Oil Company Welcomed to Drill in Alaska's Wilderness

According to scientists, avoiding a global disaster requires countries to halt new oil and gas projects. ConocoPhillips, meanwhile, is moving quickly on the $8 billion Willow project after receiving approval from the Biden administration.

Oil traders have been worried for months that a price cap and EU embargo on Russian oil, both of which took effect on Monday, could lead prices to spike and serious shortages to develop.

Friday saw a decline in projected increases in cost owing to the oil shock. They haven't been this low since before Russia invaded Ukraine, which was earlier this year.

There have been setbacks, unfortunately. Turkey has blocked oil tankers from passing through the Bosphorus on their way to Kazakhstan for companies like Chevron and ExxonMobil's joint venture. Turkey requires insurance documentation.

The market, however, seemed to have paid the news little mind. The price of oil as a whole has fallen by almost 10% this week. More than two dozen yellow dump trucks sit patiently on a gleaming ice pad on the frozen tundra near the northernmost edge of the United States.

The Biden administration has just authorized an $8 billion project to explore for oil in Alaska's National Petroleum Reserve, the biggest undeveloped area in the United States. However, oil giant ConocoPhillips is already on the move, bringing in supplies and personnel by air to this massive icy plain located some 250 miles north of the Arctic Circle.

Subscribe 100% Free to Wall Street Rebel.com and receive access to investment tools worth $17,500!

The individuals participating in the Willow project are anxious to get started, despite the fact that experts have warned that governments must cease permitting new oil and gas drilling or face a disastrous future on a dangerously hot globe.

The top executives at ConocoPhillips are working to establish a business that will last for decades, with the possibility of looking toward even additional growth inside the reserve later. Like the other oil companies that achieved record profits in 2022, the corporation is wagering that any transition away from fossil fuels will take place in the far-off future.

ConocoPhillips has years of experience in drilling in the Arctic, one of the most dangerous places for almost any operation that can be conceived of. Temperatures on the current trip averaged approximately 4 degrees Fahrenheit, a pleasant change from the wintertime lows that may drop to roughly 40 degrees below zero.

Even as ConocoPhillips prepares to begin construction on Willow, the company must contend with the challenges posed by global warming at an alarming rate due to the use of fossil fuels. Temperatures are rising nearly four times as quickly in the Arctic as they are everywhere on the planet, and the permafrost is melting at a rate that is more rapid than scientists had anticipated.

The impacts are seen across the area that surrounds the reserve and may be observed in flooded ice cellars that can no longer preserve meat from caribou and whales. The ground is gradually burying homes situated along the coast, as well as in telephone poles that have become unstable and are now bending over as a result of erosion. It can also be observed on the ice roads used by the oil firm, which are becoming thinner and melting earlier in the season due to climate change.

Subscribe 100% Free to Wall Street Rebel.com and receive access to investment tools worth $17,500!

The Arctic is already one of the most costly regions to produce oil; new changes will make it more so.

There are additional economic difficulties brought on by global warming. When other energy sources like solar and wind power grow more affordable and prevalent, would this oil still be needed? This is perhaps the largest risk ConocoPhillips has ever taken.

The crude oil would begin to flow at the earliest in around six years from now. The aim of the administration of Joe Biden is that by the time they take office, the demand for oil will have significantly decreased due to government expenditures to promote the use of renewable energy and the transition to electric cars.

According to Roger Marks, a prominent petroleum economist in Alaska, all oil firms assume the risk when they begin new drilling that the oil demand will reach a peak and then begin to drop. This is a risk that all oil businesses take.

The National Petroleum Reserve–Alaska comprises 23 million acres and was established in 1923 by the United States government as an emergency oil supply for the Navy. ConocoPhillips is the only business drilling inside the National Petroleum Reserve–Alaska. Despite its name, the reserve provides a vitally important habitat for a wide variety of animals, including brown bears, caribou, and migrating birds. Many kinds of ice seals, as well as beluga whales, polar bears, and walruses, live in the Arctic Ocean off of its shore.

 The business anticipates that the Willow project, consisting of as many as 199 wells distributed over three drill sites, will have the potential to generate about 600 million barrels of oil over 30 years. That would put it in the position of becoming the most significant oil project in the United States.

Elevated pipelines stretching seven feet above the earth would transport oil from the drilling sites to the existing pipes at the Alpine site. Eventually, these elevated pipelines would link with the Trans-Alaska Pipeline, which runs over 800 miles from the North Slope of Alaska to Valdez in the southern part of the state.

If all of the oil were burned, the resulting emissions might be close to 254 million metric tons of carbon. This would result in 8.4 million metric tons of carbon emissions annually, equivalent to adding roughly two million more automobiles to the road each year.

The United States is the second most polluting nation, behind China. The United States annually emits 5.6 billion metric tons of carbon dioxide into the atmosphere. The emissions projected to come from Willow are just a tiny percentage of that total. Both ConocoPhillips and the government of President Joe Biden believe that if Willow were not allowed, the supply of oil to satisfy demand would transfer to oil drilling in other areas.

Before spring temperatures melt the ice roads and make the tundra marshy and inaccessible for construction trucks, ConocoPhillips has approximately a month to perform the first stage in the Willow project, which is to establish a gravel mine and create a gravel road.

Environmental organizations are seeking to put an end to the Willow project, which they refer to as a "carbon bomb." A federal court turned down their attempt to halt construction while they continued to pursue the legal case on Monday. Abigail Dillen, the president of Earthjustice, which is the organization that is organizing the lawsuit against the project, posed the question, "When do you get off fossil fuels?" "Before or after you destroy one of the most significant and delicate ecosystems for wildlife anywhere in the world?"

Thermosyphons are long metal tubes filled with refrigerant and partially buried in the ground to keep the earth frozen. ConocoPhillips use these to maintain the integrity of the permafrost. The dilemma of permafrost that is melting is being made much worse by climate change.

Thermosyphons, which have been used in the Arctic for decades to protect roads and buildings, will also be erected on the platforms for rigs that will bring out oil; this is oil that, when burnt, will generate the emissions that experts claim will cause the permafrost to melt more quickly.

To make drilling on the North Slope profitable, the oil fields there need to be "giant." Willow will have a footprint of roughly 500 acres and, at its height, could create around 180,000 barrels of oil per day. This is even though the Biden administration decreased the size of the initial proposal that ConocoPhillips had submitted.

It is anticipated that oil from Willow will assist the Trans Alaska Pipeline, which is now 46 years old and has a daily flow that has decreased to less than a half-million barrels from two million barrels in 1988. This rate is so low that it causes the pipeline to have frequent ice and paraffin wax buildups. Oil from Willow is likely to be of assistance.

The advantages to Alaska, which will be relatively restricted since the state does not have a statewide sales tax or a personal income tax, will continue to rely on fossil fuel revenues. Since Willow is located on federal territory, Washington would be eligible to receive royalties while Alaska would only be able to collect taxes related to oil extraction; however, these taxes would be somewhat offset by tax deductions for business costs claimed by the companies. Willow might potentially have a somewhat negative effect on state revenues for the first several years up to the time when it begins producing oil.

Subscribe 100% Free to Wall Street Rebel.com and receive access to investment tools worth $17,500!

ConocoPhillips has been drilling for oil in Alaska for the last fifty years. Corporate leaders have said that the business has successfully overcome the extraordinary difficulties presented by the severe environment.

Economists agreed that prices would need to be about $30 per barrel for ConocoPhillips to profit from Willow. That is similar to other oil operations in the United States, where prices have been much higher than $30 per barrel for most of the previous 20 years.

The North Slope Borough, comprised of eight villages in the most northern section of the United States, will be one of the most significant benefits recipients due to the Willow project. The municipal taxes levied on oil and gas activities account for around 95 percent of the borough's yearly budget of $410 million.

Oil money is used to pay for various activities, such as installing a brand-new basketball court at the leisure center in Utqiagvik and paying residents' heating expenses in Nuiqsut. Oil earnings are also anticipated to assist in paying for a sea wall to defend Utqiagvik from the Arctic Ocean, which is rapidly advancing due to climate change brought on by the combustion of oil and gas.

                       Controversial oil drilling project in Alaska approved by Biden administration