NuStar Energy (NS) 10-Q 2004 Q2 Quarterly report

Exhibit 12.1

VALERO L.P.
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio)

	Six Months Ended
	June 30,			Years Ended December 31,
	2004			2003			2002			2001			2000		1999
Earnings:
Income from continuing operations
before provision for income taxes and
income from equity investees	$	38,946		$	67,177		$	52,350		$	42,694		$	35,968	$	65,445
Add:
Fixed charges		10,507			16,443			5,492			4,203			5,266		997
Amortization of capitalized
interest		28			55			48			39			34		32
Distributions from Skelly-Belvieu
Pipeline Company		975			2,803			3,590			2,874			4,658		4,238
Less: Interest capitalized		(28	)		(123	)		(255	)		(298	)		-		(115	)
Total earnings	$	50,428		$	86,355		$	61,225		$	49,512		$	45,926	$	70,597
Fixed charges:
Interest expense (1)	$	10,082		$	15,291		$	4,968		$	3,721		$	5,181	$	777
Amortization of debt issuance costs		201			740			160			90			-		-
Interest capitalized		28			123			255			298			-		115
Rental expense interest factor (2)		196			289			109			94			85		105
Total fixed charges	$	10,507		$	16,443		$	5,492		$	4,203		$	5,266	$	997
Ratio of earnings to fixed charges		4.8x			5.3x			11.1x			11.8x			8.7x		70.8x

(1) The “interest expense, net” reported in Valero L.P.‘s consolidated statements of income for the six months ended June 30, 2004 and the years ended December 31, 2003 and 2002 includes investment income of $86,000, $171,000 and $248,000, respectively.

(2) The interest portion of rental expense represents one-third of rents, which is deemed representative of the interest portion of rental expense.