare Republican ally who has helped in getting nominees approved and tempering extremism in Congress.

The last year also brought Peltola into Congress in an upset election win, giving the Biden White House a rare Alaska ally in a narrowly divided House. Since then she used her meetings with White House and Interior aides to lobby for Willow’s approval, arguing that her state needs the development to generate jobs and keep the state’s biggest oil pipeline functioning.

She also has requested another White House meeting before the final decision, and the entire delegation has been trying to amp up pressure on the White House as the decision nears.

“Our economy is in a true, real slump,” Peltola said in an interview last month, adding that the message hasn’t often persuaded administration officials. “You can see by the expression and the body language that is not a factor in their decision-making. I get the impression that they perceive Alaska to be a rich state and that our economy’s dependence on [oil] is arcane and it should be shifted.”

As the shale boom helped grow oil production in other parts of the country and sink oil prices, it hurt oil production and economic growth in Alaska. From 2015 to 2021, the Alaska economy performed “at or near the bottom” nationally in four key measures of economic health, according to a report released last year by the University of Alaska Center for Economic Development.

In recent weeks, several Alaska Native groups have also traveled to Washington for routine meetings that have often become about Willow and the state’s oil industry. Although some in the nearest town to Willow, Nuiqsut, are concerned about the project’s local impacts, many Alaska Natives stand to receive a slice of the revenue, which they say will help reduce poverty and boost generational wealth.

They have been handing out fliers showing that during the first 25 years of the modern Alaska oil industry, starting in roughly 1980, life expectancy surged in the North Slope and other parts of Alaska far beyond other parts of the country.

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The Washington Post’s Tyler Pager contributed to this report.