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Technically, no "oil" was spilled when an ExxonMobil tar sands oil pipeline in Central Arkansas burst, spilling an estimated 10,000 barrels of tar sands oil, if not more than that, and forcing evacuations of entire residential areas and a lengthy clean-up process.

You may be asking yourself: 10,000 barrels of oil was spilled as a result of a pipeline bursting, but no oil was spilled?

For the purposes of the federal Oil Spill Liability Trust Fund, that's correct. Here's the explanation as to why tar sands oil is not technically "oil":

ExxonMobil has already confirmed that the compromised pipeline was transporting “low-quality Wabasca Heavy crude” from Canada’s Alberta region. That particular form of crude must be diluted with lighter fluids to evenly flow through a pipeline - it also contains large quantities of bitumen (commonly known as asphalt).

The end result is that both the US Congress and the Internal Revenue Service do not consider tar sand oil as oil at all, and thus exempt any company transporting the crude from paying an $0.08-per-barrel tax - which is the primary source of cash for the federal government’s oil spill cleanup fund.

The strange exemption of heavy bitumen crude from classification as oil dates back to a time when the extraction of tar sands on a large scale was thought improbable with then-contemporary technology. However, as oil companies developed the means to develop Canadian tar sands into a booming energy sector, the legal definition of oil has remained the same.

In other words, according to federal law, tar sands oil is not "oil", and ExxonMobil is able to get off without having to pay an $0.08/barrel tax that is used to fund a federal trust fund that pays for oil spill cleanup.

Members of Congress should do the right thing and change the law so that tar sands oil would no longer be exempt from the federal tax that is used to fund the Oil Spill Liability Trust Fund, however, I'm not holding my breath.

Originally posted to Aaron Camp on DailyKos on Tue Apr 02, 2013 at 09:51 PM PDT.

Also republished by DK GreenRoots, Climate Change SOS, and Gulf Watchers Group.

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