If one had to guess the state of the energy midstream sector solely from the performance of its equity, one would have no choice but to imagine it on the brink of collapse.

Perhaps it’s a pandemic rendering most power plants superfluous, or a nuclear war dampening interest in scenic drives.

What we’re dealing with, in fact, is the mercifully less dire disaster of an imploded bubble, now inverted into a black hole of utmost doom and gloom.

The only problem with all the doomsday prophesies is that, 18 months into crude’s collapse, it’s barely dented the cash flows from pipelines and terminals. These are much more likely to traffic in natural gas or refined products, which continue to ship in volume to centers of demand. Many of the newer crude pipelines, too, are only starting to generate fixed multi-year fees from producers as well as refineries.

It’s indisputable that midstream contracts and volume commitments can be dissolved in bankruptcy. What’s questionable is the assumption of massively diminished cash flows if wells covered by such commitments change hands in a bankruptcy restructuring. Often, the new owners will want to keep the wells up the production and the shipments, and many will not have ready alternatives to current arrangements. In sum, such renegotiations look much more likely to inflict a flesh wound than a killing blow on the industry.

And in the meantime MLPs as diverse as Magellan Midstream (NYSE: MMP), Enterprise Products Partners (NYSE: EPD), Delek Logistics (NYSE: DKL) and AmeriGas Partners (NYSE: APU) just keep raising the distributions, some of which are derived from businesses benefiting from lower energy prices.

This month’s Portfolio Update includes earnings-season reports on all the current Best Buys and several other key midstream companies. They range from concerning (TRGP and GLP) to surprisingly bullish for gas-focused shippers (EQM and SE).

Propane distributors might have outperformed as well, were it not for an unseasonably warm fall and mild early winter in the East. New contributor Jennifer Warren and I  survey that corner of the energy trade in Sector Spotlight and emerge with a new portfolio recommendation.

We’re also recommending renewable energy yieldco TerraForm Power (NASDAQ: TERP) again, for reasons outlined in New Buys.  Demand for solar and wind energy is driven not just by the recently extended federal tax credits but, perhaps more importantly, by state mandates for increased renewables use. TerraForm has been discounted severely as a result of a liquidity crisis at its controlling sponsor SunEdison (NYSE: SUNE). If SunEdison is ultimately forced to sell TerraForm to a stronger developer, TERP’s share price could jump dramatically.

Niches like renewables and propane will never supplant the larger oil and gas shippers and processors. That’s not their role. But as high yielders that don’t need higher oil prices to keep on yielding, they can certainly diversify an energy income portfolio.

MLP Profits Portfolio Update

• Suburban Propane Partners (NYSE: SPH) added to Growth Portfolio; buy below $26
• TerraForm Power (NASDAQ: TERP) upgraded in Aggressive Portfolio; buy below $10.