The U.S. energy sector is suffering from a lack of capacity. Low energy prices through 1998 are partly to blame. Investment capital that could otherwise have funded energy infrastructure projects such as refineries, pipelines, and tankers was instead chasing big returns in the high-tech sector. And the areas that were damaged the most were the energy and power sectors. Invesco's Segner agrees.
Technology plays another key role in bolstering the long-term prospects of the energy sector.
So firms are increasingly in need of higher-quality power sources. The major beneficiaries of the new energy landscape are likely to be those companies whose business is getting at and delivering oil, natural gas, and even coal. Nabors, the world's largest land-based drilling contractor, owns 60 percent of all rigs that can drill deeper than 15,000 feet to where natural gas is located. Patterson Energy provides onshore drilling in the Southwest, and analysts expect it to have annual earnings growth of 56 percent during the next five years, versus 12 percent for the oil and gas industry as a whole. The company recently opened three training centers in a scramble to hire enough qualified workers to keep up with demand.