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U.S. President Joe Biden would like to see his proposed $2-trillion package on infrastructure passed by the summer, White House Press Secretary Jen Psaki said on Tuesday, while analysts estimate that the package could raise demand for oil for building roads.
“He’d like to see progress by May and certainly a package through by the summer,” Psaki said, referring to President Biden’s plan on fixing the nation’s infrastructure unveiled last week.
The timeline Psaki mentioned is more ambitious than what some Democrats have hinted at—a deadline for action by September.
The package faces opposition from Republicans and even some Democrats who have called for a lower corporate tax rate than the 28-percent rate President Biden is proposing.
“We’re always open to hearing from members of Congress and — on their ideas and what they think should be a part of the package. At the end of the day, the President’s red line is inaction,” Press Secretary Psaki said on Tuesday.
The plan also proposes to “eliminate tax preferences for fossil fuels and make sure polluting industries pay for environmental clean up.”
President Biden’s plan is expected to have an unforeseen but positive effect on oil demand because $621 billion of the total would be used for transportation infrastructure, including lots of roads—which are built with asphalt. The biggest winner from the recovery plan could be Canadian oil sands producers in what could be seen as an ironic twist of fate after President Biden canceled the Keystone XL pipeline that might have made life easier for these companies by providing a much needed additional outlet for their growing oil exports to the southern neighbor.
Asphalt is made from bitumen, and bitumen is what the oil sands yield. With ambitious targets for new roads and bridges and large-scale repair works, asphalt demand in the next few years could soar.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.