ETP’s Dakota Access Pipeline to go ahead?
As discussed in the previous part, Donald Trump plans to reduce and eliminate barriers to US energy production. He would like to remove environmental blocks to pipeline projects such as TransCanada’s (TRP) Keystone. The fourth phase of this pipeline was rejected by Barack Obama in 2015.
Trump is believed to have close connections with Energy Transfer Partners’ (ETP) CEO Kelcy Warren. While Trump is believed to have invested in ETP, Kelcy Warren has made donations to the Trump Victory Fund. Trump’s stance on energy production and his ties with Warren likely made investors believe that ETP’s Dakota Access Pipeline project will go ahead. This was reflected in Energy Transfer Equity’s (ETE) and ETP stock prices, which surged 17% and 11%, respectively, yesterday.
The above graph compares gains on selected MLPs on November 9 with the Alerian MLP ETF (AMLP).
Smaller refining companies like CVR Refining (CVRR), which have been struggling due to EPA’s (Environmental Protection Agency) renewable fuel standard (or RFS) requirements, may benefit from Trump’s presidency. CVRR surged 26% yesterday. Learn more about CVRR and Alon USA Partners (ALDW) in CVR Refining Has Fallen 55% in 2016: Is the Bottom in Sight? and Alon USA Partners Has Fallen 59% Year-to-Date: What’s Next?
Increased oil and natural gas production will be a positive for frac-sand producers Hi-Crush Partners (HCLP) and Emerge Energy Services (EMES). The surge in these stocks yesterday reflected this. Learn more about HCLP and EMES in Hi-Crush Partners and Emerge Energy: Is a Recovery Really in Sight?