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Watch It Now: Kent Talks Energy Policy

by | published April 4th, 2012

North America can be energy independent in the next 15 to 20 years.

That's what Kent told Fox Business last Friday when he sat down with Shibani Joshi and Charles Payne to discuss changes to the U.S. energy market.

It's welcome news to energy investors, particularly those of you who have followed our advice on how to invest in midstream companies poised to transport the massive quantities of oil and gas out of the American shale fields and Canadian oil sands.

There is one major sticking point, however.

The United States lacks a cohesive, long-term energy plan to take advantage of the technological breakthroughs of the past few years.

As Kent said during the interview, significant rises in global demand have altered the way Americans buy energy today. And, there's nothing the United States can do in the short term to confront rising prices at the pump.

But over the long term, changes to the North American markets will ensure greater domestic supplies.

And investors will have many new ways to profit.

Why Washington Can't Get It Right

As I've pointed out before, every single U.S. president dating back to Richard Nixon has proposed his own “silver bullet” to create American energy independence.

Energy independence has been a successful selling point on the campaign trail.

But once elected, few leaders seem willing to explain to Americans how this will happen, and the required costs and sacrifices.

Currently, we purchase oil from foreign sources because it is still economically reasonable to do so.

However, as supply concerns become greater, and conventional sources of crude grow more scarce, the United States and its North American trading partners stand to benefit from the technological breakthroughs we have uncovered in recent years.

Shifting forward, the United States can drill its shale fields and obtain a greater share of resources from the oil sands of Canada. But we need to make these sources a priority over the medium to long term.

And Washington doesn't seem to be making that happen; quite the opposite, in fact.

Canadian Prime Minister Stephen Harper stated this week that the United States' reluctance to build the Keystone Pipeline influenced his nation's decision to increase the flow of oil to other export markets, namely China.

“Look, the very fact that a 'no' could even be said underscores to our country that we must diversify our energy export markets,” Harper said on April 2.

“We cannot be, as a country, in a situation where our one and, in many cases, only energy partner could say no to our energy products. We just cannot be in that position.”

Considering that Canada is our No. 1 source of oil, if that scares you, well, it should.

But no matter what Canada decides to do, there are still great ways to profit over the long term.

Profit on China from Home

China has ironically adopted a similar energy policy to ours in the past. One the centers on securing as much oil as possible, from whatever source possible. But that has significant drawbacks, too. They expose themselves to the perils of international diplomacy in unstable parts of the world, particularly Africa.

What raises the stakes in Canada is the fact that our neighbor to the north offers one of the most important characteristics one could seek from a trading partner: long-term political and economic stability. Canada's business-friendly climate, resource-rich environment, and willingness to build infrastructure for its export markets are vital socioeconomic indicators of future success.

That may be why Chinese companies have already invested Canada's energy sector.

China's Sinopec made headlines in October when it agreed to buy Canadian oil and gas company Daylight Energy for a little more than $2 billion. Other companies, like Encana (NYSE: ECA) and Progress Energy (NYSE: PGN) , are considered potential buyout targets in the near term.

But speculation on potential M&A activity isn't the best bang for your buck as an investor.

We have to examine the companies that are poised for long-term growth, increased cash flows, and rising demand for the services.

Which takes us back to our favorite part of the energy value chain. The midstream.

Recall that midstream companies are the ones that connect the upstream companies (exploration and production) to the downstream markets (retail, refining and marketing). And companies that own pipeline that will transport oil from the Canadian oil sands to new export terminals in British Columbia, or down to the United States, will see a steady increase in service demand over the long term.

We are still just entering the most profitable time in history for the energy sector, and investors who pay attention to these growing shifts in policy, technology, and supply constraints are well positioned to enjoy very happy returns.

Best,

James

[Editor's Note: In his Fox Business visit, Kent highlighted the biggest trend in the oil markets right now. And that trend is exactly why people all over the world are turning to Kent.

He's identified an opportunity that stems from it – and it happens to be the biggest investment opportunity in the energy markets right now.

To hear all about it, go here now.]

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  1. siavash
    April 4th, 2012 at 16:25 | #1

    I just want to know how can i invest and where should i buy or colaborate with raising my money. i don’t understand where should i contact to buy shares or something similar of that. ? thanks

  2. enthusceptic
    April 4th, 2012 at 16:57 | #2

    Really interesting, the US buying “cheap” oil and China – in many ways still a developing country – having to pay more. I suppose that the US has greater influence economically and politically…We must absolutely look at Canadian oil and gas companies!

  3. Todd J. Smith
    April 4th, 2012 at 20:54 | #3

    I agree with James and Dr. Moore that we could be energy independent with tar sand oil from Canada but it’s still foreign oil that we will spend billions of dollars for. These billion dollar outflows could be billions of dollars that stayed in our economy if we truly had a national energy policy.

    The reason there is such push back against the keystone pipeline is because 1. it is so environmentally damaging. They are strip mining to get the tar sand oil then they cook the oil out of the sand with large quantities of natural gas. Northern Albert will become a waste land, stip mining an area the size of Florida.
    2. We need to address climate change. Tar sand oil requires about 20% more energy to produce than traditional oil, creating more C02 emmissions. Canada sold out of the Kyoto Protocol because of this tar sand oil money which has bought out many politicians in Canada. Many Canadians never wanted the oil sand to be produced at this volumne.
    3. America would finacially benefit more by a energy policy that got America off of foreign sources of oil and gave us real choices. Instead we are letting a oil company take private American land by eminent domain to build a pipeline through the country that keep us addicted to oil. In the 10 to 15 years it takes us to be independent because of Canadian oil, we could be independent of foreign oil by our own efforts.

    Electrify our railroads making them the electric grid for our vast solar and wind resources. Tie them together and you have base load. We are developing room size batteries for storage so the rail road could get off oil and onto renewables.

    Use the “Better Place” model of battery swapping stations for electric cars and lights trucks. In this model you drive through a battery swapping station to get a standard sized recharged battery. Charge your car at home or when your out, swap out your battery at these stations. Isreal, Denmark, Australia are already implementing this idea. It would take one weeks oil purchases to build the entire system of battery swapping stations in America. 1/52 tax on a barrel of oil for one year will build a system that gives us a choice between oil and electricity for our daily commute.

    Do the Pickens plan of liguified natural gas for medium and heavy duty trucks.

    America could do better but our politicians are bought off also. That’s why we haven’t had a national energy policy and probably won’t unless we all speak up.

    Todd

  4. chris gleason
    April 4th, 2012 at 21:07 | #4

    I guess I just don’t understand.
    If our government has no clear and consise policy
    on energy and we are always paying more and more for our energy,
    why do we need the over stuffed bureaucratic nightmare known as the
    Department of Energy?
    Couldn’t we jettison this useless entity and be about where we now?

  5. MR.HARSHAN MENON
    April 5th, 2012 at 01:35 | #5

    AMERICA DOES SO MANY THINGS AND ONE SHOULD NOT GET BOTHERED
    OR WORRY ABOUT IT AS IT IS A VERY BIG AND GREAT NATION?
    YOU HAVE TO SEE WHERE YOU ARE TODAY?
    TODAY IT IS NOT GENUINE TO ANALYSE WHAT AMERICA OR AMERICANS
    DOES AS THEY HAVE ALREADY PROVED THEY ARE THE BIGGEST POWER
    AND ALMOST MOST OF THE NATIONS HAVE ACCEPTED THAT IS WHY
    SOME ARE TRYING THIS,THAT ETC.
    IN A DAY SO MANY THINGS ARE TO BE DONE AND BEING ENERGY CONSULTANT
    YOU SHOULD BE ALERT AND VIGIL AFTER ALL BUSINESS MEANS COMPETITION.

    HARSHAN MENON
    PROPRIETOR
    IMC

    PLEASE NOTE: INTERNATIONAL MANAGEMENT CONSULTANT IS A CONSULTING
    FIRM.SOVIET VODKA.

  6. Robert Berke
    April 6th, 2012 at 01:11 | #6

    @MR.HARSHAN MENON
    What’d he say?

  7. Robert Berke
    April 6th, 2012 at 01:23 | #7

    America has an energy plan, it just hasn’t told its citizens what it is. The plan is clearly to deliver all low priced US and Canadian energy to Asia in exchange for Asian manufactured goods. That will mean we finally have something of value to trade with Asia, rather than merely buying their products and having them reinvest the proceeds in our bonds. For that to happen will require a build out of infrastructure to get our goods to Asian markets, and enabling the US to make better use of its own energy in power generation and transportation, creating a massive construction boom over the next number of years. That’s the plan. Simple.

  8. GRUNT
    April 14th, 2012 at 08:05 | #8

    Amerikkka is or was great, tell us the real story, 0il is so high only because of the so called Wars.I spent nearly 30 years working in the Canadian oil fields, we are all in it for the money. America cannot lead with out taking in the needs of other Countries . What happened to in Lybya was a Fucking discrace , You educated Morons make me sick . I wonder how many, are perverts, Coke heads, in this Elitiste clan CLINTON, BUSH, WISCKY FOR MY MEN , BEER FOR MY HORSES. LA,LA , HA, HA

  9. April 27th, 2012 at 13:50 | #9

    mes amie.ce que j ai reflichere acose de cette relation de partonaria.que vous ne conaisé pas ce qui es l enrgies de future.pouisque vous tourné acoté des le classique energies.vrement je suis forcé un parté de l energies renouvlables.mes sa ne defent pas que le monde est on crise de cette mariéres.est le plus demondables au monde ces le oil.est le gase.moi je reservé pour ce monde.son energies de fture.soiy en electricité .soiy les nouvaux viucule plus fore que la demonstration qui je vous reposé.est solude.mes amie nopus somme pas ici pour jouéx .mes pour travallés .est apropo de vous montalité.comment vous attendé de un delanquent faire pour vous .de pouis 5 ans est moi demandé l eedes de vous .matnent je suis fatigué de toute ce bloogue est je veux la rialités.pour rechisés le monde .pour ce releve les bon facon de vivre .est ne bliés pas que l energies classique est préssé est la lerte va declanché.est nous beusien de la preparation de oil de future.qui va donné son premiere production au moien de deux ans .vous conaisé mes amie le pouvoire de deux plus forte que nous .pouisque la demonstration de ce oil de fture ela donné les memme zone qui prodouire le classique petrole.saveux dire le golf est la fric est mexcico ……est le monde va prendre son culubre .entre lindustry est l energies.
    mes nous avon une autre energies de l espace.qui eté guratouis arés les depase d une zone (?).mes amie ces sa mon energies.
    est ne croiyé pas que je suis un milionaire come vous redejet.je suis un dilainquent au maroc.merci

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