Energy Conservation
Key Issues:Energy in Minnesota
Energy in Minnesota

Following is an overview of Minnesota's consumption and production of transportation fuels, electricity, and heating fuels, as well as the mandates and initiatives that affect the state's energy supply and economy.
Transportation fuels (gasoline and diesel fuel)
Gasoline and diesel fuel are the primary fuels used to power vehicles in Minnesota. According to the Energy Information Agency, Minnesotans used 2.5 billion gallons of gasoline in 2009 and 1.6 billion gallons of diesel fuel in 2008.

Gasoline and diesel fuel come from crude oil. According to the Minnesota Department of Commerce, Canada supplies approximately 80% of the crude oil used for transportation fuel products in Minnesota. Two refineries in Minnesota - Pine Bend refinery and Marathon refinery - refine a majority of the gasoline and diesel fuel used in the state. The remaining products come into Minnesota via pipelines from refineries in North Dakota, Wisconsin, Illinois, and the southern United States.
Western Canadian crude as a percentage of total crude consumed
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Minnesota law mandates that all gasoline sold in the state contain 10% ethanol and that all diesel fuel contain 5% biodiesel. Minnesota is home to 16 ethanol plants. According to the Minnesota Department of Agriculture, the industry has a capacity to produce 620 million gallons of ethanol a year. However, Minnesota motorists use about 256 million gallons of ethanol for fuel. There are three biodiesel plants in Minnesota, which have the capacity to produce 63 million gallons of biodiesel annually. According to the Minnesota Soybean Growers Association, Minnesotans consume approximately 16 million gallons of biodiesel each year.
Minnesota is home to 21 ethanol plants, four biodiesel plants, and two oil refineries.
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A 2009 University of Minnesota study found that the environmental and health costs associated with corn-based ethanol (72 cents to $1.45 per gallon) are higher than the costs of gasoline (71 cents per gallon) and significantly higher than the costs of cellulosic ethanol (19 to 32 cents per gallon), which is made from non-food plant sources like wood chips and switch grass.
Electricity
Most of the coal used by coal-fired power plants in Minnesota comes from Wyoming and Montana. Minnesota's nuclear power comes from the two plants in the state, Prairie Island and Monticello. The Minnesota Department of Employment and Economic Development reports that Minnesota ranks third in the nation in wind energy production, generating 1,809 megawatt hours of renewable wind power each year. Other renewable sources used to generate electricity in Minnesota include conventional hydroelectric dams, municipal solid waste, landfill gas, and wood waste. Hydroelectric power and most of the oil used in Minnesota comes from Canada. The natural gas used in Minnesota comes from Canada and the United States.
Coal
Nuclear
Renewables
Natural gas
Oil
59%
24%
9%
7%
1%
Source: www.americaspower.org
Heating fuels
Two-thirds of Minnesota homes use natural gas for heating. The natural gas used in Minnesota comes from Canada and the United States. The other third of homes in Minnesota use propane, electricity, fuel oil, or solar energy for heating purposes.
Natural gas
Electricity
Propane
Fuel oil
Other
68%
12%
10%
6%
4%
Source: U.S. Department of Energy,
2000 Census data
Minnesota's existing energy mandates
Minnesota has been aggressive in implementing clean energy policies in the state, including passing some of the country's strongest renewable energy mandates. The state has attracted millions of dollars in clean technology venture capital over the past few years. Learn more about the state's energy mandates below.
Metro Emissions Reduction Project (MERP)
As a result of state legislation encouraging utility companies to voluntarily reduce emissions - while allowing them to recover the cleanup costs from the rate base - Xcel Energy developed its Minnesota Metro Emissions Reduction Project (MERP). This project will attempt to reduce air emissions from three coal-fired power plants and increase their energy output. Read more

Xcel Energy installed emission-control equipment at its Allen S. King coal plant in Oak Park Heights, and converted two other coal plants (Riverside in Minneapolis and High Bridge in St. Paul) to natural gas.

Through MERP, pollution from mercury, carbon dioxide, sulfur dioxide, particulate matter, and nitrogen oxide will be reduced at the plants. The nearly $1 billion MERP was completed in May 2009.
Renewable energy standard

In 2007, Minnesota approved one of the nation's most aggressive mandates for increased production and use of homegrown sources of renewable energy, including wind, solar and hydrogen energy. The standards require electric utilities to generate 25-30% of their electricity from renewable sources by 2025. Read more

Utilities are also subject to a conservation mandate requiring them to achieve annual energy savings equal to 1.5% of annual retail energy sales of electricity and natural gas.
Biodiesel mandate

In 2008, Minnesota passed the country's strongest biodiesel mandate, requiring 20% of the diesel sold in the state to come from renewable sources by 2015. Read more

Minnesota diesel fuel sold today contains 5% biodiesel, which reflects a state mandate that passed in 2002 (the nation's first biodiesel mandate), took effect in 2005, and was modified in 2008. Approximately 80% of the country's biodiesel comes from soybeans.
Ultra-low sulfur diesel (ULSD) fuel mandate
Minnesota is subject to a federal ultra-low sulfur diesel (ULSD) fuel mandate. The Environmental Protection Agency (EPA) has regulated highway diesel fuel quality since 1993 and began phasing in the ULSD requirements in 2006.
Ethanol mandate

In 2005, the Minnesota Legislature passed a bill calling for 20% of the total volume of gasoline sold in Minnesota to be replaced by ethanol by 2010. If 20% of the total volume of gasoline sold in the state cannot be met through the sale of E85 and E10, then all gasoline sold in Minnesota will be required to contain 20% ethanol beginning in 2013. Read more

This is the most aggressive ethanol mandate in the country. Before the mandate can go into effect, Minnesota must obtain a waiver from the United States EPA, since federal law only allows for 10% ethanol to be blended into gasoline used in a non-flex-fuel vehicle. Testing is currently underway as part of the process to obtain the waiver from the EPA.

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