Thanks to New Climate Change Program, Washington Now Has the Most Expensive Gas in the Country

Oil industry officials and analysts are telling outraged drivers in Washington, ‘We warned you.’

AP/Elaine Thompson, file
Seattle's Space Needle is seen in view of still standing but now defunct stacks of the Nucor Steel plant. AP/Elaine Thompson, file

Washington state has unseated California as the state with the most expensive gasoline in the country, and analysts have a simple explanation for the dubious distinction — a new carbon cap-and-trade program instituted by the state in an effort to combat climate change.

An analysis of gas prices by the Seattle Times found that the average price of a gallon of fuel in the state reached $4.91 cents this week. In King County, which includes Seattle, the average price is well above $5. Oil industry officials and analysts are telling drivers in Washington, “We warned you.”

This year, a new law went into effect in Washington that requires oil companies and other fossil fuel producers to pay the state for the greenhouse gasses their products emit, also known as a cap-and-trade program. At the first two auctions for emissions allowances this year, companies had to pay more than $850 million to offset their emissions.

Naturally, those additional costs have been passed on to consumers. Affordable Fuel Washington, a coalition of energy industry companies and other businesses in the state opposed to the system, estimates that the program has added more than 44 cents to the pump prices of each gallon of gasoline and more than nearly 55 cents to the cost of each gallon of diesel fuel.

A spokeswoman for Affordable Fuel, Dana Bieber, tells the Sun that the state legislature created a monster with the new program and now needs to step in and fix it. “Most experts have linked Washington’s soaring gas prices to the new cap-and-trade program that went into effect in our state earlier this year,” she says. “It’s widely known that higher fuel costs unfairly impact those who can least afford it — including working families and businesses as well as lower income groups.”

Cap-and-trade programs are all the rage in climate activists’ circles, especially in blue states. Washington is the second American state behind California to launch one, and there are regional programs in New England and the Midwest. In her most recent budget, Governor Hochul created a program similar to Washington State’s that she has dubbed the “cap-and-invest” program.

Democrats in the House passed legislation aimed at creating a national system in America as far back as 2008, but the effort died in the Senate. The Obama administration attempted to impose a national cap on carbon emissions through executive action by the Environmental Protection Agency, but the Supreme Court blocked the measures as an unlawful expansion of the administrative state. 

When the Washington state bill was passed by the state legislature last year the Democratic governor of the state, Jay Inslee,  was adamant that the program would have a minimal impact on consumers. “This is going to have a minimal impact, if any. Pennies. We are talking about pennies,” he said, according to the Times.

The governor’s Department of Ecology echoed those sentiments in its public assessments of the new law’s impact, suggesting as recently as early this year that it would add between one percent and three percent to the retail price of gasoline. According to the Affordable Fuel Washington lobbying group, however, those assessments have now been scrubbed from the department’s website, and Mr. Inlee’s office is blaming oil companies for the high fuel prices in the state.

A spokeswoman for the governor, Jaime Smith, tells the Sun that gas prices fluctuate for a number of reasons — pipeline maintenance, refinery capacity, and demand among them — and that it is too early to assess the impact of the new law on gas prices. Even at today’s elevated rates, she notes, retail prices are still 60 cents below what they were a year ago.

“No one would be surprised, however, if oil companies experiencing record profits are choosing to pass their compliance costs to customers,” she says. “These companies also expect us to take on the horrific costs of continued reliance on fossil fuels, costs that come in the form of homes destroyed by fire, asthma in children, crops destroyed by drought, and streets wiped out by floods.”

The environmental director at the Seattle-based Washington Policy Center think tank, Todd Myers, says the governor’s office is attempting to deflect blame with such claims, however. The external factors cited by the governor have always been there, he notes. The only thing different this year is the new cap-and-trade program.

“Politicians are now looking to blame others for the effects of their own policy, by pointing the finger at oil companies or world markets,” he says. “Apparently they believe that oil companies are only greedy in Washington and not Idaho, Oregon or other states. The impacts of world markets are felt by everyone, not just Washington.”

“I think we should do things to reduce CO2 emissions, but Washington’s policy is needlessly expensive and there are better ways to address climate change without such excessive economic costs,” he says.

The New York Sun

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