OPINION - Maybe It Doesn't Look So Bad



In just 6 days the North Dakota Public Service Commission will hold a public meeting to discuss and take input on the expansion of the Dakota Access Pipeline.  Full disclosure, the owner of the pipeline, Energy Transfer, is a client of ours.  But I will also tell you that they were friends before we ever were, and will be long after they don't need us anymore. 

Anyway, the pipeline is not being expanded, it's being equipped to transport oil faster.  It's the same pipeline.  But for whatever reason there needs to be a public hearing.  I'm not here to argue the need for this hearing, and the result will almost certainly be a stamp of approval.  The reason I'm here is that some perspective is needed about this pipeline as all these regulatory gymnastics are taking place.

No amount of money is worth selling your soul for, but we'd be wise to understand a few facts right now, in light of the photos that surfaced after the Keystone pipe ruptured recently, sending almost 400,000 gallons of oil into the ground.  The photos show a sizable black area on the ground and reports were that the pressurized pipeline was actually spraying oil into the air.  Nobody can prove that but it may very well have happened.  The area it occurred in was considered a wetland by the environmental clean up police, but it certainly didn't appear to be a prime fishing resort or anything.  It looked more like a low-lying field area.  And apparently, half the oil has now been recovered. 

Plainly put, it did look bad though.  And the timing couldn't have been worse, with the DAPL hearing set for less than 2 weeks from the rupture.

At times like these, various political factions will attempt to make this look like either Chernobyl or nothing at all.  It's clearly something, and notable.  It WAS after all, 383,000 gallons of oil.  But at times like this some perspective can be handy.

Today on Scott's show, Ryan Rauschenberger, the state tax commissioner offered the following quotes. 

They are stunning.  

"In the last two years we've actually realized...$250 million in additional oil tax revenue because oil producers are now able, because of Dakota Access, to send their oil to a better market where they can get a better price."

"In addition, there's about $90 million a year in property taxes that are paid statewide by pipelines, natural gas pipelines, oil pipelines, refined petroleum pipelines.  And that's mostly going to schools, you know, as the biggest part of your rural property tax bill, is your school and mill levy."

"This next budget cycle - a two year cycle - we (the State of North Dakota) will collect about 9 billion in total taxes.  5 billion of that is the 10% oil tax on just the production of oil.  Five out of the 9 billion. So it's over 50%. But then think about all the sales tax....We'll collect about 2 billion in sales tax. A huge portion of that comes from exploration, about $200,000 per well drilled.  And we drill about 110 wells a month, and that generates a huge portion of our sales tax base and that goes to fund education. Human services. So it's, it's almost unimaginable to think where we'd be if in this last decade we wouldn't have the Bakken....Our state finances would be almost unrecognizable."

Again, no amount of money is worth doing the wrong thing.  But think of all the social programs that this state has.  Cut them in half if you want to keep the oil in the ground.  The same people that hate the oil love the social programs, but it seems you can't have one without the other.  Is the Keystone breach a bad thing?  Yes.  Is it a reasonable and manageable level of collateral damage?  That answer to that is a yes, as well.  A resounding yes.

Oh, and one other thing.  Having an underground pipeline means no emissions from the trucks and trains that aren't now needed to transport the oil.  That's gotta make everybody happy.