4 Energy Stocks To Gain From Trump's Preferred EPA Chief

The U.S. Environmental Protection Agency (EPA) has been coming up with more stringent rules for the energy market with a bid to lower green house emissions.

Per the Energy Information Administration (EIA), motor gasoline and diesel consumed for transportation in the U.S. during 2015 emitted a total of 1,545 million metric tons of carbon dioxide (CO2). This accounted for almost 83% of the U.S. transportation industry’s total CO2 emission. This is where the urgent need for reducing pollution and saving the environment rises.

Amid a situation when caring for the earth has become the central theme for most of the regulatory bodies, President-elect Donald Trump selected Scott Pruitt – attorney general of Oklahoma – as the next leader of EPA. Pruitt’s appointment will undoubtedly be in favor of the energy industry as he is known to be pro-fossil fuel.

Scott Pruitt to Lead EPA

Republican Scott Pruitt is a skeptic of climate change and is well known for playing a leading role to halt the EPA’s ‘Clean Power Plan’ – an attempt by the Barack Obama administration to cut emissions of greenhouse gas from coal-fired power units.

After choosing Scott Pruitt, Trump has given a clear indication of nullifying a host of regulations associated with the climate legacy of President Obama. In other words, the nomination of Scott Pruitt reflects Trump’s strong inclination towards fossil-fuels.

Energy Firms Welcome Pruitt

Expectedly, the energy industry is happy with the decision of Trump and is confident that Pruitt, being an ally of fossil fuel, will not come up with any regulations that will inhibit the oil and gas sector.

In fact, Mr. Pruitt’s statement “Scientists continue to disagree about the degree and extent of global warming and its connection to the actions of mankind,” clearly indicates that he strongly doubts the theory that fossil fuel leads to increase in earth’s temperature by emitting greenhouse gas.

On the other hand, environmentalists are outraged over the nomination of Mr.Pruitt as they believe that with this selection Trump has paved the way for polluters to fill up their pocket at the expense of global warming.

Oil & Gas Stocks to Get a Boost

After taking office on Jan 2017, Donald Trump and his energy sector friendly EPA chief has to decide which fossil fuel -- among oil, gas and coal -- to choose.

Overall, whatever policy Trump decides on, it is almost a clear indication that they are not going against fossil fuel and might implement all the policies in favor of the energy industry. So the revolution for producing clean fuel by saving environment is no longer going to be a threat for the oil and gas stocks.

4 Safe Bets

Let’s focus on those players that are involved in upstream energy operations and will go on producing more oil and gas without any restrictions from the EPA. We have employed our proprietary screening methodology to choose five oil and gas stocks that are carrying either a Zacks Rank #1 (Strong Buy) or #2 (Buy). We believe these companies should prosper in the Trump-Pruitt era. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

San Antonio, TX-based Abraxas Petroleum Corp. (NASDAQ:AXAS) is involved in producing oil and gas in the U.S. The company currently carries a Zacks Rank #2 and has surpassed the Zacks categorized Oil & Gas-U.S Exploration and Production industry, year to date. Over the aforesaid period, Abraxas gained more than 97%, while the Zacks categorized Oil & Gas-U.S Exploration and Production industry improved only 48%.

Headquartered in Midland, TX, Diamondback Energy Inc. (NASDAQ:FANG) is engaged in the exploitation and development activities in the oil and natural gas resources in the Permian Basin in West Texas. The company sports a Zacks Rank #1 and outperformed the Zacks categorized Oil & Gas-U.S Exploration and Production industry after improving more than 57% during the above mentioned period.

Denver, CO-based SM Energy Company (NYSE:SM) , previously known as St. Mary Land & Exploration Company, is an independent oil and gas firm engaged in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. SM Energy carries a Zacks Rank #2 and has surpassed the Zacks categorized Oil & Gas-U.S Exploration and Production industry after gaining more than 80%.

Resolute Energy Corp. (NYSE:REN) – based in Denver, CO – is involved in the exploitation and development of oil and gas resources in the U.S. The company carries a Zacks Rank #2 and has beat the Zacks categorized Oil & Gas-U.S Exploration and Production industry after improving as much as 660%.

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