Environmental Stewardship

Environmental stewardship is a core value at Valero, and producing environmentally clean products is an integral part of our company’s mission statement. But our commitment goes far beyond producing clean fuels in clean facilities and distributing and selling them in a responsible fashion. At Valero, environmental excellence means providing industry-wide leadership and holding ourselves to a higher standard. The vision and dedication shared by our management team and our employees who operate our facilities on a daily basis reflects this commitment.

Over the years, Valero has made significant investments in environmental initiatives, not only to comply with increasingly stringent state and federal environmental regulations, but in voluntary environmental initiatives throughout our system. In the past few years, we have invested more than $1.2 billion in environmental capital projects, and we plan to invest approximately $1.9 billion more over the next three years. We have installed new, state-of-the-art scrubbers at six of our refineries, and are currently working to install scrubbers at four of our other refineries. The scrubbers are expected to reduce sulfur dioxide emissions by more than 93%. We have also committed to make environmental upgrades at our new Aruba refinery, including a new sulfur plant that is expected to reduce sulfur emissions by 80%.

Additionally, Valero has invested in new technology that allows us to detect equipment leaks with video cameras. This new infrared technology affords us the ability to quickly find and repair leaks of gaseous hydrocarbons, thereby reducing emissions into the environment. Finally, Valero has invested in flare-gas recovery systems at three of our facilities, and is currently reviewing the feasibility of applying this emission-reducing technology at others.

Clean Fuels
Valero has made significant investments to produce cleaner-burning fuels. Approximately $2 billion has been or will be spent in the production of cleaner burning gasoline, diesel, and ethanol-blended fuels. Our low-sulfur gasoline program, which was fully implemented in 2006, not only reduces sulfur emissions from cars but allows new automobile technology to reduce emissions of nitrogen oxide – a major ingredient of smog. Our low sulfur diesel program, which began implementation this year, will achieve similar reductions and will apply both to on-road and off-road diesel. Finally, in 2006 Valero began supplementing our gasolines with ethanol, an agricultural-based renewable fuel. Valero will utilize this environmental beneficial fuel at the percentage of our total gasoline production mandated by Congress' Renewable Fuel Standard.

As a result of our environmental leadership, Valero has received considerable recognition, including:

Recognized by five railroad companies in one year for an exemplary safety record in the shipment of materials.
In 2006, the CSX, Burlington Northern Santa Fe, Norfolk Southern, Union Pacific and Canadian National railroads honored Valero for having the best record in keeping shipments secure.
Received the Environmental Excellence Award at the 2004 Global Energy and Environmental Excellence Awards ceremony.
In 2001, Valero was honored by World Refining Magazine as the U.S. Refiner of the Year for serving as a national leader in the production of clean-burning fuels.
Valero was the first petroleum refiner ever to win the "Governor’s Award for Environmental Excellence," Texas’ highest environmental honor.
The Burlington Northern Santa Fe Railway Corporation honored Valero with a Stewardship Award for an exemplary safety record in the shipment of materials.

Greenhouse Gas Emissions Reductions
As a petroleum refiner, Valero provides reliable, affordable products to a growing population. We take seriously our responsibility to be a good neighbor and prudent environmental steward, while at the same time we are faced with the challenge of meeting the nation’s rising energy needs. Valero is committed to maintaining this balance, and has already made significant reductions in air pollutants while increasing the refining capacity at each of our refineries.

After years of research and intense public debate, climate change’s potential consequences to the global economy remain uncertain. Our knowledge of climate change indicates that climate variance has been continual throughout history and is dependant on many changing and complex factors. Further studies are necessary in order to better understand the issue but in the interim, Valero will:

Continue to review scientific, technical, and economic research on climate change and proposed response options.
Implement economic projects that improve energy efficiency, which reduce greenhouse gas emissions.
Invest in advanced technology to reduce future emissions.

Valero supports voluntary efforts to conserve energy and reduce emissions. The enactment of regulatory policy prior to a full understanding of the causal factors of climate change could damage national, regional or state economies and obstruct other environmental goals where the human health and environmental impacts are more clearly understood, such as clean fuels. If climate change policy is developed, it must be enacted at the national or international level to be effective. These regulations must also be coordinated with other government-driven environmental mandates that may run counter to addressing climate change. For instance, recent EPA mandates to meet clean fuel specifications require additional hydrotreating capacity to remove sulfur from diesel and gasoline. This mandate alone increased GHG emissions by 20-30% above pre-existing refinery levels.

Valero closely follows regulatory developments. We participate in professional and public policy forums that address climate change and its potential impacts on society and ecosystems. Through careful scientific, economic, and technical analysis, we will work with stakeholders to develop long-term measures that protect the environment while improving shareholder value.

Valero will continue to produce clean fuels for our national energy needs in safe and reliable refineries with a focus on the communities and environment around us.