No Gas Tax Hike Announced by Senators

In US Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT) have been discussing the idea of establishing a “linked fee” on oil and gas companies. This potential fee would be related to the carbon market price for other industrial sectors rather than putting oil companies directly into an economy-wide cap-and-trade program.

Kerry, Graham, and Lieberman struggle with how their climate and energy bill will affect oil companies under a carbon control plan, though all reject the prospect of a gas tax hike. There is no gas tax; however, the notion of putting a fee on oil and gas companies, a measure which could in turn raise prices at the pump, in the current political and economic climate is cause for alarm in some quarters.

The senators have floated the concept of a “linked fee” on oil and gas companies, which would tie to the carbon market price for other industries instead of grouping oil companies directly into a cap-and-trade program. ConocoPhillips, BP and ExxonMobil Corp. have expressed support for the idea.

The Congressional Budget Office (CBO) has come out with numbers on the cap-and-trade legislation passed by the House in June. The CBO said the legislation would raise the cost of electricity and other goods produced through the use of fossil fuels, costing the average household $160 a year in 2020 and $930 a year by 2050.