It's Time To Look North For Oil (SU, CNQ, CVE)

The United States energy policy is unclear. After the largest oil spill in history, the country decided to put a moratorium on oil drilling in the Gulf of Mexico until November, conveniently around election time. Instead of dealing with the parties who were at fault (BP, Transocean) and coming down on them, the government decided to levy its heavy hand and hurt the whole Gulf of Mexico region. As a result of this, investors may want to look at oil sands and in particular Canadian Natural Resources

, Cenovus Energy Inc Common Stock

, and Suncor Energy Inc.

. All three of these companies are Canadian oil companies which deal primarily in oil sand operations. Oil sands is different from conventional oil in that it is locked in naturally occurring mixtures of sand, clay, water, and an extremely dense and viscous form of petroleum called bitumen. It is extremely difficult to extract oil sands as prices need to be cost effective and it's not exactly the most friendly on the environment. Yet technological advances and improvements in recovery, as well as the reduction of water usage and greenhouse emissions have made oil sands a viable option for the future. One out of every six barrels of oil comes from our friendly neighbors to the north and it is only likely to increase as demand increases and supply falls. The three companies mentioned above are all poised to benefit as the supply from the Gulf of Mexico needs to be replaced. As oil hovers and eventually crosses $80 per barrel, money will flow into alternative sources of energy. Since this country doesn't have a strong alternative energy policy, different sources of oil will be seen as the beneficiary with oil sands likely getting a large chunk of the investment.