President Obama continues to push additional legislation that will push more Eagle Ford operators out of business. The latest move is a controversial oil tax embedded in his $4.1 trillion budget request he sent to Congress today.
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The Obama Administration hopes to raise $319 billion over the next decade for 'clean' transportation and plans to fund these projects with a $10.25-per-barrel tax on crude.
This new tax is part of Obama's 21st Century Clean Transportation System, which is dubbed as "smart, strategic integrated investments to help reduce carbon pollution and strengthen the economy."
The President’s plan stresses the need for a sustainable funding solution that takes into account the integrated and varied nature of our transportation system. It will increase American investments in clean transportation infrastructure by roughly 50 percent while reforming the investments we already make to help reduce carbon pollution, cut oil consumption, and create new jobs. 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.
The proposed tax is the latest in an onslaught of regulations aimed at the fossil fuel industry. The move brought immediate criticism from many analysts and industry leaders with oil mogul T. Boone Pickens tweeting its the "dumbest idea ever" and that the "$35 billion/year oil tax would bankrupt O&G industry."
After months of plummeting crude, the boom has become a bust for many and companies have struggled to survive. 18 companies that do business in the Eagle Ford filed bankruptcy and an estimated 60,000 jobs have been lost. Adding an additional tax that is roughly 30% of a barrel of crude will devastate many producers.
Key components of the plan include:
- Reducing carbon pollution by creating incentives to reduce our reliance on oil and cut carbon pollution from our transportation sector including self-driving cars vehicles and other alternative vehicles
- Strengthening the economy by supporting hundreds of thousands of jobs each year and increase the competitiveness of U.S. businesses and the productivity of our economy by making it faster, easier, and less expensive to move American-made products.
- Expanding clean, reliable, and safe transportation options such as public transit and rail