By Elizabeth A. Stanton, PhD
Cross-posted at the author's blog, lizstantonconsulting.com.
Thanks to abundant coverage by social media, the nation watched this week as activists protesting the construction of a pipeline to transport oil through the Dakotas, Iowa and Illinois put their own safety at risk to protect a Native American cultural site. A Pinkterton-esque goon squad used pepper spray and attack dogs to clear the site for unscheduled excavation, resulting in injuries, hospitalizations, and an outraged public.
Energy Transfer Crude Oil Company—the developer of the Dakota Access or Bakken Oil Pipeline—asserts a public need for the 1,172-mile pipeline and promises jobs, tax revenues, and a boost to the economies of the affected states. Advocates arguing against this pipeline's construction have found these claims to be unfounded. Energy Transfer bases its statement that the Dakota Access Pipeline is necessary on the business opportunity to get more Bakken oil to market sooner, and not on any public need that would be served by a greater flow of oil from the Dakotas to Illinois. The company's claim that farmers need the pipeline to open up space to ship grain on trains that currently transport oil was soundly debunked by expert witnesses and even by Iowa's Utility Board in issuing its approval of the project. There is no reason to believe either that Midwest grain shipments will be curtailed in the future or that building the pipeline would reduce any rail shipping constraints should they arise.
And while the private benefits of building the Dakota Access Pipeline are clear, any benefit to the public is harder to discern. Energy Transfer's case for a public benefit in new jobs and tax revenue is difficult to credit after reading local economists' critiques of the company's underlying analysis. After studying Energy Transfer's cost-benefit analysis of Dakota Access as well as post hoc assessments of recent, similar projects, Dave Swenson of Iowa State University found that the company had presented inflated jobs and economic benefit projections. More generally, Swenson found that pipeline projects are large but "labor-stingy" and most of their economic stimulus leaks out of the region in which they are built.
Energy Transfer's assessment also fails to look at the cost to local environments and human communities. The planned route for the Dakota Access Pipeline was re-located away from the more densely populated Bismarck area because of health and safety concerns while dangers to the rural communities impacted by its new route have been ignored. Toxic water pollution and the permanent loss of cultural heritage sites have important effects on public well-being. Any complete accounting of the costs and benefits of pipeline construction must be broad enough to include these external, or non-market, costs.
I'd like to be able to say that the time has passed when a narrow pecuniary interest in resource extraction trumps the public good, but the permits issued by state agencies and the U.S. Army Corps of Engineers would prove me wrong. The Standing Rock Sioux protesters and their allies seem to be not only on the right side of history but also on the right side of prudent decision making for the public good. The Dakota Access Pipeline has not been shown to be necessary, and Energy Transfer has failed to offer a transparent accounting of all project costs and benefits, both monetary and non-monetary. A full halt on construction is essential while legal remedies are taken and an impartial, comprehensive assessment of impacts is made.
Elizabeth A. Stanton, PhD, is an independent consultant with more than 15 years of professional experience as an environmental economist, and has authored more than 80 reports, policy studies, white papers, journal articles, and book chapters on topics related to energy, the economy, and the environment.
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