Oil spills involving oil-sands-derived crude oils have generated interest from policymakers and a variety of stakeholders. Several oil spills, including both the 2010 Enbridge pipeline spill in Michigan and the 2013 ExxonMobil pipeline spill in Arkansas, involved this material. The Oil Spill Liability Trust Fund (OSLTF) provides an immediate source of federal funding to respond to oil spills in a timely manner. The monies from the OSLTF can be used to respond to a wide variety of oil types, including oil-sands-derived crude oils. The OSLTF is financed primarily by a per-barrel tax on domestic crude oil and imported crude oil and petroleum products. In 2017, the tax increased from 8 cents to 9 cents per barrel. The Obama Administration's budget proposals in recent years called for statutory changes that would have subjected oil sands to the per-barrel tax. In 2005, the United States imported approximately 217 million barrels of oil-sands-derived crude oils from Canada. In 2015, that figure increased to 587 million barrels, accounting for approximately 22% of crude oil imports from all nations. Uses of the Fund

Pursuant to OPA Section 1012, the trust fund may be used for several specific purposes:
Payment of removal costs, including monitoring removal actions, by federal authorities or state officials; Payment of the costs incurred by the federal and state trustees of natural resources for assessing the injuries to natural resources caused by an oil spill and developing and implementing the plans to restore or replace the injured natural resources; Payment of removal costs related to a discharge from a foreign offshore unit; Payment of parties' claims for uncompensated removal costs and for uncompensated damages; Payment of federal administrative and operational costs, including research and development; and Payment of loans to provide interim assistance to fishermen and aquaculture claimants impacted by an oil spill. Until 2008, the OSLTF tax provisions (26 U.S.C. The 2011 IRS interpretation is based on language from a 1980 House Committee on Ways and Means report leading to the passage of CERCLA, which stated that "the term crude oil does not include synthetic petroleum, e.g., shale oil, liquids from coal, tar sands, or biomass, or refined oil." Implications of the Different Scopes

Based on the statutory definitions above and the committee report language, oil-sands-derived crude oil likely meets the OPA definition of "oil" but would not meet the definition of crude oil in the context of the OSLTF excise tax. This difference raises several issues. Perhaps the foremost issue is one of equity. Policymakers may consider whether there is a rationale for exempting certain types of crude oils from the excise tax. At present, it is unclear to what degree importers of oil-sands-derived crude oils are paying the OSLTF excise tax. Assuming most importers are not paying the OSLTF excise tax for imported oil sands, the difference in scope could lead to situations in which expenditures from the trust fund are used to clean up spilled oil that was not subject to the tax supporting the trust fund. The OSLTF arguably plays a backup role in terms of response funding during many oil spills. Although the trust fund is available to support oil spill cleanup efforts, the responsible party for an oil spill often provides the primary source of response (i.e., cleanup) funding. Thus, the financial impact to the trust fund could be minimal if the majority of its payments are reimbursed by the responsible parties. Therefore, if a party's liability limit remains valid, the OSLTF could effectively pay—up to a per-incident cap of $1 billion—for response costs and applicable damages above a responsible party's liability limit. Over the last five fiscal years, this tax has generated, on average, $493 million per year. §§4611-4612) to explicitly include oil-sands-derived crude oils, the tax revenue supporting the OSLTF would likely increase. The below estimate assumes that 100% of the imports of Canadian oil sands crude oils are currently not contributing to the excise tax. Section 5 of S. 953 would permanently extend the per-barrel financing rate and amend the definition of crude oil to include "any bitumen or bituminous mixture, and any oil derived from a bitumen or bituminous mixture." 114th Congress

Several Members proposed legislation that would have specifically included oil-sands-derived crude oils within the scope of the per-barrel tax.
In 2005, the United States imported approximately 217 million barrels of oil-sands-derived crude oils from Canada. In 2015, that figure increased to 587 million barrels, accounting for approximately 22% of crude oil imports from all nations. Pipeline oil spills, including the 2010 Enbridge spill in Michigan and the 2013 ExxonMobil spill in Arkansas, involved this material and generated interest from policymakers and a variety of stakeholders.
The Oil Spill Liability Trust Fund (OSLTF) provides an immediate source of federal funding to respond to oil spills in a timely manner. Monies from the OSLTF can be used to respond to a wide variety of oil types, including oil-sands-derived crude oils. The OSLTF is primarily financed by a 9-cents-per-barrel tax on domestic crude oil and imported crude oil and petroleum products (up from 8 cents per barrel in 2016). In the context of the per-barrel OSLTF tax provision, a 1980 House committee report stated that "the term crude oil does not include synthetic petroleum, e.g., shale oil, liquids from coal, tar sands, or biomass, or refined oil."
Based on that statement, the Internal Revenue Service (IRS) concluded that oil-sands-derived crude oils are not subject to the OSLTF excise tax. This determination raises several issues. Perhaps the foremost issue is one of equity. Policymakers may consider whether there is a rationale for exempting certain types of crude oils from the excise tax. At present, it is unclear to what degree importers of oil-sands-derived crude oils are paying the OSLTF excise tax.
The different contexts for "oil" could lead to situations in which expenditures from the trust fund are used to clean up oil that was not subject to the tax. However, the OSLTF arguably plays a backup role in terms of response funding during many oil spills. The responsible party for an oil spill often provides the primary source of response (i.e., cleanup) funding, and the federal government may recover costs or damages paid from the OSLTF. Thus, the financial impact to the trust fund could be minimal if the majority of its payments are reimbursed by the responsible parties. Nonetheless, the liability of responsible parties may be limited under certain conditions. In those situations, the OSLTF could effectively pay—up to a per-incident cap of $1 billion—for response costs and applicable damages above the liability limit.
In the 114th Congress, Members offered several legislative proposals that would have specifically included oil-sands-derived crude oils within the scope of the per-barrel tax. In general, the proposals would have modified the definition of "crude oil" in the OSLTF tax authority (26 U.S.C. §4612) to include oil-sands-derived crude oil, often described in the amendments as "any bitumen or bituminous mixture, any oil derived from a bitumen or bituminous mixture."
In addition, recent budget proposals from the Obama Administration called for statutory changes that would subject oil sands to the per-barrel tax.
If Congress were to explicitly include oil-sands-derived crude oils within the scope of the per-barrel OSLTF tax, the revenue supporting the OSLTF would likely increase. Over the last five fiscal years, this tax has generated, on average, about $500 million per year. Based on import data of Canadian oil-sands-derived crude oil, the tax would have increased by approximately $47 million in 2016, assuming that 100% of the imports of Canadian oil sands crude oils are currently not paying the tax.