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CA Air Resources Board (CARB)

Oil Lobby Pushes For Pump Labeling, Calling Cap and Trade “Hidden Tax”

10:29 AM PDT on July 1, 2016

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A few days after the largest oil lobbyist in the state told a legislative hearing that cap and trade is “the most cost-effective way to produce greenhouse gas emissions reductions,” the oil industry is trying out a new way to attack the state program.

The California Independent Oil Marketers Association, a trade group for oil distributors, is asking its gas station members to put a label on gas pumps that points out the supposed cost per gallon of the state's cap-and-trade system. Insisting that it constitutes a “hidden tax,” the group says it is just trying to inform consumers how much they are paying per gallon for the climate change policy.

The amount, estimated by various sources to be around ten to eleven cents per gallon for gasoline and 13 cents per gallon for diesel, is not a tax, but a cost passed on to consumers by the industry. Oil companies got a free pass for a few years, but starting last year had to join the cap-and-trade program and buy allowances for the greenhouse gas emissions they produce.

Of course the point of having them pay is to encourage them to cut emissions, and the money thus collected by the state goes into the Greenhouse Gas Reduction Fund, which pays for other programs that further reduce emissions.

But apparently none of that information is included on the label. Nor are other costs that contribute to the price of gas, like the supply fluctuations that followed last year's refinery fire in Torrance.

Writing in ClimateWire, Anne C. Mulkern quotes Dave Clegern, spokesman for the California Air Resources Board, who points out that “it seems likely customers would really be more interested in the profit margins of the oil industry and public health impacts. . .Why aren’t they posting those figures?”

She writes:

Oil companies are trying to “have it both ways,” said Susan Frank, director of the California Business Alliance for a Clean Economy, a coalition of 1,300 small and mid-sized companies supporting clean energy. Oil companies have opposed labels that said burning gasoline contributes to global warming, she said.

In 2014, Berkeley and San Francisco were debating a label stating that burning gasoline worsens climate change, Frank said. The San Francisco Chronicle said that Catherine Reheis-Boyd, president of oil trade group Western States Petroleum Association, in a letter to the city of Berkeley had called the labels “forced reproductions of the state’s and city’s policy opinions.”

“It’s incredibly hypocritical because the oil industry opposes gas pump labeling except when it reflects their claims of how gas prices may or may not reflect the cost of clean air standards,” Frank said. She added that “no one can definitively” say how much gas prices have gone up because of the state’s clean air policy.

Assemblymember Tom Lackey (R-Palmdale) has supported the labels, calling them a move towards “transparency” that the state legislature won't take. But if the oil industry really wants transparency, it should include more detail on the labels, including an estimate of the social and health costs of climate change and pollution as well as information about what the cap-and-trade money is funding.

If they did that, consumers might very well be pleased. Ten cents a gallon seems a true bargain, considering that cap and trade is fighting climate change, funding green transportation, fostering healthier communities, and benefiting California's economy.

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