Summary
- We’ve maintained coverage of all the top MLPs but exposure to a limited number.
- In order to understand Plains All American, we must analyze the broader commodity market and near- and long-term challenges.
- MLPs are very out of favor. The question is if PAA’s distressed levels are justified or a great opportunity.
- Looking for more investing ideas like this one? Get them exclusively at iREIT on Alpha. Get started today »
This article was coproduced with Williams Equity Research (WER).
Warning, guys and gals: We’re going to get a little political here. This isn’t to annoy anyone, but master limited partnership (MLP) owners need to be aware of Joe Biden’s stance on a fracking ban.
Because that will most definitely effect the oil and gas industry in America.
During last week’s presidential debates, President Trump pointed out that Biden only changed his rhetoric on the subject when he went to Pennsylvania, a battleground state that relies on fracking and natural gas.
True to form, Biden denied it, with the conversation going something like this:
Biden: “I never said I oppose fracking."
Trump: “You said it on tape!”
Biden’s running mate, Kamala Harris, similarly denied the stance during the vice presidential debates. I believe her exact words were: “Joe Biden will not ban fracking. That is a fact.”
As Michael Boyd previously pointed out:
"A future president could not outright ban fracking across the United States on the first day. Most fracking takes place on private lands where any attempts to limit it would face legal challenges, particularly from the states themselves, which have begun to count on it as a source of revenue and as a job provider."
Even so, we suspect a Biden win would likely mean a continuation of Obama policies. (Technically, shale did thrive under Obama, though that wasn’t because of his support on the subject.)
