Study finds a LCFS in Minn. would create nearly 32,500 jobs

By Erin Voegele | October 02, 2012

A study recently published by the Political Economy Research Institute at the University of Massachusetts, Amherst explores some of the economic impacts of establishing a low carbon fuel standard (LCFS) in Minnesota. The study, titled “The Employment Impacts of a Low-Carbon Fuel Standard for Minnesota,” found that enacting a LCFS in Minnesota could create nearly 32,500 jobs when analyzed through 2025.

The study evaluates three possible scenarios. The first assumes no change to the distribution of transportation fuel consumption. The second assumes that the fuel mix will change in response to the federal renewable fuel standard (RFS). The third assumes a more aggressive change in the fuel mix in response to the establishment of a statewide LCFS. According to the report, the research team has estimated the employment that would result from building the capacity to produce each of these fuel mixes as well as the ongoing employment from actual production activities. In all scenarios, employment increased in response to increased consumption of transportation fuels. However, the report states that employment increases the least under the first scenario, and the most under the LCFS scenario.

Under the baseline scenario, one new corn ethanol plant would need to be installed within the state, along with 33 new ethanol blender pumps. A total of 1,300 new job-years would be created through direct, indirect and induced means. A job-year is one full-time position for one year.

According to the report, the RFS scenario would lead to the development of six cellulosic ethanol plants in Minnesota, while 30 percent of current ethanol plants would be retrofit to utilize biomass to produce process heat. The scenario would also lead to the installation of 2,726 ethanol blender pumps, with at least one installed at every Minnesota refueling station. The RFS scenario would lead to the creation of nearly 13,000 direct, indirect and induced job-years. These job years would come from ethanol production and distribution, biodiesel production and distribution and the development of charging stations for electric vehicles.

The LCFS scenario would lead to the development of six new corn ethanol plants and 10 cellulosic ethanol plants. All current ethanol plants would also be retrofit to generate process heat from biomass feedstock. The scenario would also lead to the development of 2,726 ethanol blender pumps, with approximately 32,500 direct, indirect and induced job-years created. These jobs years would also come from ethanol production and distribution, biodiesel production and distribution and the development of charging stations for electric vehicles.

A full copy of the report can be downloaded from the PERI website.