The Economic Impact of Pipeline Construction
The oil and natural gas sector is a vital component of the North American economy, improving both our quality of life and our economic well being. As a key part of that sector, the pipeline industry is also an important contributor to the continent’s long-term prosperity.
According to the Canadian Energy Pipeline Association, construction of a typical 1,000-kilometre pipeline project creates more than 12,000 person-years of employment – directly benefiting the many communities through which the construction passes.
“Pipeline construction can be like a mini-boom for those communities,” said Rich Adams, Enbridge Vice-President, Engineering, Procurement and Construction. “Each section we build typically involves between 500 and 600 workers, which has a tremendous economic impact on nearby communities.”
As an example, Enbridge anticipates that our proposed 1,200-kilometre Northern Gateway pipeline, which would connect Strathcona County, near Edmonton, Alberta to the port at Kitimat, B.C., will bring with it some 5,000 construction jobs and more than $1 billion in economic benefits to British Columbians and Albertans. The project is expected to be one of the largest petroleum undertakings in North America in more than 50 years – and many of the communities through which it will pass are pleased with the prospects it brings. “Certainly this is great news for Kitimat, Terrace, and the region,” said Kitimat Mayor Richard Wozney, when Enbridge announced that the pipeline would terminate at Kitimat. “I think it will be a great addition to our community.”
It’s not just western Canada that will be – or already is – reaping the benefits of Enbridge’s pipeline construction activity. Wisconsin, Minnesota and other U.S. states are also enjoying the increased employment and other economic spinoffs that accompany pipeline construction. In addition to construction jobs and other indirectly created jobs, Enbridge’s Alberta Clipper pipeline – which runs from Hardisty, Alberta to Superior, Wisconsin – is expected to create further economic benefits of over $1.5 billion in purchased goods and services.
Pipeline construction is a huge undertaking, requiring people from all over the continent with many types of skills. “Pipeline construction moves in a similar fashion to a railway,” said Michele Perret, Manager, Community Relations, Enbridge Major Projects, who is responsible for keeping in touch with local community leaders, chambers of commerce and other stakeholder groups, to make sure they know what to expect, and what business opportunities may exist for them.
“First the surveyors come in to prepare access to the rights-of-way and identify overhead electrical wires. Then crews arrive to clear the rights-of-way by removing and setting aside topsoil, and ensuring that the area is properly graded. Then other teams lay the pipe on the ground and bend it to match the topography and planned road crossings – a process called stringing. Then the welders and pipe layers come in to weld the pieces together. Large equipment is then used to create the trench, and the pipe is buried. Finally, a restoration and clean-up crew replaces the topsoil and returns the area to its former state.” The restoration phase, in fact, can continue long after the pipe has been laid.
“The people who travel to the construction site need food and accommodation,” Perret added. “And these needs generate significant direct and indirect benefits for the local economies.”
In addition, before and after construction, Enbridge commits to maintaining strong and ongoing relationships with the communities that host our pipelines and facilities. “Enbridge has an inclusive approach to engaging with communities near our pipelines,” said Perret. “We consider all of our neighbours to be important stakeholders, and we extend our broader CSR efforts to include them. We want to make sure we have a positive impact on the quality of life in all of the communities we touch.”
Once the pipelines have been laid, Enbridge continues to contribute to the economy through the taxes we pay. In 2007 alone, Enbridge paid $226 million in income taxes and $113 million in property taxes to local, state, provincial and federal governments in Canada and the U.S.