Kinder Morgan Canada Limited (KML) is a fossil fuel pipeline and terminal company operating in British Columbia (BC), Alberta and Saskatchewan. Its Houston-based parent company, Kinder Morgan Inc. (KMI), is one of the largest energy infrastructure companies in North America, transporting nearly 2.1 million barrels of petroleum products per day.23
KML is former owner of the Trans Mountain pipeline, an oil and gas pipeline system extending from Edmonton, Alberta, to Vancouver, BC. When it gained federal approval to twin the line, tripling its capacity and requiring seven times the number of tankers already travelling through the Georgia Strait,24 growing protests and legal challenges from Indigenous peoples, environmentalists and community groups ensued. In 2018, Kinder Morgan sold the pipeline and its expansion project to the Government of Canada for C$4.5 billion25—a move widely regarded as an unprecedented expression of the government’s commitment to sustain the oil industry. Given the sale of the pipeline, Kinder Morgan’s role in Canada’s fossil fuel sector is less certain today, but it has been a key player in shaping public discussions of oil sands and pipelines.
The Kinder Morgan group includes an array of publicly traded companies operating under Kinder Morgan’s name, of which Kinder Morgan Canada Limited (KML) is one. Kinder Morgan Energy Partners (KMP) was founded in 1997 by former Enron executive Richard Kinder and former vice-chairman William V. Morgan after they acquired the general partners of Enron Liquid Pipelines.1 After its incorporation the company continued to acquire various oil and gas pipeline and storage companies, creating distinct publicly traded companies under the Kinder Morgan corporate umbrella. This includes Kinder Morgan Inc. (KMI), formed out of the 1999 acquisition of KN Energy, a natural gas pipeline company. In 2001, Kinder Morgan Management, LLC (KMR) was created to manage KMP’s equity.2 In 2012, KMI acquired El Paso Corporation, creating the publicly traded entity El Paso Pipeline Partners, LP (EPB). In 2014, KMI acquired all of the publicly held shares of its various offshoots, including KMP, KMR and EPB, briefly making KMI the only Kinder Morgan company publicly listed—see “Trans Mountain Ownership,” below, for further details.3
With regard to KML’s former Canadian asset, the existing Trans Mountain pipeline, the Trans Mountain Oil Pipeline Company was established in 1951 when a Special Act of the Canadian Parliament gave the company a charter to build the pipeline, which was completed two years later. At the time, the company was incorporated by a partnership of various oil companies, including Imperial Oil and Shell Canada.4 It was acquired by KMI in 2005 through its purchase of the Canadian pipeline company Terasen. At the time of purchase, KMI indicated that it planned to increase the line’s capacity.5
|Kinder Morgan Inc.||US||65.94|
|Cambridge Global Asset Management||CA||4.00|
|CI Financial Corp.||CA||3.93|
|Grosvenor Capital Management||US||2.88|
|Grosvenor Holdings LLC||US||2.82|
|Province of Québec||CA||2.70|
|Manulife Financial Corp.||CA||2.22|
|Banque Pictet & CIE SA||CH||1.29|
Included are all shareholdings of 1% and greater. Source: Orbis Database, October 2018.
Until recently, KML was wholly owned by its US parent company, KMI. While KMI continues to be its largest owner, a mid-2017 initial public offering (IPO—a first sale of a company’s stock to the public) of Kinder Morgan Canada opened up the company to external owners. Valued at C$1.75 billion, the IPO shed light on the various corporations who are hoping to profit by financing increased crude oil exports. Most noteworthy, Canada’s five largest banks—Toronto-Dominion (TD), Royal Bank of Canada (RBC), Canadian Imperial Bank of Commerce (CIBC), Scotiabank, and the Bank of Montreal—held 73.6 per cent of the IPO, valued at C$1.28 billion.6
|Bank of Montreal||446 million|
Since its decision to sell the Trans Mountain Pipeline system, and the rights to the expansion, KML’s future as one of Canada’s largest oil transporters is uncertain. The company continues to hold a number of storage and pipeline assets, including the Canadian portion of the Cochin pipeline system which travels from Alberta and through the United States to Windsor, Ontario. The pipeline has the capacity to carry 95,000 barrels per day.7 It also operates a number of storage terminals in Edmonton and Vancouver.8
The federal government will retain key management and technical personnel within KML to execute construction of the expansion project, and the company will help Ottawa find other investors, as Finance Minister Bill Morneau said the government was not interested in holding on to the asset.9
In 2017, the National Energy Board (NEB) penned a letter to KML, ordering it to remove anti-spawning nets in salmon- and trout-bearing streams along the project’s proposed path.10 The nets were installed without prior consultation with the NEB, violating the National Energy Board Act.11 In the months following, the BC government issued an appeal to the federal government, urging it to enforce KML’s responsibility to act in accordance with these conditions.12 As of 2019, charges have never been laid. A year later, the BC Oil and Gas Commission issued a $920 fine against the company for violations of the provincial Water Sustainability Act.13 This modest fine drew considerable criticism from those suggesting that it did not match the severity of the offense.
In March 2017, the Corporate Mapping Project exposed the lobbying activities of the top fossil fuel companies in BC between 2010 and 2015.14 This study documented the political reach and influence of fossil fuel corporations. KML ranked 12th among the top lobbyists of provincial decision-makers, with 462 lobbying contacts with BC Liberal and NDP MLAs, many of whom represented constituencies along the Trans Mountain pipeline route.15
In June 2017, a campaign led by Indigenous leaders and environmental groups sought to expose the 14 largest financiers of KML’s IPO, including RBC.16 In response to the coalition, Dutch Bank ING withdrew its financing from all major oil sands pipeline projects, but RBC refused to comment.17
The federal government pledged to buy the Trans Mountain pipeline and expansion project from Kinder Morgan in May of 2018. The deal, currently valued at C$C4.5 billion, was devised to ensure the project’s construction amid investor uncertainty. 18 On August 30th 2018, the Federal Court of Appeal quashed the federal approval for the expansion, finding that the federal government failed to adequately consult with First Nations affected by the project, and that the NEB’s exclusion of marine shipping as a consideration violated environmental assessment legislation.19 A day later, the shareholders of KML approved the sale to Canada. While it currently holds the pipeline ownership under the Crown corporation, the Trans Mountain Corporation, the federal government intends to transfer ownership of the pipeline to a new owner in the future.20
On September 21, 2018, Prime Minister Justin Trudeau directed the NEB to reassess its recommendations to permit construction of the Trans Mountain pipeline expansion.21 In early 2019, the NEB concluded that while the marine shipping activities implicated by the project would likely cause “significant adverse environmental effects”, including negative impacts on threatened Southern resident killer whale populations, that the project was “in the Canadian public interest” and should be approved.22
Learn more about Kinder Morgan Canada at LittleSis.org
The intent of the Corporate Mapping Project database is to engage Canadians in a conversation about the role of the fossil fuel sector in our democracy, by “mapping” how power and influence play out in the oil, gas and coal industries of BC, Alberta and Saskatchewan.