Tuesday, March 20, 2012
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
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