Obama Proposes $10 Per Barrel Tax On Oil In Push For Cleaner Transport
President Barack Obama proposed setting a $10 fee per barrel of oil, paid by oil companies, as a way to fund cleaner transportation investment.
Well, we must admit that the timing for this new tax was perfect from the oil price stand point, as prices are now the lowest they've been in many years. Just imagine how this news would've be received when oil prices peaked a few years ago.
The intention is to gradually phase in the fee in over five years.
"Background on funding the President’s plan:
For too long, bipartisan support for innovative and expansive transportation investment has not been accompanied by a long-term plan for paying for it. We need a sustainable funding solution that takes into account the integrated, interdependent nature of our transportation system. Travelers choose between walking, biking, driving, flying, and taking the train; and companies choose between trucks, barges, airplanes and rail lines. So to meet our needs in the future, we have to make significant investments across all modes of transportation. And our transportation system is heavily dependent on oil. That is why we are proposing to fund these investments through a new $10 per barrel fee on oil paid by oil companies, which would be gradually phased in over five years. The fee raises the funding necessary to make these new investments, while also providing for the long-term solvency of the Highway Trust Fund to ensure we maintain the infrastructure we have. By placing a fee on oil, the President’s plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future."
Oil prices (source: oil-price.net)
According to the U.S DOE, average consumption in 2014 was measured in millions of barrels per day, so the funding will skyrocket up to $60-70 billion or maybe even $200 per capita annually?
"In 2014, the United States consumed a total of 6.97 billion barrels of petroleum products, an average of about 19.11 million barrels per day.2 This total includes about 0.34 billion barrels of biofuels."
Electric cars were mentioned once - together with charging infrastructure: "ensuring electric cars and other alternative vehicles have the technology and the charging infrastructure they need."
"The Benefits of the President’s Plan
- Reducing carbon pollution: The plan would make public investments and create incentives for private sector innovation to reduce our reliance on oil and cut carbon pollution from our transportation sector, which today accounts for nearly 30 percent of U.S. greenhouse gas emissions. The investments in vehicle research and deployment would get clean autonomous vehicles on the road more quickly and more safely, while ensuring electric cars and other alternative vehicles have the technology and the charging infrastructure they need.
- Strengthening our economy: The President’s plan would support hundreds of thousands of good-paying, middle-class jobs each year and increase the competitiveness of U.S. businesses and the productivity of our economy by making it faster, easier, and less expensive to move American-made products.
- Making transportation easier for American families: The plan would expand clean, reliable, and safe transportation options like public transit and rail, making it easier for millions of Americans to get to work, access new jobs, and take their kids to school—reducing the 7 billion hours that American waste in traffic each year."
The new structure would also allow for $20 billion in additional spending to increase transit options between cities and rural areas, while turning rail in a "viable alternative to flying" on major routes as well. $10 billion will be spent on regional/local, and state governments f0r new for clean-vehicle infrastructure. $2 billion would go to development of autonomous clean vehicles.
However, the bulk of the money would still go to funding/stabilizing the Highway Trust Fund - which entails fixing a lot of America's most pressing issues - such as repairing/re-opening bridges and fixing highway that have fallen into serious disrepair.
The proposal will be submitted to congress next week.
Source: The White House