Economic Policy
July 12, 2022

Dakota Access Pipeline Pros

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     The Dakota Access Pipeline (DAPL) is a safe and efficient way of transferring oil from North Dakota to Illinois. The pipeline has already been completed and has the ability to move oil, and shutting it down after it has already been built would be a massive waste of resources and cause many negative effects that greatly outweigh the positives of shutting it down.

     For one, the DAPL allows the United States to become more energy independent. Because the pipeline increases oil production and makes it easier for oil to flow, the U.S. can rely less on foreign imports. This improves energy security and lowers trade deficit, which in turn, boosts economic growth.

     The DAPL has also increased oil production at the starting location in Bakken, North Dakota. Whether or not the use of oil is good is a whole different debate, but we use it now, and the pipeline has helped this. The pipeline moves about 40 percent of Bakken’s oil output, and this has lowered transportation costs for operators, which in turn has improved the region's drilling economics. 

          The pipeline has also been paying millions of dollars in property and sales tax (around $50 million property and $74 million sales, annually) to the states it runs through. This is good for public interest too, as these tax dollars have helped improve schools, hospitals, emergency services, etc. Not only does the DAPL pay taxes, they have also donated $11.3 million to different organizations and charities across the four states the pipeline crosses.

     Operating the pipeline has also created many new jobs and benefited thousands of Americans. During construction, the DAPL created approximately 8,000 to 12,000 jobs for highly skilled workers. These workers also benefited the local economy by using hotels/motels, restaurants, shops and other services. The economic impact of all of this work is estimated to be over $129 million per year. The pipeline also lowers transportation costs by $5 to $10 per barrel of oil and reduces the load of traffic on highways and railways. The overall impact of the pipeline on the U.S. economy is estimated to be over $250 million annually.

    If the pipeline is discontinued, all these benefits will stop, and many other groups of people will be negatively impacted. For example, farmers would suffer, as oil transportation will move to rail which displaces crops, and counties the pipeline runs through would face increased environmental risk. 

     Moving oil by pipeline has a lower carbon footprint than by train or truck and harms the environment the least. A pipeline is also the safest and most efficient method of oil transportation (as opposed to other methods such as trucks or rails). More oil can move at once, and it can move faster. A study by the Fraser Institute (a nonpartisan research organization) found that pipelines have the least amount of accidents/spills per million barrels of oil. Rails are 4.5 times more likely to experience an accident than pipelines, and when a pipeline does have an occurrence, 80 percent are not actually from the pipeline itself and 99 percent did not harm the environment. A review by the U.S. Department of Transportation has found the same patterns, and many other studies reported similar findings. 

     This addresses the conflict with the Sioux Tribe who oppose the pipeline. Their main fear is that an accident or spill would harm the environment and/or contaminate Lake Oahe, their main source of water. However, this is statistically very unlikely to happen, and if the pipeline runs underground like planned, it would not even affect the tribe. There are already other pipelines running under Oahe Lake that have not caused any issues, such as the Northern Border Pipeline, which has been in place since 1982 and has not had a significant operational incident impacting the environment or the Sioux Tribe.

     Because the DAPL benefits both the national and local economies, improves infrastructure, is safer and better for the environment than alternatives and does not affect the Sioux Tribe, there is no reason to discontinue or get rid of it. The pipeline has many positive effects that would make it best to keep it running.