Dakota Access Pipeline study outlines economic impacts

By Emily Aasand | November 19, 2014

The Strategic Economics Group released a study of the economic and fiscal impacts of the proposed Dakota Access Pipeline that would carry crude oil from the Bakken to Patoka, Illinois. The study found the pipeline would have significant impact on the four states it will cross—North Dakota, South Dakota, Iowa and Illinois.

The Dakota Access Pipeline spans more than 1,000 miles and is estimated to cost roughly $3.8 billion. The pipeline will have a capacity of more than 450,000 barrels per day of crude and will move the oil to domestic refineries at a lower cost than other alternatives such as rail.

According to the study, during the two-year construction stage of the pipeline, the four-state region will experience an increase of 33,000 temporary full-time jobs, an increase of $1.9 billion in income, nearly $5 billion increase in production and sales, and a $156 million increase in state and local taxes.

The study also found that once the pipeline is in full operation, the region will annually experience an increase of 160 permanent full-time jobs, a permanent increase of $11 million in income, a permanent increase of $5 million in production and sales, a permanent increase of $55 million in state and local taxes, and a reduction in rail service delays for farm-to-market transport.

The cost to build the 346-mile North Dakota portion of the Dakota Access Pipeline is expected to be $1.4 billion, with 47 percent resulting in direct purchases within North Dakota, the study found.

“The total impact on spending in North Dakota during the construction stage is expected to add nearly 7,700 job-years (work done by one person for one year) of employment, generate more than $450 million in labor income and add about $1.05 billion to the production and sales within the state,” said the study.

Other economic impacts the Dakota Access Pipeline will have on North Dakota’s economy include state and local governments seeing annual sales, use, gross receipts, and lodging tax increases of about $158,000 and income tax increases of about $84,000. During the first full year of operation, the pipeline is expected to generate about $13.1 million in new property taxes for local governments, according to the study.