In Alaska, ConocoPhillips Prepares for Willow Drilling Project

On the snowy tundra at the northernmost tip of the United States, more than two dozen yellow dump trucks wait on a glistening ice pad.

It’s been just days since the Biden administration approved an $8 billion project to drill for oil in the National Petroleum Reserve in Alaska, the nation’s single largest expanse of untouched wilderness. But the oil giant ConocoPhillips is already in motion, massing equipment and flying in workers and provisions to this vast frozen flatland 250 miles above the Arctic Circle.

In Nuiqsut, a village of about 500 people and the closest town to the site of the drilling project, the only hotel is booked solid. It’s the Kuukpik Hotel, a row of metal trailers that also hosts the cafeteria that serves as the only restaurant in town — in fact, the only one for hundreds of miles. Sitting in the cafeteria on a recent Wednesday (“Steak Night” at the Kuukpik) oil workers from California, Oklahoma and other parts of Alaska said they were excited by the years of employment promised by the project, known as Willow.

“I can probably retire on it,” one man said.

The boomtown mind-set stands in stark contrast to the remoteness. People stopped by Nuiqsut’s one-room post office to chat, then hustled back to their pickups to avoid the whipping, frosty winds. For fun, teenagers on snowmobiles drove along empty streets, towing younger kids tethered to sleds behind them. The mayor headed to the small airport to pick up the medicine and supplies that arrive once a day on a six-seater from Deadhorse.

While scientists have warned that nations must stop approving new oil and gas drilling or face a perilous future on a dangerously heated planet, the people involved in the Willow project are eager to get going.

Executives at ConocoPhillips are building an operation to last generations with, perhaps, an eye toward even further expansion inside the reserve at a later date. Like other oil giants that earned record profits in 2022, the company is betting that any pivot away from fossil fuels will take place in a distant future.

A transition to renewable energy is going to take a long time, said Connor Dunn, a ConocoPhillips manager in Alaska. “There is going to be a significant need for U.S. domestic oil production for a great many decades to come,” he said.

ConocoPhillips has years of expertise at drilling in the Arctic, one of the most hostile environments for nearly any activity imaginable. During a recent visit, temperatures hovered around 4 degrees Fahrenheit, a welcome improvement over winter temperatures that might top out around 40 degrees below zero.

The company’s main oil field installation in the region, Alpine, looks from afar like a glowing spaceship on ice. It is essentially a self-contained town encompassing an air strip, a few roads, a processing facility, a power plant and a three-story operations center that serves as a home base for workers.

The expectation is that Willow eventually will look like Alpine.

But even as ConocoPhillips gears up to build Willow, it faces complications on a planet that is dangerously warming because of the burning of fossil fuels. Average temperatures in the Arctic are increasing about four times as fast as the rest of the globe, and the permafrost is thawing faster than expected.

The effects can be seen throughout the region that surrounds the reserve: in flooded ice cellars that can no longer preserve caribou and whale meat. In homes along the coast that are sinking into the ground, and in telephone poles now tilting from erosion. And it can be seen on the ice roads traveled by oil companies and others, which are growing thinner and melting earlier in the season.

“We don’t have the normal snow covering that we should have at this point in the year,” Rosemary Ahtuangaruak, Nuiqsut’s mayor, said as she drove across the frozen Colville River and pointed to vegetation poking out from the snow.

Changes like these will make drilling in the Arctic, already one of the most expensive places in the world to extract oil, only costlier.

Global warming presents other economic challenges as well. Will there be demand for the oil in years to come, as renewable power like solar and wind becomes cheaper and more widespread? This is perhaps ConocoPhillips’s biggest gamble.

At the earliest, the crude would begin flowing in about six years. By that time, the Biden administration hopes that demand for oil will have plummeted because of federal investments to encourage use of renewable energy and to encourage a transition to electric vehicles.

The threat that demand for oil will hit a peak, and then decline, is a risk that all oil companies take as they begin new drilling, said Roger Marks, a longtime petroleum economist in Alaska.

“The stone age did not come to an end for a lack of stone,” Mr. Marks said, making the point that he expected the same would be true with oil. “That’s the long-term risk these companies face with electric cars and wind and hydro and everything else,” he said. “Eventually oil is going to go away, even if there’s still some to produce.”

ConocoPhillips is the only company that is drilling inside the National Petroleum Reserve-Alaska, 23 million acres set aside in 1923 by the federal government as an emergency oil supply for the Navy. Despite its name, the reserve is an important habitat for migratory birds, caribou and brown bears, among other species. The Arctic Ocean off its coast is home to beluga whales, polar bears, walruses and several species of ice seals.

Willow will consist of as many as 199 wells spread across three drill sites, which the company believes could produce nearly 600 million barrels of oil over 30 years. That would make it the largest oil project in the United States.

Elevated pipelines seven feet above ground would carry oil from the drill sites to existing pipes at the Alpine site, eventually connecting with the Trans-Alaska Pipeline, which stretches 800 miles from Alaska’s North Slope to Valdez in southern Alaska.

Burning all that oil could release nearly 254 million metric tons of carbon emissions. On an annual basis, that would translate into 8.4 million metric tons of carbon pollution, equal to adding nearly two million cars to the roads each year.

Bryan Thomas, the station chief at the Barrow Atmospheric Baseline Observatory, which is run by the National Oceanic and Atmospheric Administration, said greenhouse gas emissions that are rising into “uncharted territory” mean shrinking sea ice and changing weather patterns.

Still, projected emissions from Willow would be a small fraction of the 5.6 billion metric tons of carbon dioxide emitted annually by the United States, the second biggest polluter on the planet after China. ConocoPhillips and the Biden administration both say that if Willow were not permitted, supply to meet demand would just shift to oil drilling elsewhere.

ConocoPhillips has about a month to take the first step in the Willow project, which is to open a gravel mine and construct a gravel road, before spring temperatures melt the ice roads, making the tundra swampy and impassable for construction vehicles.

Environmental groups, which call Willow a “carbon bomb,” are suing to stop the project. On Monday, a federal judge denied their request to block work while they pursue the legal challenge. “When do you get off fossil fuels?” said Abigail Dillen, the president of Earthjustice, which is leading the lawsuit against the project. “After you destroy one of the most important and fragile ecosystems for wildlife in the world, or before?”

The thaw is coming. The short winter construction season helps to make Alaska’s North Slope one of the most expensive places to drill for crude oil in the country, said Mr. Marks, the petroleum economist.

To keep the permafrost sturdy, ConocoPhillips uses thermosyphons, tall metal tubes filled with a refrigerant that are partly buried in ground to keep it frozen. Climate change is, of course, worsening the problem of a thawing permafrost.

Thermosyphons, which have been used in the Arctic for decades to protect roads and buildings, will also be installed on the platforms for rigs that will pull up oil — oil that, when burned, will produce the emissions that scientists say will cause the ground to thaw more rapidly.

To drill profitably in the North Slope, the oil fields have to be “giant,” Mr. Marks said. Although the Biden administration reduced the size of ConocoPhillips’s original plan, Willow will have a footprint of almost 500 acres and at its peak could generate about 180,000 barrels of oil a day.

Oil from Willow is expected to help the 46-year-old Trans Alaska Pipeline, whose daily flow has dropped to fewer than a half-million barrels from two million barrels in 1988, a rate so slow that it leads to periodic buildup of ice and paraffin wax inside the pipeline.

The benefits to Alaska, which remains dependent on fossil fuel revenues because it has no statewide sales tax or personal income tax, will be somewhat limited. Willow is on federal land, which means that Washington will receive royalties but that Alaska will be able to directly collect only oil-production taxes, which would be offset by company tax deductions for expenses. The state may also receive a share of federal revenues in grants and other funding. For a few years, until the oil starts flowing, Willow could even have a small negative impact on state revenues.

ConocoPhillips has been drilling in Alaska for half a century, and executives said the company had conquered the unique challenges posed by the harsh conditions. “We have the existing infrastructure, we have the existing work force, which is why the economics of this stuff works,” Mr. Dunn said.

Several economists said prices would need to be about $30 per barrel for ConocoPhillips to profit from Willow. That’s comparable to other oil operations in United States, where prices have been well above $30 per barrel during most of the past 20 years.

A Blessing and a Curse

One of the biggest beneficiaries of the Willow project will be the North Slope Borough, which includes the eight communities across the northernmost part of the United States. About 95 percent of the borough’s annual $410 million budget comes from local taxes on oil and gas operations.

Oil money pays for a range of things, including a new basketball floor at the recreation center in Utqiagvik and heating bills for Nuiqsut residents. Oil revenues also are likely to help pay for a sea wall to protect Utqiagvik against the Arctic Ocean, which is fast encroaching because of climate change caused by burning oil and gas.

“We are blessed and cursed at the same time,” said Sam Kunaknana, 55, one of the few residents in Nuiqsut, along with the mayor, Ms. Ahtuangaruak, who has joined a lawsuit to stop Willow.

Sitting in his living room while his girlfriend cut fresh caribou into strips for jerky, Mr. Kunaknana said the oil industry had hurt fishing, changed caribou migration patterns, made it harder to hunt and harmed the air quality in the village. “My biggest worry is how many of my grandchildren are going to need medicine to help them breathe,” he said.

Most Alaska Native groups see Willow as an economic engine. The Kuukpik Corporation, which owns and manages much of the land around Willow on behalf of Alaska Native groups, receives royalties from nearby drilling. Many residents receive annual dividends.

George Sielak, 63, and Leonard Lampe Sr., 54, are Kuukpik board members who were children when their families resettled Nuiqsut. They lived in tents until permanent housing was built and recalled the years without flush toilets. “We grew up without hardly anything,” Mr. Lampe said. “All we have is oil and gas.”

Mr. Lampe said that he considered climate change a serious threat but that it shouldn’t be solved by eliminating the only significant source of income in a region where goods must be flown in or sent by ship, and where a gallon of milk costs $13.

Few of Willow’s projected 2,500 construction jobs or 300 permanent jobs will go to Nuiqsut residents, in part because the work schedule interferes with the subsistence hunting and fishing that is central to the Inupiaq community here, several residents said. But the North Slope Borough job postings in the village’s post office advertise nearly $30 an hour for waste collectors, well-paying jobs that indirectly result from oil and gas operations.

“We used to be like them, hate the oil companies,” Mr. Sielak, a laborer who compacts gravel, said, referring to the project’s opponents. The jobs changed his mind. “I’ve been working 40-something years,” he said. “When you want a job, there’s a job.”

Riding in a van across the blindingly white territory, Mr. Dunn and five other ConocoPhillips employees said that they understood that fossil fuels are heating the planet and that they wanted to be part of the transition to clean energy. In the meantime, they are betting on oil.

“We all hope and want to see that energy transition in an orderly fashion,” Mr. Dunn said. “We look at it as, demand is there. Demand is a huge part of it, and we take that sole risk. If that demand is not there, we’ve taken that sole risk.”

Audio produced by Sarah Diamond.