$10 Dollar a Barrel Tax on Oil for Clean Energy
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.
Background on the bold investments in the President’s Plan:
For the United States to remain a leader in the global economy, while reducing the carbon pollution that fuels climate change, we need to take a new approach to our investment in infrastructure planning and funding. The President’s 21st Century Clean Transportation Plan would set America on a long-term path to achieving our economic and climate goals by:
- Refocusing federal investment to enhance transportation options for American families: 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.
- Rewarding state and local governments for innovations that lead to smarter, cleaner, more resilient transportation systems: The President’s plan invests roughly $10 billion per year to transform regional transportation systems by shifting how local and state governments plan, design and implement new projects. The President is proposing to reform the existing transportation formula programs to ensure that local, regional, and state governments are maximizing returns on public investments and delivering better outcomes. As part of reforming formula programs, the plan would create a new Climate Smart Fund that provides bonus funding to states that use existing formula funding to cut carbon pollution in the transportation sector – for example by encouraging better land use planning, investing in clean vehicle fueling infrastructure or increasing use of public transportation. The plan would also launch three new competitive grant programs: a 21st Century Regions program to implement regional-scale transportation and land-use strategies, a Clean Communities program to support more livable cities and towns with expanded transportation choices, and a Resilient Transportation program to spur investments that bolster resilience to climate impacts.
- Accelerating the safe integration of autonomous vehicles, low-carbon technologies, and intelligent transportation systems into our infrastructure: The President’s plan invests just over $2 billion per year to launch a new generation of smart, clean vehicles and aircraft by expanding clean transportation R&D and launching pilot deployments of safe and climate smart autonomous vehicles. It also accelerates the transition to cleaner vehicle fleets in communities around the country, including expanding Diesel Emissions Reduction Act Grant Program funding, and supports the creation of regional fueling infrastructure for low-carbon vehicles. The budget also proposes to invest $400 million a year to ensure that new and changing technologies are integrated safely into our transportation system.
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.
In addition, the President’s plan:
- Utilizes one-time revenues from business tax reform: The plan would continue the President’s call to use the one-time revenues from pro-growth business tax reform to fund a temporary near-term surge in investment, while the oil fee will play for the long-term investments needed to put us on the right path for the years ahead.
- 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.
Consumers will likely pay the price for President Obama’s proposed $10 tax per-barrel of oil, an administration official and a prominent analyst said Thursday.
Energy companies will simply pass along the cost to consumers, Patrick DeHaan, senior petroleum analyst for GasBuddy.com, which tracks gas prices nationwide, said in an interview with USA TODAY.
Obama is set to propose the tax when he reveals his budget next week, as part of an effort to reduce carbon emissions and generate billions of dollars for mass-transit investments and self-driving vehicles. The new tax would be phased in over five years, and would apply to both domestic and imported oil.
Although the tax is likely to run into political opposition from Republicans, it comes at the most politically expedient time possible: Rock-bottom oil prices could make the inevitable increase in gas prices that would follow a tax increase more palatable.
“Something like this would trickle down and be a $10 per barrel tax on motorists,” DeHaan said. “This is not something oil companies are going to absorb.”
That means a 15-gallon fill-up would cost at least $2.76 more per day. It would also affect people who use heating oil to warm their homes and diesel to fill their trucks. But Obama will also propose a relief fund for families affected by higher energy bills.
Of course, at a nationwide average of $1.77 per gallon on Thursday, gasoline is already cheap compared to historic highs. Environmentalists say a small price increase is worth it to help fight climate change and spur innovation.
Zients declined to elaborate on how the oil fee — which is different from a gas tax — would affect prices at the pump.
DeHaan called it a “bold” proposal that would be the most significant change in energy policy in recent memory.
Oil stock investors did not appear to be fazed when the news hit Thursday afternoon. Shares of Exxon Mobil, Chevron and Shell all closed up for the day.
Tax credit for private investment into renewable energy – popularinitiative.org
i like tax credits for private investment into renewable energy, wind, solar…