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EXHIBIT 8.1
[BAKER BOTTS L.L.P. LETTERHEAD]
June 28, 2000
006240.0117
Valero Energy Corporation
One Valero Place
San Antonio, Texas 78212
Ladies and Gentlemen:
We have acted as counsel to Valero Energy Corporation, a
Delaware corporation ("Valero"), and VEC Trust I, a Delaware statutory business
trust, relating to the registration of 6,900,000 7 3/4% Premium Equity
Participating Security Units--PEPS(sm) Units of Valero (the "PEPS Units"). In
that connection, reference is made to (i) the registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), of Valero on Form S-3
(Registration Nos. 333-33846, 333-33846-01 and 333-33846-02) filed with the
Securities and Exchange Commission (the "Commission") on March 31, 2000, as
amended by Pre-Effective Amendment No. 1 thereto filed on May 24, 2000, and
declared effective by the Commission on May 30, 2000 (as amended, the
"Registration Statement"), (ii) the prospectus dated May 30, 2000 (the
"Prospectus") included in the Registration Statement, (iii) the preliminary
prospectus supplement, subject to completion, dated June 7, 2000 and (iv) the
prospectus supplement dated June 22, 2000 (the "Final Supplemented Prospectus")
describing the PEPS Units. Capitalized terms not otherwise defined herein shall
have the meaning specified in the Prospectus and the Final Supplemented
Prospectus.
We have examined the Prospectus, the Final Supplemented
Prospectus and such other documents and corporate records as we have deemed
necessary or appropriate for purposes of this opinion. In addition, we have
assumed that the PEPS Units will be issued in accordance with the operative
documents described in the Prospectus and the Final Supplemented Prospectus.
Based on certain assumptions set forth therein, the statements
of legal conclusion set forth under the caption "United States Federal Income
Tax Consequences" in the Final Supplemented Prospectus reflect our opinions on
the material tax consequences of the purchase, ownership and disposition of the
PEPS Units based on the Internal Revenue Code of 1986 and applicable regulations
thereunder, both as in effect on the date hereof, and on reported judicial
decisions.
Our opinion is limited to tax matters specifically covered
hereby.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the references to this Firm in the sections
captioned "United States Federal Income Tax Consequences" and "Legal Matters" in
the Final Supplemented Prospectus. In giving this
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BAKER BOTTS L.L.P.
Valero Energy Corporation 2 June 28, 2000
consent, we do not thereby admit that we come within the category of a person
whose consent is required under Section 7 of the Securities Act or the rules and
regulations of the Commission thereunder.
Very truly yours,
BAKER BOTTS L.L.P.
GVN:430
