Think tank researcher bets on gas prices falling if I-2117 passes this November

Todd Myers, vice president for research at the Washington Policy Center think tank, recently offered to bet Rachel Smith, president of the Seattle Metropolitan Chamber of Commerce, over something she said during an editorial board meeting before the Seattle Times regarding Initiative 2117 to repeal the Climate Commitment Act and end the state’s carbon auctions.

Myers claims that if voters repeal I-2117 next month, gas prices will fall.

“Smith and BP, who is a major funder to keep the CO2 tax, said that repealing the tax wouldn’t necessarily cause the price of gas to go down, which is absurd,” Myers said, noting that companies pass increased costs to consumers.

“There’s no guarantee that it’s going to reduce gas prices. This isn’t a gas tax,” Smith said in speaking to The Seattle Times editorial board. Later she repeated the claim: “Nothing in this initiative guarantees that prices will go down.”

“They made this claim, which is totally counterintuitive, and I offered to bet Smith at the Chamber and others, but they haven’t taken the bet, and that’s because they know I am speaking truth,” Myers said.

He pointed to multinational oil and gas company BP’s own numbers to make his case.

“BP sells gasoline wholesale, and on their invoices, they list the cost of the CO2 tax as ‘cap at the rack,’” Myers noted.

Cap at the rack refers to wholesale fuel prices.

“They have a specific line item that says, ‘cap at the rack’ and that line item per gallon is basically exactly what the amount of the tax is and when the prices of the tax went down this year, the price that BP charged on their invoices went down by the exact amount,” Myers explained. “They admit that when the cost of the tax goes down, they pass those savings on to the people who buy gas from them, which are gas stations primarily.”

That’s pretty convincing, in Myers’ estimation.

“BP’s own invoices show that if voters repeal the CO2 tax, they will save money,” he said.

Myers went on to explain the math.

“The price is currently about 24 cents a gallon, so prices would go down that much,” he said. “But the state’s own estimates from the Department of Ecology are that in the year 2030, the tax would be about 80 cents a gallon.”

The most recent auction held by the state Department of Ecology saw the price fall to $29.88 per metric ton of greenhouse gas emissions, which according to Myers, translated to about 30 cents per gallon of diesel fuel. BP marked up the price 28.4 cents per gallon, he noted, or just below the price hike implied by the tax.

The Center Square reached out to BP but a spokesperson said the company would not comment.

Smith did not respond to an email request for comment.

Voters will decide I-2117 on Nov. 5.