Excellence Refined - 30 Years - Valero

A Company
Is Born
The story behind Valero is one unequaled in
corporate America. Named for the Mission
San Antonio de Valero – the original name
of the Alamo – Valero Energy Corporation
was created on January 1, 1980, as the corporate
successor to LoVaca Gathering Company, a subsidiary of
the Coastal States Gas Corporation. Valero is the direct
result of a settlement approved unanimously in 1978 by
the Texas Railroad Commission, the state’s natural gas
regulatory agency, which ended more than six years of
litigation brought against Coastal by its municipal gas
customers who claimed they had been overcharged for
natural gas. Virtually the entire state was affected, directly
or indirectly, by LoVaca’s situation, which became one of
the major political controversies in Texas history.
In July 1973, the Texas Railroad Commission and state
Attorney General John Hill agreed to put LoVaca under
independent management. LoVaca’s board of directors
resigned, and the 200th District Court in Austin installed
a five-member board that was allowed to choose a
new leader for the embattled company. In 1974, the
independent board offered the LoVaca presidency to
William E. Greehey, Coastal’s young Senior Vice President
of Finance, and charged him with negotiating a settlement.
He accepted, and immediately began discussions with
the cities and townships that did business with LoVaca
to try to reach a settlement on the existing contracts. In
all, nearly 400 customers were involved in the process. By
the time resolution was found in July 1978, six years and
hundreds of hours of negotiation had passed.
“It was a long, laborious process,” said Stan McLelland,
who at the time represented customers’ interests as
a 28-year-old attorney with Austin-based Baker &
Botts. “Ultimately, what helped the settlement along
was customers’ realization that if they pursued their
individual lawsuits, it would result in bankruptcy for
LoVaca and they wouldn’t get anything anyway. Some
(customers) had to be dragged kicking and screaming to
the settlement table, but eventually, they all realized it
was the right decision.” McLelland went on to work at
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