No matter what business you’re in, delays are expensive. Time is money, right? The longer something takes to reach its intended market always means consumers end up paying more. And gasoline is no exception. Unfortunately, folks in Minnesota and the Northern Midwest may learn that lesson the hard way pretty soon if the Minnesota Public Utilities Commission decides to take the recommendations of the ALJ and replace the current pipeline where it already sits.
That’s because besides the oblong, oval-shaped, silver trucks that deliver fuel at a gas station, do you know where gasoline comes from? And if so, where delays occur that would hurt consumers?
Most people understand that gasoline comes from crude oil. Even more, crude oil is refined and processed at an oil refinery, which is an industrial processing plant, that turns our energy into more useful byproducts such as propane, gasoline, diesel fuel, asphalt base, heating oil, kerosene, waxes and natural gas liquids. They’re not only an essential part of today’s energy and transportation world and how we get fuel to move products and people. They’re also key ingredients of everything from chewing gum to aspirin.
But once energy is produced, how do we get it?
Well, crude oil arrives at refineries by truck or pipelines. Decisions about pipelines, such as where a pipeline goes and the path it takes, is a highly involved conversation and typically includes many public meetings, coordination between local and state governments, and sometimes the federal government, where environmental impact analyses are conducted to assess what potential conflicts could arise when a pipeline is built. Alternative pipeline routes are always explored by the builder before a recommendation is made.
Which brings us back to Minnesota and the northern Midwest. Right now, state officials are talking about a new oil pipeline designed to improve delivery of crude oil to a local Minnesota refinery.
One idea suggested was to dig out the old pipeline and lay a new pipeline in its tracks. Unfortunately, constructing a new “in-trench” line would require lengthy pipeline outages, which would certainly cause extended supply disruptions.
While leaving the route the same and just removing existing pipe may be well-intentioned, it would shut the line down completely for an estimated 9-16 months.
That’s just estimated.
And what they’ve estimated is that Minnesota would lose 8.2 million gallons of gasoline, 1.1 million gallons of jet fuel, or 4.7 million gallons of diesel fuel. In the end, that would spell out higher gasoline prices impacting Minnesota and the surrounding region and leave consumers holding the bill.
Sticker shock like that could also mean less travel right when summer, and Minnesota’s biggest tourist season peaks. Thankfully, there is a better way.
The new Line 3 pipeline is an alternative route that would meet 80% of the demand Minnesota refiners need, 100% of Wisconsin’s demand and 70% of the broader Midwest. That’s a massive benefit for just one pipeline. But the benefits go beyond just better delivery of crude oil or stabilizing gasoline prices. Building Line 3 also means great paying jobs and a pipeline that is safer, using the newest technology and is better for the environment.
It’s important we learn where things come from, how they get to market, and why we pay certain prices as consumers. If we can identify delays up front then we can expect high prices later. Once we know we either look for the best option or get ready to open our wallets.
We’ll soon see which option Minnesota chooses.
