(Reuters) - The U.S. oil industry has spent a record $30 million to fight a ballot measure in Washington state that would create the nation’s first carbon tax, double what an alliance of green groups and billionaire activists has spent to support it, according to state data reviewed by Reuters.
The big-ticket battle reflects the stakes of climate regulation. The oil industry is worried that new curbs on carbon emissions will hobble business, while environmental advocates are concerned that a failure to act soon to halt global warming will spell devastating consequences for the planet.
Washington is the nation’s fifth biggest fuel-producing state, with five refineries, according to the Energy Information Administration. It is also among several Democrat-led states that have vowed to pursue climate action in defiance of President Donald Trump’s agenda to ease regulation on fossil fuel companies.
The state’s Carbon Emissions Fee and Revenue Allocation Initiative, known as Initiative 1631, would impose a $15 fee on each metric ton of carbon released to the atmosphere, rising $2 a year until the state’s 2035 emissions target is met. It would generate $2.3 billion over five years for clean energy and air programs if it is passed by voters in next week’s election, according to a state analysis.
The measure is on the ballot for the Nov. 6 elections.
A Crosscut/Elway poll this month showed half of voters approve of the initiative, with 36 percent against and 14 percent undecided.
If the measure passes, the oil industry is likely to feel the most pain since transportation is the largest contributor of greenhouse gas emissions in Washington at 43 percent, according to a state report from 2016.
The Western States Petroleum Association raised $31.2 million from oil companies and business groups to oppose the measure, the most ever spent in the state to defeat a ballot initiative, according to state campaign finance data. The previous record was set in 2013, when agriculture and food companies spent $24 million to defeat a measure to require labeling of genetically engineered foods.
The anti-carbon tax money has fueled a months-long public relations blitz involving television and digital ads, flyers and mailers that argued the fee would drive up energy costs for consumers, small businesses and farms, and which criticized proposed exemptions for industries like aluminum, pulp and paper, and soon-to-retire coal-fired power plants.
“The state’s largest polluters would be exempt from 1631’s new costs, so many big corporations would pay nothing. But families, small businesses and farms would pay billions in higher energy costs,” farmer Rosella Mosby says in one ad while standing in a field on her family’s vegetable farm.
Many of the TV ads aired during this month’s Major League Baseball’s World Series, one of the most widely viewed events on television.
Dana Bieber, a spokeswoman for the “No on 1631” campaign, said the high spending was justified. “We’re up against a very misleading campaign and we think it’s important that voters have the facts,” she said in an interview.
Top donors to the “No on 1631” campaign include BP America (BP.L), which contributed more than $11.5 million, followed by Phillips 66 (PSX.N) with $7.2 million and Andeavor with $4.4 million. All three own refineries in the state.
BP spokesman Jason Ryan said his company supports action to combat climate change, but strongly opposes the Washington ballot initiative because it believes it would disrupt the state’s economy without significantly reducing carbon emissions. “It is a poorly designed policy,” he said.
Out-of-state refining companies like Valero Energy Corp (VLO.N) and HollyFrontier Corp (HFC.N) also contributed, as did the national refining industry lobby group, the American Fuel and Petrochemical Manufacturers - a sign the industry is concerned the measure could inspire other states to follow suit.
By contrast, environmental groups and climate activist billionaires including Bill Gates, Michael Bloomberg, Tom Steyer and Laurene Powell Jobs, the widow of Apple founder Steve Jobs, put together $15.2 million to support the initiative, according to the state Public Disclosure Commission.
Top supporters included The Nature Conservancy, which donated $3.05 million, the League of Conservation Voters, which contributed $1.4 million, and Gates and Bloomberg, who each contributed $1 million. The campaign spent $1.8 million of the money on television advertising emphasizing the clean air benefits of a carbon tax, along with spending on mass-mailings, canvassing and voter research.
“With Big Oil spending $30 million, that makes it a real fight,” said Bill Holland, state policy director for the League of Conservation Voters. “It has been a frightening amount of money.”
Reporting by Nichola Groom; editing by Richard Valdmanis and Leslie Adler