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.

There’s something about rising gasoline prices that fuel a fire in our belly. Behavior experts have studied this particular consumer purchasing habit for years and have arrived at several likely reasons why gasoline price increases – which often only go up by pennies at a time – anger us the most.

“Gasoline is a unique product,” said David Stewart, who teaches marketing at the University of Southern California’s Marshall School of Business. “You have to go to a specific place, a service station, to fill up, so it becomes an event that really stands out relative to other kinds of shopping.”

That experience is significantly different than when we go to the grocery store and purchase several items at once. We may know or “sense” a higher bill at checkout, but we may not know as to which product or products caused the increase, but with gasoline, we know without question since we watch the numbers roll as we wait for the tank to top off.

Everywhere we drive, we roll past countless gas stations advertising their prices – and sometimes increasing literally before our very eyes if we spot an attendant making an update to their station’s prices.  Not to mention, the size of our tanks don’t change, but each time we go, the price always does – it’s like playing credit card roulette – always guessing when, and at what price, the pump will stop. We pay because our cars get us from point A to point B and all the places in between.

According to the US Energy Information Administration (EIA) the highest price of gas in the US was reached during the week of July 7th, 2008 at $4.11 per gallon for regular grade gasoline. While we haven’t seen signs that gasoline will hit that high anytime soon, experts agree prices are going up again.

And things are getting heated, especially in Minnesota. Patrick DeHaan, head of Petroleum Analysis at GasBuddy, said forty-nine of the nation’s 50 states saw gas prices go up in the last week [of April 2018] and all of it has to do with the price of oil. It could also come down to the decisions made about what to do with Line 3, especially if the Minnesota Public Utilities Commission approves the ill-advised recommendation from the ALJ which could place much of our much-needed energy out of service for as little as 16 months.

This got us thinking. If gasoline continues to rise, what would people have to give up? And if so, what? It’s a balancing act when we look at our bank accounts, and like they say, something’s gotta’ give.

Mn.gov, the official website of Minnesota, includes a cost of living calculator on their website that outlines consumer costs in detail. Users can select the size of their household and their county of residence. From there, it shows how much Minnesotans typically pay for fuel and many other necessities like groceries and rent.

We certainly hope it doesn’t come down to it, but if Minnesotans have to choose gasoline over childcare, food, housing or entertainment, at least the state government has built a tool to help them decided what they’re willing to give up in order to keep putting gas in their tank.

Summer must be around the corner because gasoline prices are on the rise (again). And even though Minnesotans on average pay less than their neighbors – that could quickly change if the proposed Line 3 pipeline replacement isn’t built.

Obviously, we all pay at the pump – and some people definitely pay more than others – depending how much driving you (or your family) do each week. What we don’t think about is that increased gasoline prices also get passed along on in the price of goods.

If it costs more to deliver milk, cheese, and bread to the grocery store, you can count on a higher grocery bill, restaurant check or even a higher price for your child’s hot lunch at school.  The same is true for many of the products we use and consume, the higher the transportation cost – the higher the total bill.

While some are quick to point the finger at retail gas station owners and assume collusion, the real reason gasoline prices are on the rise is simpler than that. Just like the ingredients we buy at the store have varying prices tied to transportation costs, the ingredients in gasoline do too.

There are two main conditions that have to be met by refiners when they produce gasoline blends for our cars – they need to have the right amount of octane and Reid Vapor Pressure (RVP). Of the two, the octane content is probably what most people would recognize since we see it posted at the pump as Regular 87, Mid-grade 89, and Premium 91.

The octane number doesn’t give a car better power or performance, it is a rating designated to specify what type of gas is needed for specific types of car engines to perform at their best. Typically, the higher the octane number, the more expensive the gasoline.

RVP is designed to reduce emissions, especially during summer ozone months.  We don’t usually see it listed on the pump because RVP changes depending on the season. In the summer months, the RVP specification is harder to attain and is tied closely to the price of oil.

So it’s true, gasoline does get more expensive as summer approaches because that’s the time of year when refineries beginning making the more expensive summer blends.

Along those same lines, a change in the price of oil – the number one ingredient in gasoline – can cause the price at the pump to rise too. Not to mention the 100’s of different ingredients that also come from “cracking” and are used in the various fuel blends.

But if America is now the number one oil producer in the world, why would gasoline prices rise?

Well, just like the price of the delivery of goods can cause bills to go up, so can the price of the delivery of oil.  And Minnesota is a perfect example of what could happen if a critical oil pipeline in the area goes offline.

Enbridge Energy has proposed building a new pipeline to help ensure the safe and efficient delivery of oil to refineries so they can continue making gasoline for consumers and businesses. Some have suggested the existing pipeline be removed where it is and replaced, and while that idea is well-intentioned, it would shut the line down completely for as short as 16 months.  That’s a long time to have no, or slow, delivery of oil. Significant delays would almost guarantee higher gasoline prices for Minnesotans and the consequences that come with it.

So if gas prices are already rising, Minnesotans need to ask (and prepare) themselves – are you ready to pay more for gasoline and the price of goods they consume every day?