The Dakota Access Pipeline and Keystone XL Pipeline: The Subject of an Executive Order

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1 The Dakota Access Pipeline and Keystone XL Pipeline: The Subject of an Executive Order Business Communications Faculty Sponsor: Cindi Bearden Abstract: On January 24, 2017, President Trump signed an executive order reinstating the construction of the Dakota Access Pipeline and Keystone XL Pipeline. Both pipelines run through the heart of the United States and are crucial pieces of infrastructure for pumping oil across the country. The pipelines could provide a boost to the economy by bringing tax revenue and local spending to the region. The work force would strengthen as thousands of jobs will be created. Dependence on hostile foreign nations for energy would decline. However, the pipelines pose a threat to the environment and those who live near them. Water and soil contamination could lead to poisoned drinking sources and infertile lands. Oil spills could also leave the land unsalvageable for future use. These concerns have sparked protests and debates surrounding the environmental effect of the pipelines. The Dakota Access Pipeline and Keystone XL Pipeline: The Subject of an Executive Order The United States is the world s single largest consumer of oil per year. Based on studies completed by the U.S. Energy Information Administration, it is estimated that the United States used over seven billion barrels of petroleum oil in 2015 (U.S. Energy Information Administration, 2016). To cope with the high demands for oil, the U.S. has turned to finding other oil sources. Part of these solutions come from within the country s borders. The Dakota 1

2 Access Pipeline and Keystone XL Pipeline provide access to oil deposits across North America. After a halt in the construction of these pipelines, an executive order was signed to re-start the projects. The Executive Order On January 24, 2017, President Donald Trump signed an executive order regarding the construction of both the Dakota Access Pipeline and the Keystone XL Pipeline. The executive order was written so that work on the projects would resume (Exec. Order No , 2017). President Trump believes the pipelines will provide benefits to the economy and energy independence of the U.S. Before the order was signed, the pipelines were already a contentious topic of discussion throughout the country. The signing of the order led to major protests across the nation, including at the sites of the two pipelines. The Dakota Access Pipeline The Dakota Access Pipeline (DAPL) is a $3.8 billion-dollar project that stretches 1,172 miles long, starting at the Bakken and Three Forks shale formation in North Dakota and ending near Patoka, Illinois. Throughout the route, the pipeline passes through four states, including South Dakota and Iowa. The thirty-inch pipe will push an estimated 500,000 barrels of crude oil daily to refineries in Illinois. (Dakota Access Pipeline Will Keep, 2016). The DAPL does not cross lands belonging to the Standing Rock Sioux. The image below shows that the pipeline makes a pass approximately seventy miles north of the Sioux reservation. The pipeline is built upon land that is both privately and federally owned. In fact, 99.98% of the land used is privately owned, leaving the other.02% ownership of the land to the federal government (Dakota Access Pipeline Will, 2016). The privately-owned land was acquired using the power of eminent domain. The owners were compensated by the United States government. 2

3 The pipeline runs through major landmarks, including Lake Oahe. The pipeline is expected to rest, at a minimum, 95 feet below the lake (Dakota Access Pipeline is the Best, 2016). Figure 1. Map of the DAPL passing by the Standing Rock Reservation (Dakota Access Pipeline is the Best, 2016) The company responsible for the construction of the DAPL is the Energy Transfer Partners (ETP). ETP was founded in 1995 as a Texas-based company and is now one of the largest and most diversified investment grade master limited partnerships in the United States (Energy Transfer Partners, 2016). ETP has constructed nine other pipelines within the U.S. that it currently operates. Since 2005, the company s pipelines have spilled over 18,000 barrels of crude oil throughout the country. Along with this, a subsidiary company of ETP called Sunoco Logic has faced issues with hazardous materials leaks. Matt Belanger of Channel 5 Eyewitness News ABC 3

4 in Minnesota, wrote, Federal records show no company has had more hazardous materials leak in the past decade than Sunoco Logistic. There have been 274 incidents (Belanger, 2016). These incidents raise concerns about the company and its current project, even though ETP is considered the most experienced company in the nation and has one of the best safety records in the industry. The Keystone XL Pipeline The other pipeline subject to the executive order signed by President Trump is the Keystone XL Pipeline. The Keystone XL Pipeline (KXL) is a proposed pipeline that stretches 1,179 miles from the Canadian province of Alberta to Steele City, Nebraska (Keystone XL Pipeline Why, 2017). Once the pipeline reaches Nebraska, the 36-inch pipes will connect with an existing pipeline, also known as the Keystone Pipeline System (KPS). The completed pipeline will carry oil to Port Arthur, Texas. Below is a map that depicts the current KPS and proposed KXL pipelines route through the U.S. The pipeline will pass through the United States on private property obtained through eminent domain. The privately owned KXL can potentially carry 830,000 barrels a day from the oil sands in Alberta through the U.S. (Keystone XL Pipeline Why, 2017). This state of the art infrastructure will create a shorter, more direct path to Nebraska than that of the current KPS. 4

5 Figure 2. Map of the current KPS and the future KXL pipeline path (Keystone XL Pipeline Why, 2017) TransCanada Corporation will construct the Keystone XL Pipeline. The Canadian company has been operating for over 65 years (TransCanada, 2017). TransCanada constructed and currently operates pipelines across North America, including assets in Canada, The United States, and Mexico. The president and CEO of the company, Russ Girling, expressed his excitement for the project in a personal statement. We're very pleased to have the opportunity to resubmit (the KXL) application. I've always believed this is a very important project for both of our nations, from a security standpoint, from an energy independence standpoint, and from a safety standpoint (Girling, 2017). Although there is optimism surrounding the project, there are many who oppose the pipeline. TransCanada has a less than spotless history of oil spills from its pipelines (Swift, 2012). Within the first year of operations in 2010, the KPS experienced 14 separate leaks, the largest over 21,000 gallons of crude oil. These spills came after a forecast from the company that 5

6 the system would leak no more than 1.4 times a decade (Swift, 2012). Unfortunately for TransCanada, these would not be the only leaks experienced. This led people to question the safety of the construction of the new KXL pipeline. Potential Benefits of Pipelines Both the DAPL and KXL could yield multiple positive results for the United States. To begin, the construction of both pipelines would create thousands of jobs for Americans. The DAPL has already created around 12,000 jobs (Dakota Access Pipeline Will, 2016) while the KXL pipeline could provide up to 9,000 local jobs (Wald, 2017). These figures do not include the spin off jobs that would be required in the oil refineries and for maintenance of the lines. The projects are also expected to add millions of dollars to the local and national economy. In an article published in The Hill, Bradley Blakeman wrote, The economic benefit to the construction of the [DAPL] pipeline with the state and local economies is an estimated $129 million annually to property and income taxes (Blakeman, 2016). He continues by saying that once the projects are complete, local governments could see roughly $50 million in property taxes and $74 million annually in sales taxes in Illinois, Iowa, and North and South Dakota. Once the income from restaurants, hotels, and other attractions are factored in, the local economy could see a major boost. Perhaps the most important benefit from the pipelines is the increase in U.S. energy independence. By tapping into local fuel sources, the need for foreign oil would decrease considerably. While there seems to be encouraging benefits, there are also possible negative outcomes associated with both projects. Potential Threats of Pipelines When drilling and transporting oil, there is always the possibility of harming the environment. A major consideration surrounding the handling of oil is the effect a spill could have on local water sources. If a spill or explosion occurred, drinking water for both humans and animals could be contaminated. The protests surrounding the Standing Rock Reservation seem to 6

7 focus on a local water source in the area. Protesters rallied to stop the construction of the pipelines for fear of what may happen to their source of water. In an article published by National Geographic, Tera Houska, an Anishinabe native, said, We know how it feels to have extractive industry projects threatening our communities and our drinking water and our children s future (Houska, 2017). She recognizes the potential issues that could arise when dealing with oil. Unfortunately, this is not the only negative affect that could occur. Climate change leads to many problems for the environment. When methane gas is released into the atmosphere due to the transportation of oil, it is more harmful than carbon dioxide. This could cause global warming. Safest Method of Transportation There is debate about the safest way to move oil across the U.S. Some say that transporting oil via pipelines is safer than trains or other vehicles. In studies conducted by Fraser Institute, evidence points to pipelines being safer than trains, trucks and other shipping methods. In every year from 2003 to 2013, pipelines experienced fewer occurrences per million barrels of oil equivalent transported than did rail. Overall in this period, rail experienced occurrences per million barrels of oil equivalent transported compared to for pipelines (Green, 2016). This means that when using railroads, there is a 4.5 times higher chance that a problem will occur. The same study also showed that between the years 2003 and 2013, only 1% of oil spills from pipelines had a harmful effect on the environment. This means that 99% of all spills within the decade had no harmful effect. Another method of moving oil is by using large trucks. This method, while effective for moving small amounts of oil, leads to gas emissions, corrosion of roads, and seepage of vehicle fluids into the earth (Green, 2016). After evaluating the studies, the safest way to transport oil is through underground pipes. Conclusion The United States consumes a high level of oil for personal, business and governmental purposes. This high demand requires a large source of crude oil being brought into the U.S. A 7

8 way in which the nation can combat high gas prices and dependence on hostile foreign resources is by tapping into the resources in North America. The construction of the Dakota Access Pipeline and Keystone XL Pipeline will create thousands of jobs and boost local economies. Using the pipelines is also a safer and more reliable source of transportation than trains or trucks. While the pipelines provide benefits to the U.S., environmental issues surrounding the pipelines are a concern. Global warming and water contamination could damage the surrounding communities and the environment. References Belanger, M. "Records Show History Of Safety Violations For Dakota Access Pipeline Company". KSTP. N.p., Web. 8 Mar Blakeman, C.B. (2016, September 09). Why we must build the Dakota Access pipeline now. Retrieved March 08, 2017, from -environment/ why-we-must-build-the-dakota-access-pipeline-now The Dakota Access Pipeline Will Keep. (2016). Retrieved March 08, 2017, from The Dakota Access Pipeline is the Best. (2016). Retrieved March 08, 2017, from Energy Transfer Partners. (2016). Retrieved March 08, 2017, from Exec. Order No , 3 C.F.R. 1 (2017). Girling, R. (2017). KXL Pipeline Project. Retrieved March 08, 2017, from Green, K. (2016, March 02). Retrieved March 08, 2017, from -and-gas Houska, T. (2017, March 07). Retrieved March 08, 2017, from -access -pipeline-advancement/ 8

9 Keystone XL Pipeline: Why is it so disputed? (2017, January 24). Retrieved March 08, 2017, from Swift, A. (2016, December 15). TransCanada's record presents a strong case for rejecting Keystone XL tar sands pipeline (again). Retrieved March 08, 2017, from -rejecting-keystone-xl-tar-sands TransCanada. (2017). Retrieved March 08, 2017, from U.S. Energy Information Administration - EIA - Independent Statistics and Analysis. (2016, March 17). Retrieved March 08, 2017, from Wald, E. R. (2017, January 27). Here Are The Jobs The Keystone XL Pipeline Would Create Under Trump's Executive Order. Retrieved March 08, 2017, from -pipeline-would-create-under-trumps-executive-order/#807f533773df 9