Obama Proposes $10 Tax on Every Barrel of Oil

The White House proposed Thursday a $10 per barrel tax on oil to fund a $300 billion green overhaul of the country’s transportation system.

The proposal is the latest in a slew of second-term measures from President Obama aimed at stemming climate change. Previous measures like the Clean Power Plan have largely targeted greenhouse gas emissions from power plants, which account for nearly a third of emissions in the U.S.

The measure, part of Obama’s upcoming budget request to Congress, is not likely to win the legislative approval necessary for it to become law with tax-averse Republicans controlling both Houses of Congress. Previous Obama climate measures have largely relied on executive action that allowed the White House to act without approval.

The oil tax was proposed at a time when the price of crude oil is hovering at its lowest point in more than a decade, at just over $30 a barrel. Some energy experts have wondered whether the low price of oil would discourage investment in clean alternatives to fossil fuel. The proposal seemed at least in part to be an attempt to spur energy firms to pursue green technologies.

The White House said the tax would be paid by oil companies, but declined to specify when exactly in the process of bringing oil to market the tax would be levied. Those details would be determined in collaboration with Congress, said Jeff Zients, director of the National Economic Council, on a conference call for journalists. Some of the cost would likely be passed by the companies to consumers indirectly.

The funds raised by the tax would go towards a wholesale transformation of the transportation sector, the White House said, which emits 27% of the country’s greenhouse gas emissions, according to the Environmental Protection Agency. The proposal calls for expanded high-speed rail, new mass transit options and investment in technology to allow the swift incorporation of driverless cars into the transportation infrastructure.

“Some things from the nineteenth century, like the Beatles, may be timeless,” said Zients. “But our transportation system certainly is not.”

The idea drew immediate praise from environmental groups that have been advocating for Obama to take further action to reduce fossil fuel use. “The move should send a clear signal to investors: get out of fossil fuels and start investing in a clean energy future,” said Jason Kowalski, policy director at 350.org in a statement.