U.S. report slams Kinder Morgan’s enviro transgressions: “Bad neighbour” allegations from the U.S.

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“Bad neighbour” allegations from the U.S.

Bribing a ship captain, oil spills, and million-dollar fines among the transgressions highlighted by a U.S. report on Kinder Morgan.

Front cover of Sightline Institute’s “Facts about Kinder Morgan” report released Tuesday.

The Seattle-based think-tank Sightline Institute released a report Tuesday highlighting Kinder Morgan’s enviro-transgressions across the energy giant’s continent-wide network of pipelines and export terminals.

The company’s recent troubles on Burnaby Mountain in Canada were cited as a major reason for updating the second edition of this report. More than 100 people were arrested last month — including scientists, environmentalists, First Nations and other people young and old — for disobeying a court order designed to protect the company’s drillers on the mountain.

The story was not widely reported in U.S. press, the think tank lamented.

“It’s become the Keystone XL fight of Canada,” said the institute’s policy director Eric de Place in a tele-press conference to journalists on both sides of the border.

“I often despair that the 49th parallel ends up being quite a barrier [to news coverage from Canada].”

The Sightline Institute’s report — “The Facts about Kinder Morgan” — is described as a “careful, factual examination of Kinder Morgan’s track record.” It contains a laundry list of the company’s troubles with American federal investigators, million-dollar fines, oil and gas spills, and safety failures.

“For years, and in many locations, Kinder Morgan has engaged in behaviour that experts and regulators have called fraudulent, deceptive and irresponsible,” said De Place.

“Kinder Morgan’s plans have run into trouble, both in the Gulf Coast region, Louisana and Texas, as well as in British Columbia and many other places around North America,” he added.

Kinder Morgan protesters arrested after crossing an RCMP-zone protecting the company’s drillers last month on Burnaby Mountain. Photo by Mychaylo Prystupa.

The Texas head office of the company responded to the report, stating:

“The Sightline Institute has an agenda, and their report certainly takes sensational liberties,” wrote Kinder Morgan spokesperson Sara Loeffelholz from Houston.

“Kinder Morgan complies with all applicable rules and regulations, and we are committed to employing sustainable business practices and conducting ourselves in an ethical and responsible manner.”

“You will find that Kinder Morgan continues to perform better than its industry peers relative to environmental, health and safety measures,” she wrote Tuesday.

Ship Captain bribed

The $100-billion company is the “largest energy infrastructure company in America” according to its website. The company is well known for its pipelines – but it also operates several coal and fertilizer export terminals.

In one colourful example, Sightline highlights how Kinder Morgan plead guilty to bribing a Portland, Oregon ship captain to dump a 160 tonnes of potassium-chloride fertilizer in the Pacific Ocean in 2003. The U.S. Department of Justice fined the company $240,000.

“Kinder Morgan…is paying for its employees’ attempts to save money by illegally dumping materials at sea,” said a U.S. Attorney General in 2008.

The 2007 Burnaby oil spill that dramatically sprayed local homes and vehicles with oil was highlighted.

So too was the company’s gas pipeline explosion in California in 2004 that killed five workers. That incident resulted in six felony counts, states the report.

The Seattle think tank says the report is a reminder to Canadians that Kinder Morgan is a massive American corporation, and not just another pipeline company from Calgary.

The company’s Canadian division president, Ian Anderson (born and raised in Winnipeg) may not have a southern U.S. accent, but the CEO of the larger U.S. holding company certainly does.

The Missouri-born billionaire Rich Kinder — who has describes himself as an “old Texas oil man” — owns 24 per cent of the company, and earns $400 million annually in dividends making him one of the richest men in America. Kinder’s salary is otherwise one dollar per year.

The former Enron executive built the pipeline company over 17 years, by aggressively buying up oil and gas infrastructure. The company now controls 130,000 km of pipelines – enough to circle the Earth three times.

The U.S. report claims Kinder has been a major financier of the Republican Party, as well as Bush presidential campaigns. It quotes the CEO as having told Forbes Magazine:

“I think that for any of our lifetimes fossil fuels are going to be the primary source of energy in this world…. I’m a huge believer in the genius of mankind, and I think we’ll continue to find new ways to utilize, explore for and produce more and more fossil fuels,” Kinder was quoted.

In a January investor call, the company said the $5.4-billion Trans Mountain pipeline expansion in Canada was the biggest infrastructure project at Kinder Morgan.

“Bad neighbour” allegations from the U.S. deep south

The Sightline Institute also brought on to its media teleconference a Louisiana resident who recently won a class-action lawsuit against the company, over coal dust blowing on to local homes like hers.

“I was asked to come here today to speak to y’all about living beside one of Kinder Morgan’s coal plants,” said Linda Ramil with a southern drawl.

“The coal dust gets on everything… homes, boats. It sticks to everything, and it only comes out with pressure washers and elbow grease.”

“I don’t understand why this company isn’t a better neighbour than they are,” concluded Ramil.

Kinder Morgan pipeline construction. Company’s own photo for use by media.

Sightline also described investor analysts in the financial press who have said the company substantially under invests in pipeline maintenance. Kinder Morgan disputes this, saying:

“We spend hundreds of millions of dollars each year on integrity management and maintenance programs to operate our assets safely and to protect the public, our employees, contractors and the environment,” wrote its spokesperson Tuesday.

Americans in Washington state were also said to be worried about the 400-plus oil supertankers that would result from the Trans Mountain pipeline expansion. The shores of the American San Juan islands, to the southeast of Vancouver Island, could face oil spill risks, De Place stated.

The Sightline report contains nearly 100 footnotes to various federal investigation reports and news media stories, to back up its assertions. The Vancouver Observer is quoted for its coverage of Burnaby Mayor’s comments opposing the company’s pipeline for example.