President Barack Obama will propose a $10-per-barrel charge on oil to fund clean transportation projects as part of his final budget request next week, the White House said Thursday.
The proposal — which follows the passage of a bipartisan transportation bill last year — would have difficulty clearing the Republican-controlled Congress. In a statement, Rep. Steve Scalise of Louisiana, House majority whip, said the House would quash the "absurd" plan.
Oil companies would pay the fee, which would be gradually introduced over five years. The government would use the revenue to help fund high-speed railways, autonomous cars and other travel systems, aiming to reduce emissions from the nation's transportation system.
Obama said Friday that the investments would put the United States in a "much stronger position" in the coming decades, particularly if oil prices start to rise again. It makes more sense to levy the charge now while gas prices remain low for consumers, he contended.
"I think we'll look back and say, 'that was a smart investment,'" Obama said in response to a question at a news conference Friday.
Obama has prioritized reducing carbon emissions and the use of fossil fuels. But some of his administration's proposals, including the Clean Power Plan, have faced significant opposition at the federal and state level.
The White House said the oil-fee proposal would invest an additional $20 billion per year to cut traffic and "provide new ways for families to get to work and school." It would also put about $10 billion per year into regional travel systems and another $2 billion annually into clean transportation research.
At least part of the cost of the proposal would be passed on to consumers, Jason Furman, chairman of Obama's Council of Economic Advisers, told CNBC on Friday. He said Americans would benefit from infrastructure investments though.
Asked whether it would make more sense to tax gasoline at a time when prices are low, Furman said the administration's proposal would benefit infrastructure that serves aviation and rail in addition to autos, and so the burden should not be placed solely on gasoline.
The proposal comes amid a brutal stretch for the U.S. oil industry. Crude prices have fallen nearly 50 percent in the last year to just below $32 per barrel, pressuring profits in the sector.
Global outplacement firm Challenger, Gray & Christmas attributed more than 104,000 layoffs by U.S.-based companies to falling oil prices in 2015. In January, job cuts in the energy sector hit 20,246, the highest monthly total since the start of the oil price rout in the second half of 2014, according to Challenger.
Furman on Friday stressed that the plan would be phased in over time and said it was designed to allow U.S. drillers to compete on a level playing field.
"Ten dollars a barrel is the type of fluctuation we see in a given month in oil prices. The bigger things that effect oil are supply, demand, the geopolitical situation, and this proposal is relatively small compared to those, but big enough to fund some really important investments," he told "Squawk on the Street."
In a statement Thursday, American Petroleum Institute CEO Jack Gerard said the fee would hurt consumers by raising gasoline prices and reducing jobs.
"On his way out of office, President Obama has now proposed making the United States less competitive," he said.
But the Natural Resources Defense Council applauded the proposal, saying its emphasis on funding clean transportation built on the global climate accord reached in Paris last year.
"This is the right move at the right moment. It's the appropriate next step in moving America beyond the dirty fossil fuels that are driving climate change," said Rhea Suh, president of the NRDC, in a statement.
Shares of some major U.S. oil producers did not appear to react to the initial news Thursday.
— CNBC's Tom DiChristopher contributed to this report.