As a nation, we are consuming our nation’s resources and the world’s resources at an unsustainable rate. Our reliance on and promotion of a petroleum-based economy threatens our environment and our way of life. Our dependence on foreign oil has almost tripled in volume in the past 35 years, with imports growing from one-third of total consumption to almost three-quarters of total consumption. Simultaneously, global warming is taking its toll on agriculture and water resources, increasing both flood and drought.
Some organizations in our society benefit from our dependence on the petroleum-based economy, the increasing global and national demand for oil, and the stagnation of production. Those are the major multinational oil companies. While Washington citizens and businesses are paying historically high prices for gasoline, these major oil companies are reaping windfall profits. Hundreds of millions of dollars are being taken from the budgets of families and businesses and exported out of our state every week.
There is a better way. We can steer our economy to become more dependent upon renewable energy. We can develop a transportation system that emphasizes convenience and efficiency. We have the resources at hand to do so, by redirecting windfalls from the oil industry into investments for research and development and commercialization of the renewable energy industry, and building a rational transportation system that will get us from home to work quickly and efficiently.
A state level windfall profits tax could generate over $600 million annually. Proceeds could be invested to incubate the production and use of renewable energy, retrofit schools for greater energy efficiency, shift student bus transportation to biodiesel fuel, and reduce business and occupation (B&O) taxes across the board in recognition of the increasing cost for fuel borne by business. A portion of the money could also be used to mitigate the toll that increases in energy prices are taking on public services.
Washington state has the responsibility to develop and catalyze a rational energy policy that promotes longterm economic vitality. Lawmakers also have the authority to create policy to capture some of the windfall profits of oil companies, and invest these profits for the benefit of all state residents and businesses. This policy brief discusses the energy-economic-environmental quandary confronting us individually and as a society, and explores policy options for rational and democratic energy and transportation policies in our state.