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My picks among the pumpers: Flowserve (FLS, news, msgs), where revenue from pumps grew 24% and from valves 15% in the third quarter of 2007 from the same period a year earlier, and Gorman-Rupp (GRC, news, msgs), a maker of a wide line of pumps that saw its order backlog climb to a record $124 million, a 47% year-to-year increase, in the quarter that ended Sept. 30.
Moving electricity
You can see the same delay-induced-crisis dynamic at work in the nation's electrical grid. Virtually any solution to the energy crisis will require a massive juggling of supply and demand across the grid, assuming electricity supply rises when the sun shines in Arizona and falls when the wind stops blowing in Kansas. The existing grid connects 3,000 electric utilities and 2,000 independent power producers with 120 million residential customers, 16 million commercial customers and 700,000 industrial customers -- along 700,000 miles of high-transmission lines owned by 200 entities. It isn't up to that task.- Talk back: What are your favorite energy plays?
But it's the only grid we've got. All of the electricity for any solution to the energy crisis will flow through this grid. And in a crisis world, the owners of this grid -- which now include Warren Buffett, by the way -- will be able to raise prices for the use of the grid.
Those price increases will be easier for the world to swallow, too, because grid owners can promise increases in efficiency that will save electricity in a world desperate to reduce consumption. They'll be able to offer pricing options that will cut the costs of electricity for large corporate customers in a world where energy bills are climbing fast enough to mean the difference between corporate life and death. And they'll be able to supply uninterrupted and unvarying supplies of electricity -- at a premium price -- to that part of the global computer civilization that needs it.
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These possibilities are leading to a long-delayed resurgence in investment in the grid. The North American power industry spent $20 billion on grid infrastructure equipment in 2005. That investment is projected to grow to $45 billion this year. Sales are climbing 20% a year for advanced metering equipment, which allows real-time tracking of customer energy use and two-way communication between the power supplier and the power consumer.
My picks for the grid: Itron (ITRI, news, msgs), a maker of smart meters that permit the variable pricing schemes and two-way communication networks essential for the owners of the grid to reap larger profits, and General Cable (BGC, news, msgs), where about 45% of sales come from the energy sector.
Moving oil
And lastly, this same delay-induced-crisis dynamic is making the 100,000 miles of U.S. pipeline much more valuable as well. The pipeline companies are just about salivating at the opportunities the energy crisis presents for them:- Pipelines could be built to include a north-to-south flow and to distribute oil and gas from new production areas, such as the Rocky Mountains.
- There's the potential flow of new fuels, such as ethanol and biodiesel. Both fuels present pipeline challenges. Ethanol seems to lead to stress-corrosion cracking of pipe, for example. But blending and changes in design are likely to conquer those problems around the time the shipped volume of these fuels grows large enough to economically interest pipeline owners.
- Pipeline operators might play a (still vague) role in getting wood chips or saw grass, the raw materials of ethanol made from cellulose, to production plants. One suggestion: Grind up the cellulose, mix it with water, and pipe it to ethanol plants.
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How bad is the market?It's unclear whether we are in a correction or a bear market. How should investors handle it? MSN Money's Jim Jubak suggests you delay buying stocks that rely on an economic rebound. Instead, he says, buy stocks that can survive shaky times -- and keep an eye on how the market reacts to earnings reports.
My pipeline pick: TransCanada (TRP, news, msgs) for the depth of its Canadian system, its north-south orientation, its lead in the Alaska natural-gas pipeline project and its liquefied-natural-gas facilities and pipelines, which give the company access to a growing global market.
That's five more companies and stocks that will profit, in my opinion, from our national energy policy of delay. In my next column, the last in this series, I'll take a look at why delay helps the solar and nuclear sectors.
Continued: Developments on past columns
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