Category Archives: Valero Energy Corporation

IN MEMORIAM: Benicia’s Joel Fallon: Is Crude by Rail really do or die?

Is this really adios?

[Re-posting today in memory of Joel Fallon, who died on August 11, 2016 (obituary). Joel was Benicia’s first and most beloved Poet Laureate, an inspiration to all who knew him and a thoughtful, visionary activist. Originally reposted from The Benicia Herald and here on the Benicia Independent.]

April 25, 2014 by Joel Fallon

WHAT AM I MISSING HERE? Are Benicians just kittens in a burlap sack, down by the riverside, resigned to the inevitable?

Let’s see if I’ve got this right.

(a) We’re in earthquake country (see evidence of the Green Valley fault in terrain on the way to Cordelia);

(b) We’re next to fragile wetlands (for spectacular views, click Google Maps/Benicia, hybrid setting, find rail line and follow to Sacramento);

(c) We’re contiguous with an important commercial waterway;

(d) We host an outfit whose headquarters has fought attempts to safeguard our environment (see Valero Energy Corporation’s position and funding regarding Proposition 23);

(e) A local outfit, under direction from its far-off headquarters, plans to process a dangerous, toxic product;

(f) The outfit is served by a rail system with a recent history of tank car derailment;

(g) Parts of this railroad system (built by Central Pacific RR in 1877), running through marshland to the Carquinez Strait, repeatedly sank into unstable marshy terrain, requiring hundreds of thousands of tons of rock, gravel and other materials to stabilize it;

(h) Other parts of the antique rail infrastructure seem poorly maintained and may be unsafe, e.g., the Benicia-Martinez rail bridge, built between 1928 and 1930 for Southern Pacific RR to replace the train ferry to Port Costa;

(i) Old tank cars are a problem — an area newspaper reports that BNSF railway officials told federal regulators in March of concerns that older, less robust tank cars will end up transporting crude oil because of Canadian rail pricing policies;

(j) Emergency responders are unprepared to handle spills or fires in the event of derailment of cars headed to any of five Bay Area refineries. State Sen. Jerry Hill, D-San Mateo, after listening to testimony from emergency responders, said, “There is a potential for very serious problems and very disastrous problems.” Chief of the Contra Costa Fire District is quoted saying, “… with the sheer volume that will be coming in, we are going to see more accidents.” The 2007-08 Solano County Grand Jury, after investigating the county’s fire districts, reports a general need for more funding, heavy dependence on dedicated volunteers and the preponderance of old fire trucks, while noting the high cost of HAZMAT suits and problems with communications caused by incompatible equipment and radio frequencies.     

And yet, despite this unbelievably horrific backdrop, certain elements in town warn us to hush lest Valero be forced out of the competitive (i.e., tar sands crude) market, destroying its “desire to remain in Benicia.”

Clearly, Valero Benicia Refinery cannot be faulted for all of the foregoing. Good workers deserve good jobs; they should be able to tell their grandkids they helped, rather than harmed, the environment. Valero Benicia is just one of many links in a chain of factors that could lead to the disaster so many in this community fear.

Am I “agenda driven” as charged? Bet your raggedy backside I am. My agenda involves doing homework to find threats to my home, my town, my state and my nation, and advising others of my findings (just in case they might care). If you detect it, yell “GAS” to alert the rest of the platoon; then put on your mask, while you can still breathe.

For a glimmer of the scope of Big Oil’s operations from sea to shining sea and beyond, see the astounding number of outfits similar to Valero Energy Corp. in the U.S and Canada. Find ’em in Wikipedia (“independent oil companies — Americas”). Select a company to see its history of oil spills. Wonder why the Keystone XL pipeline is planned to extend to Texas? Check out which corporations own the pipeline and the benefits associated with Foreign Trade Zones (32 FTZ in Texas compared to 17 in California, and 15 in New York).

If folks look around a bit they may discover that Big Oil, like Big Coal and other corporate behemoths, extends powerful influence throughout the land of the free and the home of the brave. Many were hoodwinked by Operation Iraqi Liberation, in which Big Oil colluded with Big Government to achieve absolute power of life and death over us and our enemy — the one with phantom WMDs and a vast, very real amount of oil.

Is this really adios, Pilgrim? — or just “I double-dog dare you”? I don’t believe it’s Valero’s style to leave town. It’s not in the corporation’s best interests and shouldn’t be its preferred option.

What are those options? They include:

Option 1. Stay put, but back away from risky tar sands crude and focus on products involving minimum environmental risk. Backing away for good business reasons is not the same as “backing down.” CVS decided to stop selling cigarettes. The firm considered it “the right thing to do for the good of our customers and our company. The sale of tobacco products is inconsistent with our purpose — helping people on their path to better health.” Barrons online says, “We think that CVS — like anyone who quits smoking — is making a good long-term decision, even if it makes things rough short-term.” Others consider it a PR coup! CVS gained the respect of millions of customers for what is perceived as a moral and ethical decision. I shop CVS more often since they made that brilliant call; so do my friends.

Backing away from tar sands crude would take similar corporate guts; but the public would be pleased with the image of a moral, ethical, highly principled corporation — a Valero that gives a damn. Sales at Valero service stations might even increase.

Option 2. Continue to pursue tar sands crude; seeking high profitability despite increased environmental risk. The downside: prices at the pump are too high. Californians are already angry; they may avoid Valero service stations and products. I’ll urge my friends to do so. Word of mouth is powerful and spreads quickly. Contempt for an outfit that doesn’t respect its customers or our environment could lead to loss of sales in the country’s most populous state. Cesar Chavez showed us boycotts work. Most folks I know didn’t buy grapes.

Option 3. “Re-purpose” Valero’s operations in Benicia (and elsewhere) to enhance instead of degrade the environment while remaining profitable. Valero is an energy outfit. Turning to alternate sources of energy is ultimately inevitable. Valero should expand its vision and not limit itself to fossil fuels. Farmers in Ireland who grew only potatoes learned about diversification too late.

(a) Pursue wind farming if feasible and profitable. A recent Mother Earth News article about mountaintop removal coal mining in Appalachia cites a 2007 study that determined placing wind turbines on Coal River Mountain would provide power to 70,000 West Virginia homes while generating $1.7 million in local taxes each year. Better than ripping off the tops of mountains and dumping enormous amounts of debris into streams and rivers.

(b) Pursue solar energy if feasible and profitable. Produce solar products for sale and/or operate a solar power facility to resell power. See an article by Don Hofmann, president of RegenEn Solar LLC, looking at mountaintop removal mining and suggesting solar power instead. He recognizes there are challenges but is optimistic about lower-cost solar cells and technology in the future. He notes that the U.S. fossil fuel industry received $72 billion in subsidies from 2002 to 2006 and asks us to imagine that kind of money put into solar development.

(c) Pursue other approaches (geothermal, tidal, et al.) if appropriate and profitable.

Option 4. Determine feasibility of combining 3a, 3b and/or 3c. If appropriate and profitable, pursue the combination.

Option 1 would be the easiest and would be enthusiastically supported by most folks in Benicia, applauded by most Californians and recognized as a principled business decision.

Option 2 is the least desirable from an environmental standpoint. While profitability is high, it may incur the contempt and wrath of the public, possibly leading to damaging boycotts and a decline in profitability.

Option 3a thru 3c may seem starry-eyed, wild and outside the box. They would require imagination, foresight and courage. It can be done. CVS is showing the way and TESLA is succeeding with electrically powered cars. Examine pluses and minuses — Valero could take a quantum leap and be regarded as an industry trailblazer. Its reputation would be enhanced. Envious competitors might scoff and want Valero to take a pratfall but ultimately they would have to follow suit.

In conclusion the priority order of Valero’s options should be:

Option 1 — Most desirable (preferred)
Option 3/4 — Most “outside the box” (defer initially, but plan for the future)
Option 2 — Least desirable (avoid).

If Valero is really in the long-term energy game, it should choose Option 1 and start thinking seriously about Option 3. If, instead, its focus is on short term — high profits while risking irreparable harm to the environment — then Option 2 is their ticket.

If Valero wants to be recognized as rich, principled, brave and famous instead of rich, unscrupulous and infamous, then it should open door No. 3 as soon as possible.

Finally: I don’t believe it is “adios” for Valero Benicia Refinery. Unfortunately, I think Valero will not choose a clean path. They will probably press on with dirty tar sands crude. After that, “¿Quien sabe?”

I don’t intend to “go gentle into that good night.” Instead I prefer to “rage against the dying of the light.”

This whole thing could be like a colonoscopy, but a lot less fun.

Joel Fallon is a Benicia resident.


The Benicia Herald’s Poetry Corner was recently dedicated to Joel Fallon…

“For Joel Fallon” by Ronna Leon

Reposted from the Benicia Herald, Poetry Corner, August 19, 2016

You called them “dead Mother poems”
and scorned their cloying sentiment, easy forgiveness.
Your poem about your Mother named her Kali.
You hungered for life – anger, difficulty, competition, sex.
You insisted that wringing a tear from a stone
was superior to opening well oiled floodgates.

 

Now you are dead and my tears come unbidden
looking at the bookshelf, pulling a stubborn weed,
eating a pastry.
“Keep smiling” you’d instruct,
but I don’t want to brush these tears away,
each glistens with memory, swells with loss.
You are in them, like it or not.Ronna Leon was Benicia’s third poet laureate from 2010 to 2012


“Hope is the Thing with Feathers (Dedicated to Joel Fallon)” by Johanna Ely

Reposted from the Benicia Herald, Poetry Corner, August 19, 2016

“Hope is the thing with feathers
that perches in the soul
and sings the tune without the words
and never stops-at all”
-Emily Dickinson

 

If such a tiny bird,
perhaps left for dead,
or suffering from an injured wing,
its feathers matted and torn,
finds refuge in your broken heart,
then reach inside yourself
and touch this living thing called Hope,
gently bind its limp and useless wing
with Love’s tattered cloth,
and press it to your shattered heart
until it heals,
until this lovely creature sings again,
then let it fly,
and nest in someone else’s heart,
the stranger,
the neighbor,
the old friend,
the one who just like you,
needs to hear its song.
Johanna Ely is Benicia’s current poet laureate

“Joel’s Passing” by Mary Susan Gast

Reposted from the Benicia Herald, Poetry Corner, August 19, 2016

“So, I may have been wrong after all – this damn cancer may indeed be the death of me.”
-Joel Fallon, in an email of June 30, 2016

He died on the morning of August 11.
That night, meteor showers dazzled the skies:
The Perseids, at their peak.
No reason to doubt that Joel hitched a ride
On that celestial glory train,
Meeting up with all the other streaming luminaries,
Fireball to fireball.

Mary Susan Gast served as Conference Minister of the Northern California Conference United Church of Christ, now retired, and is a member of Benicia’s First Tuesday Poetry Group
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Valero, other refiners spend more on U.S. clean fuel standards, look for savings through exports

Repost from Reuters
[Editor: Significant quote: “The price of credits has fuel makers like PBF Energy Inc and Valero looking to increase exports, which are not subject to the regulations, as a way to escape the costs.”  (emph. added) – RS]

Refiners on track to spend record on U.S. clean fuel standards

By Jarrett Renshaw, Aug 10, 2016 4:26pm EDT

Major refiners like Valero Energy Corp are on track to pay record amounts this year for credits to comply with U.S. renewable fuel rules, corporate filings show, a trend that hurts profits and has some looking to export more to avoid the cost.

Refiners and fuel importers are required to meet a U.S. biofuel quota of roughly 10 percent through blending products like ethanol into gasoline and diesel. If they fall short, they can buy credits generated by companies in compliance. But the cost of the credits, known as Renewable Identification Numbers (RINs), has jumped.

The rising costs have hurt a sector already struggling with huge global fuel stockpiles. The S&P 1500 index of refining and marketing companies has fallen 18 percent so far in 2016, compared with a 6.5 percent gain for the broader market.

In the first half of 2016, a collection of 10 refinery owners including Marathon Petroleum Corp, spent at least $1.1 billion buying RINs, a Reuters review of their filings showed. This puts them on track to surpass the annual record of $1.3 billion the same group spent in 2013.

Refinery executives sharply criticized the regulations during recent earnings calls, saying the burden helped bring about the weakest profits in five years.

“RINs continue to be an egregious tax on our business and have become our single largest operating expense, exceeding labor, maintenance and energy costs,” CVR Refining Chief Executive Jack Lipinski said last month.

Marathon Chief Executive Gary Heminger said on a call last month that demand for RINs are going to outpace supply and the company wanted to see renewable fuel standards eased.

Refiners without blending or retail outlets, such as Delta Air Lines and CVR, have to buy a greater percentage of RINs because they don’t create their own. Delta is part of a refiner group challenging fuel standards through the courts.

Supporters of the existing policy, including the influential corn lobby, said the regulations have produced the desired effect: more renewable fuels in the nation’s gasoline and diesel. They noted refiners can avoid the cost of RINs by investing in blending operations.

“Companies that refuse to blend more renewable fuel will end up paying a premium to other market participants, including speculators, but this is a choice,” said Emily Skor, CEO of Growth Energy, which represents ethanol producers.

ESCAPE THROUGH EXPORTS

Renewable fuel credits averaged about 78 cents apiece in the second quarter, about 25 percent above the same period a year ago, according to Oil Price Information Service data analyzed by Reuters.

Prices for the credits have rallied on more ambitious targets from U.S. regulators on the volumes of ethanol required to be blended with gasoline, traders and industry sources said.

The price of credits has fuel makers like PBF Energy Inc and Valero looking to increase exports, which are not subject to the regulations, as a way to escape the costs.

PBF Chief Executive Thomas Nimbley said on an earnings call last month that it was “very important” that they expand their refined product export operations, citing RINs as a driver.

Refiners are also lobbying to shift the responsibility of compliance from their industry to blenders and distributors who mix gasoline with ethanol for delivery to filling stations.

(Editing by Jeffrey Hodgson)
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California attorney general subpoenas oil refiners

Repost from SFGate
[Editor:  See also coverage in Bloomberg, Reuters, Wall Street Journal and Los Angeles Times.  – RS]

California attorney general subpoenas refiners on gas prices

Associated Press, Updated 2:57 pm, Friday, July 1, 2016

The California attorney general has issued subpoenas to several oil refiners to learn how they set gasoline prices, which are consistently higher in California than in most other states.

Chevron Corp., Exxon Mobil Corp., Valero Energy Corp. and Tesoro Corp. confirmed on Thursday that they have received subpoenas in recent weeks.

The attorney general is making a sweeping request for information about gasoline supplies, pricing, and maintenance shutdowns that can temporarily create shortages and increase prices, according to people familiar with the investigation. The people spoke on condition of anonymity because they were not authorized to discuss details of the subpoenas.

The requests came from Attorney General Kamala Harris, a Democrat who is running for the U.S. Senate. Kristin Ford, a spokeswoman for Harris, declined to comment on whether her office was investigating.

Chevron spokesman Braden Reddall said the company received a subpoena from the attorney general’s office and would cooperate with the investigation.

Valero received a subpoena “and we will respond accordingly,” said spokeswoman Lillian Riojas.

Spokesmen for Exxon and Tesoro also confirmed the requests for information. None of the companies would discuss the matter further.

California perennially has among the nation’s highest prices for gasoline. This week, the average for a gallon of regular was $2.90 in the state compared with the national average of $2.29, according to the AAA auto club.

Some consumer advocates have charged that refiners drive prices higher by tactics such as frequent or overly long plant shutdowns.
Refineries are routinely taken offline for maintenance, and there have been longer-lasting outages after disasters such as the explosion in February 2015 at an Exxon refinery in Torrance, near Los Angeles.

Gordon Schremp, senior fuels specialist with the California Energy Commission, said 2015 saw an “extraordinary price spike in magnitude and duration in California,” which a commission advisory committee has been investigating.

“We are aware that they were doing this,” Schremp said of the attorney general’s investigation, “because off and on they’ve talked to us about what was going on with the 2015 market, important factors that can cause spikes in the markets.”

Industry officials blame high prices on California’s stricter clean-air requirements, which they say add costs and make it more difficult to import gasoline from other states when there is a price spike.
Rebecca Adler, a spokeswoman for the American Fuel & Petrochemical Manufacturers, called the allegations in the subpoenas baseless.

“We are confident that nothing will come of this,” she said.

The group Consumer Watchdog has repeatedly called on Harris to investigate oil companies over California gas prices and welcomed news of the investigation.

“It’s great that we have a law enforcement official asking questions about both supplying the market and equitable pricing within the market,” said the group’s president, Jamie Court.

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