Obama seeks $ 10- per- barrel oil tax to fund clean transport

U. S. President Barack Obama wants American oil companies to pay a $ 10 fee for every barrel of oil to help fund investments in clean transportation that fight climate change.

Obama will formalize the proposal Tuesday when he releases his final budget request to Congress, although the fee is expected to be dead on arrival for the Republicans who control Congress and oppose new taxes and Obama’s energy policies.

Still, the White House hopes the proposal will drive a debate about the need to get energy producers to help fund such efforts to promote clean transportation.

It said the $ 10 fee would be phased in over five years. The revenue would provide $ 20 billion a year for traffic reduction, expanding investment in transit systems and new modes of transportation like high- speed rail.

“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.

It is unclear who, exactly, would pay the tax if it were to pass and how it would be structured. White House officials repeatedly stressed the fee would fall on oil companies, but said it wouldn’t be charged at the wellhead.

Asked about Obama’s $ 10- a- barrel proposal in Calgary Thursday, Prime Minister Justin Trudeau noted he has always advocated for a price on carbon. He said governments across the globe are looking at ways to take concrete action on diversifying energy sources.

“This kind of movement all around the world … is something I’m looking forward to hearing more about,” Trudeau said.

Premier Rachel Notley said her NDP government’s climate change plan is designed to stand alone in its aim to reduce Alberta’s greenhouse gas emissions.

“Should the economy as a whole ultimately end up embracing those things, that of course would help with our competitiveness.”

The American Petroleum Institute projected the proposed fee would raise the cost of gasoline in the U. S. by 25 cents a gallon.

This kind of movement all around the world … is something I’m looking forward to hearing more about.