Northern Tier Energy set to talk amid debate on gas price bill
ST. PAUL PARK, Minn. -- A Northern Tier Energy representative said new company managers will meet with state lawmakers to discuss concerns that gas prices at the firm’s SuperAmerica stores are higher near the St. Paul Park refinery than elsewhere in the Twin Cities.
“We will engage,” Mike Ahern, a lobbyist for Northern Tier, told legislators last week.
Ahern’s comments came as the Senate Commerce Committee considered a bill by Sen. Katie Sieben, DFL-Cottage Grove, that would place certain restrictions on how much Northern Tier can charge for its fuel at stations near the refinery.
Sieben said she authored the bill “sort of out of frustration” after she and Rep. Dan Schoen, DFL-St. Paul Park, were unable to get a response from Northern Tier about gas price discrepancies in south Washington County.
“We’ve never really gotten an answer or an explanation,” Sieben said.
The proposal by Sieben and Schoen would require that fuel sold at stations owned by Northern Tier Energy within seven miles of the refinery can’t be priced higher than at any of its gas stations within 35 miles. Northern Tier owns SuperAmerica stores across the Twin Cities and the region. The bill does not affect other gas stations.
A South Washington County Bulletin story that looked at area gas prices over a 10-week period ending Jan. 10 was cited in committee testimony. The Bulletin review found that over a 70-day period in late 2013 and early this year, average gas prices in Cottage Grove often were higher than in neighboring Woodbury. There were only seven days when prices were cheaper in Cottage Grove than in Woodbury. Northern Tier did not respond to requests for comment for that story.
“This is a very serious matter for our district, and we want an explanation at the very least of what is driving this,” Sieben told senators.
Texas-based Western Refining Co. now owns a majority stake in Northern Tier’s operations. There also is new management at Northern Tier, and company officials are willing to meet with lawmakers to discuss the issue, Ahern said.
“I understand there’s been some considerable frustration with the lack of engagement from the previous management,” Ahern said, adding that Western Refining operates refineries and service stations in the South and Southwest. “I do think that they pride themselves on being good neighbors and responsive.”
Northern Tier registered two lobbyists in the days before the Senate hearing, according to the Minnesota Campaign Finance and Public Disclosure Board.
Local officials frustrated
The gas price disparity has frustrated local officials. Newport Mayor Tim Geraghty and City Council members Tom Ingemann and Steven Gallagher testified in support of Sieben’s bill.
Geraghty said he may not have supported legislation five or 10 years ago, before major Highway 61 roadwork and the Wakota Bridge construction. There were three gas stations in Newport before those large projects were completed, reducing access to businesses along the highway, Geraghty said. Now there is only the SuperAmerica station on Hastings Avenue.
Post-construction, gas “pricing seems to have gone up and (there is) some gouging going on,” Geraghty said. That gas is cheaper in other areas of the Twin Cities than it is a mile from a fuel refinery is mind-boggling, he added.
Ingemann said he buys gas in South St. Paul because it’s cheaper. He called the pricing difference peculiar.
“We put up with their refinery odors. If they have a problem, our fire departments respond to their problem,” Ingemann, a Newport assistant fire chief, told senators. “But however, they charge us the highest. Is that a reward for being a neighbor? I don’t think so. To be honest with you, I think we’re getting screwed.”
Higher gas prices have a broader economic impact on the community, Gallagher said. People stop for gas in other cities and then do other shopping there instead of in their hometown.
The lead Republican on the Senate Commerce Committee said a solution reached through talks between the company and lawmakers would be better than the Legislature forcing a change.
Sen. Paul Gazelka, R-Nisswa, likened the gas prices bill to telling 3M it should sell locally made Post-It notes cheaper here than elsewhere.
“If we start mandating what a business can or cannot do, I’m concerned,” Gazelka said.
The committee laid the bill over for possible future consideration as Ahern pledged to have Northern Tier officials meet with the local lawmakers.
“If Northern Tier can assure Sen. Sieben and I that they’re going to treat their neighbors fairly, then I think we can back off on the legislation,” Schoen said.
The gas price issue was the latest of several refinery incidents that have bothered local officials since Northern Tier purchased the facility. Last year Schoen and Sieben pushed for a new law requiring local emergency response notification of industrial spills, following incidents at the refinery in St. Paul Park. Schoen also said there was frustration when Northern Tier moved its corporate office to Woodbury.