Vertex Energy, Inc. (Vertex) operates as an energy transition company specializing in refining and marketing high-value conventional and lower-carbon alternative transportation fuels.
The company is engaged in operations across the petroleum value chain, including refining, collection, aggregation, transportation, storage and sales of aggregated feedstock and refined products to end-users. All of these products are commodities that are subject to various degrees of product quality and performan...
Vertex Energy, Inc. (Vertex) operates as an energy transition company specializing in refining and marketing high-value conventional and lower-carbon alternative transportation fuels.
The company is engaged in operations across the petroleum value chain, including refining, collection, aggregation, transportation, storage and sales of aggregated feedstock and refined products to end-users. All of these products are commodities that are subject to various degrees of product quality and performance specifications.
Segments
The company operates in two segments: (1) Refining and Marketing, and (2) Black Oil and Recovery.
The company's Refining and Marketing segment manages the refining of crude oil and renewable feedstocks, and distributes finished products across the southeastern United States through a high-capacity truck rack, together with deep and shallow water distribution points capable of supplying waterborne vessels.
The company's Black Oil and Recovery segment aggregates and manages the re-refinement of used motor oil and other petroleum by-products and sells the re-refined products to end customers.
Refining and Marketing Segment
The company's Refining and Marketing segment is engaged in the refining and distribution of petroleum products and includes the Mobile Refinery and related operations. As described above, effective April 1, 2022, the company completed the acquisition of the Mobile Refinery, a 75,000 bpd crude oil refinery ten miles north of Mobile, in Saraland, Alabama and related logistics assets, which include a deep-water draft, bulk loading terminal facility with 600,000 Bbls of storage capacity for crude oil and associated refined petroleum products located in Mobile, Alabama. The terminal includes a dock for loading and unloading vessels with a pipeline tie-in, as well as the related logistics infrastructure of a high-capacity truck rack with 3-4 loading heads per truck, each rated at 600 gallons per minute. The Mobile Refinery processes heavy and sour crude to produce heavy olefin feed, regular gasoline, premium gasoline, jet fuel, and diesel fuel.
On May 27, 2023, the Mobile Refinery began processing soybean oil into renewable diesel ('RD'). The RD facility located in Mobile, Alabama, specializes in the advanced refining of organic feedstocks, including crop oils and waste oils, into high-quality renewable diesel. With a proven background in feedstock and supply-chain logistics, coupled with strong transport infrastructure and tankage, Vertex's commercial operations provide critical support by establishing pathways to supply feedstock necessary for ratable production. The company sells its finished renewable diesel product in the western half of North America.
In addition, the company aggregates a diverse mix of feedstocks petroleum distillates, transmix and other off-specification chemical products. These feedstock streams are purchased from pipeline operators, refineries, chemical processing facilities and third-party providers. The company has a toll-based processing agreement in place with Monument Chemical Port Arthur, LLC (formerly with KMTEX) ('Monument Chemical') to re-refine feedstock streams, under the company's direction, into various end products that the company specifies. Monument Chemical uses industry standard processing technologies to re-refine the company's feedstocks into pygas, gasoline blendstock and marine fuel cutterstock. The company sells all of its re-refined products directly to end-customers or to processing facilities for further refinement. In addition, the company is distributing refined motor fuels, such as gasoline, blended gasoline products and diesel used as engine fuels, to third party customers who typically resell these products to retailers and end consumers.
Black Oil and Recovery Segment
Discontinued operations of Vertex include the company's Heartland Assets and Operations, which is part of the company's Black Oil business.
The company's Black Oil business is engaged in operations across the entire used motor oil recycling value chain, including collection, aggregation, transportation, storage, refinement, and sales of aggregated feedstock and re-refined products to end users. The company collects and purchases used oil directly from generators, such as oil change service stations, automotive repair shops, manufacturing facilities, petroleum refineries, and petrochemical manufacturing operations. The company owns a fleet of 68 collection vehicles, which routinely visit generators to collect and purchase used motor oil and perform other collection services. The company also aggregates used oil from a diverse network of approximately 30 suppliers who operate similar collection businesses to the company.
The company manages the logistics of transport, storage and delivery of used oil to its customers. The company owns a fleet of 30 transportation trucks and more than 80 above ground storage tanks with over 8.0 million gallons of storage capacity. These assets are primarily used by the Black Oil segment. In addition, the company utilizes third parties for the transportation and storage of used oil feedstocks. Typically, the company sells used oil to its customers in bulk to ensure efficient delivery by truck, rail, or barge. In many cases, the company has contractual purchase and sale agreements with its suppliers and customers, respectively. In addition, at the company's Marrero, Louisiana facility, the company produces a Vacuum Gas Oil (VGO) product that is sold to refineries, as well as to the marine fuels market. At the company's Columbus, Ohio facility (Heartland Petroleum), divested on February 1, 2023, the company produced a base oil product that is sold to lubricant packagers and distributors.
The company provides its services in 5 states, primarily in the Gulf Coast, the Midwest and Mid-Atlantic regions of the United States. For the rolling twelve-month period ending December 31, 2023, the company aggregated approximately 67.9 million gallons of used motor oil and other petroleum by-product feedstocks and managed the re-refining of approximately 59.7 million gallons of used motor oil with the company's proprietary VGO and Base Oil processes.
The company's Black Oil and Recovery segments include two business lines. The Black Oil business collects and purchases used motor oil directly from third-party generators, aggregates used motor oil from an established network of local and regional collectors, and sells used motor oil to the company's customers for use as a feedstock or replacement fuel for industrial burners. The company operates a refining facility and the company also utilizes third-party processing facilities. The company's Recovery business includes a generator solutions company for the proper recovery and management of hydrocarbon streams, as well as metals which includes transportation and marine salvage services throughout the Gulf Coast.
The company also operates a facility in Marrero, Louisiana, which facility re-refines used motor oil and also produces VGO and a re-refining complex in Belle Chasse, Louisiana, which the company calls its Myrtle Grove facility.
The company's Recovery business includes a generator solutions company for the proper recovery and management of hydrocarbon streams, the sales and marketing of Group III base oils through January 2021, and other petroleum-based products, together with the recovery and processing of metals.
The company has established relationships with key feedstock suppliers, storage and transportation providers, oil re-refineries, and end-user customers.
Products and Services
The company generates substantially all of its revenue from the sale of twelve categories of products and certain services discussed below. All of these products are commodities that are subject to various degrees of product quality and performance specifications.
Distillates
Distillates are finished fuel products such as gasoline, jet fuel and diesel fuels.
Base Oil
Base oil is an oil to which other oils or substances are added to produce a lubricant. Typically, the main substance in lubricants, base oils, are refined from crude oil.
Pygas
Pygas, or pyrolysis gasoline, is a product that can be blended with gasoline as an octane booster or that can be distilled and separated into its components, including benzene and other hydrocarbons.
Industrial Fuel
Industrial fuel is a distillate fuel oil which is typically a blend of lower quality fuel oils. It can include diesel fuels and fuel oils such as No. 1, No. 2 and No. 4 diesel fuels that are historically used for space heating and power generation. Industrial fuel is typically a fuel with low viscosity, as well as low sulfur, ash, and heavy metal content, making it an ideal blending agent.
Oil Collection Services
Oil collection services include the collection, handling, treatment and sales of used motor oil and products which include used motor oil (such as oil filters) which are collected from the company's customers.
Metals
Metals consist of recoverable ferrous and non-ferrous recyclable metals from manufacturing and consumption. Scrap metal can be recovered from pipes, barges, boats, building supplies, surplus equipment, tanks, and other items consisting of metal composition. These materials are segregated, processed, cut-up and sent back to a steel mill for re-purposing.
Other re-refinery products
Other re-refinery products include the sales of asphalt, condensate, recovered products, and other petroleum products.
VGO/Marine fuel sales
VGO/Marine fuel sales relate to the sale of low sulfur fuel meeting the criteria for IMO 2020 compliant marine fuels.
Customers
The Black Oil segment sells used oil, VGO, base oil and other petroleum feedstocks to numerous customers in the Gulf Coast and Midwest regions of the United States. The primary customers of its products are packagers, distributers, blenders and industrial burners, as described above as well as re-refiners of the feedstock. The Black Oil segment is party to various feedstock sale agreements whereby the company sells used oil feedstock to third parties.
The Recovery segment does not rely solely on contracts, but mainly on the spot market as well as a strategic network of customers and vendors to support the purchase and sale of its products which are commodities. It also relies on project-based work which it bids on from time to time, of which there is no guarantee or assurance of repeat business.
Seasonality
Demand is generally lower in the first and fourth quarters of the year (year ended December 2023) for gasoline and other fuel products the company produces, as compared to the second and third quarters. Demand for gasoline and diesel is generally higher during the summer months than during the winter months due to seasonal increases in highway traffic and agricultural activity. For an example, asphalt plants burn recycled waste oil in their process, placing pricing and supply availability constraints on the industry during the good weather construction and road building seasons. In the company's current markets, road paving typically occurs from late spring to early fall. Therefore, it is somewhat easier to procure certain waste streams during winter months when competition for used motor oil feedstock is historically not as strong. The company is seeing increased demand for used motor oil feedstocks throughout the year due to the addition of re-refining technologies in the marketplace.
Governmental Regulation, Including Environmental Regulation and Climate Change
The U.S. Departments of Transportation, Coast Guard and Homeland Security, as well as various federal, state, local and foreign agencies exercise broad powers over the company's transportation operations, generally governing such activities as authorization to engage in motor carrier operations, safety and permits to conduct transportation business.
The company also generates solid wastes that are subject to the requirements of the United States Resource Conservation and Recovery Act, as amended, or 'RCRA,' and comparable state statutes.
The company operates facilities that are subject to requirements of the United States Clean Water Act, as amended, or 'CWA,' and analogous state laws for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters.
The company generates RINs through the blending of biofuels and plan to generate additional RINs through the company's renewal biodiesel operations at the Mobile Refinery.
Specifically, in Texas, the company is subject to rules and regulations promulgated by the Texas Railroad Commission and the Texas Commission on Environmental Quality, including those designed to protect the environment and monitor compliance with water quality. In Louisiana, the company is subject to rules and regulations promulgated by the Louisiana Department of Environmental Quality and the Louisiana Department of Natural Resources as to environmental and water quality issues, and the Louisiana Public Service Commission as to allocation of intrastate routes and territories for waste water transportation.
The company is subject to the requirements of the United States Occupational Safety and Health Act, as amended, or 'OSHA,' and comparable state laws that regulate the protection of employee health and safety. OSHA's hazard communication standard requires that information about hazardous materials used or produced in the company's operations be maintained and provided to employees, state and local government authorities and citizens.
Intellectual Property
The company has developed a website and has registered www.vertexenergy.com as its domain name.
History
Vertex Energy, Inc., a Nevada corporation, was founded in 2001.
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