The protests against the Dakota Access Pipeline at the Standing Rock Indian Reservation in North Dakota are, on the surface, about water quality. The pipeline’s planned route–which closely mirrors the path of the would-be Keystone XL pipeline–goes right through the tribe’s water source. And like Keystone XL (which President Obama vetoed this February), the Dakota Access Pipeline has taken on larger significance as a conduit for worsened global climate change.

There is no question as to whether the protest, if successful, would protect the tribe’s water. No pipe, no possibility of a spill. But do protests like these significantly lessen the impact of global climate change? One way–maybe the only way–to know is to look at how protests affect the price of oil. “We have to look at if it is impacting the industry, and potentially discouraging or constraining their profits, so they have less incentive to produce oil,” says Lorne Stockman, research director for Oil Change International, a nonprofit that tracks fossil fuel economics.

Fossil fuels are great energy sources because they are cheap–and transportable, and storable–but let’s focus on the cheap. If fossil fuels get more expensive, things like electronic vehicles and renewable energy sources become more attractive to investors and consumers. Then, theoretically, the market goes green. (Economics are way more complicated than that, but I’m gonna keep this 101-level.)

The first thing to consider is the Dakota Access Pipeline’s cost–$3.8 billion to connect the Bakken oil fields in North Dakota to another pipeline (leading to refineries on the Gulf Coast) in Pakota, Illinois. An analysis by RBN Energy says oil producers will pay around $8 per barrel to move their crude through Dakota Access. At max capacity, the pipeline could carry about 570,000 barrels per day. So, if the pipe runs at peak, the pipeline will earn its owners, Energy Transfer Partners, roughly $1.7 billion a year. That means the pipeline only needs a few years to put the investment back into the black.

No surprise there: Moving oil makes money. But the Dakota Access Pipeline was built on promises, and can only move oil (and make money) if it delivers. Energy Transfer Partners promised to have the pipeline finished by the end of December 2016. In return, oil refiners promised to buy oil delivered through the pipeline for a certain cost. That stuff is in contracts, signed back in 2014.

Do you know what the price of oil was back in 2014? Seventy to 80 bucks a barrel, buddy! Currently, oil prices are way down, and profit margins in the oil industry are (by oil standards) pretty thin. Prices hover around $40 or $50 a barrel. “For sure, Energy Transfer Partners are concerned with delivering the pipeline by the end of the year, because otherwise they have to renegotiate their contracts, and no shipper who made terms in 2014 wants to renegotiate in 2017,” says Stockman. Energy Transfer Partners probably can’t count on making $8 per barrel.

And maybe nothing at all. The global oil market is overstocked. With thin margins and a flooded oil market, producers might have little incentive to drill, baby, drill. Which would leave the Dakota Access Pipeline way under capacity, and the pipeline’s owners shortchanged.

That’s just if the protestors succeed in delaying the pipeline. But let’s say they shut down the whole ordeal–a long shot, considering Energy Shipping Partners is already moving ahead with other sections of the pipeline. In that case, oil companies drilling and fracking and pumping in the Bakken might have to use trains to move their crude to Gulf Coast refineries. According to the same RBN Energy report, rail adds about $7 per barrel to the price of shipping Bakken crude.

Stockman estimates that shutting down the pipeline would keep nearly 30 coal-fired power plants worth of CO2 from the atmosphere each year. But really, that’s only if some other, cheaper-to-ship oil-producing region doesn’t pick up the slack.

In the US, oil fuels mostly cars. And really, the world’s oil markets are too complicated and noisy for this hypothetically successful protest to really cause gas prices to jump so much that they’d cause a mass shift to electronic vehicles. And that’s not the problem with EVs, anyway. “It’s already much cheaper to run an EV than a gas car, so it’s not really a cost competitiveness issue,” says David Timmons, a clean energy economist at the University of Massachusetts, Boston. “It’s a matter of acceptability.” As in, consumers aren’t really interested in an electric car that can’t go more than 200 miles on a charge for less than $60,000, or charge its battery on a highway outside, say, California or the I-80 corridor. (Although, the Chevy Bolt and Tesla Model 3 will definitely change the math on all this.)

But that’s all short time scale stuff. Oil companies operate on 30 to 50 year horizons. If the Standing Rock protest is successful, it could cause other companies to reconsider the risks of investing in other pipeline projects.

And that works both ways. Say the protests fail, and the Dakota Access Pipeline operates for several more decades. Meanwhile, the US has promised to cut its emissions by 26 to 28 percent by 2025. “Should we really be building infrastructure for resources we don’t plan to use if we want to stop climate change?” says Stockman. That’s a pretty significant question that economics can’t answer.

25 Comments

  1. Please produce one poisoned Indian?

  2. You are a whinging, wretched, stupid, ignorant wench. I am well involved in the corporate world and manage a decent size fortune. You obviously know nothing of what you are talking about. BP had to set aside $20 billion in escrow for damages. Incorporation is the tradeoff the US federal government, and other governments, provide in order to shield invididuals from people like you! You think the system is broken because one multibillion dollar company SEEMS to have got away with murder when hundreds of other companies don’t. You argue from emotion and not reason or knowledge.

  3. cyninoregon

    Zeet, the true NIMROD here is you. But you know that–the lie is just too egregious. Sure companies pay–they ought to pay down until they are riding bicycles and working nights as janitors, but they don’t. THE BP DISASTER IN THE GULF COST AMERICAN TAX;PAYERS NEARLY $10 BILLION. Tell me,what investor had to pay anything close to that amount? One tenth that amount? One tenth that one tenth? What is all the talk about “Plaintiff’s lawyers” all capitalized? When a company screws up, of course the value of its stock goes down. It’s called “results.” Motivation not to screw up, not to buy the cheapest warning devices, or ignore when they go off….or how about cut corners like the asses who constructed the Fukushima Nuclear Plant, who knew just what they were doing, in fact, had done it already in the U.S. under a different name, and been banned from doing business….
    Your rant about shareholder values makes me think you are a child studying this stuff for the first time, so sorry for those poor stock owners, not maturely analyzing the public policy of preventing society getting stuck with bills for the negligence and worse of rich men who are already shielded from liability beyond the value of their stocks by the very nature of corporate law….it’s why they incorporate! You’d prefer the homeowners working as hard as they can, with families in school, be subjected to even higher property and income taxes so they can protect the company that spilled hazardous waste, or rammed a container ship aground from going broke cleaning up their mess? Or those poor poor executives who have only their stock options and their $20 million salaries who may have to sell that home on the slopes in Aspen or the condo in Hawaii when that stock option just is not as valuable as they had projected? Let’s have the vast middle class subsidize clean-up efforts….that’s the con the Trumps of the world have played on the people, while diverting their attention to things like the safety net, MediCare, MediCaid, Social Security, foreign aid, and public schools. Don’t tell them half the U.S. budget goes to the military industrial complex Eisenhower warned us about. Or that the U.S. spends more than the next 10 countries combined for it’s “disastrous” crumbling defense budget–more than Russia + China + UK + France + Italy + India + Saudi Arabia + Iraq + Australia + Japan + Germany + Brazil + South Korea! (See https://www.washingtonpost.com… )
    Or just China + Russia + UK + France + Saudi Arabia + India + Japan according to another source See http://www.pgpf.org/Chart-Arch
    Or according to Politifact, it’s just the next 8 nations combined! They use the same firm as the above example but add Germany. See http://www.politifact.com/trut
    U.S. taxpayers pay enough supporting Lockheed Martin, Hughes, Northrup, McDonnellDouglas, and about 200 others in significant ways.

    Let those shareholders find safer investments. After all, a basic rule of economics is the greater the risk, the greater the profit. If they are exposed to that much loss it has you capitalizing every other word in horror, they earned plenty for the last 10 or 20 years that there is plenty socked away in the Cayman’s forthis rainy day.

  4. cyninoregon

    The “we” is particularly salient here since your new president-elect owns a large batch of stock in this project. And he’s appointed o couple of these guys involved to his administration. He never hesitates to require U.S. taxpayers to come to the rescue of his failing enterprises, flopping deals, and fishy decisions. Besides, you never really believed it was in the best interests of U.S. citizens to reverse course back into investing in oil at rock bottom prices because no one wants it, coal which is not popular because climate change scenarios all ask why? Dirty, polluting, and if alternatives are plenty…. And then there is frakking, which Trump calls only “shale.” It causes earthquakes–just ask Ohioans, Texans and Okies. It uses horrendous quantities of your clean water, poisoning it and returning it to the aquifers, farm fields, lakes and rivers…just ask the Chinese farmers who have had to stop farming and leave their land to become the new urban poor. Dumb when wind and solar are working out so well. Why not save the fossil fuels for a time when we could not use sunshine, for ex, if a super-volcano opened on us, creating dust and ash clouds blocking sunlight…..

  5. You had me at, “No pipe, no possibility of a spill.”

  6. God damn I hate eminent domain! The guise of better for the people. The DOD runs on oil. But eminent domain, bank bailouts, oil spills, wars, debt, tax code and bank bailouts all the rules are broken, heck ACA. Who cares what the government do? The gov can’t afford it. Who cares what happen to the oil companies? They can get their subsidies and insurance to pay for their loss. Who cares for clean water??? No clean up is ever 100% and any amount digested is bad. What ever happens the debt will get bigger for the government. Than they will drill and sell more land to big oil, big banks, and eminent domain.

  7. HealthyAmerican

    1) Don’t put “Science” in the headline if your article is about economics and doesn’t actually touch on science.
    2) What’s dismal about the “impact to oil company profits” is the mentality that if there is no pipeline, then the oil will not flow. This is a patently false argument. A pipeline reduces the usage of trucks and rail to transport oil. Costs are reduced and the likelihood of an environmental disaster is also reduced (trucks crash…pipelines only spring leaks, and since money is involved, you can be damned sure they will be monitoring the pipeline thoroughly so that their profits don’t spill out into the ground).

  8. Now they’ll have Trump to deal with.

  9. Meanwhile, industrial wind turbines are doing major damage to the world’s landscapes, birds, bats and human quality of life, yet they’re promoted as “clean and green” by naive people and pathological liars posing as environmentalists. ALL forms of environmental hypocrisy need to stop. Too many people assume that fossil fuels and carbon are the only things harming nature anymore. If “clean energy” expands on the scale envisioned by people like Standford’s Mark Jacobson, a disturbing new category of rural/industrial land (and ocean) will be created, and it’s already getting there.

  10. simplekills

    LOL

    police are good people

    u dont even get to comment as you live in nodak

  11. simplekills

    bootlicker

  12. Nimrod, unless the plaintiff’s lawyer is totally incompetent, the “individuals who make those decisions” do have their wealth penalized. If you are a SHAREHOLDER of a CORPORATION and the CORPORATION gets FINED, then some of the ASSETS of the CORPORATION leave the CORPORATION and the NET ASSET VALUE of the CORPORATION is LESS, meaning the WEALTH of the CORPORATION is less and a SHAREHOLDER’S FRACTIONAL OWNERSHIP of the CORPORATION is WORTH LESS on a NOMINAL BASIS. You think that shareholder’s and/or manager’s of a corporation that makes a MISTAKE and must pay FINES based off of COURT DECISIONS should not “get away with their lives intact”? You need to do some growing up. CRIMINAL CONDUCT is another matter entirely.

  13. This is just the sort of raging ignorance that causes dumb mass protests like what “we” are seeing at Standing Rock. The ability to incorporate exists primarily to shield individual people from unlimited liability in the event idiots like Zeke Woollett try to sue people for EVERYTHING for accidentally spilling oil. Limiting liability to going after a corporation’s assets allows people to take more risks in the economy. Dumb dumb also thinks that these same corporations somehow aren’t liable at all when something goes wrong. You want to complain about corporate liability? Complain about when megacorps litigate endlessly and get away with things that they should not get away with. I’d also like to add that Mr. Stockton’s economics are a hair away from being totally stupid. Higher prices incentivize…….SUPPLIES! You know, the ENTIRE REASON WHY PRODUCTION HAS SKYROCKETED IN THE US, ALONG WITH ALL THE ASSOCIATED INFRASTRUCTURE, LIKE THE DAKOTA ACCESS PIPELINE.

  14. Exactly Wired! Continuing with fossil fuel development doesn’t work for the environment anyway you do it! And it is too risky on the business side also. Divest and move back from the coast, people. Another thing that would help, would be stationing that Russian aircraft carrier in the channel off Catalina Island and letting it proceed with Aleppo-urban-redevelopment for Orange County, CA. Rebuilding a non-Toon designed built environment is best done from rubble, and there will be so much asphalt to recover, the World won’t need to drill for oil for another century.

  15. Jason Tanzman

    The pipeline company used a thing called “Eminent Domain” to secure land rights for the dakota access pipeline; meaning, the government – acting upon the pipeline company’s request – is FORCING people to sell their land (or at least the rights to construction and burying a pipeline on their land). That is not just a “private company with private financing” – this is the government BECOMING a command economy on behalf of their corporate partners.

  16. Swanson Corners

    I voted for Trump and with our new Republican led House and Senate that we got to know with our own threat of eminent domain hanging over our farm they assured us that one of the first courses of action is to protect landowners from corporate eminent domain. Property Rights is very Republican you Socialist ass.

  17. John Filburn

    building new pipelines with better efficiency and higher capacities will lead to the older less safe and more expensive to maintain pipelines being shut down

  18. John Filburn

    they dont get to “take” anything, you are forced to sell… HUGE difference there snowflake

  19. John Filburn

    look at you trying to play hydrologist, you clearly dont know what non-porous means… aquifers by definition are porous. For a river to flow there must be an aquitard (eg non-porous), meaning a layer of rock that does not transmit water, other wise it would be ground water, nice try but your an idiot

  20. John Filburn

    this process took place over YEARS, that is not fast tracking, just a clarification

  21. John Filburn

    dont like it, elect politicians that agree with you and will repeal eminent domain, until then its the law of the land… and the land owners are compensated, and in case of an underground pipe line most of the land is still usable and profitable, double win. bet your sad trump won 🙂

  22. John Filburn

    sacred sites, you mean the ones that were not found when the transmission lines were constructed, or the sacred sites not found when the pipe line that DAPL will parallel 25 ft away was constructed. how big do you think a cell is, about the size if not smaller than these dog kennels, and kennels is the wrong term, they are considered dog “runs” because a dog can RUN in them, doesnt sound too small to me. But i guess you just release criminals with no consequence. And to your final (and tired) point of first amendment of our constitution… EVERY ONE OF YOUR RIGHTS STOPS WHEN IT INFRINGES ON THE RIGHTS OF ANOTHER…. your freedom of speech does not give you any right to disrupt activities on private property. How about the SRS not taking the time to protest or participate in puplic hearings until April of this year, you know TWO YEARS late, they had their chance but ignored it instead….. it is clear they are now just being used by national enviro groups as puppets…. get out of your liberal echo chamber and join the real world…

  23. Freedom Calls

    Folks, you might be fighting for a noble cause.

    But I see some of you poking your heads up and appealing to Obama and Clinton, the federal government and even the U.N. to come in and help / save you. That’s like asking the fox to guard the hen house. These people you are appealing to are in thick with those behind the pipeline in the first place – the banksters, the robber barons, globalists, main stream media, the education system, etc. DYR – Do Your Research.

    People have been propagandized, brainwashed, disempowered, literally poisoned physically, completely duped and that includes the American Indians.

    Time to wake up folks. Quit appealing to the Neo Cons and Neo Libs who are neither conservative nor liberal, they are authoritarian / totalitarian. Don’t know where that could land ya? Read George Orwell’s “1984” to get some clue about “Big Brother.” They don’t give a flying #*@% through a rolling donut about the planet, you or anyone else… no one and nothing but themselves. The people at the top of both parties have been part of the global cabal.

    Not every single politician is in cahoots with the cabal, but the federal government is for sure just swarming with cabal stooges. The higher the office, the more likely the candidate is “selected” and not elected. The reports of all the voter fraud coming out these days demonstrates how they have ways to negate what the people vote for. “You’ll know them by their fruits”… but you’ll have to wake up to what’s really going on in the world to tell who’s who.

    The global cabal is not the “white man’s” club it used to be. Sellouts to the cabal come in every shape and size. Hillary, a woman is cabal. Obama is a bi-racial, Muslim, Communist, homosexual with a transgender “wife” and they are cabal.

    George H.W. Bush came out recently with an ad endorsing Hillary Clinton for president. He said the Bushes and the Clintons have been friends for years. Does that surprise you? It doesn’t surprise any of us who have known the truth for years. There’s been much talk over the years of the Bush-Clinton crime families and oligarchy. Are you paying attention?

    The global cabal is doing everything it can to bring down America now in an effort to usher in their one world government.

    Russell Means was aware of what was going on. See following youtube:

    Russell Means: Americans Are The New Indian

    https://www.youtube.com/watch?…

    He couldn’t possibly have covered all the bases / topics in these 90 minutes, but he’ll get ya started and does indeed touch on the many facets of control in this world. Time to wake up folks!

  24. Swanson Corners

    Being an Iowan who went to the Legislature to try to defend these folks against the eminent domain taking- I can assure you it was- or at least the ominous threat of it.

  25. Bs scare tactics again. Too bad people are stupid enough to believe this global warming or climate change crap. It’s so old

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