There are signs that investors in Energy Transfer (Sunoco’s parent) are starting to get restless. If enough of them abandon the stock to seriously affect its price, management will start to pay attention. There has been almost no sign of that type of stockholder exodus in the past, but now there are starting to be hints.
The investment website Seeking Alpha (www.seekingalpha.com) carries articles with solid financial information about Energy Transfer (whose stock symbol recently changed to ET from ETP/ETE) several times a year. Those articles are very helpful, but what I value most is the comments they draw from ET investors. Because Seeking Alpha does a better job of covering ET than most investment sites, more investors congregate (and comment) there.
For the last couple of years, Mariner East has been one of ET’s most important projects, so there have been many comments about it. In the past, the investor comments have been predominantly criticisms of “liberal tree-huggers” who are seen to be attempting to block all pipelines because of their senseless opposition to fossil fuels. They are often portrayed as being too dumb to recognize what an important role petroleum products play in their lives.
A shift in tone? I have noticed a change in some of the comments recently, though. This shows up in the comments following Governor Wolf’s announcement on February 8 that the Department of Environmental Protection would halt its processing of Sunoco environmental permits, and that the Revolution pipeline (which exploded in September) would not be permitted to resume operation for the time being. You can tell which comments resonate with investors by the number of “likes” they receive, and below I quote some of the most-liked comments (as of February 10).
Some of the comments are very specific to the DEP’s complaints about soil and erosion issues with the Revolution pipeline. I won’t cover those comments here because they are not really representative of overall investor attitude.
There continue to be many comments along the lines of “let them freeze in the dark” (that got 16 likes; it is a reference to the pipeline opponents’ supposed ignorance of the important role of natural gas in heating and electrical generation). But there are also quite a few commenters wondering who is at fault for the delays and mis-steps. For example, this comment got 12 likes:
Is The Pennsylvania DEP piling on or is the ET subcontractor incompetent?
This comment got 32 likes:
I like ET. I really do. It has so much potential. But the mgmt is obviously a big issue. I do not read so many problems for other MLPs. ET has more problems than 6 other MLPs combined. [“MLP” is short for Master Limited Partnership, the business structure of many pipeline companies.]
This got 12 likes:
Kelcy [Warren, Energy Transfer CEO] and the rest of management understood the political environment in Pennsylvania. They made estimations about the time and expense to complete these pipelines that should have factored this in. They were wrong. They are not competently executing. The buck stops with Kelcy.
This got 13 likes:
It IS a management failure, which explains the recent weakness of ET stock.… Considering its importance to ET, how could they mess up Mariner pipeline like this? Why didn’t ET comply with the DEP enforcement order? Major management failure, Thanks KW [Kelcy Warren].
The majority of comments, and some with many likes, are still anti-liberal, anti-environmentalist, and anti-Democratic. Some are elaborate conspiracy theories. (Example: “…start openly referring to them as what they are and what their whole movement really is and what they are really after. Communism… Abolishing air travel, abolishing privately owned land and homes and making everyone who wants to work a government employee….”)
There are also commenters who suggest simply leaving Pennsylvania, as a lost cause. This got 16 likes:
I’ll bet that if a solar farm development had the same infractions, nothing would be said. This is becoming an obvious political green hit piece on pipelines in Penn and ET is the scapegoat. Time for the pipeline industry to simply finish up their existing pipelines and do nothing more. No more new anything. The liberal left green movement will make up any excuse to stop anything fossil. Just north in Canada, new regulation has pipelines even adhering to gender analysis. The enviro stuff is going crazier and crazier.
This got 10 likes:
No way for fossil industry to exist in a state administered by Dems, in the long term. Procedural hurdles will always be thrown in the way. Invest accordingly.
We’ll see what effect, if any, the increasing questions about Energy Transfer’s management and strategy has on the stock price. Although the governor’s action was publicized early Friday afternoon in some media, the article on Seeking Alpha was not posted until after the market closed on Friday.
What’s missing from the investor comments? You might have expected that issues around pipeline risk to dense suburbs and reckless pipeline routing would give investors pause. That doesn’t seem to be the case. It may be surprising to those of us involved in the local pipeline fight, but the issues of risk and routing are still almost totally missing from the comments. Although these are the central issues for many pipeline opponents, the investor community seems blissfully oblivious to them. For the most part, they regard all of Sunoco’s pipelines as energy sources that everyone should embrace, and they consider the risk minimal (if they consider it at all).
And the fact that most of the product is being exported for plastic production is largely seen as a plus in the investor community: they understand that US markets are glutted, so of course exports are the obvious solution. Doesn’t everyone, everywhere, need more plastic?