Although U.S. President Barack Obama’s proposed tax of $10 per barrel is likely dead on arrival, it does point to continued efforts by the government to raise money. The oil industry is a convenient target for new taxes; however, this tax will hit the working class very hard through higher gasoline prices and increased crude oil imports.

The tax is framed to garner support for improving the nation’s deteriorating transportation infrastructure. The administration wants to spend $300 billion over the next decade to expand rail and mass transit infrastructure while reducing greenhouse gases.

Rep. Joe Barton (R-Texas) quickly responded to the $10 fee per barrel. “I am in total disbelief that the president and his advisers would even entertain this proposal. This 30% tax on oil will not clean our air, it will not create a new transportation infrastructure, but it will hit the checkbooks of hard-working American families, and it will hurt our economy in countless ways.

“In three decades of working in energy policy, I cannot remember a more outlandish or impractical proposal. The administration has not seriously considered the destructive implications for millions of Americans and their communities. To me, this is a political stunt and is dead on arrival in the House [of Representatives],” he emphasized in a Feb. 4 press release.

This proposal continues a long tradition of the federal government seeking financial gain from the oil industry. The windfall profits tax harkens back to President Jimmy Carter’s administration when the Crude Oil Windfall Profit Tax Act was passed in 1980. You might remember that administration for several other shortsighted but long-lasting actions, including banning use of natural gas in power generation and stopping exports of crude oil, which was only reversed recently.

Those low gasoline and diesel prices that consumers are enjoying at the moment would disappear in the slash of a pen. The benefit of low energy prices that manufacturers are realizing now would be gone with the smokescreen the administration is blowing.

Such a tax burden would not result in any additional oil and gas production in the U.S. Instead, it would aid Saudi Arabia in decimating the U.S. petroleum industry. Given the current state of U.S. oil and gas companies, this proposal would increase the number of companies in bankruptcy court.

How President Obama can say he supports U.S. energy independence and make such an ill-advised proposal, I do not know. I guess he is counting on the opposition to the oil industry to pull the tax through.

What will be evident is the oil industry’s dedication to meeting U.S. energy demand in the face of debilitating legislation. Keep calm, and drill on.

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