This article has a number of interesting pearls in it, particularly the comments about the relative monopoly these pipeline companies have due to their regional dominance and little overlap. There is a huge moat into entry into the industry in general, and into a new region specifically. With the current administration, I assume it's almost impossible to put in new pipelines. All they can do is improve / enlarge the pipelines that already exist.
Example: Representative Henry Waxman is leading efforts to stop the TransCanada Keystone XL pipeline. The project won't be stopped, but it will certainly be delayed, and the cost will go up.
This should give us a good idea what pipelines like Enbridge are really worth. This announcement that Kinder Morgan plans to go public might explain why EEP has continued to appreciate in share price over the past few days. EEP had a surprisingly good day yesterday despite a market downturn of over 2 percent.
UPDATES
Update, July 19, 2010: ENB continues to rise; EEP hits a new 52-week high, busting through trading range; actually quite spectacular.
I think you should have more details before you speak about this administration being against more pipelines.
ReplyDeleteStay tuned.
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