Yahoo Finance Enbridge's Line 5 Tunnel Receives Another Favorable Ruling
Enbridge Inc. ENB recently received a favorable ruling from Michigan’s second-highest court. The Michigan Court of Appeals sided with a lower court’s ruling, which was in favor of construction of the Line 5 utility tunnel under the Straits of Mackinac. The case is now expected to be taken to the Michigan Supreme Court.
The latest ruling follows the decision by the U.S. Sixth Circuit Court of Appeals last week that cited the emergency response for the pipeline adequate to protect wildlife in the Straits of Mackinac.
The tunnel is expected to house Enbridge’s 540,000 barrels per day Line 5 liquids pipeline. It will be built through bedrock beneath the Straits of Mackinac, which is the connector of lakes Michigan and Huron. The new plan will replace Enbridge’s six-kilometer underwater segment of the pipeline that carries oil and natural gas liquids. The pipeline connects Superior, WI, with Sarnia, in the Ontario province of Canada.
The controversial project has faced fierce opposition from environmentalists as a rupture in the pipeline in the critical area can result in loss of endangered species. The underwater segment is 67-year old and consists of two pipes. The company stated that the pipeline is in a good condition even though the outer coating has worn away in some places and steel braces are placed at places hit by erosion. The company expects the tunnel to provide critical safety for the pipeline under water.
Enbridge intends to commence work on the tunnel once it receives all the necessary permits. Construction of the tunnel is expected to be completed in 2024. Line 5 is a 30-inch 645-mile pipeline that entered service in 1953.
Price Performance
Enbridge’s shares have rallied 14% from the beginning of the second quarter compared with 28.7% growth of the industry it belongs to.
Zacks Rank & Other Stocks to Consider
Currently, Enbridge has a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include Chaparral Energy, Inc. CHAP, CNX Resources Corporation CNX and Concho Resources Inc. CXO, each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chaparral Energy’s bottom line for 2020 is expected to rise 57.8% year over year.
CNX Resources beat earnings estimates thrice and met once in the last four quarters, with average positive surprise of 111.5%.
Concho Resources has a positive earnings surprise of 4.9% in the last four quarters.
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