What Passed in 2007, Where we are Now, and What’s on the Agenda for the 2008 Legislative Session.
By Josh (Elmer) Wilkening
Whether it was for the purpose of giving the governor more national exposure, or due to significantly upsized Democratic margins in both houses of the Minnesota Legislature, 2007 was a blockbuster year for burdensome energy and environmental regulation in the North Star State. The following is an overview of what was enacted into law in 2007 and how that is being expanded upon at the current time. It’s an explanation of the real world difficulties encountered when seeking to comply with draconian environmental goals. It’s also a forecast of what may soon be on the agenda soon as the legislature ramps up its deliberations in 2008.

The Next Generation Energy Act of 2007 & Governor’s “2007 Next Generation Energy Initiative” are two names for a common set of policy initiatives that were enacted into Minnesota Law. The overall goals of these initiatives are:

1. Reduce per capita use of fossil fuels by 15% by 2015.
2. Derive 25% of total energy used in Minnesota from renewable sources by 2025.

Specific elements of the Next Generation Energy Act according to the state legislative website, or how the two primary goals will be REACHED, are as follows:

1. Cut Minnesota’s greenhouse gas emissions to 15% below 2005 levels by 2015, 30% by 2025, and 80% by 2050.
2. Creation of a Climate Change Action Plan by various state agencies which would recommend a course of action to the legislature on Feb 1st, 2008.
3. State agencies would also make recommendations on a cap-and-trade system. CAP-AND-TRADE is system whereby there would be a cap or ceiling on overall greenhouse gas emissions. The system would also assign emission allowances to power companies that could be traded with other power companies for a price.
4. Prohibition on the construction of any new power plants that would produce a net increase of carbon emissions after Aug 31st 2009. Unless a state law or rule is passed that limits greenhouse emissions,
A. No large fossil fuel-fired power plants can be built in MN.
B. No utility can import electricity from a large fossil fuel fired power plant that was not operating on the first of this year.

The Minnesota Climate Change Advisory Group website (www.mnclimatchange.us) also outlines some key proposals related to the Governor’s Next Generation Energy Initiative. To reiterate, the Initiative seeks to reach the standards of the 15% fossil fuel reduction by 2015, and 25% of energy from renewable sources by 2025:

1. Quintuple the number of E85 pumps in MN by 2010.
2. Further state grants to promote biofuels
3. Require utilities to reduce retail sales by 1.5% annually.
4. Set a goal of 1000 Energy Star commercial buildings in MN by 2010 (there are 87 currently).
5. Invite Center for Climate Change Strategies to develop an aggressive plan to reduce greenhouse emissions.
6. Utilities should offset carbon emissions from new fossil fuel generation sources.
7. Minnesota should join the Chicago Climate Exchange or another greenhouse emission offset system.

Since passing the legislation described above in 2007, the Governor’s Climate Change Advisory Group has been at work coming with a detailed action plan for how to make the proposals a reality. On January 13th, the Start Tribune reported the Climate Change Advisory Group was running into some trouble in coming up with specifics of how to implement the initiatives (). The Star Tribune article states:

“Three weeks before its deadline for submitting pollution-fighting measures to Gov. Tim Pawlenty, the Minnesota Climate Change Advisory Group has acknowledged that it's deadlocked on vehicle efficiency standards and probably won't propose a statewide carbon emissions reduction strategy.
Those two items are widely viewed as central to any plan that attempts to turn down global warming.”

These were a few points of contention within the Climate Change Advisory Group as reported by the Star Tribune:

1. Vehicle Emission Standards: There’s litigation pending that may disallow states like California from passing standards more stringent than federal standards. The advisory group therefore is making no recommendation on Vehicle Emission Standards. Pawlenty has said he’d be willing to consider a tougher vehicle emission standard if the litigation was resolved. Current standard is 35 miles per gallon average fuel efficiency by 2020.
2. There were big technical differences within the advisory group about whether to implement a carbon trading system on the state or regional level.
3. Advisory group backed away from limits on emissions from new coal burning electricity generators because 2 new ones would not make the cut. Limit would have been no more than 3/4ths of the current utility average.
"This gives us a taste of how difficult this process is," said Sen. Ellen Anderson, DFL-St. Paul, who led the briefing.
The Advisory Group DID affirm a policy calling for the metro area to develop at double the population density currently called for by the Met Council.”

These recommendations were put forth after a meeting of the same advisory group on January 24th according to Minnesota Public Radio

“The Minnesota Climate Change Advisory Group has approved a long list of suggestions on how the state can reduce its carbon footprint. Some ideas are more controversial than others, but they all mean changes in how we do things.”
1.Group strongly endorsed a regional carbon cap and trade system but many in the group thought a national system would be better. The question of whether to give away carbon allowances or auction them off “needs more study.”
2. Minnesota should replace a third of it’s gasoline with biofuels.
3. Climate friendly transportation pricing which could include a fuel tax or registration fees based on how much carbon a vehicle emits.
4. Over half voted to adopt California’s clean car standards.
5. A small majority approved a recommendation to reduce the speed limit.
6. Tough new coal plant emission standards, but they would NOT apply to two new plants, Big Stone II and the Mesaba coal-gasification plant.

The story gave the impression that although these measures ultimately passed, the group was very divided.
According to a Star Tribune Article on February 1st there were 60 recommendations assembled by state energy security director Edward Garvey and MN Pollution Control Agency Assistant Commissioner David Thornton. This is a preliminary report. A final report will be issued by the Advisory Group after the legislature convenes on February 12th.

Preliminary Report DOES NOT include:
1. Adoption of California Clean Car Standards.
2. Reduction of some rural speed limits.
Preliminary Report DOES include:
1. 75% recycling and composting rate by 2025. Current recycling rate is 41%.
2. Repeal the nuclear power plant moratorium.
3. Eliminate “certificate-of-need” requirements for power generators using renewable energy, such as wind.

Rep. Bill Hilty, DFL-Finlayson, chairman of the House Energy Finance and Policy Division, received the report Friday and said he found some of its language "tepid." "It's 'encourage' this, 'encourage' that," Hilty said. "I'm not sure we're at the point with all these things where 'encourage' is going to be enough to accomplish what needs to be accomplished."
A more detailed set of environmental and energy proposals is due from the Governor’s Advisory Board any day now. Proposals have been scheduled to be revealed after the convening of the 2008 session of the Minnesota State Legislature that occurred on February 12th, 2008.
Fighting so called “global warming” is a top theme of the environmental movement in Minnesota for 2008. But it is also not the only item for which the Minnesota Environmental Partnership (MEP) has big plans. According to the Minnesota Environmental Briefing Book 2008 these are some highlights likely to be on the legislature’s docket in the near future. The Briefing book is published by the MEP, one of the state’s foremost environmental lobbying groups.

1. Great Outdoors Heritage Amendment – 3/8ths of a cent sales tax increase dedicated to the environment.
2. Clean Energy Minnesota.
A. February 1st Action Plan, now set to be unveiled after the legislature convenes.
B. Cap, Auction, Trade system for emissions on a regional or national basis.
C. California Clean Car Standards.
D. $46 million in bonding initiatives for Minnesota farmers to grow energy crops.
3. Transportation Choices 2020
A. Construct 8 new dedicated transitwasy (light rail, commuter rail, and rapid transit.)
B. Double bus ridership by 2020
C. Aid to local governments for bike and pedestrian projects.
D. Expand mass transit in greater MN.$235 million should be allocated toward transportation needs per year according to the MEP.
4. Outdoor Traditions Investment. $344.6 million of environmental projects have been requested by the Minnesota Environmental Partnership for the 2008 bonding bill. It is also their goal that 20% of capital bonding should go toward the environment as has been done in the past.

The following are a few highlights that were listed under Member Issues in the MEP 2008 Briefing Book that may be of concern:

1. Reverse “North of Highway 2” amendment from 2005. This opened all forests north of Highway 2 to riding on unplanned trails with snowmobiles and ATVs. So the effect of reversing “North of Highway 2” would be to severely limit the usage of recreational vehicles in Northern Minnesota.
2. Regulations on metallic sulfide mining (copper, nickel, platinum) are proposed.

M4GW Analysis: Anyone following world financial markets these days knows that precious metals are hot commodities (no pun intended) right now. This hardly seems to be the right time to be DISCOURAGING the mining of such goods in our own state.

3. Pesticide Right to Know. According to this proposal, farmers would have to inform neighbors and workers when they could be exposed to the application of pesticides. Currently records must be kept on pesticide application according to law.

M4GW Analysis: Requiring notice to be given before applying pesticides seems like it would represent an onerous burden on farmers. Plus it seems kind of open ended. How many neighbors must be informed? Would that also include the workers on neighbors’ farms?
All of these initiatives outlined in the above article will impose costs. They will impose regulations. They will force Minnesotans to change the way we live. They will impose hardships on an already soft economy.
If global warming is not a problem, these are all going to be deadweight costs on the economy with no benefit whatsoever. If global warming is a problem, these may represent a minute move in the right direction. But these would be policies are only applicable to one state. Minnesota could not fundamentally change the warming or cooling trend the whole world is in no matter how good the intentions are of its elected officials.
The good news is that the devil is in the details. The Climate Change Advisory group seemed to be having trouble figuring out the specifics of how to make broad, bold regulatory goals a reality. Perhaps the divisions within the governor’s own policy group may be the seeds for the demise of the more extreme elements of the 2008 environmental agenda. Stay tuned to developments now that the legislative session is underway. It’s bound to produce its share of heated exchanges!