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February 05, 2016

Obama to Propose New Fee on Oil
    by Robert Kropp

Citing the opportunities in addressing climate change, the President's budget proposal will include a $10 per barrel fee on oil that will be used to build a sustainable national transportation infrastructure.

SocialFunds.com -- It's not quite the trillions of dollars necessary for the transition to a low-carbon economy. But the White House has announced that, in his budget proposal, President Obama will call for a $10 per barrel fee on oil; the money “would increase American investments in clean transportation infrastructure by roughly 50 percent,” a fact sheet states.

“By placing a fee on oil,” the fact sheet continues, “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.”

As the fact sheet points out, the transportation sector is responsible for 30% of greenhouse gas (GHG) emissions in the US. Obama's proposal would invest $10 billion per year in the transformation of regional transportation systems, and $2 billion per year for a new generation of smart, clean vehicles and aircraft. Three competitive grant programs will implement regional transportation and land-use strategies, expanded transportation choices for cities and towns, and encourage private investment in climate resilience. An additional $400 million per year will ensure that new technologies are safely integrated.

In the short term, revenues from pro-growth business tax will encourage a surge in investment. “This transition tax would mean that companies have to pay US tax right now on the $2 trillion they already have overseas, rather than being able to delay paying any US tax indefinitely,” the White House stated.

The plan will also help families cope with the economic impact of energy costs.

Overall, the benefits of the plan include reduced pollution, an increase in clean energy jobs, and a reduction in the seven billion hours Americans waste in traffic every year.

Of course, given the Republican Congressional majorities, passage of a budget imposing such a fee on oil companies will be hard sledding. But major environmental organizations have spoken with enthusiasm about the plan.

“President Obama is standing up to Big Oil and putting a price on pollution so we can fund the transition to a clean energy economy,” Jason Kowalski of
350.org stated. “The move should send a clear signal to investors: get out of fossil fuels and start investing in a clean energy future.”

And Michael Brune of the
Sierra Club said, “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.”

The budget also seeks to encourage increased private investment by establishing a “National Infrastructure Bank to leverage private and public capital to support infrastructure projects of national and regional significance,” the White House stated.

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