Liquid Fuels

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Minnesota’s legislative year began by tackling a problem few could have predicted only months earlier — a spike in the cost of propane and its impact on people (mostly in rural areas) who use it to heat their homes. Across the Midwest, the propane shortage has led to a spate of state legislation, gubernatorial-declared energy emergencies and executive orders.

Yesterday, the North Dakota Petroleum Council introduced a new proposal to the North Dakota Industrial Council committing the industry to capture 85 percent of the natural gas flared at wellheads within two years. Within six years, the Association committed to capturing 90 percent and upwards of 95 percent should regulatory agencies, the Legislature, and state and tribal stakeholders come on board.

The Energy Information Administration (EIA) announced yesterday that propane inventories in the Midwest dropped more than 2 million barrels in November 2013 - the largest such drop for the feedstock in a single month since 1993. The agency noted that continued frigid temperatures, low inventories going into winter, and a late harvest in the Midwest have led to sharp increases in spot market prices.

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Energy production in North Dakota and Alberta continues to grow, and producers are counting on railroads to help them get crude oil to market. Much of this oil comes to or through the Midwest. The dangers of shipping oil by rail were most recently demonstrated when two trains collided near Fargo, N.D., on Dec. 30, leading to a derailment. Explosions and fire in at least 10 oil-carrying cars followed, and the town of Casselton had to be evacuated.

CSG Director of Energy and Environmental Policy Brydon Ross outlines the top five issues for 2014, including upcoming Clean Air state implementation plans, EPA cooling water intake regulations, increased scrutiny on crude oil transportation safety, potential rate and policy disputes involving net metering, and lingering impacts that drought may pose for states and water infrastructure.  

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In mid-November the U.S. Environmental Protection Agency proposed reducing the amount of biofuels in the nation’s fuel supply for the first time, potentially dealing a major setback to the ethanol industry.
The change would require almost 3 billion fewer gallons of biofuels — mainly ethanol — to be blended into gasoline in 2014 than under the current federal mandate. The proposal comes at a time when domestic oil production has exceeded oil imports for the first time in years, and when falling motor fuel demand has made ethanol an unexpectedly large part of the total fuel supply.

Today the EPA announced the first potential reduction in renewable fuel requirements since Congress expanded the mandate in the 2007 Energy Independence and Security Act.  The agency is seeking comment on a proposal that would require refiners to use 15.21 billion gallons of biofuels in gasoline and diesel fuel blends in 2014; of that target, 13.01 billion gallons must come from conventional ethanol and the remainder would be composed of advanced renewable fuels that are not corn-based. By contrast, the 2007 bill's biofuels target for 2014 was 18.15 billion gallons of renewable fuel.

A decade ago, Minnesota became the first U.S. state with a biodiesel mandate, a move that has since been followed by six other states (none in the Midwest). The state now hopes to advance production and use even further, with plans in place to adopt a first-in-the-nation B10 mandate: a requirement that all diesel fuel sold in the state contain 10 percent biodiesel and 90 percent petroleum. The higher mandate, set to take effect in July of next year, will only apply in warm-weather months.

October 2013 ~ Stateline Midwest

Three months after an effort to block the sale of E15 stalled in the U.S. Supreme Court, the fuel blend began being offered in another Midwestern state. North Dakota Gov. Jack Dalrymple announced in September the availability of E15 (a mix of 15 percent ethanol and 85 percent gasoline) at...

NOW, THEREFORE BE IT RESOLVED, that The Council of State Governments urges the executive branch and Congress to seriously review the threat posed to American energy security from policies that do not enable the productive use of indigenous energy resources which continue reliance on imported fuels.