In his budget delivered to Congress, President Obama proposed a new few oil companies that would assess $10 for every barrel of oil both domestically extracted as well as imports. The fee would be phased in over five years and the money raised by it could then be used to fund repairs on America’s aging transportation infrastructure, and clean transportation research and development. Such as building high-speed rail, more environmentally friendly airplanes, electric-car charging stations, and improving electric vehicles. The president’s goal is a “clean transportation” system.
The White House released a fact sheet describing the president’s plan for a 21st Century Clean Transportation System, characterizing it as “smart, strategic integrated investments to help reduce carbon pollution, strengthen [the] economy.”
Today, our transportation sector accounts for 30 percent of U.S. greenhouse gas emissions. A new approach to our transportation system can help to speed goods to market, expand transportation options, and integrate new technologies like autonomous – or self-driving – vehicles while at the same time reducing our reliance on fossil fuels, cutting carbon pollution, and strengthening our resilience to the impacts of climate change.
The plan “would increase American investments in clean transportation infrastructure by roughly 50 percent while reforming the investments we already make to help reduce carbon pollution, cut oil consumption, and create new jobs,” according to the White House.
President Obama wants to break the pattern of American build more roads and increase sprawl that has been the development pattern for the country since, at least, the Eisenhower administration.
The President’s plan invests nearly $20 billion per year above current spending to reduce traffic and provide new ways for families to get to work and to school. The plan would expand transit systems in cities, suburbs and rural areas; make high-speed rail a viable alternative to flying in major regional corridors and invest in new rail technologies like maglev; modernize our freight system; and expand the Transportation Investment Generating Economic Recovery (TIGER) program begun in the Recovery Act to support high-impact, innovative local projects.
The money raised by the new oil barrel fee could bring in up to $32 billion a year in new revenue in its first year and about 465 billion annually when completely phased in. The New York Times reports:
Oil prices are at their lowest point in more than a decade, which some policy makers believe provides an opportunity to minimize the impact of such a fee on consumers.
Oil companies and their paid-for-politicians in Congress will push back on President Obama’s bold new proposal with everything they’ve got. Sure enough, the Republicans are calling the proposal dead-on-arrival. “Once again, the president expects hardworking consumers to pay for his out-of-touch climate agenda,” Speaker of the House Paul Ryan (and noted champion of the poor) said in a statement. “A $10 tax for every barrel of oil produced would raise energy prices—hurting poor Americans the most.”
“This is a backdoor gas tax hike and it’ll be hard-working American families that will have to foot the bill every time they go to the pump,” Senate Finance Committee Chair Orin Hatch wrote in an email sent to The Washington Post.
Oil company profit margins have declined with the dropping price of oil, so of course, they’re squealing about consumers hurting. The president’s proposal “would harm consumers,” the American Petroleum Institute said in a statement. “The White House thinks Americans are not paying enough for gasoline,” spun the API.
However, President Obama’s plan specifically “provides assistance to relieve energy cost burdens for families.”
Consistent with other Congressional proposals to increase energy fees, the plan would provide assistance to families to relieve energy cost burdens, including a focus on supporting households in the Northeast as they transition from fuel oil for heating to cleaner forms of energy.
As Vox points out, now is the precisely the time to add this fee.
The price of crude oil has been plummeting over the past year, down to around $30 per barrel, a level not seen since 2004. A $10/barrel tax would lift that to $40 per barrel, which is roughly the (still-low) price we saw... last November.
Furthermore, The Washington Post adds:
“Gasoline taxes haven’t been raised in 25 years, so actually rather than being radical, this proposal is simply returning to standard practice in place since the Eisenhower years of funding of transport infrastructure through small fuel taxes,” said Paul Bledsoe, an independent energy consultant in Washington who worked as a climate aide in the Clinton White House.
Politico, reliable stenographers for the conservative establishment, described the president’s proposal as “a controversial new way to fund transportation,” adding “there is no real chance that the Republican-controlled Congress will embrace Obama’s grand vision of climate-friendly mobility…” Politico forgot to add “ever!”
So, yes this is not going to get through Congress this year, but maybe next year with a new Congress it could. This is a long over due course change for the United States and President Obama is right to advocate for such a change.
I think this is great news.