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.