Oct. 30--ABILENE -- When representatives of a Canadian company told Dickinson County commissioners four years ago that they planned to bring a pipeline straight through the county, there were some pretty big numbers thrown around.

The pipeline -- it's 2,000 miles long and will cost $12 billion -- would raise the county's taxable value, which in turn would boost the amount raised by property tax levies.

Sheila Biggs was a new member of the Dickinson County Commission.

"I thought it was a big number at the time," said Biggs. She can't remember just how big that number was.

"But then they didn't come around for a long time," Biggs said.

The next thing she heard from the company was that there wouldn't be any property tax revenues because the pipeline would be tax-exempt.

At first, Biggs thought the company must be mistaken.

It wasn't. The Kansas Legislature had passed Senate Bill 303, which cleared the way for the company to qualify for a property tax exemption.

"I hate to say they snuck it past us," said Biggs. "I certainly didn't know anything about it."

As word of the project spreads, some locals are wondering what assurances they have that it will not cause problems and how it will benefit them. The 36-inch pipeline is being build by TransCanada and has been dubbed the Keystone XL project. It is to come through Washington, Clay, Dickinson, Marion, Butler and Cowley counties on its way from Alberta, Canada, to the Gulf Coast.

Why the exemptions?

According to the company's Web site, the Keystone pipeline will eventually be able to move 1.1 million barrels a day.

"I can't understand why the company was given tax exemptions," said Dickinson County Commissioner Joe Nold. He points out it will create no permanent jobs.

"It's all operated remotely out of Calgary (Alberta, Canada)," Nold said. "There's a compressor station that will be located southeast of Hope, but that will be run remotely."

On the other hand, there's always the chance local emergency responders could be called to an incident.

"I'm sure if there's ever a security breach, they'll want the local sheriff's department and fire departments to come out and work on it," Nold said.

Kansas to get oil

Sen. Jay Emler, R-Lindsborg, was chairman of the Senate Utilities Committee when company officials asked for the tax exemption.

"The company did come in and talk with me about it," Emler said. "They said they wouldn't build the line if they didn't get the incentive."

In order to qualify for the exemption, the company must make the pipeline available to Kansas refineries, Emler said.

"This would make additional crude available to Coffeyville and McPherson," Emler said.

It's not clear just how much the exemption is worth. According to an assessment done for the Legislature, the fiscal effect of an exemption for that pipeline and a natural gas line would be $1.7 million in 2009.

But the Kansas Department of Revenue said Thursday it has no idea how much revenue is at stake.

"I really don't think we have an estimate at all on it," said Tony Folsom, deputy director of the Division of Property Valuation. "We don't know what the value of that whole company is. I don't know that we have enough information to set a value on it."

Seeking compensation

But some Kansas counties are exploring ways to get at least some compensation. A meeting has been set for 6:30 p.m. Wednesday in the Dickinson County courthouse to discuss options. Representatives from the counties that the pipeline will travel through have been invited.

Brad Homman, director of administration for Dickinson County, said the county is considering a fee of $1,500 for every road the pipeline crosses. In addition, the county would like to have TransCanada pay for an inspector the county would hire to look out for county interests.

"The pipeline company indicated they've never been asked for that before," Homman said. "We are not completely satisfied the interests of the taxpayer in Dickinson County are protected."

--Reporter Duane Schrag can be reached at 822-1422 or by e-mail at dschrag@salina.com.

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