"By placing a fee on oil, the president's plan creates a clear incentive for private sector innovation to reduce our reliance on oil and at the same time invests in clean energy technologies that will power our future," the White House said in a statement.
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.
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.
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.
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