After a wild ride for MLP investors over the past couple of years, Bernstein has initiated coverage on the space. Analyst Jean Salisbury has some good news and bad news for MLP investors.

Good News

First, the good news is that bankruptcy fears in the space have been overblown. Even at oil prices below $40/bbl, Salisbury estimates that less than 7.0 percent of MLPs $70 billion in service revenues are at risk. Oil production volumes will likely fall this year, but midstream pipeline plays will mostly be unaffected.

Bad News

However, the bad news is that there may not be as much long-term upside to MLPs as many investors are anticipating. Salisbury believes that, after next year, the existing gas and crude infrastructure and infrastructure already in progress will be sufficient to handle forward production through 2025.

“In this context, we prefer…

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