The 1,172-mile Dakota Access pipeline will receive a permit from the U.S. Army Corps of Engineers to allow construction of the $3.7 billion project’s final eight miles of pipe to be completed, according to both, North Dakota U.S. Senators, Heidi Heitkamp (D) and John Hoeven (R).
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Hoeven said Acting Secretary of the Army Robert Speer had told him and Vice President Mike Pence of the move.
“This will enable the company to complete the project, which can and will be built with the necessary safety features to protect the Standing Rock Sioux Tribe and others downstream,” Hoeven said in a statement.
The announcement was met with derision and a vow to fight by the many groups protesting its construction. While the pipeline does not go through any part of the Standing Rock Sioux reservation, it is located next to the tribe’s water supply and many tribal and environmental groups have said they will oppose the pipeline’s construction under any circumstance.
The objections of the Standing Rock Sioux also involve sacred lands that elders say are near part of the planned route and such arguments are certainly valid, but the argument of the Sierra Club and other environmental groups who oppose the pipeline is a bit more suspect.
Are Trains Better Than Pipes?
We wrote way back in 2014 that grain and other agricultural shipments are more perishable than oil, yet they are largely taking a back seat to it as shipments of oil have overwhelmed an aging railroad infrastructure in that part of the country. Oil companies are paying whatever demurrage fees are necessary to transport lean-extracted oil to market. North Dakota has a 2.8% unemployment rate, the lowest in the nation, yet farmers who have long been the mainstays of the state’s economy are finding themselves at least third in line — behind oil and metals — when it comes to rail transportation priorities.
So, to make a long story short, the oil IS getting out of Canada and North Dakota’s tar sands… and it always will. The environmental groups can no more claim that stopping Dakota Access is “keeping it in the ground” as they can claim that railroad demurrage charges aren’t boosting the bottom line of railroad owners. Berkshire Hathaway, for instance, owns the Burlington North Santa Fe railroad and it could just be a coincidence that BH primary shareholder Warren Buffett is a Dakota Access opponent… sure it could.
Pipelines are far more safe for transportation of a volatile yet valuable commodity like crude oil than trains and tanker trucks. 16 Cars on a 96-car train derailed in Oregon near the Columbia River Gorge in Oregon last June. Four cars caught on fire and the same amount of leaked 42,000 gallons of the Bakken crude from North Dakota onto the ground. While any pipeline can and does rupture, the risk of fire is far less without a moving train.
Markets Find a Way
A valuable commodity like Bakken crude simply will find a way to get to port, refinery or international market whether there is a pipeline or not. The only environmental decision is do you want a fire combined with the risk of derailment? President Trump wisely said no. So did a federal judge when the Standing Rock Sioux initially challenged the pipeline in court. The Army Corps had actually approved an easement to finish the final eight miles of the pipeline back in June… one that was rescinded when President Obama got involved. Now, the easement is, apparently, back on.
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If the project really is days from approval its likely weeks from completion. That’s great news for commodities such as grain and metals trying to get out of North Dakota on trains.