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Valero Energy


Valero dominates the North American refinery business; that’s generally a profitable place to be. However, refining margins fell sharply in the third quarter of 2007 when crude prices went up more rapidly than gasoline prices. Unlike the rest of Big Oil, Valero does minimal exploration. Instead, it buys crude on the open market. The company has a strong safety record. However, it stopped releasing greenhouse-gas data in 2004 and is the only one of the top 10 companies that does not participate in the industry group American Petroleum Institute’s sourcing transparency initiative. Nor does it disclose information on other sustainability measures. Note: The company’s secrecy makes assessment very difficult.


Valero’s executives declined to be interviewed, but its strategy appears to be to sell as much oil as possible without taking into account environmental or social issues. The company stopped making public disclosures on environmental impacts in 2004, and now states that it is waiting for federal and state regulations. That said, Valero has been ranked as one of the best companies to work for by Fortune for its focus on workplace safety and employee health and compensation.


Valero discloses the least sustainability information of all Big Oil companies. The company reported no spending on renewable energy and has announced no plans to become more sustainable since it said in 2003 that it sought to reduce CO2 emissions by 1.8 million tons through reduced energy usage internally. High pay, good benefits Valero has never had a layoff and offers some of the highest compensation and best benefits in the United States in any industry. Safety Eleven of its 17 refineries have achieved “star site” status in OSHA’s prestigious Voluntary Protection Programs, a level achieved by only 23 of the 149 refineries in the country. This means Valero’s refineries have continually maintained an injury and illness rate at least 33% below the industry average. That may not last: A string of fires across Valero’s refineries in early 2007 resulted in a significant number of injuries. Low prices Valero has consistently positioned itself as a leader in keeping prices low. It is the only company to go head-to-head with ExxonMobil and Shell in California, stabilizing retail gas prices. Compensation In 2006, Valero CEO William R. Klesse made $9.9 million in total compensation (including stock awards), which is high when adjusted for revenue or market value. Transparency Valero is the most opaque of all the oil companies, releasing only information mandated by Sarbanes-Oxley or the EPA.