PHILIP - A pipeline carrying tar sands crude oil from Canada through Haakon County to the Texas gulf will mean more than $1.1 million in annual taxes to the Philip school district.

However, that won't be additional income, instead replacing a like amount of state aid to education. The cash flow could be more dependable than Pierre funding determined by statewide politics, and local property taxes should fall.

That's the early prediction at a Monday night hearing regarding the TransCanada Keystone XL pipeline project. The estimated $7 billion project will stretch about 2,200 miles from Hardisty, Alberta, angling for about 313 miles through western South Dakota.

Among the 125 people at the Philip meeting, ranchers Cory Bierle of Midland and Robin Kilness were concerned about the effects construction will have on their operations.

"It's an economic issue for us," Kilness said.

As far as individual cases, because the project being geared for 2010-2011 is so preliminary, TransCanada officials did not know how the ranches would be affected.

But Robert Jones, vice president of the Canadian company's Keystone project, assured the crowd that landowners along the route will be treated with fairness and respect.

Jones was among a dozen Keystone representatives joining members of state Public Utilities About 125 people attended a similar afternoon hearing at Winner on Monday, according to state Public Utilities Commission member Gary Hanson.

Hanson said the informal meetings provide for a better delivery of information. For the commissioners, it's an opportunity to hear what the local concerns are, he said.

Commissioners said they were hearing mostly questions and few negative comments.

TransCanada officials predict Keystone XL will mean at least $10,366,522 in annual tax payments to the nine South Dakota counties and 13 school districts the pipeline will cross, but no one knows for certain just what the financial and social effects from construction will be.

Jones and his team fielded several questions about the strength and origin of the pipe used to construct the 36-inch-diameter pipeline.

TransCanada intends to apply for a federal waiver permitting the company to use a pipe grade that is 80 percent of the industry standard.

The pipe will most likely come from North American steel mills, Jones said.

Contact Andrea Cook at 394-8423 or andrea.cook@rapidcityjournal.com.