SPOKANE — For a brief moment at a single gas station in Spokane, gas was cheaper than in Idaho — clear evidence that election season has arrived in what is expected to be a contentious fight over four initiatives that supporters say will save Washingtonians major money and opponents argue will take billions from important programs.
Drivers pulling up to pumps at Towns Liquor Mart on Wednesday saw prices for a gallon of regular gas drop from $3.79 to the national average of $3.39, part of a bid for publicity from a political group hoping to persuade voters to support Initiative 2117 this November and kill the state’s relatively new cap-and-trade system. That system, created by the state’s Climate Commitment Act in 2021 and launched in 2023, caps how much carbon can be emitted in the state each year and requires businesses that emit the most carbon to bid for an “allowance” to emit a portion of that overall cap.
The law’s sponsors argued it would decrease carbon emissions in the state as the cap shrinks over time and its sizable proceeds would be invested in environmental projects, ranging from converting the state’s diesel powered ferries to hybrid-electric models, funding projects to aid salmon populations and more. In its first year, the cap-and-trade system raised $2.2 billion.
While the system is not a gas tax, it did raise prices for the state’s fuel refineries, thereby raising the cost for the vast majority of the state’s gasoline. How much of rising costs can be attributed to the auctions, however, remains heatedly debated.
In text messages and press releases, Let’s Go Washington, the group behind three initiatives to repeal laws passed by the Democrat-led state legislature, advertised cheaper gas at the pump Wednesday, hoping to draw in voters and persuade them to “vote yes, pay less.”
The station’s pumps were packed Wednesday afternoon as dozens of drivers flocked to the discount, replicating a similar event Let’s Go Washington held in Richland in July. Underscoring the group’s push to educate and convince voters, none of the attendees The Spokesman-Review talked to were aware of the initiative before coming to the event.
Let’s Go Washington will compensate the owners of the gas station for the 40-cent-per-gallon discount, which the political action committee argues is demonstrative of how much Washingtonians could be saving if the carbon credit system is abolished.
“We want people to know what you would be paying if you were in a free state, versus this one,” said Brian Heywood, a hedge fund manager, part-time farmer and the brains behind Let’s Go Washington. “If 2117 wins, I think there’s a 20 to 50 cent decrease in the price of gas.”
Michael Baumgartner, Spokane County’s treasurer and a Republican candidate for Congress who supports I-2117, suggested at Wednesday’s event that the true cost could be closer to 60 cents.
State officials say these figures are unrealistic, noting that gas prices are influenced by a number of complicated factors including supply chains, refinery capacity and other variables, and arguing that it is difficult to detangle those factors to understand why gas costs what it does. A proposed law to create gas price transparency in the state died in committee earlier this year.
Andrew Wineke, deputy communications director for the state Department of Ecology, said Wednesday that state officials have been watching prices in Oregon, which gets most of its fuel from the same suppliers as Washingtonians, as a comparison to roughly gauge the climate law’s impact on Washington’s gas prices.
When factoring in the difference between the state’s gas taxes, average prices in Washington were roughly 10 to 20 cents higher than in Oregon earlier this year, with that number closer to 25 cents more recently, Wineke said. Confusing the matter, those higher prices at the pump don’t seem to have been tied to higher costs for carbon credits during the most recent auction, he added.
“Allowances prices are down sharply in Washington this year, but the gap between Washington and Oregon has increased,” he said.
Wineke also noted that the state’s highest ever gas prices were seen during the summer of 2022, before the carbon credit system was implemented, and gas prices today are significantly lower than they were at the same time in 2023 or 2022.
“These big supply and demand factors have a much bigger impact on what we pay at the pump than regulatory policies,” Wineke added.
While Let’s Go Washington’s outreach event compared state gas prices to the national average, the state has also had consistently higher gas prices than the nation at large for at least a decade, which Wineke partially credited to refinery capacity that hasn’t kept up with the state’s booming population growth. Gas prices in the state were 47 cents higher than the national average at the beginning of 2023, before the first carbon credit auction, and as of Monday were 66 cents higher, a 19 cent difference, according to the U.S. Energy Information Administration.
It is true, however, that initial messaging from some state Democrats suggested that the impact to consumers would be negligible, with Gov. Jay Inslee in 2022 saying that “we are talking about pennies” in a possible increase in gas prices.
“There’s dishonesty in what was told,” said Heywood, who called the carbon credit system a hidden gas tax. “This is a regressive tax. It hurts the guy who’s driving a 2001 Honda Accord hoping it keeps getting him to work every day.”
The Department of Ecology had estimated a price increase of about 1-3%, Wineke said. While prices jumped last year as the program was being introduced, they have more recently fallen closer to those earlier predictions, he continued.
Opponents of I-2117 argue that it is easier to quantify the costs to Washingtonians if the carbon credit system was abolished, putting at risk billions in investments in infrastructure and environmental programs.
“I-2117 would punch a $5.4 billion hole in our transportation plan, putting major road projects like the North Spokane Corridor and expanded rapid transit at risk of delay or cancellation,” wrote Kelsey Nyland, a spokesperson for the No on 2117 campaign. “It will devastate efforts to prevent wildfires and protect healthy forests. And it will mean more air pollution for communities in Spokane, which is already one of the area’s most overburdened by unhealthy air in Washington state.”
The Climate Commitment Act makes up about 30% of the state’s transportation budget currently, said state Sen. Andy Billig in a Wednesday interview. Many of the projects currently funded by that program, such as rehabilitating the state’s aging ferry system or court ordered improvements to salmon ecosystems, will continue regardless of whether I-2117 kills the carbon credit system, which means other mega-road projects could be cut to make up the difference, Billig added.
“If that much money gets ripped out of the transportation budget, every road project including the (North Spokane Corridor) will be in jeopardy,” he continued.
Revenue from the climate law is also slated to fund the development of a rapid bus transit system on Spokane’s Division Street, improve the Pacific Avenue Greenway, and pay for air quality and clean energy improvements for Eastern Washington University, the Great Northern School District and the Spokane Public Facilities District, among other investments. Statewide, the funds have paid for free fare for everyone 18 and younger to use the buses, among other programs. Funds from the program also are helping Kaiser Aluminum to install a new boiler that will reduce emissions.
Heywood is skeptical, however, at how effective the state’s investments have or will be to reduce carbon pollution and argues state leaders have not been transparently measuring the program’s impact.
“There’s almost no accountability in terms of actually making a reduction in carbon output,” Heywood said. “If you’re going to take a really regressive tax off the backs of people who can least afford it, you have an enormous obligation to show we’re doing what we promised we could do.”
