Obama seeks $10-per-barrel oil tax to fund clean transport

The Associated Press

President Barack Obama wants oil companies to pay a $10 fee for every barrel of oil to help fund investments in clean transportation that fight climate change.

WASHINGTON (AP) — President Barack Obama wants oil companies to pay a $10 fee for every barrel of oil to help fund investments in clean transportation that fight climate change.

Obama will formalize the proposal Tuesday when he releases his final budget request to Congress. The $10-per-barrel fee is expected face solid opposition from Republicans who control Congress and oppose new taxes and Obama's energy policies.

Still, the White House hopes the proposal will drive a debate about the need to get energy producers to help fund such efforts to promote clean transportation.

The White House said the $10 oil tax would be phased in over five years. The revenue would provide $20 billion per year for traffic reduction, expanding investment in transit systems and new modes of transportation like high-speed rail. It would also revamp how regional transportation systems are funded, providing $10 billion to encourage investment that lead to cleaner transportation options.

The White House said the tax would provide for the long-term solvency of the Highway Trust Fund to ensure the nation maintains its infrastructure. The added cost of gasoline would create a clear incentive for the private sector to reduce the nation's reliance on oil and drive investments in clear energy technology.

House Speaker Paul Ryan called the plan "dead on arrival" and "an election-year distraction."

"The president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists," the Wisconsin Republican said in a statement.

The American Petroleum Institute projected that the fee would raise the cost of gasoline by 25 cents a gallon.

"At a time when oil companies are going through the largest financial crisis in over 25 years, it makes little sense to raise costs on the industry," added Neal Kirby, a spokesman for the Independent Petroleum Association of America. "This isn't simply a tax on oil companies, it's a tax on American consumers who are currently benefiting from low home heating and transportation costs.

The administration said it recognized that oil companies would pass on some of the costs of the fee. However, it noted that Americans spend a lot of time and money as a result of an inadequate transportation system that also contributes to global warming.

"Businesses waste tens of billions of dollars each year in freight costs due to inadequate infrastructure and Americans currently spend a total of 7 billion hours stuck in traffic each year, and traffic is getting worse year after year," said Transportation Secretary Anthony Foxx. "This is the hidden tax."

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Making DDoS Mitigation Part of Your Incident Response Plan: Critical Steps and Best Practices

Like a new virulent strain of flu, the impact of a distributed denial of service (DDoS) attack is...

The Multi-Tax Challenge of Managing Excise Tax and Sales Tax

To be able to accurately calculate multiple tax types, companies must be prepared to continually ...

Operational Analytics in the Power Industry

Cloud computing, smart grids, and other technologies are changing transmission and distribution. ...

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Latest Energy Jobs

View more Job Listings >>

Archived Articles

PennEnergy Articles
2008 | 2009 | 2010 | 2011 | 2012 | 2013

OGJ Articles
2011 | 2012 | 2013

OGFJ Articles
2011 | 2012 | 2013

Power Engineering Articles
2011 | 2012 | 2013

Power Engineering Intl Articles
2011 | 2012 | 2013

Utility Products Articles
2011 | 2012 | 2013

HydroWorld Articles
2011 | 2012 | 2013

COSPP Articles
2011 | 2012 | 2013

ELP Articles
2011 | 2012 | 2013