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Delaying Dakota Access Pipeline Has Consequences for Working People

Delaying decisions has become an often-used tactic by those opposing the modernization and expansion of our energy infrastructure network. However, instituting artificial delays on projects can have serious unintended consequences.

The Midwest has a rapidly growing and diversifying economy. While the agriculture sector remains a powerhouse, other industries have migrated to our region with companies both large and small deciding to invest here. Allowing regulatory decisions to be made by factors outside of what is written into law introduces uncertainty, which scares away investment and job growth.

As the Iowa Utilities Board continues to review the application of the Dakota Access Pipeline, we urge the board members to review the application based on the facts. The evidence shows that there is both a need and a benefit for and from this kind of project. Approving this project is in the best interest of Iowa and the Midwest.

Low Oil Prices Benefiting Everyday Americans

Everyday Americans across the country are benefiting from low-cost energy with the average price for a gallon of gasoline hovering around $1.75 and natural gas prices falling to historic lows. In fact, data collected by the U.S. Bureau of Economic Analysis shows that households are spending less today on energy goods and services than almost any point in recent history.

In January, energy expenditures fell to less than 4 percent of total consumer spending, a sharp drop from only a few years ago. Consumers don’t just feel the effect of cheap energy at the gas station, the decrease in prices also translates to falling prices for consumer goods and services.

Falling energy costs are a direct result of the ‘Energy Revolution’ currently playing out across the country. Surging domestic production in areas like North Dakota’s Bakken/Three Forks region have push the United States to become one of the largest oil and gas producers in the world, and more importantly, closer to becoming energy independent.

America is still adapting to its new-found role as an energy leader and major investments must still be made to accommodate increased domestic production. Expanding our nation’s pipeline infrastructure is perhaps the most critical of these investments. Current pipeline infrastructure lacks the capacity to handle new market dynamics and is limiting producers who are unable to ship product to market.

A new era of affordable energy has already begun, but certain steps must be taken now to ensure these benefits are here to stay. Projects like the Dakota Access Pipeline are essential to sustaining low prices and adequate supply.

US Energy Has OPEC on Its Heels

On Monday the International Energy Agency indicated that total US crude output will increase by 1.3 million barrels a day from 2015 to 2021 despite a continued slump in oil prices. US shale output is currently decreasing and is expected to decrease in 2017, but is then expected to increase production once again from 2018 onward. In its medium term report, the IAE stated ‘anybody who believes that we have seen the last of rising US shale oil production should think again.’

The announcement has OPEC leaders thinking about the future. A recent Bloomberg article stated,

“After first ignoring it, later worrying about it and ultimately launching a price war against it, OPEC has now concluded it doesn’t know how to coexist with the U.S. shale oil industry.

‘Shale oil in the United States, I don’t know how we are going to live together,’ Abdalla Salem El-Badri, OPEC secretary-general, told a packed room of industry executives from Texas and North Dakota at the annual IHS CERAWeek meeting in Houston.

The Organization of Petroleum Exporting Countries, which controls about 40 percent of global oil production, has never had to deal with an oil supply source that can respond as rapidly to price changes as U.S. shale, El-Badri said. That complicates the cartel’s ability to prop up prices by reducing output.

‘Any increase in price, shale will come immediately and cover any reduction,’ he said.”

Such is the importance of planning for the future. The US shale boom that launched the price war between OPEC and the United States while subsequently driving costs for consumers toward rock bottom came on as suddenly as the most recent price plummet. This is the life of the oil markets; up and down, always cycling. But America has a choice to make for future growth.

We can allow it to catch us by surprise again and rely on aging rail and road infrastructure to transport oil from the Bakken Shale Formation, or we can invest in our future. By building pipeline infrastructure like the proposed Dakota Access Pipeline, America will stand ready for production levels to increase. While OPEC wrings their hands, the United States will lead in production while safely and reliably transporting crude oil to refineries for American consumption.

Oil prices will not remain low forever and eventually production cuts will increase the price per barrel to breakeven. When that time comes, regardless of OPEC actions, American pumps will stand ready to supply the world with energy and will rely on American pipelines to do so.

Dakota Access Already Generating Benefits for Illinois

Even before the first pipe segments are laid into the ground, the Dakota Access Pipeline’s investments are already generating benefits for businesses in the states along the route, opines a recent column in the Springfield, IL-based State Journal-Register.  Bill Fleischli, the executive vice president of the Illinois Petroleum Marketers Association points out that the benefits to the regional supply chain can already be felt:

It has been barely two months since the Illinois Commerce Commission (ICC) approved the Dakota Access Pipeline but we are already seeing some of the valuable economic benefits this critical infrastructure project promises to bring our state. Construction of pipeline is set to begin this spring and Illinois-based John Deere and Caterpillar have already received commitments exceeding $200 million for heavy machinery and related equipment needed for the project. This sizable investment will stimulate job creation and business growth throughout the entire supply chain necessary to build these huge machines.

That heavy machinery will be soon joined at work sites all across the Midwest by thousands of skilled laborers, at least half of whom will be sourced from local union halls. With the pipeline application being approved for North Dakota, South Dakota, and Illinois, it is up to the Iowa Utility Board members to determine when the men and women of the Midwest will get to work.

Williston’s Best Days are Ahead

Williston was once a sleepy town tucked away in the western part of North Dakota. Thanks to an abundance of natural resources, it became the epicenter of the Midwestern oil boom. Williston and the surrounding areas offered Americans workers a real shot at the American dream, where people with a high school diploma could make six figure salaries with the proper training and a commitment to work hard. In a recent blog post published by Bakken Backers, Shawn Wenko, executive director of Williston Economic Development expressed confidence that those days would be back.

The decision of foreign governments to artificially undercut the price of oil has did not go unnoticed in the city. While Williston’s growth has slowed, Wenko points out that much has improved over the last few years:

We cannot base our success or failure of this community on what we have seen over the past 15 months. In fact, if you analyze statistics from Williston in 2007 compared to Williston in 2015, you would find the growth numbers to be quite impressive. Building permit valuations have increased from $42 million in 2007 to $182 million in 2015; third-quarter sales tax collections have gone from $118 million in 2007 compared to $528 million in 2015; 1,334 businesses and 25,000 jobs have been created since 2007; school enrollment has climbed 64 percent; our unemployment rate hovers around 2.3 percent and there are still quality jobs available.

The Dakota Access Pipeline would be a well-received investment into the area. With the pipeline representing a $1.4 billion investment into the state, Dakota Access would yield between 2,000 and 4,000 jobs in North Dakota, many of which would be created in the Williston area. Construction projects would not only focus on the pipeline itself, but on six state-of-the-art tank farms throughout the region. In the long term, the Dakota Access Pipeline would make Bakken oil more competitive against foreign oil, by lowering transportation costs.

Mr. Wenko’s positive outlook on Williston’s future is not without merit. If the Iowa Utilities Board follows the lead of those in North Dakota, South Dakota, and Illinois, Williston can soon be home to thousands of pipeline workers.

Register Op-Ed: It’s time for IUB to Approve DAPL

Mike Ralston of the Iowa Association of Business and Industry and Bill Gerhard of the Iowa State Building and Constructions Trade Council represent an interesting partnership. While one man speaks for Iowa’s businesses and the other represents thousands of working men and women, respectively, they both agree upon the economic benefits of energy infrastructure expansion and modernization. Published in The Des Moines Register, their joint op-ed highlights the benefits of the Dakota Access Pipeline for the stakeholders they represent, as well as the public at large.

In their op-ed, Ralston and Gerhard assert that while oil will move from its extraction point to the consumer, it is up to us to determine the safest and best way to do so:

The reality is with the need for domestic crude oil established, we need to get it from point A to points B, C and beyond. Oil is primarily transported from production fields in one of three manners — by pipeline, by rail or by truck. Pipelines are by far the safest and most efficient way to move oil. The Dakota Access Pipeline will move nearly 450,000 barrels a day. At that rate it will replace four to seven unit trains a day.  

Getting crude oil into pipelines and out of the rail network will benefits the region’s farmers, Raslton and Gerhard point out:

 Iowa’s agriculture sector will also benefit greatly from this transfer of crude oil from rails to pipeline. The current demand on rails to move oil has led to a shortage, leaving fewer railcars for moving agricultural and other products and sending prices higher. With the pipeline, farmers will face less competition. Our highways will benefit from fewer tanker trucks as well.

Finally, Ralston and Gerhard encourage the IUB to act:

Years of planning and months of debate have gone into the review process that resulted in green lights from North Dakota, South Dakota and Illinois. We can be proud of the careful consideration that the Iowa Utilities Board has given the matter, but further prolonging a decision does no service to any party involved. It’s time for Iowa to lead by providing access to our valuable domestic energy resources.

The Dakota Access Pipeline is expected to begin construction in 2016, and will employ anywhere between 2,000 and 4,000 Iowans during the assembly of the line.

See the full text of the op-ed here.

It’s Clear, We All Benefit From Petroleum

Are we all living a petroleum-based lifestyle? Will getting rid of our cars and using bikes eliminate petroleum use from our daily routines? Far from it.

As a recently released infographic from Energy in Depth shows, we are surrounded by petroleum-based products, without which modern life would be impossible. From the moment we get up and use soap and other toiletries to get ready for the day, to when we put on our clothes, check our phones and computers, and commute to work with vehicles equipped with petroleum-made tires, we find ourselves more reliant on this natural resource than we ever thought possible.

As the Iowa Utilities Board reconvenes on Friday to discuss whether or not to approve the Dakota Access Pipeline, one of the questions that the Board Members must decide is whether or not the project fulfills a public need and convenience. It is pretty clear that we all rely on the products transported by pipelines for us to live our daily lives. Through the use of cars and thousands of other products, we show that our petroleum-based lifestyles will continue to be the norm for the foreseeable future, even if we introduce renewables into the mix.

The question that remains is whether or not we choose to use the resources we have here at home to fulfill our needs, or whether we import them from elsewhere, and whether they will be transported through a state-of-the-art pipeline system or on trains. It is pretty clear that all Iowans, and indeed all of the Midwest, have a clear need for the product that will be carried by the Dakota Access Pipeline.

Click here to see the enlarged infographic.

Pipeline Training Video Highlights Commitment to Safety, Benefits to Local Men and Women

Time spent in a classroom is more than just learning rote facts, it represents an investment in one’s future. Such is the message of a pipeline safety training overview published by LiUNA Local 92. As the video shows, a chance to work on pipelines is never just a temporary job. Pipeline work is a career, and for some, a second chance at achieving a better future.

The Laborers’ International Union of North America (LiUNA) is one of many unions that has partnered with Energy Transfer Partners to construct the Dakota Access Pipeline. With local chapters spread across the Midwest and the rest of North America, LiUNA has been instrumental in bringing critical infrastructure projects into fruition.

With LiUNA’s multi-week programs, pipeline workers, both new and old, can learn to hone essential skills and learn from each other’s experiences. These sessions provide opportunities for local labor members to benefit from the construction opportunities taking place in their regions. Much like Local 92 engaged locals in Canada, similar trainings in the Midwest engage men and women across Iowa, Illinois, and the Dakotas.

LiUNA has previously published a video specific to Dakota Access and the benefits that the pipeline will generate. You can view the video here.

Dakota Access Keeps Midwestern Oil Competitive

During today’s hearing of the Iowa Utilities Board, Board Member Nick Wagner stated that demand drives the extraction of energy and that the Dakota Access Pipeline will not influence demand or production of oil.

While Board Member Wagner is correct in stating that demand drives production of oil, regardless of the infrastructure in place, it is important to remember that oil extracted from North Dakota, or even the United States, has to compete against oil derived from other parts of the world. According to estimates, a pipeline reduces transportation costs of oil by anywhere between $5 and $10 a barrel. These are savings that help make oil fields such as the one in North Dakota more competitive against foreign oil.

We urge the Iowa Utilities Board to take the savings that a pipeline such as Dakota Access into account when making their decision on granting the necessary permits for its construction.

Column: Dakota Access Pipeline offers economic benefits to Iowa

As we continue to watch the members of the Iowa Utilities Board hold their public deliberations over the Dakota Access Pipeline, it has become clear that the decision will involve weighing the importance of several aspects of the project.

A very important and undeniable factor is the substantial economic benefit that the pipeline project will bring to the state of Iowa.  After all, the pipeline represents a $1 billion investment in Iowa alone. A recent column in The Cedar Rapids Gazette underscores the economic potential of the project:

This multibillion dollar project will deliver short- and long-term economic benefits to our state, employing thousands of construction workers and providing a much-needed boost to the communities in which they live and work. All of this will lead to tens of millions of dollars in new tax revenue. Over the long-term, it will contribute to our communities in the form of property taxes to support state and local government. At the same time, it will help to promote the energy security of our country. In challenging economic times with great global uncertainty, we need to enhance the infrastructure needed to support domestic energy production. All Iowans should stand together to support this project.

With at least 50% of the workers on the project being sourced from the communities around the pipeline route, it is clear that the economic potential of the Dakota Access Pipeline should be a significant factor in the decision of the Iowa Utilities Board.  Creating a safe and modern energy infrastructure also generates economic opportunity, and that is something that the IUB should consider.

Read the rest of the column here.