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ND delegation upset by Obama’s oil tax plan, President to seek $10-per-barrel tax in budget proposal

WASHINGTON -- North Dakota's Congressional delegation is both laughing off and expressing unbridled disgust over President Barack Obama's bid to impose a $10-a-barrel tax on crude oil.

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President Obama walks past a pumpjack on his way to deliver remarks on energy independence in New Mexico, March 2012. (Jason Reed/Reuters)

WASHINGTON -- North Dakota’s Congressional delegation is both laughing off and expressing unbridled disgust over President Barack Obama’s bid to impose a $10-a-barrel tax on crude oil.

The longshot tax proposal, which will be a part of Obama's fiscal 2017 budget plan on Tuesday, would fund the overhaul of the nation's aging transportation infrastructure, the White House said on Thursday.

“To be honest when I first saw it, I thought someone was mistaken,” said Rep. Kevin Cramer, R-N.D. “Clearly, it’s real. … We all know it’s dead on arrival. This thing has zero chance of being taken even remotely seriously.”

The proposed fee, which would be paid by oil companies and phased in over five years, was quickly met with scorn by lawmakers in the Republican-controlled Congress, and some Democrats, including North Dakota Sen. Heidi Heitkamp.

“Way to kick somebody when they’re down,” said Heitkamp, whose line was echoed almost verbatim by North Dakota Republican Sen. John Hoeven in phone interviews with The Press.

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“This is never going to happen,” Heitkamp added. “This is some kind of crazy, Hail Mary pass that will never, ever see the light of day. It is not responsible if you’re trying to put together a budget. It’s really, really unfortunate.”

In the last year of his presidency, Obama has said the country must stop subsidizing the "dirty" fossil fuels of the past and focus on clean, renewable fuels that do not exacerbate climate change.

The $10 tax would, ironically, come at a time of tumbling oil prices.

Oil prices fell last month to below $30 a barrel, the lowest level since 2003, as demand fails to keep pace with a glut of new supply and the world’s biggest oil producers resist cutting production.

The fee would provide nearly $20 billion a year to help expand transit systems across the country and more than $2 billion a year to support the research and development of self-driving vehicles and other low-carbon technologies.

"By placing a fee on oil, the President's plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future," the White House said in a statement.

Cramer said the proposal speaks to Obama’s radical environmental agenda.

“His goal is to make fossil fuels so expensive that other forms of energy look good by comparison, and use the extra money he raises from this stuff to further supplement the green energy sector, which can’t compete on a level playing field,” Cramer said. “This is clearly all him in terms of what he believes and the way he views the world.”

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Republican lawmakers, who have repeatedly clashed with the Obama administration over energy policy, panned the proposal on social media. House Majority Whip Steve Scalise asked on Twitter whether the proposal was "Obama's worst idea yet?"

Hoeven, who is on the Senate Committee on Energy and Natural Resources, said it’s not just a bad idea economically, but also in terms of national security.

“We’re in a global battle to determine who is going to provide energy,” he said. “It’s a national security issue. … Bottom line, again, he’s making it harder for us to produce energy here at home while he makes it easier for our adversaries like Iran to produce energy.”

Neal Kirby, a spokesman for the Independent Petroleum Association of America, said in a statement that the tax would ultimately be passed along to U.S. consumers, who have benefited from low gasoline prices.

Jeff Zients, director of the White House National Economic Council, pushed back against assertions the oil tax would place U.S. crude producers at a disadvantage. He told reporters on a call that the fee would be applied to domestically produced and imported barrels of oil but not to crude exported from the U.S.

North Dakota Petroleum Council President Ron Ness said crude oil is already taxed extensively at both state and federal levels, and to impose a greater tax -- especially when prices are so low -- would be devastating the industry.

“You’ve got to give him (Obama) credit for sticking to his anti-American economic positions, as far as producing our own energy sources here,” Ness said. “He seems more intent on destroying our own energy economy than helping it succeed.”

 

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