Nobody Gets Email:
Here’s a rather interesting email I got a few weeks ago…It’s a copy of a memo written to Valero Employees…a major oil company, and their reaction to Obama’s decision to block oil production in the United States.
Brazil, on the other hand, he’s all for.
(Thanks to Tom Beebe)
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
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 administration’s 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.