By Devashree Saha – September 14, 2016
In what looks to be a sequel to the Keystone XL Pipeline dispute, a group of climate activists, Native American groups, and landowners are opposing the construction of yet another oil pipeline. Since the North Dakota Access Pipeline was first announced in 2014, opposition to it has slowly gathered momentum, culminating in high-profile protests last week.
Advocates of the project tout its economic benefits, while its detractors question its environmental and social impacts. While the ultimate fate of the project will be decided in the coming months, let us look at some of the key issues surrounding the project.
WHAT IS THE DAKOTA ACCESS PIPELINE?
The oil potential in North Dakota’s Bakken formation is huge. Oil was first discovered there in the 1950s and the U.S. Geological Survey estimates that the region holds an available 7.4 billion barrels of oil.
The 1,172-mile project is expected to carry nearly half a million barrels of crude oil daily—enough to make 374.3 million gallons of gasoline per day—from the hydrofracked sites in the Bakken formation in northwestern North Dakota through South Dakota and Iowa into Illinois. From Illinois, shippers can access Midwest, East Coast, and Gulf Coast markets. The project is also referred to as the Bakken Oil Pipeline, named for the oil-rich area in North Dakota.
WHY IS IT BEING BUILT?
The advent of modern horizontal drilling and hydraulic fracturing has made North Dakota’s Bakken shale one of the largest oil developments in the United States in recent history. Crude oil extraction of North Dakota’s Bakken shale has increased significantly from 309,000 barrels a day in 2010 to more than 1 million barrels a day in 2014.
Supporters of the project argue the pipeline represents the safest and most efficient way to transport Bakken oil. In the absence of sufficient pipeline infrastructure, North Dakota drillers have had to rely on more expensive railroads to ship the oil. With falling oil prices and thinning profit margins, the pipeline offers a cheaper way to transport crude oil. In addition, the project is expected to create more markets and reduce truck and oil train traffic—the latter of which has been a growing concern after a spate of fiery derailments of a train carrying North Dakota crude.
Finally, Dakota Access LLC, the company behind the pipeline, claims that the project produces significant economic benefits. It is expected to create8,000 to 12,000 construction jobs and up to 40 permanent operating jobs. The project is also expected to generate $156 million in sales and income taxes and $55 million in property taxes annually to the states of North Dakota, South Dakota, Iowa, and Illinois. All these benefits would help offset the total cost of the project, which is estimated at $3.8 billion.
WHY IS THE PIPELINE CONTROVERSIAL?
Comparable in size to the rejected Keystone XL, the Bakken pipeline has generated controversy from the beginning and inspired months of protests.
The protests have been the most intense in Sioux County, North Dakota, home of the Standing Rock Sioux Tribe and a reservation of 8,000 people. The Native American group says the pipeline endangers sacred sites and drinking water resources.
The core of the dispute centers around the issue of tribal sovereignty and claims that the U.S. government approved the project without consulting tribal governance, something they are obligated to do, according to U.S. treaties and the United Nation’s Declaration on the Rights of Indigenous Peoples. Thousands of Native Americans from across the country are protesting the pipeline in solidarity with the Standing Rock Sioux.
The pipeline has also brought together environmentalists and climate activists intent on blocking the construction of new fossil fuel infrastructure. They have raised concerns about the dangers of oil spills. A study by the International Energy Agency found that U.S. pipelines spilled three times as much crude oil as trains from 2004 to 2012. Even though pipeline accidents happen less frequently than train accidents—a fact that some people use to argue that transporting oil by pipeline is safer than rail—they can be larger and more difficult to clean up.
Finally, questions have also surfaced about the estimated economic benefits of the project. Dave Swenson at Iowa State University believes that the job numbers have been overstated. While the project claims to create as many as 4,000 construction jobs in Iowa over a one-year period, Swenson puts the number of jobs created at about half that.
WHAT IS THE CURRENT STATUS OF THE PROJECT?
In late July, the Standing Rock Sioux Tribe filed a lawsuit against the U.S. Army Corps of Engineers for failing to address the tribe’s concerns and violating federal permitting law. The suit alleges that the Corps—the federal agency that approves any interstate pipelines—did not properly consult them before issuing a permit for construction near their reservation.
On September 9, however, a federal judgedenied the tribe’s request to put a freeze on construction. An hour later, the Obama Administration, in an unexpected intervention, ordered the Army Corps to pause construction on the project until it could revisit the controversial portion near the Native American reservation.
In the meantime, the project is in legal limbo. The D.C. Circuit Court is currently hearing the legal challenge to the pipeline and the case could take months to reach a resolution.
WHAT IS NEXT FOR THE PROJECT?
Even though the federal government’s suspension of construction is temporary, the future of the North Dakota Access Pipeline looks uncertain.
Given the significant outcry from several dozen environmental organizations and multiple Native American groups, it remains to be seen if the Obama Administration will choose to cancel the pipeline’s federal permits, as it did with Keystone XL last year.