This Pipeline Will Make Investors More than Keystone Ever Could

Look for the Obama administration to delay its Keystone Pipeline decision until after the 2014 election as it's preoccupied by ongoing scandals and the debate about fracking in the United States.

With House and Senate Democrats now vulnerable over these scandals and Obamacare costs, the President is expected to appease his base and continue to double down on alternative energy projects at the Department of Energy.

That isn't great news for investors, since alternative energy projects under this administration have led to bankruptcies, liquidation, and a lot of investigations into cronyism among donors and the Energy Department.

But for all the talk about the Keystone Pipeline, we've been looking at another pipeline currently in the works that has the potential to make investors a lot of money in the coming years.

In fact, this pipeline could provide more upside to U.S. energy development than the Keystone Pipeline.

And it's one that has completely slipped off the radar with everything happening in Washington.

Back into the Bakken

The Keystone pipeline is just another pipeline across the United States, one that will bring crude oil to the Gulf Coast to refineries.

Although the Keystone Pipeline may create jobs, it won't do anything to reduce the price of gasoline.

Very little of the oil going from Canada to the U.S. refining network along the Louisiana coast will end up in the gas tanks of ordinary Americans. In fact, we're likely going to see an increase in oil and gas prices after the implementation of the pipeline, despite what some supporters have argued.

The Keystone Pipeline will help to alleviate the current logjam in the Canadian oil sands and help reduce the glut of oil and gas coming out North Dakota and the Bakken shale fields.

But there may be a better way to profit from one of the biggest energy bottlenecks and opportunities in the world.

At current estimates, more than 6.7 trillion cubic feet of natural gas is technicallyrecoverable from the Bakken fields in North Dakota and surrounding areas. Getting all that gas out of the shale fields is a massive challenge. There remains a massive glut of energy in the Bakken.

What that means is this: We need more pipeline infrastructure to alleviate the increasing glut.

And one company just made a major proposal this week that could change the game completely.

Ending the Glut in the Bakken Once and For All

Last week, WBI Energy Inc. proposed the construction of a natural gas pipeline from far western North Dakota to western Minnesota. Upon arrival, it would connect to Viking Gas Transmission Co.'s pipeline system, which is owned by ONEOK Inc. (NYSE:OKS).

The pipeline would increase takeaway capacity out of the Bakken and could reach a flow of more than 500 million cubic feet of natural gas per day.

Pending customer commitments, permits, and regulatory approvals, the new pipeline will be constructed by the end of 2016. That is a little bit of a ways out. But it's time to start keeping a close eye on this opportunity.

Because, as Global Energy Strategist Dr. Kent Moors likes to say: "There's always money in the midstream." As Kent has taught so many of our investors over the years, so long as you keep your money in the middle of the oil and gas supply chain, you're going to make some money... and sometimes... A LOT of money.

That's because the midstream provides critical services in transportation, storage, and refining, connecting the producers to the end-users all across the country. As we've seen over the years, the midstream is the best source for higher-than-average yields and best window for share appreciation as demand and supply both continue to rise.

Right now, ONEOK is near a 52-week low at $50.07 on Thursday. But given the benefits it could receive should this pipeline get approved, there's a lot of upside. And as an MLP, the company is paying a nice dividend at 5.71%.

Not only is share appreciation likely in the event of this approval, but so too would be an increase in its dividend over time.

The Keystone drama will continue to divided liberals and conservatives for the next 18 months, but rest assured that there are other companies looking to cash in on the massive natural gas glut in North Dakota.

With natural gas production still booming despite the government's best efforts to overregulate, ONEOK could provide a nice opportunity for forward-looking investors.

Related Articles: