How will Donald Trump’s election impact my MLP investments? Many investors have been wondering about this since the election results came out. While it’s too early to make firm conclusions in the absence of a detailed energy policy, Trump’s comments do indicate the direction in which he plans to move. Let’s take a look at how Trump’s presidency could impact midstream companies and MLPs.
Donald Trump’s vision for the energy sector is to “make America energy independent,” while creating “millions of new jobs.” He would like to “Unleash America’s $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves.”
It’s Trump’s vision to “Rescind all job-destroying Obama executive actions.” Trump will “reduce and eliminate all barriers to responsible energy production.” In his Gettysburg, Pennsylvania, speech on October 22, Trump said, “We have roadblocks like you’ve never, ever seen – environmental blocks, structural blocks.” Relating to pipeline projects, he said, “We are going to allow the Keystone pipeline and so many other things to move forward.”
Broadly, Trump is in favor of the increased use of fossil fuels, the development of infrastructure to support this, and the elimination of barriers to US energy production. This platform bodes well for midstream energy MLPs.
The positive sentiment was reflected in a bigger surge for the Alerian MLP ETF (AMLP) compared to the broader market yesterday. The chart above compares the gains in Kinder Morgan (KMI), Enterprise Products Partners (EPD), Williams Partners (WPZ), AMLP, and the SPDR S&P 500 ETF (SPY) on November 9.
Let’s next take a look at some MLPs that could benefit most from Trump’s victory.