Kinder Morgan Energy Partners

Kinder Morgan Energy Partners LP (NYSE: KMP) (KMEP) was a subsidiary of Kinder Morgan, Inc.. The company owned or operated petroleum product, natural gas, and carbon dioxide pipelines, related storage facilities, terminals, power plants and retail natural gas in the United States and Canada. On August 10, 2014, Kinder Morgan announced it was moving to full ownership of along with two other partly owned companies, Kinder Morgan Management, and El Paso Pipeline Partners, in a deal worth $71 billion.[1] Kinder Morgan announced its completion of the acquisition on November 26, 2014.[2]

The company, headquartered at One Allen Center in Houston, Texas, was co-founded by Richard Kinder and William Morgan. The company began in 1997 when Kinder and Morgan purchased the liquid pipeline assets of Enron, and now employs many former Enron employees, including former Enron whistleblower Jordan Mintz.[3]

In 1999, Mr. Kinder and his management team took over the reins of KN Energy, an integrated natural gas pipeline company based in Lakewood, Colorado. KN's roots dated back to 1936 when, as a local distribution company, it provided natural gas service to small communities and rural areas in Kansas and Nebraska. One of the main assets that came from this deal was Natural Gas Pipeline Company of America (NGPL), which serves the high-demand Chicago market. KN Energy became Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan's second publicly traded company. Today KMI owns 20 percent of and operates NGPL.[4]

In May 2012 KMI completed an approximately $38 billion acquisition of El Paso Corporation. The transaction made Kinder Morgan the largest midstream and one of the largest energy companies in North America, as well as the largest natural gas network operator in North America. As part of the transaction, Kinder Morgan added a fourth publicly traded entity to its family of companies – El Paso Pipeline Partners, L.P. (NYSE: EPB).[4]

In May 2013, the company acquired Copano Energy LLC (NASDAQ:CPNO, closed), which is now assigned under the company's Natural Gas Pipeline section as well as under Product Pipeline section.[5]

Regulatory oversight

The majority of its pipelines fall under the regulatory oversight of the U.S. Department of Transportation. The company asserts that it is proud of its safety record and follows many regulations and procedures to monitor and ensure the integrity of its pipelines, despite involvement in numerous accidents as outlined below. Interstate natural gas pipelines are subject to the rate and facility regulation of the Federal Energy Regulatory Commission under the Natural Gas Act.

Facilities

Main article: Kinder Morgan

Accidents

Pipelines operated by this company have failed throughout the United States.[7] See Kinder Morgan wiki for details of more spills, leaks, explosions, and other significant incidents.

Suisun Marsh diesel spill

On April 28, 2004, a petroleum pipeline owned and operated by Kinder Morgan Energy Partners ruptured, spilling an estimated 1,500 barrels (240 m²) of diesel fuel into marshes adjacent to Suisun Bay.[8][9]

Walnut Creek gasoline fire

Pipeline fire flames
Pipeline fire wide angle

On November 9, 2004 in Walnut Creek, California, a petroleum pipeline carrying gasoline to San Jose owned and operated by Kinder Morgan Energy Partners (KMEP) was struck by a backhoe used by Mountain Cascade Inc. (MC), a contractor operating in the construction of a water pipeline for the East Bay Municipal Utility District (EBMUD). A massive gasoline spill was subsequently ignited, likely by the unaware welders of subcontractor Matamoros Welding[10] working inside the steel water pipe, resulting in an explosive fireball that caused the deaths, by burns, of four workers and one supervisor and the severe injury of four others. Several nearby homes were ignited and one was partially destroyed. The fire burned for several hours before being brought under control by firefighters from departments throughout the central Contra Costa County region. CalOSHA (California Occupational Safety and Health Administration) cited KMGP Services Company (a subsidiary of Kinder Morgan) for failure to accurately stake-out the pipeline location.[11] On Wednesday, July 7, 2005, the California State Fire Marshal assessed a fine of $500,000 upon KMGP, the largest ever levied within the state.[12][13][14]

On September 22, 2007 KMGP was convicted on six felony charges related to the Walnut Creek Explosion. They were fined $15 million in connection with the case.[15][16][17] Over $90 million in legal settlements were paid to the various victims of the explosion.[18]

Burnaby crude oil spill

On July 24, 2007, a crude oil pipeline owned and operated by Kinder Morgan Energy Partners was ruptured by an excavator digging a storm sewer trench. The rupture was a few hundred meters from the final location at the Westridge Marine Terminal. It resulted in almost 2,000 barrels of crude oil being released into the residential neighborhood and the ocean near Inlet Drive in Burnaby, British Columbia.[19][20] The crude oil sprayed 11 houses on Inlet Drive and caused an evacuation of the area, forcing 250 residents from their homes.[21] Approximately 600 barrels of the oil flowed into Burrard Inlet, the resulting cleanup costing more than $15 million. The cleanup operation ultimately recovered 1,800 barrels of oil from the Inlet and coastline.[19][22]

The Transportation Safety Board released a report on the incident in 2009 which concluded that the pipe, which was 610 mm in diameter, was struck and punctured by a contractor’s excavator bucket during excavation of a trench for a new storm sewer line along Inlet Drive in Burnaby.[22] On October 3, 2011 three companies—two contractors and Kinder Morgan—each entered guilty pleas to a 21-count indictment in Provincial Court. The Crown sought a sentence of a $1,000 fine and a $149,000 contribution to the Habitat Conservation Trust Foundation, which works to protect B.C.'s fish, wildlife and habitats. Kinder Morgan was also asked to contribute $100,000 to an educational and training program.[23]

Burnaby Mountain oil spill

On May 6, 2009, a contractor discovered that oil was leaking from one of the tanks Kinder Morgan's Burnaby Mountain terminal. In total, almost 1,700 barrels of crude oil were spilled. Fire and HazMat teams were called to the scene and contained the spill.[24]

Abbotsford oil spill

On January 24, 2012 an oil spill was discovered at Kinder Morgan's Sumas terminal in Abbotsford. Local residents began reporting a strong gas-like smell coming from the area as early as 4:30 a.m. The spill was reported to be limited to a "containment area." [25]

References

  1. ↑ "Pipeline King Kinder rakes in $1.5 bn in one day". Houston Mirror. 11 August 2014. Retrieved 13 August 2014.
  2. ↑ "Kinder Morgan Announces Closing of the Merger Transactions". 26 November 2014.
  3. ↑ Kinder To Buy Company He Co-Founded
  4. ↑ 4.0 4.1
  5. ↑ "Acquisition for Copnano. Google Finance. 2014/1/26".
  6. ↑ 6.0 6.1 6.2 6.3 6.4 Pipeline Operator Information, Pipeline and Hazardous Materials Safety Administration (PHMSA), U.S. Department of Transportation, http://primis.phmsa.dot.gov/comm/reports/operator/Operatorlist.html, accessed June 22, 2014.
  7. ↑ The Tyee (August 23, 2005). Kinder Morgan Marked by Spills
  8. ↑ Breaking News
  9. ↑ San Francisco Bay Watershed
  10. ↑ SFGate 11/11/04
  11. ↑ Officials Dole Out Fines In Fatal Pipeline Explosion
  12. ↑ Walnut Creek Explosion: Cal/OSHA Issues Multi-Employer Citation
  13. ↑ State Of California, Notice Of Violation
  14. ↑ Marketwatch 4/10/06
  15. ↑ Boxer & Gerson
  16. ↑ SFGate 9/22/07
  17. ↑ Walnut Creek Gas Explosion Pipeline Case
  18. ↑ Victims Have Rights in the San Bruno Explosion
  19. ↑ 19.0 19.1 British Columbia Ministry of Environment. Burnaby Oil Spill. Retrieved on: 2012-04-23.
  20. ↑ Vancouver Sun (July 25, 2007). Huge Burnaby Oil Spill. Retrieved on: April 23, 2012.
  21. ↑ CBC News ( July 24, 2007). Cleanup continues on B.C. oil spill. Retrieved on: April 23, 2012.
  22. ↑ 22.0 22.1 CBC News (March 18, 2009). Transportation Safety Board releases report on Burnaby oil spill.
  23. ↑ CBC News (October 3, 2011). 3 Companies plead guilty to Burnaby oil spill.
  24. ↑ Darcy Wintonyk (May 7, 2009). Major oil spill at Kinder Morgan B.C. facility. CTV News.
  25. ↑ Andrea Woo (April 3, 2012). Oil spill at Abbotsford tank farm raises concerns over pipeline expansion. Vancouver Sun. Retrieved on: 2012-04-23.

External links

Kinder Morgan information

News articles