Lost Infrastructure is Lost Opportunity for Local Businesses and Communities
Posted February 11, 2021
In the public debate over natural gas and oil pipelines, it’s often underappreciated how much infrastructure projects boost local economies and support “induced” jobs – those based on the spending of industry workers and associated suppliers and contractors. Losing these benefits is felt by all kinds of businesses and service sectors along the route of the canceled Keystone XL pipeline.
The industry shares President Biden’s goal of getting Americans back to work, and the U.S. can accelerate job creation by addressing the nation’s critical need for more energy infrastructure. Unfortunately, the decision to halt Keystone XL construction undermines the “Build Back Better” plan and hurts small communities and their residents.
Keystone XL underscores the larger point that the economic contributions of pipeline projects are larger than the projects themselves and should be a significant part of other infrastructure under consideration.
The Keystone XL pipeline would have run from western Canada through Montana, South Dakota and Nebraska, carrying crude oil needed by many U.S refiners on the Gulf Coast and supporting thousands of jobs along the way – and not just energy jobs. Already, residents and business owners along the pipeline route are concerned about impending job losses and economic uncertainty due to the project’s cancellation.
In South Dakota, members of the state’s congressional delegation hosted a public forum where people talked about the financial and personal toll from losing Keystone XL. Jeff Birkeland, CEO of West Central Electric Cooperative in Murdo, noted that the pipeline would have created sizable property tax revenues for the state and local governments:
“You look at our numbers, we've lost $90 million in revenue. Take that times 11 just for the cost in the basin. It's big.”
And Tricia Burns, the owner of a neighborhood wellness studio in Philip, spoke to the losses for non-energy businesses in the region:
“There’s no certainty at all with anything it seems anymore. So what does the future hold? If we continue to lose jobs and people continue to leave, will we have enough locals to support our business? It’s some difficult conversations…It’s not just the money but it’s the lives too.”
Residents in small towns across Nebraska have similar concerns. Chris Olson, a local truck driver from Crete, said:
“Any of these people that work on the pipeline, all the sudden they're not making money so they're not spending money. So the community they live in is going to have less money coming in…It's flyover country, that's what they call us. It's like we don't even exist.”
Lisa Veprovsky runs the East Side Bar and Grill in Dorchester, Nebraska, population 600. She and her husband bought the business three years ago. Workers building the pipeline helped the business stay afloat last year, but now they’re gone. Veprosky said:
“It's not just our town. It's going to affect Milford, it's going to affect Friend, it's going to affect Crete not having those crews around here.”
Montana Attorney General Austin Knudsen, in a recent letter to President Biden, laid out the devastating impacts of the cancellation, which will cost the state about $58 million in annual tax revenue. Knudsen also wrote about harm to some of the state’s most vulnerable residents and communities:
“[Y]our decision to shut down the project means less money for schools, less money for public services, and the elimination of business and job opportunities in those areas where they are most needed.”
The decision to halt the Keystone XL pipeline is a step backward for America’s economic growth – especially in smaller communities where recovery faces significant challenges. Building for the future means investing in modern pipeline projects that will deliver lasting economic and environmental progress, while benefiting local governments and tens of thousands of hard-working Americans.
About The Author
Sam Winstel is a writer for the American Petroleum Institute. He comes to API from Edelman, where he supported communications marketing strategies for clients across the firm’s energy and federal government practices. Originally from Dallas, Texas, Sam graduated from Davidson College in North Carolina, and he currently resides in Washington, D.C.
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