Is a New Pounding at the Pump Coming In Washington State?
The Washington State Department of Ecology has released the results of the first "Cap and Invest" (more commonly know as 'Cap and Trade') auction of carbon fuel credits in Washington State history.
Just under 6,200,000 allowances were allotted and sold by ecology over the course of the roughly three hour auction. The final sale price was significantly higher than the $22 per metric ton that was the opening Auction Floor Price. The settlement price came in an eye popping $48.50 per metric ton.
What Impact Will This Have on Gas Prices?
The real question is does the impact take in to consideration the impact that has already been felt on gas prices. Eight weeks in a row of increases, even those are slight, have been noticed and felt at the pump.
Todd Meyers, the Director for the Center of the Environment for the Washington Policy Center, speculated after the numbers were revealed by Ecology that gas prices would increase roughly 39 cents more per gallon and approximately 48 cents per gallon for diesel. He also noted that "The price on CO2 is nearly double what they pay in California for the same CO2 reduction."
There is no doubt that gas prices will increase over the next few weeks. As of this writing the average price of gas in Washington State, according to AAA, is $4.23 with diesel still above $5 per gallon at $5.02. If Mr. Meyers is accurate in his prediction, then we could be looking at gas prices exceeding $4.50 per gallon, which would be the highest average gas price in over a year in the State, and diesel prices roughly a full dollar higher at $5.50 per gallon.