It is easy to see why the Walz administration is trying to conceal the outrageous costs of his California Fuel Standards proposal until after the election. You just won’t believe it.

Minnesotans all over the state are talking about inflation at the gas station. On a nearly weekly basis, the average prices of gasoline and diesel fuel are breaking records. Unfortunately, Gov. Tim Walz and other liberal lawmakers in St. Paul want to enact a California Fuel Standard (CFS) that will increase Minnesota gasoline and diesel prices by up to $2 per gallon.

These new regulations, which the administration is calling a “Clean Fuel Standard,” will significantly increase the pain Minnesotans are feeling at the pump, but none of these extra costs will go to maintaining our roads and bridges. They will also yield zero measurable environmental benefits.

But the most interesting part of this situation isn’t that liberal lawmakers are trying to make energy more expensive — they do that all the time — it’s that they’re trying to hide it.

What is the California Fuel Standard?

Before we dig into the coverup, it’s important to explain what the CFS is, how it will cause more gas station inflation, and what Minnesotans can expect to receive in return for feeling more pain at the pump.

The CFS, which Oregon and Washington have already adopted, is a complicated cap-and-trade government regulation intended to lower emissions of greenhouse gasses (GHGs) from gasoline and diesel fuel.

The quantity of GHGs emitted by each gallon of fuel is called its carbon intensity (CI). The CFS regulations will require fuel producers to reduce the CI score of their fuels by a larger amount every year. The graph nearby shows the mandated reductions in California.

Fuels sold in the state with a CI score that exceeds the government limit are assessed a deficit (think “demerit”); fuels sold with a CI score below the mandated benchmarks receive credits. Fuel producers with deficits must either blend lower-carbon fuels into their products or buy credits from other fuel producers. In other words, producers must offset every deficit by purchasing a credit.

Consumers ultimately pay the additional costs of purchasing credits in the form of higher fuel prices. The cost of the CFS starts out small but increases over time as the regulations become more aggressive, which you can see in the graph showing the cost of the program in Oregon over time.

CFS in Minnesota

An analysis by Stillwater Associates, a consulting firm, estimated a CFS in Minnesota would require a 20 percent CI reduction from our fuels by 2035.

They concluded that these regulations would increase gasoline prices by 20 cents per gallon by 2026, eventually rising to 54 cents per gallon by 2035. Diesel prices would eventually hit 53 cents per gallon. These costs would be in addition to the historic prices Minnesotans are already paying at the pump.

Federal data show that the average Minnesota household consumed about 1,053 gallons of gasoline in 2019, the most recent data available. Increasing the cost of gas between 20 and 54 cents per gallon would require families to pay an additional cost between $210 and $568 per year.

Rising gas prices have already left families and businesses with less money for groceries, health care, education, or savings. These California regulations will only make things worse.

Higher fuel costs lead to higher inflation as businesses charge more to pay for their own increases in energy prices.

A CFS will disproportionately harm rural families because residents of Greater Minnesota drive farther distances than people in cities. Costs are higher in rural areas even though wages are generally lower than in the Metro. This is why the expensive energy policies pushed by urban liberal politicians are especially devastating for residents of Greater Minnesota.

While adding 20 to 54 cents per gallon of fuel seems like an unthinkable burden on Minnesota families who are already struggling with the highest inflation in 40 years, the most recent version of the CFS legislation in the Minnesota House of Representatives is even more costly.

Crazier than California

Earlier this year, liberal lawmakers in the Minnesota House of Representatives introduced House File 2083, a new version of the CFS legislation that is more aggressive and more expensive than California’s mandate.

The new version was set to be discussed at an informational hearing of the Minnesota House Climate and Energy Finance and Policy Committee on March 29, 2022. American Experiment requested two minutes to share the findings of our research with the committee, but liberal lawmakers refused to let Mitch Rolling make his two-minute testimonial debut.

Apparently, they didn’t want the “informational hearing” to have too much information.

While the decision was disappointing and decidedly undemocratic, it was probably a shrewd move on their part. Mitch’s testimony would have been devastating to the liberal narrative, which claims enacting a CFS wouldn’t increase prices, and that it would make a meaningful difference to the environment.

The original bill sought to reduce greenhouse gas emissions from the fuel sector by 20 percent below the 2018 baseline by 2035. The new version called for a 25 percent reduction by 2030 and a 75 percent reduction by 2040.

American Experiment used the formula on the Oregon Department of Environmental Quality’s website to show how making the standard more stringent and shortening the timeline for implementation would make the regulations more expensive. Much more expensive.

Requiring a 25 percent reduction in carbon intensity by 2030, for example, would push up the cost of the program 36 to 67 cents per gallon by 2030, depending on the cost of compliance credits. The stricter mandates would cost the average Minnesota household an additional $380 to $710 per year in additional gasoline costs (in constant 2022 dollars) by 2030.

The per-gallon cost increases of mandating a 75 percent CI reduction by 2040 would be measured in dollars, not cents. By 2040, gasoline costs would increase between $1.08 per gallon and $2.02 per gallon, depending on credit price.

By 2040, the average Minnesota family using 1,053 gallons of gas would pay an additional $1,137 to $2,127 per year under the California Fuel Standards.

These numbers are so big that it’s hard to believe anyone could actually want to implement this policy, but the math doesn’t lie. The latest version of the CFS legislation is baffling because it shows that the liberal lawmakers behind it either have zero understanding of how it will make life more expensive for Minnesotans, or they don’t care.

Where does the money go

A CFS will substantially increase gasoline and diesel fuel costs, but unlike a gas tax, none of the extra money Minnesotans will pay at the pump will be used to pay for crucial infrastructure projects. Instead, that money will become profits for the companies that generate credits and sell them to gasoline and diesel producers under the mandates. This is where the complicated cap and trade part, mentioned earlier, comes into play.

Companies that have credits sell them to companies with deficits. In practice, this means gasoline and diesel producers pay companies that install electric vehicle charging stations, sell electricity for electric vehicles, or generate alternative fuel sources for their credits, and these additional costs are passed on to the consumer in the form of more pain at the pump. It all boils down to cold hard cash. Consumers would be forced to indirectly funnel money into the pockets of the special interest groups preferred by liberal politicians, and liberal politicians will almost certainly blame rising gasoline and diesel prices on “price gouging” by fuel producers.

It’s an unvirtuous cycle that can only be stopped by an informed public who understands that liberal energy policies are making energy more expensive.

No measurable benefits

Gov. Walz has argued that implementing a CFS is necessary to reduce GHG emissions from the transportation sector in Minnesota, but he fails to level with Minnesotans and tell them how these regulations will impact future global temperatures.

The reason for this glaring omission is obvious: The change of future global temperatures would be embarrassingly small. According to our estimates, the CFS would avert only 0.0002° C of potential future warming by 2100.

In fact, eliminating all the 36.5 million metric tons of GHGs emitted by the transportation sector in Minnesota — just 0.1 percent of the global total — would reduce future global temperatures 0.00095° C by 2100, an amount far too small to be measured with even the most sophisticated scientific equipment.

Hiding the ball

Given the record high gas prices and the looming election in November, it’s not surprising that Walz and other liberal lawmakers don’t like to talk about the enormous costs of the CFS and its utter lack of measurable environmental benefits.

What other rationale can there be for enacting a harmful policy like the CFS that will cause prices at the pump to increase by 20 cents to $2 per gallon? As we have already discussed, the CFS will deliver zero measurable environmental benefits, and none of the additional costs borne by Minnesota families will go toward maintaining our roads and bridges.

For example, the Walz administration recently contracted with a consulting firm called WSB to release a 19-page report summarizing the feedback received on the CFS from stakeholders in Minnesota, including eight meetings with environmental groups, four meetings with petroleum refineries, three meetings with labor, farm groups, business groups and utilities, and four public meetings.

Astoundingly, the report never once discusses the likely costs of the CFS, even though cost information for California and Oregon is easy to find. In fact, the report explicitly punts on this vital question, naming it an area for “further exploration.”

Public polling explains why the Walz administration might be anxious to avoid a conversation about costs. American Experiment’s Spring 2022 Thinking Minnesota Poll found that 59 percent oppose the CFS, with 50 percent “strongly” opposing it. Those are abysmal numbers for someone seeking statewide office.

Critics say the intentional ambiguity of the Walz report enabled them to offer a knowing wink at the radical environmentalists while letting the CFS simmer on the back burner until after the election. Then, if victory is secured, Walz can crank up the heat on this policy, which will cause even more gas station inflation.

While Walz would probably like the electorate to think that he doesn’t plan on implementing a CFS, the appendix of his administration’s Climate Action Framework draft report clearly states that he wants to enact the policy. The mainstream media will likely leave the issue unexamined, but American Experiment is holding his feet to the fire.

In addition to exposing the cost of the CFS in our report, we launched a petition at NoGasStationInflation.com urging Walz and state lawmakers to oppose these expensive California regulations. So far, more than 1,850 Minnesotans have signed the petition, and it’s just getting started.

This summer, American Experiment will run an aggressive social media campaign, host a webinar, and air radio ads warning the public that enacting a CFS could cause gas prices to increase by up to $2 per gallon. These ads will air all over the state, as well as being run in different languages, such as Spanish and Somali.

This outreach is important because it will clearly communicate the devastating impact of rising energy prices to
the families who can least afford to pay them, whether they be rural families in Greater Minnesota, or Latino families in the Twin Cities.


It’s important to remember that the record-high energy prices we are experiencing today are the direct result of Biden administration actions that have sought to stifle American energy production at every opportunity. Unfortunately, the prevailing view among many liberal politicians is that rising prices are a good thing because it will make alternative energy sources more competitive with conventional fuels. Therefore, high prices are the point.

What other rationale can there be for enacting a harmful policy like the CFS that will cause prices at the pump to increase by 20 cents to $2 per gallon? As we have already discussed, the CFS will deliver zero measurable environmental benefits, and none of the additional costs borne by Minnesota families will go toward maintaining our roads and bridges.

Not only is the Walz administration advocating for bad public policy, but it revealed its cynicism when it concealed the costs of the program. Any time a politician, regardless of party, proposes a new regulation on Minnesotans, the first question they should have to answer is, “How much will it cost?”

Record-high gasoline prices paired with the looming election have likely stymied the CFS for now, but it is fair to consider Walz’s Climate Action Framework as a roadmap for his second term, should he secure one. That means the transitioning of Minnesota to Walzifornia is very much on the table.