Keystone XL Pipeline Act

Floor Speech

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Mr. WYDEN. Mr. President, I ask unanimous consent to call up and make pending Wyden amendment No. 27 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.

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Mr. WYDEN. Mr. President, this amendment closes a tax loophole that currently places Canadian tar sands oil ahead of the American taxpayer. While oil produced here in the United States, in places such as North Dakota and Texas, pays into a cleanup fund for oil spills, tar sands does not. The bottom line here is simple--when Canadian tar sands oil is spilled on American soil, the American taxpayer pays up. In effect, it is possible to state what this is all about in straight forward English: right now, our Tax Code is so out of date that it says that oil from the tar sands isn't actually oil. Put your arms around that for a second. The Tax Code is in a time warp. Under the current policy, what concerns me is a judgment that oil from the tar sands isn't actually oil.

All other crude oil product refiners have to pay an 8-cent-per-barrel tax to support the oilspill liability trust fund that pays for cleaning up the spills.

This puts our own domestic producers at a competitive disadvantage.

I see my colleague from Colorado who cares greatly about these issues. I am saying to myself, in Colorado or Texas or North Dakota--in effect the policy that we have today on tax law--and I am the ranking Democrat on the Senate finance committee--as I looked at it, the first thing that came to mind is we have a tax policy here that, without the amendment I offer with my Senate finance colleagues, Senator Markey and others, we are putting domestic American producers--whether it is Colorado, North Dakota or Texas--at a competitive disadvantage. While domestic producers willingly contribute to clean up the oil spills, their Canadian competitors, and the tar sands up north of Edmonton, simply do not. This just defies commonsense.

Oil from the tar sands is just as likely to spill as other kinds of oil. Unfortunately, you don't have to look much beyond today's headlines to get a sense of what an oil spill actually means for communities across our country.

This past weekend an oil pipeline ruptured in Montana, pouring about 50,000 gallons of oil into the Yellowstone River, 5 miles upstream from the city of Glendive. Now local residents are reporting that their water smells like diesel fuel. The officials tested the water in Glendive and found oil in the drinking water and along with it elevated levels of benzene, a cancer-causing agent.

That is what is under consideration with this amendment, making sure that all of the parties responsible--no matter where they are from--would pay their fair share when they put our citizens' health and safety at risk.

The double standard--the standard that is much more exacting on our domestic producers than it is on the Canadian tar sands producers--ought to be fixed.

Tar sands oil producers ought to pay into the same fund as other oil producers to clean up the spills. Because, make no mistake about it, at the end of the day, without this amendment that closes the tar sands loophole, Canadian tar sands oil will keep getting a free ride.

The last point I want to mention, is just to put this issue in context. Before I chaired the Senate Finance Committee in the last Congress, I had the honor of chairing the Senate Energy and Natural Resources Committee. In session after session of the Energy and Natural Resources Committee, proponents of the pipeline said: We have got to have this to lower gas prices. If we are really going to lower gas prices, said the proponents--this was session after session after session--we have got to build the pipeline.

Well, we have all seen that prices have fallen dramatically. To a great extent it is due to exciting developments in the Bakken and others. We are now essentially the Saudi Arabia of oil production. This is good news. This is like a tax cut for working-class families across the country.

One of the judgments I reached in making the decision to oppose the pipeline is I did not think it made much sense to tamper with something that was such a promising development as real rate relief at the pump. A fair number of experts--yes, there is a difference of opinion, but a fair number of experts--are concerned that the pipeline, if it is built, could actually raise prices, particularly for vulnerable parts of the country. The Midwest could be one, but certainly there could be others.

So I had reservations about this from a variety of standpoints, including the standpoint that tar sands are a very carbon-dense material. But I am particularly concerned tonight about the inequity of the tar sands loophole, where the Canadians get a free ride at the expense of communities all across the Nation.

My amendment would close this flagrant abuse, close this loophole, help us put our tax priorities in order, and protect American citizens and American communities, rather than giving an undeserved advantage to foreign oil.

I urge all of my colleagues to support this amendment, to reform the Internal Revenue Code of 1986, to clarify that those products derived from tar sands are crude oil for purposes of the Federal excise tax on petroleum. I hope this amendment will generate bipartisan support. No matter how a Senator feels with respect to the pipeline, I do not see how you can make the case that you should not correct something that defies common sense.

Before the Presiding Officer came in, I made mention that right now the absence of the amendment that I offer puts a disadvantage--a serious disadvantage--on all of America's domestic producers. We did an awful lot to make it possible for Americans to get relief at the pump. That does not make any sense. So I hope my colleagues tomorrow will support this amendment on a bipartisan basis to close a flagrant tax loophole, to end what amounts to an inequity that hurts at a minimum our producers, but puts at risk our communities needlessly.

I yield the floor, and I suggest the absence of a quorum.

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