This Week in Midstream

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Midstream assets, specifically pipelines and processing centers, play a crucial role in America's energy future. The industry is growing rapidly and may play a crucial role in the future of your portfolio. There are many companies to keep an eye on, and it's an industry worth watching. Here's a recap of this week's highlights and lowlights.

End of the line?
Kinder Morgan Energy Partners
(NYSE: KMP  ) has its hands full in Canada. The company has enough commitments from customers to expand the capacity of its Trans Mountain pipeline, but it doesn't have the cooperation of local communities. One of North Vancouver's First Nation tribes has already signed a legal declaration banning oil sands pipelines on its land. The law also bans tankers from carrying oil sands across the migratory route of Fraser salmon.

To complicate matters, the Canadian government recently passed a bill that changes the environmental review process for energy resource projects, and sidesteps First Nations' land rights.

There will likely be a lot of court action before we know for sure whether there will be a Trans Mountain expansion.

Dividends up
We love our midstream MLPs for their delightful yields, and Plains All American Pipeline (NYSE: PAA  ) and Enterprise Products Partners (NYSE: EPD  ) did not let us down this week.

Plains increased its distribution from $1.045 to $1.065 per unit. It marks a 1.9% quarter-over-quarter increase from May, and an 8.4% increase over last year's second-quarter distribution.

Enterprise increased its second-quarter payout by 5% over last year's, from $0.6050 to $0.6350. This brings the annualized payout to $2.54 per unit, and is the 32nd consecutive quarterly increase for the company.

After three oil spills in two months, and a U.S. agency's harsh critique of one of Canada's biggest pipeline companies, Alberta environmentalists and landowners have established a hot line for pipeline leaks. Though the government already has an accident tip line, this particular line will be used to alert appropriate response teams and the public.

It is perhaps most significant from an investment perspective as proof of the changing political climate in Canada. We should expect more communications, more media coverage, and stiffer opposition to energy projects going forward. There is already a separate movement for an independent pipeline safety review in the province.

Foolish takeaway
Midstream is where it's at, folks. The energy industry will spend an estimated $130 billion to $210 billion expanding natural gas infrastructure over the next 20 years. After all, the more oil and gas that flow through those pipelines and processing centers, the more cash there is to flow into your pockets. Stay on top of all the midstream action by adding the companies above to My Watchlist.

Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by @TMFDuffy.

Motley Fool newsletter services have recommended buying shares of Enterprise Products Partners. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Related Tickers

10/21/2016 4:01 PM
EPD $26.75 Down -0.32 -1.18%
Enterprise Product… CAPS Rating: *****
KMP.DL $0.00 Down +0.00 +0.00%
Kinder Morgan Ener… CAPS Rating: *****
PAA $32.45 Down -0.19 -0.58%
Plains All America… CAPS Rating: ****