Biden halting Dakota Access Pipeline will increase transportation costs, SD farmer says

Scott Vanderwal, a third-generation South Dakota farmer, warned on Monday that halting the Dakota Access Pipeline will lead to an increase in transportation costs and will show up in lower prices for the commodities of farmers since “there's nobody else to absorb that.”

Speaking on “Fox & Friends” on Monday, Vanderwal, the vice president of the American Farm Bureau Federation, argued that transporting oil on trucks or trains instead of through the pipeline, will create “tremendous competition” for commodities, including corn, wheat and soybeans, and will lead to the spike in transportation costs.

He also warned that “there are so many unintended consequences with something like this.”

“Not only is it higher prices or lower prices … for what we get paid, but it does show up in higher prices to consumers and other things,” Vanderwal said.

He explained that people likely don’t think about “the tax money that's generated.”

“Property taxes in North Dakota, South Dakota, Iowa and Illinois in this particular case, that go to the schools, the hospitals, the emergency services, all those things that have to be paid for through tax money that those things are picking up and if the Dakota Access Pipeline is shut down, they’re going to have to pay for those things some other way,” Vanderwal said.

“And that’ll show up in higher property taxes for everybody else or some other method of taxation.”

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Experts have warned that if President Biden were to shut down the Dakota Access Pipeline, it would result in Americans paying higher prices at the supermarket.

Agricultural economist Elaine Kub said in a legal filing last fall that shutting down the Dakota Access Pipeline would cost Corn Belt farmers more than $1 billion in annual revenue and “drive up food costs for consumers” as oil would command key space on railroad cars needed to transport agricultural products long distances.

The Biden administration will decide the fate of the Dakota Access Pipeline, which was approved by former President Trump in 2017 after being denied by former President Barack Obama, following a court-ordered environmental review.

More than 200 celebrities, including Cher and Leonardo DiCaprio, climate activists, indigenous leaders and more recently sent a letter to Biden asking him to permanently shut the pipeline due to its impact on the environment and its impact on the Indigenous people who live in the area.

The Dakota Access Pipeline transports 570,000 barrels of oil each day from the Bakken Shale in North Dakota through South Dakota, Iowa and to an oil terminal in Illinois. It is the safest and most efficient way to transport the oil, according to operator Energy Transfer Partners.

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Last week, North Dakota Gov. Doug Burgum sent a letter urging the U.S. Army Corps of Engineers to allow the Dakota Access Pipeline to continue operating as it conducts a court-ordered Environmental Impact Statement (EIS) review on the pipeline, the office of the governor announced on Thursday.

“Shutting down the pipeline during the EIS review would have devastating consequences for the State of North Dakota and a chilling effect on infrastructure investment across our nation,” Burgum warned in the letter sent on Tuesday.

“To pull the plug now, after the pipeline has been operating safely for more than three years, would severely impair future capital investment in much-needed projects at a time when America is in desperate need of infrastructure upgrades, jobs and economic activity to accelerate recovery from the COVID-19 pandemic,” Burgum added in the letter.

“It is all political,” Vanderwal said on Monday speaking of the potential move to halt the Dakota Access Pipeline.

“These pipelines are safe,” he stressed, adding “it’s the best technology we’ve ever used.”

“The Dakota Access Pipeline has no history of any impact on ground water or any resources around it and it's been proven to be the best way to transport oil and when we can do that, that way, then it frees up our other transportation methods to all our other commodities,” Vanderwal continued.

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The potential to halt the Dakota Access Pipeline comes after President Biden revoked the permit for the Keystone XL oil pipeline project on his first day in office, ending a project that was expected to employ more than 11,000 Americans this year.

In addition to halting the 1,700-mile pipeline in a series of orders aimed at combating climate change, Biden temporarily suspended the issuance of oil and gas permits on federal lands and waters.

A White House spokesperson did not immediately respond to FOX Business’ request for comment.

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FOX Business’ Jonathan Garber contributed to this report.