Obama proposes $10-a-barrel oil tax to pay for clean tech

Source: Ariel Wittenberg, E&E reporter • Posted: Friday, February 5, 2016

President Obama will ask Congress to set a $10-per-barrel oil tax to help invest in clean transportation infrastructure, the White House announced today.

In a preview of the president’s fiscal 2017 budget, which will be released Tuesday, the White House outlined a plan to make oil companies pay fees that would then be used to invest in enhanced transportation options like low-carbon technologies and intelligent transportation infrastructure.

The president’s plan would hike American investments in clean transportation by roughly 50 percent while overhauling current investments being made in cutting carbon pollution and reducing oil consumption.

Obama’s budget would invest nearly $20 billion per year above current spending to reduce traffic and provide new commuter options by expanding public transit systems in cities, suburbs and rural areas. The plan also would include investment in controversial train systems like high-speed rail and maglev.

The plan would invest roughly $10 billion annually to reform how regional transportation systems are planned and designed. That money would also be used to create a “Climate Smart Fund” to give “bonus” funding to states that cut carbon pollution in the transportation sector.

The budget proposal would also launch three competitive grant programs, including one for “clean communities” to support cities and towns that expand clean transportation choices.

Placing an emphasis on clean technologies, the budget would include more than $2 billion to expand clean transportation research and development. It would also fund regional fueling infrastructure for low-carbon vehicles.

According to the White House, the president envisions using one-time revenues from pro-growth business tax reform to help fund the temporary near-term surge in investment the proposal requires, while the oil barrel fee would help fund longer-term investments.

In a statement, the White House framed the proposal as a means of moving the country beyond its vast highway system developed in the 1950s. The White House also said that the funding mechanisms employed in the budget proposal are meant to “build on the success” of the American Recovery and Reinvestment Act of 2009.

Then, a $90 billion dollar clean energy investment “laid the foundation for a clean energy economy of the future” by helping to drive down the cost of wind and solar energy, the White House said.

The proposal is unlikely to gain much traction in the Republican-controlled Congress.

“Proposed Obama oil tax ‘could add as much as 25 cents a gallon to the cost of gasoline,'” Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell (R-Ky.) said on Twitter this afternoon.