Progressives in St. Paul reintroduce California fuel standards that will fuel gas station inflation

On Monday, House progressives reintroduced legislation that would force Minnesota to enact a California Fuel Standard (CFS). As Mitch Rolling and I wrote in our March 2022 report Gas Station Inflation, this policy will increase pain at the pump by creating a cap and trade program for the fuels we use to get from Point A to Point B.

Importantly, the Minnesota House version of this legislation is even crazier than the California regulations because it would require fuel producers to reduce carbon dioxide emissions, called the “carbon intensity,” or CI, by 25 percent below the 2018 baseline by the end of 2030, a 75 percent reduction by the end of 2040, and a 100 percent reduction by the end of 2050.

This means Minnesota drivers will pay more than California drivers do to comply with these regulations.

Based on the most recent credit prices in California, these regulations would increase gas prices in Minnesota by 20 percent per gallon by 2030, 60 cents per gallon by 2040, and 80 cents per gallon by 2050, which means Minnesota families would pay an extra $210 per year in 2030, $630 in 2040, and $842 in 2050, respectively, in constant 2022 dollars.

Minnesotans will see large increases in gasoline and diesel fuel costs, but unlike a gas tax, which increases prices at the pump to pay for roads and bridges, none of the extra money Minnesotans will pay at the pump as part of a CFS will pay for these crucial infrastructure projects.

To make matters worse, the CFS would have zero measurable impact on future global temperatures. In fact, eliminating all the 36.5 million metric tons of GHGs emitted by the transportation sector in Minnesota would reduce future global temperatures by 0.00095° C by 2100.

This means the CFS is all pain and no gain for Minnesota families and businesses.