Anti-energy activists in recent weeks have called on President Biden to shut down the Dakota Access Pipeline (DAPL), despite more than three and a half years of safe operation transporting crude oil from the oilfields of North Dakota to a hub in Southern Illinois.
It is important to keep in mind that shuttering DAPL won’t reduce our nation’s need for crude oil. Rather, it will only increase reliance on the less safe, less efficient, and less environmentally-conscious methods of transport, like truck and train. The consequences of a shutdown would be significant, and the impact would extend far beyond the oil and gas industry.
As Fox Business recently highlighted, halting DAPL operations “will lead to an increase in transportation costs and will show up in lower prices for the commodities of farmers since ‘there’s nobody else to absorb that.’”
Scott Vanderwal, vice president of the American Farm Bureau Federation argued that “transporting oil on trucks or trains instead of through the pipeline, will create ‘tremendous competition’ for commodities, including corn, wheat and soybeans, and will lead to the spike in transportation costs.”
Fox Business reports agricultural economist Elaine Kub said in a legal filing last fall that shutting down the Dakota Access Pipeline would cost Corn Belt farmers more than $1 billion in annual revenue and “drive up food costs for consumers” as oil would command key space on railroad cars needed to transport agricultural products long distances.
Vanderwal also emphasized the significant tax revenue that is generated from the pipeline’s operation and the oil production it supports: “Property taxes in North Dakota, South Dakota, Iowa and Illinois in this particular case, that go to the schools, the hospitals, the emergency services, all those things that have to be paid for through tax money that those things are picking up and if the Dakota Access Pipeline is shut down, they’re going to have to pay for those things some other way.”
Before the Biden Administration makes any decisions on DAPL, it is critical to consider the unintended and long-term impacts of a shutdown.