Why the South Dakota Public Utilities Commission Should Approve Dakota Access

The South Dakota Public Utilities Commission kicks off a two-week hearing this week examining the question of whether or not to approve the Dakota Access Pipeline. The pipeline is a multi-billion dollar major investment in the energy infrastructure of the Midwest, and will provide a safe, reliable delivery method for around a half million barrels per day of American crude oil to American consumers.

The project deserves the PUC’s approval, and not just because it will benefit our state, or because it will create jobs and investment throughout the Midwest. The project deserves the PUC’s approval because it is a vital and necessary step forward for the energy infrastructure upon which South Dakota and our entire nation relies.

Close to home, the Dakota Access Pipeline will benefit the state in numerous ways. For one, it will make the transport of oil in the state and in the region safer. Due to a lack of adequate infrastructure, the beginning of the energy revolution marked a sharp increase in the amount of oil transported by rail in the region. Great as the freight rail system is in our country, it just simply was not designed with petroleum shipping in mind. The winding and often circuitous routes traveled by crude trains through South Dakota put strain on regional freight infrastructure and, unfortunately, can put our environment at risk of spill, derailment, or other unexpected incidents. Pipelines come with some risk too – and we all know that no method of transportation – whether it’s an automobile, an airliner, or anything in between – is perfect. But managing the risk associated with transporting crude oil must be a priority, and statistics from the federal government and numerous other sources have consistently shown that pipelines are the safest mode of transporting petroleum.

In addition to making South Dakota safer, shifting crude off roads and railways and into pipelines allows farmers to gain easier access to rail cars when they need them. A recent paper released by the American Farm Bureau Federation made clear that overburdened rail infrastructure can have a significant effect on farmer’s bottom lines. The 2014 harvest season alone brought losses totaling well over half a billion dollars. Freight rail costs ballooned to $500 to $8,000 over tariff per rail car. Rail carriers have made considerable progress in their efforts to improve service overall, but even under the best of conditions, the rapid uptick in crude oil production in the Bakken region means that other freight alternatives must be developed if grain farmers and other commodities shippers hope to keep pace. Developing our region’s rich oil reserves should not negatively impact our state’s farmers and ranchers, and it doesn’t have to.

Adding to safety and reliability, there are economic benefits to be gained. The project represents a capital investment of $820 million in South Dakota alone and is estimated to generate around $38 million in sales and income taxes during its construction. The pipeline will provide South Dakota with a new stream of property taxes once completed, with over $13 million estimated to be paid in 2017. The project will create between 2,000 and 4,000 construction jobs for South Dakotan men and women.

The South Dakota members of the MAIN Coalition represent a diverse set of industries and trades. From hospitality, to agriculture, to trucking, and construction, we are united in the belief that our state should take advantage of the opportunity before us and commit to improving our energy infrastructure. The Dakota Access Pipeline will not only improve South Dakota’s economy and people, but will help bring our country one step closer to energy independence. The project will enable American crude oil producers to ship American crude oil to American consumers. It will reduce our reliance on oil from unstable foreign regimes and enhance our ability to assert control over our nation’s energy and economic future.

For these reasons and others, it’s no surprise that South Dakota media outlets like the Argus Leader have editorialized in support of the project.

South Dakota currently faces some choices regarding transporting energy. Crude by rail shipments can continue to rumble through South Dakota towns, crowding out the products of our state’s farmers or we can choose to build a state of the art pipeline specifically designed to conduct such a task in a safe and efficient manner. The path forward is clear, and by choosing to invest in our state’s energy infrastructure, we can build a safer and stronger South Dakota, create thousands of jobs and spark hundreds of millions in investment, and help move our nation one step closer to a secure energy future.  We urge the PUC to recognize the merits of this application and approve the project to move forward.