Valero Company Profile

by Corporate Watch / Companies, Environment / 30 Oct 2012

US-based Valero Energy is the world’s largest independent petroleum refiner. The company takes crude oil from various sources, processes it at its refineries to produce petrol, diesel, jet fuel, concrete, petrochemicals and other products, then sells it. Valero is also in the biofuel business. It its relatively brief history Valero has repeatedly been fined for water and air pollution, funded climate change deniers and opposed legislation to reduce carbon emissions.

You can find Corporate Watch’s 2012 company profile on Valero and other articles in the right hand column of this page.

Click here for details of their latest profits and other financial results from the Bloomberg website.

There is lots of useful information on Valero’s website:

•Click here to see the fuels and products that Valero sells.

•Click here for details of Valero’s head office and here for where the company does business around the world.

•Click here to find out who Valero’s directors and board members are.

•Click here to download Valero’s latest annual report and accounts (or ’10-K’ form, as it is also called here).

For a more critical perspective on their work, try:

Polluter Watch

Dirty Energy Money

Sourcewatch

If you want to do some digging into Valero yourself, have a look at our Investigating Companies: A Do-It-Yourself Handbook.

If you would like your website added to this list, or have any other links or suggestions for this page, please get in touch.

Valero: Overview
Industry Areas

US-based Valero Energy is the world’s largest independent petroleum refiner. The company does not drill for oil, instead the majority of the its operations are focussed on the business of taking crude oil from various sources, processing it at its refineries to produce gasoline (petrol), diesel, jet fuel, asphalt, petrochemicals, and other products, then selling either on the market or directly to the consumer through its 6,800 retail outlets. Valero is also in the biofuel business, producing ethanol from ten plants in the US by fermenting corn starch with yeast.

Market share and importance

As of September 2012 Valero has a Global workforce of 22,000 employees and total assets of $42.8 billion (end of 2011). It owns 10 ethanol plants and owns 16 refineries with a combined refining capacity of 3 million barrels per day. Valero has plants and offices located in the US, Canada, the United Kingdom, Ireland and the Caribbean.[1]

History

Valero, who’s name comes from Misión San Antonio de Valero, otherwise known as The Alamo, was created as a spinoff of Coastal States Gas Corporation on January 1st 1980. A corporate spinoff is where a section of a company is split off to form a separate business. At the time, Valero’s creation was the largest corporate spinoff in US history.

The company’s creation was the result of a $1.6 billion settlement, ending over six years of litigation brought against Coastal by municipal gas customers who claimed they had been overcharged for natural gas. LoVaca Gathering Co, a natural gas gathering subsidiary of Coastal, had failed to honour contracts to supply natural gas to utilities around Texas. As part of the settlement, Valero was created as a successor to LoVaca and separated from Coastal.

Valero started to diversify its gas transportation business when it bought a small oil refinery in Corpus Christi, Texas, in 1981. It began refining operations in 1984. Then, in 1997, Valero’s refinery and retails divisions became a separate business, keeping the Valero name, whilst its natural gas divisions were acquired by the Pacific Gas and Electric Company.

Valero then acquired further refineries, including four in Texas and Louisiana in 1997, through its acquisition of Basis Petroleum, and another in 1998 in Paulsboro, New Jersey. In 2000 the company purchased ExxonMobil’s Benicia refinery, along with interests in Californian Exxon branded service stations, and began retailing under the Valero brand.

Since then Valero has continued to take on more refineries, and expanded into the retail and wholesale market, including acquisitions of Ultramar Diamond Shamrock in 2001 and Premcor Inc. in 2005. It continues to operate under the Valero, Ultramar, Texaco, Diamond Shamrock, Shamrock and Beacon brands.

In 2009, Valero expanded to the ethanol business, purchasing seven ethanol plants from VeraSun Energy Corp, and forming a new subsidiary, Valero Renewable Fuels Company LLC, or Valero Renewables. The company also built a wind farm outside its McKee Refinery in 2009, which now has 33 turbines with maximum generating capacity of 50 megawatts.

More recently, in the summer of 2011, the company expanded to the Western European refining market with the acquisition of Pembroke Refinery in Wales, from Chevron. The refinery is one of the largest in Western Europe with a throughput capacity of 270,000 barrels per day. Valero also purchased various other maketing and logistics operations in the UK, including more than 1,000 Texaco branded garages.

Finally, in Autumn 2011, Valero purchased the 135,000 barrels per day Meraux Refinery outside New Orleans, along with related logistics.

Key Dates

1980: Valero Energy Corporation is formed as a spinoff of Coastal States Gas Corporation, specifically Coastal’s intrastate Texas gas-gathering pipeline, based in San Antonio. Valero moves into refining by acquiring an interest in Saber Energy, Inc., which operates a small refinery in Corpus Christi, Texas.

1981: Valero begins a massive expansion of the Corpus Christi facility into a state-of-the-art refinery.

1984: The expanded Corpus Christi refinery is up and running.

1987: Valero spins off its natural gas pipeline and natural gas liquids business into Valero Natural Gas Partners, L.P., in which it holds a 49 percent share; company shuts down its exploration activities.

1994: Company buys the 51 percent of Valero Natural Gas Partners it does not already own.

1997: Valero divests its natural gas business in a deal with PG&E valued at $1.5 billion; company acquires Basis Petroleum, Inc. and its three Gulf Coast refineries.

1998: Refinery in Paulsboro, New Jersey, is purchased from Mobil Corporation.

2000: Valero buys a refinery in Benicia, California, from Exxon Mobil Corporation, along with 350 gasoline stations,marking the firm’s entry into retailing.

2001: Ultramar Diamond Shamrock Corporation is acquired in a $6.1 billion deal.

2003: A refinery in St. Charles Parish, Louisiana, is purchased from Orion Refining Corporation.

2004: Valero acquires El Paso Corporation’s Aruba refinery.

2005: Valero announces a definitive agreement to acquire Premcor Inc. for $6.9 billion in cash and stock.”

2009: Valero purchases seven ethanol plants from VeraSun Energy Corp.

2011: Valero acquires Pembroke refinery and associated logistics, in a $730 million deal with Chevron.

Sources: [2], [3]

References

[1]www.valero.com/OurBusiness/Pages/Home.aspx

[2]www.fundinguniverse.com/company-histories/Valero-Energy-Corporation-Company-History.html

[3]www.valero.com/OurBusiness/Pages/CompanyHistory.aspx

Valero Energy Corporation: Operations and projects

•Refining and marketing
•Valero ‘Renewables’
•Pembroke refinery

Refining and marketing

Valero is the world’s largest independent petroleum refiner with 16 refineries. The majority of the company’s operations are focussed on the business of taking crude oil from various sources, processing it at its refineries to produce gasoline (petrol), diesel, jet fuel, asphalt, petrochemicals, and other products, then selling either on the market or directly to the consumer through its 6,800 retail outlets.

Valero ‘Renewables’

Valero also produces ethanol from ten plants in the US by fermenting corn starch with yeast. It refers to this side of its business as Valero Renewables, although many see bio-ethanol as neither environmentally nor socially sustainable (for more information see ‘biolfuels’ in ‘corporate crimes’ section).

Sunray Wind

In an apparent attempt to improve its green credentials, Valero built a 33 turbine wind farm outside its McKee Refinery. However, comparing one 50 megawatt wind farm to the three million barrels of crude that Valero processes each day, its obvious where the company’s priorities lie.

Pembroke Refinery

In the summer of 2011, Valero expanded into Western Europe with the acquisition of Pembroke Refinery in Wales from Chevron. The refinery has a throughput capacity of 270,000 barrels per day and is one of the most complex in Western Europe, capable of processing heavy crudes, such as those produced from the tar sands in Canada (see below).

The $730 million deal (approx £450m) included ownership interests in four major pipelines and 11 fuel terminals, a 14,000 barrel per day aviation fuels business, and more than 1,000 Texaco-branded service stations in the UK and Ireland.

The purchase of the Pembroke refinery in the UK, along with the completion of the Keystone XL pipeline in North America would put Valero in an ideal position to import diesel made from tar sands to European markets (see ‘Valero and tar sands’ section)

Sources: [1]

References

[1]www.valero.com/OurBusiness/Pages/Home.aspx

VALERO AND TAR SANDS

•Introduction to tar sands
•Keystone XL
•Tar sands and Valero’s operations
•b>Valero, keystone XL and the Pembroke refinery
•History

Introduction to tar sands

Tar sands, also known as oil sands or bituminous sands, are a mixture of sand, water and clay with a dense, sticky form of crude oil called bitumen. Sometimes referred to as extra heavy crude, bitumen needs to be heated or diluted in order to make it flow.

The process of making liquid fuel from tar sands requires enormous amounts of energy and water. Greenhouse gases emitted during the production process are two to four times more than those resulting from conventional crude production.

Deposits have been reported in 23 countries, with the largest volumes found in Canada followed by Kazakhstan and Russia, where deposits remain largely unexploited due to the presence of cheaper conventional oil.

Alberta in Western Canada has extremely large deposits with the three Alberta oil sand areas, Athabasca, Peace River, and Cold Lake, containing 1.73 trillion barrels of discovered bitumen between them (Energy Resources Conservation Board [ERCB], 2009a). This represents two thirds of that in the world and, at the time of writing, are the only bitumen deposits being commercially exploited as sources of synthetic crude oil (SCO). More than 40% of the crude oil and bitumen produced in Canada in 2008 came from the Alberta natural bitumen deposits. According to Canadian Energy Research Institute, investments in Albertan tar sands could total more than $215 billion over the next 25 years.

The other location where commercially successful extra heavy crude (bitumen, similar to that from tar sands) projects have taken place is the Orinoco Oil Belt in Venezuela, which accounts for 20% of the countries oil production.

The extraction of the tar sands in Alberta, which involves dredging up vast areas of land, is hugely destructive to the local environment, polluting water sources and irreversibly damaging the ecosystems of the pristine Boreal Forest and associated wetlands. This, in turn, has a devastating effect on the health and way of life of the local indigenous communities of Cree, Dene and Métis.

The Alberta tar sands represent the second-largest known fossil fuel reserve in the world, the only larger reserve being the oil fields in Saudi Arabia. Their exploitation has serious implications for climate change, as world leading climate scientist James Hansen said: “An overwhelming objection is that exploitation of tar sands would make it implausible to stabilise climate and avoid disastrous global climate impacts.”[1]

Keystone XL

Keystone XL is the proposed expansion to the existing Keystone Pipeline, which will, when completed, transport synthetic crude oil from the Alberta tar sands in Canada, across the US, to the gulf coast. TransCanada, a North American energy infrastructure company and the sole owner of the Keystone Pipeline, which started operating in June 2010, is planning to build the extension.

Many have argued against the energy security arguments being used in the US to justify the construction of the XL, arguing that in fact much of the oil would be destined for overseas markets.[2]

Those opposing the pipeline extension also argue that spills will threaten local groundwater resources, including the Ogallala, one of the world’s largest aquifers.

Tar sands and Valero’s operations

Valero’s business plans rely heavily on Canadian tar sands. The company’s 2009 annual report comments on the Alberta tar sands:

“This large new source of crude oil for the Gulf Coast market will further diversify our feedstock slate and increase our ability to optimize our profitability.”[3]

A 2010 report by Greenpeace revealed how petroleum products containing crude from tar sands have already been entering the EU’s petroleum supply chain for some time, mainly from diesel imports from the US Gulf Coast.[4]

The investigation examined US government and industry import and export data and showed that at least three refineries in the US Gulf Coast region were sourcing Alberta tar sands and exporting products to Europe at the same time. Valero’s Port Arthur refinery came out on top and was shown to have regularly processed tar sands crude while exporting diesel to Europe since at least June 2009. The report estimated that at about 24,000 barrels per day or 9.5% of the crude processed at the refinery originated from the Alberta tar sands.

Valero, keystone XL and the Pembroke refinery

Valero has committed to taking on at least 100,00 barrels a day (20% of initial capacity) from Keystone XL until 2030. It is the only US company among the six customers who have committed to purchase 76% of Keystone XL’s initial capacity between them. The others are Motiva (a joint venture between Shell and the Saudi government), Total, two Canadian producers and one international oil-trading firm.[5]

The company has also recently upgraded its Port Arthur refinery, increasing its ability to process ‘heavy sour crude’ to 80% of its 310,000 barrels per day capacity (crude oil can be ‘heavy’ or ‘light’ depending on its density, and sour -with a high sulfur content or sweet -low in sulfur. Tar sands oil is a form of heavy sour crude). The Port Arthur refinery is located where the proposed Keystone XL pipeline is planned to finish, on the Texas Gulf Coast. This, along with the purchase of the Pembroke refinery, puts Valero in the ideal position to take crude from tar sands via the XL pipeline, convert it to diesel and transport it Europe.

Commenting on Valero’s Commitment to Keystone XL, Bill Klesse, Valero CEO said:

“This commitment represents a major accomplishment in our strategy to secure additional long-term supply of heavy sour crude oil for our complex Gulf Coast refining system.. Because ample complex refining capacity already exists on the U.S. Gulf Coast, this expansion is a logical step in moving significantly more heavy sour crude oil into the Gulf Coast market, where it can be processed cost-effectively. The additional crude strategically aligns with our projects to increase ultra low sulfur diesel production at our Port Arthur refinery, which can process heavy feedstocks into clean products.”

“For some time, Valero has been communicating its intent to secure Canadian crude oil delivered to the Gulf Coast, and we believe our participation in the Keystone pipeline expansion is the best opportunity to carry that forward,” Klesse said. “Canada is the United States’ leading trading partner and one of its closest allies, and it has very large undeveloped crude oil reserves, so bringing Canadian crude oil to the U.S. Gulf Coast makes sense on many different levels.”[6]

References [1]:http://thinkprogress.org/climate/2011/06/05/236978/james-hansen-keystone-pipeline-tar-sands-climate/?mobile=nc [2]http://priceofoil.org/2011/08/31/report-exporting-energy-security-keystone-xl-exposed/ [3]www.valero.com/InvestorRelations/Documents/AnnualReport2009/pdf/annualReport.pdf [4]www.greenpeace.org.uk/files/pdfs/tar-sands-in-your-tank.pdf [5]http://priceofoil.org/2011/08/31/report-exporting-energy-security-keystone-xl-exposed/ [6]www.reuters.com/article/2008/07/16/idUS211492+16-Jul-2008+BW20080716

WHO, WHERE, HOW MUCH?

•Location and size of operations

•Personnel

Corporate Offices

Valero Corporate Headquarters ?

One Valero Way?

San Antonio, Texas 78249

(210) 345-2000

Western Europe

1 Westferry Circus

Canary Wharf

London, England E14 4HA

United Kingdom

+44 (0) 20 7513 3000

Location and size of operations

Originally solely based in the U.S., Valero now markets products in 44 U.S. states, Canada, United Kingdom, Ireland and the Caribbean region.

It owns 16 refineries, with 13 in the US, one in Quebec City, Canada, one in Uruba, in the Caribbean, and one in Pembrokeshire, Wales. [4].

Valero’s refineries have a total throughput capacity of 3 million barrels per day making it the world’s largest independent refiner, with a global workforce of 22,000 employees and total assets of $42.8 billion (end of 2011). [3]

The company also has ten ethanol plants in the Midwest with a combined capacity of 1.2 billion gallons per year, operates a 33-turbine wind farm near its McKee Refinery in Sunray, Texas, and has approximately 6,800 retail and wholesale sites. [1],[3]

The company markets products in 44 U.S. states, Canada, United Kingdom, Ireland and the Caribbean region. [1]

Personnel

Bill Klesse
Chairman of the Board, CEO and President
Starting his 40 year career in refining as an engineering trainee for Diamond Shamrock, Klesse was(need to clear formatting here) named Valero’s Executive Vice President and Chief Operating Officer in 2003. In 2006, he became CEO, and in 2007, Chairman of the Board.

Mike Ciskowski
Executive Vice President and Chief Financial Officer
Mike Ciskowski serves as Executive Vice President and Chief Financial Officer with responsibility for Treasury, Finance, Accounting, Internal Audit, Trading Controls, Insurance and Information Services.

Gene Edwards
Executive Vice President and Chief Development Officer
Gene Edwards is Executive Vice President and Chief Development Officer, with responsibility over domestic and international corporate development, alternative energy, market analysis and strategic planning.

Joe Gorder?

Executive Vice President and Chief Operating Officer
Joe Gorder is Executive Vice President and Chief Operating Officer, responsible for refining operations and commercial operations in marketing, supply and transportation.

Kim Bowers
Executive Vice President and General Counsel
Bowers oversees Valero’s Legal, Health, Safety & Environmental, Government Affairs, Ad Valorem Tax, Energy & Gases, Reliability and Project Execution departments.

References
[1]www.valero.com/OurBusiness/Pages/Home.aspx

[3]www.valero.com/OurBusiness/Pages/CompanyHistory.aspx

[4]www.valero.com/OurBusiness/OurLocations/Pages/Home.aspx

CORPORATE CRIMES

•Biofuels
•Environmental Racism
•Air Pollution
• Water Pollution
• Safety and Wrongful Deaths
• Anti-Competition
• Iraq
• Property Assessment Challenges
• CEO Pay

Valero has an appalling environmental record, being responsible for major air and water pollution from its refineries on numerous occasions. It has funded climate change deniers, fiercely opposed carbon reduction legislation and is one of the companies most heavily invested in the toxic Canadian tar sands. The company is also a major player in the biofuels business, owning 10 bio-ethanol plants across the US. For details of Valero’s links to the tar sands industry see ‘Valero and the tar sands’ section.

In addition to environmental criticism of the company, Valero has been the centre of a host of other controversies, including safety issues, political influence, labour disputes, wrongful death lawsuits, excessive CEO pay and war profiteering.

Biofuels

Valero also produces ethanol from ten plants in the US by fermenting corn starch with yeast. Biofuels and bioenergy are associated with a host of problems, including deforestation, destroying indigenous communities, soil depletion, reducing biodiversity and land grabs, and are themselves a major source of greenhouse gas emissions. Both corn and ethanol produced from corn are heavily subsidised in the US, and this, combined with financial incentives for biofuels, has had a dramatic impact on global grain prices and contributed to food shortages, famine and food riots.[21]

Valero is also investing in more advanced ‘second generation’ biofuels, such as those produced from cellulose. [22] However fundamental issues with fuel produced from biomass still apply. Even if land used to produce the biofuels (or agrofuels) does not compete directly with agricultural land, it can still have indirect effect on land prices, and indirect land use change can substantially increase overall carbon intensity of the fuel. Even so called ‘waste’ biomass is problematic as agricultural practices rarely waste biomass, it is usually used as animal feed or fertiliser, for example. Ultimately conversion from fossil fuels to agrofuels is not a sustainable solution to the worlds energy needs, it would require the transformation of vast tracks of land and could exacerbate climate change rather than mitigate against it.

Valero has invested in various companies aiming to commercialise emerging alternative biofuels such as “green” diesels from algae, from municipal-landfill solid waste and from animal-fat grease and used cooking oil.

Environmental Racism

In 1994, the state of Texas and the City of Corpus Christi were accused of environmental racism by two grassroots community groups in Texas’ Nueces County. People Against Contaminated Environments (“PACE”) and the American GI Forum of Texas (“AGIT”) filed a Title VI (Civil Rights Act of 1964) complaint alleging that, due to the existence of the Valero refinery, people of colour residents of Texas and Corpus Christi respectively were discriminated against by having their environmental protection and public health needs ignored.

According to the Political Economy Research Institute, 59% of people exposed to Valero’s air pollutants, including ammonia, sulfuric acid, and benzene, are minorities. [23]

Air Pollution

In March 2010 Valero Energy was Ranked 12th in the Political Economy Research Institute list of the top 100 air polluters in the United States (based on quantity and toxicity of emissions), having released 4.13 million pounds (1.88 million kilos) of toxic air pollutants in 2006.[24]

In its relatively brief history, Valero has received huge fines on numerous occasions for violations of air pollution legislation. These are some the most significant incidents:

April 2008 – In a settlement with The New Jersey Department of Environmental Protection (NJDEP), Valero agreed to pay a penalty of $905,796 and fund community projects worth $977,808. The settlement followed allegations of dozens of air pollution violations during 2005, 2006 and early 2007 at Valero’s refinery in Greenwich Township. The NJDEP cited Valero for exceeding overall emissions limits, violating stack-emission testing requirements, exceeding emission standards for pollutants during stack tests and various other violations.[25]

August 2007 – Valero agreed to a $4.25 million fine and additional expenditure of $147 million on pollution controls at its refineries in Port Arthur (TX), Memphis (TN), and Lima (Ohio). The settlement with EPA/DoJ required Valero to spend $1 million on support for a local health centre treating residents suffering respiratory illnesses who are not covered by health insurance.

Days before the announcement, Valero was heavily criticised at a town hall gathering for two recent incidents: a release of toxic gas from its Port Arthur refinery on 28 July, which hospitalised some residents living near the plant, and a fire at the refinery on 8 August. [26]

June 2005 – Valero pledged to install $700 million in pollution controls and pay a $5.5 million penalty to settle a five-state/US EPA joint complaint following alleged violations of federal air-pollution law. The settlement was one of the largest the EPA reached since it started investigating the refining industry in 2000 due to widespread concerns over compliance and enforcement.[27]

April 2005 – In a settlement of alleged Clean Air Act violations between 2001 and 2004 at its Paulsboro (NJ) refinery, Valero was fined $793,000 by the New Jersey DEP. The company was ordered to pay a further $3.5 million to install emission controls, intended to reduce nitrogen oxides and sulfur dioxide from its waste water treatment plant.[28]

2001 – Following repeated flaring of large volumes of sulfur dioxide between 1994 and 1998, Valero Refining was ordered to install a backup Sulfur Recovery Unit at their Corpus Christi refinery.[29]

2000 – Texas Natural Resources Commerce Commission forced Valero to pay a $174,455 penalty following alleged violations involving record keeping deficiencies and emissions exceedancies at its Texas City refinery.[30]

Water Pollution

A partial settlement between a dozen oil companies, including Valero Energy, and public water providers in 17 states was reached in December 2008. The litigation concerned groundwater contamination from the gasoline additive methyl tertiary butyl ether (MTBE), which had been used despite the fact that “No human health studies or long-term carcinogenicity studies on animals were conducted by the oil companies prior to adding MTBE to the nation’s gasoline supply”. The oil companies were required to Pay $422 million, and treat wells for MTBE over the next thirty years.[31]

In 2008 Valero Refining-Texas, L.P. agreed to resolve alleged violations of the Clean Water Act following a spill of 3,400 barrels of oil into the Corpus Christi Ship Channel on June 1, 2006. Under the consent decree, Valero agreed to pay a $1.65 million civil penalty and perform a supplementary environmental project costing approximately $300,000.[32]

In January 2006 the New Jersey Department for Environment Protection announced an agreement made with Valero Refining Company that the company would preserve four properties totalling 615 acres as compensation to the public for ground water pollution at its oil refinery in Greenwich.[33]

Safety and Wrongful Deaths

In 2005 two workers suffocated while carrying out maintenance at Valero’s Delaware refinery, resulting in wrongful death lawsuits against the company in February 2006. According to evidence used in the lawsuits, the two men working for contractor Matrix Service Co were asphyxiated while retrieving a roll of duct tape that had fallen into a refinery reactor. Valero blamed the deaths on the victims, saying they hadn’t followed safety instructions. Others disputed this, asserting that a work permit gave no warning of suffocation hazards as required.

It was reported that Occupational Safety and Health Administration fined Valero the previous year for failing to adequately oversee handling of work permits, and supervisors were unconcerned about discipline for violations. (Jeff Montgomery, “Valero staffing an issue in deaths,” Wilmington News Journal, 5/17/07). In addition,the company was accused of neglecting safety while rushing the refining system back into service to take advantage of high fuel prices.

One of the cases, brought by survivors of John A. Lattanzi, was settled in 2008 for an undisclosed amount. The U.S. Chemical Safety and Hazard Investigation Board concluded that the deaths were in part due to “inadequate” warnings and barriers around an opening in the tank where the men died, and that managers had failed to give the workers adequate written notice of the suffocation hazard. There were also claims of destruction of evidence against Valero and disputes over expert testimony.[34]

According to the Federal Contractor Misconduct database, it was reported that the case brought by the family of John Ferguson was settled in 2010 for an undisclosed amount.[35]

A previous wrongful death claim associated with the same refinery was settled for $36 million in 2003. (Jeff Montgomery, “Suit in worker’s death: Valero put ‘profits over safety’,” Wilmington News Journal, 2/8/06). This followed a fatal explosion and fire in 2001, also at the same plant, which led to tough new laws on storage tanks and tens of millions of dollars in criminal and civil fines and penalties.Valero sold the plant in June 2010 to subsidiaries of PBF Energy Company LLC for $220 million.[36]

See here for a chronology of problems at the Delaware Refinery (Source: Wilmington News Journal, 11/7/05):

-March 2005: State regulators warn refinery managers about concerns over leaks, fires and risk of catastrophe.

-January 2005: 12,500 pound propane leak.

-September 2004: 20,000 and 9,000 pound butane leaks.

-February 2004: 11,000 pound propylene/butane leak.

-May 2003: Chemical reaction bursts a tank roof open, releasing 25,000 pounds of acid and 15,000 pounds of hydrocarbons, forcing employees to flee for their lives. (Occupational Safety and Health Administration recommended a $132,000 fine).

-March 2002-August 2003: Excessive releases of carbon monoxide and other pollutants. (237,500 fine by Delaware).

-July 17, 2001: Explosion and fire in a sulfuric acid tank kills one man, cripples several others and releases more than one million gallons of gasoline-laced acid.

-April 2001: State regulators file criminal pollution charge accusing refinery managers of twice neglecting caustic chemical leaks that damaged the environment.

-May 2000: Worker burned by pipe failure.

-December 1997: Four workers injured when a tank explosion splashes them with a caustic chemical.

Valero has been involved in numerous other safety incidents and lawsuits, including:

-An accident involving the release of sulfur dioxide at Valero’s refinery in east Houston in 2006, sending 28 workers to hospital for treatment of respiratory complaints.[37]

-A fire at the Valero McKee refinery in Sunray, Texas, in February 2007. Three workers were seriously burned, and the entire refinery was shut down and evacuated. In July 2008, the U.S. Chemical Safety and Hazard Investigation Board (CSB) released a final investigation report that concluded the refinery did not have an effective programme to identify and address the risk of pipe failure due to freezing and the hazards posed by fire exposure to neighbouring equipment. [38]

-In 2008 the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) proposed penalties totalling $101,750 for various violations including 13 alleged serious violations at Valero’s Port Arthur, Texas.[39]

Anti-Competition

Valero acquired various other companies in the refining business, growing from the fourteenth-largest US refiner at the outset of 2000 to the largest in 2005 with the $8billion acquisition of Premcor Inc. This raised concerns that the wave of mergers had reduced the number of refineries and companies in the wholesale market, resulting in increased market concentration, failure to build new capacity to relieve increased demand and therefore increased cost to the consumer.

The US Federal Trade Commission only agreed to Valero’s $6 billion merger with Ultramar Diamond Shamrock Corporation in 2001 after forcing Valero to shed Ultramar’s Golden Eagle Refinery, bulk gasoline supply contracts, and 70 Ultramar retail service stations in Northern California.[40]

Iraq

Valero was one of the first companies to receive oil from Iraq after the US invasion. It was amongst ten other companies to win contracts to buy Iraq’s new oil production of Basra Light crude, covering production from Mina Al-Bakr port in southern Iraq from August to December 2003.[41]

In 2004, Valero received a subpoena to give documents to the Iraq Food for Oil enquiry, investigating alleged improprieties in the programme.[42]

Property Assessment Challenges

Valero has a track record of aggressively pursuing property assessment lawsuits as a way of recovering money spent on property taxes. In 2006 Valero filed 150 lawsuits against 42 appraisal districts in 85 Texas courts.[43]

CEO Pay

Valero has come under sustained criticism for paying excessive CEO salaries. The total figure received by CEO’s is often (deliberately made) difficult to calculate, as it can include basic salaries, bonuses, stocks and options and various other forms of compensation and calculations of stock values.

According to Forbes magazine, William R Klesse, who has been CEO of Valero Energy for five years, received total compensation of $8.07 million in 2011 and a total five year compensation of $53.39 million.[44]

Figures quoted elsewhere claim that, according to the company’s proxy, William R Klesse received $15 million in 2007: salary, $1.5 million; bonus, $3.7 million; stock awards, $5.5 million; options, $3 million; deferred pay of $1.1 million, plus other pay of $117,110.[45]

The Institute of Policy Studies quote a figure for previous CEO William Greehey’s total compensation in 2005 as $95.2 million, adding that it would take the average energy company construction worker 4,279 years to equal what Greehey collected in a year.[46]

References
[1]www.bloomberg.com/news/2012-01-21/use-of-corn-for-fuel-in-u-s-is-increasing-prices-globally-fao-chief-says.html
[2]www.businessgreen.com/bg/news/1937195/valero-pumps-usd50m-wood-biofuel-plant
[3] http://data.rtknet.org/tox100/2010/index.php?search=yes&company1=25149&chemfac=chem&advbasic=bas&sortp=airrel
[4]www.peri.umass.edu/toxic_index/
[5]http://contractormisconduct.org/ass/contractors/94/cases/931/1226/valero-marketing-and-supply-greenwich-township_pr.pdf
[6]www.justice.gov/opa/pr/2007/August/07_enrd_626.html
[7]www.chron.com/news/article/Refiner-Valero-to-make-environmental-upgrades-1563672.php
[8]www.nj.gov/dep/newsrel/2005/05_0043.htm
[9]www.crocodyl.org/wiki/valero_energy
[10]www.valero.com/Financial%20Documents/Form%2010-K%202006.pdf
[11]www.businesswire.com/news/home/20080508005464/en/Water-Contamination-Suit-Results-Historic-Settlement
[12]http://yosemite.epa.gov/opa/admpress.nsf/dc57b08b5acd42bc852573c90044a9c4/b4a9cb157a51ec7d85257464007354dd!OpenDocument
[13]www.nj.gov/dep/newsrel/2006/06_0001.htm
[14]www.jerebeasleyreport.com/2008/12/valero-settles-one-wrongful-death-lawsuit/
[15]http://contractormisconduct.org/index.cfm/1,73,222,html?CaseID=618

[16]http://blog.chron.com/newswatchenergy/2010/06/valero-sells-delaware-city-refinery/
[17]www.chron.com/CDA/archives/archive.mpl/2006_4204272/valero-leak-prompts-evacuation-sulfur-dioxide-gas.html
[18]www.csb.gov/investigations/detail.aspx?SID=12
[19]www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=NEWS_RELEASES&p_id=15083
[20]www.ftc.gov/opa/2001/12/valero.shtm
[21]http://knowmore.org/wiki/index.php?title=To_the_Victors_Go_the_Spoils_of_War
[22]http://agonist.org/20060303/valero_subpoenaed_for_records_in_iraq_oil_for_food_program
[23]www.crocodyl.org/wiki/valero_energy
[24]www.forbes.com/lists/2011/12/ceo-compensation-11_William-R-Klesse_ZJO9.html
[25]http://blog.mysanantonio.com/clockingin/2008/03/valeros-ceo-earned-15-million-in-2007/
[26]http://economiajusta.org/files/pdf/ExecutiveExcess2006.pdf

CORPORATE CRIMES

•Biofuels
•Environmental Racism
•Air Pollution
• Water Pollution
• Safety and Wrongful Deaths
• Anti-Competition
• Iraq
• Property Assessment Challenges
• CEO Pay

Biofuels

Environmental Racism

According to the Political Economy Research Institute, 59% of people exposed to Valero’s air pollutants, including ammonia, sulfuric acid, and benzene, are minorities. [23]

Air Pollution

In its relatively brief history, Valero has received huge fines on numerous occasions for violations of air pollution legislation. These are some the most significant incidents:

Water Pollution

Safety and Wrongful Deaths

According to the Federal Contractor Misconduct database, it was reported that the case brought by the family of John Ferguson was settled in 2010 for an undisclosed amount.[35]

See here for a chronology of problems at the Delaware Refinery (Source: Wilmington News Journal, 11/7/05):

-March 2005: State regulators warn refinery managers about concerns over leaks, fires and risk of catastrophe.

-January 2005: 12,500 pound propane leak.

-September 2004: 20,000 and 9,000 pound butane leaks.

-February 2004: 11,000 pound propylene/butane leak.

-March 2002-August 2003: Excessive releases of carbon monoxide and other pollutants. (237,500 fine by Delaware).

-July 17, 2001: Explosion and fire in a sulfuric acid tank kills one man, cripples several others and releases more than one million gallons of gasoline-laced acid.

-April 2001: State regulators file criminal pollution charge accusing refinery managers of twice neglecting caustic chemical leaks that damaged the environment.

-May 2000: Worker burned by pipe failure.

-December 1997: Four workers injured when a tank explosion splashes them with a caustic chemical.

Valero has been involved in numerous other safety incidents and lawsuits, including:

-An accident involving the release of sulfur dioxide at Valero’s refinery in east Houston in 2006, sending 28 workers to hospital for treatment of respiratory complaints.[37]

Anti-Competition

Iraq

In 2004, Valero received a subpoena to give documents to the Iraq Food for Oil enquiry, investigating alleged improprieties in the programme.[42]

Property Assessment Challenges

CEO Pay

CORPORATE CRIMES

•Biofuels
•Environmental Racism
•Air Pollution
• Water Pollution
• Safety and Wrongful Deaths
• Anti-Competition
• Iraq
• Property Assessment Challenges
• CEO Pay

Biofuels

Environmental Racism

According to the Political Economy Research Institute, 59% of people exposed to Valero’s air pollutants, including ammonia, sulfuric acid, and benzene, are minorities. [23]

Air Pollution

In its relatively brief history, Valero has received huge fines on numerous occasions for violations of air pollution legislation. These are some the most significant incidents:

Water Pollution

Safety and Wrongful Deaths

According to the Federal Contractor Misconduct database, it was reported that the case brought by the family of John Ferguson was settled in 2010 for an undisclosed amount.[35]

See here for a chronology of problems at the Delaware Refinery (Source: Wilmington News Journal, 11/7/05):

-March 2005: State regulators warn refinery managers about concerns over leaks, fires and risk of catastrophe.

-January 2005: 12,500 pound propane leak.

-September 2004: 20,000 and 9,000 pound butane leaks.

-February 2004: 11,000 pound propylene/butane leak.

-March 2002-August 2003: Excessive releases of carbon monoxide and other pollutants. (237,500 fine by Delaware).

-July 17, 2001: Explosion and fire in a sulfuric acid tank kills one man, cripples several others and releases more than one million gallons of gasoline-laced acid.

-April 2001: State regulators file criminal pollution charge accusing refinery managers of twice neglecting caustic chemical leaks that damaged the environment.

-May 2000: Worker burned by pipe failure.

-December 1997: Four workers injured when a tank explosion splashes them with a caustic chemical.

Valero has been involved in numerous other safety incidents and lawsuits, including:

-An accident involving the release of sulfur dioxide at Valero’s refinery in east Houston in 2006, sending 28 workers to hospital for treatment of respiratory complaints.[37]

Anti-Competition

Iraq

In 2004, Valero received a subpoena to give documents to the Iraq Food for Oil enquiry, investigating alleged improprieties in the programme.[42]

Property Assessment Challenges

CEO Pay

INFLUENCE AND LOBBYING

Prop 23
Californian Low Carbon Fuel Standard
Climate denial

Valero has a history of using its wealth to influence political candidates and policy making. Since 1999 Valero has spent almost $2.9 million on congressional and political candidate donations, with 83% going to the Republican Party.[1]

Valero’s political action committee spent $2.3 million on the 2010 election cycle.[2]
Prop 23

Proposition 23 was a 2010 ballot measure which would have suspended AB 32, the “Global Warming Act of 2006”, Californian state legislation aimed at reducing greenhouse gas emissions. If passed, Prop 23 would have blocked provisions of AB 32 unless certain conditions about California’s unemployment rate were met. Under the proposed legislation AB 32 would only take effect if unemployment dropped to 5.5% or below for four consecutive quarters. Critics of the proposal said that this would effectively defeat the Global Warming Act as California’s unemployment rate, which is currently around 11%, has only been at 5.5% or below for four consecutive quarters three times since 1980.[3]

In the end the proposition was defeated, with 61.6% voting against and 38.4% in favour, but in the run up to the vote fierce campaigns were fought by both sides with supporters dubbing the legislation the ‘California Jobs Initiative’ while opponents called it the ‘Dirty Energy Proposition’.

Valero was by far the largest single donor to the campaign pushing Proposition 23. By August 2010 it had provided over $4 million dollars of the $10.6 million cost of the campaign. The next highest donor was Tesoro, another refiner and marketer of petroleum products, giving $1.5 million.[4]

Valero’s generous donations to the campaign were intended to prevent the Californian Low Carbon Fuel Standard from being introduced (see below).
Californian Low Carbon Fuel Standard

The LCFS is a regulatory measure designed, in accordance with the Global Warming Solutions Act of 2006, by California Air Resources Board (CARB). It’s aim is to substantially reduce greenhouse gas emissions from the state’s transportation sector by requiring oil refineries and distributors to ensure that the fuel they sell in the Californian market meets carbon intensity (CI) targets. The CI targets, measured in CO2 equivalent per unit of fuel energy, include not only tailpipe (exhaust) emissions but also all other associated emissions from production, distribution and use of transport fuels within the state. The LCFS directive calls for a reduction of at least 10 percent in the carbon intensity of California’s transportation fuels by 2020.[5]

Valero has interests in preventing the Low Carbon Fuel Standard from coming into effect as both it’s bio-ethanol plants and refineries would be impacted by CI standards, creating substantial costs. On the refining side, Valero would be particularly exposed as it already receives tar sands from Alberta, where it has several plants, and has plans to take on significantly more, especially if the Keystone XL pipeline goes ahead (see Operations and Strategy for more details).

The LCFS is currently locked in a legal battle, with a federal judge in Fresno, California, ruling on 29 Dec 2011, that CARB cannot enforce the measure until an outstanding lawsuit by the oil industry and ethanol advocates is resolved in 2013. The ruling follows lawsuits brought by the ethanol industry, big agriculture, and the National Petrochemical & Refiners Association, where Valero CEO Bill Klesse served as chairman between 2009 and 2011. CARB responded, saying that they would appeal the ruling.[6]

The LCFS has recently come under further attack from ethanol and agriculture groups, with attempts to force an injunction against it in March 2012.[7] Seven states have also filed challenges. [8]

A similar piece of legislation is currently being debated in Europe. The EU Fuel Quality Directive could also harm Valero’s commercial interests, as any CI standards would impact on its plans to import tar-sands oil to the UK via its newly acquired Pembroke refinery in Wales (see Operations and Strategy)
Climate Denial

Responding to emails encouraging him to stop attacks on Californian climate change legislation, Valero CEO, Bil Klesse, claimed that CO2 was not a pollutant, a common strategy among climate deniers.[9]

In addition Valero donated $147,895 to Rick Perry’s Republican leadership campaign, who made climate denial a central theme of his campaign strategy.[10]

References
[1]http://dirtyenergymoney.com/view.php?type=search&com=5727
[2]www.opensecrets.org/pacs/lookup2.php?cycle=2010&strID=C00109546
[3][www.nationaljournal.com/columns/political-connections/california-s-new-energy-divide-20100703]

[4]www.ballotpedia.org/wiki/index.php/California_Proposition_23_%282010%29
[5]www.arb.ca.gov/fuels/lcfs/lcfs.htm
[6]www.greencarcongress.com/2011/12/lcfs-20111231.html
[7]http://domesticfuel.com/2012/03/03/ethanol-groups-order-injunction-on-california-lcfs/
[8]www.sacbee.com/2012/03/12/4331456/7-states-oppose-california-low.html
[9]http://act.credoaction.com/boycottvalero/email_exchange.html
[10]http://thinkprogress.org/green/2011/08/15/295888/rick-perry-is-big-oils-11-million-man/?mobile=nc

LINKS, CONTACTS AND RESOURCES

Valero Website: www.valero.com

Boycott Valero campaign: act.credoaction.com/boycottvalero/

Stop Keystone XL campaign: www.tarsandsaction.org/

UK Tar Sands Network: www.no-tar-sands.org

Indigenous Environment Network: www.ienearth.org