AP reports on a ‘sort of boomlet’ due to Trump’s approval of pipeline
President Trump's leadership already is making one part of America great again: North Dakota. The Trump administration's timely approval of the Dakota Access Pipeline already is providing a shot of adrenalin to the North Dakota economy. Even better, the long-term benefits are substantial and will continue long after construction is completed and it is in use, in about a month. James MacPherson of the Associated Press reports:
More than two years after the state's unprecedented oil bonanza fizzled to a lull, North Dakota – the nation's No. 2 oil producer behind Texas – is experiencing a sort of boomlet that has pushed daily production back above 1 million barrels daily.
"There is a long-term optimism that was not here just a year ago," said Williston Republican Sen. Brad Bekkedahl, whose western North Dakota district is in the epicenter of the state's oil-producing region.
Industry officials and others say the uptick comes from a bump in crude prices, regulatory certainty with the more drill-friendly Trump administration, better technology, and the prospect of nearly half of the state's crude coursing through the disputed Dakota Access Pipeline, which could open markets abroad where top prices are typically fetched.
That last point is absolutely critical to the long-term development of the massive Bakken reserves. Formerly, Dakota oil sold at a discount of several dollars a barrel from world market prices because it was so expensive to get it to market via trains, and there were so few bidders as a result. Soon, half of the current production can reach global markets via Gulf ports through the Dakota Access Pipeline connection. That will provide the incentive for more exploration and greater supply that will help keep oil prices low – and, not so incidentally, possibly create demand for a second pipeline. As technology improves and costs fall, the estimates of Bakken's recoverable reserves keep going up, from the USGS 2013 estimate of 7.4 billion barrels up to 35 billion barrels or even more, as technology continues to develop.
President Trump's vigorous support of energy production and distribution not only strengthens the U.S. economy, but weakens those of many of our enemies, including Iran and Venezuela, as well as many fundamentalist Islamic nations and other regimes not exactly in the freedom-loving camp.
So both our economy and our geopolitical power thrive thanks to these Trump energy policies. I'd call that an early victory.
Hat tip: Ed Lasky