Governor Jay Inslee calls out “Big Oil” at the Highline School District maintenance yard in Burien (Photo by Ryan Harris)
Governor Jay Inslee says he will hold oil companies accountable, both for pollution and what he says is price gouging, and he says the state will penalize them for gouging as they make record profits.
Inslee says shutting down the only oil pipeline to Western Washington refineries in the summertime, which restricts supply, is among what’s driven gas prices up, but with those increases coinciding with the start of the state’s carbon pollution allowance auctions, Northwest Newsradio’s Ryan Harris asked the Governor if Olympia also has a part in those higher prices. “We’re talking about what we can do about this effectively, and we can do two things. Number one, restrain their pollution. This is their toxic material that their product is putting into the air we breathe, and we can restrain that,” Inslee says, “Second, we can restrain these outrageous profits, which we intend to do. Third, we want to build a mechanism that can be effective in reducing the cost of these credits by having a large market. Merging our market with California and Quebec – that can restrain the cost of these credits. Those things, I believe, in combination can help consumers and people who want to breathe, and I have found it’s kind of unanimous in the State of Washington – we like to breathe.”
Ryan followed up by asking the Governor about the oil companies passing on the costs of carbon pollution allowance credits to consumers at the gas pump, to which an indignant Inslee replied, “No they’re not passing on! This is profit on top of everything they spend, folks. This is $35 million bonus to the Exxon CEO, when he went from $2 billion profit to $11 billion. They’re not just passing it on. They’re padding their pockets with this, and that’s what’s outrageous. They haven’t just increased their numbers of the cap-and-trade which, by the way, have always been high in the Northwest because we are kind of an island of supply, and these companies as (State Senator) Joe (Nguyen, D-White Center) said, they’re profit margin in the Pacific Northwest is 10 to 20 times higher than the profit margin in other states. We have been victimized for years, not just now. And another thing I want to point out. Go listen to what AAA said about this. They shut down the pipeline! That’s what’s AAA said is what really was contemporaneous with these price increases.”
So, Inslee’s plan, with help from Democratic lawmakers, is to require oil companies to show their accounting, establish a commission like California and penalize the companies if they’re found padding the books. The legislation is planned for the next session in January, which won’t do anything to provide relief from high gas prices. Governor Inslee, however, says restarting the pipeline is among the things that will help reduce prices sooner. He did not answer directly when asked if a “gas tax holiday” is under consideration but instead circled back to the pipeline shutdown and restraining oil company profits.
Northwest Newsradio received several statements in response to the Governor’s news conference.
The Western States Petroleum Association president and CEO, Catherine Reheis-Boyd:
“Rather than ‘strategically misrepresenting’ the issue to the public, the Governor and lawmakers can help consumers and business in the state by working with us to fix the cap-and-trade program. They claimed the program would cost ‘pennies,’ but Washington’s consumers are now paying 50 cents per gallon for just the cap-and-trade program. In total, the state has collected more than $850 million from just two auctions, and there are three more ahead this year. It’s time for the political rhetoric to end and the real work to rein in the skyrocketing costs of this regulation to begin.”
State Representative and ranking Republican on the House Environment and Energy Committee, Mary Dye (R-Pomeroy):
“Washington state has the highest gas prices in the nation because of the governor’s cap-and-trade program that took effect in January. Governor Inslee’s new climate mandate, which is the most expensive of its kind in the nation, has forced fuel prices to rise by 50 cents per gallon in our state. This means about 500-dollars more to the average Washington family per year. This program is costing consumers three times more than the Legislature was told.
“Washington’s inflated fuel prices are not because of big oil, but because of big government gouging Washingtonians.
“Washington state also has the eighth highest gas tax in the nation at 49.4 cents per gallon of fuel, yet we have terrible roads, unreliable ferries, an alarming increase in traffic fatalities, and horrible traffic congestion. Combine this with the cap-and-trade hidden tax, it means nearly one dollar of every gallon of gasoline goes to state government, not big oil.
“Idaho ranks eighth best in the nation for quality of road conditions, yet their residents pay at least a dollar a gallon less for their fuel than Washington. Idaho’s government is taxing less and providing better services.
“These fuel prices are affecting everyone in our state, from the costs at the grocery store, to moms and dads just trying to transport their kids to daycare and commute to work. Those citizens and the pain they are feeling in their budgets are our first concern. The governor championed this law and he needs to accept the state’s responsibility of these higher prices.”
State Senate Republican Leader John Braun (R-Centralia):
“The governor’s news conference today was a blatant attempt to scapegoat one of his favorite boogeymen, which is the oil industry. It is patently ridiculous to assume the oil companies would just absorb the hit from the governor’s ‘Cap and Gouge’ plan. The simple truth is that companies pass increases in their overhead on to their customers through higher prices – just as small business and gig workers pass along increased costs from taxes and regulations to their customers in the form of higher prices. If the oil companies really wanted to cash in, why would they choose to do so in Washington over the dozen other states that have higher populations? It’s nonsense.
“The reality is that gas prices rose to historically high levels in Washington at the same time the ‘Cap and Gouge’ began. Any new proposals that don’t deal with the carbon program won’t bring down fuel prices. Arguments to the contrary are only meant to distract the people from the core issue – Washington’s Climate Commitment Act is the cause of the highest gas prices in the nation and is disproportionately affecting those with lower incomes.
“It’s been clear for many years that Democrats push for policies that make fossil fuels more expensive as a way of forcing the people to change their behavior and not drive as much. It’s a similar concept to the soda tax, which they claimed was necessary to motivate people to drink less soda. They use taxes to manipulate public behavior.
“What I hope is now clear to Democrats is that the so-called ‘polluters’ suffering most from their policy are hard-working people and businesses who rely on their vehicles and can’t afford alternatives – or reasonable alternatives are not yet available. Working people are angry. And they have every right to be.”
Kris Johnson, president of the Association of Washington Business:
“It should come as no surprise to anyone that gas prices in Washington are going up because of the Climate Commitment Act. It was clear from the beginning this program would raise the cost of gas — and it has. Even so, the state’s first two carbon allowance auctions pushed carbon credit prices far above projections, a clear sign of instability in the program and evidence of the need to fix the CCA so it works for the economy and the environment.
“It’s unfortunate the governor and some legislators continue to direct blame at employers to distract from the real issue: Washington now has the highest gas prices in the nation largely because of the way the Climate Commitment Act has been implemented. This is something the business community warned about extensively in testimony, public comment and economic modeling before the program started, and something we continue to call on lawmakers to address. Rather than propose new legislation, as we heard today, it’s time for lawmakers to get serious about fixing the Climate Commitment Act.
“Fine-tuning the program will allow us to better phase in the future price increases caused by the state’s program, creating a more gradual increase. This will slow future price increases and give needed relief to Washingtonians struggling because of the sudden spike in prices. At the same time, we need our public officials to acknowledge the true cost of achieving our climate goals. The infrastructure required for a net-zero carbon emitting state is astonishingly expensive, and these costs are barely the beginning. Washingtonians are poised to pay more to live and work in this state and we need honesty and transparency about this from our elected officials, not finger pointing and distracting blame games.”
