Many things had to come together to help me pick my favorite stock for 2016. First we have a rolling disaster in US energy businesses. Fracking companies face the new year without more hedges against lower prices for oil and gas. Existing contracts run out then. Oil and gas price declines continue.

The rout has moved from the shale fields to gas pipeline utilities businesses, many of which have spun off LPs to create high-yield entities in a market without many alternatives. These are now roiled by the problems of outfits like Kinder Morgan (KMI), NGLS, and Williams (WMB). These utilities were touted by brokers as a way to collect a toll for shipping gas, regardless of its price. But now they are in trouble.

Meanwhile Keystone XL has been derailed—literally leaving it to trains to dangerously transport Canadian oil to markets.

The other component of my selection is the Paris COP 21 accord on global warming. I have been covering United Nations confabs on global warming since the first one, in 1992 in Rio de Janeiro. And this is the first one with a clear program for countries to cut back, to me the equivalent of a Santa Claus rally (which we are unlikely to get in 2015.)

While there are greener energy sources beyond the horizon, right now greater use of natural gas is how greenhouse gas emissions are curbed. In fact, the US has become the only nation to significantly meet climate targets thanks to switching more power plants to natural gas from hydraulic fracturing (fracking) and sideways drilling, mostly because it saves money by producing gas more cheaply. This and not government decrees have cut down on US carbon emissions.

Natural gas is shovel ready, unlike crude oil, which it is illegal to export from the USA; unlike US ethanol which uses more carbon to produce than addition to gasoline saves (as well as boosting the price of food); unlike electric cars and solar roofs, still mostly years away. And there are important geopolitical gains for the US to export its natural gas.

Liquefied natural gas (LNG) is shipped all over the world in super-cold form—at minus 162 degrees celsius in special super-cool tankers. One is being opened next month at Sabine Pass, Louisiana, two others in Gulf of Mexico waters and two more a-building on the Chesapeake Bay. But we don't cover US stocks, so they are outside our remit.

Europe is still dependent on Putin's pipeline which has been turned off whenever he wanted to make trouble in Ukraine. Israel, Turkey, and Egypt are developing Mediterranean gasfields but they will be several years from production.

Iran, coming back into the world market, has for decades been kept out of the business of exporting LNG by a successful US boycott of LNG technology sharing with Iran. From the 1996 Iran and Libya Sanctions Act (passed under Pres. Bill Clinton) European and Asian firms which wanted to invest more than $20 mn in Iranian LNG were sanctioned. And $20 mn will not get you far in LNG. The huge Pars field in Iran was out of bounds. Foreign oil companies tempted by the Iranian regime's potential, like Royal Dutch Shell (RDS-A), (RDS-B),  Repsol (Spain) (REPYY), and Total (France) as well as Conoco (USA) (COP) all of which have LGN know-how were frightened away by the US law. Now they may come back but it will take years.

Meanwhile Qatar, a country not in US bad books, which had access to part of Pars, built up its LNG exports to 10 bn cubic feet/day. The sanctions on Iran were also enforced also by the George W. Bush administration, and until now by the Barrack Obama one. Iran is the great unknown in this forecast.

Like the troubled gas pipelines criss-crossing the USA, LNG plants are paid by throughput: how much gas they cool and load. The difference is that LNG plant construction is supported by US export finance and the importers in energy-short countries. It is backed by US and Canada local governments.

While Cheniere Energy and its US ilk are not global stocks, we have one for LNG: Veresen (FCGYF) of Canada picked by Martin Ferrera, with a US listing as FCGYF, is easier to buy in Canada where it trades as VSN. It links gasfields further east to a port being built at Jordan Cove at Coos Bay in Oregon. All the necessary permits to build are in place including the US Federal Energy Regulatory Commission's final economic impact statement . What is lacking is the financing but I expect Jordan Cove will prove attractive to a big oil patch partner.

If the money is not forthcoming, VSN itself has assets it can sell. These include 50% stakes in the Ruby (US Rocky Mountain gas) and Alliance pipelines (serving the Bakken in ND; and Monteny Duvernay in Alberta linked to the Channahon natural gas liquid plant near Chicago) and a wholly owned entity called Alberta Ethane Gathering System (delivering ethane to petrochemical plants and underground storage facilities in Saskatchewan.) Its Veresen Midstream pipeline from western Canada to Channahon is half owned by Kohlberg Kravis Roberts (KKR) a US venture fund. Channahon itself is owned by the Aux Sable NGL firm of which VSN owns 42.7% in partnership with Shell Canada. VSN has over 2000 miles of pipeline around North America including special facilities for sweet gas, and removing heavy hydrocarbon compounds to ready gas for its pipeline network.

Aux Sable gas supplies not just gas and co-generation companies, but also petrochemical firms making ethylene, propylene, butadiene and other precursors for plastics and foams, and for gasoline blends. It uses its gas and waste heat plus wind and “run of river” to generate cheap “green power” in Canada.

Right now with the pipeline system south of the border in disarray, the sinking Canadian loony (C$), and end-of-year tax loss selling to boot, VSN is well down from our purchase price at C$8.63-8.64. But it is my best bet for 2016 because the tax loss selling is finite; the loony has probably hit its bottom; and the financing is more likely going forward. VSN paid a dividend of C$1 in the past year and has done so since 2007, a handsome reward for hanging in there of a yield of 11.46%. VSN's CFO stressed that they have no plans to cut dividends without recovery in natural gas pricing. Martin points out that like all LNG or energy or midstream companies they are getting trashed. Veresen currently wholly-owns the Jordan Cove LNG project but the Pacific Connector Gas Pipeline leading to it from the Ruby pipeline is a 50:50 venture with Williams Cos, among the troubled US gas companies sold off lately.

Jordan Cove is licensed to export 1.55 bn cubic ft of LNG per day for 25 years, about 9 mn metric tonnes per year. All the permits are in place but finance is being negotiated slowly and painfully with off-takers, presumably in Asia for which it is the shortest-location LNG project and likely to be cheaper than Chesapeake Bay or the Gulf of Mexico for Pacific off-takers.

On Dec. 7, Veresen cut the ribbon on a 2^nd major gas plant for the Cutbank Ridge Partnership in Montney costing C$715 mn, in the Veresen Midstream Partnership. That brings the total of projects under construction to C$1 bn including C$715 mn for the rich gas processing complex for Cutbank. It will be funded out of the C$1.275 bn credit line VSN has barely drawn down from, in partnership with KKR which will be a minority partner. (Montney is in British Columbia where reporter Martin lives.)

On Dec. 7, VSN too came out with upbeat forecasts for 2016 based on the midstream business alone. Their pipelines are fully contracted and are doing fine. Management again stressed that VSN has virtually no commodity exposure in its contracts.

Veresen in its more recent third quarter reported net income up 1869.7% (that is not a misprint) to all of 3 loony cents according to the Toronto Globe & Mail. Most analysts covering it rate it a buy.

But to finance the big Kahuna it may have to dip into its other LNG operation near Chicago.

US investors are disadvantaged. Only Canadian accounts may reinvest dividends at a 5% discount.