Counter Saudi attack on U.S. economy through oil glut; impose tariff

The current deflation of the energy markets is a direct result of Saudi Arabia's decision to glut the market with cheap oil. This strategy is designed to maintain market share by undercutting more expensive oil producers.

This is a direct attack on American energy independence and the growing renewable energy market. The glut of cheap oil will delay the ability of renewable energy to compete on a cost basis, reverse the production of American crude oil, which impacts jobs and the value of the U.S. energy market, causing a drop in stock market value; that, in turn, affects pension funds and the market as a whole.

There is an answer to counter this Saudi-initiated attack on our economy.

The U.S. imported 9 million barrels of oil per day in 2014; 80 percent of the oil imported was crude oil for refining. By instituting a tariff on the import of crude oil that would set a price floor, we would stabilize our oil production, set a bar that renewable energy production could compete with, create jobs and stabilize our investment markets.

A tariff can be instituted that decreases or increases based on a price standard. For example if the standard were set at $50 per barrel and the imported oil was priced at $40 per barrel, a $10 tariff would be applied. At the 2014 rate of 7.2 million barrels per day of imported crude, this would produce $72 million a day in tariff income and $26.2 billion a year.

The tariff income can be used to support the development of renewable energy, reduce the national debt, etc. We will need our current oil energy sources for the foreseeable future as we transition to other sources of renewable energy.

Ray Fusco

Bradenton

This story was originally published December 15, 2015 at 12:00 AM with the headline "Counter Saudi attack on U.S. economy through oil glut; impose tariff ."