An article about Keystone Pipeline addressed several issues, including its substantial economic benefits and how it strengthens American energy security ("Concerns mount over oil pipeline," Feb. 14 Eagle).
However, the article added to the confusion regarding the Kansas Legislature's overwhelming approval in 2006 of property-tax abatements to qualified energy projects and TransCanada's decision to include Kansas on the pipeline route.
On behalf of TransCanada, I would like to set the record straight about this issue.
Passage of the tax abatement was a key factor and an important consideration in TransCanada's decision to reconfigure Keystone and to locate the second phase of Keystone Pipeline in Kansas, a 300-mile segment from Steele City, Neb., to Cushing, Okla. The tax abatement was not the sole determining factor in our decision to route this phase of the project through Kansas; nor was the pipeline the sole determining energy project the legislation was to benefit. There are many variables that affect the requirements of a new pipeline, the most important of which is the market demand for petroleum transportation services from Kansas refineries.
Furthermore, Keystone did not request introduction of the legislation that included the property-tax abatement, and certainly never stated that receiving it was a condition to our decision to construct the pipeline in Kansas. Keystone publicly supported passage of the property-tax abatement during the legislative process, and our representatives testified on our behalf during several legislative hearings in support of the proposal.
It is important to mention that Keystone represents a $1 billion capital investment in Kansas, one of the largest nongovernment investments in the state in recent years. In fact, during construction in 2010, we spent an estimated $683 million and paid $17.9 million in state and local taxes. These figures illustrate our commitment to Kansas.
While the benefits Keystone generated in Kansas during construction are substantial, Keystone will pay hundreds of millions of dollars in new property-tax revenues on a long-term basis during the project's life span.
Keystone will strengthen America's energy security because it expands a reliable energy partnership with Canada and will transport American oil from Texas, Oklahoma, Montana and North Dakota to U.S. refineries. The combination of American and Canadian oil that Keystone will transport provides an opportunity for America to reduce imports from offshore, unreliable sources and reduce price volatility.
We worked hard during design and construction of Keystone to protect the natural beauty and environmental resources of Kansas. During operations, Keystone will replace the equivalent of a tanker train 25 miles long. On a yearly basis, Keystone can offset as many as 200 ocean tankers per year, reducing global greenhouse-gas emissions by as much as 19 million metric tons.
At TransCanada, we believe Keystone delivers more than oil: It generates significant economic benefits, strengthens energy security by reducing America's dependence on OPEC oil imports and provides environmental value.
We look forward to a long and positive relationship with Kansas and the communities in which our facilities are and will be located.