$3.7B Dakota Access Pipeline to Create Thousands of Local Construction Jobs

The Dakota Access Pipeline is a multi-billion dollar investment that will create thousands of local jobs during construction.

📅   Fri August 26, 2016 - Midwest Edition #18
Cindy Riley - CEG Correspondent

Dakota Access Pipeline LLC photo.
Construction on the six tank terminal sites in North Dakota began in early 2016 and include the tanks, pumps and meter stations.
Dakota Access Pipeline LLC photo. Construction on the six tank terminal sites in North Dakota began in early 2016 and include the tanks, pumps and meter stations.

Across a spattering of states, crews are working on a more than 1,170-mi. (1,882 km) 30-in. (76.2 cm) diameter pipeline that, when complete, will transport crude oil from the North Dakota Bakken region through South Dakota and Iowa into Illinois. The Dakota Access Pipeline is a $3.7 billion investment that will create thousands of local jobs during construction.

“We're pleased with the progress of construction in each of the four states,” said Lisa Dillinger, Dakota Access Pipeline spokesperson. “The Dakota Access pipeline is a vital energy infrastructure project that will provide the safest means of transporting light sweet crude oil to multiple markets across the U.S.

“It will generate an estimated $156 million in state sales and income taxes during construction and employ up to 4,000 construction personnel in each state,” said Dillinger. “It will benefit communities along the route through annual property tax payments to traversed counties, landowner easement payments, and increased business via the use of local goods and services.”

Work continues on Dakota Access along the route in each state.

“Construction began in North Dakota, South Dakota and Illinois in mid-May and is in all stages of the process, including restoration in some areas that are furthest along. Construction started in Iowa in early June and is mainly in early stages, including grating, clearing, temp road construction, and building temp fences/gates. Construction will ramp up quickly in order to have it limited to one growing season.”

Dillinger said, “Pipeline construction activities are going smoothly in all four states. We are in all stages of construction, including welding, coating and testing.

“We are at multiple stages of construction in each state and have multiple spreads working simultaneously. We plan to be in service by the end of this year,” said Dillinger, adding, “We have hired skilled union workers for this project who are professionals in their specific areas of work.”

When appropriate, trenchless installation technologies are employed under roads and bodies of water to minimize impacts. This can include conventional bores or horizontal direction drills, where the pipe is installed by pushing and pulling the pipe through the soil with large equipment instead of digging a trench.

Dillinger said civil, environmental and cultural resource surveys were performed along the four-state route.

“The current pipeline route corridor is the best route which balances the constructability and safe operation of the pipeline, minimizes the environmental impact and provides economic development opportunity for local communities/businesses.”

Construction on the six tank terminal sites in North Dakota began in early 2016 and include the tanks, pumps and meter stations. The half-dozen tank farms will have in total roughly two million barrels of storage capacity. The work is being performed by Matrix, with the terminals in service by the end of this year, along with the rest of the pipeline project.

“Six tank farms were deemed necessary, in order to accommodate the 450,000 barrels of oil per day contracted on the pipeline, with a capacity as high as 570,000,” Dillinger said.

Some of the larger construction equipment used at the terminal sites include bulldozers, scrapers, concrete pumpers, mobile and large cranes. The tank is made of welded steel, by hanging one sheet on top of another.

“The majority of the pipeline materials have been purchased, manufactured and assembled in the U.S. This will contribute an estimated $1 billion in direct spending to the U.S. economy. This includes manufacturing of the steel pipes, fittings, valves, pumps and control devices.”

Regarding early site work/ preparation for the project, said Dillinger, “Throughout 2015, we conducted civil, environmental and cultural resource surveys along the proposed right-of-way and began stacking pipe at multiple pipe yards in each state. Early stages of construction started in North Dakota, South Dakota and Illinois in mid-May.”

Varying forecasts and times of year will have an impact on the project, as well.

“Weather and seasonal activities play a large role in our construction time line. Our plan is to complete construction within one growing season, to minimize the impact on farmers and to limit the amount of winter construction.”

Traveling through more than four dozen counties, the proposed route was designed to carry out the task in the safest, most efficient way possible. Working with engineers, agriculture experts and farmers, the Dakota Access team conducted on-the-ground surveys of the proposed route to make certain any risks were mitigated regarding the property.

Currently, there are more than 190,000 crude oil pipelines operating in the United States. Pipelines are designed and maintained to last hundreds of years and withstand extreme weather environments. Officials have said the Dakota Access Pipeline will enable domestically produced light sweet crude oil from North Dakota to reach major refining markets in an environmentally responsible manner. The pipeline also will reduce the current use of rail and truck transportation to move Bakken crude oil to major U.S. markets to support domestic demand.

With a capacity to transport more than 500,000 barrels per day or more, this represents roughly half the Bakken current daily crude oil production. Shippers will be able to access multiple markets, including Midwest and East Coast markets.

Connecting the Bakken and Three Forks production areas in North Dakota to existing pipelines in Illinois, the pipeline will reportedly reduce the current use of rail and truck transportation to move Bakken crude oil to major United States markets to support American energy needs.

The project, however, is not without controversy. The Standing Rock Sioux Tribe and other individuals are currently fighting to prevent construction of the project. Standing Rock's tribal chairman said the Tribe and its allies are concerned about the health and well-being of the citizens of the Great Sioux Nation, vowing that the Tribe will continue to demonstrate that the U.S. Army Corps of Engineers has not properly consulted with the group regarding cultural resource issues. The risk of an oil spill that would harm the Tribe's waters has also not been adequately addressed, according to the chairman.

Dakota Access Pipeline officials have stated that protecting landowner interests and the local environment is considered a high priority, and representatives are working with individual landowners to make accommodations, minimize disruptions and achieve full restoration of impacted land.

Pipeline officials have partnered with Laborers' International Union of North America (LiUNA.) which recently announced a new Clean Power Progress campaign.

“Clean Power Progress will cut through the politics and ideology that have distorted the debate on clean energy,” said Terry O'Sullivan LiUNA general president. “Natural gas is already helping us reduce our carbon emissions. It burns cleaner, results in lower energy bills, and even backs up renewables. Clean Power Progress will demonstrate that if we develop this resource to the highest standards, we can keep the lights on and help cut America's greenhouse gas emissions.”

The Dakota Access Pipeline also will employ new advanced pipeline technology to guarantee both safety and reliability. Based on statistics from the U.S. Department of Transportation, pipelines are considered the safest mode of transporting crude oil. Current crude oil pipelines are designed to exceed stringent federal safety standards. Dakota Access will be built and operated using the most advanced technology and monitoring systems.

Proper research and preparation is crucial when carrying out a project of this nature. With pipeline construction, field surveys are typically conducted along the proposed pipeline route months ahead of the actual work, to better understand environmental, development and local issues. A final route can then be determined. The specific location of the selected route is marked with stakes, and when weather allows, crews begin to prepare for construction by grading the right-of-way and temporary work space to remove trees and prepare the space.

In cultivated areas, the topsoil along the right-of-way is stripped by bulldozer and stored in piles for careful replacement later.

Pipe crews then re-stake the center of the trench, layout or “sting” sections of the pipe along the right-of-way. Crews bend and weld the pipe into one long piece. The pipeline will follow the contours of the land.

The pipes are already coated to prevent corrosion. The integrity of the weld is inspected, and the weld joint is coated. Once the process is completed, backhoes or wheel excavators are used to dig a trench.

In agricultural areas, careful attention is paid to properly separate and store the topsoil and subsoil so they do not mix. The pipe coating is inspected one final time.

The pipe is lowered into the trench where it is surveyed and laid within prepared trench bottom. The trench is then back filled with subsoil. Before operation, water is used to test the pressure of the line and ensure the structural integrity of the pipe and welds. Final grading is performed and topsoil is spread over the work area using a bulldozer.

The pipeline is expected to result in millions in state and local revenues during the construction phase, and an estimated $129 million annually in property and income taxes. It will generate roughly $50 million annually in property taxes, and nearly $74 million in sales taxes to the states of North Dakota, South Dakota, Iowa and Illinois to support schools, roads and emergency services.

The North Dakota Bakken has experienced a dramatic increase in the production of crude oil, from 309,000 barrels a day in 2010 to 1 million barrels a day in 2014. This energy will need reliable transportation networks to reach U.S. markets.

According to officials, millions of hours of labor will be required during the construction phase, employing putting welders, mechanics, electricians, pipe fitters and heavy equipment operators. There also will be increased demand for manufacturers of the steel pipes, fittings, valves, pumps and control devices necessary for a major pipeline. Local economies along the route also will benefit from the use of restaurants, hotels and motels.

The project also will address transportation strains in the upper Midwest created by the dramatic increase in crude oil production in North Dakota. A lack of rail cars to move grain out of South Dakota has only intensified the problem. Tariffs on grain rail cars have increased from $50 to nearly $1,400 per car.

Dakota Access is using union contractors to construct the approximate 346 mi. (556 km) in North Dakota. Michels Pipeline Construction will construct segments in North Dakota, South Dakota, and Iowa totaling 380 mi. (611 km). The Dakota Access project team has held more than 150 meetings with local elected officials and community organizations in North Dakota since the project was announced. Dakota Access has also hosted a number of public open house meetings.

Depending upon regulatory approvals, the pipeline is projected to be in service by the final quarter of 2016.