Is Dilbit Oil? …

Is Dilbit Oil? Congress and the IRS Say No

The oil industry has often said that dilbit, a heavy crude oil from Canada’s tar sands, isn’t much different from conventional crude oil. But when it comes to paying into a federal fund used to clean up oil spills, it’s different enough to deserve a sizeable tax break.
Dilbit is exempt from the tax, because the 1980 legislation that created the tax states that “the term crude oil does not include synthetic petroleum, e.g., shale oil, liquids from coal, tar sands, or biomass…”
The Internal Revenue Service cited that 1980 text in a 2011 memo that confirmed the exemption for at least one company.
The tax helps support the federal Oil Spill Liability Trust Fund, whose primary funding comes from an 8-cent-per-barrel excise tax on domestically produced and imported crude oil and on imported refined products such as gasoline.
Money from the fund is helping to clean up the 2010 oil spill in Michigan, where a ruptured pipeline spewed more than 1 million barrels of diluted bitumen, or dilbit, into the Kalamazoo River. Unlike conventional crude oil, which floats on water, much of the dilbit sank into the river. Removing it has been so difficult that cleanup crews are still struggling to mop it up, making the Michigan disaster the most expensive oil pipeline spill in U.S. history.

Read more:

Previous Post
Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: