Kelcy Warren, chief executive of the firm behind the contentious Dakota Access Pipeline, has made plenty of enemies of late. Investors, apparently, are not among them.
In the 12 months ending February 17, when rankings for the 2017 Forbes Billionaires list were finalized, Warren added $2.8 billion to his personal fortune, propelling it to $4.5 billion. The 165% increase was the biggest percentage gain of any American this year.
The soft-spoken Texan owes much of the bump to the climbing stock price of Energy Transfer Equity, the Dallas-based oil and gas giant he cofounded and chairs. Company shares have nearly tripled since February 2016, and Warren is the business’ largest individual stockholder.
Warren personally views his spiking net worth as nothing more than a rebound from a dreadful 2015, when Energy Transfer suffered from soft commodities prices and an investor-reviled proposed merger with Williams Companies, an Oklahoman rival. “The structure of that merger was very cash intensive, so the market began to treat us very poorly,” Warren explains. “Our stock traded very low; superficially low; just crazy low.”
But Energy Transfer has undoubtedly also benefited from the election of Donald Trump. Shares rose 17% the day after his victory, and to date have soared more than 30% higher since November 8. Contributing to that surge was President Trump’s January 24 executive order calling for expedited approval of the Dakota Access Pipeline.
Warren had been a spirited Trump backer in the run-up to the general election; in total, he gave more than $100,000 to the president’s campaign and the Trump Victory Fund, according to Federal Election Commission filings. The donations, Warren suggests, were money well spent.
‘I’m pretty happy with what I’ve seen out of President Trump so far as it relates to my industry,” he says.
Energy Transfer Equity serves as parent to Energy Transfer Partners, which is constructing the Dakota Access Pipeline through one of its subsidiaries. It has already spent more than $3.5 billion on the project alongside its partners, which include Sunoco Logistics. The oil line, which will connect production fields in North Dakota to Patoka, Illinois, has generated tremendous controversy, in part over concerns that it will threaten the water supply of adjacent Native American tribes.
Since early 2016, demonstrators have gathered near the Standing Rock Indian Reservation in North Dakota to challenge the pipeline’s construction. Protesters have clashed fiercely with local law enforcement, whom they have accused of deploying excessive force. Amid the disorder, the Army Corps of Engineers halted the project in December by withholding a key permit, but reversed course last month following President Trump’s order.
Warren is pleased with the turnabout, but dismisses the legitimacy of the initial roadblock. “We had done everything correctly; followed every law, every rule, every regulation,” he says.
For Warren, this year’s windfall marks another chapter in a winding path to prosperity. Born in rural Texas to an oil field worker father, he failed out of the University of Texas at Arlington during his freshman year, though later returned to complete a civil engineering degree.
In 1993, after stints at a number of energy firms, he partnered with friend Ray Davis to purchase Endevco, a former employer, out of bankruptcy. They sold the business for a profit two years later and founded Energy Transfer soon after. In the early 2000s, good luck came in the form of Enron’s collapse, which created a glut of cheap pipelines available for purchase. Revenues steadily increased thereafter, as did Warren’s personal fortune. In March 2015, his net worth peaked at $6.2 billion.
Then, rock-bottom energy prices caused Energy Transfer’s stock to plummet, and Warren’s stake in the company lost more than 75% of its value within a year. The firm is now back on the upswing, and has plans to merge Energy Transfer Partners with Sunoco Logistics to further streamline its balance sheet.
Warren, for one, shrugs off his fluctuating net worth. ‘The energy business is very cyclical. It’s a boom and bust business,” he says.
Right now, things are booming.
