How Electric Cars Would Benefit From Obama’s Oil Tax


Do electric vehicles have a greater advocate than President Barack Obama? In terms of reach and influence, the president is impossible to top. Obama continued his efforts in clean energy and alternative fuel vehicle policy with a proposed $10-per-barrel tax on oil, a measure included in his budget plan released February 4. Though passing it remains a long shot, the oil tax would add EV charging infrastructure and hasten deployment of autonomous driving, a feature tied to the smartest plug-in vehicles.

Billed as a “21st Century Clean Transportation System,” Obama’s plan would place a tax on barrels of oil (imported or exported) while the price remains low and be phased in over the course of five years. Oil companies would likely pass on the cost to consumers in the form of a small hike in gas prices. The bulk of the new funds generated, $20 billion, would be used to reduce traffic through an expansion of public transportation in cities and suburban areas around the country, including investments in high-speed rail.

Another $10 billion would be devoted to improving mass transit through various measures, including the addition of systems that rely on low-carbon fuels. Finally, $2 billion would go to advancing autonomous drive systems, with some $400 million extra set aside for upgrading existing public transportation with better technology. A major upgrade in charging station infrastructure, including DC Fast options, would be a part of this last $12.4 billion in spending.

For a proposal designed to make Americans’ commute greener and create thousands of jobs, the Obama plan rightly focuses on reducing traffic, something automakers have become interested in with mobility experiments in recent years. Studies show how much of our transportation emissions — now at 30% of U.S. greenhouse gas pollution — are tied to wasted exercises such as looking for a parking spot or spewing fumes while sitting in traffic on the freeway.

Electric cars and autonomous vehicle technology would help solve these and other problems.


Autonomous vehicle technology has been hyped in so many ways, but its greatest potential benefit was revealed in a 2015 study by Berkeley Lab. Using self-driving electric cars in place of an urban taxi system, 90% of emissions from those cars could be eliminated. Rather than having drivers roam the streets spewing emissions and causing congestion while they look for fares, the cars deploy when someone orders a ride. Otherwise they wait and charge off the street.

On top of the reduction in pollution, this system eliminates the hassles of EV driving like waiting for the battery to charge. Since humans would neither park nor drive the car, a robot would have to absorb these frustrations. The improvements are considered more than a decade from becoming deployable. Obama’s tax on oil would jumpstart research and development of the technologies to realize them.

To pare down emissions from congestion, stop-start technology developed in hybrids can shut down engines while vehicles idle in traffic and at red lights. EVs have taken the lead in autonomous driving and mapping systems that find parking spots as well as available charging stations. When we see start-stop systems deployed soon in Ford trucks, a 7% improvement in fuel economy could be in store. We have a hard time believing these systems would materialize without the R&D resources automakers devoted to plug-in cars.

Of course, we can always continue the massive oil subsidies funded by taxpayers and wait for the oil industry to finance change on its own. Then we wouldn’t need a tax at all. This angle is worth considering when we hear the blowback coming from the oil lobby and its devoted advocates in Congress.

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