The Dakota Access Pipeline is an underground pipeline for transporting oil for about 1886 kilometers in the US. Its starting point is Bakken shale which is located in North Dakota. The pipeline continues through Iowa up to Patoka in Illinois (EDWARDS, 2017). This is a massive project that will cost US tax payers 3.8 billion dollars. This being such an important project, it has several advantages as well as disadvantages. This is so since, despite the fact that the project is meant to impact on the lives of people positively, there are other aspects that should be considered such the impact it will have on the environment, as well as culture.
There are several incentives associated with the Dakota Access pipeline project. This is so since, this project will not only benefit companies that deal in oil such as Trans Canada but also to the American citizens.
First, this project will benefit US citizens since it will create jobs. During the construction phase the demand for skilled workforce will be very high. Additionally, permanent jobs will be created as a result of the construction of the pipeline. This implies that the economic welfare of individuals who will get jobs because of the project will improve. This in turn will improve the overall economic status of the country. This being such a huge incentive, the US government cannot afford to ignore the project (EDWARDS, 2017).
Secondly, oil companies are incentivized to invest in the project since it result in the reduction of transportation costs. This is so since transporting oil on tracks via roads results in higher costs which include labor costs (drivers), costs associated with purchasing and maintenance of tracks as well as losses incurred as a result of delays associated with traffic jams on roads. This implies that by investing into this project, oil companies will be able to generate more profit in comparison to when they keep on using tracks to transport oil. The need to cut down on costs is reinforced by the recent drop in oil prices which has greatly affected oil companies. Therefore by investing in alternative means of transporting oils that is cost effective, this companies will be able to remain competitive.
Lastly, the US government is incentivized to invest in this project since it will reduce maintenance cost associated with roads that are usually used by heavy tracks transporting crude oil. This is so since this tracks tend to reduce the lifespan of roads by applying excessive loads on the road surfaces. This implies that by eliminating the need for road transportation of crude oil, the lifespan of roads will increase, thereby saving a lot of tax payers’ money that is usually needed to maintain as well as construct roads (EDWARDS, 2017).