Kinder Morgan’s dodgy finances

Elizabeth May

Mr. Speaker, my colleague from Timmins—James Bay made a lot of good points about this pipeline. I want to put something to the House that I do not think anyone has raised yet, and that is the financing around this, which is pretty dodgy. We have to remember that Kinder Morgan was founded by Richard Kinder who was a senior executive of Enron.

Kinder Morgan had to go out on the open market. At a National Energy Board hearing, it said that all the money for the project would be raised by the parent company out of Houston. It raised about $1.7 billion from investors. About a year and a half ago, Richard Kinder told his shareholders that he used that money to pay down debt. Then it changed the corporate structure of the organization and had Kinder Morgan Canada stand alone and not as part of Kinder Morgan of Houston. They are related as a subsidiary. However, it is a pretty clear tell that Kinder Morgan was backing off the whole idea of building the expansion.

Therefore, the reason we are paying so much for an existing pipeline, which was never part of the problem, was the blackmail note from Kinder Morgan, falling due May 31. It was not about getting the ransom; it was about shooting the hostage. What it really wanted to do was get out of it and blame someone for that.

Our poor beknighted front benches over there were terrified of a press conference on May 31, in which Kinder Morgan would announce that the Prime Minister of Canada could not get it done, that the Minister of Finance could not get it done. We had the problem of an unwilling vendor, and we know one pays through the nose when one has an unwilling vendor.

Charlie Angus – Member for Timmins-James Bay

Mr. Speaker, let us be clear. When Kinder Morgan gave that ultimatum and said “If you don’t give us a really safe environment, we’re leaving”, that meant it was leaving. The potential for confrontation was very clear.

We saw the Prime Minister jump up and say, “Before you go, we’ll pay off all your investors to the tune of $4.5 billion.” That is the best payout. If I were the CEO, I am sure my investors would be giving me a slap on the back for that. That is a heck of a lot of money to pay for such little effort.