DAPL: The Cost of Nearsightedness

DAPL protesters gather near the White House September 13, 2016. [Image by Jacquelyn Martin/AP Images]

Thousands have lived without love, not one without water. -- W. H. Auden

One of the key signs of a healthy economy is the labor force. Federal and state decision makers frequently reference their plans to increase employment and expand the job market for working-class Americans. While such political rhetoric holds promises of progress and expansion, this short-term agenda often overlooks important long-term implications and tradeoffs that accompany rapid growth. The energy sector perhaps best illustrates the dichotomy that still exists between immediate growth and longstanding stability in the nation’s economy. In June 2014 the Texas-based company, Energy Transfer Partners (ETP), announced the approval of a “1,100 mile crude oil pipeline to transport crude supply from… North Dakota to Patoka, Illinois” (1). According to the energy company, the Bakken Pipeline, also known as the Dakota Access Pipeline (DAPL), will deliver 320,000 barrels of crude oil per day through a 30-inch diameter pipeline. The U.S. Army Corps of Engineers granted the $3.8 billion project a Nationwide Permit 12, which is typically used for small-scale infrastructure projects. 

Since ETP’s controversial announcement, a bitter battle has ensued resulting in lawsuits and vehement protests. Not only does the Bakken Pipeline undermine progress on climate mitigation by prolonging America’s unsustainable reliance on fossil fuels, but it also poses significant public health and environmental threats to Native American communities around the proposed construction site, which spans four states. The Standing Rock Sioux Tribe, a federally recognized American Indian tribe, is one such community profoundly impacted by DAPL. Not only will the pipeline cross through sacred lands and burial sites, but it will also pass under the Missouri River that provides the Sioux Tribe with drinking water and irrigation. Any leakage from the pipeline would directly threaten safe drinking water for the communities who have relied on the Missouri river for generations. While supporters of DAPL tout the project’s potential to boost economic development and spur job growth in the short-term, the social, environmental, and public health impacts of the pipeline present significant long-term costs that must be reevaluated.

One of the core arguments as to the benefits of the Bakken pipeline relies on the assumption that the project would create thousands of jobs and provide tax revenues for the states involved. According to a private study conducted on behalf of Energy Transfers, the pipeline project will bring nearly $2 billion in tax revenue and thousands of jobs to the four states along the pipeline’s route. Specifically, the study, prepared by Strategic Economics Group, claims that the pipeline will “create the equivalent of 33,000 jobs for one year, with an annual compensation exceeding $57,000.” Additionally, the study claims that the region will see an increase in income, production and sales with the creation of 160 permanent full time jobs (2). While these economic benefits sound enticing, the actual gains are not nearly as generous as Energy Transfer projects.

Dave Swenson, an economics research specialist at Iowa State University who examined Energy Transfer’s cost-benefit analysis of DAPL, concludes that the company presents inflated jobs and economic benefit projections. Based on his analysis of post hoc assessments of many similar projects, Swenson finds that “pipeline projects are large, but labor-stingy” (3) and that most of their economic stimulus tend to leave the region in which they are built, contrary to Energy Transfer’s assertion that “the pipeline will continue to generate considerable ongoing tax revenues in each of the four states” (2). In examining recent pipeline deployments, Swenson finds that while the construction of large projects creates bursts of economic activity, they are typically short-lived. One recent deployment includes the controversial Keystone XL pipeline, which originally estimated “$9.605 billion in output and 118,935 person-years of employment,” according to a private study. On the contrary, Swenson found that the job estimates by the U.S. State Department were nearly two-thirds lower than the first Keystone XL study, prepared by the Perryman Group.

These large discrepancies underscore the “magnitude of impact variability” that exists in such large-scale projects, particularly when comparing private studies to publically conducted analysis (4). Based on his research and the investigation of previous pipeline deployments, Swenson concludes that the construction of DAPL will yield the state of Iowa annual economic impacts that “will likely be half if not less than those reported by the consulting firm” (4). The underwhelming economic benefits from the pipeline project represent just one side of the disconcerting reality for communities in the affected states. Large pipeline deployments also have significant risks associated with leakage and spillage that must not be downplayed.  

"It’s not a question if a pipeline will malfunction, but rather a question of when," says Sierra Club’s executive director Michael Brune (5). The International Energy Agency finds that pipelines spill a much greater quantity of oil—three times as much as trains between 2004 and 2012 (6). More importantly is DAPL’s proposed route, which passes through active farmland, forests, and across major rivers: The Big Sioux, the Missouri, and the Mississippi. Once again, the Keystone XL pipeline offers important lessons regarding the risks of spillage and leakage associated with large-scale deployments. According to Richard Kuprewicz, president of Accufacts, Inc., a consulting firm that provides expertise on pipelines to government agencies and industry, “the proposed routing in South Dakota places the [Keystone XL] pipeline at undue risk of rupture with massive release of oil” (7). In fact, under Worst-Case Release Scenarios, Kuprewicz finds the cost of a major pipeline rupture can range from “US$1 billion to amounts in excess of $2 billion for a very high consequence event” (7). Scientific understanding of how dilbit, refined Canadian tar sand oil, interacts with water has developed considerably since the Keystone controversy began. In 2010, a rupture in another large-scale deployment, the Enbridge pipeline in Marshall, MI, resulted in a catastrophic 20,000-barrel dilbit spill. The spill involved a large discharge into the Kalamazoo River, which led to extensive review by the US EPA and concerns regarding the additional impacts of tar sands crude spills on waterways (7).

The Dakota Access pipeline currently poses similar threats to federal waterways. Accufacts performed another detailed pipeline technical review of the Environmental Assessment (EA) for the DAPL proposal, including the U.S. Army Corps of Engineers’ mitigated finding of no significant impact. Kuprewicz and his team found the EA seriously deficient and concluded that “the analysis is incomplete such that potential risks and impacts to the federal areas and waters have not been adequately presented nor evaluated” (8). Compromised waterways not only undermine water quality for communities in the present day, but also threaten water security and safety for future water users.

In addition to the potential costs associated with maintenance, spillage, and remediation, the DAPL project has violated the rights of native communities residing around the construction sites, as well as several federal statutes regarding clean water and environmental protection. The nature of the approval and permitting process by the Army Corps of Engineers has been highly criticized, shedding light upon social justice offenses that infringe upon rights of the Sioux Tribe. Among the federal statutes violated include: the National Historic Preservation Act (NHPA), Clean Water Act (CWA), and the National Environmental Protection Act (NEPA). The official lawsuit against the Army Corps was filed by Earth Justice, a nonprofit organization based in Washington D.C. Earth Justice asserts, “the construction and operation of the pipeline… threatens the Tribe’s environmental and economic well-being, and would damage and destroy sites of great historic, religious, and cultural significance to the Tribe“ (9). The latter assertion relates directly to the NHPA, which is intended to protect sites of historic and cultural significance to Tribes like Standing Rock.

As previously established, the current proposed route of DAPL crosses important waterways, such as the Missouri River and Lake Oahe, locate half a mile upstream of the Tribe’s reservation boundary. The Sioux Tribe relies on the waters of Lake Oahe for drinking water, irrigation, fishing, and recreation, and to carry out cultural and religious practices. The public water supply for the Tribe, which provides drinking water for thousands of people, is located a few miles downstream of the proposed pipeline-crossing route, and so any risks of spillage or leakage would be detrimental for the community. Furthermore, in the lawsuit against the Army Corps of Engineers, Earth Justice emphasizes that no activity authorized by the Corps’ permit may “impair tribal rights including reserved water rights…the Reservation necessarily includes the protection of adequate water quality” (9).

The deployment of large-scale pipeline projects, such as Keystone XL and Dakota Access, involve substantial private and public implications that require thorough assessment prior to the construction of such projects. Although the short-term economic benefits seem to offer prosperity and progress to working class Americans in the respective states, a closer analysis of the Dakota Access pipeline project reveals critical environmental, economic, and public health costs that ultimately outweigh the temporary gains associated with construction of the pipeline. The value of culturally sensitive lands and recreational use of waterways also plays an important, yet underrepresented, role in the analysis of economic and social tradeoffs. The Dakota Access pipeline inherently entails questions about the ethics if economic growth and the moral limitations of development, questions society will continue to grapple with in the coming decades of increased resource scarcity.

References

1.    Ratliff, Brent. “Energy Transfer Announces Crude Oil Pipeline Project Connecting Bakken Supplies to Patoka, Illinois and to Gulf Coast Markets,” Energy Transfer. Web. 25 June 2014. https://ir.energytransfer.com/phoenix.zhtml?c=106094&p=irol-newsArticle&ID=1942689    

2.    Granado, Vicki. "Study Finds Dakota Access Pipeline Will Have Substantial Economic Impact Across A Four-State Region," Strategic Economic Group. Web. 13 Nov. 2014. https://www.daplpipelinefacts.com/docs-dapl/DAPL_Economic_Study_Release.pdf

3.    Stanton, Elizabeth. “Dakota Access Pipeline: The Wrong Side of a Long, Long History of Resource Extractio,” Naked Capitalism. Web. 14 Sep. 2016. https://www.nakedcapitalism.com/2016/09/dakota-access-pipeline-the-wrong-side-of-a-long-long-history-of-resource-extraction.html

4.    Swenson, David. “Multi-Year Capital Development Projects: Recent Insights From Oil Pipeline Impact Evaluations,” Iowa State University. Web. June 2016. https://www2.econ.iastate.edu/prosci/swenson/Publications/Pipeline%20Projects%20Evaluations.pdf

5.    Sammon, Alexander, “The Government Just Quietly Approved This Enormous Pipeline,” Mother Jones. 12 Aug. 2016. https://www.motherjones.com/environment/2016/08/new-american-mega-pipeline-youve-never-heard-dakota-access-bakken  

6.    “Rail vs. pipelines: how to move oil,” International Energy Agency. Web. 2 May 2014. https://www.iea.org/ieaenergy/issue6/rail-vs-pipelines-how-to-move-oil.html

7.    Goodman, Ian and Brigid Rowman. “Changes to the Economic Costs and Benefits of the Keystone XL Pipeline for South Dakota,” The Goodman Group. Web 24 April 2015. https://www.thegoodman.com/pdf/TGG20150424_RST_KXLSD.pdf

8.    Kuprewicz, Richard. “Accufacts Review of the U.S. Army Corps of Engineers (USACE) Environmental Assessment (EA) for the Dakota Access Pipeline (“DAPL”),” Accufacts Inc.  Web. 28 Oct. 2016 https://earthjustice.org/sites/default/files/files/10-28-16-Final-Accufacts-Report.pdf

9.    Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers. Case 1:16-cv-01534. Earth Justice. 27 July 2016. https://earthjustice.org/sites/default/files/files/3154%201%20Complaint.pdf