As the process to secure permits and approvals for the Line 5 Wisconsin Segment Relocation Project moves forward, it’s important to recognize the positive economic impact pipeline construction and other large-scale projects can have on communities.
A recent review of the Line 3 project in Minnesota shows how important they are. Line 5 is different than replacing Line 3 – but they will invest in our communities, create jobs, and support our communities.
It is estimated that the replacement of the Line 3 pipeline has supported, on average, 4,157 jobs per year in the region during the period, with peak employment reaching more than 13,000 jobs in 2021, which was the peak of the construction activity.
Overall, the project contributed almost $1.7 billion in employee wages and benefits, nearly $2.2 billion in value added spending, and more than $5 billion in new spending.
Wages & Benefits
Line 3 replacement has supported almost $1.7 billion in employee wages and benefits in the study area over the life of the project.
Contribution to GDP:
It is estimated that Line 3 has contributed nearly $2.2 billion in value added spending to the study area during the seven-year period (2017-2023), with roughly half of that ($1.0 billion) occurring in 2021.
According to the results of modeling, the project has contributed over $5 billion in new spending over the life of the project, through the combined direct, indirect, and induced effects.
During the project, non-local workers have spent a per diem allowance on expenses, such as lodging, meals, and incidentals.
They also have spent on automotive and health care cost over the seven-year construction timeframe.
The per diem spending budget provided by Enbridge, totaled $32.3 million.
While the per diem allowance paid to non-local workers represents a small portion of the overall construction project, it has had a significant impact on retail and hospitality industries in the study area.
Non-local workers spent roughly one-third of their per diem on lodging ($11.3 million)
Non-local workers spent another third on meals ($10.8 million).
Automotive expenses (such as gas and repairs):
represent about 21% ($6.9 million).
Other significant expenses include:
retail purchases (7% of spending or $2.3 million)
health care (3% or $0.9 million).
The replacement of the Line 3 pipeline supported thousands of construction jobs over the seven-year project.
In addition to the construction laborers themselves, Enbridge has employed (either directly or using subcontracts) engineers, right-of-way agents, environmental monitors, project managers, and construction supervisors to complete the project.
Employment for the project began to accelerate dramatically in December of 2020, peaking at nearly 5,500 workers in February 2021.
According to the estimates, roughly 4,157 workers have been employed each year of the Line 3 project.
The majority have been in construction (1,842 employees annually), followed by project management and support (141 annually), and environmental monitoring (101 annually).
The research team estimated that more than $1.4 billion in labor income (wages) has been paid throughout the life of the project, more than $1.1 billion of which went to workers in construction, specifically construction laborers.
Roughly half of the construction laborers employed on the project have been residents of the study area.
Throughout the project, increased demand for equipment, labor, and transportation has led to increased economic activity in the affected counties.
Comparing the economic impact results of this analysis with that from 2017 shows that the Line 3 project had a larger impact than what was anticipated.
Originally, the Line 3 replacement was projected to take two years and cost approximately $1.9 billion. The project actually spanned seven years and cost $4.0 billion.
Peak employment impacts (2021) were also larger, whereas average annual employment impacts were slightly lower than what had been predicted, due to the project actually taking seven years compared with two.
Spending by non-local workers has provided an injection of spending to the region.
This spending on the part of non-local workers—through direct, indirect, and induced effects—has:
- supported an average of 259 jobs each year in 2020 and 2021
- added $17.7 million in additional wages and benefits to study area households
- contributed $24.4 million in additional value-added spending and $44.4 million in output.
Largest value added for other industries:
- Resorts, campgrounds, RV parks, etc. have seen the largest value added ($3.8 million)
- Hotels and motels ($3.5 million)
- Automotive repair and maintenance ($2.2 million)
- Other Food and drinking places ($1.8 million).
According to Enbridge representatives, by the time the Line 3 replacement is completed in 2023, the company will have invested more than $4 billion over the seven-year project.
Of that, the company estimates that more than $2.9 billion will have been spent within the 16-county study area.
The Minnesota portion of the Line 3 replacement represent the bulk of spending for the project overall.
Nearly half of the spending on the project—nearly $2.0 billion—has occurred in 2021.
Spending was also significant in 2017 and 2020—more than $600 million in both years.
Procurement and construction represented the largest share of spending on the project, totaling over $2.2 billion of direct spending (77% of total costs) in the 16-county region.
This budget item includes materials purchased, construction laborers, and all on-site activities related to the construction of the pipeline.