Inslee rebuffs tribes seeking relief after WA climate laws boost gas prices

SEATTLE – Gov. Jay Inslee doesn’t think Washington should exempt tribal gas stations from climate laws that have driven up fuel prices across the state since taking effect at the start of this year, he told tribal leaders this week.

In a meeting Wednesday, Inslee rebuffed an exemption request from the Lummi Nation and a number of other Native American tribes, arguing the state’s new carbon-cap system is good for the tribes and making the case that giving the tribes special treatment would subvert the aims of the policy.

“The governor said exempting Tribal gas sales from pollution limits would result in a competitive advantage in sales of gasoline to the public at Tribal gas stations, undermining the purpose of the (Climate Commitment Act),” according to notes shared by Inslee’s office after Wednesday’s meeting.

Having made no inroads with Inslee, tribal leaders may now turn to the Legislature, Tom Wooten, chair of the Samish Nation, said Thursday.

“There’s no remedy there from the governor’s office, that was pretty plain,” Wooten said. “I wasn’t very happy with the meeting, I have to admit.”

In a written statement, Tony Hillaire, chair of the Lummi Nation, said that he hoped Inslee heard the concerns voiced by the tribes and that “we can work on shared solutions” to climate change while honoring treaty rights.

“Tribes aren’t just partners in climate change. We’re leaders,” Hillaire said.

“This issue is about our sacred and inherent responsibility to take care of our home, ourselves and each other. We are not the ones who have created the crisis caused by development and fossil fuel extraction. But we certainly pay the highest price,” he added, citing habitat loss and degradation for salmon and shellfish. “Our entire way of life as Lummi people is threatened.”

Adopted in 2021, the Clean Fuel Standard and Climate Commitment Act require major polluters like fuel suppliers to pay to release greenhouse gases into the atmosphere and to reduce their emissions over time. They’re designed to combat climate change, and fuel suppliers are passing their new expenses down the line to distributors and customers, including tribes.

A 2022 state-commissioned report predicted the CFS would cause gas prices to increase by less than 1 cent a gallon in 2023, and officials at one point predicted that the CCA would boost prices by 1%-3%. Inslee last year said he expected the pass-through impact on consumers would be “pennies.”

Though Washington’s average price at the pump is lower than a year ago, the difference between Washington’s average price and the national average has grown by about 50 cents a gallon, according to AAA data. Suppliers are citing the climate laws with surcharges on fuel invoices.

At Wednesday’s meeting, “Inslee expressed that he was proud to work with the Tribes to develop the CCA policy and ensure they benefit from the proceeds. But the governor also expressed his deep disappointment that some Tribes are now reversing course on the policy they helped create and are benefiting from – and erroneously claiming the CCA imposes taxes or fees on Tribes,” according to the notes shared by Inslee’s office.

Inslee scheduled the meeting with tribal leaders last month after some said they were taken aback by how much the climate laws seemed to be boosting gas prices, despite earlier assurances from the governor and his administration that the increases would be marginal.

Though state officials say the new charges on fuel suppliers are fees related to “compliance obligations,” rather than revenue-generating taxes, tribal members are paying more for gas than they would otherwise, the tribal leaders said, pointing out that state lawmakers have carved out exemptions for other fuel customers, like the aviation industry and farmers.

Lummi leaders described the system as an attack on tribal sovereignty. Inslee denied that this week.

“The CCA does not impede tribal sovereignty, nor does it determine any taxes or fees on Tribes,” the governor’s office said. “The CCA regulates and reduces climate pollution. Fossil fuel polluters incorporate their compliance costs into what they charge for their product, similar to any business with compliance costs related to things like workplace safety or bookkeeping.”

The participants in Wednesday’s meeting represented 12 of Washington’s 29 federally recognized tribes. In addition to the Lummi Nation, there were leaders from the Chehalis Tribe, Colville Tribes, Lower Elwha Klallam Tribe, Makah Tribe, Nisqually Tribe, Nooksack Tribe, Samish Nation, Sauk-Suiattle Tribe, Stillaguamish Tribe, Squaxin Island Tribe and Yakama Nation. Some of the Puget Sound region’s tribes near urban areas didn’t participate.

Some tribal leaders pushed back Thursday against Inslee’s argument that it would be wrong to give tribal gas stations an advantage. Tribes made huge sacrifices when they signed their treaties and some are still struggling to help members get ahead in life, said Nino Maltos II, Sauk-Suiattle Tribe chair.

“We gave up a hell of a lot more than the advantages we get,” Maltos said. “For us smaller, remote tribes it’s very difficult to make it by as is.”

When tribal leaders “expended our political capital” to help pass the CCA in 2021, “we didn’t realize, no one realized,” what the impact was going to be, said Wooten, the Samish Nation chair. Wooten said he feels that Inslee, who isn’t running for governor again in 2024, doesn’t want to cede ground now on a policy that he considers crucial to his legacy as a “green governor.”

“I’ve lost a lot of respect for that man,” Wooten said, adding, “I don’t think the average citizen should be taking it on the chin.”

The meeting didn’t go “as anybody wanted it to,” Eric White, chair of the Stillaguamish Tribe, said after hearing from council members who attended.

“We are good stewards of the environment,” White said. “They have exemptions for agriculture and aviation … and that just, to us, doesn’t make sense when you give exemptions to the biggest polluting industries and not the ones who are actually taking care of the environment.”

Wooten echoed that point.

“We already do an extensive amount of restoration and climate change battling on our own,” he said. “Now we’re paying twice.”

The state partly refunds gas taxes to tribes based on agreements reached after years of sovereignty-related litigation. Tribes sold about 176 million gallons of fuel in 2022, paying about $87 million in gas taxes and receiving about $65 million back, according to state estimates shared by Inslee’s office.

Washington’s first quarterly auction of pollution allowances raised nearly $300 million and lawmakers have budgeted about $2 billion in anticipated revenue for projects intended to reduce emissions over the next two years.

The legislation requires that 10% of CCA revenues go toward tribally supported uses and projects. Tribes will receive about $130 million directly over the next two years (about 6.5% of CCA proceeds) and are eligible to apply for up to $120 million more, Inslee’s office added, noting that an additional $153 million in CCA proceeds will fund salmon recovery projects, “a top environmental priority of Tribes.”

Exempting tribal gas stations from the state’s climate laws would enable “the sale of even cheaper fossil fuel by entities that already receive gas tax refunds” and CCA dollars, Inslee’s office said, calling that course of action “antithetical to Washington’s climate efforts.”

In his response, Hillaire, from the Lummi Nation, mentioned that tribal enterprises such as gas stations, “fund reservation schools, health care, social services, youth programs and natural resources.”