The Budget Deal Reinstates a Tax to Fund Oil Spill Clean-Ups

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The new budget deal, which Congress passed early Friday morning after a brief shutdown overnight, reinstates a tax on oil to help pay for spill clean-ups.

The nine cents-per-barrel tax on both domestic crude and imported petroleum products, which lapsed in December, generated $500 million a year, on average, in federal revenue and was the main source of funding for the Oil Spill Liability Trust Fund. The fund was established in 1986 to ensure that the financial burden of oil spill clean-ups does not fall to taxpayers, and currently has roughly $5.7 billion in reserve.

Republican lawmakers faced significant criticisms from environmentalists at the time, who characterized the lapse as a $500-million-a-year tax break for the oil and gas industry. "We see it as illustrative of the way in which [President Donald] Trump and the GOP continue to push giveaways for corporate polluters at any cost," Lukas Ross of Friends of the Earth told the Washington Post in December. "They had a tax bill that disproportionately benefited the fossil fuel industry, and then they allowed a $500 million-a-year tax on that same industry to expire."

The reinstated tax goes into effect March 1st.

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