Valero Energy's HR Practices and Culture

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Background

Valero came into being as a spin-off from the Coastal States Gas Corporation (CSGA)⁴ on January 1, 1980. It took over the natural gas gathering operations of a defunct subsidiary of CSGA called LoVaca.⁵ Valero was formed as a new company separate from the parent CSGA. (This was the largest spin-off in US corporate history at that time).

Although it started off as a natural gas gathering operation, Valero soon began exploring other options in the energy sector and eventually acquired a small crude oil refinery in Corpus Christi (Texas) in 1981. Concerns about energy were at an all-time high in the US in the early 1980s after the crippling energy crisis of the 1970s. Environmental concerns and sustainability issues had also gained prominence in the 1980s. Keeping this in view, Valero positioned itself as an environmentally conscious and socially responsible oil company. It invested more that one billion dollars in the Corpus Christi refinery to make it a state-of-the art facility that produced clean burning low cost fuels.

The renovation of the Corpus Christi refinery continued until 1984, after which it was put into service. Through the 1980s and the early 1990s, Valero grew as a diversified energy company, with operations in refining, marketing, and natural gas-related services.

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4] The CSGA was originally established in 1951 by a mechanical engineer Oscar S. Wyatt, Jr., who established a small natural-gas-gathering business in Corpus Christi (Texas). In 1955, the firm became the Coastal States Gas Producing Company, engaged in collecting and distributing natural gas from the South Texas oilfields.

5] In the early 1960s, Coastal purchased the Sinclair Oil Corpus Christi refinery and pipeline network and established a subsidiary called Lo-Vaca, to gather and supply natural gas in the Texas region. When Lo-Vaca curtailed its gas supplies and raised prices during the energy crisis of the early 1970s, customers sued Coastal. Regulators ordered the subsidiary to refund $1.6 billion in 1977, and Coastal spun off Lo-Vaca as Valero Energy to finance the settlement.

6] PG&E was a utility holding company based in California. The company operated in electric utilities, hydroelectric, nuclear and fossil fuelled power plants.

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