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Application - NuStar Logistics, L.P.


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UNITED STATES OF AMERICA

BEFORE THE

DEPARTMENT OF STATE

APPLICATION OF NuStar LOGISTICS, L.P.

TO AMEND

THE PRESIDENTIAL PERMIT

FOR AN EXISTING PIPELINE LOCATED AT THE

UNITED STATES-MEXICO BORDER


Pursuant to Executive Order 11423, August 16, 1968, 33 Fed. Reg. 11741 (August 20, 1968), as amended, and Executive Order 13337, April 30, 2004, 69 Fed. Reg. 25299 (May 5, 2004), NuStar Logistics, L.P. (formerly known as Valero Logistics Operations, L.P.) (“NuStar”) submits this application to the United States Department of State (“Department”) to amend the Presidential Permit issued to NuStar on December 19, 2003 (“2003 Presidential Permit”).[1] Specifically, NuStar requests that the Department amend the 2003 Presidential Permit to: (1) reflect NuStar’s name change from Valero Logistics Operations, L.P. to NuStar Logistics, L.P., as the owner and operator of the pipeline crossing the international boundary (“Dos Laredos Pipeline”); and (2) to amend the 2003 Presidential Permit to permit the transportation of liquefied petroleum gas (“LPG”) and Petroleum Products,[2] including diesel.

I. Background
 

A. DESCRIPTION OF THE DOS LAREDOS PIPELINE

The Dos Laredos Pipeline is an 8 5/8 inch outer diameter pipeline at the U.S.-Mexico border that connects the NuStar terminal in Laredo, Texas, with a terminal in Nuevo Laredo, Tamaulipas, Mexico. The U.S. portion of Dos Laredos Pipeline consists of approximately 10.6 miles of pipeline from the NuStar terminal in Laredo, Texas to a location on the Rio Grande known as “La Bota,” approximately 6 miles northwest of downtown Laredo. The Mexican portion consists of approximately 1.5 kilometers of pipeline from the Rio Grande crossing to the Nuevo Laredo terminal.

B. PERTINENT REGULATORY BACKGROUND 

On December 19, 2003, the Department issued the 2003 Presidential Permit granting NuStar authority to construct, connect, operate and maintain the Dos Laredos Pipeline.[3] The 2003 Presidential Permit states that the pipeline would be used to transport LPG between Mexico and the United States. Article 1 of the 2003 Presidential Permit states that “permittee shall make no substantial change in the location of the United States facilities or in the operation authorized by this permit until such changes have been approved by the Secretary of State of the United States or the Secretary’s delegate.” In addition, Article 2 of the 2003 Presidential Permit states that “[t]he operation and maintenance of the facilities shall be in all material respects as described in permittee’s application filed on July 10, 2003.” On December 30, 2003, the Department issued a “Finding of No Significant Impact and Summary Environmental Assessment; Valero Logistics LP Pipeline in Webb County, TX,” applicable to the Dos Laredos Pipeline.[4] In the 2003 Environmental Finding, the Department described the proposed Dos Laredos Pipeline as being constructed to convey LPG across the border and that the pipeline was designed to transport up to 32,400 barrels (1.36 million gallons) of LPG daily from the United States to Mexico. The Department concluded that issuance of a Presidential Permit authorizing the proposed Dos Laredos Pipeline would have no significant impact on the quality of the human environment within the United States.

In accordance with the 2003 Presidential Permit and the 2003 Environmental Finding, the Dos Laredos Pipeline was constructed and went into service in 2004.[5] As discussed in detail below, NuStar hereby requests that the Department amend the 2003 Presidential Permit.

II. Identifying Information

Communications regarding this notification should be addressed to:

Michael P. Dillinger, Esq. Christopher J. Barr, Esq.

Environmental Counsel Matthew J. Agen, Esq.

NuStar Energy L.P. Post & Schell, P.C.

2330 North Loop 1604 West 607 14th Street, NW

San Antonio, TX 78248 Suite 600

(210) 918-2091 Washington, DC 20005

Mike.Dillinger@NuStarEnergy.com (202) 661-6950

cbarr@postschell.com

matthewagen@postschell.com

NuStar Logistics, L.P. is a subsidiary of NuStar Energy L.P., a publicly traded, limited partnership based in San Antonio, Texas with 8,573 miles of pipeline; 87 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids; and 50% ownership in two asphalt refineries. NuStar is an experienced pipeline operator with substantial experience in transporting Petroleum Products. NuStar is qualified to operate the Dos Laredos Pipeline, either to transport LPG or other Petroleum Products.

III. Notice of the PARTNERSHIP Name Change

Valero Logistics Operations, L.P. changed its name to NuStar Logistics, L.P. on April 1, 2007. NuStar, therefore, requests that the Department amend the 2003 Presidential Permit to reflect NuStar Logistics, L.P., a Delaware limited partnership, as the owner and operator of the pipeline crossing the international boundary. Appended as Attachment C are copies of the items from the Delaware Secretary of State evidencing the name change.[6] NuStar requests that an amended Presidential Permit be issued reflecting the partnership name change, discussed above.

IV. TYPE oF PRODUCTS TRaNSPORTED

NuStar requests authorization to transport LPG and Petroleum Products, including diesel.[7] As discussed above, the 2003 Presidential Permit permits the transportation of LPG. No significant physical changes to the pipeline would be required to transport Petroleum Products, although the maximum throughput of the Dos Laredos Pipeline in transporting refined Petroleum Products would be 24,000 barrels per day (in contrast to the 32,400 barrels per day of LPG) because of differences in the viscosity and flow characteristics.[8]

V. THe Amended PRESIDENTIAL permit will serve the national interest

The proposed operational amendment will serve both the national interests of the United States and Mexico, help increase trade between the United States and Mexico, and make it more economical to sell Petroleum Products to Mexico. There is currently a demand for Petroleum Products, including diesel fuel, in the area of Nuevo Laredo, Tamaulipas, Mexico. The primary impacts of the operational amendment would be to replace loads of truck transportation with pipeline transmission of diesel and other Petroleum Products. Based on a 90% operational assumption, the Dos Laredos Pipeline could transport approximately 24,000 barrels per day of diesel. These developments would reduce air pollution resulting from vehicular emissions, eliminate a large source of traffic congestion at border crossings, save energy, and improve highway safety in heavily urbanized areas within the Rio Grande Valley, and the cities of Laredo and Nuevo Laredo.[9] By reducing the number of commercial truck crossings, the project will also improve homeland security.

VI. Similar Facilities

Appended, as Attachment D, is a map that identifies similar facilities in the area and the owners of said facilities. NuStar currently operates another Petroleum Product pipeline near the Dos Laredos Pipeline, but solely on the U.S. side of the international border.[10]

VII. Construction Plan

Not Applicable. With this application, NuStar seeks only to amend the existing 2003 Presidential Permit to its correct name and to permit the transportation of Petroleum Products. NuStar is not proposing any construction with regard to the U.S. portion of the Dos Laredos Pipeline, and, therefore, no construction plan is being submitted as part of this application.[11]

VIII. Financing

Not Applicable. Only de minimis costs will be incurred in order to effectuate the operational change to the Dos Laredos Pipeline and such costs will be paid for through funding by NuStar.

IX. Mexican Approvals

NuStar has received or will receive the necessary approvals to store and transport the types of products that would be transported under the proposed revised operations of the Dos Laredos Pipeline, including from the agencies listed below.

  • Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT)
  • Comisión Reguladora de Energía (CRE)

X. Other U.S. Approvals

Not Applicable. NuStar is not proposing any construction with regard to the U.S. portion of the Dos Laredos Pipeline, and, therefore, no construction related approvals will be required. If necessary, NuStar will amend its tariff with the applicable state or federal authorities.

XI. HISTORIC PRESERVATION

Not Applicable. The proposed changes will not have any impacts on historical preservation or require any review under the National Historic Preservation Act.

XII. ENVIRONMENTAL JUSTICE

To facilitate the Department’s obligations under Executive Order 12898, environmental justice considerations, including information on minority and low-income populations likely to be affected by construction of the proposed pipeline, were addressed in the 2003 Presidential Permit process. Approval of NuStar’s current request similarly will not result in any disproportionately high and adverse human health or environmental effects on minority populations or low-income populations in the United States.

Because of the benefit to air quality and health and safety in Webb County, the Dos Laredos Pipeline project would have a net positive impact to Webb County as a whole. Webb County is 95.4% Hispanic and 30.6% of families meet Federal poverty criteria.[12]

XIII. COMPATIBILITY WITH NEC RECOMMENDATIONS

Not Applicable. With respect to the recommendations contained in the August 8, 1994, National Economic Council White Paper, “Staff Recommendations on the Task Force on Border Infrastructure and Facilitation for Improved U.S. Border Operations,” NuStar states as follows: Because no construction on the U.S. portion of the Dos Laredos Pipeline outside the fence line of the U.S. terminal would be required, no specific support infrastructure or access roads are necessary or required by state or regional plans with respect to the border crossing facilities. To the extent required, NuStar will comply with all permitting and other requirements applicable to the Mexican segment of the project, to the border, and NuStar would continue to inspect the border crossing facilities in accordance with U.S. Department of Transportation regulatory requirements set forth at 49 C.F.R. Parts 194 and 195, including aerial, foot and in-line mechanical inspections, as it has since 2003.

XIV. ENVIRONMENTAL REVIEW
 

A. AMENDMENT

Approval of this amendment request will not result in significant impacts and does not raise any significant concerns regarding the adequacy of the prior Finding of No Significant Impact. In order to assist the Department in the National Environmental Policy Act review process, NuStar shall provide an “Impacts Analysis for Proposed Addition of other Petroleum Products, including Diesel, to NuStar’s Dos Laredos Pipeline” which was performed by Atkins North America, Inc. (“Impacts Analysis”).

B. 2003 ENVIRONMENTAL REVIEW

As part of its review process for the 2003 Presidential Permit, the Department prepared an environmental assessment. On behalf of NuStar, URS Corporation of Austin, Texas prepared a draft environmental assessment under the guidance and supervision of the Department. Numerous Federal and state agencies independently reviewed the draft environmental assessment. These agencies included: the United States Section of the International Boundary and Water Commission, the Department of Transportation, the Department of the Interior, the U.S. Fish and Wildlife Service, the Environmental Protection Agency, the Federal Emergency Management Administration, the U.S. Department of Homeland Security, the Department of Defense, the Department of Commerce, the Council on Environmental Quality, the Texas Railroad Commission, the Texas Historical Commission, the Texas Parks and Wildlife Department, and the Texas Commission on Environmental Quality. NuStar also hosted a public meeting on behalf of the Department, where public input on the project was received. Notably, no formal written public comments were submitted on the draft environmental assessment.

Comments received from the Federal and state agencies and the public were either responded to directly, or addressed directly by incorporation into the analysis contained in the draft environmental assessment. In addition, comments were used to develop measures to be undertaken by NuStar to prevent or mitigate potentially adverse environmental impacts, which were included as commitments.

In the 2003 Environmental Finding, after a review of the environmental assessment, the Department determined that there would be no significant impacts and an environmental impact statement was not required. As fully described in the 2003 Environmental Finding and the Final Environmental Assessment,[13] the Department determined, with regard to the Dos Laredos Pipeline, that the construction and operation of the pipeline would have no impacts to or on, inter alia, geology and topography, groundwaters, the Heritage status of the Rio Grande, wetlands, mineral resources, and recreation resources. Moreover, the Department found there will be net benefits to air quality through the elimination of exhaust emissions, and particulate matter that are generated when tankers move fuel across the border. Due to the fact that NuStar is not proposing to construct any new facilities with this application and the operational change discussed herein is limited, NuStar believes that the Department’s 2003 Environmental Findings that the Dos Laredos Pipeline will have no significant impacts remains valid even with the approval of this amendment request.

XV. CONCLUSION

For the reasons set forth above, NuStar Logistics, L.P. submits that the operation and maintenance of the existing border crossing facilities under the name of NuStar Logistics, L.P. and permitting the transportation of Petroleum Products, as set forth above, including diesel, in addition to LPG, is in the national interest of the United States. Accordingly, NuStar respectfully requests that the Department issue an amended Presidential Permit authorizing operation and maintenance of the Dos Laredos Pipeline, located at the international border between the United States and Mexico, as more fully described in this application.

Respectfully submitted,

_______________________

Michael P. Dillinger, Esq.

Environmental Counsel

NuStar Energy L.P.

2330 North Loop 1604 West

San Antonio, TX 78248

(210) 918-2091

Mike.Dillinger@NuStarEnergy.com

Christopher J. Barr, Esq.

Matthew J. Agen, Esq.

Post & Schell, P.C.

607 14th Street, NW

Suite 600

Washington, DC 20005

(202) 661-6950

cbarr@postschell.com

matthewagen@postschell.com


Dated: December 4, 2013


[1] A copy of the 2003 Presidential Permit is appended as Attachment A.

[2] The term “Petroleum Product,” as used herein, means any petroleum product which by American Society for Testing Materials test methods, substantially distills below seven hundred (700) degrees Fahrenheit, has a Reid vapor pressure not exceeding twenty-eight (28) pounds at one hundred (100) degrees Fahrenheit and a color not darker than No. 3. However, the term “Petroleum Product” specifically excludes petroleum products legally prohibited from being exported by statute or regulation. The 2003 Presidential Permit currently permits the transportation of LPG.

[3] Maps of the Dos Laredos Pipeline are attached as Attachment B.

[4] Finding of No Significant Impact and Summary Environmental Assessment; Valero Logistics LP Pipeline in Webb County, TX, 68 Fed. Reg. 75312 (December 30, 2003) (“2003 Environmental Finding”).

[5] As discussed below, in June 2011, NuStar temporarily suspended transportation of LPG on the Dos Laredos Pipeline and NuStar has continued to maintain the pipeline with the intent to place the pipeline into active service in 2014.

[6] The partnership’s name change did not result in a transfer of ownership of the Dos Laredos Pipeline; therefore, the Department’s Procedures for Issuance of a Presidential Permit Where There Has Been a Transfer of the Underlying Facility, Bridge or Border Crossing for Land Transportation, Public Notice 5092, 70 Fed. Reg. 30990 (May 31, 2005) (“Public Notice 5092”) are not applicable. However, to the extent necessary, and out of an abundance of caution, NuStar, herein, provides the information required by Public Notice 5092, and requests that the amended Presidential Permit reflect the new partnership name.

[7] See fn. 2, supra.

[8] In a step unrelated to this Application, and pursuant to the authority granted under the 2003 Presidential Permit and the April 18, 2011 letter from the Department authorizing NuStar to replace a segment of the Dos Laredos pipeline beneath the Rio Grande River, NuStar anticipates replacing a segment of the Dos Laredos pipeline. Notably, the April 18, 2011 letter states that “[t]he State Department considers this action ‘maintenance’ under the terms of the Presidential permit issued by this Department in December 19, 2003.”

[9] Based on the 90% operability assumption, this could replace up to 39,400 tanker trucks per year.

[10] See Attachments B and D.

[11] As discussed above, pursuant to the authority granted under the 2003 Presidential Permit and the April 18, 2011 letter from the Department, NuStar will replace a segment of the Dos Laredos pipeline.

[12] See http://quickfacts.census.gov/qfd/states/48/48479.html.

[13] Final Environmental Assessment for the construction of the Dos Laredos Pipeline is appended as Attachment E.



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