US appeals court refuses to vacate Biden approval of Alaska's Willow oil project

JUNEAU, Alaska — A federal appeals court panel on Friday refused to vacate the approval of the massive Willow oil project on Alaska's petroleum-rich North Slope though it found flaws in how the approval was reached.

The decision from a panel of the 9th U.S. Circuit Court of Appeals comes in a long-running dispute over the project, most recently greenlit in March 2023 by then-President Joe Biden's administration and under development in the National Petroleum Reserve-Alaska by ConocoPhillips Alaska.

The court's majority opinion found what it called a procedural error — but not a serious or substantive one — by the U.S. Bureau of Land Management as part of the analysis in approving Willow. The court sent the matter back to the agency for additional work.

The majority determined that vacating the project's approval would be unwarranted and its consequences severe, though Judge Gabriel P. Sanchez dissented on that point.

A prior version of the project approved late in President Donald Trump's first term was overturned in 2021, leading to the environmental review process completed under Biden that drew the latest legal challenges from environmentalists and a grassroots Iñupiat group.

Alaska's Republican governor and its congressional delegation and state Legislature have backed Willow. The project also has broad support among Alaska Native leaders on the North Slope and groups with ties to the region who see Willow as economically vital for their communities.

But critics cast the project as being at odds with Biden's pledges to combat climate change and raised concerns that it would drive further industrialization in the region.

Trump expressed support for additional drilling in the reserve as part of a broader, Alaska-specific executive order he signed upon his return to office aimed at boosting oil and gas drilling, mining and logging in the state.

During the cold-weather seasons, ConocoPhillips Alaska has worked to build infrastructure such as new gravel roads, bridges and pipelines at the project site, and it has laid out a timeline for producing first oil in 2029. In a statement Friday, the company said it welcomed the ruling and looked forward to ''continuing the responsible development of Willow.''

J. Elizabeth Peace, a spokesperson with the U.S. Department of the Interior, said the agency doesn't comment on litigation. The Bureau of Land Management falls under Interior.

The appeals panel ruling comes more than a year after it heard arguments in the case. Environmental groups and the grassroots Sovereign Iñupiat for a Living Arctic had appealed a lower-court ruling that upheld Willow's approval. Attorneys representing the groups on Friday were evaluating next steps.

Arguments before the appeals court panel focused largely on claims the land management agency did not consider a ''reasonable'' range of alternatives in its environmental review, as well as the groups' contention the agency had limited its consideration of alternatives to those that allowed for full-field development of the project.

Attorneys for ConocoPhillips Alaska argued the leases in the company's Bear Tooth Unit in the northeast part of the petroleum reserve are in areas open to leasing and surface development — and that the agency committed the unit to development in issuing leases there over a number of years. Willow is in the unit.

Friday's ruling said the agency during the environmental review process took a stance that it needed to screen out alternatives that stranded an economically viable quantity of oil but then never explained whether the pared-back plan it ultimately approved satisfied the full-field development standard.

The agency ''framed its environmental review based on the full field development standard and had a rational explanation for doing so,'' the ruling states. ''But that does not permit BLM to potentially deviate from the standard without explanation.''

ConocoPhillips Alaska had proposed five drilling sites for Willow but the Bureau of Land Management approved three, which it said would include up to 199 total wells.

Erik Grafe, an attorney with Earthjustice who represented some of the groups that challenged Willow, saw the ruling as a partial victory.

''They found a fundamental flaw that led them to conclude that the BLM acted arbitrarily in approving the Willow project and have sent that back to the agency to reconsider in a non-arbitrary way and make a new decision,'' he said.