Oil money flows to stop car­bon fee By Rye Druzin

Texas com­pa­nies fight Wash. mea­sure that would tax emis­sions

Houston Chronicle Sunday - - BUSINESS -

Texas en­ergy com­pa­nies are pour­ing mil­lions of dol­lars into Wash­ing­ton state to fight a bal­lot mea­sure that, if passed, would cre­ate the na­tion’s first car­bon fee, rais­ing the cost of gaso­line and other fos­sil fu­els and likely hurt­ing de­mand for pe­tro­leum prod­ucts.

The fee, essen­tially a tax on car­bon emis­sions, is con­sid­ered by en­vi­ron­men­tal­ists, econ­o­mists and even some oil com­pa­nies as a mar­ket-based ap­proach to slow­ing the pace of cli­mate change by pro­vid­ing in­cen­tives to use en­ergy sources that pro­duce less car­bon diox­ide, a green­house gas that traps the sun’s heat and con­trib­utes to global warm­ing. Fos­sil fu­els, such as coal, oil and nat­u­ral gas are among the largest sources of car­bon diox­ide emis­sions.

Wash­ing­ton’s pro­posed car­bon fee, which vot­ers will be asked to ap­prove in Novem­ber, would im­pose a fee of $15 a ton on car­bon emis­sions start­ing in 2020, which

would in­crease by $2 a ton a year in sub­se­quent years. The state es­ti­mates the car­bon fee would raise up­ward of $2.3 bil­lion in the first five years, with 70 per­cent of the money spent on de­vel­op­ing re­new­able en­ergy, 25 per­cent to re­spond to ef­fects of cli­mate change such as ris­ing sea lev­els and 5 per­cent to­ward re­duc­ing the im­pact of cli­mate change on the most vul­ner­a­ble com­mu­ni­ties, such as those at risk from from wild­fires.

The cam­paign over Ini­tia­tive 1631 could be a gauge of pub­lic con­cern over cli­mate change and will­ing­ness to adopt poli­cies aimed at re­duc­ing the use of fos­sil fuel — even if it means higher en­ergy costs, an­a­lysts said. Wash­ing­ton vot­ers will con­sider the bal­lot ques­tion fol­low­ing a sum­mer of wild­fires that de­stroyed wide swaths of Cal­i­for­nia and deadly flood­ing in North Carolina caused by Hur­ri­cane Florence — nat­u­ral dis­as­ters blamed in part on warm­ing global and ocean tem­per­a­tures.

If the ini­tia­tive passes, it could pro­vide the im­pe­tus for car­bon fees or taxes across the coun­try, said Aseem Prakash, a Univer­sity of Wash­ing­ton po­lit­i­cal science pro­fes­sor and found­ing di­rec­tor of the Cen­ter for En­vi­ron­men­tal Pol­i­tics at the Univer­sity of Wash­ing­ton.

“If the ‘yes peo­ple’ suc­ceed here,” Prakash said, “then first of all, it will demon­strate that there’s pop­u­lar sup­port, and sec­ond, it will give an em­pir­i­cal ba­sis to claim that a car­bon tax or a car­bon fee ac­tu­ally does not hurt eco­nomic growth.”

In Wash­ing­ton, re­fin­ers and trans­porta­tion fu­els would bear the brunt of the car­bon fee, which would raise the price of gaso­line by 14 cents a gal­lon and cost a two-driver house­hold an ad­di­tional $167 a year, ac­cord­ing to an anal­y­sis by the Wash­ing­ton Pol­icy Cen­ter, a think tank that pro­motes free-mar­ket so­lu­tions. Com­pa­nies such as Phillips 66 of Hous­ton and the Bri­tish oil ma­jor BP — both of which op­er­ate re­finer­ies in the state — have con­trib­uted nearly $19 mil­lion to the cam­paign to de­feat the pro­posal.

The com­pa­nies ar­gue that the car­bon fee would be in­ef­fec­tive be­cause the pro­posal ex­cludes some large car­bon pol­luters that are con­sid­ered en­ergy in­ten­sive and com­pete in global mar­kets, a def­i­ni­tion that could in­clude pulp and pa­per man­u­fac­tur­ers, mar­itime com­pa­nies and the air­craft-maker Boe­ing, one of the state’s big­gest em­ploy­ers. The ini­tia­tive also ex­empts a coal-fired power plant near Cen­tralia,Wash., un­til it shuts down in 2025.

Coal is one on big­gest pro­duc­ers of green­house gases.

“We agree that there’s a car­bon mech­a­nism that can be put in place, but it’s got to be fair,” said Dana Bieber, spokes­woman for the No on 1631 cam­paign. “It can’t ex­empt the largest pol­luters, it can’t un­fairly put the bur­den on fam­i­lies and con­sumers, and it’s got to pro­vide some as­sur­ances that car­bon emis­sions will, in fact, be re­duced.”

But per­haps the big­gest con­cern among en­ergy com­pa­nies is that the ini­tia­tive would open the door for states to adopt their own brands of car­bon taxes or fees, cre­at­ing a maze of vary­ing sys­tems and costly ad­min­is­tra­tive night­mare for com­pa­nies try­ing to com­ply with 50 dif­fer­ent ver­sions of a car­bon charge. BP, for ex­am­ple, has joined other oil com­pa­nies, such as Exxon Mo­bil, that have called on Congress to adopt a na­tional car­bon tax that would be the same in all states.

“BP sup­ports a wellde­signed price on car­bon that is clear, flex­i­ble, ef­fi­cient and can be ap­plied con­sis­tently across the econ­omy,” the com­pany said in a state­ment.

At least 10 states, in­clud­ing Wash­ing­ton, have con­sid­ered car­bon taxes and fees, although none has yet to pass them, ac­cord­ing to the New York re­search firm Rhodium Group. In­ter­na­tion­ally, sev­eral Euro­pean coun­tries and Cana­dian prov­inces have adopted car­bon taxes of some sort.

The idea be­hind car­bon taxes and fees is sim­ple. By rais­ing the costs of fu­els that emit car­bon diox­ide, con­sumers and busi­nesses will turn to al­ter­na­tives, cre­at­ing big­ger mar­kets for elec­tric cars or so­lar and wind power and en­cour­ag­ing in­vest­ment in cleaner forms of en­ergy that ul­ti­mately re­duce green­house gases.

This is not the first time Wash­ing­ton vot­ers have con­sid­ered a car­bon tax or fee. In 2016, a car­bon tax pro­posal, Ini­tia­tive 732, was re­jected de­ci­sively, with nearly 60 per­cent of vot­ers op­pos­ing the mea­sure.

Sup­port­ers of the ini­tia­tives say this time is dif­fer­ent be­cause Ini­tia­tive 1631 ear­marks money raised from car­bon fees for spe­cific mea­sures to shrink the car­bon foot­print of power gen­er­a­tion, such as in­vest­ing in re­new­able en­ergy, and help com­mu­ni­ties cope with the ef­fects of cli­mate change . The state has suf­fered at least five wild­fires that each burned more than 100,000 acres in the last five years, ac­cord­ing to data from the Na­tional In­ter­a­gency Fire Cen­ter, a sup­port cen­ter for wild­land fire­fight­ing based in Boise, Idaho. In 2015, the state, well known for its rain, was gripped with ex­treme drought con­di­tions.

“What 1631 does is it iden­ti­fies a fu­ture in which Wash­ing­to­ni­ans have more choices,” said Mike Stevens, the Wash­ing­ton state di­rec­tor for the Na­ture Con­ser­vancy, a na­tional en­vi­ron­men­tal ad­vo­cacy group. “We will be stim­u­lat­ing in­vest­ments in new and emerg­ing tech­nolo­gies that are cleaner and sus- tain­able and prof­itable for Wash­ing­ton busi­nesses.”

The Na­ture Con­ser­vancy is the largest donor to the Yes on 1631 cam­paign, con­tribut­ing more than $1.2 mil­lion. The Yes cam­paign has raised more than $6.5 mil­lion.

That pales in com­par­i­son with the money raised for the No cam­paign. Phillips 66 and BP, which each have re­finer­ies in the state, con­trib­uted $7.2 mil­lion and $6.4 mil­lion, re­spec­tively. Be­fore its merger with Marathon Pe­tro­leum of Ohio, the San An­to­nio re­finer An­deavor, which also op­er­ated a re­fin­ery in the state, con­trib­uted $4.3 mil­lion.

Valero re­cently gave $495,000 to No cam­paign. Koch In­dus­tries, run by the in­flu­en­tial backer of con­ser­va­tive causes, Charles Koch, re­cently con­trib­uted $300,000.

Elaine Thomp­son / As­so­ci­ated Press

A tanker is moored at a BP oil re­fin­ery in Wash­ing­ton. The Bri­tish oil and gas com­pany has con­trib­uted mil­lions to a cam­paign against the state’s Ini­tia­tive 1631.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.