Suncor Buys Denver Assets from Conoco
Maui Raises Gasoline Tax By 5 Cents
Pilot to Buy Gallup Travel Center
Tesoro Hawaii to Quit Carwash Operations
California Lawmakers May Quit Driving SUVs

SUNCOR BUYS DENVER ASSETS FROM CONOCO

DENVER, CO — Suncor Energy has signed a deal to acquire the ConocoPhillips refinery in Denver, CO., as well as 43 Phillips-branded stations, fuel storage, pipeline, and distribution facilities.

The purchase price was $150 million for the ConocoPhillips assets. In addition, the company agreed to purchase existing crude and refined product inventories.

Suncor says they will hire the existing workforce of approximately 585 employees, including 300 from the branded service stations.

"Colorado is a growing, dynamic marketplace, and we're excited about expanding our business in this area," said Rick George, Suncor's president and chief executive officer, announcing the deal.

"Suncor has been looking to expand its access to strategic markets for some time and this acquisition is an excellent fit for us," continued George. "Additional refining and storage assets linked by existing pipeline to our growing oil sands production are key to effectively marketing our products into the U.S.

"This acquisition provides us with the flexibility to move our products to the Denver refinery or other customers and gives us increased control of our product from production straight through to the consumer. It also provides consumers with a new competitor in the refining and marketing industry, as well as a reliable, long-term source of crude oil."

Suncor said they plan to spend between $175 to $225 million in the next three years to upgrade the refinery to produce cleaner reformulated gasolines as well as utilize its supply of sour crude blends.

Suncor Energy Inc. is a U.S. subsidiary of Calgary, Alberta, Canada-based Suncor Energy.

MAUI RAISES GASOLINE TAX BY 5 CENTS

MAUI, HI. — The Maui County Council has enacted a five-cent-per-gallon gasoline tax increase, raising street prices for fuel on the island to an all-time high.

According to local reports, Maui gasoline prices hit $2.31 per gallon for unleaded regular gasoline after the tax increase took effect at the beginning of July.

"Most of the people, of course, they don't like it," said Alvin Makimoto, owner of Uptown Chevron in Wailuku. "It's shocking for me to be at $2.30 for regular unleaded. It's too high."

Makimoto posted signs at his station to let his customers know the price hike was due to new government taxes.

The Maui County Council approved the tax increase as part of their fiscal 2004 budget, which took effect on July 1. County taxes in Maui now total 18 cents per gallon.

PILOT TO BUY GALLUP TRAVEL CENTER

SCOTTSDALE, AZ. — Pilot Travel Centers has agreed to buy Giant Industries' Travel Center located on Interstate 40 east of Gallup, NM. The truckstop will be rebranded to the Pilot image and will be added to the Pilot Travel Center network.

As part of the deal, Pilot agreed to continue to buy fuel from the Giant Ciniza, NM., refinery to supply the truck stop.

Fred Holliger, Giant's chairman, noted that because of the supply deal the travel center will continue to "contribute incremental earnings for our refining business unit and provide Pilot with a stable long-term fuel supply."

Holliger continued, "Proceeds from the sale will be used to reduce the outstanding balance of our revolving credit facility. Upon closing of this sale, we will have generated approximately $9.2 million toward our goal of $20-$30 million from the sale of non-strategic assets by year-end and approximately $28.1 million since May 2002."

The sale of the travel center closed in June.

TESORO HAWAII TO QUIT CARWASH OPERATIONS

HONOLULU, HI. — Tesoro Hawaii Corporation has announced that it plans to outsource its carwash operations on the Hawaiian Islands.

Involved in the deal are five Tesoro stations operating carwashes.

In a filing with the state Department of Labor and Industrial Relations, Tesoro officials said that they will lay off 33 employees associated with the carwash operations.

Tesoro owns 35 gasoline stations in Hawaii as well as the Islands' largest refinery and has 602 employees in the state.

CALIFORNIA LAWMAKERS MAY QUIT DRIVING SUVS

SACRAMENTO, CA. — In an effort to increase their environmental consciousness, members of the California legislature have said they will no longer allow the state to buy Sport Utility Vehicles for the Legislature.

Members of the California Legislature are given money to buy their own vehicle for use while they are in office — and many legislators have chosen to buy SUVs with their funds instead of smaller, more fuel-efficient vehicles. The cost of gasoline is generally not an issue for the legislators as their vehicles are fueled — as well as washed — by the state.

California's Democratic-controlled Assembly announced in June that they would give an extra $10,000 in office allowance to Assemblymembers who traded in their SUVs for hybrid gasoline-electric vehicles. Shortly thereafter, the state Senate Rules Committee announced in June that it planned to stop buying SUVs for California Senators.

These actions seek to lower the number of SUVs driven by the legislators. At the time the measures were passed, approximately half the state's legislators — 54 of 120 — were reportedly driving SUVs.

Capitol observers say that the politicians are moving away from SUVs because they are "clearly concerned about being labeled hypocrits." The state's lawmakers have been passing increasingly stringent legislation on air quality and greenhouse gas control while continuing personally to drive vehicles with lower fuel efficiency and higher emissions.

"We need to lead by example and we will use whatever bully pulpit we have," said John Waldie, the California Assembly's chief administrative officer. "It's time to reduce emissions in California because Lord knows we have more smog than just about anywhere else."

Waldie, who drives a Ford Expedition, one of the largest and least fuel-efficient SUVs on the market, told reporters that "I like [the Expedition]. But I definitely consider myself an environmentalist."

Originally published in the August 2003 issue of O&A Marketing News.
Copyright 2003 by KAL Publications Inc.