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Pipeline construction will benefit local landowners, farmers, and businesses

Staff writers

What will be the economic benefits to Marion County from the construction of the pipeline?

Landowners along the route are pleased with the process so far. They say the company has fulfilled all its promises.

Landowners are receiving thousands of dollars per acre for providing easements for the 110-foot construction right of way as well as a 75-foot maintenance easement after the project is completed.

The majority of these landowners are Marion County residents and will be spending some of that money in the county.

Operators of farmland in the right of way will be reimbursed for crop damage for three years. On grassland, the construction company will be responsible for re-establishing grass in the right of way.

Cardie Oil Inc., of Tampa, already has seen a benefit. It had a contract with Sheehan Pipeline to provide fuel for the trucks that delivered the pipes from Florence to the pipe depot west of Lincolnville.

Key Convenience in Lincolnville is seeing increased business. According to proprietor Cheryl Key, groups of 10 to 15 have been coming to eat lunch there five days a week and sometimes on Saturday.

“It really helps us,” she said.

As construction moves south, other businesses may be helped, as well.

According to TransCanada/Keystone Pipeline spokesman Jim Prescott, the county will realize an $86 million increase in spending, a $61 million gain in output, and a $48.6 million increase in personal income — with much of that gleaned from easements paid to property owners. The most significant benefit will be nearly a $175 million increase in property taxes during the predicted 100-year life span of the pipeline, after the Canada company’s 10-year tax exemption ends.

Statewide benefits during construction include $904 million in total expenses, $661 million in total output or dollars spent, $514 million increase in personal income, $24.3 million in tax revenue to state, $6.5 million in tax revenue to local governments, and an influx of $1.7 billion in new property taxes to the 10 counties in Kansas during the 100-year predicted lifespan.

The first leg of the pipeline project, called the Keystone Pipeline Project, is from Hardisty, Alberta, Canada to Illinois, going through a small section of the northern part of Kansas. Crude oil will be delivered through that line to the Illinois refinery by July 1, Prescott said.

The Keystone XL Project is currently being constructed from Steele City, Neb., through Marion County to Cushing, Okla., and then eventually to the Gulf Coast region.

The Keystone Pipeline project is 2,148 miles long, constructed of 30-inch pipe. The Keystone XL project is 1,980 miles, using 36-inch pipe.

Another expansion project will begin next year when a second line will be constructed from Oklahoma City to Hardisty.

This has been no easy fete. With the 4,000 miles of pipe, 4,000 permits were obtained. In all, more than 800,000 tons of steel will be used, hauled to the sites by 12,500 rail cars. There will be 115,000 field welds over 5,227 tracts of land and 1,445 bodies of water crossed. There will be 20 million man hours spent on the project.

The result will be the ability to move 435,000 barrels of crude oil per day in the first leg of the pipeline from Hardisty to Illinois. Phase II of the project to Cushing will increase capacity to 591,000 barrels per day.

An additional 500,000 barrels is anticipated when the Gulf Coast expansion is completed.

When completed, the expansion will increase the Keystone Pipeline system from 591,000 barrels per day to approximately 1.1 million barrels per day.

Long-term commitments have been secured for 910,000 barrels per day for an average of 18 years.

Last modified May 26, 2010

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