Governor Walz and several legislators are advocating for an E15 mandate. Essentially, it would require that most gasoline sold in the state have a minimum ethanol content of 15% starting as early as next year. The cost associated with this mandate could force retail gas station operators to close.
Many Minnesotans are still dealing with the economic pain of the pandemic: Job losses, business failures, contractions in the hospitality industry, and much more. There is no denying that our work and our standards of living are not what they were before.
Retail gas station owners, especially the small town locally-owned stations we rely on for essential service, have had a front-row seat on how the pandemic has impacted the traveling public. People have been driving less often and fewer miles – for work, to school or on vacation. The situation is slowly returning to normal and a lot of family road trips have replaced air travel plans. But it will be a long, slow climb back to our previous habits.
Overall, Minnesotans have been buying less gas and diesel, even here in farm country. While this means a cost savings for consumers, it means that the retail gas station operator has been dealing with decreased sales for more than a year.
Fuel retailers like myself support the increased sale and use of biofuels. But if this mandate were enacted into law, it could put a large number of fuel retailers out of business. State and federal regulators require us to have compliant equipment before we sell E15 or higher ethanol blended fuels. According to state data, 3,500 facilities offer E10 gasoline today. Of those, 85% or 3,000 sites cannot sell E15.
It is estimated that replacing our E10 equipment to handle E15 will cost each filling station almost $600,000 on average. That is an enormous number, totaling $800 million statewide. Most retailers cannot afford to make those upgrades. The result of a government mandated E15 standard would be that some smaller filling stations will simply close because they might not be able to finance extremely expensive infrastructure upgrades, while others will have to increase prices to pay for the expense. In either case, consumers will pay for higher ethanol content gas, either through the inconvenience of fewer retail options or more money out of pocket at the pump.
The timing of the proposed E-15 mandate is flawed. Our politicians have to remember that gas station retailers in our communities are critical. Gas station retailers and our customers cannot afford to carry the burden of the cost this government mandate would place upon our shoulders.
Ryan Tonsfeldt is the CEO of Dean’s Bulk Service based in Barnesville.
This column does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.