Category Archives: West Coast refineries

Listening in: Valero on recent earnings, then Q&A with investors

Repost from The Motley Fool
[Valero’s profits continue at massive levels, although not as high as in 2017 when the Republicans gave corporations unheard-of tax windfalls.  I have  highlighted  the only reference to west coast production.  Of special interest: search this long transcript for the 9 references to “exports” and the 18 references to “rail.”  – R.S.]

Valero Energy Corp (VLO) Q4 2018 Earnings Conference Call Transcript

VLO earnings call for the period ending December 28, 2018.
By Motley Fool Transcribers, Jan 31, 2019 at 4:36PM
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IMAGE SOURCE: THE MOTLEY FOOL.

Valero Energy Corp  (NYSE:VLO)
Q4 2018 Earnings Conference Call
Jan. 31, 2019, 10:00 a.m. ET

Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator

Good day, ladies and gentlemen, and welcome to the Valero Energy Corporation’s Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, there will be a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the conference over to Homer Bhullar, Vice President of Investor Relations. Sir, you may begin.

Homer Bhullar — Vice President, Investor Relations

Good morning, and welcome to Valero Energy Corporation’s fourth quarter 2018 earnings conference call. With me today are Joe Gorder, our Chairman, President and Chief Executive Officer; Donna Titzman, our Executive Vice President and CFO; Lane Riggs, our Executive Vice President and COO; Jason Fraser, our Executive Vice President and General Counsel and several other members of Valero Senior Management team.

If you have not received the earnings release and would like a copy, you can find one on our website at valero.com. Also attached to the earnings release are tables that provide additional financial information on our business segments. If you have any questions after reviewing these tables, please feel free to contact our Investor Relations team after the call.

I would like to direct your attention to the forward-looking statement disclaimer contained in the press release. In summary, it says that statements in the press release and on this conference call that state the company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the Safe Harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we’ve described in our filings with the SEC.

Now I’ll turn the call over to Joe for opening remarks.

Joseph W. Gorder — Chairman, President and Chief Executive Officer

Thanks, Homer, and good morning, everyone. We are pleased to report that we completed another good quarter where we ran our business well and delivered solid financial results. Throughout the quarter, we maintained our unrelenting focus on operations excellence, which enabled us to operate safely and reliably in an environmentally responsible manner.

We also delivered on our commitment to invest in growth projects and acquisitions that increase Valero’s earnings capability, while maintaining solid returns to our stockholders. In 2018, we matched our 2017 record for process safety performance, and we continued to outperform the industry on our personnel injury rates.

For logistics investments we made over the last several years are contributing significantly to earnings. Our investments in Line 9B, the Diamond Pipeline and the Sunrise Pipeline expansion increased our systems flexibility, allowing us to take advantage of the opportunities available in the fourth quarter of 2018. In fact, we set a record for total light crude runs at 1.5 million barrels per day and a record for North American light crudes process at over 1.3 million barrels per day.

We also continued to maximize product exports into higher netback markets in Latin America. Turning to capital allocation, we continued to execute according to our disciplined framework. Our projects in execution remain on track. Construction is scheduled to finish on the Houston alkylation unit in the second quarter and the Central Texas pipelines and terminals are expected to be completed in mid 2019. Continue reading Listening in: Valero on recent earnings, then Q&A with investors

    Final decision on Tesoro’s Washington railport pushed to 2016

    Repost from Reuters  

    Final decision on Tesoro’s Washington railport pushed to 2016

    By Kristen Hays, June 26, 2015

    HOUSTON – The latest delay in a detailed government review of Tesoro Corp’s proposed $210 million railport project in Washington state means a final decision will not happen until 2016, according to a state council’s published schedule.

    The 360,000 barrels-per-day project would be the biggest in the United States, moving domestic and Canadian crude via rail to Washington’s Port of Vancouver, where it would be loaded onto vessels to supply West Coast refineries – mainly in California.

    The company had hoped to start it up by late 2014, and then pushed it to this year as the project undergoes a lengthy state review.

    Several other oil-by-rail projects, largely in California, are stalled amid opposition after multiple crude train crashes and derailments since mid-2013.

    Tesoro said the company was disappointed in “yet another delay” and remains committed to the project.

    Chief Executive Greg Goff told analysts last month that the delay to 2016 was likely as the project undergoes what he called a “painfully slow” review process.

    The projected cost also has more than doubled to $210 million from its original $100 million as Tesoro upgraded the design, including seismic dock improvements.

    Washington’s Energy Facility Site Evaluation Council (EFSEC)’s schedule, made public this week, says a draft environmental impact statement will be published in late November. The council had previously expected to release the draft report in late July.

    State law then requires a month-long public comment period which can be lengthened.

    EFSEC then will submit the final report to Gov. Jay Inslee, who has final say on whether it will be built. The new schedule, and the public comment session, pushes that submission to early 2016. Inslee will have up to two months to decide once he receives the report.

    Most Washington refineries, including Tesoro’s 120,000 bpd plant in Anacortes, receive oil by rail. No major pipelines move oil west across the Rocky Mountains or the Cascades, so West Coast refineries turn to rail to tap North American crudes that cost less than imports.

    (Reporting by Kristen Hays; Editing by Christian Plumb)

      New rules for crude-by-rail transport fall short

      Repost from SFGate (San Francisco Chronicle)

      New rules for crude-by-rail transport fall short

      By Lois Kazakoff on May 1, 2015 5:50 PM
      Oil imports by rail account for just about 1 percent of total shipments to California refineries, but they are rising rapidly. Above, trains at a Union Pacific yard in Bloomington, Calif.
      California moves to prevent spills of oil shipped by trains – Oil imports by rail account for just about 1 percent of total shipments to California refineries, but they are rising rapidly. Above, trains at a Union Pacific yard in Bloomington, Calif. Photo By Irfan Khan/Los Angeles Times/MCT

      The U.S. Department of Transportation unveiled new rules on transporting crude oil by rail Friday that set a timeline to get old-technology, easily punctured tank cars off U.S. and Canadian rail lines but fail to address the explosive nature of the Bakken crude that sparked the public’s concerns to begin with.

      While the new rules are a step toward safer rail transport, it is a disappointing decision for the dozens of communities the oil trains roll through on the way to West Coast refineries. The new rules get the old DOT-111 cars off the rails over the next three years, and beef up the steel gauge required to construct the new CPC-1232 cars. But the Department of Transportation itself noted nearly a decade ago that the old cars punctured in minor, low-speed collisions. The new rules should have immediately banned them rather than phasing them out.

      Most distressing is that the new rules do not set a standard for the volatility of what goes in the tank cars. Lower volatility would reduce the risk of explosions. Crude extracted from the Bakken Oil Shale is significantly more volatile than other types of petroleum — a fact the Department of Transportation has acknowledged and the public became aware of in July 2013 when a train carrying Bakken crude exploded in Lac Megantic, Ontario.

      The new rules will do little to allay the worries of residents in Davis, Martinez and Pinole, where railroad tracks crisscross streets, or in Benicia, where Valero has applied for permission to retrofit its refinery to receive crude by rail in addition to crude by tanker ship. Valero has proposed moving the oil in the CPC-1232 cars, limiting oil trains to 50 cars rather than the more standard unit of 100 cars, and reducing train speeds in town. The City of Benicia is expected to release the draft environmental impact report on the project June 30.

      Bills introduced in the House and the Senate this month would address these concerns, and more, notably requirements to notify first responders in real time when the trains are coming through. The new department rules require a railroads to provide a telephone number for first responders to call but do not require notification.

      “These rules do not go far enough in addressing the safety concerns posed by trains transporting highly volatile crude oil through the heart of our communities,” said Rep. Mike Thompson, D-St. Helena. “We need to put robust, comprehensive safety measures in place that will help make sure communities are safe, rail cars meet the strongest possible standards, and first responders are prepared in the event of an emergency. DOT’s rules do not sufficiently address these issues and so Congress should act to put safety measures in place.”

      Action in Congress this month presaged the announcement of the new less-than-adequate Department of Transportation regulations.

      Thompson’s bill, introduced April 15 and co-authored with Reps. Jim McDermott, D-Wash., Doris Matsui, D-Sacramento, and Ron Kind, D-Wis., would require volatility standards and weekly communications between first responders and railroad officials about crude oil trains.

      In the Senate, Sens. Dianne Feinstein, D-San Francisco, Ron Wyden, D-Ore., and Jeff Merkley, D-Ore., introduced legislation April 30 to protect communities from oil train accidents, focusing on communication with first responders.

      Last year saw a record 144 rail accidents in the U.S., up from just one in 2009. The volume of oil cars, however, has increased by 4000 percent since 2008.

      Rep. Thompson has it right: Congress needs to step in and demand better protections for communities on the rail lines.