As the New Year approaches, time is ticking down for Congress to renew an excise tax collected on domestic barrels of oil. The money goes into a government trust used for oil spill cleanup and prevention.
The Gulf of Mexico and the Bering Sea share something in common. Through the years, oil spills of different magnitudes have leached contaminants into the water.
On both of those occasions, the U.S. Coast Guard was able to tap into cash quickly to launch a response. The parties responsible for the damage are supposed to pay that back. But the Oil Spill Liability Trust Fund can also act like a safety net when no one steps forward or companies refuse. It was funded after the Exxon Valdez spill.
Oil and gas companies pay a tax which is the principal source of revenue for the trust.
But after the New Year, the authority to collect that tax is going away.
“Personally, for us, we are funded on the interest on a very small portion of the Oil Spill Liability Trust Fund,” Scott Pegau, a program manager at the Oil Spill Recovery Institute in Cordova, said. “So it could reduce oil spill-related research.”
The trust currently has more than $5 billion in it. Still, Pegau says without the tax that fund could be in jeopardy.
“I think a couple of real bad accidents without someone being responsible could drain it fairly quickly unfortunately these days,” Pegau said.
If that happens federal agencies could be on the hook to pay for the cleanup.
Pegau says there have been a few “mystery spills” in the waters connecting Alaska and Russia. Fishing vessels in the state also account for a large number of oil spills, he says. It’s not always obvious who should be held accountable.
But Pegau thinks Congress could renew the excise tax eventually. They’ve let it lapse once before.
