Effects of the DAPL Decision

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The Dakota Access Pipeline has been a very hotly discussed topic that has been debated in and out of the national news for over a year. Now that discussions are getting down to the finer details, the public who this will affect are trying to understand the consequences. This is also going to have a knock on effect on markets. Whether traders are trading online with a company like CMC markets, or through a broker, this is likely to reshape the landscape of the American oil industry.

What is the DAPL?

The Dakota Access Pipeline is a proposed oil pipeline that will travel through the United States. The route that is being looked at by the various companies involved in the pipeline would go from the Bakkan oil fields in North Dakota (this is also why it is sometimes known as the Bakkan pipeline) to Patoka, Illinois. Although it has already been started, there is still a lot of controversy around the project being finished.

How will the DAPL effect the environment?

Amid concerns over the water supply surrounding the pipeline, there has recently been a detected leak from the DAPL which has not helped matters for those who are trying to get it finished. The leak was not far from Standing Rock, which is where protectors have been demonstrating against the further development of the pipeline.

Water protectors have also raised concerns over the natural habitat of wildlife being ruined when developers install the rest of the pipeline. Having a leak so soon after the demonstrations has not fared well in the media.

How will it affect the people?

Already lands sacred to the protectors have been destroyed.  On December 4th, the US Army corps determined that the pipeline must be rerouted. Protectors insist development needs to be stopped permanently for the sake of the environment as a whole.

Before the December 4th decision, people felt they had been ‘bullied’ into having the pipeline through their land, because too much change to fully-developed communities near Bismarck would have cost more than the DAPL has to invest.

How will it affect the markets?

Needless to say with all of the speculation, the commodities market has been fun and games with regards to oil recently. Cities such as Seattle have now held back on their investments to wait and see how the situation plays out. But for every one lost shareholder, there is someone to step up. The pipeline, for the oil industry, represents big business for anyone involved, and if it is completed will cut costs for companies that will use it to transport oil.

Wells Fargo, the funder for the project, has also had their share of controversy stemming from involvement in the project, which hasn’t helped the stability of the oil market.

Will it go ahead?

Barack Obama dragged his feet on the issue, but finally did send in the Army Corps of Engineers to make the decision that the pipeline must be rerouted in early December.

However, now that Donald Trump wants to ‘make America great again’ it is highly unlikely that the pipeline will be stopped completely. He campaigned heavily on old forms of energy. Couple that with the fact that he has assigned Ricky Perry as his energy secretary, and the completion of the pipeline looks to be a sure thing. On top of being the future energy secretary, Ricky also happens to be a main shareholder in the DAPL project.

It is not known yet how Donald Trump intends to safeguard from conflict of interest, or if he does at all. While the previous administration eventually acknowledged the plight of the protectors, it looks as though Trump is very set to run things his way on his terms.

Economically, the project could be good for the burgeoning US oil market, which is often overshadowed by its richer Arabic counterparts. After months of speculation, the only resolution looks to come with the transition of power in the USA.

 

This post is brought to you and contributed by an outside writer. Femme Frugality supports the protectors, and believes that we should invest our money in forms of energy that will not kill the planet.

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