Washington (March 12, 2025) - Senator Edward J. Markey (D-Mass.), a member of the Environment and Public Works Committee, today reintroduced the Tar Sands Tax Loophole Elimination Act, legislation that would close the tar sands loophole in the Oil Spill Liability Trust Fund, which pays for immediate oil spill removal costs and damages and is primarily financed by a tax on domestic crude oil and imported crude oil and petroleum products. Representative Jan Schakowsky (IL-09) is leading the legislation in the House of Representatives.
Due to an outdated 2014 ruling based on 1980s-era reports, tar sands—also called oil sands—are not subject to the tax which finances the Fund. This ruling resulted in an unequal playing field where certain forms of oil extraction are not paying their fair share for the cost of oil spills. This is especially concerning given that tar sands emit significantly more greenhouse gas emissions than other forms of fossil fuels during extraction and refining, while also depleting freshwater resources and creating an abundance of hazardous byproducts.
Eliminating this tax loophole would generate approximately $1.75 billion in revenue for the Oil Spill Liability Trust Fund over 10 years. Several tar sands projects are currently operating or under construction in the United States, including the controversial Enbridge Line 3 pipeline.
“Tar sands are one of the dirtiest forms of crude oil on the market and have been responsible for devastating spills from Kalamazoo to Kansas. For far too long, American taxpayers have borne the burden of oil spills along our coasts, waterways, and farmlands, while tar sands companies walk away scot-free. We must close this tax loophole to ensure tar sands pay their fair share—no more evading the bills for spills,” said Senator Markey.
“For too long, greedy oil companies have been able to take advantage of a massive loophole that allows them to avoid paying taxes on tar sands oil,” said Congresswoman Jan Schakowsky. “I'm partnering with Senator Markey to close this loophole and ensure Big Oil companies pay their fair share. Time is running out to address the climate emergency, and our legislation is one step towards holding dirty fossil fuel producers accountable for damaging our planet.”
The Tar Sands Tax Loophole Elimination Act is cosponsored by Senators Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Peter Welch (D-Vt.), Bernie Sanders (I-Vt.), and Chris Van Hollen (D-Md.).
The legislation is endorsed by the Sierra Club, Earthjustice, Center for Biological Diversity, Earthworks, and Oil Change International.
In March 2021, Senator Markey introduced the Tar Sands Tax Loophole Elimination Act with former Representative Earl Blumenauer.
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