Economic Impacts of a Dakota Access Pipeline Shutdown

ICF analyzed the economic impacts of shutting down the Dakota Access Pipeline (DAPL) on the Bakken Shale region, including impacts to producer revenues, state tax revenues, and employment. To analyze these impacts, ICF modeled Bakken rig activity, oil and gas production, oil disposition, and prices under two regulatory scenarios: one where DAPL remains in operation and one where DAPL is offline for a total of 16 months—13 months for the environmental impact study to be completed, one month for the court to review the study, and two months for the line to be refilled with oil prior to restart of commercial operations. ICF estimated job and other economic impacts for the 16-month shutdown period. In order to capture the lagged impact of reduced drilling and completion activity during the shutdown period, ICF analyzes the impacts on production, producer revenue, and taxes for an additional year after the pipeline restarts for a total analysis period of 28 months. This analysis uses the oil price forecast from the U.S. Energy Information Administration (EIA)’s August 2020 Short-Term Energy Outlook (STEO). Exhibit 1 below compares the economic impacts of the two DAPL operation scenarios. The bullets following the table summarize the key findings of this analysis.

At the request of the American Petroleum Institute (API), ICF, supported by Hellerworx, LLC analyzed the economic impacts of shutting down the Dakota Access Pipeline (DAPL) on the Bakken Shale region, including impacts to producer revenues, state tax revenues, and employment. The scenario adopted in this report for when and how long DAPL might be shut down was created in consultation with API and does not reflect any specific analysis or opinion on the part of ICF on any legal, policy or technical issues related to the pipeline and its permits. The ICF analysis concerns the market and economic impacts of a certain shutdown scenario, not whether any shutdown is warranted.

Downloads

API DAPL Shutdown Impacts Memo

File Size: .8 MB