Senator Murkowski and 20/20 Energy: How Energy Policy Can Impact Stocks

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In The Washington Post there is an interview with Senator Lisa Murkowski (R-AK) regarding her plan for energy policy in the future, “20/20: A Vision for America's Energy Future.” (Warning:PDF) It's an interesting document and the senator appears to be on the offensive with it.

As Murkowski says, the plan is not designed to be a one-time, comprehensive energy policy but is instead designed to implement small steps (singles and doubles, as she calls them) to move the United States toward a more sensible energy policy. She supports the development of nuclear power, the Keystone XL pipeline, enhanced coal and liquid natural gas exports and the economic development of regions of Alaska currently off limits.

Some of these, perhaps all of them, will face significant political opposition from interests on both the left and the right. Honestly, that's the most encouraging sign there could be. If one can get extremists on both sides mad, then a plan is truly workable, in my former-political-reporter opinion. From a market perspective, and depending on which parts of the plan get introduced in what order, there will be some stock gains to be had. Let's take a look at some of them.

Valero Energy (NYSE: VLO)

Anything that moves approval of the entire Keystone XL pipeline forward is going to benefit Valero enormously. Not only does the company have an option to buy a good piece of the pipeline but a big chunk of the oil that moves through it will end up in the company's refineries. Best of both worlds should it come true. Heck, I'm already on record as thinking it will. This is an energy company that's been on the way up, climbing $24.81 to $46.13 in the last year and raising its dividend 20% in that time. Heck, it's gained more than 30% in the last month. T. Boone Pickens has it as one of his top holdings and you should think hard about it, too.

Royal Dutch Shell (NYSE: RDS-A)

Even though it has not had a good run in the news lately, I'm including Royal Dutch Shell on this list. Why? Because the company is already well-established with a mining presence in Alaska and off the Alaskan coast. It is well-positioned to take advantage of the opening up of further oil leasing rights in the far north, including the Arctic National Wildlife Refuge. The firm's stock has taken a beating lately as the bad news had piled up. It's been as high as $74.09 this year and as low as $60.62 and sits in the middle right now. Still, I'm cautiously optimistic on it. And that dividend is an enormous 5.10% yield. Keep this one in your back pocket and spend some money if you have some with nothing better to do.

The Southern Company (NYSE: SO)

Perhaps a sleeper in the energy debate, The Southern Company owns several deep south public utility companies. And the company is developing two new nuclear reactors. Nuclear power is on the way back in the United States, with new applications moving through the pipeline as I type. They face some resistance but the public is now split on nuclear power instead of being opposed so I think they'll go through. The company's stock has traded within a seven-dollar range all year and is on the low end of that now at $43.85. If nuclear does expand as I predict, SO will see a growth spurt. Combine that with the company's 4.47% dividend yield and this could be a play that works for you. You should have some.

Chevron (NYSE: CVX)

If the part of the plan devoted to increasing the export of liquid natural gas is put into play Chevron should see a nice little spike. Look, it takes no brains to notice Chevron, the company's a monster. But an increase in LNG activity means that it is in the path of increased sales and that's never a bad thing for a firm. It's trading at $115.64 right now and had been below $100 as recently as last May. In November it hit a recent low at $101.62 so it's grown 13.79% in about two and a half months. It's also showing a pretty hefty dividend above 3%. It's worth picking up, even at the $100+ price point. I'm not the only one who thinks so, either.

OK, so any professional, or even amateur, political observer knows that Murkowski's plan will face hurdles. There will be opposition from radical greens who oppose any energy plan and there will be opposition from conservative energy groups who want to shoot down anything with the words 'clean energy' or 'green energy' in it. The point is that Murkowski's plan can get some bipartisan support for trying to create a series of small, easier-to-support moves that don't require a huge amount of discussion to enact. Nothing's certain in Washington, DC these days, but this is one to watch and make portfolio adjustments about if you're into the energy sector.

Good luck!

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