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Small South Dakota town still grappling with Keystone cancellation a year later

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Small South Dakota town still grappling with Keystone cancellation a year later

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A year after Biden signed an executive order killing the Keystone XL pipeline, a small town in rural South Dakota is still grappling with the fallout from the decision.

“We are the collateral damage,” West Central Electric Cooperative CEO Jeff Birkeland told Fox News. “Our one chance in a lifetime to have an opportunity, to grow, to lower our rates for our members, and he took it away from us.”

President Biden signed an executive order on January 21, 2021 revoking planning permission for the 1,200-mile Keystone XL project, which would have transported oil through Montana, South Dakota and Nebraska. Biden has terminated the multibillion-dollar sum due to concerns about its potential climate impacts.

“The Keystone XL pipeline does not serve the American national interest,” Biden said in the order.

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Within a week, construction halted, workers lost their jobs and families moved out of small towns along the pipeline route, the manager of the only motel in one of those towns told Fox News.

Canadian company TC Energy approached West Central in 2008 to supply power to two pump stations along the Keystone XL pipeline. West Central, an energy cooperative, has 3,700 members and was one of three power cooperatives in South Dakota working on substations for the project.

West Central Electric Cooperative office in Philip, South Dakota

Birkeland worked on the project for 13 years. His tenure saw President Obama shut down the pipeline in 2015 and President Trump relaunch it in 2017.

West Central had invested $9 million in building the two near-complete substations when Biden halted the project, the energy CEO told Fox.

“All that money is gone,” Birkeland said. “All this material was created for a specific project – designed, engineered – and now it’s just worthless, it’s salvage value.”

Located in Philip, a town of 779, the pipeline would have brought opportunity in all forms to the small community, Birkeland said.

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“We saw this as a boon to our community,” Duane Adair, manager and caretaker of the town’s motel, Motel West, told Fox News.

Adair said the project brought in the motel business in the form of security guards hired to oversee construction and other short-term workers.

“For a small place like us, we have 20 rooms,” said Adair, who said he lives at the motel. “Half my house is full of good people, and I make money when a signing has changed a whole economic benefit for our community – let’s go.”

Many residents have invested in rental opportunities expecting longer term tenants. Business owners have taken out loans to improve their operations, Birkeland and other Philip residents told Fox News.

“It was absolutely devastating for us, for our members, for local businesses here and for the people who had planned this,” Birkeland said.

During its 20-year contract, the pump stations reportedly brought West Central an additional $18 million each year, doubling their annual revenue, according to Birkeland.

Small South Dakota town still grappling with Keystone cancellation a year later

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Motel West in Philip, SD
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The company pays a tax on its electricity distribution, which pays to local school districts in the county. The lost revenue would have translated into $350,000 a year for the schools, according to Birkeland.

Remnants of the project and the lost opportunities it represented are still visible a year later. Less than a mile outside of Philip is a vacant labor camp that was built to house pipeline workers.

“It was a political proclamation from the government to say it was OK to build it, [TC Energy invests] money in it, and all of a sudden you unplug,” Mike Albrecht, who leased the 80-acre land from TC Energy, told Fox News.

It was just one of four “man camps” the energy company was building along the pipeline. Philip’s was the first yard to be completed, and it cost TC Energy nearly $10 million to build, according to Albrecht. It would have housed up to 1,200 workers.

Small South Dakota town still grappling with Keystone cancellation a year later

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TC Energy labor camp for pipeline construction workers

After the pipeline was canceled, TC Energy negotiated with Albrecht and agreed to leave the camp as is. He hopes to sell some of the camp infrastructure.

“I would have loved to see this race,” Albrecht said. “Most cities were built hundreds of years ago and to see a new city spring up here and function would have been fun to watch.”

“I’m pissed off, I think we’re all pissed off, because it was so unfair what he did,” Birkeland said of Biden’s decision. “I mean, it’s the United States of America. Lord, it’s not a dictatorship.”

“Moving oil by pipeline is much safer than doing it by railcar, truck or river barge,” he said, pushing back against the president’s claim to end the project on environmental grounds. “The only reason it was canceled was purely political.”

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“A year later, it’s still on people’s minds,” Birkeland said. “It will be on people’s minds for years to come.”

Philip residents are resilient, Adair said. But many fear for the future of their city.

“I’m terrified that in 10 years…if we don’t really start thinking about what’s happening to us economically…Philip will die,” he told Fox News. “It’ll just be another little ghost town in the middle of nowhere that nobody cares about.”

Small South Dakota town still grappling with Keystone cancellation a year later

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