Prop 23 Backer Says Valero, Tesoro "Are Not Oil Companies" at UCLA Forum

"They are not oil companies."

With that stunning statement -- responded to by a hearty round of laughter from the audience at hand -- California Manufacturers and Technology Association (CMTA) Vice President Dorothy Rothrock tried to defend the multi-million dollar backers of Prop 23, Valero and Tesoro, during a debate at UCLA last night on the ballot measure.

That apparently is news to all of California, as well as the companies themselves.

According to Valero's website the company describes itself as "based in San Antonio...North America's largest independent petroleum refiner and marketer."

According to Tesoro's website, the company is "an independent refiner and marketer of petroleum products."

But Rothrock's misstatements didn't end there.

Rothrock also said that Valero "hasn't made a profit" in California since 2007. Yet the company's own statements to its shareholders say otherwise.

The West Coast is Valero's most lucrative refining market as measured by margin per barrel: The company's latest quarterly SEC filings show that California and the West Coast in general (California is the largest volume with the largest portion of the refining system so it presents the greatest gross dollar but the refining margins in California are commonly shared in WA, OR, NV, AK, and HI on a dollar per barrel or cents per gallon basis) are Valero's most lucrative refining market as measured by margin per barrel, with a margin per barrel of $10.55.  That is nearly double what the company makes in the Northeast U.S. market (See p.48 http://www.valero.com/InvestorRelations/FinancialReports_Filings_Statements/Documents/VEC%202Q%202010%20Form%2010-Q%20FINAL.pdf)

• According to Valero's own briefings for investors, Valero wants the oil industry to reduce refining capacity in order to drive up prices: Company executives call the period of sky-high gas prices between 2004 and 2007 the "Golden Age" and call for a "squeeze" in capacity to hike prices again. (See pp. 7-9 in attached Valero Energy Corporation 8K, March 2, 2010.)
• $98 million from West Coast: Valero made $98 million from its West Coast refining operations between April and June of this year, according to its latest SEC filing. (See p.48 http://www.valero.com/InvestorRelations/FinancialReports_Filings_Statements/Documents/VEC%202Q%202010%20Form%2010-Q%20FINAL.pdf)
• Excessive Profits from California Markets: In the 2nd quarter of 2010 Valero reported almost 50 percent higher per gallon net revenues from selling gasoline in California than in its other U.S. market, an average of about 15 cents more per gallon. Accounting for the slightly higher refining cost in California ($6.44 per barrel vs. an average of $4.85 in other regions), Valero's net margin on California gasoline was almost twice as high as the average from other regions ($10.03 per barrel vs. $5.18). (See pages 48 and 49: http://www.valero.com/InvestorRelations/FinancialReports_Filings_Statements/Documents/VEC%202Q%202010%20Form%2010-Q%20FINAL.pdf)

On the defense all night, Rothrock also said that Valero and Tesoro hadn't attracted support of California's business community because the No on 23 campaign was "negative" and "mean-spirited."

Perhaps if CMTA -- and its faux "AB 32 Implementation Group," bogus studies it pays for by Tanton & Associates, and misleading polling -- were a little honest with voters, than the campaign could focus on facts instead of lies.

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