The economic, environmental and stability benefits we stand to gain from choosing pipe to transport our energy go beyond the Midwest. As the region that feeds the world, the decisions that we make every day on the Great Plains effect Americans coast to coast and this decision is no different. International petroleum market uncertainty and foreign economic and political instability has become the rule, not the exception these days.
As we plan for the future we need to do our part and work together to lessen our dependence on foreign oil and increase our access to a diverse portfolio of domestic energy – including renewables like ethanol and wind along with fossil fuels. We, as a nation, have been fortunate to see our capacity to produce our own energy – whether renewable or traditional – expand drastically over the course of the last decade. Shale formations like the Bakken in North Dakota are at the heart of this expanded capacity. Safely transporting Bakken crude – and oil from other domestic sources – through modern pipelines is the best way to ensure that we’re making the most of our resources, and minimizing our need to pursue the energy that powers our economy from unreliable and often unstable foreign governments.
Investing in infrastructure that allows our domestic energy needs to be met with domestic oil is a simple way to ensure future generations will have access to the same affordable, reliable energy that allowed us to build the Midwest into a place we’re proud to call home.
Without appropriate and up-to-date energy infrastructure, our nation’s energy boom and our push for energy independence is incomplete. As President Barack Obama noted in a 2012 executive order, “Although expanding and modernizing our Nation’s pipeline infrastructure will not lower prices right away, it is a vital part of a sustained strategy to continue to reduce our reliance on foreign oil and enhance our Nation’s energy security.”
In the Midwest, we know firsthand that the path to market is almost as important as the crops that we grow and the goods that we make – we can’t have one without the other.
The dramatic increase in crude oil production in North Dakota has created unprecedented economic opportunity in our region, but it’s also caused serious transportation strains for our producers, who have long relied on the roads and rails to move their goods to consumers. As crude oil production has grown, the number of railcars available to transport agricultural products has decreased. This has led to drastically increased shipping costs, lengthy delays at elevators and points of delivery, and a damaged bottom line for farmers throughout the region.
Tariffs on grain railcars have increased from $50 to nearly $1,400 per car. These cost increases can carve up to $1.00 from every bushel of corn or grain shipped. A North Dakota State University study found in 2014 that increased rail costs and congestion stand to cost grain farmers in North Dakota alone more than $160 million.
Making the decision to move oil by pipe instead of rail will alleviate 4 to 7 unit trains per day and help ease transportation shortages for agriculture and other industries. Getting this crude oil into a state-of-the-art pipeline and off of our roads and rails will alleviate congestion, free up capacity, and enable farmers to regain unfettered access to the methods of transportation that best fit their business.
As demand increases, there is no denying that the crude oil from the Bakken will be moving through our communities by rail, road, or pipe, but we do have a choice to determine how it will be transported.
The decision shouldn’t be taken lightly, for many of us our land is not only our livelihood, but also our heritage, history, and what we intend to leave behind for future generations.
Pipelines are the tried and tested method used to transport over 70 percent of crude oil and petroleum products across our country. They are the safest, most efficient option, and a solution that just makes sense for a region like ours. Pipelines could free up freight capacity to transport cattle, crops and manufactured goods to market, easing the financial costs of shipping agricultural products.
All sectors of our economy, in every corner of our nation, rely heavily upon affordable energy resources to stay competitive. But here in the Midwest, the availability of affordable crude oil resources takes on an added importance because of how important the agricultural economy is to our region. Farming has, for generations, been the cornerstone of the region’s economic landscape. And as farmers know firsthand, energy costs weigh heavily on the sector’s bottom line.
No sector depends more heavily on affordable energy than does the agricultural sector, both directly – through the use of diesel fuel, gasoline, oil and other lubricants, propane, natural gas, and more – and indirectly through the use of agricultural chemicals like fertilizers and pesticides. Fuels produced from crude oil meet the lion’s share of those needs, according to the US Energy Information Administration.
Infrastructure projects like Dakota Access are poised to help the United States to assert greater control over domestic energy prices by delivering a steady stream of domestic crude oil to American refineries. This makes us less reliant on oil from unstable foreign allies – or adversaries – and insulates us from price fluctuations and spikes witnessed on the global market.
Today’s low energy prices have been a blessing for farmers. But history shows us that these price dynamics are fluid, and that events on the world stage or spikes in global demand can send prices through the roof in an instant. Bolstering our ability to meet our own energy demands through ample domestic supply and an updated and efficient energy transportation network provides farmers with the stability that they need to plan, and does all that we as a nation can do to keep prices under control for farmers and countless other energy consumers.
We in the Midwest are proud to be at the tip of the spear when it comes to expanding the role of renewable energy in the United States. But even as these sources of energy grow, the reality is that today’s economy runs on fossil fuels, and it will for quite some time.
Given this fact, it’s vital that we select the safest and most efficient methods through which the energy that we rely upon can be moved from its extraction point to consumers nationwide.
Pipelines are the best way to move crude oil and other hazardous liquids. When compared to other methods of transport – whether railcars, trucks, or barges – pipelines operate far more efficiently and are drastically less prone to incident.
Pipeline infrastructure positioned to move resources from the Bakken region is currently lacking. Given the rapid expansion of development in that region, pipeline capacity simply hasn’t yet caught up to demand. As a result, energy must utilize other avenues of transport, most frequently rail.
The upsurge in rail transport of crude oil has been dramatic. Five years ago, rail carriers in the United States moved just over 20,000 barrels of oil per day. Today, railcars carry more than a million barrels of crude per day, according to the United States Surface Transportation Board.
This exponential increase has led to a commensurate growth in the amount derailments, spills, and even explosions associated with crude oil trains. Federal statistics from the Pipeline and Hazardous Materials Safety Administration (PHMSA) show that more oil was spilled by railcars in 2013 – 1.1 million gallons – than in the previous forty years combined (792,600 gallons).
As the Wall Street Journal recently noted, crude oil trains operate as “virtual pipelines,” often more than a mile long and carrying thousands of barrels of oil apiece while traveling at high speeds on the nation’s busiest railways. They cross busy intersections, travel through heavily populated areas, and often sit unnoticed for hours or days at rail yards. And towns often don’t even know when or how often crude oil trains pass through.
Countless trains of this nature cross through communities in the four states crossed by Dakota Access. And as recent derailments in Dubuque, Iowa and Fayette County, West Virginia indicate, they are prone to accidents.
Dakota Access will take crude oil off of the rails and roads, allowing it to more safely reach the consumers that rely upon affordable crude oil each and every day.
Job creation is at the heart of a robust and growing economy. Major capital investments in all four states crossed by the project have placed our state near the forefront of economic development nationwide. Projects like Dakota Access are needed to sustain our recent growth, and keep our states on the path toward a stable economic future.
Jobs
The proposed $3.7 billion project will generate 8,000 – 12,000 immediate jobs for our skilled workforce during the construction phase and permanent jobs in operations to support the facility long term. These jobs will pay good, living wages – wages that will enable thousands of families in Iowa, Illinois, and the Dakotas to support their families and invest in their communities
Tax Revenue
Construction and operation of the Dakota Access Pipeline will also generate tax revenue that will allow us to increase investment in our own infrastructure needs, funding roads, schools, and community services like police and fire departments along the proposed pipeline route and throughout the states crossed by the project. The millions of hours of labor required to complete the project will generate an estimated $50 million in revenue from income and sales taxes during construction and the pipeline will continue to generate an estimated $50 million annually in property taxes and nearly $74 million in sales taxes
Private Investment Funding the Public Good
Economic development projects of this magnitude are rarely executed without some financial cost to the taxpayer – whether through abatements, incentives, property tax breaks, or other measures. Dakota Access is a multi-billion dollar project aimed at improving the public good through improved energy infrastructure, and it is funded entirely through private investment. That’s a major win for taxpayers along the route.
In just the last decade, the energy outlook in the United States has undergone a drastic transformation. Thanks to rapid expansion of production in states like North Dakota, the United States is now a global leader in energy supply. Our expanding energy supply has also left us less dependent on energy resources imported from places like the Middle East, helping us to assert greater control over our economic future.
Taken together with the expansion of renewable energy sources like corn ethanol and wind energy, we as a nation are becoming increasingly energy independent. Thanks to vast reserves of fossil energy and ongoing advancements in both the production of renewables and the extraction of additional fossil energy, our nation has at its disposal nearly all of the tools that it needs to secure an economic future defined by a stable supply of affordable American energy.
But if this is the future that we aspire to, then more has to be done to make it a reality. Currently, energy infrastructure – particularly in the Midwest thanks to the rapid expansion in Bakken oil supply – is behind the times. Pipeline capacity has not kept pace with the growth in our ability to extract American oil. In order to fully realize the benefits of growing American energy production, expansion of pipeline infrastructure is of urgent importance.
Projects like the Dakota Access Pipeline, which would transport American crude oil from North Dakota to Illinois and on to American refineries, address the urgent need to more efficiently transport our energy resources. Doing so keeps prices stable and further reduces our need for foreign oil, helping to bring us closer to our dream of American energy independence.
But Dakota Access means more than energy security. The project also represents a considerable economic opportunity for the Midwest, bringing nearly $4 billion in private investment, creating more than 10,000 jobs, and generating tens of millions of dollars in tax revenue without costing a dime of taxpayer money. It represents a chance to energize local economies throughout our region, keeping our states on a path toward continued growth in the years ahead.
Updating our region’s lagging pipeline infrastructure also brings benefits to the agricultural economy that has fueled our states for generations. No sector depends more heavily on affordable fuel than agriculture. Investment in our region’s network of pipelines means more affordable energy, and improved bottom lines for farmers throughout the region.
Construction of Dakota Access also improves the region’s transportation and freight network by moving crude oil off of the roads and rails and into a state-of-the-art pipeline – a move that brings both reduced shipping costs and congestion for farmers as well as greatly improved efficiency.
Pipelines are also far safer than railcars or trucks. Statistically speaking, there is no better way to transport the energy that we need than a modern pipeline.
The Dakota Access Pipeline is an opportunity to help the Midwest play a pivotal role in improving our nation’s energy outlook. But perhaps even more importantly, it’s a project that brings unique benefits to countless sectors within the Midwest, from consumers and farmers to laborers and business leaders.
I would like to respond to a recent letter published by ISU student Angie Carter. As a fellow ISU student, our environment and safety is a main concern for myself as well. Unlike Carter, I do support the Dakota Access Pipeline because it is actually the safest way to transport crude oil.
Carter referenced recent pipeline leaks and environmental concerns as the reason to oppose the project. I’ve heard Energy Transfer Partners’ presentation on the Dakota Access Pipeline, and I came away very impressed with the steps being taken to protect Iowa’s land. Today’s pipelines are constructed under much stricter safety guidelines, using vastly improved materials and construction methods compared to those pipelines decades old, referenced in Carter’s letter.
Here in Iowa we take great pride in the fact that our farmers’ hard work fuels not just the region, but the nation as a whole. For generations, farming has been a way of life characterized by hard work, good stewardship, and the satisfaction that comes from cultivating the land to feed your family and the world. Our farmers’ hard work provides us with one of the nation’s must robust economies, but we must maintain a clear view of both the opportunities and obstacles that will weigh on our future.
Among those factors is our nation’s increasing energy development, and the transportation infrastructure upon which our region relies to get products to market. At recent IUB meetings concerning the Dakota Access Pipeline it is clear how the two are closely intertwined.
The Jan. 20 Register editorial “Keystone debate detracts from real issue” indicates confusion about part-time jobs and individual projects, the latter being prevalent in the construction and entertainment industries. Individual projects, which might last four to eight months, when strung back to back, result in yearly employment for thousands of middle-class laborers and their families. They mean jobs and money for those who provide materials, goods, transportation and services related to those projects.
The editorial further suggests Gov. Terry Branstad’s reasonable request for further study of the Bakken pipeline proposal, which was introduced last July, is somehow equivalent to President Barack Obama’s seven years of dallying over the Keystone XL, which was first proposed by Canada in 2008 and commissioned in the U.S. in 2010. After environmental, economical, energy and employment impact studies, the pipeline was approved by the U.S. State Department, which considered it to be modern, efficient and safe with little negative environmental impact.
