HOUSTON—An increasingly sophisticated environmental movement has exploited the pipeline permit approval process to hamstring energy companies, midstream titan Richard Kinder told attendees at the recent IHS CERAWeek conference in Houston, making clear that he wants the industry to fight back.

“It’s difficult to go up and shut down the oil sands,” he said of environmentalists during a discussion with Daniel Yergin, conference chairman and vice chairman of IHS. “It’s difficult to shut down the Eagle Ford or the Bakken or the Permian, but if you can stop pipelines from moving natural gas or crude oil or condensate, the theory is that you can put so much pressure on the upstream part of the business that you can have them quit drilling or slow down.”

Prime examples of slowdowns include TransCanada Corp.’s Keystone XL Pipeline and Kinder Morgan Inc.’s (NYSE: KMI) own Trans Mountain Pipeline System, which is awaiting permit approvals to expand its capacity from 300,000 barrels per day (Mbbl/d) to 890 Mbbl/d of Canadian crude oil from Alberta to the Port of Vancouver, British Columbia. In the U.S., a lack of pipeline infrastructure to carry gas from the Marcellus and Utica shale plays has contributed to consumers in New England paying the highest rates in the country for natural gas and electricity.

“To me, it’s a very spurious argument in the sense that I don’t know what the hell they’re going to replace all this fossil fuel with,” Kinder said. “We can talk all we want about renewables and I’m a believer that we should do all of the above, but there’s no way, for example, to replace the impact of fossil fuels.”

The energy sector needs to promote its role as an important segment of the industrial sector, he urged.

“We have done more as an industry to advance the cause of raising living standards across the globe than any other industry I can think of,” Kinder said. “We need to do a better job of selling how important what we do really is. Sometimes I think we hide behind it like we’re selling cigarettes.”

Kinder later confessed to reporters that his company was taken aback by the ferocity of the campaign against Trans Mountain.

“Yes, I was surprised by the pushback,” he said. “I’m not asking to build a new line. This is a 300,000 barrel per day line and it has been around for 50 years. I’ve been astounded by all of the opposition, but almost all of it has been concentrated in the last 30 miles, which is the lower mainland. I think that a lot of this is just seeing the pipelines as a choke point to get at production in the oil sands. There are people in Canada and the United States who just want to strangle that altogether.”

The wide-ranging discussion also touched on crude by rail. Kinder, whose company operates 84,000 miles of pipelines, admitted to having adjusted his perspective and strategy.

“Rail has its place,” said Kinder, who added that the company’s 250 Mbbl/d-capacity Edmonton, Alberta, rail terminal is about to come online. “I used to not think that as a pipeliner. I thought, well, rail is an interim step and as soon as you can pipe something up, rail goes away.”

The volatility in crude prices cements rail’s place in the process, though Kinder maintains his view that pipelines are the safest and cheapest way to move hydrocarbons.

“I think you’re going to see, both on the supply side and the demand side, a preference for having part of the supply move out by rail,” he said. “I don’t know what that is—10% or 20%—but with rail, you don’t have to make as long a commitment and you have more optionality to take into account the volatility of pricing. If one day you want to move it to Baton Rouge and the next day to L.A. [to capture arbitrage], you can do that.”

Contact the author, Joseph Markman, at jmarkman@hartenergy.com.