America’s oil production will remain critically important as our economy recovers from COVID-19 and the OPEC oversupply. One of our country’s most important crude transportation pipelines is the Dakota Access Pipeline (“DAPL”) which has been safely moving approximately half of the Bakken’s light sweet crude oil production since June of 2017.

The pipeline is currently going through the process of securing the appropriate permits and approvals to increase its throughput capacity based on commitments from multiple shippers to increase the amount of crude moving through the line out of North Dakota to major refining markets, further demonstrating the importance of the pipeline.

Some anti-pipeline activists argue that if any of the oil is eventually exported, it diminishes the public need for the proposed capacity increase. To the contrary, exports of crude oil, like exports of many other products ranging from agricultural commodities to manufactured goods, are generally regarded as good for the U.S. economy and beneficial to the U.S. public.

Expanded exports produce a number of economic benefits for multiple sectors of the U.S. economy, including directing investment into new production and new technology and increased tax revenues. Exports also provide revenues to producers and manufacturers, put wages in the pockets of employees of the businesses producing the products for export and of those involved in the exporting chain. This helps to support positive trade balances, all of which improve the nation’s economic and fiscal condition.

The U.S. District Court for the District of Columbia has ordered the Army Corps of Engineers to conduct an Environmental Impact Study along the pipeline’s route.  This summer the Court will decide whether to keep this critical pipeline’s permits in effect and the pipeline operating while the study is completed.

Here are some important facts to consider:

• Bakken crude oil is one of the best crude oil grades for low sulfur content, and is one of the more desirable light sweet crude oils that can be used to meet the International Maritime Organization (“IMO”) 2020 regulations placing limits on the sulfur content in marine fuels. As a result, the new regulations are creating an additional, world-wide market option for Bakken crude oil production.
  
  

• The U.S. Energy Information Administration (“EIA”) forecast projections through 2050 show Bakken production remaining strong.
  
  
• Shippers in North Dakota prefer using DAPL to transport their volumes, based on cost and efficiency and, most importantly, because Dakota Access provides the only direct pipeline transportation from the Bakken production region to the major crude oil terminal and hub at Patoka, Illinois.
  
  
• Regional railroad networks could not support anywhere near the crude oil volumes currently being shipped, as there are simply are not enough specialized tank cars available in the United States or Canada to transport the volume.
  
  
• Use of railroad routes to displace DAPL shipments could increase the risks to people and the environment due to the influx of increased transportation congestion. The main east and west lines from the Bakken region pass near or through multiple rivers, population centers, national parks and historically sensitive areas.
  
  
• Additionally, agricultural shippers in the region are highly dependent on rail availability and affordability because there are few markets in rural areas for low-value, bulk commodities.
  
  
• More U.S. refineries are making use of light sweet crude oil. An October 2019 report by the EIA shows that the portion of crude oil used by Gulf Coast refineries increased from 36% to 70% from 2011 to 2018.
  
  
• The ability of Dakota Access to transport greater volumes of crude oil from the Bakken region will increase the supply availability for refineries, will increase their ability to switch supply sources to take advantage of market conditions and economics, and will support price stability.
  
  
• There is no evidence of increased risk of leaks or spills from operating the pipeline at a higher capacity. The maximum operating pressures (“MOP”) for the pipeline, which has been established in accordance with the formula specified in federal pipeline safety regulations, will not be increased.
  
  

Americans rely on safe, efficient infrastructure—from our roads, bridges and railways, to our electrical grid and energy pipelines. The Dakota Access Pipeline is an important part of the mix, supporting our energy needs and modern way of life.