Move over Koch Brothers, San Antonio's Valero Energy is working overtime to stop climate-change legislation and keep the future oily
Published: January 18, 2012
"That's still an impressive number — basically, a third of shareholders said Valero should disclose that type of spending," said Sister Susan Mika of the San Antonio chapter of the Socially Responsible Investment Coalition. "The issue won't go away anytime soon."
The Nathan Cummings Foundation resolution would require Valero to reveal how much it gives to groups like the NPRA and American Petroleum Institute, which started running pro-Keystone XL pipeline advertisements in Midwestern states last week. NPR reported that approval of the pipeline is likely to become a hot issue in the states along the proposed 1,700-miles route from Canada to Port Arthur.
Valero has a reported 20 percent stake in TransCanada's Keystone XL pipeline. It plans to refine tar sands crude into gasoline and diesel at its Port Arthur facility for export to Europe and developing nations. Thanks to a state-level push in California, Valero might eventually have to disclose political spending under the proposed AB 1148, the California DISCLOSE Act. It's a state-level response to both the Citizens United ruling and the Prop 23 push behind the scenes by Tesoro, Valero, Koch Industries, and other energy interests. The act now moving through the state assembly would require the three largest funders of political advertisements to clearly identify involvement with names and logos.
Valero's business model focuses on refining oil and selling petroleum products at "corner store" fueling stations. It differs from the "big five" oil companies like BP and ExxonMobil, which supposedly have greater control over costs since they drill for oil, transport it, and market products in addition to refining.
Valero is the nation's largest independent refiner, so it has managed to compete against the big five, in part, by focusing at least one-third of its capacity on refining "heavy sour" crude. This has earned Valero criticism among environmentalists, who say the cheap and dirty crude results in greater carbon emissions and air pollution.
As heavy crude production declines in Latin America, Valero's long-term strategy looks to source heavy oil from Canada's tar sands. Processing the bitumen in Canada, transporting the heavy crude via Keystone XL, and refining the oil would require about 20 percent more carbon emissions than the refining of "light sweet" crude from, say, the Eagle Ford shale, environmentalists say.
For that reason, none other than NASA scientist-activist Jim Hansen has said the Keystone XL would be "game over" for the planet's climate, while Midwest residents and environmentalists worry a major spill would contaminate the nation's largest freshwater aquifer, the Ogallala.
President Obama put the pipeline on hold, but Republicans are working overtime to put it back into play. With the assist is Valero lobbyist Craig Felner — a former staffer in the George W. Bush White House and aide to Senator Kay Bailey Hutchison — working K-Street to the tune of $167,000 per year. "It just goes to show how the same oil industry insiders cycle through politics," said Ryan Salmon, manager of the Oil & Gas Program at Ceres, a Boston-based coalition of investors and environmental groups active on climate change and water scarcity issues.
> Email Robert Crowe