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 - Get Report), Deere ( DE - Get Report), Chicago Bridge and Iron ( CBI), TransCanada ( TRP - Get Report) and Buckeye Partners ( BPL).

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.

The situation is only marginally better for natural gas. The U.S. is becoming more dependent on imports of liquefied natural gas: LNG is projected, again by the Energy Information Administration, to account for 21% of our natural gas supply by 2025.

The bill does nothing to tax carbon emissions. This amounts to a huge subsidy to oil, gas and coal-based energy production, since power plants and vehicles burning those fuels can dispose of much of their waste for free by putting it into the air. (Yes, some specific pollutants are regulated, but carbon emissions aren't.)

The big losers here are nuclear power and alternative technologies such as solar and wind. Nuclear gets slammed especially hard, because the government taxes nuclear plants to pay for waste disposal.

Clean Coal?

Congress rejected a carbon tax despite arguments that this was the best way to reduce U.S. contributions to global warming and that it would lead to a free market in the trading of carbon pollution "rights." Instead, Congress created a bucket of subsidies for nuclear and alternative technologies.

Then, in typical congressional fashion, it added subsidies for "clean coal" technologies. (A provision to require that 10% of our electricity comes from alternative sources by 2020 appeared to die in committee.)

The subsidies and regulatory changes the bill does throw at nuclear power aren't enough to offset the bias toward fossil fuels.

I have my doubts about the wisdom of building more nuclear power plants when we've done so little to secure the ones we have against terrorist attack. And we still haven't solved the problem of how to secure the nuclear waste these plants produce. But I understand the current attraction of nuclear power.

The U.S. sits on large domestic deposits of uranium, so nuclear power is a domestic replacement for foreign oil. Nuclear power doesn't add carbon dioxide to the atmosphere, a plus for anyone worried about global warming. And once a nuclear power plant is up and running, it produces cheap electricity -- about 1.7 cents per kilowatt hour vs. 1.8 cents for coal and 5.7 cents for gas.

But the big costs for nuclear power are in plant construction and waste disposal. Add those and nuclear power costs 6.5 cents per kilowatt hour vs. 5 cents for coal. The bill attempts to fill some of that gap with loan guarantees for nuclear-plant construction and rules to speed construction.

But, absent a carbon tax, nuclear isn't competitive with coal. That's certainly a problem if Congress really intends to get utilities investing in a new generation of nuclear-power plants, since claims of improved safety haven't yet been tested in real-world operations.

What It's About

So what does the bill do?

  • It gives federal officials the power to site liquefied natural gas terminals, overriding state and local rules if necessary. Currently, the U.S. has only four LNG terminals. If we're going to rely on imports for 21% of our natural gas needs, we're going to need a lot more terminals.

  • It puts more ethanol into our gasoline. The final bill could call for as much as 7.5 billion gallons of ethanol to be added to the nation's gas by 2012. That's about double the current level of ethanol production. That is, of course, good news for farmers who grow the corn that's used in ethanol.

  • And it keeps us firmly committed to the big-infrastructure model of energy production. Whether our energy comes from massive coal plants or nuclear reactors, imported natural gas or imported LNG, domestic coal or imported oil, we're going to need the infrastructure to move these commodities or the energy itself from production to consumption. That means lots more pipelines, transmission lines, port facilities and railroads.

    Investment Plays

    My five energy bill winners play into those trends, both in what Congress didn't do and in what Congress did.

      Coal is even more firmly king of domestic energy after this bill. My preferred coal stock is Peabody. But owning just about anything in the sector -- such as Penn Virginia Resources ( PVR) or Arch Coal ( ACI) -- should be a good investment, even from current price levels.

        More boom times are ahead in the farm belt, at least if you grow corn. Think of the doubling of ethanol production over the next seven years as a huge guarantee that current good times for farmers have much longer to run. My preference is Deere, a pure play on the farm equipment market. (One play on ethanol to check out, if you can find the information -- this isn't a purchase recommendation -- is Novozymes, a Danish company developing enzymes to convert agricultural products into sugar for ethanol.)

          Build we must, if we're going to import all that LNG. And as this bill makes clear, Congress is committed to building these ports no matter how local residents feel about them. My pick here is Chicago Bridge and Iron, a construction company with extensive overseas experience in designing and building these terminals.

            We must get it from here to there, by pipe or rail. My sector picks are TransCanada, a pipeline-industry leader well placed for increasing oil and gas traffic between the U.S. and Canada, and Buckeye Partners.

            Don't Count on Progress

            I can't say I think much of the energy bill Congress has produced. It's a long way from what our country needs at this moment. It'll dig us deeper into an energy hole. The best thing that can be said is that maybe its passage will clear the decks for more creative approaches to our dependence on imported energy.

            I'm not counting on it, however.

            And in the meantime, I don't see any reason not to make some money by investing in the world as it is, imperfect as it as.