Disturbing buy/sell outs

I was reading the news today with regard to Canada and BC and I have been quite disturbed with what I read today. I was just reading that Terasen Gas was bought out by an American Company, namely, Kinder Morgan of Houston in the story posted here.

If you do not know much about Terasen, this company is the major natural gas distribution company for BC which deals with gas distribution to residents of BC in addition to owning assets in terms of gas and oil pipelines for distribution into Canada and the States. In addition, Terasen also controls pipelines for water distribution in BC. If you are interested in learning more about Terasen Gas, their webpage is located here.

I am uncomfortable with the buyout of Terasen by an American company as it gives the US stronger access into Canadian natural resources. Canada has the second largest oil reseves in the world with its reserves in Oil Sands (cf. PDF report here) and the largest fresh water reserves in the world. With current ongoing disputes such as softwood lumber, which BC has just won in the WTO courts, the US still refuses to remove tarrifs on imports of Canadian lumber into the US (the US has so far collected and is holding $5 billion in lumber tarrifs, which is Canadian money). Frankly, putting the management of distribution of Canadian natural resources at the hands of an American company is not a prudent decision under current circumstances-- why would you want give control of energy distribution to an American Company?

I will say this much, it is not entirely the fault of the government that this happened, though they did allow the possibility for this to happen after splitting up BC gas into a production and distribution company (if I am not mistaken) which are on the stock market. The problem with this is that a company can be bought out as it just happened now due to management decisions and shareholder agreements that bring the most value to them (the shareholders voted in favor of Terasen being sold). Share holders could careless about Canadian or US interests so long as the company they invested in makes them money. Now the question is, what is this decision going to cost BC and the average person.

I will say right off that I am no expert in the energy market and I have little understanding of how gas distribution companies work and the current state of energy trade regulations. I have already tried looking at the financial reports and investor information of Terasen Gas to determine their assets and customers (if you have both pieces of information you can determine how they make their money). Unfortunately I haven't been able to find much details on neither pieces of information. If anyone does know how the energy industry works please feel free to contact me as I do want to learn more about this industry.

The reason is the following: I would like to confirm or disprove the following concern I have with the US growing needs for natural resources such as gas and possibly water in the near future. What is to stop the American owned Terasen company from diverting Canadian resources into a lucerative American market, which could lead to rising prices in the Canadian market for gas? Looking at this from the point of supply and demand, if you have an American customer that might be more willing to pay more for gas than a Canadian company, they may have preference to sell resources to the Americans, unless if Canadian customers pay atleast the same price. I highly doubt that Canadian customers will face shortages of fuel, but it could lead to higher prices.

The above is a possible scenario I concocted based on guesses and assumptions (and hence could be far from the truth). I could come up with more possibilities but they would be little more than stabs in the dark which is not what I want to do (but I do want to raise why is it important to look at the implications of this event, which was the point of the last example). Without a better understanding of the business of Terasen gas (which seems to have little details posted in their webpage) I cannot understand the full implictions of the sale of this company to the US, which bothers me. What I exactly need to know is what service do they provide and what do they control in terms of natural resource flow to the US.

The other thing that needs to be understood is why did this company get sold and what value did the shareholders of this company saw interms of letting Terasen get bought out by Kinder Morgan.

It is now 1:47 am. Time for sleep.