Since the beginning of the year, many Washingtonians have felt pressure at the gas pump and wondered how much of the high price tag they see is caused by the state’s Climate Commitment Act.
The average price of gasoline on Friday was $4.72 in the state – making Washington the third most expensive place to buy gas in the country, following California and Hawaii.
Washington’s auction of carbon credits has raised $1.5 billion since the first one was held in February. That money has largely come from oil and energy companies and other big emitters of greenhouse gases in the state that need the credits to help meet their carbon emission limits.
For months, the climate act has sparked heated debates between policy critics who blame high gas prices on the legislation and policy supporters who say big oil companies and a complicated economy are to blame for the uptick in prices.
In July 2022, the state Department of Ecology publicly estimated gas prices in the state would rise by about 5 cents per gallon when the carbon auctions began, but that prices would gradually drop.
“The economic analysis was looking at these longer-term effects,” Ecology department spokesperson Andrew Wineke said. “Through the first several months of the program here, the impacts are a little bit higher than what we estimated. We still think that, over time, the cost will still go down.”
Wineke said the price of gas will be forced down with time in the state by things like the growing number of electric vehicles and more people working from home or taking public transportation. Right now, about 17% of new car sales in Washington are zero-emission or plug-in hybrids. That percentage is going up every month, Wineke said, and it will pressure oil companies to charge less.
State officials acknowledge that Washington’s landmark climate legislation has caused a 25- to 35-cent increase in the average price of gas per gallon . Between Jan. 1 of this year and October, gas prices in Washington climbed about $1.25 per gallon. The origin of the rest of that increase remains unclear.
Factors such as seasonal fluctuations play into gas prices – such as hikes in the summer travel season, Wineke said. And in 2022, Wineke attributed skyrocketing prices to the Russia-Ukraine War’s impact on the global oil and gas market.
“I understand why people are looking to cap-and-invest,” Wineke said. “It is not the only thing that affects gas prices.”
Sen. Mark Schoesler, R-Ritzville, has been an outspoken critic of the climate act ever since it passed the Legislature in 2021. He called the policy “mean-spirited and punitive.”
Schoesler said the policy is putting an unfair burden on working-class families, particularly in rural parts of the state. The senator said many of his constituents and friends in Eastern Washington are making frequent trips to Idaho to fill up their gas tanks for less.
“These are hardworking families that can’t just say, ‘Oh, it’s the right thing to do. Let’s just buy a new car,’ ” Schoesler said. “They can’t afford their gas bills, and they can’t afford to buy an (electric vehicle). EVs are not universally practical yet.”
The ecology department’s estimate that gas prices would only increase a few cents was dishonest and irresponsible, Schoesler said, and he wants the state agency to be held accountable.
“Who believes that any corporation would absorb a billion dollars in cost and not pass it onto consumers?” he asked. “I don’t care what the product is – it always gets passed to the consumers.”
Schoesler said he hopes the Legislature will ditch the climate act entirely and start over to draft a new climate policy that doesn’t make taxpayers foot the bill.
The Ritzville senator said he supports a petition effort to repeal the climate act through a ballot initiative.
“I’m not directly involved in it,” he said. “I signed it as a citizen.”
The billions of dollars raised from the climate act are meant to go “directly” back to people and their neighborhoods so they can live a better life, said Sen. Joe Nguyen, D-White Center.
Nguyen said this happens through subsidizing purchases of electric vehicles, heat pumps and public transportation. Money from the carbon credits is also allocated to the working family’s tax credit, a state program designed to mitigate the impact of higher fuel prices by giving up to $1,200 in tax credits back to qualifying families and individuals.
“The whole point of why we’re doing all this is we’re seeing extreme heat, we’re seeing droughts, we’re seeing rampant wildfires and we’re seeing toxic air that pollutes our communities,” Nguyen said.
A lot of the mitigation from the climate act goes to central and Eastern Washington, the senator added, to help with drought resilience and wildfire prevention.
When asked about heightened gas costs, Nguyen said big oil companies are jacking up prices for profit and letting people think it’s the Legislature’s fault. He said if people are mad about the climate act, they should be even angrier at oil companies.
“This is kind of a tactic oil companies have used to hold people hostage for a long time,” Nguyen said. “They blame climate policies for fuel prices when in fact Washington state has had high fuel prices for the last 30 years.”
Schoesler and Nguyen differ on whether the climate act would bolster the state’s economy. Schoesler warned increased fuel costs would push jobs out of state, while Nguyen said investments in green technology will create more jobs.
Lawmakers are currently looking at ways to reduce fuel costs in the state, Gov. Jay Inslee’s spokesperson Mike Faulk said. The issue will likely appear in the upcoming legislative session, beginning in January.
One idea floated has been to link Washington’s cap-and-trade market with Quebec and Canada, Faulk said, to bring stability and decrease prices. Another idea is to pass gas pricing transparency legislation and require oil companies to open their books.
“We basically only have so much information about understanding why fuel prices, in general, are the way they are,” Faulk said. “You’ll hear people who look at this kind of describe it as a ‘black box.’ ”
This year, oil companies have pulled record-breaking profits.
Faulk said Washington is on a path to a day when people will no longer have to worry about gas prices, thanks to renewable energy. The climate act is working to speed up this process, he said.
“It is a very people- and community-oriented law that is telling our biggest polluters that they have to pay their fair share for the damage they’re causing,” Faulk said, “and that we’re going to use those funds to make life better … And ultimately get to where we need on emissions to get away from catastrophic climate change.”