North Dakota's Pipeline Payoff
The Dakota Access Pipeline marks six months of operations on New Year’s Day, and new data show that North Dakota is already enjoying major benefits from the $3.8 billion project.
The pipeline has significantly lowered energy transportation costs and energy companies to move their oil to the Gulf Coast, where it fetches a higher price. So it’s little surprise that energy production has surged since the Dakota Access Pipeline opened.
Between September and October alone, oil production grew by 78,000 barrels a day, the biggest month-over-month increase North Dakota has ever seen. The state peaked at around 1.185 million barrels a day that month—135,000 barrels more than it produced daily before the pipeline was operational. Compared with January 2017, North Dakota has an additional 15 drilling rigs currently in operation.
Increased oil production has resulted in job growth. North Dakota’s unemployment rate was 2.3% in November, and more than 850 existing wells need fracking crews. State revenue rose by about $43.5 million in the first five months the pipeline was operational. And solely because of the Dakota Access Pipeline, the state is on track for $210 million to $250 million in additional tax revenue by the end of this biennial budget period. “That’s exceeded expectations,” says Tax Commissioner Ryan Rauschenberger.
The Dakota Access Pipeline has also reduced oil-train traffic within the state. The last time oil production was this high, North Dakota saw as many as 12 trains, or 1,200 cars, pass through daily. Today, only two trains do. That’s a victory for the environment and public safety, given that oil-spill accidents occur with much greater frequency on railways than in pipelines.
A year ago, North Dakotans were coping with thousands who flocked to Standing Rock to protest the pipeline, creating a nuisance and costing taxpayers millions for law enforcement and cleanup. The new statistics on the Dakota Access Pipeline’s benefits are recompense for dealing with those unruly out-of-towners.
This article appeared in the Dec. 30 print edition of The Wall Street Journal. Click here to read it on the publication's website.