The potential impact of Keystone XL and Dakota Access pipelines

4 min readFeb 2, 2017

Instead of the series of closures, delays and roadblocks that the oil industry has come to expect from the US government, President Trump’s new regime on 24th January 2017 brought in some great news in the form of an executive order¹ that expedites the permits needed to build two long-debated pipelines with huge impact on our economy and the environment- the Keystone XL and the Dakota Access pipelines.

A little background

The Keystone pipeline system is an existing oil pipeline system that connects the Alberta tar sands in Canada to various refineries, tanks and distribution system across Illinois, Texas, Nebraska and Oklahoma. It runs 2,500+ mile long across all its current branches. The proposed Keystone XL pipeline will add 1179 miles to the system, reducing the cost associated with the transportation.

The Dakota Access Pipeline (DAPL) is an under-construction 1100+ mile long oil pipeline connecting the Bakkan oil fields with the refineries and oil tanks along its way to Illinois. DAPL faces roadblocks to its completion given tribal & environmental protests and the Obama administration’s failure to expedite the process, one way or the other.

The economic impact

President Trump claimed that these two projects will create 28,000 construction jobs, while a state department investigation from 2014 projected less than 4000 jobs for KXL. Either way, these predominantly blue-collar jobs will only last an year as less than 50 permanent jobs result from this project². At an estimated cost of 8 billion dollars to KXL’s owners TransCanada, this pipeline will transport 830,000 barrels of oil each day, with more than 500,000 barrels being transported currently³.

The DAPL, on the other hand, will create less than 40 permanent jobs and around 12000 temporary ones. It will cost the owners, Dakota Access LLC and Philips 66, an estimated 3.8 billion dollars to build and will transport 450,000 barrels of oil daily⁴. This could be a god-send to this declining venture⁵, which is currently strapped by its dependency on the relatively costly rail transport system.

President Trump’s insistence to use American steel, however, could be a major economic barrier to both these projects. Whether the government remains steadfast on this requirement, and whether these companies are willing to take losses in billions to fulfill it, remains to be seen.

The environmental impact

The first and foremost impact comes from the economic easement on the production of oil, which means lowered costs to produce more than 400 kgs of CO2 per barrel⁶.
The secondary impact comes from destruction of thousands of acres of arable land and water resources.
These pipelines also have the potential to destroy habitats of multiple endangered species, including the greater sage-grouse and swift fox⁷.
Oil spills is always a concern with any transportation method for oil, and pipelines are only marginally better than any other method, as demonstrated by the countless oil spills recorded⁸. Cost of cleanup, destruction caused to land, animal and plant life is undeniable.

Needless to say, thousands of people concerned with the impact have protested across the country, led by the Native Americans who have reason to take legal action as their treaty rights have been broken over the claimed lands.

The facts (not alternative ones)

The matter of fact is that the oil industry is a declining one, as it should be. The ecological impact of extracting & using oil is too high to ignore, and we are now at a conjecture. We need to divert any investment away from growth in non-renewable energies, however enticing, and into sustainable energy industries- especially solar ones. We’ve already seen that renewable industries can be as efficient and cost-effective, with huge growth in both energy production and cost reduction.