Silvia Secchi

Another kind of inflation: economic benefits of CO2 pipelines

Silvia Secchi is a professor in the Department of Geographical and Sustainability Sciences at the University of Iowa. She has a PhD in economics from Iowa State University.

There is a long tradition of industry proponents overselling the economic benefits of pipelines by paying for economic impact studies.

Two kinds of goals drive this practice. The first is to increase the social acceptability of the pipelines, which often require formal environmental assessments because of their long and short-term environmental effects. Local landowners and environmental groups often oppose the projects, concerned about impacts on existing infrastructure like tile drainage, and on water and land resources. Second, if the pipelines are in line for subsidies, such studies help create the impression that the subsidies are justified.

The inflated economics reports go back to the Trans-Alaskan pipeline in the 1950s and early 1970s, and the more recent infamous examples of the Keystone XL and the Dakota Access pipeline. The tricks in the consultants’ playbook have largely remained the same.

In this post, I will discuss several issues associated with the report that Ernst and Young prepared for Summit Carbon Solutions.

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