The US Senate voted to recommend that the House originate legislation that would make heavy crude oil moving through the proposed Keystone XL pipeline subject to the excise tax on other transported crudes that goes into the federal Oil Spill Liability Trust Fund.
Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-Alas.) offered the resolution as an amendment to her own bill approving the pipeline’s construction during floor debate on Jan. 22. It was approved by 75 to 23 votes.
“Right now we have what appears to be a legitimate and unintended loophole on the books,” Murkowski said after the vote. “We will engage with our colleagues in the House to examine this issue, and it is my hope we will close it.”
She said federal law makes conventional crude subject to the 8¢/bbl tax, but a 2011 US Internal Revenue Service ruling excluded crude from oil sands from the levy.
Passage of Senate Finance Committee Ranking Minority Member Ronald L. Wyden’s (D-Ore.) amendment to close the loophole outright would have violated the US Constitution’s requirement that revenue generating legislation originate in the House, Murkowski said.
That would have led to a “blue slip” from the House, halting advancement of the underlying bill approving the project’s construction, she said. A subsequent vote on Wyden’s amendment attracted 50 yeas, but was 10 votes short of the supermajority required for passage under Senate rules.
“It is very significant that more than 70 senators voted for a nonbinding resolution to close an outlandish tax loophole that favors Canadian tar sands producers over American oil and American taxpayers,” Wyden said after the votes.
“I’m disappointed Republicans did not vote to end this loophole today, but for colleagues seeking areas of common ground, today’s overwhelming vote means closing the tar sands loophole should be the first order of business,” he said. “I won’t let this issue go until the loophole is closed for good and tar sands producers are paying their fair share.”
Contact Nick Snow at firstname.lastname@example.org.