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last update: September 2002

  

DEPARTMENT OF COMMERCE
[Docket 52-96]

Foreign-Trade Zone 116--Port Arthur, TX Application for Subzone
Status U.S. Department of Energy Strategic Petroleum Reserve (Crude Oil
Storage) Jefferson County, TX

    An application has been submitted to the Foreign-Trade Zones Board
(the Board) by the Foreign-Trade Zone of Southeast Texas, Inc., grantee
of FTZ 116, Port Arthur, Texas, requesting special-purpose subzone
status for the crude oil storage facilities of the U.S. Department of
Energy Strategic Petroleum Reserve (SPR) located in Jefferson County,
Texas. The application was submitted pursuant to the provisions of the
Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the
regulations of the Board (15 CFR part 400). It was formally filed on
June 18, 1996.

    The SPR involves an emergency stockpile of crude oil (over 590
million barrels) stored in underground caverns at five sites in
Louisiana and Texas. Currently, all crude oil is owned by the U.S.
Government. However, in 1995, the U.S. Department of Energy commenced
plans to conduct commercial crude oil storage and terminal activities
at SPR facilities for foreign governments.

    This application involves SPR's ``Big Hill'' facility (274 acres,
149 employees), located in Jefferson County, Texas, some 25 miles west
of Port Arthur. It consists of a main crude oil storage site (14 underground
caverns/160 million barrel capacity) and a 24-mile pipeline connecting
to the Sun Marine Terminal in Nederland, Texas.

    Zone procedures would exempt foreign crude oil that is reexported
from Customs duty payments. On domestic sales, duties on such oil could
be deferred until formal Customs entry is made. The duty on crude oil
ranges from 5.25 barrel to 10.5/barrel. Foreign merchandise would also
be exempt from state and local ad valorem taxes. The application
indicates that the savings from zone procedures would help the SPR to
lease under-utilized crude oil storage capacity to foreign governments,
thus generating revenues for the General Treasury.

    In accordance with the Board's regulations, a member of the FTZ
Staff has been designated examiner to investigate the application and
report to the Board.

    Public comment is invited from interested parties. Submissions
(original and 3 copies) shall be addressed to the Board's Executive
Secretary at the address below. The closing period for their receipt is
August 26, 1996. Rebuttal comments in response to material submitted
during the foregoing period may be submitted during the subsequent 15-
day period (to September 9, 1996).

    A copy of the application and accompanying exhibits will be
available for public inspection at each of the following locations:

U.S. Department of Commerce Export Assistance Center, Suite 1160, 500
Dallas, Houston, Texas 77002
Office of the Executive Secretary, Foreign-Trade Zones Board, Room
3716, U.S. Department of Commerce, 14th & Pennsylvania Avenue, NW.,
Washington, DC 20230

    Dated: June 18, 1996.
John J. Da Ponte, Jr.,
Executive Secretary.
[FR Doc. 96-16191 Filed 6-25-96; 8:45 am]