Washington motorists have been on the front lines of an epic surge in U.S. gas prices in the run-up to the summer driving season.
During the past month, Washington has ranked 15th in the U.S. for the biggest monthly increase in the cost of a gallon of regular, according to AAA price surveys.
In that time, the average cost of regular gasoline in Washington jumped more than 53 cents to nearly $5.22 per gallon as of Friday — just as many motorists hit the road in advance of Memorial Day.
The runaway prices in Washington and elsewhere in the nation are helping to supercharge inflation, looming large as a political issue and spurring two Washington state Democrats to take high-profile roles in shaping their party's response in Congress to escalating gas prices.
Last week, Rep. Kim Schrier, D-Sammamish, cited the price run-up in her own neighborhood to help make the case for an anti-price-gouging bill she co-authored with Katie Porter, D-California.
The legislation, which passed the House last week in a 217-207 vote, would empower the Federal Trade Commission to go after fuel price gouging when a president declares an energy emergency.
"Gas and oil companies should be held accountable to be transparent about their pricing, and should be penalized for unconscionable, excessive or extreme prices," Schrier said in a House floor speech. "This bill will give the FTC the ability to go after gas and oil companies and retailers that in a time of crisis jack up prices without justification."
Sen. Maria Cantwell, D-Wash., chair of the Senate Commerce, Science and Transportation Committee, is one of three West Coast senators to co-sponsor a bill directing the Energy Information Administration to collect more detailed information and make more disclosures about the pricing of consumer fuels. The legislation also would create a new unit within the FTC to monitor markets to increase watchdogging for manipulations or unfair methods of competition used to increase profits, and follow up with investigations.
This past week, the Commodities Futures Trading Commission and the Justice Department announced a $1.2 billion settlement to resolve charges that Switzerland-based Glencore International AG, an energy and commodities trading firm, engaged in schemes attempting to manipulate oil markets over 11 years ending in 2018. Cantwell said her bill would give the FTC a similar ability "to police bad actors" in gasoline markets.
"Let's make sure that everybody understands in a tight supply it's a lot easier to do manipulation and that is why we need to get this done," Cantwell said in remarks on the Senate floor Thursday.
Both Cantwell and Schrier's approaches have drawn plenty of potshots from Republicans, who along with some oil industry officials, have sought to put the spotlight on Biden administration policies they contend have unduly restricted oil exploration and development and contributed to higher gas prices.
"This is not an accident. This is not Putin. This is Joe Biden and the Democrats, and the Green New Deal and they're desperately looking for a political excuse to blame somebody for the consequences of what they promised," said Sen. Ted Cruz, R-Texas, in opening remarks during an April Senate Commerce Committee hearing on oil pricing transparency.
On Wednesday, Cantwell's bill failed to muster any Republican support, resulting in a 14-14 tie vote as it moved out of the committee.
In Washington, the national Republican talking points are echoed by the party's candidates who seek to unseat Schrier, the state's most vulnerable Democratic congressional incumbent, who in 2018 flipped the 8th Congressional District for the first time to Democrats.
Metropolitan King County Councilmember Reagan Dunn is one of three Republicans who hope to represent their party against Schrier in the November election.
Schrier "backed Biden when he paused new oil leases and drilling on federal lands ... but now that every American feels the impact of the price-raising policies she supported, she's running away from taking responsibility," Dunn said in a written statement.
Market movements
While politicians spar over what should be done about gas prices — and who to blame for them — federal analysts have detailed some of the forces that set the stage for the spring surge in prices.
Oil prices make up a big component of the cost of gasoline, and they were on the rise through much of 2021 as economic activity rebounded during the second year of the COVID-19 pandemic. The average daily price of the benchmark Brent crude oil topped $70 for that year, which compares to an average price of less than $42 during the previous year.
This year, in the aftermath of the Russian invasion of Ukraine, Brent crude oil spot prices averaged more than $117 in March, then declined to an average of $105 in April, then edged up to $115.13 as of Monday.
Gas prices, meanwhile, have soared to much higher levels than in early March. The national gas price for a gallon of regular, on Friday, averaged nearly $4.60, compared to $4.07 on March 8 when oil prices peaked.
In analyzing the spring jump in prices, EIA officials have examined outputs from refineries that process the oil into fuels. They note since 2020 refinery capacity in the U.S. has declined by 5% as some facilities have closed.
That U.S. capacity reduction has combined with increased demand to help push up the prices for gasoline, diesel, jet fuel and other refined products through most of April and May.
"The high price of gasoline is currently driven by several factors, including the price of crude oil, the effects of Russia's full-scale invasion of Ukraine, and rising U.S. gasoline demand outpacing refinery runs," stated an EIA report released Friday.
This has also increased refinery profits by widening the gap between the cost of crude oil and the selling prices of refinery products. This spread is known as "the crack" and has soared this spring.
The EIA found the gasoline spread was 68% higher than the five-year average, and the jet fuel spread was 276% higher than the five-year average.
Washingtonians still paying more
At the retail level, Washington state has long had some of the most expensive gas in the nation. As of Friday, Washington's average price for a gallon of regular ranked fourth among the 50 states, according to AAA.
Washington's high gas prices reflect, in part, state gas taxes that escalated in 2015 and 2016, and at 49.4 cents per gallon rank among the highest in the nation.
Since 2016, the Washington Legislature has not approved any new gas taxes. But the gap between what state motorists pay for a gallon of regular and the national average still increased. From 2017 to 2021, adjusted for taxes, that difference was almost double the 2011-16 average of 24 cents, according to a Seattle Times analysis.
As of Wednesday, Washington's average cost of a gallon of regular was 50 cents higher than the national average, when adjusted for taxes.
In California, a state Energy Commission investigation into rising gas prices looked at retail margins, as well as those by refiners. The commission concluded in a report that prices had climbed as retailers increased their margins above the national average, including higher-priced brands that raised margins "far beyond competitors."
Tough road
In an April letter to the FTC, Cantwell asked for more scrutiny of Washington and other West Coast fuel markets. If investigators uncover illegal activity in any of those markets, her bill authorizes the FTC to approve fines of up to $1 million per day for each violation, which is double the current level.
In the weeks ahead, a Senate floor vote is expected for Cantwell's bill.
Schrier's bill approved by the House was amended to include some of the provisions of Cantwell's legislation, with the hopes of easing its way in the Senate. And it is possible that bill could be put to the full Senate for a vote, according to Cantwell.
But Cantwell and Schrier's bills appear to be long shots for passage since they would likely require support from at least 10 Republicans.
"It can feel like a lonely road, trust me," Cantwell said in an interview. "I think that people want members of Congress to be aggressive on any issue related to pricing ... We are going to keep fighting."
