An open letter to the CPP Investment Board

In 2002, an American company called Enron was a prime contributor to a wave of problems with investments that led to a major tanking of the US economy, with pensioners losing much of their pension, and major stock losses. I wrote about this and other investment “games” in my 2012 book – Salvaging Capitalism/Saving Democracy. Enron was a classic shell game, with interlocking entities with shifting boundaries that kept debt hidden from sight. Ultimately, some of the players were jailed. Others avoided that fate.

So imagine my shock and dismay to find otherwise supposedly sane politicians and investment people actually talking seriously about putting MY money into what I call “the Son of Enron”.  Richard Kinder was COO of Enron in the late 1990s. He got a sweet deal, getting out shortly before the proverbial stuff hit the fan. He is now worth billions. You might see that as the sign of a good business man. That is not what I see.

In my 2012 book, I talked about what I called the five games of the stock-market: the shill game, the shell game, the short game, the steal game, and the secured creditors game. Kinder Morgan has already showed its colours in taking investments in Kinder Morgan Canada and using them to pay down the US company’s debt.

Accessing tidewater will NOT guarantee a higher price for tar sands oil.  From my perspective, this entire operation is a shill game – and it seems there really is a sucker born every minute. Promoting a stock with a concept that inverts the supply-demand curve that we all learned in Economics 100 seems totally ludicrous.  Incredulous!

(By the way, I am trained as a chemist and have provided training materials for heavy oil upgraders, so I DO know the processes involved. And I have been in business for myself for 37 years, so am quite competent with a balance sheets or revenue/expense statements.)

Ultimately, probably sooner rather than later, TMP will become a stranded asset. Other countries are moving much faster on renewables, with China installing solar and wind faster than any other country.  Surely, with your experience, you know that Kinder et al will not be around to clean up the stranded-asset mess. The government will be on the hook to deal with the abandoned infrastructure.

(The Alberta Energy Regulator just gave Suncor a get-out-of-jail-free card on cleaning up their massive tailing ponds – until 70 YEARS after they abandon the mine. Seriously? You can’t make this stuff up!)

And none of this has even considered the moral and financial implications of putting highly volatile and explosive diluted bitumen into a pipeline, or the impacts of these known carcinogens on the environment when, not if, a major spill occurs.

I am trained as a chemist. There is no way this crud (not a mis-spelling) should be allowed in pipelines, let alone tankers, or rail cars. There is an argument to be made, in the short term, for rail transport of UNDILUTED bitumen. Surely the government is aware of this option … surely. But then again, they seem to be listening to the shills.

Does rail transport of UNDILUTED bitumen represent yet another risk factor to investment in the pipeline? Do you know? As with any responsible investment, it is imperative that you do your due diligence and thoroughly interrogate this investment from a financial and business perspective, and make that analysis public.

Finally, there is growing research and legal opinion that pension trustees have a fiduciary duty to consider climate change in investment decisions. The UK’s Pensions and Lifetime Savings Association (PLSA) has said, “Climate change is not just an ethical issue for pension fund governance bodies, but a major threat to financial stability highlighted by numerous credible economic commentators and rigorous research. It is therefore imperative that boards and committees consider the potential impact that climate change will have on their investment portfolios.”

Please respond and confirm that you are not putting my retirement income at risk by investing in a risky pipeline project from the Son of Enron.