A new study shows that a new pipeline to access the Bakken shale region will bring several economic benefits to North Dakota, South Dakota, Iowa and Illinois. The study, released Nov. 12 by Strategic Economics Group, shows the economic and fiscal impacts of the Dakota Access Pipeline, proposed by Energy Transfer Partners LP.
The 1,100-mile pipeline will carry crude oil from the Bakken oil field in northwestern North Dakota to Patoka, Illinois, and will be built at a cost of approximately $3.8 billion. The pipeline will have a transportation capacity of more than 450,000 barrels per day (bpd) and will move crude oil to domestic refineries. Currently, about 70 percent 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 $1.9 billion in income;
- Nearly $5 billion increase in production and sales; and
- A $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 $11 million in income;
- A permanent increase of $5 million in production and sales;
- A permanent increase of $55 million in state and local taxes;
- A reduction in the current rail service delays for farm-to-market transport; and
- Lower transportation costs and less reliance on imported oil.
A copy of the study and individual state-by-state analyses and summaries are available at economicsgroup.com.
Dakota Access LLC, a subsidiary of Energy Transfer, retained Strategic Economics Group to develop independent estimates of the economic and fiscal impacts associated with the project. Strategic Economics Group developed input and 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.
Strategic Economics Group specializes in economic impact studies, fiscal impact estimates, cost-benefit models, management information systems and forensic projections. The authors of the study are Harvey Siegelman, Mike Lipsman and Dan Otto.Tags: Bakken, Dakota Access Pipeline, Energy Transfer, Strategic Economics Group