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Sullivan plans to close oil tax loophole for Canada after it opposed ANWR drilling

Sen. Dan Sullivan will introduce a measure slapping new costs on oil imported from Canada, partly in response to that country's effort last year to stop Congress from opening the Arctic National Wildlife Refuge to drilling, according to news reports.

Canada's government, concerned that ANWR development would hurt the Porcupine caribou herd that ranges from the refuge to Canada, lobbied lawmakers last year to stop the bid by Alaska's delegation to allow leasing in the refuge, Bloomberg reported Thursday.

Alaska's delegation won that fight in December, inserting language into the federal tax overhaul bill to open a portion of the refuge to potential oil and gas development. Recently, the federal government launched its regulatory effort to allow oil and gas leasing in the refuge's 1.6-million-acre coastal plain, as required by the legislation.

Before Canada tried stopping the ANWR effort, Sullivan had already been working on a measure to reform the Oil Spill Liability Trust Fund that taxes oil production to fund spill cleanup efforts, said Matt Shuckerow, a spokesman with Sullivan's office, on Friday.

As part of that work, Sullivan and other lawmakers had considered including language that would close a loophole on oil imported to the U.S. from Alberta's tar sands deposits, Shuckerow said.

"This effort began long before the expressed opposition by the Canadian government on opening ANWR to responsible resource development," Shuckerow said.

But Canada's actions — described as "outrageous" by Sullivan — ultimately helped the senator decide to include language to close the loophole, according to Bloomberg.

The loophole allows hundreds of millions of barrels of oil a year from the Canadian deposit to avoid the liability fund tax, amounting to a $47 million savings in 2016.

Sullivan said Canadian officials were visiting every office in the Senate last year to kill Alaska's refuge-opening effort.

"It was not a smart move," he said, according to Bloomberg. "It's a loophole and we intend to close it."

Bloomberg said Sullivan planned to punish Canada. Shuckerow disagreed with the news organization's characterization, saying it was "not entirely accurate."

"The legislation is based on a sound policy belief that this loophole should be closed," Shuckerow said.

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