The bill may struggle getting passed the Republican led House of Representatives and Congress

Obama wants oil tax to fund driverless cars and green transport

US president Barack Obama has proposed a $10 tax on every barrel of oil to fund green transport initiatives and driverless vehicles.

The plan would use the money raised to make public investments in transportation and incentivise the private sector to reduce America’s reliance on oil and also to cut carbon pollution.

Greenhouse gas emissions from the sector currently account for nearly 30 per cent of America’s total output.

$2bn would be used to get clean autonomous vehicles on the road more quickly and safely by funding research and development projects and launching pilot schemes.

It will also be used to fund infrastructure to enable electric cars and other vehicle technologies such as hydrogen to become a viable alternative to traditional combustion vehicles.

$20bn would be allocated to improve public transport systems in cities and make high-speed rail a viable alternative to flying in major regional corridors.

“To meet our needs in the future, we have to make significant investments across all modes of transportation,” said a White House release.

“Our transportation system is heavily dependent on oil. That is why we are proposing to fund these investments through a new $10 per barrel fee on oil paid by oil companies, which would be gradually phased in over five years.”

If the president’s plan is fully implemented it would reportedly increase American investments in clean transportation infrastructure by roughly 50 per cent.

However, it is highly likely that the bill be rejected in the Republican-controlled House of Representatives and the Senate and will therefore struggle to be implemented.

American Petroleum Institute CEO Jack Gerard has voiced his disapproval of the plans.

"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," he said.

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