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Fossil-fuel billionaire Kelcy Warren is about to land a knockout punch on Greenpeace.
The pipeline magnate’s company, Energy Transfer ET -0.41%decrease; red down pointing triangle, is behind a lawsuit that Greenpeace says could bankrupt the environmental group’s U.S. affiliate. A courtroom victory, which some Greenpeace officials fear is likely, would be a coda in the nearly decadelong battle between the two sides over one of Warren’s signature projects: the Dakota Access Pipeline.
In 2016, Greenpeace, Native American tribal groups and thousands of other activists camped in a remote corner of North Dakota to block the project. The monthslong protests impeded the oil pipeline’s completion and became a flashpoint in the fight over fossil fuels. Images of sometimes violent confrontations between protesters and law enforcement made international news.
Warren ultimately completed the conduit, but the fight wasn’t over for him.
Warren sees green activists, who he once said should be “removed from the gene pool,” as a serious threat to the industry. Starting with protests of Keystone XL, which successfully derailed that project, activists have targeted pipelines across the country.
“Everybody is afraid of these environmental groups and the fear that it may look wrong if you fight back with these people,” Warren said in a 2017 TV interview. “But what they did to us is wrong, and they’re gonna pay for it.”
Now the pugnacious tycoon, who is valued at more than $7 billion, is within spitting distance of dealing a serious blow to Greenpeace—and the U.S. green movement.
Native American protesters and their supporters at a demonstration against the Dakota Access Pipeline near Cannon Ball, N.D., in September 2016. Photo: Robyn Beck/AFP/Getty Images
Energy Transfer’s lawsuit alleges several Greenpeace entities incited the Dakota Access protests, funded attacks to damage the pipeline, and spread misinformation about the company and its project. The case is set for trial in February in a North Dakota state court, where both sides expect a fossil-fuel-friendly jury. Energy Transfer is seeking $300 million in damages, which would likely wipe out Greenpeace USA, according to the group’s leadership.
Deepa Padmanabha, Greenpeace USA’s acting co-executive director, said the lawsuit is “an existential threat” to the group.
In court papers, Greenpeace says it played a limited role in the protests, which it says were organized by Native American groups, and never took part in any property destruction or violence.
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The litigation is unlikely to affect Greenpeace’s international operations. While the Greenpeace network’s coordinating body in the Netherlands is also a defendant, Energy Transfer may struggle to enforce any award against it because it doesn’t own assets in the U.S. But Greenpeace says losing its affiliate—and influence—in the U.S. would have a profound impact on the group’s ability to address climate change.
Environmental leaders fear the demise of Greenpeace USA would send a chilling message to their movement. Josh Galperin, an associate professor of law at Pace University, said that environmentalists have long recognized that they can choke off pipelines by challenging them on legal grounds. Now, some oil-and-gas companies are realizing they can use litigation to stop green activists.
Warren declined an interview request. “We support the rights of all Americans to lawfully protest and express their opinions,” an Energy Transfer spokeswoman said. “However, when it is not done in accordance with our laws, we have a legal system to deal with that.”
Pipeline magnate
In the sedate world of pipelines—a low-risk, fee-based business—Warren stands out for his aggressive style. Since co-founding Energy Transfer in 1996, he has snagged one competitor after another and built one of the largest pipeline firms in the U.S., with about 125,000 miles of oil and gas lines and related assets and a market capitalization of roughly $55 billion.
His success has afforded him a $46.5-million ranch in Colorado, a castle-like home in Dallas, and a private island in Honduras, where visitors can ride a zip line over a lagoon and nearby sharks.
Warren has also emerged as a key oil industry supporter for Donald Trump. He co-hosted a May fundraiser in Houston for the former president, and he and his wife have contributed more than $20 million to Trump’s presidential runs since 2016.
Protests against the Keystone XL pipeline, such as this one in South Dakota in 2019, helped derail the project. Photo: Adam Fondren/Rapid City Journal/Associated Press
Warren’s congenial demeanor belies his drive, his friends say. When he and Marshall McCrea, Energy Transfer’s current co-chief executive, were preparing to run the Athens marathon in Greece, Warren warned the executive he would beat him—despite only sporadic training. On race day, he finished ahead of McCrea.
“He enjoys business so very much because he sees it as a game,” said Charlie Waters, a former Dallas Cowboys football player who worked at Warren’s company. “He’s so damn competitive.”
The son of a Sun Oil Co. employee, Warren grew up in East Texas and was a pole vaulter in high-school. After graduating from the University of Texas at Arlington with a civil engineering degree, he got a job at a pipeline company.
Following the demise of Enron, Warren bought thousands of miles of pipelines. The shale boom, which saw scrappy drillers in Texas, Pennsylvania and North Dakota scramble for steel tubes to ship their product in, made the conduits hot property, and further whetted his appetite: Between 2011 and 2014, Energy Transfer splurged more than $12 billion on deals.
While his stature in the industry grew, Warren remained largely unknown to the broader public.
That changed in the spring of 2016.
A bitter fight
That year, protesters descended on North Dakota to try to block the Dakota Access project, a nearly 1,200-mile pipeline designed to ferry about 570,000 barrels of crude from the Bakken Shale field to Illinois. Native American leaders said the $3.8 billion pipeline threatened sacred sites and posed a drinking-water risk.
The protests saw a number of clashes between authorities and activists. At one point, law enforcement trained water cannons on protesters in freezing temperatures. President Trump ultimately reversed a decision by President Obama halting the pipeline and, after years of litigation, it was completed.
Sections of the Dakota Access Pipeline being buried in Morton County, N.D., in October 2016. The pipeline was completed the following year. Photo: Tom Stromme/Rapid City Journal/Associated Press
In Warren’s view, Greenpeace was largely to blame for a construction delay he said cost the company millions of dollars, and Energy Transfer sued the group for $300 million under a law created to prosecute the mafia that could allow the company to claim triple that amount. When a federal judge dismissed the suit, the company filed a new one in a North Dakota state court.
Greenpeace says that it only played a supporting role in the protests, and that the lawsuit, which alleges the group spread false claims about Dakota Access, is an attack on free speech. It has paid for radio ads in Dallas, where Warren lives, that say, “This is America, we all have a right to speak—but Energy Transfer disagrees.”
“That sets a really dangerous precedent no matter who you are or what your politics are,” said Greenpeace USA’s Padmanabha.
Energy Transfer’s claim has caught the attention of high-ranking Democrats. “Energy Transfer’s $300 million lawsuit against Greenpeace shows how megacorporations deploy legal strategies to strong-arm and crush their critics,” said Rep. Jamie Raskin (D., Md.), who has introduced legislation to establish a procedure to dismiss and deter strategic lawsuits against public participation.
The lawsuit has thrown Greenpeace USA, which has been active since the 1970s, into turmoil. It is preparing contingency plans for a number of scenarios, including a bankruptcy. The group’s leadership and the board have clashed over what would constitute an acceptable settlement with Energy Transfer, according to people familiar with the matter.
The lawsuit poses its own risks for Warren. Some oil-and-gas investors expressed concerns about the claim, saying it makes the industry look vindictive and could result in a reinvigorated protest movement. But people close to him say that Warren, who has gone to the mat with competitors and critics alike, isn’t the kind to lay down arms.
“You’re not going to wear Kelcy Warren out, I can promise you that,” said Matthew Ramsey, a director on Energy Transfer’s board. “He will fight to the bitter end.”
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The post The Texas Billionaire Who Has Greenpeace USA on the Verge of Bankruptcy appeared first on Energy News Beat.
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