"The philosophy is flawed," Klesse told reporters following the release of Valero's third-quarter earnings statement. (Click here to view previous CSP Daily News coverage.) "The tax incentive is huge. Consumers are paying for this, and it doesn't do anything for the environment."
Klesse and his predecessor as Valero CEO, Bill Greehey, have long been very vocal in predicting that alternative fuels will not replace gasoline as a motor vehicle fuel any time soon, the report added. Several years ago, Greehey predicted that effort to increase ethanol production would lead to higher prices for food and potential food shortages, a prediction which has come true this year.
"These lower crude oil prices will also provide consumers with a clearer view of the magnitude of the subsidies that will be needed to make alternative fuels competitive," Klesse said.
But Klesse also did not close the door to the possibility of Valero investing in "second-generation" alternative fuels, but he said the company would have to see clear evidence that such an investment would pay off, something he says is not on the horizon today. "We might, and also we think it all depends on economics," he said. "We are an economically driven company here."
San Antonio-based Valero owns and operates 16 refineries throughout the United States, Canada and the Caribbean with a combined throughput capacity of approximately 3.1 million barrels per day, making it the largest refiner in North America. Valero is also one of the nation's largest retail operators with approximately 5,800 retail and branded wholesale outlets in the United States, Canada and the Caribbean under brands including Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon.
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