Kinder Morgan / Port of Wilmington privatization deal in jeopardy?
Kinder Morgan officials are not taking kindly to legislative oversight of their deal for a partnership with the Port of Wilmington.
From a Page One story in The NEWS JOURNAL:
"Delaware lawmakers might have scuttled a Port of Wilmington privatization deal by imposing a new requirement for legislative review, a top official with Kinder Morgan told investment analysts Wednesday.
Directors of the state-owned port are scheduled to receive a briefing on Kinder Morgan's offer and plans during a meeting with company officials Friday..."
Kinder Morgan's C.E.O. Rich Kinder declares the legislative oversight "seemed to be more intent on protecting union jobs than it is in the economic well-being of the port."
A power-play by Kinder Morgan to maximize its position, which the Markell Administration can then hold over lawmakers' heads? Likely.
As I noted in a previous blog on this subject, the unions and pro-union legislators fear a loss of jobs or an erosion of salaries, benefits, etc. People such as DEDO Director Alan Levin and Delaware State Chamber of Commerce V.P. Rich Heffron respond by saying the 89-year-old port desperately needs to modernize in collaboration with a private partner. If it doesn't, it's doomed, and many or all of those jobs eventually disappear anyway. So the concern over jobs becomes a moot point.
What goes unmentioned - in both The NEWS JOURNAL's account, and in much of the public debate - is that Kinder Morgan has a checkered environmental reputation. Bluntly, issues such as pipeline safety appear to play second fiddle to profits.
Just use your search engine to find scores of articles about KM's record, particularly in the Pacific Northwest. Granted, much of the critique comes from environmental groups.
A report from the independent, non-profit, environmentally oriented, Sightline Institute based in Seattle found a corporate track record of "pollution, lawbreaking, and cover-ups."
While much of the critique deals with KM's activities in the Pacific Northwest, another chapter deals with KM's Myrtle Grove facility in Louisiana: Specifically, coal dust from that coal-export terminal polluting the Mississippi River, apparently even visible from satellite photos.
And Carl Weimer, executive director to the Bellingham, Washington--based, Pipeline Safety Trust, called KM "the poster child for pipeline problems".
KM's environmental record has hardly been debated here in Delaware. Or is the priority just jobs, jobs, jobs?
Posted at 7:22am on January 31, 2013 by Allan Loudell
The News Journal has ignored KM's past problems with the environment. They are also erroneously reporting on the true nature of the deal. Although the the Port's original bidder request was for a partner to expand onto the Delaware River, the KM deal will have nothing like that in it. Just as the State could not afford to build on the Delaware without first having a customer, neither can KM. Their deal is about coming in and taking over the existing Port operations.
The News Journal has also been remiss in reporting that deals like this are done by states and Port Authorities every day. The truth is that if a deal was done with KM, it would be the first time in the U.S. that a full-service cargo port that operates its own facilities has ever been completely privatized.
The Port of Wilmington is a huge economic asset to the State of Delaware. If the whole Port were to be turned over to one private company, the State would be creating a monopoly at its only public port. Once the papers are signed, regardless of whether you call it a sale or a long-term lease (30 or more years), KM as a private company could do anything it wants with the Port with labor or customers.
According to the Port's own economic study done in 2011, there is direct business revenue generated by operations at the Port of $337 million. Of this the Port's direct revenues are around 34 million. In round figures that means that private businesses in and around the port have revenues of 303 million a year which accounts for hundreds and hundreds of jobs. To turn an economic engine this size, that affects the lives of so many Delaware citizens, over to one private entity, without any public oversight, is a very dangerous thing to do.
Thu, Jan 31, 2013 5:25pm
I have done a lot of research on Kinder Morgan. For if it is a heartfelt good company, the deal might be beneficial. (Consider how we would be less upset if DuPont took it over because we "know' Dupont.) If it is a bad company, then the deal needs to go away.
For a company to think it can take over one of a state's largest assets, one of the big chunks of its economy, and no one will care, shows a company whose heart is not in the right place.
If Kinder Morgan is saying "What! Oversight? Not part of the bargain!" ..one has to wonder what it was trying to pull over us.
There is a lot of negativity regarding KinderMorgan. However, anyone in Delaware knows that Markell and Levin would not sell the port to an unscrupulous venture capitalist such as the most horrible of horribles, Bain Capital. As would any Dad, they would look for a good suitor for their daughter.
We hear of Kinder's connections to Enron. But a quick search shows that Kinder left Enron specifically because he thought Ken Lay's accounting methods were illegal and would eventually bring down the company. Kinder's other partner, Morgan, also left Enron near the same time, and it was these two good business partners, who united to bring this company into existence. And, that highly principled whistleblower who testified against Enron finally collapsing the house of cards on that company's finances? He also works for KinderMorgan.
All corporations are bad. That is a given. But as far as bad corporations go, this is a good one. If you look hard you will find the Department of Labor slapped a suit and forced them to pay backpay to their workers. Sounds bad, until you look at the details of that judgment. I tend to be pro-employee, but I would have been in error as well. In fact, from my take it seems as if the law punishes employers trying to do well for their employees, but, after reading the original 1930's legal judgments challenging it, I agree that it should be maintained. Basically, Kinder Morgan offers extra bonuses to employees on top of their normal pay, when the projects are completed early or on time. The normal wages of course follows the normal overtime laws. However, under the New Deal Legislation, bonuses paid to employees who excel and work harder and faster thereby shorting themselves of several weeks of money by finishing the jobs earlier than they normally would have, unknown to me and them, are also supposed to be at paid time-and-a-half, which means KinderMorgan, which paid out the bonuses on top of the regular overtime, had to cough-up the additional half-time amount for each of their bonuses after the judgment. Their statement was: We disagree but will fully comply with the law. Again, sounds like a strongly principled corporation.
Now much is being made over their environmental record. Remember now, they are an energy company... Also remember how much we all liked BP because they were into solar; they were into green energy so much they made their logo green. We felt they were the greenest and environmentally friendliest of the big oil companies. Then the Gulf Oil spill occurred.
KinderMorgan is the third-largest energy carrier. But it takes a very hard look to find a record of their environmental problems. Of course the searches lately may have pulled them all to the top... but the one report found in Washington State is the most damning. If we bring energy to Wilmington, there will inevitably be environmental damage. And it will flow down into the bay and contaminate houses, beaches, and pristine ecosystems we have kept up for decades.
So that is where one needs to apply the risk. Is the gain of investment, or the loss of a million dollars a year, worth damaging the entire coastline of the Delaware Bay permanently as did the Valdez oil spill, sometime over the next 50 years.
Do we want this? Or are we happy to be a sleepy little port that supplies America with most of their bananas?
For a company to say, no oversight or the deal is off, is pushing me in the direction of saying... umm, maybe not this suitor at this time.... It is like marrying a partner without even talking to their parents. It may work out.... but then again... it may be a rough relationship over the long haul...
Fri, Feb 1, 2013 2:13am
btw. Today we get the Kinder-Morgan report at the Diamond State Port Corporation meeting at 10 A.M. at Buena Vista...
Fri, Feb 1, 2013 12:26pm
Isn't this typical of the Delaware way? Ignore past performance of a company and get in bed with it (same as with Delaware City) all for the sake of profits, or get in bed with a company with NO history (Bloom & Fisker) for the sake of promoting the party's agenda.
Fri, Feb 1, 2013 7:34pm
Sun, Feb 3, 2013 4:31pm
Granted we have two businessmen running the state right now, and when you run a business, you tend to look at things in black and white.
When you start a product line that is a dud and soaks up money, you kill it. If you have a sliver of your business that is draining money away from the part of your group that is making money, you dump it.
These guys aren't bad guys. They are performing their fiduciary duty to make our state less costly. But, from our standpoint as the people who have to live with that decision, we feel we ought to have a say. Perhaps we don't like the step mom the governor has picked out for us?
Being open and honest with our pleasure or displeasure is better in the long run for all to make a decision upon the actual facts, then rush into a relationship, and then find out we really were non compatible....
Sun, Feb 3, 2013 4:34pm
Please change one letter in the last sentence above; it changes the entire meaning from what I was trying to say... Gosh, darn, it. One little letter... sheesh... :)
"Being open and honest with our pleasure or displeasure is better in the long run for all to make a decision upon the actual facts, than rush into a relationship and then find out we really were non compatible..."
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