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Big Oil, Free Trade and How We Get Pumped at the Pump, Every Day

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posted on Mar, 24 2013 @ 04:43 PM
** (Reader Note: This OP is long and it's complex. It's multi-page and represents many hours spent on solid research. This isn't a fast read, but it ALL TIES TOGETHER....and is worth reading thru, even if it seems redundant at times. I included everything for a reason.)


Good Afternoon my fellow members,

I promise everyone two things after reading this. You'll agree it's long, even by my standards ..... and you'll agree it was worth reading (If I've done my part well) Lets see how I can live up to what this subject demands for reporting what I've discovered.

Last evening, I was on another thread relating to the Keystone XL Pipeline. After many pages of spirited debate, I had to run off and chase down some details for one of my usual, lengthy replies when I stumbled across something. A little thing at first...hardly noticed in fact. It was merely a reference to the EXISTING Keystone pipeline. Existing? Huh?

Well... That's what I get for casually following the topic and I deserved the Pointy Hat of Ignorance for that one.

That isn't the issue though. It simply led to more. Following that and learning how many pipelines run from Canada to points all over the US, I turned to one of the next arguments I'd seen on the thread, regarding export. Well, I said to myself. 'Self, that can't be true. We don't EXPORT gasoline when we're all paying near $4 a gallon and more in many places, right?'

Wrong.... We do, we have been and it's increasing at a rapid rate for numbers.

First, lets get some eye candy out of the way for reference material. It'll make everything else go better ...and we have a few pages of OP to go over here.

Refineries and Pipelines relating to Tar Sand Oil in the United States

Overall U.S. Pipelines Across the Nation

United States Foreign Trade Zones

What is a Foreign Trade Zone and why should I care?

What Are they?

Foreign Trade Zones or Free Trade Zones (FTZ's) are areas set aside under U.S. Federal Jurisdiction in each state for the purpose of facilitating international trade and commerce. First introduced in 1937 in New York City, these serve important and valuable purposes for furthering what they're designed to service. They exist in both the United States and nations all over the world. In the US, they are called Foreign Trade Zones. In foreign nations, they're usually referred to as Free Trade Zones. The difference is terminology. The end result and benefit are the same. Lets see their official explanation to clarify.

What is a free trade zone?

A free trade zone is a designated area that eliminates traditional trade barriers, such as tariffs, and minimizes bureaucratic regulations. The goal of a free trade zone is to enhance global market presence by attracting new business and foreign investments.

What types of business use free trade zones?

Free trade zones are utilized by everyone from large manufactures to small businesses to individuals. Any person or entity that intends to import or export goods and can consider taking advantage of free trade zones.
(Source: Small Business Administration (SBA))

Sounds reasonable, logical and downright wholesome to good business and commerce...doesn't it?

Why should anyone care?

Imagine, for a moment, hundreds upon hundreds of little nations within our nation. Independent zones for assessment of taxes, duties, tariffs and fees. These little nations also enjoy streamlined customs treatment and other benefits. Lets see a couple as outlined by the "Import Administration". (Yes, we have one. No, I didn't know we had one either?)

What are the benefits to a zone user?

* Duty Exemption. No duties on or quota charges on re-exports.

* Duty Deferral. Customs duties and federal excise tax deferred on imports.

* Inverted Tariff. In situations where zone production results in a finished product that has a lower duty rate than the rates on foreign inputs (inverted tariff), the finished products may be entered at the duty rate that applies to its condition as it leaves the zone (requires prior authorization).

* Logistical Benefits. Companies using FTZ procedures may have access to streamlined customs procedures (e.g. "weekly entry" or "direct delivery").

* Other Benefits. Foreign goods and domestic goods held for export are exempt from state/local inventory taxes. FTZ status may also make a site eligible for state/local benefits which are unrelated to the FTZ Act.
(Source: Import Administration)

This point about the benefits of being inside a foreign trade zone is critical to understand in the meaning and full importance of this issue.

The Keystone Pipeline is just another Pipe with any other pipe's issues ...otherwise. So, bear with me while I close this page with a couple more references to help explain why this is SO important to how we're getting Pumped at the Pump.

As you'll see, it really is a tax haven of unbelievable benefit when used the 'right' way.

Ad Valorem Tax Relief

The Foreign-Trade Zone Corporation has a wealth of experience and an exceptional success rate at facilitating equitable ad valorem tax arrangements with businesses, grantees, and local communities. The federal law that established the U.S. Foreign-Trade Zones Program allows companies to obtain exemptions from inventory taxes. Certain tangible personal property is generally exempt from state and local ad valorem taxes. A small number of states assess local taxes on business inventories. The Foreign-Trade Zones Act exempts most merchandise from such taxes in Foreign-Trade Zones

Zone to Zone Transfers

A vendor located in one Foreign-Trade Zone may sell goods to a company in another Zone or Subzone anywhere in the U.S. and transfer those goods to the purchasing company’s FTZ with no duty paid on the goods. The FTZ Corporation has assisted companies in a wide variety of industries, from automobiles to pharmaceuticals to food products, to implement Zone-to-Zone transfer procedures with U.S. Customs and Border Protection. By helping to extend FTZ benefits through a company’s U.S. supply chain, the FTZ Corporation can help the company to lower its overall cost structure and optimize just-in-time supply chain elements.

This page is background and 'what is an FTZ?'. In the next page, I'll really get into why you should not only care, but be pissed. Actively, meaningfully pissed.

Let's jump to that..............

posted on Mar, 24 2013 @ 04:43 PM
Welcome to part 2 readers,

We left off with the detailed benefits of being in an FTZ on American Soil. I'll skip the recap as I feel safe to assume those still with me don't need it. No need wasting space.

Alright, We have down that FTZ's are a mini-tax haven and covered the point of Zone to Zone transfers. This means that combined with their original purpose and function, the following is true.

Importing into an FTZ carries no duties or tariffs until it exits the FTZ and into the regular territory of the United States. While inside the FTZ, business and those running them enjoy a wide variety of breaks and very substantial tax/cost reductions. Of course, all this ends when the product leaves the FTZ to be shipped into the U.S......right?

Well. Yes, that's true and ...No, it's not even close to the whole story. That is where the media would like this to be left, I'm sure. It would make it so pretty and easy to write off as a non-issue most people do. I always have, and I've BEEN IN these FTZ's countless times around the nation picking up or taking in freight of one type or another.

Lets see the benefit that defines the abuse as I'm about to lay out.

Duty Exemption of Re-Exports

When not utilizing a Zone, an importer is required to pay Custom duties at the time the imported merchandise enters U.S. commerce. Merchandise in a Foreign-Trade Zone is considered to be outside the commerce of the United States, so no Customs duty is owed when foreign merchandise is brought into a Foreign-Trade Zone, for as long as it remains in the Zone. If the foreign merchandise is exported from the U.S., no Customs duty is ever due. This benefit is available to companies in General-Purpose Zones and to companies that have received Subzone approval from the FTZ Board.

The duty exemption on re-exports benefit available to U.S. companies under the U.S. Foreign-Trade Zones program is often available in free trade zones abroad. This makes it especially important for U.S.-based distributors to take advantage of the FTZ program in the U.S. in order to gain a level playing field against their foreign competitors and sister companies.
Source (Emphasis Mine)

^ ^ ^ That is one way to put it, for the second paragraph. It's not quite how I'd choose to put it though.

To emphasize a point here. I DO SEE and I HAVE seen, personally, how these zones benefit business. Sanyo in Arkansas for TV's, for instance. Border zones for simple dry goods trade and manufacture. There are many very solid and legitimate reasons why this is valuable and NOT perpetrating a fraud on the American public. Unfortunately, those are largely reasons confined to the the whole nature of how this is used and abused has changed, particularly over the last few years.

(This is NOT an Obama bash section. Don't even go there. HIS decisions don't move THIS fast. Some of his appointed secretaries may...but I don't have proof of that for timing. I leave timing for all to draw conclusions on.)

U.S. Exports of Finished Motor Gasoline (Thousand Barrels)

(Source: Finished Gasoline Export / 1945 - 2012 - Energy Info Admin)
** Note the increase, degree of increase and timing of it.

Now who is all that going to? Well... Here:

Export By Destination

Some of those are long term and I don't even count them. The numbers for recent history to present show that. Many, however, are ramped up by very large numbers in the last few years. The data is not a DIRECT cross over, by the way and it's not meant to be. The first one shows Gasoline as a total refined product export and total number. The second link shows destination of refined petro products as a whole. You can tinker to get it to display different breakdowns. Again, comparison wasn't the point. Scale and context is...and it's big.

However, this still doesn't give the real sense of HOW big the issue and rip-off really is. For that, we need another couple pieces of data. How much is really in and out of the FTZ TOTALS? How much is on the table to debate for lost money anyway?

First, as with any Government docs, definitions of terms are EVERYTHING. Let's start there then.

The last points for what isn't covered are as important as anything. close the 2nd part, the data itself:

and finally, the totals that matter most.

(Source: Federation of American Scientists / Congressional Research Service)

Continued. . .

posted on Mar, 24 2013 @ 04:43 PM
Welcome to part 3 and the final part.

Here is where the data of the last two pages can come together and make a nice, neat and terribly upsetting package to view.

On the last page, we left off with Table A-3 from a C.R.S. report which shows that between 1997 and 2010 in particular, the number of businesses inside FTZ's DROPPED by over 1,000 while the money being handled actually ROSE by nearly $400 Billion. So how is it that the number of businesses could drop so greatly while commerce could rise so sharply over a relatively short period? (Recall a chart above which shows just HOW short a time some of that actually occurred in).

Well... This is a part of what this was all leading up to.

What you have yet to see and what the media is damn sure not going to make any effort to explain right now is WHO draw the greatest benefits from this cozy tax limbo. In addition to the FTZ Refineries around Port Arthur that Keystone XL Oil is planned for, there are so many more ....and you have to SEE this to believe it.

Honestly, I spent a long time reading this list up ..and down..and back up again. Lets see how everyone else takes the details of who plays in this very elite game.

(Note, the material below draws from direct source US Government documents that exist, by nature, entirely in the public domain for reprint or reuse.)

Lets start with a couple innocent enough areas of FTZ operation and where I've said that I can see uses for this that don't constitute abuse.



Hmm.. Not too bad... Lets see Arizona?


Not too much to object to there at all, eh? If someone were to cherry pick this data in isolation, a solid case could be made that I'm just making things into far too much. Indeed. What harm could JVC or Sony possibly be..right? Those aren't their ONLY plants, after all and anyway, they aren't making their whole business out of import to export back out why worry? Indeed. No worries here!

Now, I wonder... The Keystone XL is designed to bridge Cushing Oklahoma . . .

(They're quite proud of their claim to fame, I can see)

. . . and Port Arthur as well as Houston in one primary extension and final leg. Hey, lets see what exists in THOSE free trade zones, eh? I'll bet we find something at least half way interesting. Watcha think?

Let's peek.

Port Arthur

Ummmm........ Guys?


Anyone else seeing a pattern here? Let's check another spot. Surely it's just a fluke ... This concentration of one business sector using the enormous benefits of the FTZ system. A Local thing..I'm sure. Right? What's happening up the coast in Corpus Christi?

Corpus Christi

Uh Oh.... Houston, we have a problem I'm thinking.

Okay.. It's Texas then. Those hicks in the sticks get a little funny in the noggin' after being around tumble weeds and rattlesnakes more than other people ...right? I'm sure we won't find any such thing elsewhere, where Environmentalists are on the job and watching close! Lets go see ...

San Francisco


Holy Big Oil, Batman! I think we done been screwed! Watcha all think?

I can add that you will find a couple other business sectors who just use (or abuse) the living daylights out of the FTZ system. In Puerto Rico, I don't think I missed seeing ANY of the Pharmaceutical Companies. They are elsewhere as well. Bayer, Pfizer and the bunch. In other areas, you'll find just about every car manufacturer. I'll let ya guess which regional FTZ zones those show up in most....or, check it out of course.

United States Foreign Trade Zones, by State and Company name

I'm going to close this in the same way I opened it. With some eye candy. People love eye candy and let's be communicates a message like nothing else really can, doesn't it? I sure think so.

First, here is a map of ALL the refineries in the Continental United States. It shows their production capacity as well.

North American Pipelines with Refinery locations and Production Numbers

That now may have considerably more meaning when you gaze across this map again.

Remember...with things like Keystone. There is NO benefit to piping it down there instead of the Midwest, where it goes now....EXCEPT for the RE-Export benefits of sending the refined products to export. ANY other benefit is largely lost by going out the gate "into" America.

* (A final note. When FTZs screw local taxes, that money is LOST. Locals can't print money like Congress. It's money simply not there for other things local cities and counties need.)

posted on Mar, 24 2013 @ 05:38 PM
Nice work Wrabbit! I have no idea what to make of it quite yet other than it's another example how joe schmoe american is getting screwed by our Corporate masters.

posted on Mar, 24 2013 @ 06:00 PM
So,in other words, to save money on tariffs, Canada is simply going to bypass it by building a special pipeline which bypasses local taxing authorities. Is that what you are trying to say with all this?

posted on Mar, 24 2013 @ 06:00 PM
I've done my very best to break down a very complex thing. It did take me the whole night and losing track of time entirely to read enough so I felt I fully understood it and was certain it was how I was seeing it. How do you break down almost 7 hours of research into something that more than a few people will bother with the time to read?

I hope a few do anyway. It was an epiphany to fully comprehend the degree of scam happening here while the entire nation, states and local cities are desperately struggling for any money. The Feds can go stick it. They can print more and do..just because they feel like it that day.

States and Locals? Ugh...... Money for everything from Cops to Schools comes out of the tax base which local commercial property and business generate. A GIANT black hole with highly profitable entities sitting in the middle of it must be an outright killer for these cities looking at going outright bankrupt. Prior to digging into this thread's material? I had NO IDEA there were so many FTZ's set up. These are anything but ports or "Duty Free" trade zones.

They're tax shelters in plain sight if the business just knows all the rules to play right, at the right times.

While we hear about taxes....these things are insuring we never collect any! It wouldn't sell as fiction. No one would buy it!
edit on 24-3-2013 by Wrabbit2000 because: (no reason given)

posted on Mar, 24 2013 @ 06:12 PM

Originally posted by ThirdEyeofHorus
So,in other words, to save money on tariffs, Canada is simply going to bypass it by building a special pipeline which bypasses local taxing authorities. Is that what you are trying to say with all this?

Well, now I'm trying to keep my own speculation out of where it departs from facts I can back up with something. It's not how I always am, but I try to be on the big threads I make investigative like this for a report to everyone. Otherwise...where do people know where my opinion ends and fact starts?

So.. I'll leave the motives to others to figure on specific companies or specific names. My general opinions are just that..general.

I will say that by the regulations of the Foreign Trade Zones, they are outside normal U.S. Commerce and related tax/fee issues because the oil is literally "In Bond" status while shipped as I read and understand it. That's saying it's going from one international point to another with no diversion or use in between.

(The same status lets a trucker shortcut from Buffalo, NY to Detroit, MI without going through the US and toll roads ...IF someone is silly enough to go through the border headaches twice for that little benefit.)

As long as it arrives into free trade entities (Which the extension does), then the fact it was crossing the U.S. doesn't matter, legally. It may as well have landed by plane, right inside the FTZ from outside the country as far as regulations care.

If it goes to export ....they never DO care again. No fuss .. no muss. All the use of U.S. infrastructure and refinery capacity without the pesky little fees and costs everyone outside an FTZ would have paid for the same style of business being done. They simply need to export directly out of the FTZ. If it goes out the FRONT gate...they get the full bill to pay for the whole package.

posted on Mar, 24 2013 @ 06:23 PM
So what I am getting out of this, in a nutshell:

The sole purpose of this new "controversial" pipeline, will be to send oil directly to these FTZs allowing them to completely bypass any taxes or tariffs they might have accrued.

Yup, sounds just like something the Good ol US of A would do. Really at this point, if the Govt. Wasn't up to something shady. My head might explode.

Great thread Wrabbit.

Thanks for taking the time to put this together.

posted on Mar, 24 2013 @ 06:38 PM
reply to post by Wrabbit2000

I was trying to understand it in relation to the Keystone Pipeline, but otherwise I think I understand that foreign entities get around paying taxes to local communities via these foreign trade zones.

The articles do say that anything which leaves the foreign trade zones is subject to tariffs though, the way I read it is it is only interactions which happen inside the trade zones are not subject to taxation.

I need to go back and reread the material though. I had another project today which involved a lot of brainstorming.
edit on 24-3-2013 by ThirdEyeofHorus because: (no reason given)

posted on Mar, 24 2013 @ 07:12 PM
reply to post by ThirdEyeofHorus

I think I may have another way of explaining it that will be easier than the near legalese that some of the material is in for the technical points.

Okay, the following chart segment comes from this : Total Product Exports by Destination

Venezuela, as you can see, is among those that we've have a long established relation with compared to many of the others with high volume on the list. I'd hope we did, anyway. CITGO is a wholly owned entity of the Venezuelan State energy company.

The largest share of Venezuela's global downstream operations is in the United States. CITGO, a wholly-owned subsidiary of PdVSA, operates three refineries (Lake Charles, LA; Corpus Christi, TX; Lemont, IL), with a combined crude oil distillation capacity of 755,400 bbl/d. CITGO's gulf coast refineries source most of their crude oil with PdVSA under long-term supply contracts. PdVSA also owns a 50-percent stake in the 189,000-bbl/d Chalmette facility in Louisiana.

Now my thread above doesn't show all the data to make the example, which is why I got this added material to help.

Venezuela regularly brings it's crude up to refineries on the Gulf Coast. Some they own outright, some they partially own or share. Something about the Gulf refineries being geared best for the heavy crude Venezuelan fields produce. ANYWAY...... If they want to send some of their OWN Oil back on the same ship that brought it up to the FTZ based refinery they have at Corpus Christi, why not?

SHOULD the US be able to charge duties and tariffs on Oil or Refined products that never left the fence of the refinery from the time the Venezuelan ship came and docked? Probably not.. No. See why that works though? Into an FTZ and back out again ... whatever gets sent into the US is paid full duty on ..whatever goes back out, isn't charged anything because it was never "IN" the United States at all (So the law says).

The TransCanada line is doing the very same thing, except they aren't bringing a ship to dock and unload into the refinery...they are building a 1,600 pipeline to add to the many they already use and operate across our soil...our national territory ... so they can play the same game and export without ever having the product "inside" the U.S. by technical stroke.

They literally lose money and take penalty if they do refine it those extra hundreds of miles beyond the current refineries in Oklahoma which handle it now .....if they don't export and make use of the only benefit those refineries give to justify the pipe in the first place.

Pretty tricky..and getting so 'inside baseball' on how the technical side of the system works, what normal person would even notice?? Well... NO one really DOES ...unless of course, they make a national debate, ongoing fight and spectacle out of what looks like a rather secondary and redundant pipeline. At least, it looked that way at first.

posted on Mar, 24 2013 @ 07:18 PM
Bunny, I have to tell you, you are incredible! You have opened an entire new eye for me that I never knew existed.

The MSM would lead us to believe that the Keystone pipeline is the endall solution to our nation's fuel woes. I had NO IDEA that this much pipeline transportation was already in place.

I did, however, know that the US did export a massive amount of refined product, and that our refinery capabilities were massive. But to think that this scam is so massive is just unbelievable.

You deserve a star, a flag, and a beer.

If you could compile this post into a PDF, and get it to me, I would be willing to send it to my contacts in the MSM to get their attention. Beck, Hannity, Quinn, Doyle, and a few others might be able to take the ball and run with it. I don't think that these talking heads know the extent of this corruption.

You are one of a kind!

Great work, and THANK YOU for your effort.

posted on Mar, 24 2013 @ 07:44 PM
reply to post by Wrabbit2000

This is probably the most important Thread this year. Not a Left/Right divide. Something the Tea Party, Occupy and anyone else should be up in arms about. We the Tax payer are being shafted!

I took your lead and looked up Texas.

(emphasis mine)

U.S. foreign - trade zones (FTZs) are sites administered by U.S. Customs and Border Protection (CBP) officials located in or near a U.S. Customs Port of E ntry, where foreign and domestic merchandise is consi dered to be outside the country, and therefore outside of U.S. Customs territory for purposes of duty payment .

Not from out of the country then?

Some of the primary manufacturing industries benefitting from FTZs are consumer electronics, automotive, and energy (primarily oil refining).

Refining done within the U.S.?

Texas leads the nation with 31 FTZs, more than any other state.

Wonder why?

And the best.....

Of in coming zone shipments, over 58 percent , or $248.6 billion, involve domestic status merchandise

Texas Foreign - Trade Zones

Thank you Mr Wrabbit.
edit on 24-3-2013 by BritofTexas because: (no reason given)

posted on Mar, 24 2013 @ 08:04 PM
reply to post by BritofTexas

I thank you for your additional data to the thread. I'd looked at Tennessee for local laws in some depth while skimming over some others in how the state vs. feds give benefit to the Trade Zones and saw enough to realize I didn't want to touch more below the Federal level it's controlled at.

I mean, I have to call the parameters of my project at some point, right? I started getting a sinking feeling that I could have gone and written a small book without getting everything outrageous to be found in association with all this.

Anything you or anyone else would like to add to the topic data is more than welcome and always appreciated!

posted on Mar, 24 2013 @ 08:12 PM
Well done wrabbit, well written and now you do get it.

To take it a step further in a quick summary, The Canadian citizens see little benefit from the tar sands, they get next to nothing from it. It is piped to refineries that pay next to no tax, in fact not even taxes that apply if you employ people. Then the oil is refined and shipped overseas to be sold on the world market.

The only group making a profit here is big oil. This is why Western Nations are falling over like dominoes. The Multinationals first squeeze everyone else (including family companies) out of the market and end up as monopolies. Then they arrange things so they pay almost no tax anywhere in the world. It is no wonder countries are falling over, their primary taxation is disappearing at an alarming rate.

It is screw the worlds citizens time and we all live in la la land since we can't see what is happening.

Well done Wrabbit, If my service was not capped I would send you a case of the sweetest carrots on this world of ours. They are Australian of course!


posted on Mar, 24 2013 @ 09:53 PM
Excellent thread!

I knew portions of the material you provided, but never connected the rest of the dots.

This is the sort of material we need to see more of on ATS!

Kudos to you sir!

posted on Mar, 25 2013 @ 12:22 AM
reply to post by Wrabbit2000

When I was stationed in Texas, I was once told that all the crude pumped in Texas never gets refined in Texas. It get's refined in Oklahoma. And all the crude in Oklahoma, get's refined in Texas.
(simplified, for sure)

The reason? They "sell" the crude to another state, thus collecting on state taxes.

Now I'm not the sharpest bowling ball on the lane, but isn't this just a bigger manipulation of the tax system?

Wouldn't solutions include a revamping of our tax code?

You provided a lot on my plate to chew on. Well done, by the way. Will add more as I learn more.

posted on Mar, 25 2013 @ 01:23 AM
holy wrabbit turds!!!

this is the definition of cronyism.

we are not going to see one drop of oil from the keystone.
while i usually try to defend big oil, i just can't in this case.
and the brunt of the blame rests on the shoulders of the bureaucrats in d.c. who sold their soul to the highest bidder.

but i have to consider something else too.
our economy relies on the price of energy more than anything.
what would happen to the price of energy if this cronyism was put to a stop, and all oil was taxed?
i mean we're talking billions in tax dollars here.

the price at the pump would go through the roof.
at least short term. they will just pass it on to the consumer.

need to ponder on this some more. S&F

edit on 25-3-2013 by bjax9er because: (no reason given)

posted on Mar, 25 2013 @ 05:51 AM
reply to post by bjax9er

Ya, you do.

posted on Mar, 25 2013 @ 08:49 AM

SHOULD the US be able to charge duties and tariffs on Oil or Refined products that never left the fence of the refinery from the time the Venezuelan ship came and docked? Probably not.. No. See why that works though? Into an FTZ and back out again ... whatever gets sent into the US is paid full duty on ..whatever goes back out, isn't charged anything because it was never "IN" the United States at all (So the law says).

The TransCanada line is doing the very same thing, except they aren't bringing a ship to dock and unload into the refinery...they are building a 1,600 pipeline to add to the many they already use and operate across our soil...our national territory ... so they can play the same game and export without ever having the product "inside" the U.S. by technical stroke.

I'm still not sure I follow this whole thread, but I'll focus on the quote above for now. To be honest, the only difference I can see between these 2 situations is that in the first the oil arrives by ship, and in the second it arrives by pipeline. Oil arrives from outside the US, is refined within a FTZ, and is exported. Is the mode of transport really that much of a issue?

Of course, you could close down the whole FTZ thing altogether. Canada and Venezuela could refine and export their own oil, completely bypassing the US refineries. I'll leave you to make your own mind up on how that might affect employment and spending in cities like Port Arthur and Corpus Christie.

posted on Mar, 25 2013 @ 10:02 AM
reply to post by lacrimoniousfinale

Think of it this way.

I want to export Pork Pies from Melton Mowbray in England to Rio de Janeiro in Brazil. The only way I can do this is by ship. There is no direct shipping line but one ship can take them to New York and another from there to Rio.

The Pies sit in New York harbour for a few days before the second ship shows up to take them the rest of the way.

The Pies are not being sold in the U.S. so Customs create a FTZ where they can sit. Even though I'll still have to pay the Port for storage etc, I don't have to pay import export/duty.

This was the original intention of Foreign Trade Zones.

In the case of the Tar sand oil. It gets piped across the entire U.S. and then refined in the U.S. Therefore making it a new product on U.S. soil. It then gets shipped to China or wherever.

Raw material is imported into the country, a new product is manufactured and exported. All without paying import/Export duty.

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