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The Pros And Cons Of The Dakota Access Pipeline

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This is a briefing on the current situation involving the Dakota Access Pipeline controversy. The pipeline, spanning over 1,100 miles through North Dakota, Iowa, and parts of Illinois, is currently in the final phases of construction. The Dakota Access Pipeline, or DAPL, is estimated to cost $3.8 billion and will result in a functioning pipeline capable of carrying 450,000 barrels of crude oil per day. While there are strong arguments for the economic benefit to the region, there exists an opposition based on the value of the land being used. In addition, there is similar concern among groups whose nearby land could be affected by the construction of the pipeline. Among the most vocal of oppositions lies the Standing Rock Sioux reservation …show more content…

Nearly all $3.8 billion was to be spent in the four state region of Iowa, North Dakota, South Dakota, and Illinois. North Dakota received 37%, Iowa 27%, South Dakota 22% and Illinois 14%. The initial spending would provide an influx of capital into the local economies. Additionally, due to direct, indirect, and induced spending the project is expected to bring nearly $5 billion in production. As a result of the influx in capital and spending, there is an expectation of a large short term employment increase resulting in increased short term spending. In the long run, the expectation is that there will be a significant portion of jobs brought to the area which will also provide additional spending. Table 1 shows the breakdown of the direct, indirect, and induced labor income in each state. The total expected labor income, or wages earned through new jobs, totals $1.9 billion. The increased employment is expected to bring an additional 32,000 job years (or sum of years employed) to the region. Table 2 shows the output, labor income, and job-years in the region. The argument for economic benefits in the region is rooted in the capital infusion and employment opportunities in the region. According to CNBC, the region, and particularly North Dakota is extremely dependent on oil production. During a strong oil market in 2014 ND GDP grew 6.2% while US GDP grew only 2.2% (Pofeldt 2015). The …show more content…

According to Energy Transfer, there will be nearly $5 billion in production and sales which will provide a boost to the national economy. Additionally, each state will see an increase in production and sales between $3.1 and $8.92 million. Although the production and sales are broken down by state, the increase fits into the greater national economy. Once the pipeline is in use there will be additional incomes related to jobs created. North Dakota expects 66 full-time jobs resulting in about $4.42 million in labor income. The remaining states expect a total of 76 full-time jobs and $5.10 million in additional labor income (“Study” 2014). The additional infusion in the economy during the continued use in the region has a significant long term benefit to the economy. As a result, the states expect to bring in about $156 million in additional tax revenue associated with the pipeline, income taxes related to oil jobs, and additional income taxes associated with economic growth in the states (“Study” 2014). States will earn long term income through the continued use of the DAPL for years to come. While the four state region will benefit the most, there is also a national economic benefit associated with the oil production. It is estimated that $9.6 billion in output is expected from

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