Aren't we all just loving the grief that the FTC is giving Kinder Morgan? This is causing a huge readjustment of assets and debt and making us all nervous. Reminds me of my retirement last year.... I just had to walk away from the work world and leave it up to the younger people to figure it all out now. So let all of them and the regulators do the hasseling about this and let us know in about another year or 2 how it turns out. America seems to have fallen in love with regulation, or at least they voted for it in 2008. Makes us wonder why we started this whole purchase of El Paso in the first place....adding and subtracting assets and debt all over the country. Regulation is just wonderful.
And to other posters about the GP taking 50% of the cash flow and then we get the other 50%: we get the declared distribution rate and that's the deal that we pay for. Love it or leave it. If Kmp was selling at half the price, we would then be getting the same rate on our investment as double that 50%. So the fault is the current purchase price....it gives a distributon rate of about 6%. But most anybody knows that the standard rate of return on most business including pipelines is above 10%. Limited partners in our case only get the declared agreed rate depending upon when we purchased the shares.
further, on acceptable distribution rate, if you had bought Kmp like I began doing in 2009 when it was below 50, you would now be getting over 10% rate of return on your investment, more with reinvested shares. That is why the analysts have been saying lately that it is the future growth rate of the rate of pay out that will make the biggest difference in your stock shares.
Regulations are a neccessary evil. No one likes them, but we can't have a society without them. Would you like Nuclear Industry without NRC? Don't forget defunding of regulatory oversight was the cause of Credit Default Swaps run amock. Look at it as a cost of doing business, you pay for Insurance not because you want to collect on it, but because things happen when there is no one monitoring. Many died operating Boilers till ASME framed rules and regulations, how would you feel if there was no EPA and chemicals dumped to pollute your groundwater. Sadly, we hear the negatives of how regulators prevented progress, but we never hear the catastrophe they prevent. Republicans love to criticise regulations I consider them opportunistic by telling you they do nothing. have we not had enough BANK and FINANCIAL disasters yet?
The difference between the Russian nuclear explosion, the Japanese nuclear meltdowns, and Three Mile Island meltdown is levels of regulation. And even though the US meltdown ended OK, the regulations were increased and will continue to be.
Some regs. like the diesel exhaust go too far too fast and industry can't keep up. Diesel cars were pulled from the market and Navistar still has to pay a fine for each new engine it ships until they find a fix to meet the new regs. I've heard little data was used to set the exact level picked.
If you are a gas producer in the Rockies and want to ship your gas to distant markets, you'd have three main choices: Rockies Express, CIG, or Ruby. All currently owned by Kinder Morgan.
Antitrust laws have been on the books for over 100 years, and would have dictated the same result if KMI's situation had arisen 50 years ago. Don't blame current government. Thank Teddy Roosevelt, Woodrow Wilson, etc.
Richard Kinder never thought for one moment that certain asset dispositions would not be necessary regarding the EP acquisition.