Tax war? Washington may tax fuel heading to Alaska, but Rep. McCabe has a plan to fight back

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The Washington State Legislature may enact an extraordinary tax on refined fuel shipped north to Alaska. The proposed tax on diesel and gasoline shipped north would add an additional 6 cents per gallon on fuel coming the Anacortes refinery in north Puget Sound. The tax would also apply to Idaho- and Oregon-bound fuel.

It would affect everything from the cost of running Toyo stoves, home furnaces, and personal and commercial vehicles in a state that produces oil, but doesn’t have the ability to refine all its own products.

About 80 percent of the barrels of oil produced in Alaska are transported by tanker to refineries in Washington and California. Alaska has three operational refineries in Nikiski, Valdez, and North Pole, with a combined processing capacity of about 164,000 barrels of crude oil per day, according to the Energy Information Administration. They produce gasoline, diesel, and jet fuel for Alaska markets. But the current output from the Trans Alaska Pipeline System is about 500,000 barrels per day.

Big Lake Rep. Kevin McCabe has a plan for that. He has proposed a tax on Washington — “a $15 surcharge on oil to any state where the state taxes us on the finished product,” he said.

HB 361 is the same bill proposed by then-Rep. Mike Chenault in 2009. McCabe just dusted it off and refiled it with new dates.

The second bill, HB 393, is a proposed tax that would hit the Washington-based fishing industry working in Alaska. It’s a 6-cent-per-pound fish tax that would be broadly applied, but then be credited back to boat owners who live and operate in Alaska.

“I’m tired of being thought of as a Washington colony,” McCabe said last week. “I’m tired of them taxing us and depending on us for their needs.”

McCabe said he would be willing to pull his bill if Washington lawmakers pull theirs.

McCabe said, “I have talked some Washington Republican legislators who have said ‘thank you.'”

The proposed gas tax from Washington comes at a time when fuel prices in Alaska are soaring. Today, President Joe Biden acknowledged the prices at the pump could go higher due to his sanctions on Russia.

“Defending freedom will have costs for us as well, and here at home. We need to be honest about that,” he said.

“My Administration is using every tool at our disposal to protect Americans from rising prices at the pump. We are closely monitoring energy supplies for any disruption, and we are executing a plan to secure the stability of global energy supplies,” Biden said.

29 COMMENTS

  1. There is something very ironic, and very wrong, about the state that produces the most petroleum of any other (namely, Alaska) having to IMPORT 75% of its refined fuels — gasoline, diesel and aviation fuel. This was not always the case, though.
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    And I believe that Alaska is down to at most two in-state refineries, if I am not mistaken —- the North Pole refinery was shut down several years ago, was it not?

    • Alaska is either the 5th or 6th ranked oil producer, depending upon which year is used. Texas, North Dakota, New Mexico, Oklahoma, and sometimes Colorado produce more oil than we do in Alaska. There was a refinery shutdown in North Pole but there is still another one there, Petro Star.

    • PetroStar operates the refineries in Valdez and North Pole. A different North Pole refinery was closed several years ago.

    • Alaska refines about 75% of fuel used here, about 25% is imported. I support Chenaults 2009 legislation that is being re-worked. Alaskans should not be financing Washington States green ambitions.

  2. Sounds like taxation without representation to me. We might as well double the tax per barrel we sell them, impose income tax on all the junk trinket shops owned by Washington state citizens, and finally put a .25 cent per pound on Alaskan salmon caught by Washington fishing fleet.

  3. Don’t the Alaskan lawmakers and other officials get paid enough to avoid these dilemmas? You run for office and proclaim your allegiance and promise astronomical dividends, then as usual, amnesia sets in. Now there’s a tax war and we don’t refine enough oil? I really wish those of you in govt would stop kissing ass and start doing your jobs so we wouldn’t be in this mess, grow a pair for gawds sake!

  4. The Flint Hills refinery in North Pole has closed, but Petro Star still operates one there as well as Valdez. Ref: ‘https://www.aoga.org/wp-content/uploads/2020/12/6_barry_pulliam-_econ_one_-_the_state_of_alaskas_refining_industry.pdf

    • Lets not stick to airlines based in Washington state. How about taxing all flights into Alaska that originated from Washington State or depart from Alaska bound to Washington State?

      • Brilliant boys. Let’s tax the airlines flying from WA to AK. As you know, any tax would be reflected in the ticket prices. What percentage of passengers on those flights do you think are Alaskans?

  5. This could get bad for us, and a handful of people in WA, real quick. Hopefully there’s enough pressure from Oregon and Idaho to get the nuts in WA to stop this tax.

  6. I say this is a great bill. If other states are willing to tax Alaskans for goods those state produce and ship to Alaska for consumption. Why not tax those State on the raw material they receive from Alaska? It only make sense. Tax for tax.

  7. Washington State has become a socialist state, they want I tax, how about a raw fish tax on all salmon exports by outside processors and fishermen.

  8. Rep. McCabe, thanks Kevin for taking up the charge on this. I noted that Governor Dunleavy only asked Alaskans to call the Washington Governor Inslee’s office and complain. A petty response, Governor.

  9. I hope it drums up a majority support in a house and senate with democrats. Its like asking alaskan democrats to go agiants washington democrats. I think if democrats don’t pass it’ll make a nice little blemish on all those running as a democrat this year. Who do they care about washington or us alaskan working families. Could be used as an advantage by the other team.

  10. Years ago I proposed that we the people not the politicians take some of our PFD fund and build are own refinery and supply system and sell gas at cost.

  11. We used to be able to fuel our trucks in Prudhoe Bay at a pump within a few miles of where the oil came out of the ground. It was cheap and efficient.
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    Now the oil flows south, gets shipped to a refinery, and the gas is shipped back to Prudhoe and pumped into trucks. All to make the environmentalists happy.
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    It’s insanity. Which is about what you can expect when the Left get involved.

  12. We need more refineries up here. Instead of teaching “wokeness” in our schools we can teach kids how to work in refineries and mining. Well paying jobs and fuel for Alaska. Washington state is also suing us on fishing rights, whatever happened to that story?

  13. I propose a massive tax on any cruise ship that began its cruise to Alaska from a port in Washington State….And in the same bill, offer significant tax advantages to ships that originate in countries other than the United States.

  14. I bet that pinhead in the Washington state legislature didn’t even know their crude oil mostly comes from Alaska.

  15. I don’t think an oil tax on WA will work. Oil is fungible and it will find the cheapest place to ship to. $15/bbl will pay for a long boat ride to another refinery while the WA refineries will find cheaper oil. And it won’t hurt the WA economy like you think. We need to hit them where it will be effective like a fish tax, or prohibiting any developments or supplies in Alaska from using WA sourced goods. Think of those huge oil modules built in Tacoma years ago. Lots of jobs and huge boost to their economy back then, like much of what they profit off of from developments in Alaska. That will get their attention. WA has profited off us for far too long while their politicians do everything they can to stop any development up here.

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