(Adds that oil prices are over $101 a barrel on growing U.S. consumer confidence; tension in the Middle East.)

BOSTON ( TheStreet) -- The energy industry is in the midst of an evolutionary change driven by technological innovation that has nothing to do with alternative energy such as sun or wind. Instead, it's about new ways of getting at fossil fuels, one of the oldest energy sources.

Fidelity Investments, the Boston-based mutual fund manager, said in its 2012 outlook that the energy sector will be dominated by three trends over the next decade: new drilling technologies for extracting natural gas and oil; a rise in demand for liquid natural gas since it will be in ample supply, is cheaper than other fossil fuels and has lower carbon emissions when burned; and new, offshore exploration and drilling techniques that will open up previously untapped oil and gas reserves.

This comes at a time when political instability in the world's top energy-producing countries, from the Middle East to Russia, threatens supply, and as the U.S. pushes for energy independence, which of course will drive up prices when the economy rebounds and demand strengthens.

As evidence of that, the price of crude oil climbed above $101 a barrel Wednesday as encouraging U.S. economic news, in particular a 10 point jump in the Consumer Confidence Index, pointed to stronger future demand. Adding to that is a concern over supply after Iran threatened to block oil shipments through the Strait of Hormuz, a narrow strait that about a third of the world's oil passes through.

Since 2000, the natural resources sector, which includes energy, and the utilities sector have been the best performers in the S&P 500 most frequently, with the energy sector the top performer three times, S&P reports.

As of Tuesday, energy sector shares were up 3.7% this year, fourth-best out of the 10 industry sectors.

Fidelity's analysis was written by John Dowd, manager of the $2.4 billion Fidelity Select Energy Portfolio ( FXENX), and five other energy-related funds. His Select Energy Portfolio is down 4.1% this year, but it has a 10-year average annual return of 11.2%, which is just out of the top third of funds in its category in terms of performance, according to Morningstar.

Fidelity doesn't reveal its favored stocks, but tips its hand when its suggestions are extrapolated to companies that are involved in each theme and cross-checked with the top holdings in Fidelity's funds.

As a result, individual investors could piggy-back off the firm's exhaustive research capabilities to find stocks that fit their own portfolios.

Several companies overlap in more than one -- and, in some cases, all -- of these trends, particularly the mega-cap industry giants such as ExxonMobil ( XOM), Chevron ( CVX) and Royal Dutch Shell ( RDS.A),which can use their ample capital to bully or buy their way into leadership in any industry breakthrough.

Chevron, for example, has all the bases covered, as this integrated oil and gas company is making a major push into offshore drilling, with projects off Mexico, West Africa and Thailand. It's also beefing up its liquid natural gas production and transportation capabilities, and recently acquired Atlas Energy in a $4.3 billion deal, which gives it a strong position in one of the biggest U.S. oil-shale production fields.

An industry driver is the relatively new use of hydraulic fracturing, or fracking, to obtain natural gas locked in rock formations. IHS Global Insight, an economic think tank, reports that that method now accounts for more than a third of all U.S. natural-gas production, and its market share is growing rapidly.

Fidelity's Dowd says beneficiaries of fracking are integrated energy producers, drilling firms and energy-services companies.

Among the leading drillers and fracking technology servicers are National Oilwell Varco ( NOV), Baker Hughes ( BHI) and Oil States International ( OIS).

Deepwater exploration drilling is led by a handful of companies, including Ensco ( ESV) and Noble ( NE).

And one firm that should benefit from the rising demand from natural gas, given its extensive network of pipelines criss-crossing the U.S. to most major markets, is Kinder Morgan Energy Partners ( KMP).

What follows is a synopsis of 15 stocks that might benefit from the emerging themes outlined by Fidelity and other research firms:

15. ExxonMobil ( XOM)

Company profile: Exxon is one of the world's largest integrated oil and gas companies, meaning that it explores for, produces oil and natural gas and is the world's largest refiner, with 36 refineries. It is also one of the world's largest manufacturers of commodity and specialty chemicals.

Exxon has a long record of not missing out on any industry opportunities and has the capital to get in early on any trend, a case of the rich getting richer. Sweetening the pot for potential investors, over the past five years, is the fact that Exxon has paid out almost $40 billion in dividends and repurchased $130 billion worth of its stock.

Share performance: up 19% this year; 15-year average annual return of 9.9%. It carries a 2.21% projected dividend yield.

14. Chevron ( CVX)

Company profile: This integrated energy company has all the bases covered in the oil industry, with exploration, production, and refining operations worldwide. Fidelity is its sixth-largest fund shareholder, with 2% of its shares.

Share performance: up 20% this year; 15-year average annual return of 9.8%; carries a 3.05% dividend yield.

13. Royal Dutch Shell ( RDS.A. )

Company profile: Shell is an integrated energy company with exploration, production, and refining operations worldwide. Given the tough competition for new reserves and national government's increasingly protective moves to control their nation's oil assets, the company is increasing its ability to find and produce natural gas, including liquefied natural gas.

Fidelity is by far the largest single investor, with 1.8% of its shares at the end of the third quarter. It added 4.8 million shares in the period.

Share performance: up 14.5% this year; 15-year average annual return of 6.3%.

12. National Oilwell Varco ( NOV)

Company profile: National Oilwell Varco is one of the biggest equipment suppliers in the drilling industry, including rigs and products used in oil and gas production, as well as services such as maintenance, spare parts, and repair services for its equipment. Fidelity owns 3% of its shares.

Share performance: up 2% this year; 15-year average annual return of 16%.

11. Schlumberger ( SLB)SLB P/> Company profile: Schlumberger is the world's largest oil-services provider, and owns and develops new exploration and production technologies that exceed those of its competitors. Fidelity owns 3% of its shares.

Share performance: down 18% this year; 15-year average annual return of 8%. Its shares have a 1.54% dividend yield.

10. Ensco ( ESV)

Company profile: Ensco owns one of the newest and biggest offshore jack-up drilling rig fleets in the industry, and has contracts worldwide. Its recent merger with another driller, Pride International, owner of one of the industry's largest and youngest deep-water, mobile-drilling rig fleets, provides it with unique capabilities at a time when demand for such services is skyrocketing.

Share performance: down 5% this year; 15-year average annual return of 5%. It pays a 2.89% dividend yield.

9. Marathon Petroleum ( MPC)

Company profile: Marathon Petroleum is an oil and gas refiner and marketer, supplying gas and other petroleum products to resellers and consumers. Its refining, marketing and transportation operations are concentrated primarily in the Midwest, Gulf Coast and Southeast regions of the U.S.

Marathon Petroleum was spun off from Marathon Oil ( MRO) on July 1. Fidelity owns 4.6% of its shares, making it its second-largest shareholder, and it added 631,000 shares to its holdings in the third quarter.

Share performance: up 14% since the company's launch July 1.

8. Baker Hughes ( BHI)

Company profile: Baker Hughes offers a wide variety of oil-field services, including directional drilling, oil-field chemicals, drill bits and pumping systems.

It operates in more than 90 countries, serving oil majors, exploration and production companies and national oil companies. Fidelity is its largest shareholder, with a 5.5% stake.

Share performance: down 12%; up 3.2% per year, on average, over the past 15 years.

7. Transocean ( RIG)

Company profile: Transocean is an offshore-drilling company. It owns a fleet of 135 vessels includes drilling ships, semisubmersible rigs and jack-up rigs, which operate primarily in deep water offshore of Brazil and in the North Sea. It contracts primarily with some of the biggest global exploration and production companies.

Share performance: down 38% this year; up 2% annually, on average, over the past 15 years.

6. Halliburton ( HAL)

Company profile: Halliburton provides a wide range of oil-field services from pressure pumping to drilling, drill bits and engineering as a contractor for many of the world's largest oil and gas companies.

Because of its ability to offer turnkey oil-field services, it has tremendous leverage in negotiating contracts, because the oil producers' only other alternative is relatively piecemeal services from a variety of contractors, which it then has to coordinate. Fidelity is the biggest shareholder, with a 5.5% stake.

Share performance: down 17% this year; 6% average annual return over 15 years.

5. Valero Energy ( VLO)

Company profile: Valero owns sophisticated refineries that can process cheap, lower-quality oil into a high-value product. That gives the company a big cost advantage versus its competitors, some of whom can only process that much higher-priced light crude. Fidelity is its second-largest shareholder, with a 4.2% stake.

Share performance: down 10% this year; 10-year average annual return of 10%.

4. Kinder Morgan Energy Partners ( KMP)

Company profile: The company operates more than 37,000 miles of pipelines for oil and natural gas transport and owns 180 terminals that store liquids, gases, and dry-bulk materials, such as coal, throughout the U.S.

Kinder Morgan announced a merger with the oil pipeline giant El Paso early this year, which is still awaiting regulatory approval, but it is expected to be approved. It creates a series of complex partnerships, but given the exclusivity of the pipeline and storage facilities it now controls, including the largest natural gas pipeline operation in the country that serves every major market, the company has tremendous leverage to raise prices as demand for natural gas grows.

2011 Return: up 24% this year; it has a 15-year average annual return of 21%. Its shares carry a 5.78% dividend yield.

3. Oil States International ( OIS)

Company profile: This $4 billion market-cap company provides the oil exploration industry everything from rigs and rental tools to pipes. About 60% of the firm's revenue comes from North America. Fidelity is by far the largest individual shareholder, with a 7.4% stake.

Share performance: up 17% this year; it has a 10-year average annual return of 23%.

2. Noble ( NE)

Company profile: The company operates 76 offshore rigs internationally and has several new ones under construction. About 60% of its customers are foreign national oil companies.

Noble also provides engineering and consulting services. Fidelity is the second-largest shareholder with 6.2% of its shares.

Share performance: down 11% this year; 15-year average annual return of 8.2%.

1. Rowan Cos. ( RDC)

Company profile: The company is a contract driller with oil rigs that can drill deeper for oil and natural gas than the competition and so allows it to charge higher day rates. Fidelity is the largest shareholder, with a 5.9% stake of this $4 billion market-cap company.

Share performance: down 9% this year; 10-year average annual return of 6.2%.

>>To see these stocks in action, visit the 15 Stocks to Ride the Energy Boom portfolio on Stockpickr.
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