A Smarter Way to Invest in Pipeline Stocks

A few months ago, a friend and I decided to build a bar.

I had just moved into a new house, and one evening, after returning home from happy hour, we decided the place lacked a certain character.

So the next weekend, I went out and got the required materials: wood, glue, polish, etc. My friend brought some of the important tools and hardware.

As we began assembling the base of the bar, we discovered our drill bits were the wrong size. We made a quick trip to the store to buy the right ones.

You could also say we were less than adept at finding studs in the wall. As embarrassed as I am to admit it, we went out again and bought a stud finder. And I assure you these weren’t the only trips we took before the project was finished.

I’m sure you’ve had a similar experience, too: You buy something at the store and find out as soon as you get home that it’s the wrong type or not quite the thing you need.

This happens to me often when I buy clothes online. Sometimes it just makes more sense to try pants on in the store.

Sure, it’s a hassle to have to return stuff like pants and drill bits, but some news that broke earlier this week got me thinking about returning something huge… something so expensive, you or I couldn’t dream of buying it, let alone returning it.

Something worth billions of dollars.

Here’s what I mean…

$7 Billion Up in Smoke

On Saturday, it was reported that a 100-car Canadian National Railway train derailed in Ontario, Canada. All of the cars were loaded with crude oil, and when the train left the tracks, seven exploded and leaked oil.

Just two days later, a massive oil train carting more than 3 million gallons of Bakken crude derailed in a small town in West Virginia. Several cars left the tracks in a fiery explosion that literally melted a house.

Not only that, but the mangled train cars also leaked oil into the nearby Kanawha River, which provides fresh drinking water to the surrounding counties.

A day later, the busted tanks were still burning, and over 1,000 people were forced to evacuate the area.

So what does all this have to do with a multi-billion dollar return?

Well, these two accidents are simply the most recent examples of what has become one of the nagging problems in the North American oil industry: oil train derailments.

Crude trains carrying Bakken oil have crashed, leaked, and exploded in North Dakota, Virginia, Oklahoma, and Lac Mégantic, Quebec, where a runaway train full of Bakken oil crashed into the small town, incinerating multiple buildings and killing 47 people.

In response to the spike in railroad accidents, the oil industry and railroads decided to regulate themselves by enforcing an industry-wide adoption of newer, safer tanker cars.

But here’s the thing… The train that crashed in West Virginia on Monday was using these “newer, safer” tank cars. The same cars were also in use last year, when a train crashed and exploded outside of Lynchburg, Virginia.

According to the Huffington Post, the oil and rail industry spent upwards of $7 billion on these upgrades.

I assume those cars are a lot tougher to return than some of my ill-fitting chinos. I digress, though…

North Dakota Bombs are Ushering in this Investment

Following this week’s additions to the oil train accident record, many regulators are pounding their chests, demanding government regulations against these trains slinking along railways all over the U.S. and Canada.

One group, The Dakota Resource Council, dubbed the trains “Bakken Bombs.”

Now, don’t get me wrong; I’m no fan of financially irresponsible government regulations. But in this case, it looks unavoidable. The industry tried to fix its own problems but ended up eating a $7 billion expense.

So as the Department of Transportation starts to roll out the new rules, it’s important for investors to take notice of which industries will thrive once Bakken oil no longer moves by train.

70% of all Bakken oil is shipped via railroads now, and it is so methane-rich that it’s even more combustible than regular oil (the stuff we use in COMBUSTION engines).

Now that I think on it, the nickname “Bakken Bomb” fits just right. Still, I don’t want any of those passing through my town anytime soon, so I’m all for this set of regulations.

I’ve been putting money into a play that’s going to see a windfall once crude-by-rail shipments are regulated to safe levels. This play has a safer, cheaper, and more profitable solution.

Here’s more information on the company and how another Bakken Bomb exploded and altered one of the largest energy investments ever made.

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

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