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Hess CEO: US Should Mull $1 Gas Tax, Boost Auto Efficiency

Tuesday, 08 Mar 2011 12:17 PM

The U.S. should consider raising federal gasoline taxes to $1 a gallon and boosting average fuel economy to 50 miles a gallon to help avert a global energy crisis, the head of oil company Hess Corp. said.

“As demand grows in the next decade, we will not have the oil production capacity we will need to meet demand,” Chief Executive Officer John B. Hess said in a speech today at CERAWeek, a Houston conference held by IHS Cambridge Energy Research Associates. “The $140-per-barrel oil price of three years ago was not an aberration — it was a warning.”

Amid unrest in the Middle East, oil futures touched $106.95 a barrel yesterday in New York, the highest intraday price since Sept. 26, 2008. The average price of regular gasoline at the pump in the U.S. has risen 12 percent in the last three weeks to $3.509 a gallon, the most since Oct. 5, 2008, according to AAA.

Hess, based in New York, produced an average of 419,000 barrels of oil equivalent a day last year, more than Syria or Yemen’s total production for 2009, according to Bloomberg data.

The U.S. needs to “moderate” demand for oil and increase supply, Hess said. That includes boosting current corporate average fuel-economy standards that call for a 35 mile-a-gallon target for cars and light trucks by 2016, he said.

The government shouldn’t eliminate tax provisions that encourage drilling and should allow the industry to “get back to work” in the Gulf of Mexico, Hess said.

The U.S. also needs to “get serious about climate change once our economy recovers,” Hess said. Increasing the gasoline tax from 18.4 cents a gallon and levying a $10-a-ton tax on power-plant emissions would raise $200 billion a year to reduce deficits and fund alternative fuel research, he said.

Carbon taxes should be “introduced over a five-year period and only when other major industrial powers” do the same, Hess said.

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The U.S. should consider raising federal gasoline taxes to $1 a gallon and boosting average fuel economy to 50 miles a gallon to help avert a global energy crisis, the head of oil company Hess Corp. said. As demand grows in the next decade, we will not have the oil...
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2011-17-08
Tuesday, 08 Mar 2011 12:17 PM
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