Dakota Access Pipeline is a milestone for ND energy development
The demonized Dakota Access Pipeline will go into service soon, likely early this week, and will begin delivering 470,000 barrels of Bakken crude oil every day to a distribution hub, providing better access to important markets. In all the pandemonium over the pipeline, with months of noisy protests, the importance of the pipeline to North Dakota has been overshadowed.
The Dakota Access Pipeline will make North Dakota's roads and railroad crossings safer, a big plus for public safety. It has the capacity to eliminate 500 to 740 rail cars or more than 250 trucks each day.
The $3.8 billion pipeline will bring as much as $100 million a year in additional tax revenue to North Dakota, a welcome infusion as the state struggles with low prices for energy and farm commodities. It will transform the economics of oil production by reducing transportation costs an estimated $3 a barrel. By increasing the competition among existing pipelines, it will help to further alleviate transportation costs. High transportation costs have long dogged Bakken producers.
Also, besides the considerable oil tax revenue that will come from the pipeline, it will generate an estimated $10 million a year in property tax revenue, helping to support schools and other local government services along its route.
The benefits could increase over time. The pipeline's capacity can be expanded to 570,000 barrels of oil per day. That would be more than half of current production, now about 942,000 barrels per day, down from the million-plus barrels the Bakken was producing before the price slump.
Pipelines are not perfect. But they are the safest mode of transportation for crude oil. Dakota Access Pipeline was bored 95 feet below the bed of Lake Oahe on the Missouri River—far lower than the other eight pipelines beneath the lake, including seven located nearby. The pipeline has been reinforced and has monitoring equipment, with valves at both ends of the lake so the flow of oil can be stopped in the event of a leak.
There will be little fanfare when the oil starts flowing, but it will be a milestone in North Dakota's energy development and will help bolster the state's economy.
Editorials represent the views of Forum management and the Editorial Board.