Obama proposes new oil tax to fund clean transport project

U.S. President Barack Obama has revealed what the White House calls a ‘bold plan’ to rejuvenate the country’s transportations system and make it cleaner and more sustainable. However, the oil companies will probably not like the plan.

Why? Because the funding for Obama’s Clean Transportation project should come from them, the oil firms.

According to a fact sheet released by the White House on Thursday, Obama’s plan would increase American investments in clean transportation infrastructure by roughly 50 percent while reforming the investments already made to help reduce carbon pollution, cut oil consumption, and create new jobs.

So what’s the fee? 

Obama is proposing to fund the investments through a new $10 per barrel fee on oil paid by oil companies, which would be gradually phased in over five years.

The plan also says that the new fee on oil will also encourage American innovation and leadership in clean technologies “to help reshape our transportation landscape for the decades ahead.”

The proposed project is expected to be included in President Obama’s budget request next week, but the Republicans running the congress have vowed to “kill the proposal on arrival.”

‘Attack on industry’

Congressman Charles W. Boustany, Jr., MD, (R-Lafayette) released a statement blasting President Obama for his plan to propose a $10 tax on every barrel of oil to pay for a new “21st century clean transportation system.”

Boustany said: “This President has relentlessly attacked the American oil & gas industry and the working families who depend on these jobs. Today, oil prices are at their lowest point in over a decade, and the workforce is hurting. But the President is proposing a tax hike that will be passed on at the pump to these same families who are trying to make ends meet. This is another absurd attack on American energy, and it has to stop. I will personally see to it this new tax never sees the light of day.”

‘House will kill absurd proposal’

Congressman Steve Scalise (R-La.) released the below statement following reports that President Obama will propose a $10-a-barrel tax on oil:

“President Obama’s proposed $10 per barrel tax on oil is dead on arrival in the House. From day one of President Obama’s Administration, he has waged open warfare on American energy and his radical policies have cost jobs while increasing costs on hard-working families.

“Washington spending is already too high, and the best way to create more jobs and get our economy back on track is by cutting taxes and controlling spending. The House will kill this absurd proposal, and instead focus on lowering costs and growing our economy.”

Tax to raise gasoline price?

President Obama’s proposal to add a new $10 per barrel tax on crude oil would harm consumers, said American Petroleum Institute’s President and CEO Jack Gerard.

Gerard said: “The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader.

“On his way out of office, President Obama has now proposed making the United States less competitive.”

‘Dead on Arrival’

Senator Tom Cotton (R-Arkansas) today released the following statement on reports that President Obama’s budget will include a tax on individual barrels of oil:

“President Obama’s proposed tax on individual barrels of oil would be laughable if it didn’t illustrate just how much he’s lost touch with reality over the last seven years. While his plan might be applauded by environmentalists and big city liberals, it would be a nightmare for working families. This proposal would effectively double the gas tax-at at time when Arkansas families are enjoying more affordable gas prices. Worse, that tax would unfairly target people in rural states like ours who use more gasoline. This proposal is dead on arrival in the Senate.”

Murkowski disappointed, but not surprised

U.S. Sen. Lisa Murkowski, R-Alaska, said: “After years of imposing new restrictions on access in federal areas in Alaska and throughout the country, the President is now apparently proposing yet another way to damage our nation’s oil production.”

She added: “This is disappointing, but not surprising. Especially at a time of low prices, the President should be looking at ways to make our energy sector more competitive, not pushing new policies that will cost jobs and raise prices. Fortunately, with Republicans in charge of Congress, Alaskans need not worry about this becoming law.”

Environmentalists rejoice

While there is obviously opposition to the new tax on oil proposed by the President, there are also those who like Obama’s plan to invest in public transit and “enhanced transportation options,” including high-speed rail, electric vehicles, self-driving cars, in order to cut emissions and oil dependence.

Conservation group Sierra Club’s Executive Director Michael Brune said: “When the world leaders joined together in Paris last year, they signaled the end of the fossil fuel era and the need to transition into a clean energy economy. With today’s announcement, President Obama laid out more of his vision of how we can meet this agreement by challenging Big Oil’s stranglehold on how America powers its transportation sector.

“President Obama’s vision underscores the inevitable transition away from oil, and investments like this speed us along the way to a 100% clean energy future. Providing clean, convenient, and affordable transportation choices will create American jobs and protect our climate. From expanding public transit, to developing the vehicles of tomorrow, the president’s plan will put people to work repairing our crumbling transportation system and moving it into the 21st century.”

Right move at right moment

The following is a statement by Rhea Suh, president of the Natural Resources Defense Council.

“This is the right move at the right moment. It’s the appropriate next step in moving America beyond the dirty fossil fuels that are driving climate change.  And it moves us toward cleaner, smarter ways to transport our people and goods far into the future – without putting the planet in peril.

“With this action, President Obama is advancing the mission our country and nearly 200 others agreed to last year in Paris. It connects the rising economic, social and environmental costs of burning oil to the vast opportunities for American innovation, enterprise and progress. And it sends a message to future generations: We’re not stuck with oil and all the hazard and harm it brings – and neither are our kids.’’

Offshore Energy Today Staff