Look you guys, I am a total Buckeye hog having holdings over five years. BUT I am looking at the articles on MLP's questioning the Maintenance Reserves. You can do your own DD, but Buckeye owns thousands of miles of 40 year old ERW welded seam pipe. There have been some significant fires relating to this type of old pipe including the PG&E San Bruno fire. There is no periodic replacement schedule for this pipe....it is only repaired. So....how long can this go on before regulators decide to require the old pipe to be replaced.
Of course, we are all speculating what the Ivy League Hockey players will come up with, but I believe they will talk about the limited funds devoted to Capital Expense Maintenance. Kinder Morgan has interests in about 80,000 miles of pipeline. The replacement cost is about $1MM per mile, however Kinder budgets only a fraction of 1% of replacement cost. Some is over 40 years old and manufactured using the ERW process. At some point, the govt. may mandate replacement cycles, whereas KM now simply repairs. The PIGs have been shown to be unreliable for inspection of ERW seam bursts. It was this type of pipe that caused the PG&E explosion in San Bruno, CA.
Under current tax law, you will owe UBTI taxes if you receive over $1K per year. If you want exposure, buy KMI or KMR.
Pleasingly plump...Have owned it and bought more. Very limited tobacco exposure, solid portfolio, leverage 37%..
.Hey whats not to like???? Tell me if you know.