The oil tax, which would be phased in over five years, is part of the president’s 21st Century Clean Transportation Plan. The plan would increase by $20 billion per year above current levels spending on ways to reduce traffic, expand public transit and invest in high-speed rail and other new technologies. It also would invest more than $2 billion annually in low-carbon and autonomous vehicles and aircraft.
“The proposal shines a spotlight on the importance of modernizing our transportation infrastructure in ways that reduce carbon pollution and grow our economy,” says Elgie Holstein, Environmental Defense Fund senior director for strategic planning.
Obama will include the plan in his budget request to Congress on Tuesday.
Former US transportation secretary Ray LaHood, who serves as co-chair of infrastructure investment group Building America’s Future, says Congress should include Obama’s plan in its final budget. “If passed, the president’s plan will make up for the shortfall in the recently passed transportation bill and put thousands of people to work fixing the approximately 61,000 deficient bridges across the country, our transit systems and enable cities to fix potholes and states to improve America’s interstates,” LaHood said in a statement.
But the oil tax — and entire transportation plan — is likely dead on arrival.
“If President Obama has recommended it and it costs the oil industry anything, it is dead in Congress,” says James W. Rubin, a partner at the Dorsey & Whitney law firm who previously worked in the environment and natural resources division of the US Department of Justice.
According to the American Petroleum Institute, the oil tax would raise the cost of gasoline by 25 cents a gallon. In a statement, API president and CEO Jack Gerard said it would “harm consumers that are enjoying low energy prices, destroy American jobs and reverse America’s emergence as a global energy leader.” It’s also a view shared by those who feel that government should not pick artificial winners, especially at the expense of an industry that employs so many but which is now against the ropes.
However, the White House says the transportation sector accounts for 30 percent of US greenhouse gas emissions. “A new approach to our transportation system can help to speed goods to market, expand transportation options, and integrate new technologies like autonomous — or self-driving — vehicles while at the same time reducing our reliance on fossil fuels, cutting carbon pollution, and strengthening our resilience to the impacts of climate change,” according to a fact sheet on the Clean Transportation Plan.
While this is unlikely to happen during Obama’s remaining tenure at the White House, former Pennsylvania governor Ed Rendell and co-chair of Building America’s Future told Politico it sets a strong clean transportation agenda for the next administration: “This is a great blueprint to hand the next administration, no matter whose administration it is.”
Photo Credit: oil pumps via Shutterstock