On a day when crude oil hit $114 per barrel, legislators met to discuss the possibility of creating a low-carbon fuel standard and furthering an investment in renewable energy.
The bill, authored by Rep. Frank Moe, DFL-Bemidji, would reduce carbon emissions from various types of fuel by at least 10 percent by 2020, and expand research capabilities for the University’s Initiative for Renewable Energy and the Environment.
The discussions marked the early stages of the bill, which isn’t expected to be heard on the floor until next year.
Some on the committee agreed that the prospect of lowering carbon emissions was a positive one, but the possible primary and secondary effects of the proposition was a topic of contention at the hearing.
Questions facing legislators are whether the bill would have any unforeseen consequences, similar to increased cost of food because of high corn demand as a result of ethanol production.
Foreign relations and global economics also came into play when Flint Hills Resources representatives Diane Schmidt and Jay Reinhardt testified. Flint Hills is a refining company with a plant south of the Twin Cities.
If Minnesota enacts a low-carbon fuel standard, the Canadian crude oil that makes up a vast majority of oil refined in Minnesota would go to places like China, Schmidt said.
China’s inefficient refining tactics and the resources required to transport the crude would emit more greenhouse gases, therefore the standards could be worse for the environment than just using it in Minnesota, Schmidt added.
But former State Sen. Steve Kelley said he personally wasn’t buying that argument.
“You could argue if we didn’t buy and burn coal in Minnesota, that would leave more coal to go to China and get burned overseas,” he said. “But you can’t do much about that.”
Kelley, director of the Center for Science, Technology and Public Policy at the Humphrey Institute, attended the hearing to discuss a study the University will conduct regarding the feasibility of the low-carbon standard.
Charged with providing a study to the Legislature, the multidiscipline project is designed to give policymakers the information they need to determine whether to enact the standard.
The intent is to have the study available for the Legislature’s 2009 session, Kelley said.
Schmidt said she was interested in the study’s findings, but also said similar legislation in California disrupted land being used for a different purpose than before and offset the region’s oil supplies.
Reinhardt also pointed out about 90 percent of crude oil refined in Minnesota comes from Canada, making the issue of reliance on Middle East oil irrelevant.
Aside from the University’s role in studying the possibility of the standards, the bill would also expand its renewable energy center’s ability to research those types of fuels.
Through previous legislation, the University received funding from Xcel Energy for renewable energy research, but the bill would allow the funds to be used for low-carbon fuel studies, Dick Hemmingsen, the Initiative for Renewable Energy and the Environment director, said.
With the potentially widened scope, the state requested the center study the effects of an approach to low-carbon fuel like California’s, Hemmingsen said.
-Jake Grovum is a senior staff reporter.