Of late, the oil industry has been swarming Olympia with guys in hard hats. It’s political theater meant to halt a small tax increase on toxic chemicals, which would pay for pollution clean-up. But the industry has been talking out of both sides of its mouth.
Industry is arguing two mutually incompatible things: that the tax increase would hurt consumers and that it would hurt refineries. But you can’t have it both ways.
The truth is: the tax would leave oil companies and refineries largely unscathed. The small tax increase will, in effect, be paid by consumers of refined petroleum products such as gasoline. (At current prices, the increase would nudge retail prices up by about two pennies per gallon, which is roughly equivalent to the fluctuation in price that motorists see every couple of days.) In other words, the consumers of hazardous substances will be asked to pay a bit more to clean up Puget Sound and other waterways.
The industry also keeps arguing that the small tax increase would somehow, very mysteriously, put some of them out of business. But their objections simply don’t hold water. Here’s why: all petroleum products sold for use in Washington will be taxed at exactly the same rate. That means every refinery is on exactly the same level playing field they are now. And, all petroleum products sold for use out-of-state will be exempt from the tax. That means refineries who export their products to Oregon or elsewhere are held harmless—and the level playing field remains intact.
It’s growing clear that the oil industry is not making arguments in good faith. They seem to have adopted a hardened and reflexive opposition to anything that would hold them responsible for their pollution. If you don’t believe me, let’s take just a moment to review what’s happened in Olympia so far this year.
Lawmakers introduced a bill to raise pollution clean-up funds by levying a small fee on refined petroleum products. The oil industry complained that they were being singled out, and that other toxic substances should also be covered. (Never mind that petroleum is easily the biggest source of toxic pollution entering Puget Sound, by volume.)
So lawmakers changed the bill to do what the oil industry said it wanted: they scrapped the fee, and instead opted to boost the state’s tax on all hazardous substances from 0.7 percent to 2 percent. But then oil industry switched tactics and begin complaining that the tax put some refineries at a disadvantage because they export a portion of their fuel out of state, mostly to Oregon, where they must compete with California refiners who don’t pay the tax. (Never mind that taxes are arguably higher in California than in Washington.)
So lawmakers again changed the bill to do what the oil industry said it wanted: they created an “export exemption,” so that refined products not consumed in Washington are spared the tax increase. But then the oil industry, longtime champions for the little guy (and, yes, that’s sarcasm you detect), began emphasizing a different argument: that the tax increase would fall too hard on consumers. (Never mind that the industry and its surrogatesrepeatedly lied about the cost impacts, a fact easily provable with basic arithmetic.)
So lawmakers once again changed the bill to do what the oil industry said it wanted: they lowered the tax increase to 1.55 percent. But to no one’s surprise, the oil industry switched tactics yet again, arguing that the increase would put refineries out of business and result in job losses. (Never mind that a leaked invoice circulated by opponents of the bill actually shows that refiners pass on the full cost of the existing tax to consumers, which is precisely what they would do with a higher tax rate too.)
See what I mean? The oil industry wants to kill the bill, any bill, that affects them. Perhaps its a show of political strength, or perhaps it’s reflexive opposition to anything that smacks of holding oil companies responsible for their pollution. But it’s becoming increasingly clear that they’re not engaged on substance, but on politics.
Oh, I almost forgot to mention two other recent events:
- In February, San Antonio-based Tesoro was slapped with a huge lawsuit by the Justice Department and the Environmental Protection Agency. It turns out that Tesoro’s Anacortes refinery was not even bothering to test for important types of air pollution such as benzene, sulfur, and other toxics.
- In mid-March, Houston-based ConocoPhillips finally agreed to pay a half million dollars for a 2004 oil spill in south Puget Sound that dumped thousands of gallons of petroleum into the water. At the time, Conoco denied any wrongdoing, though it later became clear they were at fault. But they still have not admitted guilt.
Given the oil industry’s history, are these really the folks we want writing Washington’s pollution laws?
