Kinder Morgan Energy Partners

Kinder Morgan Energy Partners LP NYSE|KMP (KMEP) owns or operates petroleum product, natural gas, and carbon dioxide pipelines, related storage facilities, terminals, power plants and retail natural gas in the United States and Canada. KMEP is a Master Limited Partnership.

The company, headquartered in Houston, Texas, was co-founded by Richard Kinder and William Morgan. The company began in 1997 as a spinoff of some assets of Enron, and now employs many former Enron employees, including former Enron whistleblower Jordan Mintz. [ [http://www.forbes.com/facesinthenews/2006/08/28/kinder-morgan-cx_cn_0828autofacescan01.html Kinder To Buy Company He Co-Founded - Forbes.com ] ]

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 being involved 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.

Controversies

In a sale that met with public protest, the company acquired Canada's BC-based Terasen Inc. on November 30, 2005, which was subsequently renamed Kinder Morgan Canada.

Accidents

Pipelines operated by this company have been involved in over thirty significant incidents in the United States. [http://thetyee.ca/News/2005/08/23/KinderMorgan/] In some cases the pipelines have exploded without warning or even provocation (as from construction equipment), causing the incineration of passers-by in several events. [http://www.mindfully.org/Energy/Lax-Regulation-Industry.htm] [http://www.mcdep.com/km30819.PDF]

usuin 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.

Walnut Creek gasoline fire

On November 9, 2004 in Walnut Creek, California, a petroleum pipeline carrying gasoline to San Jose owned and operated by Kinder Morgan Energy Partners (here KMEP) was struck by a backhoe used by Mountain Cascade Inc., a contractor operating in the construction of a water pipeline for the East Bay Municipal Utility District. A massive gasoline spill was subsequently ignited, likely by welders of subcontractor Matamoros Welding working inside the water pipe, resulting an explosive fireball that caused the deaths by burns of four workers and their 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. Preliminary indications are that the location of the petroleum pipeline was staked out with an error of five feet by KMEP. EBMUD contract with MC specifies that "contractor shall verify location" [of the KM pipeline prior to construction (in this section)] . EBMUD had terminated the first Contractor, Modern Continental (MC) for moving too slowly, with MC pointing out the need for caution due to a previous staking error of 13 feet in another location. KM claims that it is not its responsibility to determine exactly the location of the pipeline [1] . Contrary to established procedures, KMEP had no representative on site at the time of the disaster. EBMUD denies rushing its contractors and is currently suing Modern Continental for breach of contract. Investigation by State of California authorities was completed and the results announced on May 5, 2005. CalOSHA (California Occupational Safety and Health Administration) placed principle blame on the pipeline operator (a unit of Kinder Morgan) for failure to accurately stake out the pipeline location, with some responsibility shared by the other parties.

Further details were released in a State Senate report published June 11, 2005 and widely reported throughout the Bay Area. According to a Contra Costa Times article published June 19th, 2005 the report noted that the KMEP "line rider" (the person with primary responsibility for locating the pipeline) was unable to read blueprints. Furthermore a second line KMEP line rider had stated in response to subcontractor inquires that the pipe would be bent only where it was to go around a tree and since no tree was present there was not a bend in the pipe. (The tree had been removed prior to the construction.) KMEP continues both to deny responsibility and to press its legal appeals.

On Wednesday, July 7, 2005, the [http://osfm.fire.ca.gov/aboutus.html California State Fire Marshal] assessed a fine of $500,000 upon KMEP, the largest ever levied within the state.

On Friday, September 22, 2007 the subsidiary pleaded no contest to six felony charges and will pay a fine of fifteen million dollars and accept two years of probation, plus a separate five million dollars in civil penalties for violations of fair business practices laws [Contra Costa Times, headline article Firm to pay $15 million for '04 blast, Saturday September 22, 2007 ] The significance of the recent plea is not the dollar amount of the fines, even though record setting, but rather the criminal nature of the settlement. The company has previously settled civil liabilities to injured parties for a total of sixty-nine million dollars.

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, spraying and spilling 234 m² of crude oil into the neighbourhood and ocean adjacent to Hastings Street in Burnaby, British Columbia.

References

External links

Kinder morgan information

* [http://www.kindermorgan.com/ Kinder Morgan web site]
* [http://www.terasenpipelines.com/bins/index.asp Kinder Morgan Canada]
* [http://www.terasengas.com/default.htm Terasen Gas]
* [http://www.hoovers.com//free/co/factsheet.xhtml?COID=43587 Hoover's Online] Third party fact sheet.

News articles

* [http://www.ktvu.com/news/3951364/detail.html TV Station KTVU (Oakland, California) concerning event]
* [http://sfgate.com/cgi-bin/article.cgi?file=/n/a/2005/05/05/state/n183234D35.DTL Chronicle web site on CalOSHA investigation results]
* [http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/06/11/BAG1AD71BI1.DTL&hw=Walnut+creek+Kinder+Morgan+fire&sn=001&sc=1000 Reporting on the State Senate investigation]
* [http://www.cbc.ca/canada/british-columbia/story/2007/07/24/bc-oilspill.html CBC on Burnaby spill]
* [http://www.charlestoncitypaper.com/gyrobase/Content?oid=oid%3A30895 Vigilant citizen confronts Kinder Morgan]