Line 3 Economic Impact – WI - Minnesotans for Line 3 - Support Replacement of the Line 3 Pipeline

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.

Infused into the Minnesota Economy

In employee wages and benefits

Boost to Minnesota’s GDP

Spent in lodging, meals, automative & retail

Average Jobs Per Year

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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.

New Spending:

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.

Lodging:

Non-local workers spent roughly one-third of their per diem on lodging ($11.3 million)

Meals:

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.

We can’t afford to wait any longer for Line 3

“It’s long overdue for those making decisions in this state to pause and look at the facts. We cannot afford another appeal. Too much time and taxpayer dollars have been used to repeatedly determine that Line 3 is necessary.

If we do not approve Line 3 and get started soon, the people of Minnesota will deserve an explanation about why the most studied pipeline project in our state’s history – that literally checks every box – was stalled at a time when our economy needs it so much.”

Rich Siegert, Rochester Post Bulletin

Minnesota needs Line 3 project

“Let’s get one thing clear: Minnesota needs Line 3.

Replacing Line 3 will bring thousands of jobs to our state at a time when we desperately need it. While our legislature stalls on a bonding bill and other forms of relief, how about Governor Walz and his administration making an easy decision to stop delaying a project that will bring thousands of jobs to northern Minnesota?”

Craig Gaasvig, Grand Forks Herald

Nearly six years to replace Line 3 is too long

“My family has farmed in Clearwater County for 85 years. As farmers, we take pride in our land and work hard to take care of the soil and water around us. We also take very seriously planning our farming operations, including rotating our crops and maintaining our equipment.

For 48 years, we’ve hosted six pipelines on our property and have always had a good relationship with the company. In 2014, we received a letter from Enbridge about the company’s intention to replace its Line 3 pipeline. Since that initial letter, we’ve worked with Enbridge on the easement for the replacement pipe and have considered our farming plans to accommodate construction.”

Brian Emmel, Bemidji Pioneer

Support Minnesotans by supporting Line 3

“In trying times like these, you would think local governments would try to work together to get things done. The fact of the matter is, they can’t — or they won’t. The gridlock in our state house is at an all-time high, and neither side seems willing to concede anything to the other. You would think they would care more about the people than these political chess matches; but for the most part, that’s not the case. Minnesota needs jobs more than ever — as well as the hope that things can get better. As we struggle with COVID19, the changes it has forced upon us have left too many of our businesses to drop like flies, with more people applying for unemployment every day.”

Dave Langfeld, Duluth News Tribune