Friday, February 5, 2016

Obama to propose $10-per-barrel fee on oil

Obama to propose $10-per-barrel fee on oil


President Barack Obama will propose a $10-per-barrel charge on oil to fund clean transportation projects as part of his final budget request next week, the White House said Thursday.

The proposal — which follows the passage of a bipartisan transportation bill last year — would have difficulty clearing the Republican-controlled Congress. In a statement, Rep. Steve Scalise of Louisiana, House majority whip, said the House would quash the “absurd” plan.

Oil companies would pay the fee, which would be gradually introduced over five years. The government would use the revenue to help fund high-speed railways, autonomous cars and other travel systems, aiming to reduce emissions from the nation’s transportation system.

“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 Obama has prioritized reducing carbon emissions and the use of fossil fuels. But some of his administration’s proposals, including the Clean Power Plan, have faced significant opposition at the federal and state level.

The White House said the oil-fee proposal would invest an additional $20 billion per year to cut traffic and “provide new ways for families to get to work and school.” It would also put about $10 billion per year into regional travel systems and another $2 billion annually into clean transportation research.

At least part of the cost of the proposal would be passed on to consumers, Jason Furman, chairman of Obama’s Council of Economic Advisers, told CNBC on Friday.