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NEW REPORT: COMMUNITIES COULD LOSE $350 MILLION IN ECONOMIC ACTIVITY IF SUMMIT CARBON PIPELINE IS BUILT WITH NONLOCAL LABOR

Report highlights flaws in Summit’s economic analysis, urges company to use $3 billion Inflation Reduction Act windfall to maximize local benefits

 

December 21, 2022



ST. PAUL, Minnesota. Dec. 20, 2022 – A new report from Minnesota-based think tank North Star Policy Action concludes that the local economic impact of construction jobs on the proposed Summit Carbon Solutions Pipeline would be cut by $346 million – nearly half – if the company fails to prioritize hiring local labor. The project is expected to receive roughly $7 billion in public support – including an extra $3 billion windfall from the recently passed Inflation Reduction Act – which NSPA argues should be used to maximize local job creation rather than increase corporate profits.

The report, Capturing the Moment: A roadmap to high-road carbon capture development, finds that an economic analysis commissioned by Summit relies on unrealistic local hiring assumptions to inflate the project’s expected economic benefits in areas where pipeline contractors employ a largely non-local workforce. In response, the authors model the economic impact of construction employment at various levels of local workforce participation, and find that the benefit of local hires exceeds that of non-local hires by a factor of five. In total, the authors estimate that a project relying heavily on non-local workforce will generate just $380 million in associated local benefits compared to $726 million with a largely local workforce.

Capturing the Moment makes recommendations for how to maximize the benefit to the communities that this project is built in. These include Summit putting forth a detailed plan for how they will prioritize hiring local workers, reporting regularly on their progress in hiring locally throughout the scope of the project, and partnering with registered apprenticeship programs in the area to identify, recruit and train skilled local workforce.

“This project wouldn’t be possible without billions of dollars in public funding,” said Jake Schwitzer, Capturing the Moment Co-author and NSPA Executive Director. “Policy makers and the public should demand that their investment in these projects give the maximum benefit to workers and communities, not to corporate profit margins.”

"The Summit Carbon Solutions pipeline has the potential to help us address climate change, while creating thousands of good family-sustaining jobs for local workers across the Midwest," added Lucas Franco, Capturing the Moment Co-author and Research Manager for LIUNA Minnesota and North Dakota. "It is unclear based on Summit’s construction plan to what degree anticipated economic benefits will be realized by communities along the pipeline route, or lost due to reliance on out-of-state construction workers who send paychecks home to communities located thousands of miles from the right-of-way."

The full report can be found online at northstarpolicy.org/capturingthemoment.

North Star Policy Action is an independent research and communications institute that is dedicated to improving the lives of everyday Minnesotans by advancing bold ideas that change the conversation and bring communities together. We develop and promote data-driven solutions to persistent problems that allow working people to thrive, no matter who they are or where they live.

 

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