The chart is from a story about how not approving the Keystone pipeline has helped Buffett (who owns Burlington Northern), but take away the story and focus on the chart offered:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/03/Rail car loadings petroleum.jpgIs a pretty remarkable look at the increased need to move energy as new discoveries are made.
The market is going to do what the market is going to do, but it's clear (especially looking at that chart) that there's a story here that could continue to play out over at least the mid-term, if not the long-term.
Many pipeline co's/MLPs will see benefit (MLP funds are volatile) and some rail will see more benefits than others (Buffett's BNSF, Canadian Pacific, Canadian National, Union Pacific are examples). Whether or not to own MLPs or MLP funds can be debated (I've gone with individuals, some people understandably don't want the tax issues or individual stock risk), but it's clear that there's a real need for energy transportation. Unfortunately, there's not a rail ETF .
Rail car manufacturers (see below) and leasers (GATX and while I'm not sure how big an aspect of the overall business it is, GE - which I believe Charles got into the other day - also will see benefits:
http://www.ge.com/railservices/products/railequipmentbycartype.html,
http://www.ge.com/railservices/products/internationalservices/) will also likely continue to benefit if the story continues to play out.
http://www.theglobeandmail.com/globe-investor/oil-deliveries-send-cn-to-record-revenue/article7618170/http://www.petroleumnews.com/pntruncate/837556579.shtml"United States rail car manufacturers should have enough units on the rails to carry 2 million barrels per day by the end of 2014, well over double what is currently extracted from the Bakken shale basin, according to an a rail industry advisor.
Of the current tank car backlog of about 48,000 as many as 30,000 are needed for crude petroleum, Toby Kolstad, who runs the firm Rail Theory Forecasts told the National Post, and the firm is counting on thousands of cars coming off the production lines at Trinity Industries, Union Tank Car and Greenbrier."
Very good article on rail and pipelines in Barrons:
http://online.barrons.com/article/SB50001424052748704836204578340393403522294.html?mod=BOL_twm_fs#articleTabs_article=1Additionally, while I remain a bit skeptical of management, GE continues to be a play on a number of things (rail, water, infrastructure, etc.) and it's something I may consider especially after they got rid of NBC.
Comments
Good stuff as ususal. The great irony about this is that as we continue past peak oil and it becomes continually more and more expensive to - find, and/or retrieve, and/or refine, and/or transport - the cost of fuel will increase. Ah, but the economies of fuel efficiency favor rail and pipeline enormously over truck. This is in spite of the subsidies for trucks via the highway system.
peace,
rono