Excellence Refined - 30 Years - Valero

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at the end of 2009. As Valero reviews the strength and viability of all of its assets, difficult decisions are made to bring substantial cost savings and cash benefits to the company to ensure its success for the future. Embracing Ethanol Looking to the future, Klesse told shareholders that the company would willingly embrace the call for innovation and development of alternative fuels and other energy sources. In 2008 the strategy began with a new 50 megawatt wind farm (33 turbines) outside its McKee Refinery in Sunray, Texas, and grew to include even more alternative fuels investments in 2009. Valero was the first refiner to make a sizable investment in the ethanol business with its purchase of seven worldscale ethanol plants from VeraSun Energy. The move triggered a flurry of media and analyst activity, as it signaled the rapidly changing rules of energy investment. For a traditional petroleum refiner to embrace ethanol, a government-mandated blendstock for gasoline, conditions would have to be ideal. As it happened, VeraSun was in bankruptcy and looking for someone to save its operation and the hundreds of jobs that were threatened in the heartland of America. Valero won its bid for the plants on March 18, 2009, agreeing to pay $477 million – roughly 30 percent of the plants’ estimated replacement cost – for locations in Albert City, Iowa; Albion, Neb.; Aurora, S.D.; Charles City, Iowa; Fort Dodge, Iowa; Hartley, Iowa; and Welcome, Minn. A site under development in Reynolds, Ind., also was part of the deal. On February 6, 2009, company executive Gene Edwards announced a bid for the plants to employees, stressing how the deal would compliment Valero’s portfolio and provide long-term growth opportunities for shareholders. “VeraSun is one of the nation’s largest ethanol producers, but has very recently filed for bankruptcy and is selling high quality assets at a fraction of replacement cost,” Edwards told employees. “This is how Valero successfully grew its refinery portfolio, and we now have a similar opportunity with ethanol.” Valero Renewables Plant Albion, Nebraska Strategy for Success 24
Valero closed the acquisition of five of the plants on April 1, 2009, a sixth plant on April 9, 2009, and a seventh plant on May 6, 2009. In so doing, Valero became one of the nation’s largest ethanol manufacturers, producing 780 million gallons annually under a new subsidiary, Valero Renewable Fuels. The acquisition was a good business fit, with rising federal mandates to blend ethanol – a cornbased product – with gasoline. Valero quickly mobilized teams from across several departments and disciplines to the plants to have operations ready on day one – less than two weeks after the auction. Valero’s flexibility again proved profitable, and by the third quarter of 2009, the plants were running at capacity. But the investment was only the beginning. Just seven months later, Valero would make the ethanol leap again – this time investing $200 million in two former VeraSun plants in Linden, Ind. and Bloomingburg, Ohio, as well $72 million for a third plant owned by Renew Energy LLC in Jefferson, Wis. When finalized, the deals – purchased at 41 percent of replacement cost – will bring Valero’s annual production capacity to 1.1 billion gallons per year. From the McKee Wind Farm to processes that create fuel from algae and animal fat, Valero Renewables has taken the company to its farthest point yet in the alternative fuels industry – evidence that the company is constantly evaluating opportunities that bring value to the shareholder and to Valero itself. Our Company With growth as its backdrop, Valero Energy Corporation gained prominence and notoriety in an often unglamorous industry. Time and again, our company was painted as a different sort of venture – one that retained much of its small-company beliefs despite the size of its work force, refining capacity or business direction. Valero as a company continually has chosen to go its own way – with dedicated employees and a solid work ethic. It is a core belief system that has garnered recognition from the industry as well as policymakers and investors. They might question business decisions from time to time, but they do not question Valero’s strength as an ethical, experienced and socially responsible company. Our products improve people’s lives, are economical and reliable – a statement few can dispute in an era of unprecedented need. “Valero works hard for all of its stakeholders with sound business principles, planning and products that improve consumers’ lives,” Klesse told stockholders in 2009. “The jobs we provide, the taxes we pay, and the impact we have on the neighborhoods and communities around our facilities show the truly positive role we have in our society. That is our commitment.” *In December 2006, Valero completed the sale of its ownership interest in Valero GP Holdings, LLC, successfully spinning off its logistics operations (Valero L.P.) and its general partner, Valero GP Holdings. The new company was renamed NuStar Energy. 25 Valero Lines 3oth anniversary edition
Page 1 and 2: VALERO LINES EXCELLENCE REFINED INS
Page 3 and 4: Heartfelt Thanks to Our Employees W
Page 5 and 6: JULY 28, 1978: Reporters question B
Page 7 and 8: Longtime Valero refinery executive
Page 9 and 10: The original Saber refinery, near t
Page 11 and 12: By the end of its first year, Valer
Page 13 and 14: shape financially and operationally
Page 15 and 16: outreach projects and enthusiasm. T
Page 17 and 18: Barely a month later, Valero became
Page 19 and 20: Crews make a historic sign change a
Page 21 and 22: From its early roots with Ultramar
Page 23: As a leading refiner and marketer,
Page 27 and 28: AURORA WELCOME ALBERT CITY FORT DOD
Page 29 and 30: Valero San Antonio Volunteer Counci
Page 31 and 32: From the Valero Texas Open to the U
Page 33 and 34: these at-risk children do not make
Page 35 and 36: Katrina. And Port Arthur, which sec
Page 37 and 38: Leaders of several Valero refinerie
Page 39 and 40: 2004. The Ardmore Refinery followed
Page 41 and 42: In 2008, the Valero St. Charles ref
Page 43 and 44: Turbines turn in the glow of a Sunr
Page 45 and 46: Valero Family Album
Page 47 and 48: Amarillo crediT center Joined Valer
Page 49 and 50: Aruba Refinery Joined Valero in 200
Page 51 and 52: Bill Greehey Refinery Joined Valero
Page 53 and 54: Houston Refinery Joined Valero in 1
Page 55 and 56: McKee Refinery Joined Valero in 200
Page 57 and 58: Paulsboro Refinery Joined Valero in
Page 59 and 60: St. Charles Refinery Joined Valero
Page 61 and 62: Three Rivers Refinery Joined Valero
Page 63 and 64: Valero Logistics Operations Valero
Page 65 and 66: Valero Retail Joined Valero in 2000
Page 67 and 68: O R A T I O N S a family of employe
Page 69 and 70: Walter Isom RB Davis Terry Lavergne
Page 71 and 72: Michael Pantaleone Johnny Mika Davi

Excellence Refined - 30 Years - Valero

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