All pain, no gain
Inflation-strapped Minnesotans will pay a 20 cents per gallon penalty for gas and diesel to underwrite Walz’s toothless California Fuel Standards.
Gas prices in Minnesota are the highest they have been since 2013.
Unfortunately, Gov. Walz and other liberal lawmakers want to adopt a costly California fuel standard in Minnesota, which will further increase the cost of gasoline and diesel fuel for Minnesota families. American Experiment’s latest report, “Gas Station Inflation” details how this policy will have no measurable environmental benefit, and provide zero revenue to maintain roads and bridges.
What is a California Fuel Standard?
The California Fuel Standard (CFS) is a complex government program that acts as a cap-and-trade system aimed at lowering emissions of greenhouse gases (GHGs) from our cars, trucks, and tractors by reducing the average amount of greenhouse gases emitted by burning the fuel in the gas tanks for transportation in Minnesota.
These government mandates require gasoline and diesel producers to reduce the greenhouse gas emitted by their fuels, or purchase credits from producers of lower-emissions fuels to offset them from their emissions.
In California, these credits frequently cost over $200 per ton of carbon dioxide, which translates to 22 cents per gallon, according to an analysis from Stillwater Associates. These costs get passed along to families and businesses in the form of higher prices at the pump for gasoline and diesel fuel.
Huge pain at the pump
The CFS has increased gas prices in California every year since it was enacted, and it is one reason why average gas prices in the Golden State are over $5.91 per gallon.
Stillwater Associates estimates that enacting CFS in Minnesota could increase gas prices by 20 to 54 cents per gallon. This will cost the average Minnesota household an additional $210 to $569 per year. Diesel fuel would see similar price increases.
The CFS would also be a double whammy to Minnesota’s economy because high energy prices reduce the amount of money families have to spend on rent, food, or medical bills. Businesses also have higher overhead costs, leading them to increase prices. High energy costs are a big factor driving inflation to its highest levels in 40 years.
CFS would also hurt Minnesota farmers. The average farm in Minnesota uses 3,640 gallons of diesel fuel every year. Some farms use more fuel, some use far less. Under a CFS, farmers would see their diesel bills increase by $692 to $1,800 per year, on average.
No measurable environmental benefits
Despite the high costs the CFS would impose on Minnesota families, it would have zero measurable environmental benefits. The CFS intends to reduce greenhouse gases from transportation fuels by requiring gasoline and diesel producers to reduce the amount of carbon dioxide released when burning fuel. But reducing greenhouse gas from Minnesota’s transportation sector by 20 percent would only reduce future global temperatures by 0.0002 degrees Celsius by 2100 — an amount so small it is impossible to measure with even the most sophisticated scientific equipment, according to climate scientist Patrick Michaels.
In fact, eliminating all of the greenhouse gases emitted by transportation in Minnesota would reduce future global temperatures by 0.00095 degrees Celsius by 2100. This program is simply all pain for no environmental gain.
Not a cent for roads and bridges
Unlike a gas tax, which raises prices at the pump to pay for roads and bridges, none of the extra money Minnesotans will pay for gas as part of a California Fuel Standard will pay for crucial infrastructure projects.
Instead, these extra costs would become profits for companies that generate credits under the mandates and sell them to gasoline and diesel producers. This can include companies that install electric vehicle charging stations, or generate fuel with biomethane, renewable diesel, or other fuels.
In the end, Minnesotans would pay more for gasoline but not see the money go to maintaining the roads.
All Minnesotans want a cleaner environment for our friends and families, but the California Fuel Standard is all pain and no gain. Lawmakers should reject this expensive policy that will harm rural Minnesotans and low-income communities in urban areas by driving up the cost of driving to work, the grocery store, and everywhere else.