Saturday, June 29, 2013

Here’s How to Play America’s Energy Boom

For years, the United States was known for being the world's largest energy-consuming nation, with imports from abroad making up for its inability to produce enough fuels for its appetite. Now, the U.S. is entering an energy renaissance, one that's leading to a marked shift in that position.

The International Energy Agency recently predicted America's oil production will exceed Saudi Arabia's output by 2017, and three years after that, it's expected to be a net natural gas exporter. Major oil finds in California, North Dakota, Texas and Pennsylvania have already put the country on a course toward energy independence, and even more energy fields have yet to be proved out. Developing these new resources and the infrastructure to transport, process and deliver this energy could take decades. Along the way, the biggest benefactor may well be master limited partnerships, or MLPs.

MLPs build, own and operate the pipelines, barges, railcars and storage tanks to deliver natural resources, and the opportunity in front of them is potentially massive. In February, U.S. News & World Report quoted an investor who estimated that more than $300 billon of new infrastructure development is needed within the next decade to accommodate the energy boon. For some time, this wasn't widely recognized -- Warren Buffett bought railroad Burlington Northern Santa Fe for $26 billion a few years ago partly for this reason -- but that's changing. (more)

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