Tar Sands Tax Loophole Elimination Actby Representative Earl Blumenauer
Posted on 2015-01-08
in the house of representatives
Thursday, January 8, 2015
Mr. BLUMENAUER. Mr. Speaker, today, along with twelve of my
colleagues, I am reintroducing the Tar Sands Tax Loophole Elimination
Act. This bill will ensure that oil companies can no longer sidestep
paying their fair share into the dedicated trust fund created so that,
in the event of an oil spill, there are resources immediately available
for cleanup. If enacted, the legislation would generate approximately
$665 million over ten years.
The Oil Spill Liability Trust Fund, authorized in 1990, ensures we have funding available to pay for the immediate costs of cleaning up oil spills. It is funded by an eight cent per barrel excise tax on crude oil and petroleum products. In 2011, however, the Internal Revenue Service (IRS) issued a misguided decision stating that oil derived from tar sands, the same type that will flow through the Keystone XL Pipeline if approved, is not considered crude oil and is therefore currently exempt from the tax that pays into the Fund.
[[Page E35]] In 2013, we imported approximately 925 million barrels of crude oil from Canada, with over 400 million of these barrels coming from tar sands and not subject to the tax that goes into the cleanup fund. This is a significant liability, without any investment being made for if and when there is a tar sands spill.
Oil that comes from tar sands is a thick, sticky form of crude oil that can be more difficult and costly to clean up than other types of crude. In 2010, for example, a pipeline owned and operated by a Canadian company, Enbridge, spilled more than 850,000 gallons of tar sands oil into a waterway that flows into the Kalamazoo River in Michigan. That has been one of the largest and costliest pipeline spills in American history, with the price tag now at $1.2 billion dollars.
I do not support the development of tar sands--doing so is environmentally destructive and carbon-intensive. Moreover, we should not keep in place a loophole that lets big oil companies off the hook for cleaning up their tar sands spills.
The Tar Sands Tax Loophole Elimination Act would add oil derived from tar sands and oil shale to the definition of crude oil, closing the current loophole and ensuring that oil companies pay into the fund.
Oil companies already get billions of dollars in taxpayer-based subsidies, and this bill will ensure they will not be given an additional free ride on tar sands and any future oil shale development.