Let's say you're trying to sell your old car, a real beater. You hope you can get some sucker to give you five grand for it. And then along comes this young guy and, before your head can stop spinning, you're $32,000 richer.
Only you're not a guy with an old car. You're a sketchy Texas company with a beat up old pipeline, some rights of way and a few other assets. The young guy is none other than the Dauphin himself, Justin Trudeau. And Justin makes you an offer for your 60+ year old pipeline that's about 637% of what the damned thing is really worth. And then you do your Happy Dance.
HuffPost reports on a study that found Kinder Morgan made a 637% return on the sale of the TransMoutain pipeline to Deep Pockets Trudeau.
Texas-based Kinder Morgan made a seven-fold return on the sale of its Trans Mountain pipeline system to Canada's federal government, according to a new report that also warns the federal budget deficit could jump by 36 per cent because of the purchase.
The report comes from the Institute for Energy Economics and Financial Analysis (IEEFA), which is funded by a variety of philanthropic groups dedicated to climate and energy issues, including the Rockefeller Family Fund.Morneau, of course, called it a $4.5 billion "investment for Canadians" and even said it was a "fair price."
Morneau has said that the Liberal government plans to quickly flip the pipeline to a new owner, Alberta perhaps or the private sector. The only problem is it's going to be what's called a "distress sale." Nobody is going to pay the crazy money that Trudeau lavished on Kinder Morgan. It's highly unlikely that anyone will pay anything approaching whatever the real fair market value of TransMountain might be.
What is the fair market value of the J. Trudeau Memorial Pipeline today? What is a mega-bitumen pipeline worth when the Sword of Damocles, the Carbon Bubble, hangs over its head? When you're buying a pipeline you're paying for a 60-year asset. That's a pretty big risk when you look at the volatile state of world oil markets and the inevitable transition to alternative clean energy options. You're going to need to get your money back fast and that means you won't be paying multiple billions of dollars.