Five Energy Bill Winners

Today I'm going to give you five stock winners from the energy bill that's likely to pass Congress this summer: Peabody Energy(BTU Quote), Deere(DE Quote), Chicago Bridge and Iron(CBI Quote), TransCanada(TRP Quote) and Buckeye Partners(BPL Quote).

You'll notice that there's only one "pure" energy producer on the list. That's because, as an energy bill, the current legislation is a sham. But it's not bad as a farm-subsidy bill, a construction-industry jobs bill or a pipeline-company guarantee bill. So four of my five winners come from those sectors.

Let's start by looking at what the energy bill doesn't do.

It doesn't do anything to cut U.S. oil consumption. According to the American Council for an Energy Efficient Economy, the final bill that was hammered out between the House and Senate would see U.S. oil demand rise from 20.5 million barrels a day today to 26 million barrels a day by 2020. Several provisions that would have kept consumption to 25 million barrels a day by 2020 died in the joint conference.

Getting more miles per gallon is the fastest way to get a big reduction in oil use. But Congress, by a big margin, rejected attempts to significantly raise automobile fuel-efficiency standards.

A Widening Gap

The bill doesn't do much to cut U.S. reliance on imported oil and gas. Yes, there are tax breaks and subsidies galore for domestic oil and gas production. But absent some reduction in the growth of consumption, the gap between what we pump out of the ground from aging oil and gas fields and what we consume will just get wider. Last year, 58% of the oil consumed in the U.S. had to be imported, up from 34% in 1973. The U.S. Energy Information Administration estimates that by 2025, the U.S. will import 68% of its oil.