3 Ways You Can Play the North American Energy Boom: Valero Energy Corporation (VLO) and More

Pipeline Conversion: Last week, Enbridge announced its plan to convert an existing natural gas pipeline to carry crude to the eastern Gulf coast. The project, which still requires regulatory approval, will cost Enbridge up to $1.7 billion and is expected to be finished by 2015.

Northern Gateway: This much publicized proposal would allow Canadian energy firms to ship production through British Columbia allowing access higher international prices. The pipeline will likely be approved later this year as the federal government has historically been friendly to industry interests.

Enbridge has been slower to take advantage of the boom due to public protests, regulatory hurdles, and construction lag times. But if the company can breaks through this government logjam, it’s double digit earnings growth for the next three to five years.

Conclusion

Another important takeaway is that up-stream oil and gas producers are not the best way to play this energy boom. While many of these names are posting double digit production growth, it’s slamming right into a wall of low prices thanks to bottlenecks in the supply chain.

These bottlenecks could take three to five years to clear leaving the best profit opportunities for mid-stream companies that actually move and refine product.

The article 3 Ways You Can Play the North American Energy Boom originally appeared on Fool.com and is written by Robert Baillieul.

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