Refinery says Minnesota gas prices could be higher this summer because of ethanol

Minnesotans could pay 5 to 30 cents more at the pump this summer because the state opted into year-round ethanol blends.

The reasons are complicated, but come down to the Trump administration allowing states to individually decide whether they wanted to sell E15 ethanol blends during the summer months.

Only six states, including Minnesota, plus half of South Dakota, opted to expand to year-round use of E15.

This uneven terrain has meant over $10 million in upgrades for Minnesota’s largest oil refinery, Flint Hills Resources in Rosemount.

“By adopting a [higher blend], these Midwest states are effectively isolating themselves from the rest of the country during the summer,” said Jake Reint, public affairs vice president with Flint Hills. “Consequently, these states are going to be much more susceptible to supply disruptions if any of these refineries have major issues.”

To be sure, higher biofuel blends in general reduce costs for consumers at the pump. That results in lower gas prices on average than the nation, said Brian Werner, executive director of Minnesota Bio-Fuels Association.

“The assertion that E15, and biofuels more generally, are more expensive for consumers is easily refuted by simply visiting one of the 514 retail locations offering the fuel across the state,” he said.

But the new patchwork of ethanol could reduce the price advantage.

Federal clean-air law prohibits the sale of fuel that is 15% ethanol and 85% gasoline during summer months, forcing states to get temporary waivers.

President Donald Trump’s first administration attempted to change the regulation. But a federal court blocked those efforts.

Then, in 2022, eight Midwestern governors of corn-growing states — including Gov. Tim Walz — started seeking emergency waivers from the Biden administration to sell E15.

Last year, the Environmental Protection Agency ruled in favor of year-round E15 sales, with implementation delayed for a year.

Then tech billionaire Elon Musk — who leads Trump’s efforts to downsize government — blew up the deal with a post on X. Congress then stripped the bill of policy provisions beyond the budget, including the E15 policy.

In February, EPA officials under the new Trump administration wrote to the Midwestern states giving them two options: move ahead with summertime E15 or delay implementation another year.

The result? A patchwork response.

Minnesota, Iowa, Wisconsin, Illinois, Nebraska, Missouri and the eastern half of South Dakota are moving forward. Ohio and the western half of South Dakota opted to wait.

Biofuel boosters, including the Walz administration, acknowledge the rocky road to E15, but they say the change is ultimately a benefit for the region, providing a larger domestic market for corn and soybean farmers.

But Reint of Flint Hills said a pinch could be felt in North Dakota border towns such as East Grand Forks or Moorhead, which did not move forward with summertime E15 sales.

Moreover, refiners worry about what the future holds should such a patchwork be allowed to continue.

Meanwhile, in Washington, members of Congress are still pressing for a bill to nationalize E15, which would remove the need to produce different fuelstocks to fit different markets, which inevitably drives up the cost at the pump. A bipartisan fix introduced by Minnesota Democrats — Rep. Angie Craig in the House and Sen. Amy Klobuchar in the Senate — would legalize nationwide E15 sales in summertime.

“My bipartisan bill provides market certainty to America’s family farmers,” said Craig, whose district includes swaths of southern Minnesota farm country.

Craig argued that E15 has saved Minnesota families over $60 million at the pump between 2022 and 2024.

“To meet our nation’s energy needs and decrease the cost of fuel, we must deploy an all-of-the-above energy strategy, which includes leveraging domestic biofuels,” wrote the senators.

Klobuchar said investing in biofuels is good for drivers and farmers.