By Tyler Morning Telegraph Editorial Board | 07 Feb 2016
President Barack Obama’s proposed $10-per-barrel tax on crude oil is a crusade disguised as accounting. It’s part of his 2017 budget, which will be unveiled Tuesday.
Politico reported last week that “the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars and other transportation approaches designed to reduce carbon emissions and congestion. To pay for it all, Obama will call for a $10 ‘fee’ on every barrel of oil, a surcharge that would be paid by oil companies but would presumably be passed along to consumers.”
Defending his oil tax idea on Friday, Obama said “It’s right to do it now when gas prices are really low.”
But everyone knows that gas prices won’t stay this low. Eventually, they’ll climb up again. And then the tax – which would add as much as 25 cents to each gallon of gasoline and diesel fuel – will start to hurt.
Even now, with gas prices low, a tax hike like that would impact the economy.
“The national average for regular gasoline is $1.76,” the Heritage Foundation’s Nicolas Loris wrote. “Lower gas prices have provided a huge windfall and are putting money back into the wallets of American households. The U.S. Energy Information Administration projects that cheaper gasoline saved families approximately $700 in 2015. The huge boost in disposable income gives them the opportunity to spend money going out to eat, on electronics or at department stores.”
Loris pointed out that the tax – billed as a tax on Big Oil – would actually target poor families. That’s “because transportation and residential energy costs represent a larger portion of their budget. The median family spends about 5 cents out of every dollar on energy costs; low-income families spend about 20 cents of every dollar,” he wrote.
And about that “Big Oil” claim – George Rogers of the Texas Alliance of Energy Producers points out that “92 percent of the oil produced in the U.S. is produced by independent oil producers – not the major, integrated oil companies.”
That industry is already hard-hit by Saudi Arabia’s near-suicidal plan to quash the hydraulic fracturing (fracking) revolution in the U.S.
“The drilling rig count in Texas is down by 68 percent from 2014, drilling permits are down 70 percent, and oil and gas well completions have each declined by about 60 percent,” Rogers pointed out.
His agency estimates Texas has lost 72,000 jobs in the oil industry since December 2014, when oil started falling from its high of $112 per barrel.
Read more here: Tyler Morning Telegraph