Q. As of yesterday, the state requires most gasoline sold in Hawai'i to contain 10 percent ethanol. What preparations has Tesoro Hawaii had to make to meet the new ethanol requirement?

A. Gradually what you have to do is work the conventional gas out and make a different type so the ethanol can be blended in. Essentially what we do here at the refinery is make a lower octane, what they call a slightly lower vapor pressure gasoline. So when the ethanol is added it brings the octane up and the vapor pressure of the gasoline up.

Q. Plans by companies to produce ethanol locally are behind schedule, so for now the ethanol has to be imported. What's your view of how the program has progressed?

A. It's kind of crazy. They're importing ethanol and then we're exporting the (unblended) gasoline that would normally go into our local market. So it really hasn't helped in terms of terms of being self-sufficient in Hawai'i. We've also added another variable, because if the ethanol ship doesn't arrive on time we could create problems because we would have this low-octane material with nothing to blend it with.

Q. Where does Tesoro Hawaii import its crude oil come from?

A. It comes from all over now. We're getting it from Africa, from Southeast Asia, from South America. We've even had crudes from Russia and Norway. We used to get most of our crudes from Alaska's North Slope, but that's gradually drying up. So that's caused us to go further away.

Q. The fourth quarter was the most profitable for Tesoro's Hawai'i refinery in at least three years based on gross profit margin. What's behind that?

A. Really it's just the balance between supply and demand. Basically the oil industry is a world market so we kind of float with the world market. And refining margins have improved across the country. Everybody has had high refining margins, but there are periods when we lose a lot of money, too, but that's never reported. It's usually only when we make money. Typically we're a little different from the integrated oil companies because they can get the crude out of the ground. We still have to buy the crude on the open market. Integrated oil companies can lose on the refining side and still make their money on the production side — getting it out of the ground.

Q. How would you describe your transition from engineering to management?

A. It's a little scary at first. You just have to learn to work with people. I find that as you go along you learn lessons, you make mistakes and you learn from them and you don't repeat them. I've found that the biggest thing is communication — finding out what people want and listening to them and giving them feedback in a short period of time. All people basically want is communication. Most of the problems that occur are because of miscommunication.

Q. Did you have any management training, or is it something you learned on the fly?

A. Some of it I learned on the fly.

Q. What did you find was the biggest difference between working with people and numbers?

A. You tend to be more impatient with people. And when you first become boss you think, "Well I'm the boss, I'm supposed to tell them what to do, and if they don't do it, yell at them." Of course, I'm not really a yeller, but I wouldn't have been as patient as I am now. And I wouldn't look at it from the other person's angle. I'd be looking at it from my perspective instead of theirs.

Q. How would you describe your leadership style?

A. I think a big thing with leadership is motivation and trying to say that this job is fun in motivating them to get things done. We recently have come up with what we call Kapolei Pride. We just tried it on the CEO and he was totally surprised. We have this clap where everyone will give a clap for something like safety. You get 250 people doing that all at once and it's pretty impressive. We start every meeting with it.

Q. How do you gauge productivity among your workers?

A. We have what we call a scorecard here at the refinery where we monitor things like safety, environmental performance, and throughput rates. All of that is a function of people. So you can tell improvement just by the scorecard. It will show improvement, and we have been seeing that.

Q. I would imagine you put a lot of emphasis on safety at an operation like this.

A. Safety is a big thing. When people aren't happy, when they do get hurt, they don't come to work when they should. If they're motivated they'll say, "Hey, I can come back to work." If they're not then they'll prolong the injury. We've never had a fatality. We haven't had any serious instances since the early 1980s.