Thanks to a certain Omaha resident, railroad stocks are suddenly in vogue. I thought I'd mention an interesting development at one of Canada's largest rail companies.
We've tended to keep Canadian Pacific
Yesterday, the company announced a multi-year initiative to secure land and build out its rail network to the Industrial Heartland area outside Edmonton, Alberta. This is the planned site of huge oil sands-related infrastructure development getting under way over the next few years. Total SA
Canadian Pacific benefits from the oil sands activity in two ways. First, it can meet a critical need in transporting raw materials during the construction phase. Then, once bitumen upgrading gets under way, there will be a new market for the byproducts.
Railroads don't casually build out their networks -- not since the 1890s, anyway. If the price tag on a bitumen upgrader wasn't enough to convince you that the oil sands are a meaningful, long-term phenomenon and not just an energy sideshow, maybe this development will grab your attention. Sure, there are speculative plays like Oilsands Quest
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Fool contributor Toby Shute hasn't hitched his portfolio to any company mentioned. Total SA is a Motley Fool Income Investor recommendation. The Motley Fool's disclosure policy doesn't require an upgrade.