The U.S. Commerce Department has designated the U.S. Energy Department's Big Hill Strategic Petroleum Reserve site near Beaumont, Tex., as a Foreign Trade Subzone.
That would allow foreign countries to store crude in unused caverns without paying U.S. tariffs and taxes and will facilitate DOE's offer to store oil for other governments (OGJ, Sept. 7, 1998, p. 30). DOE only has 82 million bbl stored at the 160 million bbl site.
Energy Sec. Bill Richardson said, "This is an opportunity to assist our partners in pursuing their energy security goals, while at the same time, potentially adding to our own emergency oil inventory. Oil stored in the SPR, regardless of ownership, is an enhancement to world energy security."
The 1997 Balanced Budget Act allowed DOE to rent SPR storage to other nations if it were fully compensated and if the ability to draw down U.S. oil were not impaired.
A foreign trade zone (FTZs) is a site in or near a U.S. Customs port of entry where foreign and domestic merchandise is considered to be in international commerce. Foreign or domestic merchandise can enter the zone without a formal customs entry or the payment of duties or government excise taxes.
As of June 1997, the U.S. had 225 general-purpose FTZs and 359 subzones.
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