BURIEN — Gov. Jay Inslee and members of the Democratic-controlled Legislature on Thursday stressed their desire to rein in the oil industry’s record profits as Washingtonians continue to pay for the most expensive fuel in the nation.
Several of Highline Public Schools’ new electric buses served as a backdrop to the news conference, held in a gravel lot drenched in sunlight. Nearby were reporters’ cars, largely fueled by gasoline.
Inslee, Sen. Joe Nguyen, chair of the Environment, Energy & Technology Committee, and House Majority Leader Joe Fitzgibbon said the legislation they’re drafting would force oil companies to open their books and create a mechanism to penalize the companies if they are gouging consumers.
The move takes aim at what Inslee’s office has characterized as the “hypocrisy” of oil companies, one of which recently alleged it can’t afford but to pass on the costs of compliance with the state’s new efforts to curb greenhouse gas emissions. The state launched a program this year that puts a price on each metric ton of emitted gases that causes climate change.
“The spokesperson for Chevron said the other day … it’s not their job to go bankrupt,” Inslee said at the news conference. “I don’t have a Nobel Prize in economics, I only have a Bachelor of Arts in economics from University of Washington, but I can tell you the oil and gas industry is not going bankrupt.”
Thursday’s news conference was met with quick pushback from the Western States Petroleum Association and some Republican lawmakers, including Senate Republican Leader John Braun, R-Centralia, and Sen. Drew MacEwen, R-Shelton, the Republican lead on Nguyen’s committee.
“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,” Catherine Reheis-Boyd, WSPA president and CEO, said in a statement.
Months before the state’s new carbon-pricing program launched, gasoline prices began climbing until Washington surpassed California in June for the highest prices at the pump. Meanwhile, conservative think tanks, industry trade associations and nonprofit groups funded by the industry fired up campaigns casting blame on the state’s new climate policies.
Beside Inslee on Thursday, a poster detailed Chevron’s profits rising from $1.4 billion in 2021 to $6.6 billion earlier this year. On the other side of the podium, a poster said “Record-breaking oil company profits, record-breaking climate disasters.”
The poster included images from the recent Tunnel 5 fire in Skamania County, flooding in New Delhi and the debris left in Hurricane Ian’s path in Fort Myers, Fla. Headlines from KUOW, The New York Times and elsewhere described deadly heat domes, record drought and the costs of climate disasters.
“What we’re asking for today is radical transparency,” Nguyen said. “We want radical transparency as we work toward a cleaner, greener economy. We want to make sure that everybody, especially those who are most burdened by pollution, are also part of that solution as well.”
Airplanes from nearby Sea-Tac Airport frequently roared overhead as speakers stood at the podium. Communities under the airport’s flight paths, like SeaTac, Des Moines, Highline, Angle Lake, Beacon Hill and Rainier Valley, are exposed to a particularly worrisome type of “ultrafine” particles from when planes take off and land, researchers found in 2019.
According to a new University of Washington study, neighborhoods classified as “hazardous” under historical, racist redlining practices are today exposed to higher concentrations of all sizes of air pollution than those once labeled “desirable,” the study found. Black and lower-income communities are subject to some of the worst pollution, according to the study.
“I’m standing here, I’m a Black woman. I’m a mother. I’m a grandmother, so many different things to many people,” said Yolanda King-Lowe, an SEIU health care union leader. “And I’m tired of my community bearing the brunt of what’s happening with climate change and air pollution.”
After breaking annual profit records in 2022, U.S. and European oil giants ExxonMobil, Shell, Chevron and TotalEnergies posted their highest ever Q1 net profits in 2023.
In Washington, at least one oil company has added a line item listed as “cap at the rack,” a reference to the state’s new program, of more than 50 cents per gallon of diesel sold at the wholesale level. That amount is similar to estimates of compliance costs from industry and academic sources.
In the months leading up to the laws’ implementation, Inslee promised the carbon-pricing program would have little to no impact on the consumer.
Inslee on Thursday tried to shift blame for rising fuel prices on annual maintenance on BP’s Olympic Pipeline, which carries fuel from Blaine to Portland. AAA in June noted that prices were up in both Washington and Oregon likely due in part to maintenance on the pipeline.
The rise in prices in Washington outpaced California and Oregon, breaking the hand-in-hand tradition with Oregon prices.
When asked why lawmakers didn’t anticipate the costs to consumers, Inslee said the state did the best it could to estimate the impact. “But you can’t ask the legislators to solve every problem with one [legislative] session,” he added.
Braun, the Republican senator from Centralia, said “it is patently ridiculous to assume the oil companies would just absorb the hit,” from the legislation that put a price on pollution.
The state’s carbon-pricing program is the centerpiece of the 2021 Climate Commitment Act. It caps overall emissions and puts a price on pollution for some of the state’s biggest emitters in an effort to meet the targets of the Paris Agreement, which sets out an international framework to limit global warming to 1.5 degrees Celsius (or 2.7 degrees Fahrenheit).
The program is intended to infuse some of the revenue back into consumers’ wallets for initiatives such as swapping out fossil-fueled furnaces for electric heat pumps, ditching combustion engines for electric vehicles, or buying electric bikes. The rest is intended to fund local governments, schools and tribes in their clean energy transitions.
Following the hottest June ever recorded on Earth, as the compounding effects of climate change manifest through extreme heat, wildfire smoke and floods from coast to coast in the U.S., lawmakers said they’re taking aim at oil companies’ profits.
“We intend to defeat climate change. We intend to rein in the terrible pollution that the oil and gas industry is causing across our state and our nation,” Inslee said. “And we won’t stand for it. … We’re here today to hold those polluting industries, the oil and gas industry accountable.”
The proposed legislation is largely modeled after a similar law that went into effect in California last month. The California law created an independent division, the Division of Petroleum Market Oversight, within the state Energy Commission. It can penalize oil companies if it finds they are making excessive profits, and a penalty would not cause a rise in prices for consumers.
Some Washington lawmakers say the price of gasoline has gone down in California since the price-gouging legislation took effect. After a steep increase during the first quarter of the year, since March unleaded gasoline prices in California have averaged $4.85 per gallon, moving at most a few cents around that value on any given day. The state’s new legislation went into effect during this period.
