Breitling Oil and Gas Morning Podcast #191 11-14-12

The refinery business has long been the difficult stepchild of the oil industry, expensive to run,
prone to accidents and a low-margin headache for executives who preferred drilling for gushers.

But signs of the improving fortunes for the industry can be seen at Valero Energy’s Three Rivers
refinery here, about 70 miles south of San Antonio at the doorstep of a giant new shale oil field.

Five years ago the midsize operation barely eked out a return from the gasoline and diesel fuel
it produced from crude oil, and the company considered selling the plant. It was processing
increasingly expensive oil from Africa and the Middle East, and the costs were high to ship it by
tanker, unload it in a nearby port and then transport it here by a 55-mile-long pipeline. The price
of the refinery’s main power source, natural gas, was soaring too.

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