Import Administration
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last update: September 2002 

[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]