Thursday, June 01, 2006

All Your Pipelines Are Ours


Remember back when Gordon Campbell's government passed legislation that made it possible to sell off all of our assets to absolutely anybody, no questions asked?

And remember when Bush Ranger, and former Enron executive, Robert Kinder came calling and bought up Terasen Gas and all their pipelines that we (ie. British Columbians) built?

And remember when, despite one of the largest citizen write-in campaigns in British Columbia history, the (so-called) Public Utilities Commission decided that there was no need to hold public hearings on the sale?

Good thing nobody asked any questions. After all, if they did, they might have found out that something like this was about to happen.

Credit rating agencies have expressed alarm at the $22bn (£12bn) private equity takeover of the gas pipelines business Kinder Morgan, one of the biggest leveraged buyouts since the battle over RJR Nabisco, which spawned the book Barbarians at the Gate two decades ago.

Private equity backers including Goldman Sachs and the Carlyle Group are promising to loan the company up to $14bn of debt, and both Standard & Poor's and Fitch said they expect to rate that debt as junk.


In a credit analysis on the Kinder Morgan deal, Fitch said: "One of the concerns Fitch has with the transaction is the term and structure of the proposed debt and its related costs given the prospect for higher interest rates over the near to intermediate term time horizon."

So, when the going gets tough and the great 'debt shed' begins, will our willfully anemic Public Utilities Commission step in and tell KinderMorganCarlyle that they can't just tear up agreements with us and instead use the pipelines we built to sell the gas that used to be ours to the highest bidder in, say, California*?

After all, it's not like Enron-type energy traders haven't pulled this kind of stuff before.



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