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Enbridge Receives Favorable Federal Ruling Over its Pipeline - Analyst Blog


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Enbridge Inc. ( ENB ) received a favorable federal court ruling regarding its pipeline to carry tar sands oil between Oklahoma and Illinois. Earlier, the fate of the pipeline became uncertain owing to the petition by the Sierra Club and the National Wildlife Federation that the failure to conduct an environmental impact review of the pipeline violated the National Environmental Protection Act. The environmental groups alleged that the pipeline would have significant detrimental impact as it would be constructed by clearing thousands of water bodies, wetlands, wildlife habitat and other sensitive areas.

U.S. district judge Ketanji Brown Jackson in Washington rejected the petition citing that the pipeline was constructed mostly on privately owned land. The ruling noted that the builders of the pipeline had already approached more than 1,700 private land owners, and secured 96% of land rights along the 589-mile pipeline route. The pipeline will carry crude oil from Pontiac, IL, to Cushing, OK; through the states of Missouri and Kansas.

Canada-based Enbridge Inc. is a leading energy transportation and distribution company. As a transporter of energy, Enbridge operates the world's longest crude oil and liquids pipeline system in Canada and the United States. The company is also involved in natural gas transmission and midstream businesses in other countries. As a distributor of energy, Enbridge owns and operates Canada's largest natural gas distribution company. It provides distribution services in Ontario, Quebec, New Brunswick and New York State.

We remain apprehensive about the company's midstream natural gas business, which is sensitive to changes in natural gas supply-demand fundamentals and commodity cycles associated with gas processing margins.

Enbridge currently carries a Zacks Rank #3 (Hold). Investors interested in the oil and gas sector could consider better-ranked stocks like Weatherford International plc ( WFT ), Sanchez Energy Corporation ( SN ) and Sunoco Logistics Partners L.P ( SXL ). All these stocks sport a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Business , Stocks
Referenced Symbols: ENB ,



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