{"id":17912,"date":"2016-12-06T09:36:48","date_gmt":"2016-12-06T14:36:48","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=17912"},"modified":"2016-12-07T16:32:07","modified_gmt":"2016-12-07T21:32:07","slug":"americas-largest-college-mutual-fund-va529-owns-spectra-energy-a-stranded-investment","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2016\/12\/americas-largest-college-mutual-fund-va529-owns-spectra-energy-a-stranded-investment.html","title":{"rendered":"America’s largest college mutual fund VA529 owns Spectra Energy, a stranded investment"},"content":{"rendered":"

\r\nParents and grandparents buy 529 college savings plans as safe investments,\r\nso VA529 chose poorly in Spectra Energy,\r\n\r\n<\/a>\r\nthe very risky company behind the Sabal Trail fracked methane pipeline now plowing through the Floridan Aquifer drinking water of south Alabama, Georgia, and all of Florida and under the Withlacoochee and Suwannee Rivers against growing opposition.\r\nMaybe you’d like to mention that to\r\n\r\nMary G. Morris, the Chief Executive Officer of Virginia529 College Savings Plan<\/a>,\r\nthe biggest mutual fund investor in both Spectra Energy and in Enbridge, which is buying Spectra.\r\nThere’s a handy\r\n\r\nVA529 contact form<\/a> or you can call or write:\r\n\r\n\r\n

\r\n1-804-371-0766\r\n
\r\nToll-Free: 1-888-567-0540\r\n
\r\n9001 Arboretum Parkway\r\n
\r\nNorth Chesterfield, VA 23236\r\n<\/blockquote>\r\n

\r\nSpectra is so risky it just sold itself so Enbridge would\r\ntake on about $22 billion of Spectra debt<\/a>.\r\nDebt especially racked up since\r\nnatural gas prices tanked in 2014<\/a>.\r\n

\r\n\r\n<\/a>\r\nEnbridge is one of the two pipeline companies behind the Dakota Access Pipeline (DAPL) that\r\n\r\nwas just defeated at least temporarily by thousands of native Americans\r\nand supporters including U.S. military veterans<\/a>.\r\nEven Forbes says \r\nDAPL, like the failed Keystone XL Pipeline before it<\/a>,\r\nis likely to become a stranded investment.\r\nIt’s not good press when a company uses pepper spray, dogs, and fire hoses in sub-freezing temperatures on unarmed water protectors, and\r\n\r\nshoots a college-age protector who may lose her arm<\/a>.\r\n

\r\nAnd there’s even a specific report about DAPL as a stranded asset.\r\nCathy Kunkel and Clark Williams-Derry, Institute for Energy Economics (IEEFA), November 2016,\r\n\r\nThe High-Risk Financing Behind the Dakota Access Pipeline:\r\nA Potential Stranded Asset in the Bakken Region of North Dakota<\/a>,\r\n

\r\n

\r\nDAPL faces a looming financial deadline. The pipeline’s principal\r\nbacker, Energy Transfer Partners (ETP), has conceded in court\r\nproceedings that it has a contractual obligation to complete the\r\nproject by January 1, 2017. If it misses this deadline, companies\r\nthat have committed long-term to ship oil through the pipeline at\r\n2014 prices have the right to rescind those commitments—and\r\nmay well exercise that right.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\n\r\n<\/a>\r\nSpectra Energy’s Sabal Trail fracked methane pipeline through Alabama, Georgia, and Florida also faces widespread and growing opposition.\r\nSabal Trail also faces a looming in-service deadline of May 2017,\r\nwhich has already slipped to June.\r\nAnd Sabal Trail, like DAPL, is being funded by borrowed money:\r\nthe ratepayers of Florida Power and Light can’t possibly already have\r\npaid in the $3 billion for that boondoggle.\r\n

\r\nThe Conclusion of the IEEFA report could just as easily have been written about Sabal Trail:\r\n

\r\n

\r\nThe rush to build the controversial Dakota Access Pipeline stems\r\nlargely from the financial motivations of Energy Transfer Partners,\r\nmotivations that do not necessarily coincide with the interests of\r\nBakken oil drillers or with any economic rationale for increased\r\nregional pipeline capacity. The contracts for DAPL were signed in a\r\nradically different economic environment in which Bakken oil\r\nproduction was growing and drilling companies were doing well\r\nfinancially. The DAPL is a superfluous project being built to\r\npreserve the favorable contract terms that its developers negotiated\r\nin 2014.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nBack in 2013, FPL’s excuse for Sabal Trail was Florida needed 13% more new electricity in the next decade.\r\nBut this year, FPL admitted<\/a> in boldface in the executive summary of its 2016 Ten Year Plan:\r\n

\r\n\r\n“Difference: FPL does not project a significant long-term additional resource need until the years 2024 and 2025.”<\/a>\r\n

\r\nSo Sabal Trail, like DAPL,\r\n“a superfluous project being built to preserve the favorable contract terms that its developers negotiated in” a by-gone year.\r\nIEEFA carried an article spelling this out.\r\nGillian Neimark for Southeast Energy News, IEEFA, 14 November 2016,\r\n\r\nPipeline Glut in Southeast U.S.<\/a>,\r\n

\r\n

\r\nWhile the shale boom has seen a proliferation of new natural gas\r\npipelines throughout the Southeast, critics say many of the projects\r\nare not needed and are simply a way for developers and utilities to\r\nreap profits on the backs of ratepayers.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nEven if Sabal Trail ever starts shipping fracked methane,\r\nit will still be a stranded asset now that the people of Florida defeated the fossil-fuel-funded fake Amendment 1 and\r\n\r\nSolarCity, the largest U.S. solar panel installer, is starting operations in Florida<\/a>.\r\n

\r\nDon Pittis, CBC News, 8 April 2016,\r\n\r\nAnalysis: Warning for investors, not just environmentalists, in fossil fuel spending;\r\nWhat if pipelines, oilsands and power plants don’t last long enough to pay off?<\/a>\r\n

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\r\n\r\n<\/a>\r\nIt is no surprise when committed environmentalists scoff at new\r\ninvestments in pipelines and oilsands. But a new study indicates that\r\nself-interested investors should also be wary.<\/p>\r\n

As the Canadian Association of Petroleum Producers announces a $50\r\nbillion drop<\/a> in Canadian oil and gas investment, the new research\r\nraises concerns about the valuation of any future investments, saying\r\nthey may not last long enough to pay off.<\/p>\r\n