The Dakota Access Pipeline (DAPL), a project of Energy Transfer Partners, was completed in 2016 and began operations in June of 2017. The pipeline has been successfully transporting up to 570,000 barrels of crude oil daily from the Bakken and Three Forks oil region of North Dakota to its destination in Patoka, Illinois, where it is distributed to processing facilities and refineries in the Midwest and Gulf Coast region. In 2020 the pipeline will begin an expansion and optimization project that will expand the pipeline’s transport capacity to 1.1 million barrels of oil daily.
The DAPL has been paying millions in property taxes each year to the four host states through which it traverses, which include North and South Dakota, Iowa, and Illinois. Below are the latest reports of revenues received by each of these four host states as a direct result of hosting the DAPL.
The pipeline originates in North Dakota, where it has paid over $12.7 million in property taxes from 2014 to 2018, and is expected to pay some $6,750,000 in property taxes for 2019. These tax dollars have supported local schools, hospitals, emergency services, and other public services serving residents of North Dakota.
During its construction the pipeline generated close to 4,000 construction jobs for local residents between 2015 and in 2018 paid over $11,250,180 in Sales Taxes to North Dakota.
Ad valorem property taxes to the State of North Dakota during that same period totaled $12,718,168. Of this amount, $7,536,64 were in 2018 alone, allocated to local counties as follows:
- Dunn County: $653,673
- Emmons County: $748,831
- McKenzie County: $1,520,539
- Mercer County: $511,720
- Morton County: $1,264,394
- Mountrail County: $658,238
- Williams County: $2,179,289
In addition to a donation of $15 million made to the State of North Dakota to cover protest costs, the pipeline has also made significant contributions to local community agencies and civic organizations in North Dakota. Over the course of 2017-2018 the DAPL contributed a total of $5,280,000 to local North Dakota Community organizations, broken down as follows:
- $5,000,000 to the University of Mary and its Workforce Program
- $140,000 to Emergency Management Agencies serving North Dakota residents
- $35,000 each to the North Dakota chapters of the 4H and FFA Foundations
- $20,000 to the ND State Historical Society Foundation
- $10,000 to the ND Peace Officers Association
- $10,000 to the Dakota Territory Sheriff’s Association
- $10,000 to the Mandan Veterans Memorial Ballpark
- $10,000 to the ND High School Rodeo Association
- $5,000 to the ND Stockmen’s Association
- $5,000 to the Home On The Range Foundation
The pipeline currently provides 25 full-time jobs for local residents in North Dakota.
In South Dakota, the pipeline has paid over $7.9 million in property taxes from 2014 to 2018, and will pay an estimated $7,630,000 in property taxes in 2019. North Dakota’s Tax Commissioner, Ryan Rauschenberger, estimates that North Dakota has seen an increase of approximately $263 million in oil tax revenue as a result of increased production since the DAPL went into operation in June of 2017.
In 2018, the pipeline paid a total of $4,434,940 in South Dakota ad valorem property taxes, broken down by county as follows:
- Beadle County: $473,081
- Campbell County: $459,244
- Edmunds County: $549,372
- Faulk County: $370,700
- Kingsbury County: $338,311
- Lake County: $298,000
- Lincoln County: $431,227
- McCook County: $28,729
- McPherson County: $103,369
- Miner County: $227,788
- Minnehaha County: $477,995
- Spink County: $637,780
- Turner County: $39,344
From 2015 through 2018, the DAPL also paid a total of $10,029,363 in Sales Taxes to South Dakota.
These tax dollars support such services as schools, hospitals, emergency services, and other public sector services.
In addition to generating tax revenue for the state, the pipeline has also supported local agencies and organizations in South Dakota with a total of $345,000 in donations, broken down as follows:
- $260,000 to Emergency Management Agencies
- $65,000 South Dakota FFA Foundation
- $20,000 South Dakota 4H County Extension Offices
Pipeline construction in South Dakota generated some 3,000 – 4,000 construction jobs, providing increased revenues for local communities through payment for goods and services purchased by construction personnel.
The South Dakota segment of the pipeline currently provides 8 full-time jobs for local residents.
The DAPL has paid $18,344,675 in Iowa ad valorem property taxes from 2014 through 2018, including $4,434,940 in 2018 alone, and will pay a projected $25,000,000 in ad valorem property taxes in 2019.
2018 property taxes were paid to Iowa counties as follows:
- Boone County: $1,275,175.73
- Buena Vista County: $1,446,454.29
- Calhoun County: $1,529,662.25
- Cherokee County: $786,713.46
- Jasper County: $2,034,797.05
- Jefferson County: $791,583.46
- Keokuk County: $305,919.28
- Lee County: $1,609,518.96
- Lyon County: $427,572.72
- Mahaska County: $1,785,787.83
- O’Brien County: $417,766.59
- Polk County: $616,339.31
- Sac County: $18,409.63
- Sioux County: $1,438,401.19
- Story County: $1,479,759.42
- Van Buren County: $878,364.69
- Wapello County: $593,932.73
- Webster County: $889,361.99
During construction, the pipeline also paid $16,552,219 in Iowa sales taxes on items purchased by the project.
These tax revenues support hospitals, schools, and emergency services, as well as other critical ongoing services for local residents.
The pipeline has also made generous contributions to benefit local agencies and organizations in Iowa, including a $600,000 grant to Iowa State University to fund agriculture/ construction research, and funds allocated to the Iowa Department of Natural Resources. Additional donations totaling $540,000 were made to the following organizations:
- $360,000 to Emergency Management Agencies
- $90,000 Iowa 4H Foundation
- $90,000 Iowa FFA Foundation
During its construction, the pipeline generated some 3,000 – 4,000 construction jobs in Iowa, also providing additional revenues for local communities through the purchase of local goods and services by construction personnel.
In Iowa, the pipeline currently supports 9 full-time employees and currently has one open position.
The shortest segment of the pipeline traverses Illinois, where the DAPL has been paying millions in property taxes each year. Illinois property taxes paid by the DAPL between 2016 and 2018 totaled $35,604, and the DAPL will pay a projected $500,000 in Illinois property taxes in 2019. Additionally, the Dakota Access Drain Agreement with the State of Illinois generated $11,868 for the state.
From 2015 to 2018, the DAPL paid $7,223,287 in sales taxes to Illinois on goods purchased directly by the project.
These tax dollars support local schools, hospitals, emergency services, and other critical needs of the local community.
The pipeline has also donated $360,000 to local agencies and organizations in Illinois, broken down as follows:
- $240,000 to Emergency Management Agencies
- $60,000 IL 4H Foundation
- $60,000 IL FFA Foundation
In addition to generating some 3,000 – 4,000 construction-related jobs during the construction phase of the project, the DAPL currently provides 15 full-time jobs in Patoka, IL, and Energy Transfer Partners, provides 129 full-time jobs across the state of Illinois.
Capacity Optimization: Outlook for 2020
The Dakota Access Pipeline has been operating safely and efficiently since June of 2017, transporting up to 570,000 barrels of crude oil per day, which represents approximately 50% of the of the Bakken’s total daily output of crude oil, boosting oil production in the Bakken region in North Dakota by improving drilling economics in the region. By reducing the cost of oil transport, the pipeline provides producers with greater stability to face fluctuations in oil prices.
The pipeline is the safest and most efficient means to transport crude oil from the Bakken oil fields to ensure its efficient delivery to refineries and processing facilities in the Gulf Coast and Midwest, as well as other downstream markets.
In 2018, Energy Transfer Partners held an open season to obtain shipper commitments in order to increase the pipeline’s capacity. The company obtained commitments that stress the need to optimize the DAPL to increase its transport capacity to 1.1 million barrels of crude oil daily. The successful outcome of the open season emphasized the continued market demand and need to expand transport capacity out of the Bakken region.
Currently, some 300,000 barrels of oil are shipped from the Bakken via rail. Transporting oil via underground pipelines is far a safer and more efficient means of transportation, when compared to conventional land transport by truck or rail. By optimizing the Dakota Access Pipeline, more oil can be transported underground, further decreasing the cost of oil transport, allowing for increased production, and generating an additional $33 million per year in oil tax revenues to the state of North Dakota.
Optimizing the pipeline to increase its transport capacity will encourage and support further development in the Bakken, meaning increased economic growth in North Dakota, as well as providing greater stability in oil prices for both the industry and consumers. Optimizing the pipeline’s capacity will also enable further development in the Bakken, generating more jobs and economic benefits for local communities.
Details of Optimization
The DAPL may be easily optimized to accommodate increased volumes by increasing horsepower along the existing pipeline. This increase in horsepower will be generated by the addition of new pumps at new and existing pump stations along the pipeline route, requiring no mainline pipe construction or additional pipe, and will not alter the pipeline’s maximum operating pressure.
Energy Transfer Partners has purchased property for three new pump stations in North Dakota, South Dakota, and Illinois. To protect the environment and mitigate sound, each new pump station will be isolated within enclosed structures. Each new pump station will cost approximate $30 – $40 million to complete.
The installation of new pump stations in North Dakota, South Dakota and Illinois will generate increased revenue in sales taxes, as well as millions in property taxes that host counties may use to support schools, hospitals, emergency services, and ongoing public services.