Three gas stations vie for customers along Interstate 5 in Cardiff-by-the-Sea, but Cheryl Ahern-Lehmann usually bypasses the Chevron and Arco in favor of a station she once spurned as too pricey.
That station in north San Diego County, a Texaco for years, won her business after it became a Valero in 2003.
"It just appeared here . . . I didn't know what it was," Ahern-Lehmann said of the gasoline brand. She's a regular there now because, she said, "they usually compete pretty well with the Arco, at least on the cash price, and I can use a credit card when I want to."
Ahern-Lehmann, who drives 30 miles south to teach nursing at the University of San Diego, sometimes buys gas at another Valero that popped up near the school. "It's been cheaper than the other gas stations" around there, she said.
That gas-pump competition is being played out across California as, station by station, Valero Energy Corp. pushes its way into a business that's been dominated for more than half a century by well-heeled brands such as Chevron, Shell, Exxon, Mobil, 76 and Arco.
San Antonio-based Valero, which began gasoline operations in California in 2000, now owns two of the state's 14 fuel-making refineries and displays its brand on 921 service stations out of a statewide total of around 9,400. In the last three years, the company has added nearly 300 Valero locations to its California roster.
Valero's quiet expansion, which has continued apace across the country as well, represents an unusually speedy entry for a new brand. The company's push is all the more unusual because it comes as many major oil companies shed dealers, sell off stations to wholesalers and concentrate on larger, high-volume locations known as "super-pumpers."
"All the major brands have indicated that they really don't want any more gas stations . . . and they're terrified of cost cutting by companies like Costco and Wal-Mart," said Charles Langley, gasoline project manager at the Utility Consumers' Action Network, a San Diego-based watchdog group. Of Valero, he said, "they're the only brand that I see that actually seems to be growing and is aggressive about growing."
Since 2000, Valero has gone from an industry footnote to the largest refiner in North America, with 17 plants from California to Aruba in the Caribbean. The company supplies 5,800 gas stations in 38 states using the Valero, Diamond Shamrock, Shamrock, Ultramar and Beacon brands. Most of the sites are owned and operated by individual dealers and distributors instead of by Valero.
