Ex-Energy Secretary Rick Perry Joins Energy Transfer Board
January 6, 2020 EnergyNow Media
By Rachel Adams-Heard
(Bloomberg) Former U.S. Energy Secretary Rick Perry is joining the board of the general partner that controls Dallas-based pipeline giant Energy Transfer LP.The move puts Perry, who departed the Energy Department in December, back at the table of one of the biggest pipeline operators in the U.S. Billionaire Kelcy Warren’s Energy Transfer has made headlines for pursuing large projects and transactions that sometimes irked shareholders and regulators.Perry, a two-time U.S. presidential candidate who was Texas governor for more than a decade, was appointed to the board of LE GP LLC on Jan. 1, according to a regulatory filing late Friday. Energy Transfer is structured as a master limited partnership. The limited partner — Energy Transfer LP — is publicly traded, while the general partner is closely held, with Warren controlling a majority stake.Perry served as a director at Energy Transfer Partners before stepping down at the end of 2016. It was around that time that Energy Transfer was facing backlash over its Dakota Access crude oil pipeline, which drew months of on-the-ground protests in North Dakota. While seeking Senate confirmation for his Energy Department appointment, Perry pledged to “not participate personally and substantially” in matters involving the company for a set period of time unless he received special authorization.
Building pipelines in the U.S. is becoming increasingly difficult as environmental groups employ savvier legal tactics and climate-change concerns intensify. But Energy Transfer has been criticized not only for specific projects but for corporate governance practices as well.
The MLP model the company employs means the general partner — in this case, LE GP — doesn’t have a fiduciary obligation to common investors. And board members aren’t required to be independent. The model used to be popular because instead of paying corporate taxes, MLPs pass cash directly to stockholders, who pay taxes on the quarterly payouts.
Like fellow partnership peers, Energy Transfer has lagged the broader pipeline sector. Its stock is up just 1.6% in the last year, while an index of pipeline companies has gained about 15%.
Perry joined another famous Texan on the LE GP board: Ray Davis, co-owner of Major League Baseball’s Texas Rangers. The remaining members include a mix of current and former Energy Transfer executives, a private equity partner and a former president of the Overseas Private Investment Corp.
Earlier on Friday, Energy Transfer shares rose after Pennsylvania regulators lifted a moratorium on permit reviews for the company’s projects following an explosion on one of its gas lines in 2018.
EnergyNow is an online energy news and data media service dedicated to providing essential up to-date information on the United States energy industry.
We provide live feeds designed to help energy professionals, field personnel, business owners, and senior business leaders get the latest energy news and data, energy industry press releases and energy job and event listings.
Help us to improve EnergyNow, Give us your feedback