The fund for the next big oil spill holds $9.6 billion. The tax that fills it just expired.

Two federal accounts govern what happens the next time an offshore well fails the way Deepwater Horizon's did in 2010.▸ One is a reserve that pays for cleanup and damage claims after a spill happens; the other is the budget for the inspectors who are supposed to keep it from happening at all. As of this year, the reserve is larger than it has ever been and its funding source has gone dry, while the inspection budget has been cut.

The Oil Spill Liability Trust Fund (OSLTF) is the federal government's ready cash for oil spills: it pays for emergency response, natural resource damage assessments, and claims from people and businesses harmed by a spill, up front, before the Coast Guard's National Pollution Funds Center recovers the money from whoever spilled it.▸ Congress created it in 1986 and gave it teeth after the 1989 Exxon Valdez disaster, in the Oil Pollution Act of 1990. Its balance has moved with the fortunes of the excise tax that feeds it. Per the Congressional Research Service, the fund's year-end balance bottomed out at $485 million in FY2006, the year after Congress reinstated the tax following its first lapse, and had grown to $9.6 billion by the end of FY2024 — helped along by $362 million in interest earned that year alone, more than the fund paid out in recent-year appropriations, plus a scheduled $76 million a year from a Deepwater Horizon civil-penalty settlement that runs through 2031.

The reserve grew because of a per-barrel excise tax on crude oil received at U.S. refineries and imported petroleum products — five cents when it first took effect in 1990, raised in steps to nine cents by 2017.▸ The tax has lapsed and been revived twice before: it expired in 1994 and stayed dead for twelve years until the Energy Policy Act of 2005 reinstated it; it expired again in 2018 and came back in 2020. The Consolidated Appropriations Act, 2021 extended it through December 31, 2025 — and on that date it expired a third time. KPMG's tax practice confirmed the lapse in early January 2026: the IRS updated Form 6627, Environmental Taxes, to drop the oil spill tax line, leaving only the unrelated Superfund petroleum tax in effect. As of the Congressional Research Service's most recent accounting, no member of the 119th Congress had introduced a bill to extend it, unlike the 118th Congress, where a pair of bills that would have made the tax permanent and raised it to ten cents a barrel went nowhere. The fund's $9.6 billion balance means the pipeline of federal money for a catastrophic spill hasn't run dry — CRS notes a single incident on the scale of Deepwater Horizon, whose responsible parties paid roughly $67 billion in 2018 dollars, could still exceed the fund's $1.5 billion per-incident payout cap — but the tax that has periodically rebuilt that reserve for 36 years is, for now, off.

The Bureau of Safety and Environmental Enforcement (BSEE) is the agency that inspects offshore platforms and verifies operators are actually prepared for a spill before one happens — not the agency that pays for cleanup afterward.▸ Its FY2026 budget justification shows total requested funding, including fee collections, falling from $220.4 million in FY2024 (actual) to $143.4 million in the FY2026 request — a 34.9% cut. The activity that funds inspections, permitting reviews, and enforcement, Operations, Safety and Regulation, falls from $160.3 million to $101.9 million, 36.4% lower; the base appropriated share of that activity, before fee collections are added back, falls further still, from $111.9 million to $38.0 million. The Offshore Decommissioning activity — which funds enforcement of the rule that companies plug and remove the wells and platforms they're done with — is zeroed out entirely.

What that Operations, Safety and Regulation money buys, per DOI's own FY2026 Budget in Brief: "each year, BSEE conducts approximately 11,000 inspections for more than 1,400 energy-related facilities and more than 20,000 miles of pipelines" across the Gulf, the Pacific coast, and Alaska — including the unannounced spill-response drills and equipment audits that make up BSEE's Oil Spill Preparedness Program.▸ The Oil Spill Research line that funds Ohmsett, the bureau's full-scale spill-response test tank in New Jersey, is the one account in the request left unchanged, at $15.1 million both years.

Figures compare FY2024 actual amounts to the FY2026 budget request as submitted; a request is not an enacted appropriation, and Congress may set final FY2026 BSEE funding at a different level through the appropriations process.