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Obama made a pledge in his inaugural address to combat climate change, passionately pointing out that a failure to do so would "betray our future generations." In his speech Obama did what politicians do best, tugged at the heart strings of humans by bringing up the devastation that climate change has caused in recent history, including the summer's drought that sent corn prices skyrocketing and hurricane Sandy, which devastated many areas of the northeast.

The speech was cheered by environmentalists, who felt that on the campaign trail the president did not talk enough about climate change; however, not everyone was happy with the president's political theater, and questions quickly arose over how Obama would balance such a tough stance on climate change - which he says he will combat by increasing investments in green energy - along with another major promise, energy independence for Americans.

The first major test on where the president really stands on these key issues will come this spring, when he is set to approve or deny the construction of the Keystone XL Pipeline. While environmentalist supporters want to see him take a stand and reject the pipeline, others urge an approval, so the U.S. can reduce its reliance on oil from unfriendly regions and instead increases purchase from Canada, a politically stable ally.

Obama's inauguration speech resurrected concerns that Keystone XL would be rejected. After the speech, Canada's Finance Minister Jim Flaherty told Reuters: "I had reason for optimism before the election that the president would approve it, were he re-elected, but his speech the other day was not encouraging."

The Obama Administration is not expected to decide on final approval before April. Recently, governors in the state of Nebraska approved a re-routed pipeline to run through their state.

Obama has backed himself into a corner, forcing a decision that will either way seem to contradict his promises. In the past, Obama's wavering on energy policies has angered many, including vice president Al Gore who spoke out on Obama's action in an op-ed piece in Rolling Stone, called Climate of Denial. His statement goes as follows:

President Obama has thus far failed to use the bully pulpit to make the case for bold action on climate change. After successfully passing his green stimulus package, he did nothing to defend it when Congress decimated its funding. After the House passed cap and trade, he did little to make passage in the Senate a priority. Senate advocates - including one Republican - felt abandoned when the president made concessions to oil and coal companies without asking for anything in return. He has also called for a massive expansion of oil drilling in the United States, apparently in an effort to defuse criticism from those who argue speciously that "drill, baby, drill" is the answer to our growing dependence on foreign oil.

So, turning back to the keystone - Would snubbing the pipeline really help greenhouse gas emissions?

While environmentalists on both sides of the Canadian American border love to protest the pipeline, they forget a very important point. While America's demand for oil may trend downward, it is not going anywhere in the near future, and whether or not the U.S. decides to be a major purchaser of Canadian oil, that oil is going to market. Finance minister Flaherty stated in his Reuters interview that if the pipeline is rejected, "We will go wherever we have to go. We are going to create markets for Canadian commodities."

Canadians are serious about selling their oil. Last year, after Obama rejected a key leg of the Keystone Xl, Canada turned to China, and a partnership is currently in the works.

There is some major irony in the environmentalist's protests. While they protest the pipeline over concerns about greenhouse gases, they fail to acknowledge the fact that transporting oil into the U.S. from rail, rather than using the pipeline, results in far greater emissions, according to data compiled by the Bureau of Transportation Statistics. The U.S. is already getting a great deal of this oil from Canada, and trucking it down via rail. If the pipeline protesters are to be successful in their goal of reducing greenhouse gas emissions, they must work to cut off demand. If the pipeline is rejected, the oil will still be transported, most likely by rail. Last year, delivery of petroleum by rail increased by 38 percent, according to EIA data.

The fact of the matter is that America needs oil; perhaps the country can start policies to decrease their dependence on oil, but this is a strategy that will take decades to develop. In the meantime, environmentalists need to be smart about their protests and look at the total picture, while Obama needs to make a decision that will be best for the long term health of his country, and not just his popularity with special interest groups.

Obama's policies clearly have an impact on energy investments - which we saw in his first term when he cracked down on coal stocks. While other economic factors definitely came into play, his moves contributed to a slide in coal stocks. So, as an investor how can you prepare your portfolio for Obama's energy policies in terms of Keystone XL? Obviously, this depends on whether he approves or disapproves the pipeline. Here are my investment picks for either scenario.

If the pipeline is approved, here are the stocks that are poised to benefit:

TransCanada (NYSE: TRP). TransCanada, as the owner of the Keystone XL, and the entire Keystone Pipeline system arguably, stands to benefit the most if the project is approved.

Enterprise Products Partners (NYSE: EPD). Enterprise and Enbridge bought out ConocoPhillips' (NYSE:COP) stake in the Seaway pipeline that will take oil from Cushing, OK to the gulf.

Enbridge (NYSE: ENB). Has an ownership stake in the pipeline.

Valero Energy (NYSE: VLO). Valero will benefit economically from the pipeline because it has an option to acquire up to 15% of the pipeline and because many of Valero's refineries along the coast are set up to handle the heavy tar sands crude oil.

Stocks poised to benefit from a rejection of the pipeline:

Railroad stocks that will transport oil from the oil sands to the U.S. are poised to benefit the most if the pipeline is rejected. Publicly traded companies engaged in the railway transport of crude in North America include Berkshire Hathaway (NYSE: BRK.B), owner of the Burlington Northern Santa Fe railroad, and Canadian Pacific Railway (NYSE:CP).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Source: How To Prepare Your Portfolio For Obama's Keystone XL Decision