Overview

Resources and Consumption

Minnesota has no fossil fuel resources, but the western part of the State has wind energy potential, and cornfields in the south and west provide feedstock for ethanol production. Minnesota’s population and total energy consumption place the State in the middle of national rankings. The industrial and transportation sectors lead State energy demand.

Petroleum

Minnesota has two oil refineries in the Minneapolis-St. Paul area for processing crude oil that comes primarily from Canada. Several pipeline systems bring the crude to Minnesota, including the Lakehead Pipeline System from Canada that passes through northern Minnesota on its way to other markets in the U.S. Midwest. In an effort to keep pace with growing State demand for petroleum products, Minnesota recently completed construction on a new, 300-mile pipeline to carry additional Canadian crude oil to the State's refineries. Plans for two additional oil pipelines, running from northwestern Minnesota to Superior, Wisconsin, were recently approved by the Minnesota Public Utilities Commission.

Since 1992, Minnesota has had a robust program in place to support ethanol production and consumption. Minnesota is one of the few States that require the statewide use of oxygenated motor gasoline blended with 10 percent ethanol. Minnesota also offers incentives to encourage the adoption of E85 — a mixture of 85 percent ethanol with 15 percent motor gasoline — throughout the State and now has more E85 refueling stations than any other State. Minnesota is among the Nation’s top producers of ethanol, with over a dozen corn-based production plants located primarily in the southern part of the State and additional facilities under construction.

Natural Gas

The residential sector is Minnesota’s largest natural gas consumer, accounting for over one-third of State consumption. Over two-thirds of Minnesota households use natural gas as their primary heating fuel during the State’s long, cold winters. Natural gas is mostly supplied by pipelines entering the State from Canada and from North and South Dakota. The State ships over four-fifths of the natural gas it receives to Iowa and Wisconsin, on the way to other markets in the U.S. Midwest.

Coal, Electricity, and Renewables

Coal-fired power plants typically account for roughly three-fifths of Minnesota’s electricity generation. Minnesota receives most of its coal supply by rail from Montana and Wyoming. Two nuclear plants near the Twin Cities typically account for nearly one-fourth of the State’s electricity production. Recent legislation permits the Prairie Island Plant to store additional nuclear waste onsite, extending the plant’s operation through 2014. After receiving approval from the U.S. Nuclear Regulatory Commission for license renewal in 2006, the smaller Monticello nuclear plant is now licensed through September 2030.

Minnesota has numerous wind farms, particularly in the southwest, and is a major producer of wind power. Wind contributes nearly 5 percent of Minnesota’s electricity production. The State generates electricity from other renewable sources, as well, including hydroelectric dams, municipal solid waste, landfill gas, and wood waste, which together contribute minimally to the State’s total electricity production.

In February 2007, Minnesota adopted a renewable portfolio standard that requires one-fourth of Minnesota’s power to come from renewable sources by 2025. The mandate also requires Xcel Energy, the provider of about one-half of the State’s electricity, to have one-third of its total power come from renewable sources by 2020.