Dakota Access Pipeline Is A Milestone For ND Energy Development

The demonized Dakota Access Pipeline will go into service soon, likely early this week, and will begin delivering 470,000 barrels of Bakken crude oil every day to a distribution hub, providing better access to important markets. In all the pandemonium over the pipeline, with months of noisy protests, the importance of the pipeline to North Dakota has been overshadowed.

The Dakota Access Pipeline will make North Dakota’s roads and railroad crossings safer, a big plus for public safety. It has the capacity to eliminate 500 to 740 rail cars or more than 250 trucks each day.

The $3.8 billion pipeline will bring as much as $100 million a year in additional tax revenue to North Dakota, a welcome infusion as the state struggles with low prices for energy and farm commodities. It will transform the economics of oil production by reducing transportation costs an estimated $3 a barrel. By increasing the competition among existing pipelines, it will help to further alleviate transportation costs. High transportation costs have long dogged Bakken producers.

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New Ranking Finds North Dakota Has No. 2 State Economy in the U.S.

North Dakota has the No. 2 best economy of any U.S. state and is No. 1 for job growth according to U.S. News & World Report’s 2017 Best States rankings. The annual survey, which ranked North Dakota No. 4 overall, said growing energy production and robust infrastructure were key to the state’s strong performance.

The Peace Garden State has benefited greatly from being at the epicenter of the U.S. shale oil boom. In 2004, oil and gas production accounted for just 2 percent of state’s economy, but by 2014 it was almost 16 percent. Several years ago, while much of the nation was suffering from hard economic times, North Dakota was attracting billions of dollars in investments and workers from around the country.

While falling oil prices have weakened production, North Dakota is still producing over a million barrels a day and has one of the lowest employment rates in the nation. The Bakken boon may have hit slow patch in the road, but the promising opportunities and benefits derived from this remote region are far from over.

Most recently, an analysis by the Associated Press found that cost savings provided by the Dakota Access Pipeline will not only benefit producers, but also amount to a more than $110 million gain in annual tax revenue.

This staggering increase has already lead the state’s budget director to begin crafting spending plans that take the added revenue into account and perhaps leading the state to become the No. 1 economy in the years to come.


No More Keystone Capers

President Trump is making short work of campaign promises, and on Tuesday he signed executive orders reviving the Keystone XL and Dakota Access pipelines. The resurrection is good news for the economy, but one question is whether he’ll sink the projects with his protectionist impulses.

Mr. Trump signed an executive order inviting TransCanada to apply again for a permit for the Keystone XL pipeline, which the Obama Administration rejected to indulge the anti-carbon obsessions of Democratic campaign donors. Another Trump directive aims to expedite the Dakota Access pipeline, which is 90% finished but was halted by President Obama amid protests. A federal judge ruled that the government had met its legal obligations, but the Obama Administration suspended work anyway.

Such carve outs for progressive constituencies are one reason voters rejected Democrats in November, and the pipelines promise broader prosperity. Keystone is predicted to spin off 20,000 construction and manufacturing jobs, many of them to be filled by union workers, and add $3 billion to GDP. The pipeline could move 830,000 barrels a day along the route from Alberta to Nebraska; up to 100,000 would come from North Dakota, where a glut of crude has to travel by rail to reach refineries built to process it. The efficiencies will ripple across the oil and gas industry.

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Dakota Access Pipeline Will Provide Jobs, Energy Stability and Security

My experience within the U.S. government and the International Energy Agency has focused on global energy markets, energy policy and national security. I continue to follow the development of our nation’s energy infrastructure projects with a close eye.

Over the last several months I have been deeply concerned by the slowdown in developing the energy infrastructure needed to take advantage of the energy renaissance underway in the upstream oil and gas industry.

One example, although by no means the only infrastructure delay, is the result of ongoing protests and the Obama administration’s recent action over one such project, the Dakota Access pipeline.

The efforts against the Dakota Access project should serve as a powerful cautionary tale of the dangers of energy policy driven by ideology rather than economic reality. Continued delay of projects like Dakota Access could have a chilling effect on expanding our nation’s energy infrastructure and on efforts to continue bolstering American energy security.

Access to affordable and dependable energy sources is critical for energy security and economic prosperity. Potentially high energy costs and U.S. reliance on oil from unstable regions of the world undermine U.S. foreign-policy flexibility and economic competitiveness.

One of the many facts ignored by activists is that oil produced in the Bakken region and other highly prospective areas will play an important role in our energy production for decades to come.

While I support balanced and comprehensive energy policies that include responsible development and utilization of all energy resources, both traditional as well as alternative sources, the fact is we’re just not there yet and we need to recognize the long lead times involved in these capital intensive projects. The Energy Information Administration projects that by 2040, oil, natural gas and coal will provide about 75% of America’s energy needs — a relatively small change from previous projections.

 

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Dakota Access Ensures Costs Remain Low For North Dakota Producers

In an article published in Bloomberg Businessweek, recently reviewed energy and economic analyses point to a significantly reduced cost to ship petroleum by pipeline rather than by railroad or truck. This is important because those few dollars difference in cost to energy companies directly relates to the opportunities for companies to expand operations and hire individuals from engineers to craft trades to develop the infrastructure necessary to develop North Dakota resources.

According to the article, “[u]nlike Texas, which has pumped oil for more than a century and is home to thousands of miles of pipelines, North Dakota never had a reason to build much energy infrastructure. As oil gushed out of remote areas miles from any town or pipeline, wildcatters, middlemen, and traders raced to get it out by truck, train, and barge. By 2015, 800,000 barrels of crude a day was being railed out of North Dakota. Moving oil by train costs a lot more than pumping it through a pipeline, but when world crude prices hovered around $100 a barrel—as they did for several years—there was enough profit to go around. Now that prices have fallen, those transportation costs have become critical. Refineries on the East Coast, once among the biggest buyers of Bakken crude, have reverted to importing foreign oil rather than paying to ship it halfway across the country.”

Despite the massive production available in North Dakota, the high cost of transportation has actually led some American refiners to import foreign oil, rather than use domestic supplies, because of the economic realities.

The key to closing that cost gap and reducing dependence is to construct the infrastructure necessary to make North Dakota oil economically viable for the long-term future. An important part of that infrastructure investment is the Dakota Access Pipeline.

According to data compiled from Valero and Bloomberg Intelligence, current costs to ship Bakken oil to refineries across the United States by rail can range as high as $10 per barrel – at roughly $50 per barrel, that’s 10% of the total price. The estimated cost of delivery of a barrel moved by the Dakota Access pipeline would fall to about $5 per barrel, creating long-term stability for producers, refiners, and ultimately, consumers.

With the development of the Dakota Access Pipeline, transportation costs would essentially be reduced by half. Imagine if you could shave 5% off the cost of a gallon of gas, and ensure that the gallon of gas wasn’t supporting a foreign government. Not only that, but by reducing the cost of transportation, opportunities for production increase allowing more North Dakotans the opportunity to work. Right now North Dakota’s major oil producing counties support on average approximately 10% of the state workforce, and that’s with only 38 oil and gas rigs operating in November of this year. Compare that to more than 200 rigs back in 2014.

Lean operation has made production more efficient, but reducing costs for producers allows for greater development and greater economic opportunity.


Local Economies Flourish As Pipeline Construction Nears End

A new column co-authored by Ed Wiederstein, chairman of the MAIN Coalition, and Bill Gerhard, president of the Iowa State Building & Construction Trades Council, makes it abundantly clear that the Dakota Access Pipeline is benefiting the Iowa economy.

“Throughout Iowa work continues on the construction of the Dakota Access Pipeline, and already the long-touted benefits are being felt from Lyon County to Lee County. From the beginning we’ve touted the benefits and supported its construction because of the good it will do for our state — and now, with the project more than three quarters of the way complete in Iowa — we continue to see the many benefits we have extolled over the past two years.”

Wiederstein and Gerhard have been strong advocates for the landmark energy infrastructure project, often citing the thousands of jobs and millions in economic activity it will generate. But now, as evident in communities across Iowa, the case no longer has to be made, the benefits are here and they’re making a difference.

““The 4,000 construction jobs being generated along the 348 miles of pipeline represent a direct cash infusion into local economies in each county along the pipeline route. Recently, the Sioux City Journal wrote, ‘It’s not easy to put an exact dollar amount on the economic impact of the pipeline construction, local leaders say, but it’s not hard to find evidence that those workers are spending money in the area.’”

The influx of pipeline workers has meant restaurants, hotels, convenience stores and laundry facilities remain busy and close to capacity. That’s good news for business owners and the local economy, results that were consistently alluded to throughout 18 open houses across Iowa as well as during the Iowa Utilities Board hearings in November and December of 2015. Iowa stands to benefit from this pipeline from the construction phase through its operation.”

Wiederstein and Gerhard also note that unlike many large infrastructure projects, Dakota Access, despite being a public benefit, comes at no cost to taxpayers. “Large public infrastructure investments often come at a significant cost to state taxpayers, who are left holding the bag when road crews have finished rebuilding bridges or repaving highways,” they wrote. “But private infrastructure investments like the Dakota Access Pipeline do no such thing.”

Click here to read the full column in the Des Moines Register.


The Dakota Access Debate Has Grown Out of Proportion

The Washington Post recently published a supportive opinion editorial from former Senator J. Bennett Johnston (D-LA) and Daryl Owen of Owen Associates which examined how the protest and activity over the Dakota Access pipeline has grown of proportion.

From violent protest activity to millions of dollars of damage to equipment and even disturbing death threats to employees – the tactics being deployed against the project are unseemly and unnecessary.

In the column, Johnston and Owen highlight efforts of sabotage against operational pipelines across the country and the danger that such actions can create. They write that the protests are no longer about opposition to the project, but rather a new tool in the effort to stop the development and use of fossil fuels.

In addition to examining the true nature of the protest and the violence ensuing, Johnston and Owen highlight that, “[t]his is, after all, a pipeline project,” and not simply the first of which would cross the Missouri River – it would be one of dozens that do so carrying American energy products. The final piece of the puzzle, is as they say, “part and parcel of a river-crossing permit the pipeline has already received. It is a simple ministerial action authorizing the pipeline to cross beneath federal lands and, for want of a simple signature by an Army Corps bureaucrat, would finalize the process. By arbitrarily refusing to follow the law, the Justice Department has placed a lawfully permitted, vital $4 billion infrastructure project into suspended animation.”

The authors also note that the tribe who has sought to stall the project “largely refused to engage in [the] consultations” after much inquiry – a fact echoed by a federal court judge who reviewed the Army Corps findings and determinations. Johnston and Owen write that “there is much to be discussed and much to be regretted about the past 150 years of U.S.-tribal relations. But a real estate document for a pipeline river crossing seems hardly the pretext to do so.”

The Administration and Federal Government’s decision to withhold the final piece of multi-billion dollar project, in Owen and Johnston’s own words, it sends “a chilling message to the private sector about the rule of law as it relates to infrastructure development.”

It is simply unacceptable that the Federal Government has continued to delay the completion of this project – after all, their approval was already granted in July of this year. The fact remains, a single 1,000 foot section of an 1100 mile project, is currently held up by opponents who have already stated their mission is far greater than the Dakota Access Pipeline – but simply to withhold the development of America’s energy future.

 

 

 


Economic Impacts of Pipeline are Already Benefiting Iowa

Throughout Iowa work continues on the construction of the Dakota Access Pipeline, and already the long-touted benefits are being felt from Lyon County to Lee County. From the beginning we’ve touted the benefits and supported its construction because of the good it will do for our state — and now, with the project more than three quarters of the way complete in Iowa — we continue to see the many benefits we have extolled over the past two years.

The over $1 billion private investment in Iowa alone is critical to modernizing Iowa’s energy transportation network already crossing the state in the form of pipelines, railways, powerlines, and waterways.

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Statements from Members of Congress on Corps Indecision and Further Delay of DAPL

North Dakota Senator Hoeven issued a strong rebuke yesterday evening on the Corps decision to further delay the Dakota Access Pipeline and acknowledged the careful examination of the project by the agency and need to approve the project immediately. In addition, House Natural Resources Chairman Rob Bishop indicated the facts surrounding the project have not changed and that it is time to approve the project.

Hoeven: Corps Should Issue The Dapl Easement And Resolve The Pipeline Situation In N.D.
U.S. John Hoeven, November 14, 2016

WASHINGTON – Senator John Hoeven today issued the following statement in response to the Army Corps of Engineers’ announcement that it will further delay issuing a final easement that would allow construction of the Dakota Access Pipeline to be completed:

“The Corps today announced it will further delay issuing an easement for the Dakota Access Pipeline. That will only prolong the disruption in the region caused by protests and make life difficult for everyone who lives and works in the area.

“U.S. District Judge James Boasberg ruled in September that the Corps has done its due diligence, and he allowed the project to proceed. Furthermore, the pipeline is sited in an existing right-of-way that already includes a natural gas pipeline and a high-voltage transmission line. The route has been altered 141 times to address sites of archaeological significance.

“The solution now is for the Corps to grant an easement for the project so that life can return to normal for our farmers, ranchers, tribal members and law enforcement officers, who have worked very hard to protect the lives and property of all. Further, I will continue to call on the Obama administration to provide federal resources and funding to help ensure public safety.”

The senator has been working to support state and local law enforcement efforts, which include bringing in additional law enforcement resources through EMAC, the Emergency Management Assistance Compact, so that people living in the region feel safe and private property rights are protected. Hoeven and the congressional delegation have also been working to bring federal resources to assist local law enforcement in their efforts to keep the peace and deal with the protests.

Bishop: Dakota Access Delays Jeopardize Future Infrastructure Investment and Development
House Natural Resources Committee, November 15, 2016

WASHINGTON, D.C., November 15, 2016 – Yesterday, the U.S. Army Corps of Engineers (USACE) announced they will begin another round of discussions and analysis on the Dakota Access pipeline (DAPL) project with the Standing Rock Sioux Tribe, Energy Transfer Partners and Dakota Access, LLC. Chairman Rob Bishop (R-UT) issued the following statement:

“From the beginning of this controversy, the Obama administration exploited Native Americans to advance an obstructionist and radical environmental agenda.

“The facts haven’t changed. The route was approved the first time around after an exhaustive permitting process under the established regulatory framework, including the Mineral Leasing Act. The president’s increasingly autocratic interventions create massive uncertainty that jeopardizes future infrastructure investment and development. This is a mockery of our constitutional system and beyond the pale for any administration. Americans are counting down the days until we can return a semblance of certainty and professionalism to the federal government’s permitting process.”


Statements from Associations and Unions on Corps Further Delay of DAPL

A chorus of voices continue to decry and demand the approval the Dakota Access Pipeline following the Corps decision to further delay a project that has already been extensively reviewed and approved by four state agencies and the federal government. Statements from the NAM, API, IUOE, and AOPL are included below.

Americans Have Demanded Change: Manufacturers Respond to President’s Decision on DAPL
National Association of Manufacturers, November 14, 2016

National Association of Manufacturers (NAM) President and CEO Jay Timmons issued the following statement on President Obama’s decision to continue to delay approval of a key portion of the Dakota Access Pipeline project:

“Americans demanded change last week. Disregard for the rule of law and bad decisions from Washington, like the one today, are why so many have been frustrated and sought change.

“Manufacturers in Florida, Louisiana, Texas, Missouri, Mississippi, Illinois, Oklahoma, Minnesota, Arkansas and many other states who signed on to supply this project are now left hanging in continuing regulatory limbo and must come to grips with today’s wrongheaded decision.

“We look forward to working with the next administration on access to our energy to fix this mess, as the president-elect has indicated that he values the importance of energy infrastructure.”

Learn more about the importance of investing in our nation’s infrastructure, including ways to advance energy infrastructure, by reading the NAM’s Building to Win initiative.

API questions Obama administration action to delay the Dakota Access Pipeline
WASHINGTON, November 14, 2016 – API Midstream Group Director Robin Rorick questioned actions by the Obama administration to unilaterally delay construction of the Dakota Access Pipeline.

“It defies logic that the Obama administration would ignore the rule of law by unilaterally delaying this critical infrastructure that would create American jobs and benefit American consumers,” said API Midstream Group Director Robin Rorick. “This project went through an established, open and transparent permitting process where comments from numerous stakeholders were considered. The administration’s actions to further delay this project with no legal justification contradict multiple court rulings; set a dangerous precedent for other infrastructure projects including roads, bridges and electricity transmission lines; and ignore calls to uphold the rule of law by the governors of North Dakota, South Dakota, and Iowa.

“Modernizing our infrastructure helps move energy our nation demands more efficiently, helps save consumers money, and provides tens of thousands of well-paying jobs. It’s unfortunate that the Obama administration would turn its back on its own citizens and put politics over sound public policy. I hope the administration reconsiders today’s action for the good of our nation’s energy future.”

API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 30 million Americans.

IUOE Calls for Immediate Issuance of Easement for Dakota Access

WASHINGTON, DC – James T. Callahan, General President of the International Union of Operating Engineers (IUOE), issued the following statement regarding the Dakota Access pipeline:

“The Administration’s announcement today raises more questions than it answers. The United States cannot afford to further delay the Dakota Access pipeline and throw workers off a job at the tail end of the construction season in the High Plains. The project has jumped through every regulatory hoop and cleared every hurdle in a rigorous, years-long permitting process and is nearly built.

The Administration has failed to identify what could realistically be achieved by more review. Despite years of study and hundreds of meetings that the Army Corps has conducted with tribes, farmers and communities along the route, the Administration insists on more meetings. The uncertainty looming over this project for construction workers, law enforcement and other companies looking to invest in energy infrastructure has gone on long enough.

As we near the end of this construction season, employment in the oil and gas pipeline industry continues its downward spiral, down by over 20% in the last two years. It is high time to finish this vital domestic energy project.”

AOPL: Pipeline Operators Decry Continued Administration Interference in Pipeline Approval Process

WASHINGTON, DC – The Association of Oil Pipe Lines (AOPL) decried the current administration’s continued refusal today to grant final approval for the Dakota Access Pipeline project even while admitting previous project decisions met legal requirements.

“This administration continues to astonish after admitting previous Dakota Access pipeline decisions were legal, which include the environmental and cultural finding of no significant impact, they are still refusing to provide final approval for the project,” said Andrew Black, AOPL President and CEO.

In July, the Army Corps of Engineers (Corps) issued a formal Finding of No Significant Impact after conducting an environmental review of the Dakota Access Pipeline project. Required by the National Environmental Policy Act (NEPA), the NEPA review represents the federal government’s official assessment of the environmental and cultural impacts of the project.

Dakota Access’s federal NEPA review found the proposed route for the pipeline is the preferred alternative and would have less of an impact on the environment than all other alternatives, including a different route of the pipeline or no pipeline at all.

A federal district court judge in September found the 250 interactions between the Corps, Dakota Access representatives and consulting tribal, cultural and historic representatives met or exceed the Corps’ legal obligations.

The administration after announcing in September an unprecedented halt to the approval process to conduct a review of previous agency actions has now “concluded that [the Corps’] previous decisions comported with legal requirements.” And yet, the administration in its November 14, 2016, letter to stakeholders still questions whether it will grant the final easement for the project.

The administration’s refusal to approve Dakota Access after finding the project meets its environmental and cultural obligations and admitting these findings were legal denies American workers the good-paying jobs this project will create. Refusing to approve Dakota Access denies American consumers the potential to benefit from lower prices additional supplies of energy transported by pipeline will bring.

AOPL urges the administration to respect the legal environmental and consultation approvals Dakota Access has already obtained and grant final approval to this project.