Oil Companies Opposing Washington State’s Tax, But Promoting A Federal One

Jason Hopkins | Energy Investigator

Oil giants BP and Shell are supportive of a federal carbon tax, but stand in opposition to a carbon tax proposal being pushed at the state level.

Washington state might soon enact its own carbon fee — a charge levied on energy companies according to the amount of CO2 they emit into the atmosphere. The idea is considered by many as a superior alternative to environmental regulations when combating climate change. In Washington, proponents of carbon pricing on Monday submitted more than 370,000 signatures to Washington Secretary of State Kim Wyman’s office to put their measure to the November ballot.

The signatures — a third more than the minimum number required to place a measure up for a vote — regard Initiative 1631, a measure that has earned a broad coalition of support from liberals, environmentalists, labor and tribal groups in the state. Yes on 1631, a campaign in support of the proposal, recruited more than 2,300 volunteers to help with the signature collection effort.

Initiative 1631 calls for a fee that would charge $15 a metric ton of carbon beginning in 2020, hitting vehicle owners with around 14 cents more on the price of a gallon of gas. This fee would increase $2 per ton of carbon emission every year beginning in 2021, and rise with the rate of inflation. This increase would end if the state meets its carbon emissions target by 2035. The initiative is technically a “fee” and not a tax, allowing revenue to be spent on other environmental measures. The measure is expected to rake in around $1 billion annually.

Numerous energy companies are rallying in opposition, arguing the proposal is unfair and ill-designed. Phillips 66, Chevron, BP and Shell — according to Public Disclosure Commission records — have signed on as pledges for No On 1631, a campaign opposing the carbon fee proposal.

The names come as a bit of an oddity considering both BP and Shell are founding members of the Climate Leadership Council, an organization working to push a carbon tax at the federal level. Both companies support the concept of a carbon tax to mitigate the effects of climate change, but don’t think what is being proposed in Washington is good policy.

“Shell will not participate outside of the initial phase of the campaign but that should not be taken as an endorsement of the initiative, itself,” Shell spokesman Curtis Smith said in a statement to The Daily Caller News Foundation.

“Our support for a robust and transparent carbon price is well known but our desire to address climate change by way of a carbon tax cannot come at the cost of thoughtful and effective policy,” Smith continued. “It’s our view I-1631 singles out and unfairly burdens the oil and gas industry while holding harmless other major sources of emissions. Further, it does not incentivize innovation and generally lacks a convincing argument that carbon emissions would be reduced in a meaningful way if this initiative were to succeed.” (RELATED: Conservative Groups Rally GOP Opposition To A Carbon Tax)

Opponents of the initiative point out that it exempts major polluters in the state, including a central coal-fired plant that relies heavily on government spending.

BP also explained its disagreement with Initiative 1631 in a statement to TheDCNF.

“BP supports a well-designed price on carbon. The initiative in Washington state does not meet that requirement, therefore, we do not support it. Among other things, the initiative is not economy-wide and does not treat equivalent emissions from different industries the same,” said BP spokesman Michael Abendhoff. “We are committed to working with the administration of Governor Inslee and the legislature in developing a sustainable and well-designed approach in next year’s legislative session.”

Abendhoff said “well-designed” policy should be economy-wide to avoid any preferential treatment or punishment; be efficient with minimal to no overlapping regulations; and be understandable with a clear formula applied consistently.

The petition submitted by carbon fee supporters still needs to be reviewed by the state secretary’s office to determine if enough signatures are valid before placing Initiative 1631 on the ballot in November. Democrat Gov. Jay Inslee has wholeheartedly endorsed the measure.

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