An oil tax that would draw Republican support and re-energize HoustonFirst, a quick announcement: my Center for Opportunity Urbanism is having a free luncheon event near Uptown Friday Feb 19th on America's Housing Crisis. Details and RSVP here - hope to see you there!
You may have read about President Obama's "dead on arrival" budget proposal of a $10/barrel oil tax. How could it be modified for bipartisan support? Change it to an import tariff, just as the Chronicle recently proposed:
"Ed Hirs, a University of Houston energy economist, has pointed to an oil import tariff or quota as a way for the United States to stabilize prices and avoid the economic hit that comes with global price swings. A healthy price floor for domestic oil, or even a price agreement with Canada and Mexico, would ensure steady business for oil producers without hurting downstream refiners or your routine gas station fill-up.
"It is protectionist," Hirs told the Houston Chronicle editorial board. "But it is a net gain for us."
Politicians who have a gut instinct for free markets need to check that feeling when it comes to oil. Global prices are literally controlled by a cartel, and right now it looks like OPEC nations are dumping their product below cost in a fight for market share. That's not a free market, that's a trade war.
Thanks to the fracking revolution, the United States is producing oil at rates not seen since the 1970s. Changing facts led Congress to change the law about oil exports at the end of last year. The next step logical step would reinstate oil import regulations. After all, import restrictions successfully bolstered the domestic oil industry from 1959 until 1974 and the Arab Oil Crisis.It is clearly true that Saudi Arabia is dumping oil to destroy the U.S. oil industry, just as China did with steel at one time. Why are we ok with this?! An import tariff would support a higher oil price for increased domestic production.
Here's what the Democrats get:
- Increased cost of oil which reduces usage and carbon emissions to meet the new Paris climate treaty goals
- A funding source for alternative clean-energy research (btw, here's one that would save Houston's oil industry too: a new technology to pull the carbon off of fossil fuels)
- Domestic jobs
- Stick it to OPEC
- Domestic jobs in red states (Texas, North Dakota, and others)
- A revitalized domestic oil and gas industry (major funders of the Republican party)
- Domestic energy security and self-sufficiency (which is also a military priority)
- Stick it to OPEC in general and the Middle East in particular
It's hard to imagine there's an issue that both the left and the right might agree on in these days of polarized politics, but this definitely seems like one of them. Maybe a few congressmen from both parties in Houston could get together to sponsor a bill through Congress? As always, please forward this post along if you know the right people (or even just to your congressman).
UPDATE 2/21/16: The Chronicle calls for an OPEC Tax!