The article you just read was brought to you by a few thousand dedicated readers. Will you join them?

Thanks for coming by The Tyee and reading one of many original articles we’ll post today. Our team works hard to publish in-depth stories on topics that matter on a daily basis. Our motto is: No junk. Just good journalism.

Just as we care about the quality of our reporting, we care about making our stories accessible to all who want to read them and provide a pleasant reading experience. No intrusive ads to distract you. No paywall locking you out of an article you want to read. No clickbait to trick you into reading a sensational article.

There’s a reason why our site is unique and why we don’t have to rely on those tactics — our Tyee Builders program. Tyee Builders are readers who chip in a bit of money each month (or one-time) to our editorial budget. This amazing program allows us to pay our writers fairly, keep our focus on quality over quantity of articles, and provide a pleasant reading experience for those who visit our site.

In the past year, we’ve been able to double our staff team and boost our reporting. We invest all of the revenue we receive into producing more and better journalism. We want to keep growing, but we need your support to do it.

Fewer than 1 in 100 of our average monthly readers are signed up to Tyee Builders. If we reach 1% of our readers signing up to be Tyee Builders, we could continue to grow and do even more.

If you appreciate what The Tyee publishes and want to help us do more, please sign up to be a Tyee Builder today. You pick the amount, and you can cancel any time.

Support our growing independent newsroom and join Tyee Builders today.
Before you click away, we have something to ask you…

Do you value independent journalism that focuses on the issues that matter? Do you think Canada needs more in-depth, fact-based reporting? So do we. If you’d like to be part of the solution, we’d love it if you joined us in working on it.

The Tyee is an independent, paywall-free, reader-funded publication. While many other newsrooms are getting smaller or shutting down altogether, we’re bucking the trend and growing, while still keeping our articles free and open for everyone to read.

The reason why we’re able to grow and do more, and focus on quality reporting, is because our readers support us in doing that. Over 5,000 Tyee readers chip in to fund our newsroom on a monthly basis, and that supports our rockstar team of dedicated journalists.

Join a community of people who are helping to build a better journalism ecosystem. You pick the amount you’d like to contribute on a monthly basis, and you can cancel any time.

Help us make Canadian media better by joining Tyee Builders today.
We value: Our readers.
Our independence. Our region.
The power of real journalism.
We're reader supported.
Get our newsletter free.
Help pay for our reporting.
News

'Kinder Morgan Is Breaking the Law,' Economist Alleges

Robyn Allan accuses firm of failing to seek NEB sign-off for deal that may weaken oil spill liability.

By Geoff Dembicki 24 Nov 2014 | TheTyee.ca

Geoff Dembicki reports on energy and climate change for The Tyee. Find his previous stories here.

The owner of the Trans Mountain pipeline is distancing itself from responsibility for a potential disaster and is breaking the law by restructuring without a green light from the National Energy Board, claims economist Robyn Allan.

The restructuring Allan points to is a big deal for financial folks, and mind-numbingly complicated for just about everyone else. This week, the Houston-based Kinder Morgan Inc. is set to complete a $73-billion deal that gives it full ownership of Kinder Morgan Energy Partners LP, a separate entity in charge of the Trans Mountain pipeline expansion through Burnaby.

"Part of the [company's] strategy is to deal in complexity that avoids scrutiny," said Allan, a former CEO of the Insurance Corporation of British Columbia.

This weekend, as dozens of Trans Mountain protesters were arrested, Allan filed a motion to the NEB demanding all work on the pipeline cease.

Allan is an expert intervener at public hearings into whether Trans Mountain should be approved. In her motion, she argued Kinder Morgan Inc. never publicly sought NEB permission for its restructuring. "Kinder Morgan is breaking the law," she alleged. "They were supposed to file an application and they haven't done it."

Kinder Morgan Inc. and Kinder Morgan Energy Partners LP may both have "Kinder Morgan" in their names, but for legal purposes they're distinct. The Houston-based Kinder Morgan Inc. is North America's fourth largest energy company, while Kinder Morgan Energy Partners LP is a subsidiary in charge of the Trans Mountain project.

This week, the Houston-based Kinder Morgan is acquiring the Energy Partners Kinder Morgan (and its Trans Mountain project) as part of a $73-billion restructuring deal.

Ask first, say regs

If that seems complicated, prepare now to wade into the thicket of Canadian regulatory policy.

According to Section 74 of the National Energy Board Act, a pipeline company must not "enter into an agreement for amalgamation with any other company," among other such stipulations, without first publicly seeking permission to do so from the NEB. Since Kinder Morgan Inc. announced its restructuring deal early this August, Allan has found no evidence that such permission was sought.

Why does any of this matter? Allan is not only alleging that a Canadian law was violated, she's worried that the corporate restructuring may weaken Kinder Morgan's liability for an oil spill. "Nothing was communicated to the NEB about what this deal means in terms of changes to [Kinder Morgan's] insurance program," Allan claimed. In the event of an oil spill, say, in Vancouver's Burrard Inlet, "it's very possible that it will be much more difficult to go after Kinder Morgan," she alleged.

One reason financial folks are following Kinder Morgan Inc.'s restructuring deal so closely is that if offers the company, in the words of its CEO Richard Kinder, "a $20-billion tax saving over 14 years." The existing Trans Mountain pipeline earns about $170 million per year, and results in about $1.5 million in annual tax revenues to the B.C. and federal governments -- a dynamic that Allan refers to as "Kinder Morgan's high return on equity in relation to its almost non-existent Canadian tax obligation."

NEB 'reviewing' Allan's motion

When The Tyee first reached out to Kinder Morgan it initially received an automated email stating the firm has "received an extremely high number of phone calls and emails regarding the proposed [restructuring deal] expected to close before Thanksgiving of 2014."

A spokesperson later wrote to say that "with respect to any questions you may have about the implications this might have on Kinder Morgan Canada or its assets, we wish to advise that this acquisition will have no impact on or result in any changes to the operations of Kinder Morgan Canada or its assets."

What happens now that Allan's motion has been filed with the NEB? By law the regulatory agency has to deal with it directly, by first getting a response from Kinder Morgan Inc. about Allan's allegations, giving other interveners a chance to weigh in, and finally allowing Allan to respond.

An NEB spokesperson told The Tyee: "We have received Ms. Allan's motion and we are reviewing the contents. As we are currently considering the motion and will make a ruling on this request in due course, it would be premature for me to comment."  [Tyee]

Share this article

The Tyee is supported by readers like you

Join us and grow independent media in Canada

Facts matter. Get The Tyee's in-depth journalism delivered to your inbox for free

LATEST STORIES

The Barometer

Tyee Poll: Have You Relocated During the Pandemic?

Take this week's poll