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

U.S. President Barack Obamais proposing to implement a $10 US-a-barrel tax on oil in the 2017 budget he presents to Congress next week, the White House confirmed on Thursday.

The proposed fee,which would be paid byoil companies, would be used to developa range of cleantransportation initiativeslike mass transit, high-speed rail and the development of self-driving cars.

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"The president's plan would increase American investments in clean transportation infrastructure by roughly 50 per cent while reforming the investments we already make to help reduce carbon pollution, cut oil consumption, and create new jobs," said a statement issued by the White House.

"The new fee on oil will also encourage American innovation and leadership in clean technologies to help reshape our transportation landscape for the decades ahead."

One industry group was quick to criticizethe proposal, saying it couldn't come at a worse time for energy companies.

"At a time when oil companies are going through the largestfinancial crisis in over 25 years, it makes little sense to
raise costs on the industry," said Neal Kirby, a spokesman for theIndependent Petroleum Association of America.

"This isn't simply atax on oil companies, it's a tax on American consumers who arecurrently benefiting from low home heating and transportation costs."

Unlikely to pass Congress

The website Politico estimates the fee, should it beimplemented, would add about 25 cents US a gallon to the cost of fuel, assuming that oil companies passed the whole feealong to consumers.

But the likelihood of that fee ever becoming law appears to be remote,since Congress ultimately controls the purse strings and Republicans control the Congress.

Republicans have never beenfans of the president's energy policies. They've often accused him of not doing enough to support domestic energy producers.

The White House hopes the proposal will sparka debateabout the need to get energy producers to help fund efforts to fightclimate change. Obamais spendingthe last year of his presidency trying to focus attention on clean, renewable fuels that don't make climate change worse.

Among other things, the White House says the fee would provide an additional$20 billion US a year to help expand transitsystems across the U.S.