By Bill Medley, Evansville Courier & Press
MOUNT VERNON, Ind. - A company that began as a farmer's cooperative eight decades ago has spent the last several months gearing up for expansions and upgrades as Indiana's only domestically-owned oil refiner.
At its refinery in Mount Vernon, and throughout a pipeline network spanning hundreds of miles, CountryMark - founded in 1930 as the Indiana Farm Bureau Cooperative - is investing millions of dollars in improvements to boost profitability and safety and to address environmental concerns, President and Chief Executive Charlie Smith said in an interview Tuesday.
"If we look at where we came from, we have a lot of things going for us," Smith said. "We think our story is one that will be embraced."
Last week, CountryMark announced a $20 million investment in the Mount Vernon refinery - one of two such facilities in Indiana and the only refinery that uses 100 percent Illinois Basin crude. CountryMark also launched a rebranding effort that will change the signs on 90 Energy Plus fuel stations across the state to the CountryMark banner.
The refinery expansion, which will boost capacity by 45 million gallons a year, or 12 percent, comes as politicians and consumers heap criticism on the oil industry for seemingly not doing much to increase refining capacity.
While the Mount Vernon facility is about one-fourth the size of the typical U.S. refinery, the expansion is still a large undertaking for CountryMark. John Deaton, senior vice president of operations, said CountryMark has been planning the upgrade for many months and last October ordered pieces of large-scale equipment that take months to fabricate.
"A lot of refineries don't expand, because there's tremendous business risk involved," Smith said. "But we put the wheels in motion a long time ago. We committed long before we knew when it would be $20 million. It's a leap of faith, but it's a leap of faith in your people."
The focus on planning and anticipating problems has been a key to CountryMark's success, Smith said. Last year, the company reported revenues of about $870 million, up from $775 million a year earlier.
"We always think about every possible threat to our business," Smith said.
Last year, CountryMark began using specialized technology to inspect its pipelines as part of a preventive maintenance plan. The same technology was later adopted by BP after a pipeline failed in Alaska. Smith credited CountryMark's employees in coming up with the idea to use the technology to identify possible trouble spots before any developed.
"If you don't know where the problems are, you could end up replacing 20 miles of pipeline," Smith said. "It's not cheap, but it's the absolute right thing to do."
Smith said CountryMark's role as a domestic energy producer is important for consumers dealing with volatility at the pump.
"The further (imports) go up, the more dependent we are on regimes," Smith said. "The farther you have to haul gas, the higher the price is. We have a responsibility to do what we can in terms of energy independence."
CountryMark has also made a large push to promote biofuels such as soy diesel and ethanol.
The company was the first in the nation to offer metered blending of soy diesel at terminal locations, and more than 35 percent of CountryMark's gasoline sales are ethanol-blended products.
CountryMark is a "huge supporter" of ethanol, but Smith said the corn-based fuel won't provide the complete answer to the country's energy needs.
"It has to be viewed as a piece of the solution, not the entire solution."