CLA-2-27:OT:RR:NC:N2:237
Michael Foley, President
Winfield Resources Limited
606-888 Hamilton Street
Vancouver, British Columbia
Canada V6G 5W4
RE: The tariff classification of Greyrock GTL synthetic diesel fuel oil No. 2 from Canada
Dear Mr. Foley:
In your letter dated May 7, 2015 you requested a tariff classification ruling. You provided a Greyrock Overview Presentation with GTL flow charts and synthetic diesel specifications.
Greyrock GTL is a synthetic diesel fuel oil that will be produced in Canada from natural gas hydrocarbons obtained from natural gas deposits in Canada. Based on the facts provided, it will meet ASTM D975 Standard Specification for Diesel Fuel Oil No. 2, in its condition as imported.
Winfield Resources Ltd. is building a 10,000 barrels per day gas-to-liquids (GTL) facility near Ft. Nelson, British Columbia. The key to its GTL process is a patented GreyCat catalyst to crack natural gas hydrocarbons into synthesis gases (hydrogen and carbon monoxide) for conversion into synthetic hydrocarbon diesel oil, without going to wax and wax refining. The specifications include high cetane to reduce engine knock, zero-sulfur and low aromatics to reduce engine omissions, and natural lubricity to reduce engine wear. A pre-engineered additive package will ensure that seasonal and regional specifications for diesel fuel sold in the U.S. are met.
Chapter 27 statutory note 2 is relevant to your product and states: References in heading 2710 to "petroleum oils and oils obtained from bituminous minerals" include not only petroleum oils and oils obtained from bituminous minerals, but also "similar oils"…obtained by any process... If heading 2710 was intended as a catch all for mixtures of hydrocarbons derived from any source, the limiting adjective "similar" would not be present. The statutory language requires a similarity to products derived by the distillation or refining of crude petroleum oils or of crude oils obtained from bituminous minerals. Bitumen, in its various forms, is an inflammable mineral substance consisting mainly of natural hydrocarbons existing in sedimentary rock throughout the globe. Bituminous means containing bitumen. GTL fuel oils, obtained by cracking and reforming crude natural gas hydrocarbons from sedimentary rock deposits, meet the requirement for "similar oils".
The applicable subheading for Greyrock GTL will be 2710.19.1102, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Petroleum oils and oils obtained from bituminous minerals (other than crude) and preparations not elsewhere specified or included, containing by weight 70 percent or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, other than those containing biodiesel and other than waste oils (con.): Other (con.): Distillate and residual fuel oils (including blended fuel oils) (con.): Testing 25 degrees A.P.I. or more: Having a Saybolt Universal viscosity at 37.8 degrees centigrade of less than 45 seconds (light fuel oils): Fuel oils Nos. 2 and 3: Diesel oil: Containing not more than 15 ppm of sulfur. The rate of duty will be 10.5 cents per barrel.
Goods wholly obtained or produced entirely in the territory of Canada and meeting the criteria for originating in General Note 12(b)(1), HTSUS, are eligible for duty free treatment under the North American Free Trade Agreement (NAFTA). Based on the facts provided, Greyrock GTL produced in Canada from natural gas extracted from mineral deposits in Canada and classifiable under subheading 2710.19.1102, HTSUS, will be entitled to duty free treatment under the NAFTA, upon compliance with all applicable laws, regulations and agreements.
Your product may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U. S. Environmental Protection Agency at 1200 Pennsylvania Avenue, N.W., Washington, D.C. 20460. Information on the TSCA can be obtained by calling the TSCA Assistance Line at (202) 554-1404 or by e-mail to: [email protected].
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Frank Cantone at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division