Valero Oil Memo to employees

The Valero Oil Company memo was sent in January in response to President Obama’s
denial of the Keystone Pipeline permit. The copy of the memo was introduced by
the note which precedes it.

 

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 pipeline.

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

Energy Resources