Ft. Worth (WBAP/KLIF News) – President Obama will ask for a tax on oil to pay for transportation projects. The tax would add $10 to the price of a barrel of oil, which could lead to an increase of up to 25 cents in the price of gas.
The president says the tax would give the federal government money for infrastructure projects, the expansion of transit systems and the opportunity to make high speed rail a more attractive option.
“This just seems like it’s ill-placed,” says Ken Morgan, the director of the TCU Energy Institute. “I agree with the understanding and the idea of trying to invest in new technology, but why not use other people’s money?”
Morgan says a new tax should only apply to imported oil. He says a tax on all oil could lead to economic harm. Already, oil and drilling companies are laying off workers because of low prices at a time when the United States has become the leading producer of oil.
“We have surpassed Saudi Arabia and we have surpassed Russia,” he says. “The game has changed over the past two to three years.”
The president says low oil prices have made this an advantageous time to put the plan in place.
“Right now, gas is $1,80 and gas prices are expected to be low for the foreseeable future,” he told reporters on Monday.
The Highway Trust Fund, meanwhile, is currently dealing with a backlog and has a $100 billion budget shortfall.
Morgan says adding a tax on all oil would lead to economic hardship in states like Texas. In December, he says the US imported more oil than it had in November, reversing a trend of more domestic production.
“We’re going backwards. Importing is going up,” he says. “Don’t attack the rigs that are being laid down.”
Morgan says a tax on imported oil should also be implemented in steps over several years. The president’s proposal would phase in the ten dollar fee over five years.
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