Dakota Access Pipeline Fulfilling Its Promise

Dakota Access Pipeline Fulfilling Its Promise

By Bob Adelmann, The New American, January 1, 2018

Fully operational since June, the Dakota Access Pipeline is lowering transportation costs, reducing tank car usage, reducing environmental and population risk, improving South Dakota’s financial condition, and putting the lie to the alarmist anti-pipeline propaganda.

There’s scarcely a downside. An alleged criminal conspiracy that attempted to stop the pipeline in the name of protecting the environment, characterized as “The Enterprise” in a RICO lawsuit being brought by the pipeline’s developer, is being exposed as a fraud upon the public. If successful, the lawsuit could cost the members of The Enterprise (including Greenpeace, EarthFirst!, and other so-called green groups allegedly involved in the conspiracy) a billion dollars. That would severely dampen its appetite for such misadventures in the future.

Prior to the completion of the pipeline, energy producers working the Bakken oil field in North Dakota faced a shipping penalty (called a “discount”) ranging from $7 to $8 a barrel that reflected the additional cost of bringing in some 1,200 tank cars every day to transport the crude oil product by tanker to refineries on the Gulf Coast.

Now that “discount” has dropped to $5 a barrel — about a 40 percent savings. And the result has been as predictable as Economics Rule Number One: When profits increase, capital “is drawn from the moon,” as economic commentators express it. Operational rigs have jumped from 38 in January to 53 at the end of 2017. Production has soared, increasing from just over one million barrels per day (bpd) before the pipeline went operational, to 1,185,000 barrels a day — nearly a 30 percent increase.

Wryly, North Dakota’s Tax Commissioner Ryan Rauschenberger said that Dakota Access’s production increase has “exceeded expectations,” expecting to put an estimated $250 million into his state’s coffers in the first 12 months of operation.

There are additional benefits as well. Instead of 12 100-car trains coming into the state to carry oil out, there are now only two. This reduces not only the risk of accidents (pipelines are far safer for crude oil transport than tank cars) but also any potential environmental hazard from spills.

Read full article here.