Obama Calls for Carbon Tax on Oil as GOP Plots to Destroy Global Climate Agreement
February 6, 2016
Matt Smith / VICE News
The oil industry is reeling, and President Barack Obama wants to give it another swift kick in the barrels. The White House has proposed a $32 billion clean transportation plan, paid for with a $10-a-barrel tax on crude. The plan iwould fund low-carbon projects like mass transit and electric vehicles, to shrink the US carbon footprint. Meanwhile, the Republican leadership has vowed to fight implementation of the global Paris climate deal signed in Paris in December.
Obama Wants a $10-Per-Barrel Tax on Oil
Matt Smith / VICE News
(February 4, 2016) -- The oil industry is reeling, and President Barack Obama wants to give it another swift kick in the barrels.
The White House proposed a $32 billion plan to boost cleaner transportation Thursday, paid for with a $10-a-barrel tax on crude. The plan is to fund low-carbon transportation projects like mass transit and electric vehicles, in order to shrink the American carbon footprint.
With gas prices running less than $2 a gallon across most of the United States, and crude at around $31 a barrel, the White House is betting that the time is right to put an additional price on fossil fuels.
"The president's plan would 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 White House said in announcing the proposal. "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."
Cars, trucks and other vehicles make up about 30 percent US output of carbon dioxide and other planet-warming greenhouse gases -- about 1.8 billion tons of those compounds in 2014, according to the US Energy Information Administration.
The White House said the proposals announced Thursday will make American transportation cleaner and more sustainable, cutting American reliance on fossil fuels and bolstering the country's ability to adapt to climate change.
But the proposal is certain to face a hostile reception in Congress, where tax-averse Republicans control both the House of Representatives and the Senate -- and many of their leaders refuse to admit that human-driven climate change exists, much less that any money needs to be spent to address it.
It also came in for blistering criticism from the American Petroleum Institute, the oil industry's leading trade association.
"The White House thinks Americans are not paying enough for gasoline, so they have proposed a new tax that could raise the cost of gasoline by 25 cents a gallon, harm consumers that are enjoying low energy prices, destroy American jobs and reverse America's emergence as a global energy leader," API President Jack Gerard said in a written statement Thursday afternoon. "On his way out of office, President Obama has now proposed making the United States less competitive."
But it won swift praise from leading environmental groups, some of whom have been critical of the administration's support for new oil exploration. Michael Brune, the head of the Sierra Club, praised Obama for "challenging Big Oil's stranglehold on how America powers its transportation sector."
"Providing clean, convenient, and affordable transportation choices will create American jobs and protect our climate," Brune said in a written statement. "From expanding public transit, to developing the vehicles of tomorrow, the president's plan will put people to work repairing our crumbling transportation system and moving it into the 21st century."
And Rhea Suh, president of the Natural Resources Defense Council, called it "the right move at the right moment."
"It connects the rising economic, social and environmental costs of burning oil to the vast opportunities for American innovation, enterprise and progress," she said. "And it sends a message to future generations: We're not stuck with oil and all the hazard and harm it brings -- and neither are our kids.''
A 25-cent-a-gallon increase in gasoline would barely bring prices back to $2 in much of the country. By comparison, in the summer of 2014 -- as oil and gas prices began their current nosedive -- gasoline was running about $3.50 a gallon, while oil was over $100 a barrel.
"You'd be able hide this price increase form consumers pretty deftly doing it now, while oil prices are scraping bottom," said Jim Krane, an oil-market expert at the Baker Institute, at Houston's Rice University. "An extra 25 cents on gasoline isn't going to have people jumping off of rooftops."
The current oil glut has been driven by the boom in US shale oil, which has turned the United States into the world's largest petroleum producer again. Now No. 2, Saudi Arabia has tried to reclaim its dominance by refusing to cut back production, forcing a game of chicken in the markets. And the easing of sanctions on Iran in return for its agreement to rein in its nuclear development means still more oil will be available before long.
It's been good for consumers -- and bad for oil companies and workers. Two of the world's biggest, BP and Shell, reported steep losses this week, while rigs have been shut down across the United States as lower prices make it too expensive to drill in some plays.
And as gasoline has gotten cheaper, consumers have been less interested in fuel-sipping compact cars or electric vehicles.
The University of Michigan's Transportation Research Institute, which tracks fuel economy and automotive carbon output on a monthly basis, reports that the average mileage of newly-purchased vehicles has dropped about three-quarters of a mile per gallon since August 2014, after climbing by 5 miles per gallon over the previous seven years. And the greenhouse gases of those vehicles have gone up 4 percent since the summer of 2014, the institute reported this week.
"Anything leading to higher gas prices -- like a $10/barrel tax on oil -- should turn around the recent trend we have seen with new vehicle buyers going back to larger vehicles like pickups and SUVs," said Brandon Schoettle, project manager at the institute. "Whether it's due to oil market prices rebounding or a tax, we do not think that the significant drop in gas prices we have seen lately are likely to last."
Meanwhile, the 18-cent-a-gallon federal gasoline tax hasn't gone up since the Clinton administration, and the transportation network it funds is suffering, Krane said. More efficient vehicles mean less money in the budget for fixing roads and bridges.
"We're traveling a lot more miles and paying a lot less tax," he said. "The roads are still being used, and the tax revenues aren't there to fix them."
Republicans Threaten to Shred Historic UN Climate Agreement
Matt Smith / VICE News
(December 15, 2015) -- None of the top Republicans have addressed the Paris [Climate] agreement, though most are on record dismissing climate change as an issue the US government needs to address. But the Republican leadership in Congress is threatening to shred Obama's climate policies -- jeopardizing the scope and effectiveness of the UN climate accord, which aspires to transition the world's economies away from fossil fuels in just a few decades.
GOP front-runner Donald Trump wasn't asked about it on either of his Sunday news show appearances, on Fox and CNN. Up-and-coming Texas Sen. Ted Cruz hasn't mentioned the deal yet, nor was it raised when Florida Sen. Marco Rubio spoke to NBC's "Meet the Press."
In fact, none of the GOP campaigns contacted by VICE News on Monday responded to inquiries about the Paris accord. But experts like Robert Stavins, the director of the Harvard Environmental Economics Program, said there's almost nothing Republicans can do to derail the deal.
Nothing in the pact is written in such a way that it has to be voted on by the Senate. Most of the emissions cuts the United States has offered as part of the Paris pact are already under way, through a combination of state programs to restrain emissions, federal regulations requiring better gas mileage and other energy efficiency rules, he said.
"None of them are really interested in the issue, and most of them are opposed to the US actions," Stavins said. "There's not a lot of reason for them to talk about it, and they're obviously focused on the threat of domestic terrorism."
Not all Republicans are opposed to climate action: Rob Sisson, executive director of the conservative environmental group ConservAmerica, urged candidates to be ready to discuss the deal at Tuesday night's debate in Las Vegas.
"I can't speak for any of the candidates, but if I was in their shoes, I would want to read the full details of the agreement, discuss it with trusted experts, and be prepared with an answer by tomorrow," Sisson told VICE News in an e-mail Monday afternoon. "CNN is certain to ask the full panel of candidates about the Paris agreement during the debate this week."
The Paris pact, hammered out after two weeks of negotiations among nearly 200 countries, calls for countries to sharply reduce their emissions of carbon dioxide and other greenhouses gases over the coming decades in order to avert catastrophic warming.
The cuts promised so far don't keep the world to the proposed limit of 2 degrees Celsius (3.6 Fahrenheit) over pre-industrial global temperatures -- the world is already nearly halfway there. There's no mechanism to sanction countries that don't meet their proposed cuts, to the dismay of some leading environmentalists.
But the plan is for countries to reassess their progress every five years and ratchet up efforts as needed to keep warming below that mark. And supporters say the deal will mobilize investors to put money into the low-carbon energy technologies that will allow the world to replace fossil fuels by the end of the century.
The deal was met with the expected hostility on Capitol Hill, where the Republican leadership of both houses of Congress had vowed to fight any potential agreement.
Global warming conspiracy theorist and snowball aficionado James Inhofe, a Republican from the shaky petro-state of Oklahoma, said Washington "is not legally bound to any agreement setting emissions targets or any financial commitment to it without approval by Congress."
Inhofe, the chairman of the Senate's Environment and Public Works Committee, told CNN the agreement skips any mandatory cuts because "[o]ut of 100 senators, they couldn't get 30 senators to vote for something like that."
Meanwhile, Senate Majority Leader Mitch McConnell -- whose home state of Kentucky is being battered by the coal industry's decline -- called the accord "nothing more than a long-term planning document" that could be "shredded" by the next president.
"Before his international partners pop the champagne, they should remember that this is an unattainable deal based on a domestic energy plan that is likely illegal, that half the states have sued to halt, and that Congress has already voted to reject," McConnell said in a written statement.
But Jennifer Morgan, head of the climate program at the World Resources Institute, said the deal undercuts one of opponents' biggest talking points.
"One of the big questions in the United States has been, 'How should we move forward without other countries moving forward?' " Morgan said Monday. "And I think the Paris agreement answers that question. It is an agreement where all countries are moving forward collectively in a common way, and the Obama administration has played a leadership role in getting all counties to do their fair share."
And GOP warnings to other countries that the US might not stand by any commitments turned to be "irrelevant" to other negotiators, Stavins said.
"That didn't succeed, right or wrong," he said.
Sisson urged the GOP to push for more renewable energy and encourage utilities to support wind and solar power, as well as nuclear power and natural gas -- which has helped the US cut emissions sharply by displacing far-dirtier coal as power-plant fuel.
"It is wonderful that the nations of the world have agreed to a common vision on climate change, and have generated a great deal of enthusiasm for the work to follow," Sisson said. But he added, "If we're serious about tackling greenhouse gas emissions, natural gas and nuclear power are cleaner, here, now."
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