The US Energy Information Administration projects US light oil production will double by 2035. And that’s not including the vast amounts of crude likely to be shipped south from Canada’s tar sands and equally prolific light oil finds.

The bottleneck for Canada is, of course, the continuing controversy over TransCanada Corp’s (TSX: TRP, NYSE: TRP) Keystone XL project. This extension to the existing Keystone Pipeline System, if built, will carry 510,000 barrels of oil per day form Hardisty, Alberta, to Steele City, Nebraska, and eventually the Gulf of Mexico.

It’s currently hostage to an election year in which the US president has decided to postpone a decision approving it until after the vote, to avoid angering pro-pipeline labor unions and anti-pipeline environmentalists, both key to his re-election effort.

As MLP Profits Co-Editor David Dittman wrote in a Maple Leaf Memo dated Sept. 25, it seems likely Keystone XL would be approved in a second Obama term. Coupled with Republican candidate Mitt Romney’s pledge to approve the pipeline, it’s highly likely the pipeline will eventually be built. In fact, TransCanada is already hard at work on the “southern leg” of the project, which will expand shipping capacity from Oklahoma’s Cushing hub to the Gulf Coast.

Even in the unlikely event that Keystone XL is never built, however, much of this oil will still be brought south by truck and rail. And coupled with the expanding production in the US from areas such as the Bakken Shale in the Upper Midwest, that means a lot more oil is going to wind up in America’s energy patch, fueling exploding demand for gathering, storage, processing, refining and transportation assets to get it to market.

Every one of these assets is an opportunity for generating fees that for the most part will flow regardless of whether oil is at USD150, USD50 or somewhere in between. And no sector is better positioned to profit than energy midstream master limited partnerships (MLP).

Per usual, Conservative Holding Enterprise Products Partners LP (NYSE: EPD) is set to be one of the biggest winners from the trend, thanks in large part to its pipeline venture with Canadian energy giant Enbridge Inc (TSX: ENB, NYSE: ENB). The company has also made huge in roads in the liquids-rich Eagle Ford Shale region of Texas, which are starting to fuel cash flow and distribution growth.

The chief benefit of owning a huge MLP like Enterprise Products is that it has the ability to be positioned literally everywhere in the energy patch at once. When one area encounters lean times–as natural gas storage has this year in the wake of a mild winter and still low gas prices–big MLPs can easily make up the shortfall elsewhere.

By contrast, a smaller and more focused MLP may sink in a hurry if conditions move much against management’s guidance. That’s why we have a bias for size in the MLP Profits Portfolio, with virtually every holding producing more than one product or service and market capitalizations averaging well in the billions.

On the other hand, some of the more exciting opportunities in fee-focused and rapidly growing oil storage are more direct plays, for example Oiltanking Partners LP (NSDQ: OILT) and Tesoro Logistics Partners LP (NSDQ: TLLP).

Oiltanking operates facilities on the Gulf Coast of the US; it’s rapidly expanding capacity to accommodate rising energy flows. The company announced last month it will spend USD70 million to expand its Houston Terminal’s capacity by 3.3 million barrels by the end of 2014, bringing its total to 25 million barrels.

That follows very strong results in the second quarter of 2012, which saw cash flow surge 25 percent and the company report a 1.42-to-1 distribution coverage ratio, the best since last year’s initial public offering (IPO).

Revenue rose 14.1 percent as the MLP continued to put new storage assets into operation in a robust market. And Oiltanking was able to cut costs as well, pushing up margins.

CEO Carlin Conner sees the MLP as “a key link between the incremental as well as existing crude oil flows coming to the Gulf Coast and the growing demand for crude oil storage by Gulf Coast refineries, oil producers and oil traders.” That’s an ideal place to be as North American production of black gold grows in coming years.

The only problem now with buying Oiltanking is that  after ignoring it for the first half of 2012 investors have become aware of it and the unit price has shot up to the high USD30s. That’s just shy of twice the IPO price of USD21.50 and–despite the security of revenue and sure growth trajectory of the company–likely means the unit price needs a rest.

We’ll look to add Oiltanking Partners to the Conservative Holdings on any dip to USD35 or lower.

Tesoro Logistics is growing even faster than Oil Tanking. That’s in large part an adjunct to parent Tesoro Corp’s (NYSE: TSO) rapid growth in the suddenly resurgent North American refining business.

Refineries are immensely complex assets that require vast adjoining pipeline, storage and other related facilities to function. Historically many of these assets have been owned and operated by refining companies themselves. But their fee-generating nature has made them attractive to monetize in the current environment.

Tesoro Logistics’ 17.1 percent distribution growth since last year’s IPO is almost entirely due to parent Tesoro’s asset drop-downs. And they’re expected to do even better in 2013, fueling projected distribution growth of 20 percent.

Tesoro recently announced an agreement to purchase refining and marketing assets in California for USD1.175 billion plus inventory valued at USD1.3 billion. The assets include fee-generating midstream properties worth an estimated USD1 billion, including three marine terminals, four land storage terminals, four product marketing terminals and over a hundred miles of energy pipelines.

Tesoro management has already stated its intent to drop down these assets within 12 months of closing this deal, which would add as much as USD100 million to the MLP’s annual cash flow. Added to the MLP’s own expansion plans with “organic” projects and regular rate increases, distribution growth could exceed even those bullish projections.

The challenge with Tesoro Logistics, as with Oil Tanking Partners, is unit price, as it’s become an investor favorite. Consequently, we’re going to be patient purchasing it. But Tesoro Logistics Partners is a buy on any dip to USD40 or lower for modest income and reliable long-run growth.