Dunleavy Seeks to Redirect Willow Oil Royalties Away from North Slope Communities

Governor's move aims to avoid legal battle over $2.6 billion in future oil revenue

Published on Feb. 27, 2026

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Alaska Governor Mike Dunleavy is seeking to redirect the state's 50% share of royalties from the upcoming Willow oil project on the North Slope away from local communities and towards the state budget and Permanent Fund. This move is intended to avoid a potential legal and political showdown over the distribution of the estimated $2.6 billion in royalties that Willow is expected to generate by 2043.

Why it matters

The 1976 federal law governing oil royalties from the National Petroleum Reserve-Alaska (NPR-A) currently gives priority to funding requests from the five North Slope communities and the North Slope Borough, leaving the state with no direct access to the royalty revenue. As Willow is set to become a major new oil producer in the region, this could create a significant financial imbalance between the state and local governments, potentially leading to legal battles and political tensions.

The details

Under the 1976 Naval Petroleum Reserves Production Act, the federal government receives 50% of oil royalties from the NPR-A, while the other 50% goes to the state of Alaska. However, the state has been required to direct its share to the five North Slope communities of Utqiagvik, Nuiqsut, Atqasuk, Wainwright and Anaktuvuk Pass, as well as the North Slope Borough, to address the impacts of oil development in the region. With the Willow project expected to generate $1.28 billion in royalties by 2033 and $2.6 billion by 2043, Governor Dunleavy wants to redirect the state's 50% share to the state budget and Permanent Fund instead.

  • Willow oil production is expected to begin in 2029.
  • The state's 50% share of royalties from smaller ConocoPhillips projects in the region, such as GMT-1 and GMT-2, currently amounts to around $16 million per year.
  • By 2033, the state's 50% share of Willow royalties is estimated to reach $1.28 billion.
  • By 2043, the state's 50% share of Willow royalties is estimated to reach $2.6 billion.

The players

Mike Dunleavy

The Governor of Alaska, who is seeking to redirect the state's share of Willow oil royalties away from North Slope communities and towards the state budget and Permanent Fund.

North Slope Borough

The local government representing the five North Slope communities, which currently receives a portion of the state's 50% share of oil royalties from the NPR-A under the 1976 federal law.

Utqiagvik, Nuiqsut, Atqasuk, Wainwright and Anaktuvuk Pass

The five North Slope communities that currently receive a portion of the state's 50% share of oil royalties from the NPR-A under the 1976 federal law.

ConocoPhillips

The oil company that is developing the Willow project, which is expected to become a major new oil producer in the NPR-A region.

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What they’re saying

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