President Barack Obama will propose a $10 per barrel tax on oil in his fiscal 2017 budget plan, an idea that received a chilly reception in the Republican-controlled Congress that oversees spending.
With the proceeds targeted to transportation and climate initiatives, the proposal announced Thursday deepens Obama’s environmental credentials and signifies his ambitions to aggressively push action on climate change during his final year in office.
"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 that the fee would fall on oil companies, but said it wouldn’t be charged at the wellhead and they look forward to working with Congress on the details.
The fee, which drew swift objections from oil industry groups and Republicans, is part of a broader administration plan to shift the nation away from transportation systems reliant on internal combustion engines and fossil fuels. The proposal envisions investing $20 billion to reduce traffic and improve commuting, $10 billion for state and local transportation and climate programs and $2 billion for research on clean vehicles and aircraft.
The new oil tax, which would be phased in over five years, is all but certain to be rebuffed by Republicans who control both chambers of Congress.
“President Obama’s proposed $10 per barrel tax on oil is dead on arrival in the House," said House Majority Whip Steve Scalise, a Louisiana Republican.
Environmentalists applauded the move. "President Obama’s vision underscores the inevitable transition away from oil, and investments like this speed us along the way to a 100% clean energy future," Sierra Club Executive Director Michael Brune said in an e-mail.
Inadequate infrastructure raises costs for businesses and consumers, including motorists stuck in traffic -- a "hidden tax" and a harm to the environment, said Transportation Secretary Anthony Foxx.
Foxx said the plan increases investment in infrastructure in a way that combats climate change.
Oklahoma Senator Jim Inhofe, the Republican chairman of the Environment and Public Works Committee, said he agreed on the need to improve the nation’s transportation system but would oppose the oil tax.
"I’m unsure why the president bothers to continue to send a budget to Congress," Inhofe said in a statement. "His proposals are not serious, and this is another one which is dead on arrival. America is ready for a new president.”
Jeff Zients, director of the National Economic Council, told reporters that exported oil products wouldn’t be subject to the fee, even though imported ones would "across the board."
"We recognize oil companies will likely pass on some of these costs," Zients said.
Obama administration officials cast the additional cost as more than offset by the benefits of building better highways and transit systems.
"Make no mistake, this is an energy consumer tax disguised as an oil company fee," Neal Kirby, a spokesman for the Independent Petroleum Association of America, said by e-mail. "At a time when oil companies are going through the largest financial crisis in over 25 years, it makes little sense to raise costs on the industry."
The dip in gasoline prices may have created a political opening for Obama’s proposal, but it also could create tricky politics for one of the Democrats running to succeed him in the White House, Hillary Clinton.
Obama has used his annual budget request to Congress to go after tax deductions and incentives long enjoyed by oil and gas companies -- proposals that have never advanced on Capitol Hill.
"The president perennially proposes repealing the oil industry tax credits which Congress annually ignores," Benjamin Salisbury, a senior policy analyst at FBR Capital Markets, said by e-mail. "It seems overwhelmingly likely that this fee meets the same fate."
The plan comes with oil prices down 13 percent this year, thanks to increasing supply and a weakening U.S. dollar. Crude stockpiles climbed 7.79 million barrels to 502.7 million last week, the highest since the 1930s, according to weekly and monthly data from the Energy Information Administration.
House Speaker Paul Ryan, a Wisconsin Republican, said Obama “expects hard-working consumers to pay for his out-of-touch climate agenda."
"The president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists," he said in an e-mail.
Before the plan was announced, West Texas Intermediate for March delivery slipped 61 cents, or 1.9 percent, to $31.67 a barrel at 1:54 p.m. on the New York Mercantile Exchange.
Kevin Book, managing director of ClearView Energy Partners, a Washington-based research company, said there are "near-zero odds that the Republican-led Congress will grant the president’s request."
"A Congress without the political will to enact a $0.12 per gallon tax on gasoline sales that would have phased in over two years seems very unlikely to impose a new fee on oil companies that would amount to the equivalent of $0.238 per gallon phased in over five years," he said in a research note for clients.
ASCOPE organised the 47th Council Meeting on 21st November 2022 via online platform
The 47th ASCOPE Council Meeting hosted by Lao State Fuel Company (LSFC) in coordination with ASCOPE Secretariat was held virtually on 21st November 2022.
ASCOPE successfully organised the 6th Mid-Year Task Force MeetingThe 6th ASCOPE Mid-Year Task Force and its asscociated meetings hosted by PTT Public Company Limited (PTT) were successfully organised from 3rd - 5th August, 2022 in Bangkok, Thailand.
ASCOPE participated in Seminar on the Role of Natural Gas in Advancing a Low-Carbon Energy Transition in the ASEAN RegionOn 10th November, 2021, ASCOPE participated in the “Seminar on the Role of Natural Gas in Advancing a Low-Carbon Energy Transition in the ASEAN Region” which was virtually hosted by Ministry of Energy Brunei Darussalam and co-hosted by ASEAN Centre for Energy (ACE).
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ASCOPE participated in the 39th ASEAN Ministers on Energy MeetingFrom 13 to 16 September 2021, ASCOPE Secretary-In-Charge Dr. Tran Hong Nam has represented ASCOPE at the 39th ASEAN Ministers on Energy Meeting and its associated meetings (39th AMEM) via online platform chaired by the Ministry of Energy, Brunei Darussalam. With the theme “We Care, We Prepare, We Prosper”, it is expected that ASEAN Member States would continue to closely collaborate to foster ASEAN’s sustainable energy sector.
ASCOPE organised the 5th Mid-Year Task Force Meeting on 30th June 2021The 5th ASCOPE Mid-Year Task Force Meeting held on 30th June 2021 via online platform was chaired by ASCOPE Secretary-In-Charge Dr. Tran Hong Nam with more than sixty (60) participants from all ASCOPE members in ASEAN countries.
ASCOPE participated in the Special Senior Officials Meeting on EnergyOn 21st January 2021, ASCOPE Secretary-In-Charge Dr. Tran Hong Nam on behalf of ten (10) national oil and gas companies/entities responsible for oil and gas in each of the ASEAN Member State (ASCOPE members) paticipated at the Special Senior Officials Meeting on Energy “Special SOME” via online platform hosted by Vietnam.
ASCOPE participated in the 38th ASEAN Ministers on Energy MeetingFrom 17-20 November 2020, Secretary-In-Charge Dr. Tran Hong Nam has represented ASCOPE at the 38th ASEAN Ministers on Energy Meeting and Associated Meetings (38th AMEM) via online platform hosted by Viet Nam. With the theme “Energy transition towards sustainable development”, it is expected that ASEAN member states would closely cooperate together to build up a sustainable energy sector in ASEAN.
The 4th ASCOPE Mid-Year Task Force Meeting Held on 13th August 2020The 4th ASCOPE Mid-Year Task Force Meeting was held virtually for the first time on the 13th August 2020 due to Covid-19 pandemic situation. The meeting was chaired by Dr. Tran Hong Nam, ASCOPE Secretary-In-Charge and attended by ASCOPE Country Coordinators, Task Forces Chairpersons and Members.
Oil Capacity Building Program on Energy Security 2020 towards enhancing energy security in ASEAN regionDuring 17-20 February, 2020, ASCOPE’s Secretary- In- Charge Dr. Tran Hong Nam and his predecessor Mr. Nopporn Chuchinda participated in the Oil Capacity Building Program on Energy Security 2020 co-organized by Japan Oil, Gas and Metals National Corporation (JOGMEC) and ASEAN Centre for Energy (ACE) in association with Japan’s Agency for Natural Resources and Energy and the Ministry of Economy, Trade and Industry (MEITI).
The 45th ASCOPE Council Meeting
44th ASCOPE Council Meeting and Associated MeetingsDuring August 2018, the 44th ASCOPE Council Meeting and associated meetings were held in Thailand.
THE 43rd ASCOPE Council Meeting and relating Taskforce Meetings.The 43rd ASCOPE Council Meeting, and relating Taskforce Meetings were held during 22-23 August 2017 in Singapore.
THE 42nd ASCOPE COUNCIL MEETING AND THE 82nd ASCOPE NATIONAL COMMITTEE CHAIRPERSON MEETINGTwo of the ASCOPE’s major events, The 42nd ASCOPE Council Meeting, and the 82nd ASCOPE National Committee Meeting were held during 6-9 September 2016 in Siem Reap, Cambodia.
ASCOPE Major Event: The 27th ASCOPE Joint Committees and The 81st ASCOPE National Committee Chairpersons MeetingASCOPE Major Event: The 27th ASCOPE Joint Committees and The 81st ASCOPE National Committee Chairpersons Meeting
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ASCOPE NewslettersHappyNewYear 2016 to all ASCOPE family members!
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