Obama Says U.S. Should Take Advantage of Cheap Fuel With Oil Tax

(Bloomberg) — President Barack Obama defended his proposal
to levy a new $10-per-barrel tax on oil, arguing that low
gasoline prices afford the U.S. an opportunity to finance
dramatic improvements in its transportation systems.

“Right now, gas is $1.80 and gas prices are expected to be
low for the forseeable future,” Obama told reporters at the
White House. It’s “important to use this period when gas prices
are low to accelerate the transition to a clean-energy economy,”
he said.

The proposed fee drew swift objections on Thursday from
oil-industry groups and congressional Republicans. The idea is
part of a broader Obama administration plan to shift the nation
away from transportation systems reliant on internal-combustion
engines and fossil fuels. The plan envisions investing $20
billion to reduce traffic congestion and improve commuting, $10
billion for state and local transportation and climate programs
and $2 billion for research on clean vehicles and aircraft.

“We’ll have a much stronger economy, stronger
infrastructure, we’ll be creating the jobs of the future,” Obama

It isn’t clear how the tax would be structured or who would
pay it. White House officials said it wouldn’t be assessed at
the wellhead. Exported oil wouldn’t be subject to the tax,
though Obama misspoke during his remarks and said it would. Jeff
Zients, director of the National Economic Council, told
reporters on Thursday that the White House expects oil companies
would pass on some costs of the tax to their customers.

House Majority Whip Steve Scalise, a Louisiana Republican,
called the proposal “dead on arrival.” Republicans “always say”
that, Obama said.

He said he plans a larger speech on the oil tax “and the
direction we need to go on this.”

To contact the reporters on this story:
Alex Wayne in Washington at awayne3@bloomberg.net;
Justin Sink in Washington at jsink1@bloomberg.net

To contact the editors responsible for this story:
Craig Gordon at cgordon39@bloomberg.net
Alex Wayne, Bernard Kohn

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