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  • Valero Hits Back at 'Misleading' Report on Keystone Pipeline

    The renewable energy advocacy group Oil Change International released a report on Wednesday claiming that oil from Canadian tar sands imported to the United States through the proposed Keystone XL pipeline “would primarily be exported rather than used domestically in the U.S,” Politico reported.

    The report specifically and repeatedly cited Texas oil company Valero as emblematic of that strategy. Valero “has locked in at least 20 percent of the pipeline’s capacity,” the report claims. It insists that the company will use its new supplies of Canadian crude to bolster its exports, rather supplement American energy use.

    The report counters recent efforts to present the pipeline as a means to draw business away from oil rich Middle Eastern regimes that often work against American interests abroad.

    Whether the company will export the oil and whether it will reduce the industry’s dependence on OPEC, though, are two different questions. Some of Valero’s largest export markets are in South America and Europe. If those markets can replace OPEC crude with oil from Canadian tar sands, Middle Eastern oil exporters will still enjoy a smaller share of the global market.

    Bill Day, Valero’s executive director for media relations, objected to the report’s conclusions regarding the company’s export strategy in an email to the Heritage Foundation on Wednesday. Day called the report “misleading” and offered this reply, which also addresses other claims made in the Oil Change International report:

    While Valero has said that it is exporting an increasing amount of products, particularly from the Gulf Coast, the volume of exports remains relatively small. The vast bulk of our products are made for domestic consumption.

    I also take issue with the statement that “…rather than serving U.S. interests, Keystone XL serves only the interests of tar sands producers and shippers, and a few Gulf Coast refiners aiming to export the oil.”  In fact, the Keystone will generate 20,000 jobs, increase property values and generate tax revenue that will directly benefit hard-hit cities, counties, school districts, etc.

    The Canadian oil from the XL pipeline would supplement supplies of less-expensive heavy sour crudes. The pipeline would provide a steady supply of oil from a nearby and friendly trading partner, in a manner that is more efficient than bringing cargoes of oil in by ship. The Oil Change International report fails to mention that Valero is rapidly increasing the amount of Texas oil it processes at our McKee and Three Rivers refineries, and that we recently opened a pipeline to our Ardmore, Okla. refinery in order to process domestically produced oil stored at Cushing.

    Lastly, I dispute the statement that Valero was “behind last year’s attempt to overturn California’s clean fuel standards.” As the operator of two refineries in California, Valero was among the supporters of Proposition 23, which would have postponed implementation of California’s carbon dioxide cap-and-trade regime until the economy improved in that state. Prop 23 had nothing to do with clean fuel standards.

    Posted in Energy, Featured, Scribe [slideshow_deploy]

    7 Responses to Valero Hits Back at 'Misleading' Report on Keystone Pipeline

    1. John f says:

      Thank You Valero for taking a stand and setting the record straight. Sometimes I wonder who is funding these hypocrites . Those who scream "energy indepence" from one side of their mouth and condemn drilling from the other side.

    2. Joe Ruffino says:

      There are also those saying that rich farm lands will be put in jeopardy when pipe lines break or whatever. It will also go right through valuable residential areas and also place clean waters in jeopardy. This is what Daryl Hanna said appearing on one of the major networks yesterday. Can Valero comment on the accusations.

      • hdmtnryder says:

        Ridiculous. Daryl is an empty headed blonde with a samurai sword, not an engineer. How anyone can place their trust in an actress is beyond me. I wonder if you are aware that there are 12,000 miles of oil and gas pipelines already operating in the lower 48?

    3. Chris says:

      Why export any of the crude? I think all crude flowing through the pipeline should stay in the US and replace foreign imported oil. That would be good for the company and the country since tax dollars would be generated and stay in the US. Also, it would be cheaper for the company since they would not have to pay transportation costs to foreign markets. Let Europe get their oil from the middle East. It would be cheaper for them too since transportation costs would be less.

      • wet_eagle says:

        Tax dollars are the same either way. And the company doesn't pay the transportation costs – the buyer does.

        • Ben says:

          Wrong. Valero won't pay any taxes on the crude it exports b/c their Port Arthur refinery is in a Foreign Trade Zone.

    4. Hermann says:

      If you import crude at one price, refine the product here and sell it for export where prices are higher
      than in the US you help the trade balance which is in shambles anyway. The profit and the jobs stay
      in the US and taxes are paid on these in the US.
      The negative trade balance we have lowers the value of the dollar and, therefore, makes all
      imports higher in price.
      A good part of the higher prices at the pump are due to the weak dollar and you will find the
      same result in the grocery store.

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