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senate Bill S. 187

Taxing Big Oil for Shale and Tar Sands

Argument in favor

Tar sands and shale oils are just as hazardous to the environment as conventional oils. They should not be exempt from a tax that funds oil spill cleanups.

AndrewGVN's Opinion
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12/16/2015
We shouldn't be giving big oil companies tax benefits and tax breaks, these already very successful companies simply don't need them. What we need to do is establish taxes for companies that provide pollutants such as oil, and give tax breaks to green energy companies (wind power, etc.)
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Steven's Opinion
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12/18/2015
Big oil needs to pull it's own weight for a change.
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David's Opinion
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01/05/2016
Shale oil and gas producers should not be exempt from environmental regulation.
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Argument opposed

Taxes imposed on oil from tar sands and shale will get loaded off onto consumers, meaning even higher fuel prices.

John's Opinion
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02/23/2016
Just another way of taxing the American people because ultimately the cost will be passed on to the end users.
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Curmudgeon's Opinion
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07/18/2015
Do we want these energy sources or don't we? The normal taxation on profitable sale of the product already applies. This is some sort of bill of attainder on activity our activist socialistic leadership is eager to apply to an industry it and its Eco lobby has a beef against.
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Mary's Opinion
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11/02/2015
They pay a huge income tax. They should also be required to clean up their mess
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What is Senate Bill S. 187?

This bill would change the definition of "crude oil" in the Internal Revenue Code to include oil from tar sands and shale formations. This means that oils from shale and tar sands (alternatives to conventional crude oil) would be subject to excise tax — i.e. the taxes on specific purchases (like gasoline) that are usually included in the cost of the product.

S. 187 gives the Treasury Secretary the authority to include these new sources of oil in the excise tax on crude oils if they pose a significant hazard in the event of a spill. Sponsoring Rep. Ed Markey (D-MA) introduced this legislation in the 113th and in the current Congress in response to the proposed Keystone XL pipeline

Impact

Companies that use tar sands or shale to produce and refine oil, and consumers of those products, tax payers, the Internal Revenue Code.

Cost of Senate Bill S. 187

The CBO cost estimate is currently unavailable.

More Information

In Depth:

At roughly 37 percent, petroleum is currently America’s leading source of energy. By 2040, petroleum is still projected to be the leading source of energy, but its share will have fallen to around 32 percent.

The revenue collected from the excise tax on these new oil sources would fund the Oil Spill Liability Trust Fund that goes to cleanup costs for oil spills around the country.

The per-barrel excise tax, reinstated in 2005, was raised from 5 cents to 8 cents for 2009-2016 and will rise to 9 cents in 2017. Democrats on the House Natural Resource Committee estimated the revenue from the excise tax expansion would be $58.5 million in 2014 and $61.5 million in 2015.

Under current law, oil from tar sands or shale formations isn’t covered by the excise tax on conventional crude oil. This legislation may set a precedent. As costs of energy climb higher and higher, new forms of oil extraction (like tar sands and shale) have become economically viable. Supporters of S. 187 contend that the bill would keep the IRS tax code up to date with those innovations. Rep. Earl Blumenauer (D-OR) noted in support of the bill: 

“We should be moving as quickly as possible and through every legislative avenue to reduce the tax breaks and exemptions that we give to Big Oil, which has raked in record profits in recent years. This bill ensures that we don’t let tar sands — which are a costly, environmentally destructive source of oil — to slip through the cracks and avoid fair taxation.”

In opposition to bills like S.187, Kevin Hassett and Alan Viard from The American Enterprise Institution note:
"Supporters of the tax increases complain that the companies have 'too much' money and that the government is entitled to seize money from them if it believes it can spend the funds more wisely. In a free society, however, government collects revenue from companies and individuals under neutral tax rules, not based on an ad hoc determination that politically disfavored companies or individuals have too much money."

Media:


Democratic Natural Resources Committee Press Release

Huffington Post

Law 360

Scientific American — How Tar Sands Become Oil

(Photo Credit: Flickr user karindalziel)

AKA

Tar Sands Tax Loophole Elimination Act

Official Title

A bill to amend the Internal Revenue Code of 1986 to clarify that products derived from tar sands are crude oil for purposes of the Federal excise tax on petroleum, and for other purposes.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedJanuary 16th, 2015
    We shouldn't be giving big oil companies tax benefits and tax breaks, these already very successful companies simply don't need them. What we need to do is establish taxes for companies that provide pollutants such as oil, and give tax breaks to green energy companies (wind power, etc.)
    Like (8)
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    Share
    Big oil needs to pull it's own weight for a change.
    Like (5)
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    Shale oil and gas producers should not be exempt from environmental regulation.
    Like (4)
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    Yes and those tax dollars should be spent on anti-oil use = green energy.
    Like (3)
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    We are the only country that denies climate change. Could you gentlemen, I use the term loosely, get your heads out of your wallets (and other places) & wake up to the reality that the earth is warming. We need to tax the pants off fossil fuels & encourage alternative energy. Americans are, in my experience, among the most creative & brilliant people currently on the face of the earth. We should be developing all the new necessary technologies & leading the way instead of being a ball & chain on everyone else. Why are we the stupid corrupt country? This has not been our history or national character. Now we are behind in education & science. We value stupid more than knowledge. Especially in Congress. If you paid any attention to the hearings you hold, you would see that your stupid is constantly on display. I am increasingly ashamed of what we have become: bigoted, uneducated people who think we are better then other people as we sink into a morass of idiocy which we preen about. Yuk!
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    Tax them. If this were a safe alternative fuel source then maybe but this is not save clean energy
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    The tar sand oil extraction is a bad idea. Time to move more towards renewable energy. #noDAPL #SAPE #noKeystoneXL
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    Give the breaks to families. Make the corporations pay more in taxes. They devastate the environment and can never repair the damage. Consider the impact of actions beforehand. Work for the next seven generations, not for corporate profits for few today. Make our grandchildren proud not appalled.
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    Why shouldn't they be taxed? They are a big factor in destroying the earth!
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    They are The Who are polluting so they should pay for the mess to the environment rich always gets away with everything
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    .
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    Oil comes with an environmental cost. That cost should be passed on the the big oil companies that profit from it. They can pass on that cost to the consumer as needed but it's not free. Higher price oil means renewable become more cost effective alternatives.
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    Oil companies cannot pollute our world without facing repercussions.
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    This is common sense. Oil and tar sands are petroleum products. They should be taxed like other petroleum products are taxed.
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    I love paying more to protect the environment
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    Destroying the environment should be payed for.
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    Soooo bad for humans and environment
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    Heck yeah. Tax big polluters.
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    ???????
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    A tax adds the true cost of this fuel into the purchase price. This covers environmental damage. If the real true cost of fossil fuels on health were included we would already have moved on to cleaner fuels by now.
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