Nu Star Energy L.P. is a limited partnership that is publicly traded and headquartered in San Antonio. It has 9,063 miles of pipeline, eighty-six terminal facilities, four storage facilities for crude oil and two refineries for asphalt. It is the second in size among independent liquid terminal operators in the United States. It operates in the U.S., Netherlands, Canada, United Kingdom, Antilles and Mexico. The entire system of the partnership can hold up to 86 million barrels in its storage infrastructure. It has refineries for asphalt, crude oil and has pipelines for refined products. Also present are terminals for refined products, a storage facility for petroleum, a terminal operation as well as storage facilities for crude oil. NuStar strives to protect the environment and continually works to improve its programs and processes so as to meet even the most stringent of environmental practices. This has resulted in better environmental performance. Reportable releases have drastically reduced in the last eight years (Nustar Energy L.P, 2013).
Environmental and Safety Regulation
The operations of the company are controlled by extensive local, state and federal laws concerning the environment, including regulations concerning modes of waste disposal, management of wastes, measures to prevent pollution, qualifications to be an operator and pipeline integrity. Several federal and state laws and regulations concerning safety and health also apply, including the regulations that ensure the safety of pipelines. The main environmental concern of the company is making unauthorized emissions into the air, releasing waste into the soil, ground water or surface water and occasioning injury to people and damaging property. Complying with all the laws and regulations makes the company has high capital expenditures and so a high overall cost of doing business, and a violating the laws or any permits may result in heavy criminal and civil liabilities, penalties or injunctions. NuStar has incorporated procedures, practices and policies to govern the control of pollution, pipeline integrity, public education and relations, process safety management, product safety handling of materials, occupational health as well as the handling, usage and storage so as to ensure the pipelines, the employees, the public as well as the environment are safe and so limit the amount of liability that can arise from a malfunction or error. Future change or addition to environmental laws could mean more capital expenditure and costs of operations so the operating costs cannot be ascertained earlier on. Further, spills might cause contamination and this could cause liabilities. Such costs and risks are part of doing business in the field, and no assurances can be made towards the avoidance of future liabilities and costs (Nustar Energy L.P, 2013, Greenstone, 2001).
Capital Expenditures incurred in Complying with Environmental Regulations
The capital expenditures incurred by the company in complying with environmental regulations was $6.9 million in 2012 and it dropped slightly in 2013 to $6.5 million
The passage of the 1970 Clean Air Act Amendments saw the Environmental Protection Agency (EPA) establish national ambient air quality standards. This is the minimum air quality that every county is required to meet -- in 4 criteria: tropospheric ozone (O3), carbon monoxide (CO), total suspended articles (TSPs) and Sulfur dioxide (SO2). As a component of the legislation, every county in the United States gets their attainment or nonattainment designations in each of the four classes of pollutions. Nonattainment means that the county exceeded the set limit for that pollutant. Nonattainment attracts more scrutiny on the emitters in a county than the emitters in a county that attained the set standards. Free form the laws and regulations in all counties are those institutions considered non-polluters (Greenstone, List & Syverson, 2012).
Renewable Energy and Alternative Fuel Mandates
Many state and federal programs need the use of renewable energy as well as alternative fuels like engines that are battery-powered,
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