The economic and fiscal impacts of the Dakota Access Pipeline

Strategic Economics Group has released a study of the economic and fiscal impacts of the proposed Dakota Access Pipeline. The pipeline will carry crude oil from the Bakken oil field in northwestern North Dakota to Patoka, Illinois. The four states through which the pipeline will be built are North Dakota, South Dakota, Iowa and Illinois. The study finds that the construction of the pipeline will have significant economic impact on the four states.

The Dakota Access project is a more than 1100 mile pipeline that will be built at a cost of approximately US$ 3.8 billion. The pipeline will have a transportation capacity of more than 450 000 bpd of crude oil and will move crude oil to domestic refineries more safely and at a lower cost than the current alternatives. Currently, about 70% of the oil extracted from the Bakken area moves to refineries by railroad, which has experienced bottlenecks and is a more expensive form of transportation than by pipeline.

According to the study, during the two-year construction stage of the Dakota Access Pipeline, the four-state region will experience:

• An increase of 33 000 temporary full-time jobs.
• An increase of US$ 1.9 billion in income.
• Nearly US$ 5 billion increase in production and sales.
• A US$ 156 million increase in state and local taxes.

Once the pipeline begins operation, the region will annually experience:

• An increase of 160 permanent full-time jobs.
• A permanent increase of US$ 11 million in income.
• A permanent increase of US$ 5 million in production and sales.
• A permanent increase of US$ 55 million in state and local taxes.
• A reduction in the current rail service delays for farm-to-market transport.
• Lower transportation costs and less reliance on imported oil.

Dakota Access, LLC retained Strategic Economics Group to develop independent estimates of the economic and fiscal impacts associated with the project. Strategic Economics Group developed input/output models to estimate the economic impacts. These models and information from state revenue departments were used to estimate the fiscal impacts. In addition, the analysis addresses the economic and fiscal impacts associated with the operation and maintenance of the pipeline.

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/12112014/a-study-of-the-economic-and-fiscal-impacts-of-the-dakota-access-pipeline/