U.S. President Barack Obama is proposing a $10 per barrel tax on crude oil that would fund the overhaul of the nation’s ageing transportation infrastructure with the aim of replacing it with clean energy transportation, the White House said on Thursday.
According to the plan, the proposed fee, would be paid by the oil companies and phased in over five years. The plan, laid out in a fact sheet, is a “smart, strategic integrated investments to help reduce carbon pollution, strengthen economy” according to the White House.
President Barack Obama has said the country must stop subsidizing the “dirty” fossil fuels of the past and focus on clean, renewable fuels that do not exacerbate climate change.
“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,” the White House said in a statement.
The proposal is already generating a lot of debates on social media. House of Representatives Majority Whip Steve Scalise asked on Twitter whether the proposal was “Obama’s worst idea yet?”
In a similar vein, the Independent Petroleum Association of America said in a statement that “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,”
American Petroleum Institute CEO Jack Gerard has also issued a statement saying that “the White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader. On his way out of office, President Obama has now proposed making the United States less competitive.”
However, proponents of the Obama move sees it as an opportunity to cut down on the nation’s green house gas emissions of which about 30 percent is due to public transportation. They also expect that the proposed tax will lead to an increase investment in a clean transportation by over 50 percent, create more jobs and improve the economy.
It is expected that the move will meet stiff resistance in the Republican controlled House and Senate except something else happens.