Obama, EPA to push for restoration of Superfund tax on oil, chemical companies

Cleanup and containment efforts continue at the Gulf of Mexico site of the oil spill following the Deepwater Horizon explosion.
By Juliet Eilperin
Washington Post Staff Writer
Monday, June 21, 2010

There is no question that the Superfund program, first established 30 years ago to clean up sites around the country contaminated with hazardous waste, is facing a budget crunch.

For 15 years, the government imposed taxes on oil and chemical companies and certain other corporations. The money went into a cleanup trust fund, which reached its peak of $3.8 billion in 1996. But the taxes expired in 1995, and because Congress refused to renew them, the fund ran out of money.

Now the Obama administration will push to reinstate the "Superfund" tax. The Environmental Protection Agency, which rarely urges passage of specific bills, will send a letter to Congress as early as Monday calling for legislation to reimpose the tax.

The move will spark an intense battle on Capitol Hill, with Democrats and the administration lining up against oil companies and chemical manufacturers. The measure's proponents say it will ease the burden on taxpayers, who are currently funding the cleanup of "orphaned" sites, where no one has accepted responsibility for the contamination. Opponents suggest that it amounts to an unfair penalty.

"This is really about who should pay for the cleanup," said Mathy Stanislaus of the EPA's Office of Solid Waste and Emergency Response. "Should it be the taxpayer, who has no responsibility for contaminating the sites, or should it be those individuals who create hazardous substances that contaminate the site?"

Since the fund ran out of money at the end of fiscal 2003, the federal government has appropriated public dollars each year to pay for orphaned sites, which account for 606 of the 1,279 sites across the nation. But that has slowed the rate of cleanup. The program completed 19 sites last year, compared with 89 in 1999, the EPA says.

"It's clearly slowed down as the money's dried up," said Mike Charles, senior manager for government relations at the American Society of Civil Engineers.

Superfund sites are found in the District of Columbia and every state except North Dakota (whose one site was restored to health). Orphaned sites abound, including Ordinance Products in Cecil County, Md., and Atlantic Wood Industries in Portsmouth, Va. The Washington Navy Yard is still struggling with contamination dating from the 1800s, and federal authorities have yet to remove all the toxins from the area's groundwater.

Rep. Earl Blumenauer (D-Ore.), a member of the House Ways and Means Committee who has been pushing to reinstate the Superfund tax for more than three years, said the recent oil spill in the Gulf of Mexico might encourage lawmakers, even some Republicans, to embrace a new tax on oil and petrochemicals.

Blumenauer's bill would raise about $18.9 billion over 10 years by imposing excise taxes of 9.7 cents a barrel on crude oil and refined oil products, excise taxes of 22 cents to $4.87 a ton on certain chemicals, and an income tax of 0.12 percent on certain corporations' modified alternative minimum taxable income above $2 million.

"I think the stars have aligned to make it not only possible for the first time in 15 years but likely that we will reinstate the Superfund tax," Blumenauer said in an interview. He added that for industries facing the tax, "it's a golden opportunity to demonstrate their environmental responsibility and their willingness to solve problems."

House Speaker Nancy Pelosi (D-Calif.) also supports the reinstatement of what her spokesman, Drew Hammill, called the "polluter pays" tax.

But a similar measure in the Senate, sponsored by Sen. Frank Lautenberg (D-N.J.), could face a greater challenge, given Republicans' inclination to filibuster any measure that lacks the support of 60 senators.

Oil producers and refiners, now facing the prospect of Congress raising the Oil Spill Liability Fund tax from 8 to 49 cents a barrel, are furious at the idea of another tax burden.

"Policymakers -- Congress and the administration -- have simply got to stop using the domestic refining and petrochemical industry as an ATM machine," said Charles Drevna, president of the National Petrochemical and Refiners Association. "They seem to think we're an endless supply of cash for other programs."

Chemical manufacturers are just as opposed, and they note that the chemicals in question are used in everything from plastics to public water treatment. Cal Dooley, president of the American Chemistry Council, said members of his association "have invested literally billions of dollars" in sites that they have taken responsibility for cleaning up.

"It is blatantly inequitable and unfair for the administration or Congress to reinstate a Superfund excise tax," Dooley said in an interview. He said it would undermine the goal of "an economic recovery in the manufacturing sector in the United States" because it would result in "shifting jobs outside the United States to chemical manufacturers that would not be subject to this tax."

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