Repost of the DeSmog Blog Feb 23 newsletter
[Editor: Once again, I highly recommend the DeSmog newsletter. Excellent coverage of climate news. See below for most recent email, and sign up at right on their front page. – R.S.]
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Category Archives: Trump administration
Analysis: 2018 was better for Valero than 2017 (if you don’t count Trump’s billion dollar 2017 tax gift)
Repost from Seeking Alpha
[Significant quote: “Valero Energy’s operating income climbed up to $4.7 billion in 2018 from $3.7 billion in 2017. However, due to a $0.9 billion income tax benefit in 2017 versus a $0.9 billion income tax expense in 2018, it appears that the firm’s income generation materially weakened…which isn’t really the case.” Update: “Valero Keeps Gushing Profits And A 4%+ Dividend Yield.” For more check out this phone transcript Listening in: Valero on recent earnings, then Q&A with investors. – R.S.]
Valero Energy Posts A Tremendous 2018
By Callum Turcan, Feb. 3, 2019 8:06 AM ETSummary
Valero Energy Corporation performed very well in 2018.
Management is committed to rewarding shareholders via buybacks and dividend increases.
Covering the financial and operational performance of Valero Energy’s three main divisions.
Refining giant Valero Energy Corporation (NYSE:VLO) just reported its earnings for the fourth quarter of 2018 that won over some love from Wall Street. Both its earnings and revenue generation beat expectations, which is always a good sign. As of this writing, Valero yields 4.2%, as management boosted the firm’s quarterly payout by 13% in January 2019. This is on top of rewarding investors through $1.7 billion in share buybacks and $1.4 billion in dividend payments last year. Let’s dig in.
Strong refining margins carry the firm higher
Valero Energy’s operating income climbed up to $4.7 billion in 2018 from $3.7 billion in 2017. However, due to a $0.9 billion income tax benefit in 2017 versus a $0.9 billion income tax expense in 2018, it appears that the firm’s income generation materially weakened last year, which isn’t really the case. From 2017 to 2018, Valero Energy’s net income attributable to stockholders fell from $4.1 billion to $3.1 billion. A 4% reduction in its outstanding diluted share count helped offset some of the pain as its EPS dropped from $9.16 to $7.29 on a fully-diluted basis.
When comparing the performance of its refining division on a year-over-year basis, it is clear Valero Energy did quite well in 2018. Its average total throughput volumes for the year climbed by 2% to 2,986,000 bpd, which lifted its product yield by 2% to 3,025,000 bpd.
On top of higher throughput volumes, Valero’s refining margin grew by 10% year-over-year to $10.05 per barrel in 2018. Refining margin means the crack spread Valero received, the difference between its feedstock costs and the price received for its petroleum product production. Strong crack spreads ultimately enabled its refining division’s adjusted operating income per barrel of throughput (the amount of income generated per refined barrel after taking crack spreads and operating expenses into account) to grow by 22% year-over-year to $4.58 per barrel in 2018.
Trump shielded Big Oil from government shutdown effects
Repost from the San Jose Mercury News
Administration brought back furloughed employees to plan for radically expanding offshore oil and gas drilling
By MARY CREASMAN, January 27, 2019 at 7:15 am, updated January 28, 2019 at 4:16 am
President Trump’s government shutdown held our communities hostage over a racist and environmentally destructive border wall.
Hundreds of thousands of federal workers were forced to go without paychecks while the bills piled up. (How long could you go without a paycheck?) Our national parks suffered what could be permanent damage. Public health protections and safeguards against pollution were put on hold.
But one industry continued with business as usual — oil and gas.
During the shutdown, Acting Interior Secretary and former oil lobbyist David Bernhardt brought back furloughed employees to continue working on plans to radically expand offshore oil and gas drilling.
Leasing our oceans to polluters is apparently an “essential” function for this administration. As drafted, the plans would open nearly all of our nation’s coasts to oil and gas drilling, including California’s shoreline — where there have been no federal lease sales since 1984.
The offshore drilling expansion itself is unacceptable, but the fact that the Trump administration prioritized work on it during the shutdown is a slap in the face to the furloughed federal employees and all Californians who care about our beaches and healthy oceans.
And the Interior Department’s efforts to advance offshore drilling wasn’t Trump’s only effort to keep the oil and gas industry happy despite the shutdown.
While thousands of other government employees were furloughed, the Trump administration was quietly moving ahead with its efforts to advance drilling in the Arctic National Wildlife Refuge and the Western Arctic region of Alaska.
Similarly, even as national parks remained largely unstaffed, the Bureau of Land Management, an agency in the Interior Department, moved forward on 22 new drilling permit applications on public lands in Alaska, North Dakota, New Mexico and Oklahoma.
This blatant catering to the oil industry is unprecedented. The shutdown was so good for Big Oil that the head of the American Petroleum Institute — the oil industry’s main trade association — admitted they “have not seen any major effects of the shutdown on our industry.”
That statement contrasts deeply with the harm imposed elsewhere by the shutdown. Here in California, communities suffering from drinking water contamination had to wait for the EPA to reopen for action on toxic chemicals.
Overflowing trash bins and toilets, permanent vandalism and destruction left lasting damage on our national parks, and these places had to rely on volunteers to fill the gaps while federal workers and contractors were forced off the job. Joshua Tree National Park, for example, saw visitors chopping down iconic Joshua trees, illegal off-roading and graffiti — and the Park Service didn’t have staff to investigate.
These misplaced priorities should not come as a surprise given the Trump administration’s efforts, from Day 1, to sell our public lands and waters to Big Oil and other corporate polluters. The administration is stacked with industry executives focused on profits over people.
Our environment and our communities deserved better than the needless damage inflicted by the Trump shutdown. Thankfully, we have representatives in Congress who will fight to protect our coast.
Reps. Jared Huffman, D-San Rafael, and Salud Carbajal, D-Santa Barbara, have introduced legislation that would preserve California’s coast from the Trump administration’s drilling expansion. And California voters decisively sent a bold and pro-environment freshman class to the House of Representatives to stand up to Trump’s toxic agenda.
The Trump administration is shameless about its agenda to ruin our environment and poison our families, all to ensure more corporate profits. But California is paying attention, and we won’t let it happen.
Mary Creasman is CEO of the California League of Conservation Voters.AP: Trump administration miscalculated benefit of better train brakes
Repost from The Associated Press
APNewsBreak: US miscalculated benefit of better train brakes
By Matthew Brown, December 20, 2018
BILLINGS, Mont. (AP) — President Donald Trump’s administration miscalculated the potential benefits of putting better brakes on trains that haul explosive fuels when it scrapped an Obama-era rule over cost concerns, The Associated Press has found.
A government analysis used to justify the cancellation omitted up to $117 million in estimated future damages from train derailments that could be avoided by using electronic brakes. Revelation of the error stoked renewed criticism Thursday from the rule’s supporters, who called the analysis biased.
Department of Transportation officials acknowledged the mistake after it was discovered by the AP during a review of federal documents. They said a correction will be published to the federal register.
But transportation spokesman Bobby Fraser said the decision not to require the brakes would stand under a Congressional act that said the costs couldn’t exceed the rule’s benefits.
“This was an unintentional error,” Fraser. “With the correction, in all scenarios costs still outweigh benefits.”
Safety advocates, transportation union leaders and Democratic lawmakers oppose the administration’s decision to kill the brake rule, which was included in a package of rail safety measures enacted in 2015 under President Barack Obama following dozens of accidents by trains hauling oil and ethanol in the U.S. and Canada.
The deadliest happened in Canada in 2013, when an unattended train carrying crude oil rolled down an incline, came off the tracks in the town of Lac-Megantic and exploded into a massive ball of fire, killing 47 people and obliterating much of the Quebec community’s downtown.
There have been other fiery crashes and fuel spills in Alabama, Oregon, Montana, Virginia, West Virginia, North Dakota, Illinois and elsewhere.
Oregon Sen. Jeff Merkley said the administration should reconsider the brake rule in light of its miscalculation.
“The omission of $117 million from the rule’s anticipated benefits is further proof that the Trump administration is willing to cut corners to put industry profits ahead of the American people’s safety,” said Merkley, a Democrat. He called for “a new cost-benefit analysis that is full and transparent.”
After the brake rule was enacted, lobbyists for the railroad and oil industries pushed to cancel it, citing the high cost of installing so-called electronic pneumatic brakes and questioning their effectiveness.
But supporters of the brakes said the issue should be reconsidered given the miscalculation and concerns about other benefits that may have been ignored, including reducing the frequency of runaway trains and severity of train-on-train collisions, said Robert Duff, a senior adviser to Washington Gov. Jay Inslee, a Democrat.
“This is not theoretical risk. We’ve actually seen these derailments,” Duff said.
Unlike other systems where brakes are applied sequentially along the length of a train, electronic pneumatic brakes, or ECP, work on all cars simultaneously. That can reduce the distance and time a train needs to stop and cause fewer cars to derail.
“These ECP brakes are very important for oil trains,” said Steven Ditmeyer, a rail safety expert and former senior official at the Federal Railroad Administration. “It makes a great deal of sense: All the brakes get applied immediately, and there would be fewer cars in the pileup.”
Under Obama, the Transportation Department determined the brakes would cost up to $664 million over 20 years and save between $470 million and $1.1 billion from accidents that would be avoided.
The Trump administration reduced the range of benefits to between $131 million and $374 million.
Transportation Department economists said in their analysis that the change was prompted in part by a reduction in oil train traffic in recent years. Even as ethanol shipments on U.S. railroads have continued to grow, reaching about 500,000 carloads annually, crude shipments peaked in 2014 and fell to about 200,000 carloads last year.
But in making their cost-benefit calculations, government economists left out the most common type of derailments in which spilled and burning fuel causes property damage but no mass casualties, the AP found. Equipping fuel trains with electronic brakes would reduce damages from those derailments by an estimated $48 million to $117 million, according to Department of Transportation estimates that were left out of the administration’s final tally.
Including the omitted benefits reduces the net cost of the requirement to as low as $63 million under one scenario laid out by the agency. Other scenarios put the net cost at more than $200 million.
Transportation spokesman Fraser said that would not have changed September’s decision to cancel the electronic brake requirement because of the cost.
The Association of American Railroads declined comment on the agency’s cost benefit calculations. Spokeswoman Jessica Kahanek said the move to rescind the Obama rule was in line with the requirements set forth by Congress, which passed a 2015 measure saying the Department of Transportation must repeal the braking requirement if expected costs exceed benefits.
The biggest share of oil now moved by rail goes from the Bakken oil patch of North Dakota and Montana to the West Coast, where fears of an accident were realized two years ago when 16 tank cars carrying Bakken oil derailed, igniting a fire that burned for 14 hours along the banks of the Columbia River near Mosier, Oregon.
The accident was caused by track problems. An investigation by the Federal Railroad Administration concluded electronic brakes would have made it less severe.
John Risch, national legislative director for the International Association of Sheet Metal, Air, Rail and Transportation Workers, said electronic brakes also would have prevented the deaths at Lac-Megantic.
He added that the omission of benefits from the government’s findings further tilted a study that was otherwise flawed.
“It flies in the face of earlier, much more comprehensive studies,” Risch said. “We are using a 120-year-old technology with mechanical brakes. They’ve come to the peak of what you can do with them.”