To fund a 21st Century Clean Transportation System, the Obama administration is proposing a $10 per barrel fee on oil, gradually phased in over five years, which would bring in $32 billion annually. This would support clean vehicle research, ensure the Highway Trust Fund remains solvent, and improve public transit. It would also encourage innovation, strengthen the economy, create hundreds of thousands of new jobs, and assist families with energy costs. Most importantly, since 30% of U.S. greenhouse gas emissions are related to transportation, a cleaner system would help fight global warming. The administration’s press release calls it:
a bold new plan for building a 21st Century Clean Transportation System funded by a new fee paid by oil companies. The President’s 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. 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.
However, Steve Scales of Louisiana, the Majority Whip in the House, says the oil fee is an absurd proposal that will be dead on arrival. But it should not be dismissed so quickly. The results of a carbon fee (or tax) in British Columbia since 2008 show that gasoline use has declined there and the economy has benefited.
We can be sure the oil industry will fight the proposed fee in Congress as vigorously as it has fought climate change legislation in California, where the Western States Petroleum Association recently disclosed spending $10,949,149.83 for “payments to influence” California legislators in 2015. Not surprisingly, the oil industry succeeded in removing from one major bill a mandate for a 50% reduction in gasoline use by 2030. As the Guardian reported on February 5:
The oil industry targeted business-friendly Democrats in the legislature to kill the gasoline-related portion of the bill, sparking a major intra-battle in the final weeks before the vote. Ultimately, the industry was successful and the oil-related part of the bill was removed ... allowing it to pass in a weakened state with no petroleum restrictions.
Unfortunately, the Obama proposal to fund a clean transportation system has little chance of passing this year, even though gas prices are low and federal gasoline taxes have not been raised since 1993. As dailykos writer Magnifico noted on February 4 in his excellent “Finally! Obama proposes a $10 per barrel fee on oil,” funding of our transportation infrastructure through small fuel taxes used to be “standard practice.”