Senator urges fixes to cap and trade, asks lawmakers to sign letter to Ecology

Sen. Chris Gildon, R-Puyallup, is seeking the Legislature’s support in an effort to mitigate damage being done by Washington’s highest-in-the-nation gas prices.

It won’t take much. He says it can be done with simple rule changes at the Department of Ecology, to fix a cap and trade program that has sent gas prices soaring. Six months after the program launched, Washington has become the national leader in gas prices — an average $4.98 a gallon, according to latest AAA figures.

Gildon is asking lawmakers to sign a letter to the Department of Ecology, proposing changes to administrative rules that have contributed to the high cost of the new state program. Best estimates are that cap and trade has added 45 cents to the cost of a gallon of gasoline.

“We can fix this problem without forcing the Legislature back into session,” Gildon said. “Part of the idea behind cap and trade was to force gas prices high enough that people would think twice about driving, or perhaps buy an electric car. But I don’t think many legislators would have voted for it if they knew it was going to be this bad.

“The good news is that the state Department of Ecology can take care of this with a few changes to administrative rules. There are serious problems with the way the program has been configured, and this has become more obvious as time has gone on. This isn’t a matter of price gouging by oil companies, and I think the public gets it.”

Gildon voted with Republicans against cap and trade legislation in 2021, expressing skepticism at pennies-on-the-gallon cost estimates. His letter to Ecology outlines a series of changes to rules adopted by the agency as it created the state’s new carbon-allowance auction system.

Remedies include:

• Making it easier to comply with emissions targets, by slowing the pace of increasingly stringent state requirements.
• Increasing the supply of carbon “allowances” sold at the state’s new carbon auctions, to prevent shortages and bidding wars.
• Technical changes to the carbon allowance auction system, including lower floor and ceiling prices.
• Increasing the supply of no-cost allowances for businesses that compete out of state and internationally, allowing Washington products to remain competitive – and expanding eligibility for the break.
• Developing a system to easily honor fuel exemptions, a promise made to agriculture and the maritime industry when the bill was passed, but left unfulfilled.
• Adopting a temporary rule allowing the program to be suspended to reduce fuel prices, a prudent emergency measure if current trends continue.

Gildon noted that cap and trade allowance prices add about 45 cents to the cost of a gallon of gas. That increased cost is reflected precisely in Washington gas prices, which are about 45 cents higher than Western states without cap and trade programs.

“Some would have us believe this is the fault of oil companies, but they’re just passing the cost to the consumer,” Gildon said. “The state did this. And now it’s up to the Legislature to insist on a fix.”