Did You Know: Dilbit Isn't Considered Oil?

Before I delve into the main point of this post, here’s some background information.

Tar sands is a mixture of sand, clay, water, and bitumen (a hydrocarbon that can be processed into crude oil). It’s thick and sticky and must be diluted with dangerous solvents made of carcinogenic chemicals and then heated in order to be transported. This substance is called “dilbit:” diluted bitumen.

Most people classify dilbit as “oil” because it is a petroleum product and can be refined to what we know and recognize as oil. In fact, most of the industry sells tar sands as oil because, as they say, it’s really not that different from conventional oil (which is not true).

But do you know about the Oil Spill Liability Trust Fund? It collects an “8-cent-per-barrel excise tax on domestically produced and imported crude oil and on imported refined products such as gasoline.” And guess what is not classified as “crude oil” according to Congress and the IRS? That’s right: dilbit.

Why, you may ask? Because when the fund was created in 1980, the legislation stipulated that “the term crude oil does not include synthetic petroleum, e.g., shale oil, liquids from coal, tar sands, or biomass…” The legislation hasn’t been updated, which means that the massive production of tar sands is going un-taxed. That is an opportunity cost of $35 million per year.

As Anthony Swift from the NRDC points out, this issue illuminates the hypocrisy of the tar sands industry. When it comes to tax, of course tar sands isn’t oil. But when it comes to easing the worries of people who near live pipelines, then tar sands is just like other oil. What’s more: tar sands oil is 3 times more likely to spill per mile than conventional oil because it is more corrosive. The money in the Oil Spill Liability Trust Fund is needed more than even because of tar sands’ dangers. The surreptitiousness is frightening and cannot be allowed to continue.

Read this article from InsideClimate News for more information. You should also explore their website. They have fantastic articles and resources.

 

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