Pipeline that Inslee blames for gas price spike has been open for nearly a month

Gov. Jay Inslee on Thursday repeatedly blamed the closure of a major fuel pipeline in western Washington for driving the state’s gasoline prices to the highest in the nation.

But the pipeline isn’t shut down and hasn’t been since late June, refueling debate over how much of the recent surge at the pump is a result of oil industry profiteering versus the state’s climate policies. 

Christina Audisho, spokeswoman for BP, said in an email that maintenance on its Olympic Pipeline lasted three-and-a-half days and it was fully operational by June 27. There is no maintenance underway now, she wrote.

BP’s Olympic Pipeline runs along a 299-mile corridor and is used to transport gas, diesel and jet fuel from Blaine to Portland. When it went down, AAA warned of price spikes in Washington and Oregon. 

Average gas prices jumped eight cents in Washington and nine cents in Oregon on June 20, during the week the maintenance was reported, according to AAA.

In a news conference Thursday, Inslee seven times blamed gas price increases on the pipeline closure, insisting costs would fall when it resumed operation.

“That pipeline is going to come back,” Inslee said. “When it comes back, there’s a fair chance these prices can be ameliorated.” 

On Friday, an Inslee spokesman said in an email their office had not been advised of the pipeline opening and that the governor’s comment on prices going down was an ad-lib. 

“That was really a footnote to the fact that oil companies are making more than they ever have with no transparency around the prices they charge consumers,” spokesman Mike Faulk wrote. “That is his message.”

For the past month, Washington has consistently had the highest gas prices in the nation, with averages just shy of $5 for a gallon of regular unleaded. On Friday, it was $4.93, according to AAA. 

While Inslee and Democratic lawmakers who joined him at Thursday’s press conference blamed the high costs on price-gouging by oil companies, Republicans say the cause is the state’s new cap-and-trade program.

The program requires air polluters in Washington to clean up their work or purchase emissions allowances from the state at auctions. 

Allowance prices have been higher than expected, more than 2.5 times greater than the floor price. And some say companies are passing down this expense to customers at the pump. 

“Blaming the brief pipeline shutdown for the highest gas prices in the nation is nonsense,” said Sen. Curtis King, R-Yakima, ranking Republican on the Senate Transportation Committee, in a statement. “Gas prices have been on a steady rise since January, and it is caused by the cap-and-trade program.”

“Drivers are bitterly complaining about it, so the governor and his allies are trying to shift the blame instead of admitting that this is what they wanted all along,” he said.

The program’s two allowance auctions have brought in more than $850 million for the state to use on programs to fight climate change and its effects. The next auction will take place on Aug. 30.

Before the program went into effect, the Department of Ecology estimated it could add from 1 to 3% to the cost of a gallon of gas, spokesperson Andrew Wineke wrote in an email. That translates to 5 to 15 cents on a $5 gallon.

Democratic lawmakers and cap-and-trade backers say oil companies are using the climate program as an excuse to raise prices and keep profit margins high. 

At Thursday’s news conference, Inslee and legislators said they’ll pursue proposals to combat price-gouging and increase oil company transparency in the 2024 session.

Democrats are hoping to follow California’s lead where a new law creates an independent division in state government to monitor fuel markets daily for unethical or illegal behavior. 

The division, which also has the power to subpoena oil executives, can then report any market manipulation, industry misconduct, or price gouging to the Attorney General’s Office, which can issue penalties if warranted.

California’s law also requires refineries to report maintenance schedules in advance and unplanned maintenance in real-time. 

“Let’s be clear: If the oil companies actually decarbonize and meet their targets, they don’t have to pay anything,” Senate environment committee chair Sen. Joe Nguyen, D-White Center, said Thursday. 

Companies must comply with emissions requirements starting next year, but they can start purchasing allowances this year in anticipation of the compliance deadline.

“What we’re seeing is a front-loading of what seems to be price-gouging,” he said.