Manufacturers Hope Reason Will Prevail in Latest Pipeline Battle

A few months ago, I testified before the Senate Energy and Natural Resources Committee on the importance of pipeline infrastructure to manufacturers. What struck me the most about this hearing is that, on an issue that has been so filled with partisanship and vitriol in recent years—see Keystone XL—every single member of the committee that day rose above the talking points and had a thoughtful, productive conversation about the opportunities and challenges confronting new pipelines. There were different points of view on how best to balance economic growth, energy security and public health and safety. However, every member of that panel recognized that, yes, we are going to need more pipelines to meet changing domestic supply and demand for energy.

That’s why I’m shaking my head today as I watch the same tired script unfold over the latest pipeline to begin construction, the Dakota Access Pipeline. Dakota Access will bring crude oil developed in North Dakota through South Dakota and Iowa into Illinois. The project enjoys the support of a wide range of labor unions, chambers of commerce, agricultural groups and economic development authorities. The project’s sponsors ran the gauntlet and secured every federal, state and local permit needed to begin construction; however, just as construction commenced, the lawsuits began, protests got heated, and now we’re rapidly moving toward another round of political theater over a pipeline project.

Manufacturers support the Dakota Access Pipeline. Dakota Access ensures long-term access to competitively priced oil for industrial uses and as an input good for many manufactured goods, such as petrochemicals, to process gas and transportation fuels and to power operations. Manufacturers also make up the supply chain for the project: between 32 and 37 percent of the cost of constructing an oil pipeline is directly for manufacturing inputs. The major types of manufactured goods used include equipment, line pipe, fittings, coatings and booster stations, including pumps. A report written by IHS Economics for the National Association of Manufacturers in early 2016 estimates that at least 66 different manufacturing subsectors (out of 86 total) benefited from the construction of crude oil pipelines by $10 million or more in 2015. Overall, construction and operation of crude oil pipelines will have meant $7.6 billion to manufacturing in 2015 and 2016 and led to the creation of 28,438 manufacturing jobs in 2016.

 

CrudeInfo

There will always be protesters, and there will always be critics. It wouldn’t be America if there weren’t. Heck, I know a guy who once created a Twitter handle just so he could criticize the TV broadcast of the U.S. Open.

Ultimately, though, it’s the job of the regulators to listen to all the points in support and against and render a decision. That’s what happened here. North Dakota signed off. So did South Dakota. And Iowa. And Illinois. And the Army Corps of Engineers. The government got this one right; now it’s time to start building.

Delays in construction cause idled assembly lines, breached contracts and a domino effect that ripples up and down supply chains, injuring manufacturers every step of the way. We can’t let this happen. Here’s hoping that, much like that day in the Senate a few months ago, we can rise above the politics and let reason prevail.

Ross Eisenberg

Ross Eisenberg

Ross Eisenberg is vice president of energy and resources policy at the National Association of Manufacturers (NAM). Mr. Eisenberg oversees the NAM’s energy and environmental policy work and has expertise on issues ranging from energy production and use to air and water quality, climate change, energy efficiency and environmental regulation. He is a key voice for manufacturing on Capitol Hill, at federal agencies and across all forms of media.
Ross Eisenberg

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