Valero Energy Corp. announced on Friday (11/20) that it intends to permanently shutdown its 210,000 bpd refinery in Delaware City, Delaware, “due to financial losses caused by very poor economic conditions, significant capital spending requirements and high operating costs.”

The company expects to report a pre-tax charge of approximately $1.7 billion to $1.8 billion related primarily to asset impairment, employee severance and other shutdown costs. The cash portion of the pre-tax charge is estimated at $125 million to $150 million. Valero said the current and historical financial results of the affected operations will be shown as discontinued operations in its financial statements.

History has shown time and time again that the most successful businesses in any sector recognize and adapt to change sooner than their competition. Without a doubt, the Renewable Fuel Standard represents one of the biggest changes faced by both the petroleum and the agriculture industries in their histories. This fuel standard went into effect on Sept. 1, 2007 and has changed the way business is now done. And with the impending advanced standard, known as RFS2, the most successful operators in the supply chain will need to prepare now for even more changes in the coming months and years.

Recognizing the importance of these issues, and the needs of our readers, Telvent DTN has launched a series of educational briefings on the RFS. Clayton McMartin, founder of the RINSTAR® renewable fuel registry, is our guest editor for this informative series. Hundreds of companies conduct business through RINSTAR's registry each day, representing billions of gallons of renewable fuel products every year.

U.S. petroleum deliveries in October declined from a year ago, the American Petroleum Institute reported in its Monthly Statistical Report last week, but the oil and gas industry advocate said there are ongoing signs that the U.S. economy is stabilizing and deliveries are experiencing a lesser year-to-year decline than earlier in 2009.

Domestic petroleum deliveries, a measure of demand, totaled 18.9 million bpd in October, down 4.1 percent from a year ago. The decline compares with losses in the first half of 2009 that averaged more than 6 percent.