The Billionaires Behind Our Energy Renaissance

Both Charles and David Koch have received their fair share of vitriol over the years because of their involvement in politics and other activities related to either environmental or social issues in the United States. Some critics even make the claim that they exhibit a massive amount of control over how the energy industry works in America.  

I will concede that these two brothers have very large holdings in the energy industry. However, they are but one part of their entire corporate holdings that include lumber, paper, cattle, clothing, fertilizer, and even carbon capture technology. In fact, their assets in the energy industry -- refiner Flint Hills Resources and Koch Pipeline -- are close in size to the publicly traded companies HollyFrontier and Holly Energy Partners. Combined, their respective shares would amount to only about $4 billion per member of the Koch family, or less than 10% of each one's respective net wealth.

If you really want to know three people who have more control over the energy industry and have made way more money from it than the Koch Brothers, check out these people.  

3. Richard Kinder, estimated net worth $9.7 billion
In hindsight, the job that Richard Kinder didn't take may have been the best thing that ever happened to him. Back in 1996, he quit as president and chief operations officer of Enron, even though he was probably on the short list of people to succeed Ken Lay as the CEO. Well, we all know how that turned out..

After Kinder quit Enron, he started buying up natural gas pipeline assets and founded the company Kinder Morgan Energy Partners (NYSE: KMP  ) . Today, Kinder Morgan Energy partners and the several other companies affiliated with it own more than 80,000 miles of pipelines in the U.S., the largest pipeline company.

The Kinder Morgan suite of businesses also has 180 terminals, natural gas processing facilities, and oil-and-gas exploration operations. This energy infrastructure the company has in place, combined with the large capital spending program it plans to embark on over the next several years, will have a pivotal impact on how we are able to use natural gas in the United States.

As chairman of the company, Kinder receives a $1 annual salary and receives no stock options or bonuses. He has also committed to donate 95% of his wealth to charitable causes through the Giving Pledge.

2. Erik Fredriksen, estimated net worth $16 billion
Fredriksen is the only one on this list who isn't American, but many of his investments are involved in the American energy landscape. He is the founder and chairman of offshore drilling company Seadrill (NYSE: SDRL  )  and tanker companies Frontline (NYSE: FRO  ) , Golar LNG (NASDAQ: GLNG  ) , and Golden Ocean. Of all the people on this list, Fredriksen is the only one whose personal wealth didn't come from the actual production of oil and gas, but that doesn't make his impact on the energy world any less important. Seadrill is set to become one of the world's top rig companies, with a specialty in both ultra-deepwater floating vessels and harsh-environment jack-up rigs. Also, Frontline is the world's largest oil tanker company, a business that's poised to see a major shift in oil shipping routes, thanks to the boom in U.S. crude production and the increasing demand in Southeast Asia. 

1. Harold Hamm, estimated net worth $17.3 billion
Hamm is a very vocal about the prospects for the Bakken shale formation in the United States, and he should be. He's the founder and chairman of Continental Resources (NYSE: CLR  ) , which is the largest producer of Bakken oil and one of the driving forces behind the shale boom in the United States. Hamm recently made the claim that the Bakken will double its current output to produce as much as 2 million barrels of oil per day. Continental's work in the Bakken has helped to prove out some very innovative drilling and completion techniques, such as drilling multiple tight oil wells on a single pad. These sorts of moves have been crucial in driving down well costs that have been a bit of a bother for shale drillers in the Bakken. 

Hamm founded the company in 1967, and he currently owns 68% of the 185 million shares outstanding for Continental Resources. Hamm has also pledged to give a vast majority of his personal wealth to charity through the Giving Pledge. 

What a Fool believes
There is one thing that all of these companies are that the energy subsidiaries of Koch Industries are not: They all have a market-leading position in their respective spaces. Kinder Morgan, Frontline, Seadrill, and Continental Resources are all the largest players in their respective spaces and will be major drivers in the industry. Based on the prospects for each of these respective industries and the position each of these companies holds in these industries, it's pretty likely that these energy moguls' fortunes will continue to grow fast.

You know how many of these billionaires make their money? Dividends!
Dividend stocks can make you rich, just ask Richard Kinder or Erik Fredriksen. While they don't garner the notability of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 15, 2013, at 8:31 PM, Heidikitty wrote:

    _I am very impressed with this article and own two of the stocks mentioned. You have to admit the man behind the scenes running these companies know what they are doing.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2720561, ~/Articles/ArticleHandler.aspx, 10/30/2014 8:39:07 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement