Tuesday, March 20, 2012

Valero Oil Refiner

Got the following from Larry P, an old bud.

VALERO Oil memo to employees re. Keystone Pipeline*

For those of you unfamiliar with Valero, it is an independent

oil company based in San Antonio, TX. It owns 2 refineries, but no oil

fields – it buys all the oil it refines and processes via contract or on

the open market.

Its origin was as a public utility providing natural gas to the city of

San Antonio, but it has grown to be a significant gasoline retailer in a

good portion of the southeast and southwest, as well as a purveyor of

natural gas.

It is a significant economic force in Texas, even in light of the other majors

(Shell, Exxon Mobil, etc.) based in the state. This memo to employees

is a realistic insight into the economic importance of the proposed XL


Date: January 24, 2012

To: Valero Employees

From: Bill Klesse

Subject: Keystone XL Pipeline Statement

As you know, the Obama administration decided last week to deny

TransCanada’s application to ship crude oil via the Keystone XL pipeline

from Canada to the Gulf Coast. Valero has planned to be a shipper and

purchaser of that oil since 2008, and obviously we were disappointed in the

decision. We issued a statement in response to questions from the media,

and I wanted to share it with you in case you get questions from friends or

business partners, and so that you would know why Valero supports the

Keystone XL pipeline.

This is the statement: Despite the uncertainty and political fighting over the

Keystone XL pipeline, Valero has continued to invest in its U.S. refining operation.

In 2011 we spent nearly $3 billion on projects, and for 2012 our capital

expenditure budget is over $3 billion. These expenditures are keeping our

employees on the job and putting additional people to work. To reference

two of our refineries, at Port Arthur, Texas, we have 1,600 contractors

working on an expansion project, and at St. Charles Parish, Louisiana, we

have another 1,000 contractors working on a separate project. We need this

kind of economic activity to accelerate to help all Americans.

This illustrates why President Obama's rejection of the Keystone XL

pipeline is so absurd. There are pipelines in every neighborhood all across

America. The administration’s decision was not about pipelines, it was

about the misguided beliefs that Canadian oil sands development should be

stopped and that fossil fuel prices should increase to make alternative

energy more attractive. Instead, we should be impressed with how well the

oil sands engineering and recovery technology has advanced, and the

economic benefits this development brings. Having more oil available in the

marketplace has the potential to lower prices for consumers. As an

independent refiner, Valero buys all of the oil we process. Due to the

administrations misguided policies, refiners like Valero will have to buy

more oil from other sources outside the U.S. and Canada.

Consumers will bear the additional shipping cost, not to mention the

additional greenhouse gas emissions and political risks. With all the issues

facing our country, it is absolutely unbelievable our federal government

says no to a company like TransCanada that is willing to spend over $7 billion

and put Americans to work on a pipeline. The administrations decision throws

dirt into the face of our closest ally and largest trading partner.

The point above is that it is not about pipelines as many pipelines

cross the Ogallala Aquifer, in the Great Plains region, and, in fact, there

is already significant oil and gas production in the area covered by the

aquifer. This is politics at its worst.

Thank you for your support.

"Unlimited tolerance must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them." - Karl Popper

“It’s the presumption that Obama knows how all these industries ought to be operating better than people who have spent their lives in those industries, and a general cockiness going back to before he was president, and the fact that he has no experience whatever in managing anything. Only someone who has never had the responsibility for managing anything could believe he could manage just about everything.” - Thomas Sowell in Reason Magazine

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