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.

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.

Dakota Access Pipeline Part Of Transportation Solution, American Energy Independence

In a recent article from the Dickinson Press, North Dakota oil production has surpassed last year’s record and is now nearing half a million barrels per day according to a report from the Associated Press and confirmed by North Dakota state officials and industry officials. In fact, the current production in the state has already surpassed 113 million barrels produced in 2010.

A record 204 drilling rigs were operating in the western region of North Dakota this past week, nearly all are drilling on the Bakken and Three Forks formations, precisely the same region of production where the Dakota Access Pipeline will originate.

Right now in eastern Montana and North Dakota the daily capacity to move oil out of the region is 773,000 barrels, including 438,000 barrels by pipeline and 335,000 barrels by rail. Added pipeline capacity, through the construction of the Dakota Access Pipeline which will transport  470,000 barrels per day, will more than double the current take away, help free up rail capacity, and grow our country’s ability to extract our own energy resources while on the path to full energy independence.

Dakota Access Fulfills Commitment To American Manufacturers

The Des Moines Register reported Thursday that Dakota Access has fulfilled a pledge to purchase more than $200 million in American-made heavy equipment necessary to construct the $3.8 billion pipeline.   

“The purchases have been fully executed and include 250 excavators from Caterpillar Inc. and 80 excavators from Deere & Co., as well as equipment from Iowa-based Vermeer Corp., said Dakota Access representative Vicki Granado.”

Earlier this year, officials from Caterpillar, Deere and Vermeer filed letters urging state utility boards and commissions to approve the landmark energy infrastructure project. Now, with the pipeline fully approved, equipment from all three of these industry-leading manufactures can be seen a construction sites all along the four-state route.

American manufacturers are already benefiting immensely now that the Dakota Access Pipeline is under construction. The will continue to see the long-lasting benefits once operational as it will deliver affordable, domestic energy to markets across the nation.

A resurgent manufacturing sector has already shown us how low-cost energy can transform our economy, create jobs, and maintain competitiveness in a global market. Projects like Dakota Access will solidify these gains and ensure the continued ability of business to grow and thrive in the United States.

Three Ways American Energy Is Saving You Money This Summer

Surging domestic oil and gas production has greatly reshaped the global energy market both at home and aboard. Here are three ways American energy independence helping to save you money this summer.

Gas Prices: Gas prices in the U.S. are at their lowest point in more than a decade, down 20 percent in just the past year and in stark contrast to the near $4 average experienced during the 2011 crisis in Libya. According to AAA, the national average retail price for a gallon of regular unleaded gasoline fell to just $2.22 last week. Furthermore, the national motor group said that about a quarter of gas stations are posting prices below the $2 mark. Drivers across the country are saving big thanks to these low prices with CNN Money reporting earlier this year that low the typical American household upwards of $1,000 in 2016.

Groceries: Food prices are still rising over all, but low energy costs are leading them to climb at rates well below the historical average. A report by the U.S. Department of Agriculture found that prices for food at home increased by 1.2 percent in 2015, less than half the 20-year average of 2.5 percent. Delivering food to supermarket shelves requires a vest transportation network across land, air, and sea. Whether it be an airplane, 18 wheeler, ocean-going freighter, they all benefit from cheap oil.

Airfare: Fuel is the single greatest expense facing the airline industry, but thanks in part to American energy production, those costs have been greatly reduced. Cheaper operating costs for airlines translates into increased savings for consumers at the ticket counter. A recent analysis by Hopper, an award-winning mobile flight-booking app, found that the fall in oil prices is “contributing to noticeably lower travel costs.”

Celebrate American Energy Independence This 4th of July

 

This 4th of July we have added reason to celebrate America with the landmark achievement of energy independence. After decades of working towards this important goal our nation is now reaping the benefits of domestic energy production.

In the past few years, the United States has surpassed countries like Russia and Saudi Arabia to become the world’s leading oil and natural gas producer. This historic milestone means our country no longer has to rely on foreign, and often hostile, sources to meet its energy needs.

The surge in domestic production has reinvigorated the American economy with an abundant and reliable supply of affordable energy. This energy independence has revived our manufacturing industry, drastically reduced energy costs for homes and small businesses, and reduced our trade deficits.

The American dream is alive and well today thanks to this defining accomplishment and the opportunities it has created.

Thank American Energy for Cheap Gas this Memorial Day Weekend

Gasoline prices will be at an 11-year low for drivers on the road this Memorial Day weekend. Surging domestic oil and gas production in areas like North Dakota’s Bakken Region have drastically reduced the cost of energy for Americans across the nation. Just a few years ago American drivers were paying almost $4.00 a gallon at the pump, nearly double the current national average of $2.29 per gallon.

While increased production has undoubtedly been the leading driver behind the price tumble, the expansion of our nation’s pipeline infrastructure has also played a key role. Previously untapped resources now fueling America’s energy boom are located in regions that have historically not been known as production hubs. The buildout of critical pipeline infrastructure has and will continue to be key to transporting these resources to markets and thus ensuring the supply of low-cost energy.

The proposed Dakota Access Pipeline, which would ship oil from North Dakota to Illinois promises to solidify the Bakken Region as a reliable supplier of U.S. energy needs. Investing in pivotal projects like this today, will ensure that the benefits of affordable energy felt today will remain in the long-term.